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CITY COUNCIL AGENDA ITEM NO. 5

Meeting Date: November 8, 2005

Subject/Title: Adopt a Resolution of the City of Brentwood approving a Professional Services Agreement with Select 1 Realty to provide property management services for the City’s Affordable Housing rental units and authorizing the City Manager to enter into said agreement.

Prepared by: Ellen Bonneville, Housing Manager

Submitted by: Howard Sword, Director of Community Development

RECOMMENDATION
Approve the adoption of the Resolution of the City Council of the City of Brentwood approving a Professional Services Agreement with Select 1 Realty to provide property management services for the City’s Affordable Housing rental units and authorizing the City Manager to enter into said agreement.

PREVIOUS ACTION
On December 14, 2004, the City Council approved and waived first reading of Ordinance 790 amending Chapter 17.725 of the Municipal Code amending the citywide affordable housing program.

On June 14, 1005 the City Council approved Resolution NO. 2005-143 adopting the 2005/06-1006/07 Operating Budget for the City of Brentwood.

BACKGROUND
Section 17.725.004 (D) of the City of Brentwood Municipal Code provides that developers may dedicate constructed or converted on-site or off-site affordable Dwelling Units to the City’s rental housing program to satisfy the requirements of Ordinance 790 (the Affordable Housing Program). Each unit dedicated to the City shall equate to the construction of two Affordable Units and each unit dedicated under the new Ordinance must be in “turn key” condition.

Currently the City has entered into twelve affordable housing agreements with developers. Several of these agreements include the requirement to dedicate units to the City’s affordable housing rental program. The City now has ownership of four rental units and we anticipate receiving another four units during the 2005/06 fiscal year.

Staff issued a Request for Proposals for a property management firm in June of 2005 with a response date of July 1, 2005. Staff received three proposals in July and interviewed all three property management firms in August of 2005. The interview panel was comprised of the Housing Manager, Sr. Housing Analyst and Accounting Manager and they determined that the most qualified firm responding to the RFP was Select 1 Realty located in Antioch, CA.

The Housing staff, City Attorney and Accounting Manager have been in discussions and negotiations with Select 1 Realty to insure that this firm will provide the property management services necessary to accommodate the City’s needs as it relates to these rental units. Select 1 Realty will act on behalf of the City to administer the rental portion of the affordable housing program.

The Professional Services Agreement includes provisions for the following services:

• Renting the properties – the consultant will procure qualified tenants (as defined in Ordinance 790) and shall prepare and execute all leases, including all renewals and extension of leases and to cancel or modify existing leases provided that the form of any lease is approved by the City Attorney. All leases shall be on a month-to-month basis.
• Consultant shall design a marketing and leasing program for the units and shall screen all applicants in accordance with the provisions required by the City.
• All units shall be rented to persons at or below 120% of the Contra Costa County median income and all rents shall be determined by the City as set forth in Ordinance 790. (Current monthly rent for a three-bedroom unit for low income household is $1066 per month.) City shall also determine all fees and amounts of all security deposits. (City is requesting a security deposit in the amount equal to two months’ rent as recommended by the property management firm as this is the common practice.)
• Consultant shall prepare and deliver to the renters a copy of the lease that shall include the consultant’s contact information as the person who is authorized to act for and on behalf of the City.
• Consultant shall take all such actions as allowed by law to collect the rents and enforce all rights and remedies of the City under the leases or to protect the interests of the City, including the preparation and delivery to the tenants of all “late payment”, default and other appropriate notices, requests, bills, demands and statements.
• Consultant shall also provide eviction services. However, consultant shall not pursue legal action or eviction against a tenant without the prior written approval of the City. In the event a Jury trial becomes necessary, City shall hire its own attorney.
• Consultant shall act as the primary tenant contact. Consultant shall receive and respond to all tenant complaints and shall attempt to resolve and settle such complaints. Consultant shall also coordinate the moving in and moving out of the tenants from the property.
• Consultant shall identify and, with prior written approval of the City, enter into contract with architects, engineers, accountants, attorneys, tradesmen and other independent contractors to perform the services for the rental units.
• Consultant shall, at City’s expense, purchase all maintenance, janitorial, equipment and tools necessary for the proper and efficient operation and management of the property consistent with the City’s budget. These items will be owned by the City. Any single expenditure over $500 shall require the City’s prior written approval.
• Consultant shall enter into service and maintenance contracts for the purpose of servicing the properties such as those for telephone service, window cleaning, landscape maintenance, rubbish removal, security and vermin extermination.
• Consultant shall make repairs to the property and all equipment and systems located in or servicing the properties.
• City (at some future time) shall provide the consultant suitable rent-free space for use as a local office together with furniture and furnishings.

The consultant shall within three business days after the execution of this agreement, open a commercial checking account at the Bank of Agriculture. This property account will be in the name of the consultant but shall be designated as a trust account in favor of the City. All expenses for the properties paid by the consultant shall be paid from this account except that the consultant shall have the right to maintain petty cash funds in an amount not to exceed $200.00.

The consultant shall provide full financial services and maintain all records and accounts as required by the City. They shall also provide all required affordable housing reports and income certifications and recertification’s as required by the City on an annual basis. The consultant shall prepare a monthly report setting forth detailed statements of collections, disbursements, delinquencies, uncollectible accounts, balances of accounts payable and other matters relating to the management and operation of the properties. The City shall always have the right to audit or examine any of the accounts or records of the consultants as pertains to the City’s rental units.

The cost of the consultant services shall be based upon a percentage of the rent collected. Therefore, there is no “not to exceed” amount reflected in the Resolution or the Professional Services Agreement. The services are on an “as-needed”, per unit basis. The City shall pay a 7% leasing fee based upon the amount of rent collected on an annual basis and an 8% management fee (based upon amount of annual rent collected) for the services provided under this agreement. In addition to the compensation set forth above, Consultant shall receive a fee for the supervision of all authorized repairs provided by contractors other than work performed by maintenance employees of Consultant. Fees shall be ten percent (10%) of authorized repairs in excess of $100.00. For a fee of $8.00 per month per unit, Consultant will pay all eviction costs, service fees, attorney fees and Court costs, excluding costs for Jury trial.

FISCAL IMPACT
All the expenditures under the Professional Services Agreement shall be paid from the revenue stream generated by the rental units. There will be no impact to the General Fund. The budget attached to the Professional Services Agreement shows a net income after expenses to the Housing Rental Fund of approximately $16,000 during FY 2005/06. During FY 2006/07 the budget shows a net income after expenses to the Housing Rental Fund of approximately $82,000.

Attachments
Resolution
Professional Services Agreement

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING A PROFESSIONAL SERVICES AGREEMENT WITH SELECT 1 REALTY TO PROVIDE PROPERTY MANAGEMENT SERVICES FOR THE CITY’S AFFORDABLE HOUSING RENTAL UNITS AND AUTHORIZING THE CITY MANAGER TO ENTER INTO SAID AGREEMENT

WHEREAS, on January 11, 2005, the City Council adopted Ordinance 790, an Ordinance of the City Council of the City of Brentwood approving an amendment to the Municipal Code Chapter 17.725 that establishing an Affordable Housing Program; and

WHEREAS, Ordinance 790 requires that developers may dedicate constructed or converted on-site or off-site affordable Dwelling Units to the City’s rental housing program to satisfy the requirements of the Ordinance; and

WHEREAS, staff issued a Request for Proposals to qualified property management firms to manage these rental units; and

WHEREAS, staff interviewed the three firms who submitted a proposal and selected Select 1 Realty as the most qualified firm to provide property management services;

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood does hereby approve an Affordable Housing Agreement with Amber Park, LLC for Subdivision 8470 and the Mayor or the City Manager and City Clerk or any of their designees are authorized to execute the agreement and such other documents as may be needed to complete the transaction including acceptance of the Deed.
NOW, THEREFORE BE IT FURTHER RESOLVED, that the City of BrentwoodCouncil of the City of Brentwood does hereby accepts the real property described in the Grant Deed.approve a Professional Services Agreement with Select 1 Realty to provide property management services for the City’s affordable housing rental units and further authorizes the City Manager to enter into said agreement.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 8th day of November, 2005 by the following vote
 

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