11-B
TO: Honorable Mayor and Members of the City Council
ATTENTION: Ryan Smoot, City Manager
FROM: Jim DellaLonga, Director of Economic Development
SUBJECT: Consideration and possible action to provide direction to the City Manager regarding the Designated Block Downtown Façade Improvement project for the storefronts located at north west corner of Bellflower Boulevard and Oak Street, adjacent to the Edgeway Downtown Bellflower mixed-use project, and adopt Resolution No. 25-05 – A Resolution adopted pursuant to Sections II and VII(C) of the Bellflower City Charter finding that the use of and distribution of economic development funds to business and/or property owners pursuant to the Business Assistance Plan does not constitute a public subsidy requiring payment of prevailing wage in accordance with Labor Code § 1720.
DATE: January 27, 2025
EXECUTIVE SUMMARY
On July 11, 2022, the City Council approved amendments to the Bellflower Economic Development Business Assistance Plan. These included adding the Designated Block Downtown Façade Improvement Program (Chapter 3.3) and the allocation of an estimated funding amount for the project. After securing the necessary easements, preparing plans and constructions drawings, and putting the project out to bid, the cost of the project is significantly more than previously estimated. The Economic Development Director is requesting the City Council provide direction regarding the allocation of additional funds to complete the project. Relatedly, as part of the implementation of the City Charter, staff recommends adopting Resolution No. 25-05, which would determine that projects approved pursuant to the Economic Development Business Assistance Plan are not subject to prevailing wage pursuant to the City Charter.
RECOMMENDATION TO CITY COUNCIL
1) Approve a budget amendment to increase the allocation for Account No. 510-44410- 4002 by $350,000 for the Designated Block Downtown Façade Improvement Program for the project located at the northwest corner of Bellflower Boulevard and Oak Street; and
2) Adopt Resolution No. 25-05 determining that projects approved pursuant to the Economic Development Business Assistance Plan are not subject to prevailing wage pursuant to the City Charter; or
3) Alternatively, discuss and take other action related to this item.
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Staff Report – Direction regarding Designated Block Downtown Façade Improvement Program and Prevailing Wage Determination
January 27, 2025
FISCAL IMPACT
To complete the project at the northwest corner of Bellflower Boulevard and Oak Street, staff is requesting using existing and reprogrammed available budget totaling $500,000 and approving a budget amendment to the 2024-25 fiscal year operating budget to allocate $350,000 from the Economic Development Fund for the Designated Block Downtown Façade Improvement program in Account No. 510 -44410-4002 (total proposed project budget of $850,000).
DISCUSSION
In July 2022, the City Council approved the Designated Block Downtown Façade Improvement program as part of an update to the Bellflower Economic Development Business Assistance Plan. This also included designating the block of buildings that occupy the northwest corner of Bellflower Boulevard and Oak Street for this program and initially allocating $175,000 for the improvements.
As part of this program, façade easements were needed from the property owners of the buildings to allow the City’s future contractor to construct the façade improvements.
Conceptual designs were prepared and used to show the property owners the extent and benefits of the improvements. After several months of meeting and negotiating with the four property owners, all of the easements were executed and recorded, and bid -ready construction drawings were prepared at an initial budget amount of $175,000. With the rise in construction costs post-pandemic, an additional $125,000 was added to the project budget for the following year (FY 2023-24), making the total available budget for the façade improvements $300,000.
The Plans and Specifications were approved by City Council on May 28, 2024. The bid opening occurred on July 16, 2024, and no bids were received. As a result of not receiving bids, City Council approved a request to directly negotiate with contractors on September 23, 2024. Two prevailing wage estimates were received and ranged from $600,000 to $680,000. A non-prevailing wage estimate was submitted at just under $540,000.
This project began well before Measure B, the City Charter, became effective and is different from the City’s standard façade improvement program in that easements were secured on the facades of the private building for the construction of the improvements.
Because the work is being completed on private buildings, this is not a traditional public project and pursuant to the City Charter is not subject to prevailing wage. The attached Resolution No. 25-05 would make a City Council determination that projects approved via the Economic Development Business Assistance Plan, which includes Chapter 3.3, the Designated Block Façade Improvement Program, are not subject to prevailing wage pursuant to the City Charter.
Staff Report – Direction regarding Designated Block Downtown Façade Improvement Program and Prevailing Wage Determination
January 27, 2025
DISCUSSION – Continued
If City Council wishes to complete this façade improvement program, staff recommends using existing and reprogrammed available budget of $500,000 for the Business Assistance Program and approval of a budget amendment to increase the 2024-25 fiscal year budget by $350,000 (bringing the total available funding for this project to $850,000) to account for the unanticipated increase in costs related to this project as well as including construction management costs and a contingency for unanticipated construction complications once construction begins on the old buildings. These figures are conservatively based on the higher of the two prevailing wage estimates received in September 2024.
ATTACHMENTS
Resolution 25-05 ............................................................................................................. 4
CITY OF BELLFLOWER
RESOLUTION NO. 25-05
A RESOLUTION ADOPTED PURSUANT TO SECTIONS II AND VII(C) OF
THE BELLFLOWER CITY CHARTER FINDING THAT THE USE OF AND
DISTRIBUTION OF ECONOMIC DEVELOPMENT FUNDS TO BUSINESS
AND/OR PROPERTY OWNERS PURSUANT TO THE BUSINESS
ASSISTANCE PLAN DOES NOT CONSTITUTE A PUBLIC SUBSIDY
REQUIRING PAYMENT OF PREVAILING WAGE IN ACCORDANCE
WITH LABOR CODE § 1720
THE CITY COUNCIL DOES RESOLVE AS FOLLOWS:
SECTION 1. Findings. The City Council finds as follows:
A. Government Code §§ 52200 to 52203 generally allow cities to expend public monies to help private enterprise for “economic opportunity.” The City enacted several programs to encourage economic opportunity including, without limitation, the Bellflower Economic Development Business Assistance Plan (the “Plan”).
B. Bellflower City Charter Article XI, § 5 empowers the City Council to exercise home rule within the City’s jurisdiction. Section II of the City Charter authorizes the City Council to make and enforce all laws respecting the City’s municipal affairs including, without limitation, the ability to establish criteria to determine whether a project qualifies for payment of prevailing wage (City Charter, § VII(C)).
C. Before enactment of the City Charter, business owners and property owners were required to pay prevailing wage for implementing the Plan in accordance with Labor Code § 1720 since the Department of Industrial Relations (“DIR”) considered parts of the Plan to constitute a “public subsidy.”
D. The California Supreme Court determined that charter cities are not subject to the Prevailing Wage Law (AFL-CIO v. City of Vista (2012) 54 Cal.4th 547). While Section VII of the Bellflower City Charter requires prevailing wage be paid for “public projects erecting, improving, painting, or repairing public buildings and projects,” it allows the City Council to “establish criteria to determine whether a project, program, or plan qualifies for payment of a minimum wage different than that ordinarily prevailing for work performed on public works projects as defined by California law.”
SECTION 2. City Charter, Section VII Determination. In accordance with Sections II and VII of the City Charter, the City Council determines that the Plan does not constitute a public subsidy for which prevailing wage must be paid. See, Tevis v. City and County of San Francisco (1954) 43 Cal. 2d 190; City of Santa Monica v. Grubb (1966) 245 Cal. App. 2d 718; and AFL-CIO v. City of Vista (2012) 54 Cal.4th 547.
City of Bellflower
Resolution No. 25-05
SECTION 3. Authorization. The City Manager is authorized to promulgate such administrative policies and procedures that are needed to implement the Plan. The Program Manager is authorized to administer the Plan.
SECTION 4. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
SECTION 5. Recordation. The Mayor, or presiding officer, is authorized to sign this Resolution signifying its adoption by the City Council of the City of Bellflower and the City Clerk, or her duly appointed deputy, may attest thereto.
SECTION 6. Effective Date. This Resolution will become effective immediately upon adoption and will remain effective unless repealed or superseded.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER THIS 27TH DAY OF JANUARY 2025.
______________________________
Ray Dunton, Mayor
ATTEST:
____________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
____________________________
Karl H. Berger, City Attorney