City of Gonzales
CITY MANAGER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: April 3, 2023
FROM: Trevin Barber, City Manager
THROUGH: Trevin W. Barber, City Manager
SUBJECT: Award Contracts To: Keyser Marston Associates Inc.; Willdan Financial Services; and Harris and Associates Inc., to Provide Financial Feasibility Services for Various Development Projects, on an As-Needed Basis. (Cost: on an Hourly Not-To-Exceed Basis Based on Developer Reimbursement)
RECOMMENDATION
It is recommended that the Council:
• Award a contract for financial feasibility services to Keyser Marston Associates, Inc., on an hourly not-to-exceed basis based on developer reimbursement, for a total performance period of up to three (3) years;
• Award a contract for financial feasibility services Willdan Financial Services, on an hourly notto-exceed basis based on developer reimbursement, for a total performance period of up to three (3) years;
• Award a contract for financial feasibility services Harris & Associates Inc., on an hourly not-toexceed basis based on developer reimbursement, for a total performance period of up to three (3) years;
• Authorize the City Manager, or his designees, to execute the contracts referenced above, and make minor modifications as appropriate thereto, on behalf of the City; and Authorize the City Manager, or his designees, to exercise option year terms and sign the option year amendments.
BACKGROUND
The Community and Economic Development Department anticipates further development of affordable housing, specifically via the D.R. Horton project. To facilitate high-quality development, the Department seeks to utilize specialists in various economic and fiscal disciplines to assist with project feasibility and AGENDA
ITEM
7 analysis. The availability of on-call firms would provide for streamlining of future development projects in areas of affordable housing assistance, real estate transaction and property disposition.
A Request for Proposals (RFP) process was undertaken from qualified firms with demonstrated skills and experience to provide financial feasibility consulting in areas of pro forma analysis, project feasibility analyses, and other miscellaneous economic financial analyses, on an as-needed basis. The RFP was advertised on March 7, 2023, and three (3) formal proposals were received: Keyser Marston Associates Inc.; Wilden Financial Services; and Harris and Associates Inc. An internal selection panel completed an evaluation and rated the proposals on the basis of qualifications, proposal quality, budget, time management, and prior record of performance with other Governmental Agencies.
REVIEW AND ANALYSIS
Based on the evaluation results, staff determined three (3) separate and overlapping technical expertise offered by each respective firm. Keyser Marston Associates, Inc. offers an extensive expertise in affordable housing analysis, including policy and financial feasibility analyses; Willdan , Inc. is a leader in real estate and economic development analysis including fiscal and economic impact studies related to development and re-organization, the financing of infrastructure and services through special district or supplemental taxes; and Harris & Associates Inc. offers planning, development feasibility, economic analysis and housing services.
City reference checks for each respective firm confirmed positive results in fiscal analysis services with previous and current client agencies. Further, the City has previous experience with Harris and Associates as well as Willdan. Most recently, Willdan, one of the proposal applicants, provided financial feasibility analysis in determining fiscal impact for the various annexations on the east side of the City.
To date, the Department has several opportunity sites for commercial development and affordable housing projects currently in preliminary feasibility stages of due diligence in which comprehensive economic analysis may be required. Specifically, the City is currently engaged in preliminary negotiations with DR Horton for development of a site on the east side of town. This project would permit 680 units that includes 70 multi-family units. The housing developer has expressed concerns for economic uncertainty—the City would like to conduct a feasibility analysis to understand the market potential for affordable housing, and/or sweat equity and shared labor, in this development project. Therefore, it is recommended that the three (3) economic consulting firms identified above be selected and awarded contracts for financial feasibility services on an as-needed-basis.
Explain Recommendation and How it Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.
Explain: The City continues to be challenged with building enough affordable housing for our residents and families. Further, affordable housing construction costs continues to increase. In order to ensure that limited resources are being allocated towards projects that have optimal chance of success it is necessary to conduct technical and specialized feasibility studies. Having an expert consultant advise the City on the economics of different types of affordable developments will help the City work with local partners, the community, and housing developers on identifying a best-fit project that supports the City’s Vision.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment, and resources necessary to provide excellent services that enhance the quality of life of our diverse community.
Explain: Please see Vision above. By shepherding technical studies into our policy discussions the City can support well documented best practices for supporting specific affordable housing developments in Gonzales. Providing a variety of housing options, not just market-rate, will enhancing the quality of life for our diverse community.
City services will be delivered in a cost-effective, respectful, and friendly manner to ensure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner.
Explain: A feasibility study would provide technical details for the City to understand how best to support affordable housing, given the need to balance other priorities.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: Please see Mission above.
ALTERNATIVES
1. The City Council may, in its discretion, reject any proposals presented and then direct staff to:
(a) abandon the work effort for affordable homes in the D.R. Horton Project, or (b) direct staff to re-advertise for proposals.
BUDGET IMPACT
There is no anticipated impact to the General Fund. Each contract will be established for a one (1) year period with options to extend annually for a maximum performance period of up three (3) years in a notto-exceed hourly basis. Funding will be provided by a combination of the City’s Community affordable housing funds (IEFD) and/or reimbursements from developers.
Attachments:
1. Financial Feasibility RFP
2. Agreement wih Keyser Marston Associates
3. Agreement with Willdan Financial Services
4. Agreement with Harris & Associates