EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: Rachel Horst, Housing Project Manager
SUBJECT: Amendment of Agreement with David Rosen & Associates for Financial Analysis Related to Housing
Recommendation
Adopt a Resolution (Attachment 1):
1. Appropriating $40,000 from the following Funds: Housing Successor (F220), Measure HH (F219), and General Fund (010); and
2. Authorizing the City Manager to execute an amendment to the Professional Services Agreement (“Agreement”) with David Rosen & Associates that increases the not-toexceed amount to $165,000 and allows for an additional one-year extension of the contract term with approval of the City Manager.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Priority No. 6: Create a Healthy and Safe Community
Background
Professional Services Agreement with David Rosen & Associates On February 5, 2019, the City Council adopted Resolution No. 5081 (Attachment 2), authorizing the City Manager to execute a Professional Services Agreement (“Agreement”) with David Rosen & Associates (“DRA”) in an amount not to exceed $125,000. DRA was selected as one of three firms through a Request for Qualifications (“RFQ”) process for financial consulting services related to the City’s affordable housing and development activities.
The general scope of work for these agreements is provided in Exhibit A to Resolution No. 5081. The term of the three-year Agreement with DRA ends on February 4, 2022, with an option to extend contract term by one year with the approval of the City Manager, as described in Exhibit A.
East Palo Alto Opportunity to Purchase Act Ordinance Analysis At the December 22, 2021 public hearing on an Opportunity to Purchase Act Ordinance (“EPA OPA”), DRA staff were present to address general questions about real estate trends and potential impacts of an EPA OPA. At this meeting, the City Council directed staff to engage DRA for a formal analysis and to return with an updated draft Ordinance at the January 18, 2022 City Council meeting.
Analysis of Affordable Housing Revenue Options
At the City Council Priority-Setting Session on January 8, 2022, the City Council directed staff to return in late February or early March with revenue options to support affordable housing.
DRA had previously developed a comprehensive study of revenue sources for the City, which staff presented to City Council in February 2020.
There are sufficient funds remaining under the Agreement to support completion of these tasks. However, with the addition of an EPA OPA analysis and an updated study of potential affordable housing revenue sources, this will exhaust and exceed the total amount of $125,000.
The purpose of this staff report is to seek City Council authorization to extend the term by one year and increase the maximum amount in the Agreement by $40,000 total to 1.) support an EPA OPA analysis and 2.) an affordable housing revenue sources analysis, thereby preserving sufficient funds for other DRA consulting services under the Agreement through the end of the contract term.
Analysis
DRA Work to Date
The scope of work proposed by DRA for an EPA OPA analysis, totaling $20,000, is provided as Attachment 3. This work falls within the service categories described in Exhibit A to No. 5081.
The table below describes the work performed by DRA to date and currently in progress under the Agreement, with the amount remaining prior to and after all proposed work is completed.
With $49,553 remaining under this Agreement, there are sufficient funds to support additional activities through the contract term. After completion of an EPA OPA analysis, however, there would be an estimated $9,000 remaining in the contract. An additional revenue study may not be covered by the amount remaining.
Staff therefore recommend amending the Agreement to increase the total by $40,000 to retain funds for other activities intended under the Agreement.
DRA Work Performed under Current Agreement & Proposed Activities Activity Timeframe Amount
Update of Housing Impact
Fees
March 2019 $4,230
Challenge Grant Application June-July 2019 $5,437
Technical Assistance
Inclusionary Housing In-Lieu
Fee Study
July-December 2019 $26,823
Affordable Housing Revenue
Sources
December 2019-January
2020
$18,667
Amount Remaining $49,553
ADU Inclusionary Housing
Alternative Compliance
Option Analysis
In Progress $20,000
EPA OPA Analysis Proposed $20,000
Affordable Housing Revenue
Sources Update
Proposed $20,000
Amount Remaining after
Proposed Activities
($10,447)
Next Steps
If approved, the City Manager will execute the contract amendment with DRA to increase the not-to-exceed amount to $165,000 and extend the contract term to February 4, 2023, in addition to a one-year extension option at the discretion of the City Manager.
Fiscal Impact
Tasks performed under the Agreement are currently funded by a combination of funds from Measure HH (F219), Housing Successor (F220), and the General Fund. An increase of $40,000 will require appropriation from one or more of these funds. Staff recommend utilizing a combination of these same funds for the increased amount, with a minimum of $20,000 from the Housing Successor Fund.
Public Notice
The public was provided notice by making the agenda and report available on the City’s website and at the San Mateo Co. Library located at 2415 University Avenue, East Palo Alto.
Environmental
The action being considered does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.
Attachments
1. Resolution
2. Resolution 5081
3. David Rosen & Associates Scope of Work for EPA OPA Analysis