TO:Andrew P. Powers, City Manager
FROM:Ingrid Hardy, Assistant City Manager
DATE:January 16, 2024
SUBJECT: Navigation Center for Persons Experiencing Homelessness RECOMMENDATION:
1. Approve the following definitive agreements:
a. Ground Lease between the City of Thousand Oaks and Many Mansions b. Development Management Agreement between the City of Thousand Oaks and DignityMoves
c. Professional Services Agreement between City of Thousand Oaks and, jointly, Hope the Mission and Many Mansions
2. Authorize the City Manager to execute said agreements.
3. Approve expenditure in FY 2023-24 in the amount of $8,146,529 as follows: $7,756,418 from A/C #001-0960-644-5699 (HSNAVI, General Fund, Navigation Center) and $390,111 from A/C #631-5060-682-8300 (CI5714, Solid Waste Fund, Food Recovery and Storage Facility) for the construction of a navigation center and associated site improvements at 1205 Lawrence Drive, partially offset by state grant revenue in the amount of $4,112,158 and County share in the amount of $1,822,130.
4. Approve expenditure in FY 2024-25 in the amount of $1,171,373 from A/C #001-0960-644-5699 (HSNAVI, General Fund, Navigation Center) for the operation of the Navigation Center, partially offset by state grant revenue in the amount of $835,229 and County share in the amount of $168,072.
5. Approve budget appropriation in FY 2023-24 in the amount of $3,756,418 from A/C #001-0000-311-1000 (General Fund, Fund Balance) to A/C #001- 0960-644-5699 (HSNAVI, General Fund, Navigation Center).
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6 6. Approve budget appropriation in FY 2023-24 in the amount of $1,822,130 from A/C #001-0000-437-0000 (HSNAVI, General Fund Revenue from County) to A/C #001-0000-311-1000 (General Fund, Fund Balance).
7. Approve budget appropriation in FY 2024-25 in the amount of $171,373 from A/C #001-0000-311-1000 (General Fund, Fund Balance) to A/C #001- 0960-644-5699 (HSNAVI, General Fund, Navigation Center).
8. Approve budget appropriation in FY 2024-25 in the amount of $168,072 from A/C #001-0000-437-0000 (HSNAVI, General Fund Revenue from County) to A/C #001-0000-311-1000 (General Fund, Fund Balance).
9. Find that the approval of the definitive agreements are not a project and otherwise statutorily exempt under California Government Code Section 65660(b) (Low Barrier Navigation Centers Use by Right); in addition the City’s Planning Commission considered the Special Use Permit (SUP) 2023-70013 on October 23, 2023 and found the construction of the Navigation Center exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15332 of the CEQA Guidelines.
FINANCIAL IMPACT:
$3,756,418 Increase to the Adopted FY 2023-24 General Fund Budget, Partially Offset by $1,822,130 Increase to Adopted FY 2023-24 General Fund Revenue Budget. $171,373 Increase to the Adopted FY 2024-25 General Fund Budget, Partially Offset by $168,072 Increase to Adopted FY 2024-25 General Fund Revenue Budget. For FY 2023-24, a $3,756,418 increase to the Adopted General Fund Budget is required for the construction of the Navigation Center. $4,000,000 was included in the adopted budget. The total construction cost is being funded as follows: $4,112,158 from Encampment Resolution Funding (ERF) Grant, $1,822,130 from the County of Ventura, and $1,822,130 from the City. For FY 2024-25, a $171,373 increase to the Adopted General Fund Budget is required for the operations of the Navigation Center. $1,000,000 was included in the adopted budget. The operating costs for the first year is being funded as follows: $835,229 from ERF Grant, $168,072 from the County of Ventura, and $168,072 from the City. The City and County of Ventura previously entered into a cost-sharing agreement in which the County of Ventura will split construction costs with the City 50/50 up to $2.0 million and operating costs 50/50. The budget for future operating costs will be included in the upcoming and future biennial budget processes.
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6 BACKGROUND:
In recent years, the combined efforts of the former City Council Ad Hoc Homelessness Committee, City staff, Thousand Oaks Police Department (TOPD), Ventura County Continuum of Care (CoC), local social service organizations, and other government agencies have helped to increase awareness, secure funding, respond to citizen complaints and calls for service, and increase communication amongst all agencies and organizations addressing homelessness. Still, the City’s efforts to comprehensively serve its growing number of unhoused residents and respond to related community concerns remain challenged by an enduring need for emergency shelter (or more precisely, interim housing with housing navigation services) and more permanent supportive housing. Interim and permanent supportive housing are fundamental elements of an effective Homelessness Crisis Response System. The addition of housing options within the City for our unhoused residents continues to be a top priority for City Council.
On September 27, 2022, City Council authorized staff to issue a Request for Proposals/Qualifications (RFP/Q) for the construction and operation of a Navigation Center at 1205 Lawrence Drive. City staff issued the RFP/Q on October 7, 2022. On December 6, 2022, City Council unanimously approved staff’s recommendation to select Many Mansions, Hope of the Valley Rescue Mission (now Hope the Mission), and DignityMoves (“Proposer”) to develop, lease, and operate a Navigation Center and directed staff to develop an Exclusive Negotiations Agreement (ENA).
On February 28, 2023, City Council authorized the ENA, approved staff to work with the County and the Proposer to submit a grant application to the State of California for the ERF grant program, and authorized the City Manager to execute a cost-sharing agreement with the County of Ventura to provide additional financial support for year-round shelter for individuals experiencing homeless. In August 2023, the City was awarded $5.8 million ERF grant to support the project.
The Navigation Center has two proposed phases. The first phase will provide 30 beds and the second phase will provide an additional 20 beds, for a total of 50. On October 23, 2023, the Planning Commission unanimously approved a Special Use Permit (SUP) (Attachment #1) for the construction and operation of a navigation center, support facilities, supportive services, and associated improvements at 1205 Lawrence Drive. Planning Commission approval of the SUP was required for this proposed project as emergency shelters are not permitted by right in the City’s M-1 zone. The SUP outlines conditions of approval of this proposed use at this location within the M-1 zone. These conditions of approval provide the foundation for more detailed agreements between the City and Proposer.
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6 DISCUSSION/ANALYSIS:
Ground Lease and Associated Agreements
The development and ongoing operation of the Navigation Center on City-owned land requires clear roles, responsibilities, and expectations. As such, the City and its partners have developed a series of agreements to ensure timely development, accountability and effective operation of the facility. Below is a summary of companion documents, which consist of the following: Ground Lease (Attachment #2); Development Management Agreement (Attachment #3); Management, Operations, and Public Safety Policies and Procedures (Exhibit F of Ground Lease, and Exhibit B of Professional Services Agreement) and 4)]; and Professional Services Agreement (Attachment #4).
Ground Lease
The proposed Ground Lease serves as a primary agreement defining the intended use of City property under the Lease. It identifies the parties to be involved in the development and operation of the Navigation Center and outlines general roles and responsibilities for each party. Under the Ground Lease, the City (Landlord) and Many Mansions (sole Tenant) agree that DignityMoves (Developer) will develop the site in accordance with specifications outlined in a separate document referred to as the Development Management Agreement. Once developed, Hope the Mission (Operator) is to operate the facility and provide specific services to participants. Many Mansions will remain the sole Tenant through the development and operation phases of the project, ensuring that development and operation of the facility are conducted in accordance with the Lease.
A few key provisions of the lease are that Many Mansions is to manage the property with Hope the Mission as the operator. Together, they are providing low- barrier, service-enriched shelter focused on moving people into permanent housing. The initial term of the lease is fifteen (15) years. Services are restricted to “Eligible Program Participants” as further defined in the lease and exhibits. The lease also details general standards of maintenance of the center that must be complied with for the term of the lease.
Development Management Agreement
The Development Management Agreement (DMA) is a companion document to the Ground Lease. The purpose of the DMA is to provide for the terms and conditions of the acquisition, construction, and completion of the project improvements, in accordance with the Improvement Plan and all other terms and conditions of the Ground Lease. The DMA reiterates the intent, purpose, and Navigation Center for Persons Experiencing Homelessness January 16, 2024
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6 scope of the project, the Development Budget, and includes construction timeline expectations, responsibilities for DignityMoves in managing the contractors and subcontractors on the job, and the various rights the parties have in performing their respective obligations.
Professional Services Agreement (PSA)
The Professional Services Agreement (PSA) is an agreement between the City and jointly, Hope the Mission and Many Mansions. The PSA specifies and formalizes site-specific expectations in accordance with the Policies and Procedures and Scope of Services for the site.
The baseline services to be provided at the Navigation Center are outlined in the Professional Services Agreement (Attachment #4) and the Policies and Procedures exhibits to the Professional Services Agreement and the Ground Lease (Attachment 2). In general, these services incorporate a combination of basic need services, as well as supportive services aimed at creating pathways into housing and self-sufficiency. Examples include, but are not limited to, housing navigation, case management, behavioral health, security, meals, laundry, transportation, life skills, employment/job placement, and substances use treatment. The services will be provided directly by Hope the Mission or through service provider partnership arrangements. Each participant will be individually assessed for the type of services needed.
Management, Operations, and Public Safety Policies and Procedures (Policies and Procedures)
The Management, Operations, and Public Safety and Procedures (Policies and Procedures) is a County of Ventura Continuum of Care (CoC) document which describes the expectations, roles, and responsibilities with respect to site management and operations of the year-round Navigation Center. This document reflects federal, state, and local requirements and best practices to maintain a safe and healthy environment for participants and the community at-large. These Policies and Procedures also align with federal Housing and Urban Development (HUD) and CoC standards, while simultaneously considering the City’s unique conditions and needs with respect to our unhoused population. The document describes baseline hours of operation, access-related items, scope of on-site services to be provided, broader community engagement and coordination expectations, and the like. Many Mansions and Hope the Mission must operate the center consistent with the Policies and Procedures.
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6 Project Costs and Site Requirements
The initial estimated project construction budget proposal in 2022 was $3.7 million for base design and construction costs (with an additional $0.2 million in optional add-ons/upgrades) for phase one, and an additional $1.4 million to cover costs of an anticipated expansion for phase two. Initial annual operating costs were proposed to be $0.8 million for 30 beds and $1.0 million for 50 beds.
Construction and operating costs for interim housing facilities have increased since the initial estimated construction budget proposal. Many factors have contributed to these cost increases, including inflation and its impact on costs of construction materials, basic facility equipment, furnishings, and other supplies. Construction and operations-related labor costs have also grown. The single most significant factor contributing to substantial cost increases are the required updated life-and safety-related standards (e.g., fire prevention and mitigation), and adjustments to plans to satisfy these requirements.
As a result, updated cost estimates for the proposed Navigation Center at 1205 Lawrence Drive for base design and construction for phase one is $7.8 million with an additional $0.3 million for costs associated with, and being charged to, CI5714 Food Recovery and Storage Facility to be located at the back of the site and estimated to go before City Council later this Spring. Phase two is budgeted at an additional $1.5 million to cover an expansion from 30 beds to 50 beds. It is important to note the construction cost estimate includes preparation of undeveloped land requiring the installation of a roadway to access the entirety of the site and utility infrastructure (including water, stormwater, sewer, electric, gas, and data lines) Preparation of the site with these improvements during the first phase of the project will ultimately provide a cost savings and avoid service interruptions at the site in the longer-term.
Estimated annual operating costs for 30 beds are just under $1.2 million. This cost increase is largely due to recent increases in wages emerging from inflationary pressures and a tight labor market. Cost savings options regarding staffing are limited as federal and state grant programs require specific staffing ratios and specializations to qualify for grant programs that provide valuable financial support.
Food cost increases and security cost increases have also contributed to the overall increase in the annual operating budget. However, economies of scale cost savings can be realized by bringing the 20-bed expansion online in the future.
It is worth noting that the City has worked closely with our County partners to leverage additional funding opportunities and reduce the financial cost of this project carried at the local level. As a result, the City and County successfully sought and was awarded a $5.8 million state ERF grant to help with construction and operating costs. Secondly, the City and County entered into a cost sharing Navigation Center for Persons Experiencing Homelessness January 16, 2024
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6 agreement to match the City’s contribution to remaining construction costs up to $2.0 million as well as split operations costs 50/50. The City has full control over the ERF grant funding and the development management agreement specifies how monthly progress payments will be made to DignityMoves.
Despite increased estimated construction and operating costs, the 1205 Lawrence Drive location remains the most appropriate and cost-effective location to accommodate a Navigation Center in Thousand Oaks. City-ownership of the property provides a substantial cost savings to the City by eliminating acquisition costs. Other properties previously evaluated required substantial acquisition costs, were unfavorably close to existing residential neighborhoods, involved significantly higher infrastructure costs, interfered with other City operations, required use agreements with other state agencies, and/or risked displacement of current businesses.
Next steps
If City Council authorizes the execution of the three agreements, staff will continue to work with the DignityMoves as they continue to refine and submit the appropriate construction documentation and seek the necessary permits. As noted above, the Proposer’s SUP was approved by the Planning Commission in October 23, 2023, and as part of that entitlement, the contractors and subcontractors hired by DignityMoves will need to adhere to the conditions for the construction of the site.
The Proposer will engage the community over the course of the project, including coordination with local nonprofit organizations and the Thousand Oaks Police Department, to promote a good understanding of the facility and its operations.
Currently, DignityMoves anticipates construction could begin in March 2024 with a goal to complete construction by Fall 2024. Many Mansions and Hope the Mission will continue to engage with DignityMoves, the City, TOPD, County CoC, and the community during the construction phase of the project to educate and prepare for the occupancy and program implementation phases of the project.
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goals:
A. Create a more equitable, accessible, safe, welcoming, and inclusive government and community regardless of race, color, ethnicity, religion, sex, physical or mental ability, sexual orientation, gender identity and expression, age, language, education, and/or socio-economic status.
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6 B. Provide municipal government leadership which is open and responsive to residents, and is characterized by ethical behavior, stability, promoting public trust, transparency, confidence in the future, and cooperative interaction among civic leaders, residents, business representatives, and staff, while recognizing and respecting legitimate differences of opinion on critical issues facing the City.
C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.
D. Maintain strong commitment to public safety (including Police, Fire, Emergency Medical Services, and Emergency Management) to ensure City remains one of the safest Cities in the United States with a population over 100,000.
PREPARED BY: Dusty Russell, Economic Development Analyst Attachments:
Attachment #1 – October 23, 2023, Planning Commission Staff Report, Navigation Center Special Use Permit 2023-70013
Attachment #2 – Ground Lease
Attachment #3 – Development Management Agreement (DMA)
Attachment #4 – Professional Services Agreement (PSA)
CMO:120-40\H:COMMON\Council Items\2024 Staff Reports\01 16 24\011624 Navigation Center for Persons Experiencing Homelessness Staff Report