Agenda #: 5.3
Meeting Date: October 1, 2024
TO: Honorable Mayor and Members of the City Council
FROM: Daniel Fox, City Manager
TITLE: FIRST AMENDMENT TO THE CONSULTING SERVICES AGREEMENT
WITH FRJ & ASSOCIATES FOR THE ADMINISTRATION OF THE
CITY'S HOME IMPROVEMENT PROGRAM.
STRATEGIC
GOAL: Safe, Sustainable & Healthy Community
RECOMMENDATION:
Approve, and Authorize the City Manager to sign, the First Amendment to the Consulting Services Agreement with FRJ & Associates to administer the Home Improvement Program and Condominium Home Improvement Program through June 30, 2025.
FINANCIAL IMPACT:
Sufficient funds are included in the FY 24/25 budget in the Permanent Local Housing Allocation Fund (Fund 224). The total not-to-exceed amount per fiscal year set forth in the proposed First Amendment would increase by $130,000 from $120,000 to $250,000. Payments to the Consultant are limited annually to no more than 20% of the approved CDBG and PLHA allocations for the Home Improvement Program and Condominium Home Improvement Program.
BACKGROUND/DISCUSSION:
HIP and CHIP Programs
The City’s Home Improvement Program (HIP) was established in 2003 as a CDBGfunded program providing interest-free, deferred loans to eligible homeowners for the maintenance of safe, decent and sanitary housing. HIP funds are used to correct hazardous structural conditions; to make reasonable accommodations for persons with disabilities; to improve the overall exterior appearance of the home; to eliminate an appearance of blight; to provide energy-efficient upgrades; and to correct exterior code violations. Because of restrictions on the use of CDBG funds, the City’s HIP Program
may only be used to assist owner/occupants of single-family detached residences.
The Permanent Local Housing Allocation (PLHA) funds were enacted by the State Legislature through SB 2 in 2017, designed to provide an ongoing annual source of funding for the construction of affordable housing, programs to assist persons who are experiencing or are at risk of homelessness, or other housing-related assistance programs for low-to-moderate income households. Diamond Bar has been allocated a combined total of $649,080 for PLHA Program Years 1 through 3 (i.e., calendar years 2023 through 2025).
As a housing-focused, State-funded program, PLHA proceeds can be used for a wider range of housing programs than those backed by federal CDBG funds. Moreover, because housing costs in California are among the highest in the nation, households earning up to 150% of the Los Angeles County Area Median Income (AMI) are eligible for assistance under PLHA-funded programs, whereas CDBG funds are limited to households earning no more than 80% of AMI. Thus, on June 20, 2023, the City Council adopted Resolution No. 2023-25, approving the City’s participation in the PLHA Program by establishing the Condominium Home Improvement Program (CHIP), offering zero-interest, deferred loans of up to $20,000 to eligible owner-occupied condominium households, and increasing the maximum HIP loan amount from $20,000 to $30,000.
The administration of the HIP and CHIP is subject to the terms of the City’s cooperative agreements with the Los Angeles County Community Development Authority (LACDA).
Through these agreements, CDBG and PLHA funds are first allocated to LACDA, which then assigns funding amounts to participating cities according to an allocation formula.
Although more than a year has passed since the City Council adopted the resolution to participate in the PLHA Program, LACDA did not execute the Reimbursable Contracts for the expanded HIP and newly-established CHIP until August 6, 2024. The delay was due to issues out of the City’s control, and affected LACDA’s other participant agencies as well.
FRJ & Associates
On September 1, 2021, the City entered into a five-year Consulting Services Agreement with FRJ & Associates to administer the HIP. Partners Vivian and Bill Moss have consistently administered program in an exemplary manner. Their thorough knowledge of LACDA’s rules and regulations, combined with meticulous documentation of expenditures and services rendered has played a major role in Diamond Bar’s continued good standing with LACDA. Moreover, Vivian and Bill Moss have been more proactive than their predecessors in assisting applicants navigate the loan approval process, and moving projects through the funding and construction pipeline.
Following its execution of the City’s PLHA contracts this past August, LACDA notified the City that it must amend its Consulting Services agreement with FRJ & Associates to expressly authorize the consultant to process PLHA-funded loans. LACDA further required the City to post a 30-day notice of the proposed Consulting Services Agreement prior to placing the matter on the City Council agenda.
The City’s current agreement with FRJ & Associates is in effect through June 30, 2025.
Although there are some differences in how CDBG and PLHA-eligible expenses are documented, the HIP and CHIP loan approval processes are essentially the same, so it is logical to simply amend the current agreement with FRJ to authorize the consultant to process home improvement loans using either of the two funding sources.
LEGAL REVIEW:
The City Attorney has approved the First Amendment to the Agreement as to form.
PREPARED BY:
REVIEWED BY:
Attachments:
1. First Amendment to Consultant Services Agreement