2011-08-17 (Report) (2)
HOUSING AUTHORITY OF
CITY OF ENCINITAS
AGENDA REPORT
Meeting Date: August 17, 2011
TO:Chairperson and Board of Commissioners
VIA: Gus Vina, Executive Director
Jennifer Smith, Treasurer
FROM: Patrick Murphy, Planning & Building Director
Ron Barefield, Housing Administrator
SUBJECT:
Authorization for the Executive Director to amend the Professional Services
contract with Hunter Properties in an amount not to exceed $60,000 for two years
of management and maintenance of sixteen Housing Authority-owned
condominium units at Pacific Pines.
BACKGROUND:
In 2003, the Housing Authority of City of Encinitas acquired sixteen condominium units at the
Pacific Pines complex located on South El Camino Real for the purpose of providing affordable
rental housing to tenants qualified under the Section 8 Housing Choice Voucher Program (HCV)
and HOME Investment Partnership Act (HOME) programs. The HCV and HOME programs
provide rental assistance to lower income households through federal funding.
Hunter Properties has managed the Housing Authority’s Pacific Pines units for several years. Over
the last three years, Hunter Properties has managed the units under a contract executed in 2008. The
contract provided for an initial one year term with two one-year renewals for a maximum agreement
period of three years. Prior to the award of the most recent contract, staff solicited qualifications
from local property management firms though a request for proposals to acquire the most qualified,
cost-efficient property management firm for the Housing Authority and the best services available
to the residents of Pacific Pines.
ANALYSIS
:
The primary purpose of selecting a property management firm for the Pacific Pines units is to
provide a high standard of living for tenants residing in the Housing Authority-owned units, while
sustaining cost-effective property management for the Housing Authority.
Hunter Properties (Hunter) is a locally owned small business. The business has provided
property management services to property owners in North County since 1970, and specializes in
managing small properties (1-20 units) and mobilehome parks. Hunter provides a full range of
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property management services. Operating costs, such as maintenance, and legal services, are
provided by outside services and are provided “at cost” to the Housing Authority. The current
management fee is $1,400 per month with a fee of $200 per new lease. Not including the
homeowner association’s fee, the FY2010-11 operational cost of the Pacific Pines units was
approximately $26,000. The homeowner association’s fee was approximately $48,000.
Historically, the tenancy of the Housing Authority-owned units has been very stable. All costs
are offset by rental income of the units.
Typically, the Housing Authority “tests” the market every three to five years to ascertain if the
needed services are being provided in a cost efficient manner by soliciting proposals for those
services. As noted, Hunter Properties has been performing management and maintenance
services for the Housing Authority-owned units over the last three years in a professional and
cost efficient manner. Hunter Properties has provided staff written correspondence stating that it
will continue to provide property management at its past three-year fee of $1,400 per month over
the next two years. The only increase will be for rising insurance cost of Worker’s
Compensation. The increase is $2 per unit, per month (i.e., $384 per year), which is an operation
“at cost” to the Housing Authority.
Since, Hunter Properties will not increase its property management fee; staff does not
recommend proceeding with a request for proposal process, at this time, because of the cost
efficiency of current service provider and the time and expense to perform a request for proposal
process. Staff recommends the selection of Hunter Properties because it specializes in managing
small properties without an on-site resident manager, such as Pacific Pines. Hunter has
consistently provided professional property management and personal level service to the
residents of Pacific Pines and the Housing Authority.
Staff recommends an amendment to the initial three-year contract that authorizes two additional
years. This additional two year period includes a one year extension and an additional one year
period (after the first year), upon satisfactory performance of Hunter Properties, as determined
by the Executive Director. The total contract amendment period will not exceed two years or a
total of five years for the contract. Following the completion of the five years, staff will conduct
a request for proposals process in the selection of the next property management firm.
FISCAL AND STAFF IMPACTS
:
Funds are budgeted for management and maintenance of Pacific Pines. Rental income revenue
offsets operational costs. Property management and operational costs are approximately $30,000
annually. The retention of a property management firm enhances and leverages staff resources.
ALTERNATIVE ACTIONS:
1)Direct staff to prepare and issue a request for proposals for property management of the
sixteen Housing Authority-owned condominium units at Pacific Pines and return to the
Housing Authority Board with a recommendation; and,
2)Extend the current contract with Hunter Properties for management and maintenance of the
Pacific Pines units on a monthly basis until a property management firm is approved.
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RECOMMENDATION
:
Staff recommends that the Housing Authority Board:
Authorize the Executive Director to amend the Professional Services contract with Hunter
Properties in an amount not to exceed $60,000 for up to two years of management and
maintenance of sixteen Housing Authority-owned condominium units at Pacific Pines.
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