February 6, 2025 Via Electronic Mail Timothy Rood, Community Development Director CITY OF HERCULES 111 Civic Drive Hercules, CA 94547 CONSULTING SERVICES PROPOSAL HOUSING ELEMENT PROGRAM IMPLEMENTATION Dear Mr. Rood: Thank you for inviting RSG, Inc. (“RSG”) to submit a proposal to assist the City of Hercules (“City”) with implementing Housing Element programs to implement meaningful actions related to Affirmatively Furthering Fair Housing (“AFFH”) and increasing the supply of affordable housing in the City. The following table presents a menu of options for implementing Housing Element programs with an estimated budget for completion. City staff identified particular items that require RSG’s assistance in bold. Depending on the options chosen, completion times may change based on staffing availability. Once the City has chosen the options they would like to undertake, a final timeline and budget will be developed.
Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 2
Housing Element Program 2023-2031 Metrics* RSG Role Housing Asset Fund Eligibility Review City Housing Element, County Consolidated Plan, and County Analysis of Impediments to Fair Housing RSG will begin the engagement by reviewing the Hercules Housing Element and Contra Costa County (“County”) Consolidated Plan (“Con Plan”) and Analysis of Impediments to Fair Housing (“AI/AFFH”) to ascertain where there is an opportunity to collaborate with the County on Housing Element Programs that overlap with countywide programs. n/a Review Housing Element Review Con Plan and AI/AFFH Develop collaborative resource list No
Given that many Housing Element programs require County collaboration and may already be implemented by the County, RSG will facilitate a meeting with appropriate County staff to discuss how the City and County can assist one another to increase outreach and program implementation in Hercules. After meeting, RSG will draft a Work Plan that memorializes how the City Meet with County housing / housing authority staff Create a work plan No
Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 3
Housing Element Program 2023-2031 Metrics* RSG Role Housing Asset Fund Eligibility and County will collaborate on overlapping programs. H4-2: Fair Housing Services Assist households through FHANC and ECHO Fair Housing, providing fair housing services and educational programs concerning fair housing issues. Refer fair housing complaints to ECHO and consider providing funding support. [emphasis on northwest Hercules where there is a larger proportion of renter-occupied households.] Annually refer 5 residents to fair housing services and programs offered by FHANC and ECHO.
Research FHANC and ECHO existing action and outreach activities. Coordinate to include Hercules.
No
Promote fair housing practices, including advertisements on the City’s website, and provide educational information on fair housing to the public.
Annually review and update fair housing information and brochures offered to the public, publish information in the Hercules Herald, and on City social media.
Research existing fair housing brochures and resources, publish on platforms identified in Housing Element.
No
3. H4-3: Affirmatively Furthering Fair Housing Promote awareness of federal, State, and local regulations through the City website, at local public centers, at City and at Council meetings yearly. Implement an accessibility policy that establishes standards and procedures for Conduct or participate in bi-annual developer convenings. Implement AI/AFFH by 2024 and multilingual strategy by 2025.
Review Con Plan and AI/AFFH. Coordinate with County on all current outreach to include Hercules. No Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 4
Housing Element Program 2023-2031 Metrics* RSG Role Housing Asset Fund Eligibility providing equal access to City services, ensures all applications are considered, reviewed, and approved without prejudice, and continue to implement the Analysis of Impediments to Fair Housing Choice and HUD Consolidated Plan. Lastly, ensure all community stakeholders are engaged by conducting public meetings at suitable times, in accessible places, and provide translation services as needed. Actively recruit residents from protected classes and underserved neighborhoods to participate on committees, such as the Council on Homelessness of Contra Costa County, to address homelessness and affordable housing needs. [emphasis on LMI areas along I-80 and Lupine Road] By 2027, bi-annually recruit residents to participate in regional committees to address homelessness and affordable housing needs with the goal of recruiting one resident every two years.
Review Con Plan and AI/AFFH. Coordinate with County on all current outreach to include Hercules. Review existing membership on Continuum of Care board, local non-profit boards. Coordinate with County and local boards to ensure recruitment takes place in low income areas in Hercules.
No
Develop presentations and/or materials that address the local need for affordable housing and more resilient neighborhoods.
By 2026, develop materials to address local need and utilize these materials on an ongoing basis. Record a webinar and develop other educational materials that demonstrate the need for affordable housing in Hercules based on local No
Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 5
Housing Element Program 2023-2031 Metrics* RSG Role Housing Asset Fund Eligibility demographics, available housing stock, and the local housing market. H1-1: First-Time Homebuyer Assistance Programs Support first-time low- and moderate-income home buyers by connecting them to the Down Payment Assistance program, encouraging application to the Federal Home Ownership Program.
Annually refer twelve households annually and track results. Research existing first-time homebuyer assistance program providers, request data regarding assistance to Hercules, collaborate with outreach to Hercules residents.
No
Publicize housing assistance programs and provide information on these programs on the City’s website and via social media, through flyers posted at City facilities, and via staff assistance at City Hall. [emphasis on LMI areas, tracts 3592.03 and 3591.04 along I-80 and Lupine Road] Annually refer twelve households annually and track results. Identify housing assistance programs available in the region and develop resources that can be posted on the platforms identified in the Housing Element.
No
Program H1-3: Section 8 Housing Choice Voucher Program Expand the location of participating voucher properties. Facilitate or support one voucher driven development project by 2031. Identify local, County, state, and federal funding opportunities that could facilitate development of a voucher-driven housing project.
No
Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 6
Housing Element Program 2023-2031 Metrics* RSG Role Housing Asset Fund Eligibility Continue to support the HCV section 8 program, promote HCV usage in higher resource areas, and work with the Contra Costa Housing Authority.
Annually work with the Contra Costa Housing Authority with the goal of increasing HCV use in the city by 10% (using 2023 as a baseline).
Review Con Plan and AI/AFFH. Coordinate with County Housing Authority to promote HCV usage in Hercules higher resource areas and promote HCV usage to protected/ vulnerable populations in Hercules.
Continue to support the HCV program, promote HCV usage to protected/vulnerable populations, and work with the Contra Costa Housing Authority to increase HCV use in Hercules. [emphasis on tract 3591.04 (Village Park/Forest Park)] No
As part of Program H4-4 (Outreach Plan), conduct outreach to landlords to expand participating voucher properties. [emphasis on tract 3591.04 (Village Park/Forest Park)] Conduct outreach to landlords with the goal of referring 5 residents in tract 3591.04 to the County HCV program annually.
Coordinate with County Housing Authority to ensure landlord outreach in Hercules and Village Park/Forest Park No
As part of Program H4-4 (Outreach Plan), conduct outreach and tenant/landlord education through community events and public forums regarding income discrimination and voucher programs. [emphasis on tract 3591.04 (Village Park/Forest Park)] No
Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 7
Housing Element Program 2023-2031 Metrics* RSG Role Housing Asset Fund Eligibility Program H2-3: Senior Housing Engage with stakeholders, including local senior advocacy groups, developers, and residents, to gather input and insights on the specific needs and preferences of the senior population in Hercules. [emphasis on southwest Hercules, tract 3592.04 and 3591.04, where populations of persons with disabilities and elderly populations are larger.] Facilitate the development of one senior housing project during the planning period. Review Con Plan and AI/AFFH. Coordinate with County to ensure outreach includes gathering insights on specific needs and preferences of the senior population in Hercules. Identify local, County, state, and federal funding opportunities that could facilitate development of a senior housing project.
Yes, if directly related to the expenditure of Housing Asset Funds Program H2-5: Alternative Housing Models Encourage the provision of innovative housing types that may be suitable for the community, including modular homes, middle housing types, community care facilities, supportive housing, and assisted living for seniors, through discussions with developers.
Facilitate the development of one Alternative Housing Model project during the planning period. Conduct annual outreach to developers.
Review Con Plan and AI/AFFH. Coordinate with County on annual developer outreach. Identify local, County, state, and federal funding opportunities that could facilitate development of one alternative housing model project.
Yes, if directly related to the expenditure of Housing Asset Funds Program H4-1: Housing for Persons with Special Needs Make available information from HomeMatch Contra Costa for their Promote information on HomeMatch Contra Costa County Research County HomeMatch program. Coordinate with County to No Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 8
Housing Element Program 2023-2031 Metrics* RSG Role Housing Asset Fund Eligibility services for older adults, including shared housing, extra income, or assistance with home maintenance. [emphasis on central and southwest Hercules, including tract 3591.04 (Village Park/Forest Park) with the goal of referring one resident to HomeMatch services annually. disseminate marketing materials and refer Hercules residents to HomeMatch services.
Program H4-5: Reasonable Accommodation Encourage developers of single family housing to incorporate universal design and track the number of newly constructed or rehabilitated dwelling units accessible to people with disabilities. The City will provide the address and number of units to Resources for Independent Living Sacramento for inclusion in their housing list for people with disabilities.
By 2026/2031, increase the number of units accessible to persons with disabilities by 5% of new multi-family during the planning period and advertise these units through Resources for Independent Living Sacramento for Solano and Contra Costa County.
RSG will rely on City Planning staff to track the number of newly constructed or rehabilitated dwelling units accessible to people with disabilities. RSG can compile a list of addresses and number of units to provide to Resources for Independent Living Sacramento on an annual basis.
No
AFFH: County HCV Listing Program Participate in the County- sponsored HCV Listing Program to advertise affordable housing opportunities in the city.
Annually assist County efforts to keep the HCV listing up to date with affordable housing opportunities in Hercules.
Provide a list of affordable housing opportunities in Hercules to the County Housing Authority. No Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 9
Housing Element Program 2023-2031 Metrics* RSG Role Housing Asset Fund Eligibility Program H1-2: Affordable Housing Partnerships and Funding Sources Increase affordable housing activities like construction, rehabilitation, and financial assistance to renters and owners. Provide loans and grants to maintain a high-quality affordable housing stock, and actively support efforts to secure additional affordable housing funding sources.
Facilitate the development of two affordable housing projects by 2031 with annual outreach. Identify local, County, state, and federal funding opportunities that could facilitate development of two affordable housing projects. Support City staff in facilitating discussions with Caltrans and BART about the possibility of developing affordable housing development on their Willow Ave sites [e.g. CalTrans site discussed in Chapter H6, pgs. 18-19]. Issue a Notice of Funding Availability for Housing Successor funds to facilitate development of two affordable housing projects with City staff, including senior housing, alternative housing models, and/or voucher-driven projects. See more a more detailed scope after this table.
Yes, if directly related to the expenditure of Housing Asset Funds No Yes Program H2-4: Accessory Dwelling Units (ADUs) Encourage ADU development by developing an ADU information packet, coordinate with Complete information packet by 2025; Support the development of 16 Collaborate with City staff to draft an ADU information packet No Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 10
Housing Element Program 2023-2031 Metrics* RSG Role Housing Asset Fund Eligibility neighboring jurisdictions to participate in educational opportunities, and monitor ADU permit applications and approvals. [emphasis on single-family neighborhoods (southern and eastern Hercules)] accessory dwelling units during the planning period. Contact neighboring jurisdictions to coordinate educational opportunities Collect data from City staff on annual ADU permit applications and approvals Program H1-4: Monitor and Preserve Affordable Housing and At-Risk Housing Utilize CDBG or other funds to provide financial assistance for minor repairs of homes owned and occupied by lower-income residents. [emphasis on eastern side of Hercules where housing units tend to be older.] Assist 16 lower-income households per year. Review Con Plan and AI/AFFH. Coordinate with County to promote use of CDBG funds to provide financial assistance for minor repairs of homes for lower-income residents in eastern Hercules.
No
Monitor affordable housing projects in the city and preserve all affordable units. Preserve affordability of all 485 below market-rate units in the city. Create a list of below market-rate housing units in Hercules and covenant terms. Conduct owner outreach to encourage extending affordability covenants. Provide list of local, County, state, and federal funding sources available to assist property owners with preservation.
Yes
Program H2-7: Replacement Housing Establish clear guidelines and criteria for determining the Create guidelines by 2025. Replace 100% of units as required by Draft Replacement Housing and Relocation guidelines to ensure No Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 11
Housing Element Program 2023-2031 Metrics* RSG Role Housing Asset Fund Eligibility affordability of replacement units based on the income levels of previous occupants and make this information available to stakeholders and developers.
Government Code section 66300(d) on an ongoing basis. compliance with the Housing Crisis Act of 2019 as codified in the Government Code. The guidelines will be a resource for development applicants and City staff. Implement monitoring and enforcement mechanisms to track The progress of affordable housing replacement within development projects.
Implement monitoring and enforcement by 2026. Coordinate with City staff to create a system to monitor and track enforcement of the Housing Crisis Act of 2019 when a housing unit is removed from the housing market.
No
*2023-2031 Metrics are taken from the Housing Element. RSG’s role is to help implement programs, not to guarantee that the metrics will be met. Meeting metrics will rely on factors such as third-party collaboration, available funding sources, and development opportunities in the local housing market.
Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 12
HOUSING SUCCESSOR NOFA Program H-1-2 in the above table includes an optional service to issue a Notice of Funding Availability (“NOFA”) for Housing Successor Low and Moderate Income Housing Asset Funds (“Housing Asset Funds”). This presents a more detailed scope of services for that task. RSG will consult City staff on the amount of Housing Asset Funds it would like to reserve for administration and other programs in order to determine the amount available for distribution to developers. RSG will then draft a NOFA requesting developer proposals to utilize Housing Asset Funds for affordable housing development that meets all legal requirements tied to such funds. RSG would review the responses to assist the City in selecting a qualified developer(s) and project(s). • Task 1: NOFA – RSG will draft a NOFA to help the City assess developer qualifications and detail selection criteria. Selection criteria may include, but is not limited to: o Expertise and experience of the development entity and team in designing and constructing high quality affordable housing projects; o Vision and design for a market-feasible affordable housing project that implements the City’s vision for the community and promotes the community character of Hercules; o Economic viability and financial strength of the proposed project, including marketability and feasibility; o Experience and ability to creatively negotiate an affordable housing agreement, or other appropriate development agreement, that provides the greatest return on investment to the City; and o Financial and organizational capacity of the team to successfully complete the project, including the ability to secure financing and leverage other funding sources to build the highest quality housing project. RSG will work with staff and legal counsel to further define selection criteria that meets the community’s goals. If desired, RSG could hold an informational conference call wherein interested developers can get an overview of the NOFA and ask questions prior to submitting a response. It is anticipated that this task will include 3 in-person meetings: 1) staff kick-off meeting to discuss the desired criteria, 2) meeting to review NOFA with staff, and 3) Council presentation and approval of NOFA. RSG would prepare any necessary staff reports or resolutions related to this task.
Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 13
• Task 2: Developer Selection - RSG can assist the City in evaluating NOFA responses. The budget estimate assumes review of up to four developer submittals and may vary depending on the depth of review required to meet the final NOFA criteria. RSG will prepare a preliminary checklist to guide the review process and ensure that “like comparisons” are made in terms of each proposal’s completeness and compliance with submission requirements. RSG will review and analyze pertinent data and materials provided in each developer submittal to evaluate the completeness of the proposal in accordance with the criteria and requirements identified in the NOFA. RSG’s detailed evaluation will include an analysis of estimated development costs for the proposed improvements based on third-party cost data obtained from Marshall & Swift Valuation Services, our internal database of comparable projects reviewing proposals for other clients throughout the State, as well as the “indirect” construction costs identified by each developer proposal. RSG would scrutinize the developer’s assumptions to ensure that the anticipated costs, revenues, and operating and replacement reserves are realistic and not over/understated. This would include a detailed look at developer fees and deferred fees. RSG will prepare a long-term cash flow to ensure that the prospective developer can remain solvent as an operator throughout the duration of the affordability period. RSG will recommend finalists to the City and can prepare questions to conduct developer interviews, if desired. RSG can participate in interviews with City staff to select a developer that best meets the needs of the community. RSG will work with staff and legal counsel to prepare and present developer submittals to the Council. It is anticipated that this task will include 2 in-person meetings: 1) developer interviews and 2) City Council developer selection meeting. • Task 3: Developer Negotiations and Agreement Preparation – This scope of services assumes that the City Attorney will be primarily responsible for the preparation of any ENAs, Developer Agreements, or Affordable Housing Agreements (AHA). RSG will assist in negotiating financial deal points to be included in any agreement between the selected developer and the City. To ensure consistency between agreed upon deal points and documents, RSG will review and provide comments on agreements prepared by legal counsel. If needed, we will assist the City in reviewing or evaluating any alternate or subsequent developer pro forma revisions (up to two revisions). RSG is available to participate in developer negotiation meetings related to the preparation of loan agreements and legal documents. Based on our experience, the number of required in-person meetings can vary significantly based on the complexity of the proposed deal and the relationship between the developer and the City. The cost estimate assumes up to two meetings for developer negotiations. RSG will attend the City Council Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 14
meeting approving the project and any related agreements. It is anticipated that this task will include 3 in-person meetings: 1) two developer negotiation meetings and 2) one City Council meeting to approve agreements. STAFFING This engagement would be led Jim Simon, Principal-in-Charge, and Suzy Kim, Director. Mr. Simon and Ms. Kim have intimate knowledge of Hercules by partnering with the City on affordable housing, property disposition, and successor agency activities for over ten years. Cindy Blot, Senior Associate, will assist with implementing this engagement. Ms. Blot has decades of experience in the housing field and has expertise in federally funded programs, including implementation of Consolidated Plans and addressing requirements related to Affirmatively Furthering Fair Housing. Additional staff may be assigned as needed. Resumes are available on our website at https://rsgsolutions.com/meet-our-team. Firm references may be provided upon request. FEE ESTIMATE RSG proposes to provide the tasks described in the Scope of Services on a time-and-materials basis. The estimated fee for all services outlined in this proposal is $187,985 for a term ending June 30, 2026. A smaller not-to-exceed fee may be negotiated to work on a smaller list of priority Initiatives selected by the City. The following table itemizes estimated budget by task. Note that several programs require collaboration with the County and are covered under Task 1.
Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 15
The following table provides a more detailed itemized budget for the Housing Successor NOFA, which is included in the total $187,985 budget estimate.
Scope of ServicesHercules Housing Element Implementation Housing Element Programs PrincipalDirectorSr. AssocAnalystTotal Hrs295$ 275$ 225$ 145$ #Con Plan / Analysis of Impediments Review 3 17 49 10 79 18,035$ Review Con Plan and other County documents and programs for common threads and efforts 2 12 10 24 4,700 Develop collaborative resource list 2 10 12 2,800 Meet with County Housing Staff 8 12 20 4,900 Create a Work Plan to implement multiple HE programs with County 3 5 15 23 5,635 #Fair Housing Outreach and Enforcement - 10 30 25 65 13,125$ FHANC and ECHO existing activity research and coordination1 5 5 11 2,125 Research existing fair housing resources to publish on local platforms 1 5 5 11 2,125 Identify opportunities to recruit residents on committees addressing homelessness 1 5 5 11 2,125 Webinar/Recorded PPT 5 10 5 20 4,350 Prepare fair housing informational materials 2 5 5 12 2,400 #Housing Mobility 24 171 226 117 538 121,920$ First-Time Homebuyer Program resources and outreach1 5 5 2,125 Housing assistance program resources and outreach 5 5 10 1,850 Identify funding opportunities for affordable housing development addressing multiple HE programs 5 5 10 2,100 Facilitate discussions with CalTrans and BART8 12 20 5,660 Housing Successor NOFA - See separate budget 16 149 217 98 480 108,730 Reasonable accommodation tracking 5 5 10 2,100 Maintain affordable housing list 4 4 8 1,480 # New Housing Opportunities in High Resource Areas2 7 14 31 54 10,160$ Outreach to Developers, Key Stakeholders - 4 4 6 14 2,870 ADU information packet and data tracking 2 2 5 10 19 3,715 Owner outreach for preservation 1 5 15 21 3,575 #Place-Based Strategies for Neighborhood Improvement- 2 5 10 17 3,125$ Minor home repair information packet and coordination 2 5 10 17 3,125 #Tenant Protections Against Anti-Displacement6 33 35 20 94 21,620$ Review existing programs 3 5 5 13 2,675 Create monitoring program for all affordable housing projects1 5 20 5 31 6,895 Housing Crisis Act Guidelines and Enforcement Mechanisms5 25 10 10 50 12,050 TOTAL 187,985$ Housing Successor Eligible 120,595$ Non-Housing Successor Eligible 67,390$ Task Hours & Billing Rate
Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 16
RSG would utilize billing rates as follows: Our fee is based upon an estimate of the number of hours needed for each task. If the Scope of Services is substantially changed in the future, RSG will notify the City and request a fee adjustment. Any revisions to the Scope of Services will be billed on a time-and-materials basis at RSG’s hourly rates. The services would be provided per the terms and conditions of a consulting services agreement by and between the City of Hercules and RSG. RSG does not charge clients for travel or mileage (except direct costs related to field work/surveys), parking, standard telephone/fax expenses, general postage, or incidental copies. However, we do charge for messenger services, overnight shipping/express mail costs, and teleconferencing services. We also charge for copies of reports, documents, notices, and support material in excess of five copies. We bill reimbursable costs at the actual expense plus a 10% surcharge.
NOFA & Developer Negotiations
Hercules Housing Successor
PrincipalDirector
Senior
AssociateAnalyst Total
Task 295$ 275$ 225$ 145$ Hrs Total Task 1 - NOFA/RFP 2 29 24 14 69 15,995$
Draft NOFA/RFP 1 4 15 10 30 6,220
Informational Call 4 0 0 4 1,100
NOFA/RFP Checklist 1 1 4 6 1,080
Meetings and Preparation (3 meetings)1 20 8 0 29 7,595
Task 2 - Developer Selection 3 59 135 64 261 56,765$
Developer Submittal Review (4) 35 115 60 210 44,200
Recommendation 2 8 16 4 30 6,970
Meetings and Preparation (2 meetings)1 16 4 0 21 5,595
Task 3 - Negotiations and Agreements11 61 58 20 150 35,970$ Deal Points 5 20 10 0 35 9,225
Agreement Review 5 20 10 0 35 9,225
Alternate Pro Formas (2) 5 30 20 55 11,025
Meetings and Preparation (3 meetings)1 16 8 0 25 6,495
Total 16 149 217 98 480 108,730$
Task Hours & Billing Rate
Principal $ 295 Director $ 275 Senior Associate $ 225 Associate $ 195 Senior Analyst $ 160 Analyst $ 145 Research Assistant Technician Clerical $ 135 $ 100 $ 60 Reimbursable Expenses Cost plus 10% Timothy Rood, Community Development Director CITY OF HERCULES February 6, 2025 Page 17
RSG issues monthly invoices payable upon receipt, unless otherwise agreed upon in advance. Invoices identify tasks completed to date, hours expended, and the hourly rate. If you have any questions, please do not hesitate to contact Suzy Kim at 714-316-2116. Sincerely, RSG, INC.
Jim Simon Principal