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HomeMy WebLinkAboutWORK ORDER - PURCHASE ORDER - 9140201WORK ORDER PURSUANT TO AN AGREEMENT BETWEEN THE CITY OF FORT COLLINS AND ECONOMIC & PLANNING SYSTEMS INC FOR 7428 ON -CALL FINANCIAL SERVICES DATED:12113/13 Work Order Number: 1 Purchase Order Number: 7$141 Project Title: Incluslonary Housing Study Original Bid/RFP Project Number & Name: 7428 ON -CALL FINANCIAL SERVICES Commencement Date: January 2014 Completion Date: October 31, 2014 Maximum Fee: (time and reimbursable direct costs):$60,000 Project Description: Incluslonary Housing Study Scope of Services: see attached Proposal Professional agrees to perform the services Identified above and on the attached forms in accordance with the terms and conditions contained herein and in the Professional Services Agreement between the parties. In the event of a conflict between or ambiguity In the terms of the Professional Services Agreement and this work order (including the attached forms) the Professional Services Agreement shall control. The attached fors consisting of _ ( pages are hereby accepted and Incorporated herein, by this reference, and Notice to Proceed Is hereby given. Professional !� By: Date: l2 City of Fort Collin By: Prje anag Date: /? - 4 By: Gerry Paul Director of Purchasing and Risk Management (over $60,000.00) VA Date: Ov # . Batch A Acid 1 C1F't & 2013 Hourly Staff Billina Rates Managing Principal $215 Principal $215 Vice President $175 Senior Associate $145 Associate $120 Research Analyst II $90 Research Analyst I $80 Production and Administrative Staff $80 Billing rates updated annually. Billing Rates 2013 CO PROPOSAL Project Understanding r@ The City of Fort Collins City Council has identified affordable housing funding as a priority. Affordable housing inventory lags behind the demand for affordable housing. In combination with community growth and university growth projections, the demand is expected to increase. Existing development incentives and current public funding alone are not enough to entice developers to build new, needed affordable housing. It is anticipated that providing affordable housing to meet current and future needs will require a combination of existing incentives, public funding, impact fees, and new strategies. The City of Fort Collins is interested in determining the supportability of an affordable housing ordinance that provides additional affordable housing units and/or fees. There are several options in practice throughout the industry today, the most common of which for solving for -sale or rental affordable housing needs are inclusionary housing ordinances (IHO). Also in use are commercial and residential linkage programs that establish impact fees for affordable housing through nexus studies. These linkage programs are sometimes an additional part of communities' solutions, particularly where economic conditions justify the establishment of a nexus between the demand generated for affordable housing by specific types of employment generation. IHO and linkage program structures can be set up with both unit construction and a payment of fee in -lieu of construction options, or an impact fee. To balance the effects of such requirements on development, communities use incentives and provide alternatives to developers for meeting these requirements, such as a cash subsidy or incentive per unit built, bonus densities, parking reductions, among others, or even allow for exemptions when a project is already proposed to meet city affordable housing objectives or address other critical community interests. In general, the development community responds most favorably when a program's requirements strike an equitable balance between meeting workforce housing demands and the larger housing market, as well as providing for effective incentives and flexibility. Moreover, communities that establish such programs are best -suited to implement them effectively when they are easy to administer. Economic & Planning Systems (EPS) has extensive experience working with communities on evaluating the need for and structuring affordable housing programs. We propose to engage Clarion Associates as a sub -consultant to provide and assist with a public process component, review the legal aspects of the various policy options with staff and council, and draft a new affordable housing ordinance. The following scope of services is designed to identify where and to what extent needs exist, identify best practices, identify mitigation options and tools, calculate supportable fees, and draft an ordinance to implement the most effective policy tool. Economic & Planning Systems, Inc. 1 133074-ptext-112213. docx Fort Collins Inclusionary Housing Ordinance Study November 22, 2013 Scope of Work Task 1: Project Initiation and Stakeholder Interviews EPS will meet with City staff to review the draft scope of work, budget and schedule and identify any outstanding issues. As a part of our due diligence, EPS will also conduct several confidential interviews with representatives and stakeholders of the private and non-profit housing development community, regarding the issues and challenges of providing affordable housing. Issues that arise during these interview, as well as discussions with City staff will help frame our approach in the following tasks. Task 2: Best Practices EPS will prepare research and summarize best practices from regional and national examples, using case studies of affordable housing programs and tools. The summary of best practices will include: • What programs and ordinances are in place; • When and why they were adopted; • What the affordable housing goals are; • What flexibility is written into the program; • How they are administered; and • How successful they are at producing units, either through actual unit construction or in generating revenues that are able to be used to create housing. Task 3: Establishment of Need Each affordable housing mitigation program is established on the basis of need. General housing and affordability trends form the foundation of this analysis, and a comparison of respective housing cost and household income trends is used to identify the magnitude of need. Conditions are usually appropriate to justify action when local businesses begin experiencing difficulties employing workers in lower to middle -income wage categories. Given that a process to assess the City's social sustainability and housing gaps is currently underway and scheduled to be completed by the beginning of 2014, EPS will incorporate relevant findings of that gap analysis to supplement the establishment of need. While these conditions will be an integral part of the establishment of need, it will be equally important to identify the trends in affordability, as scoped in this task. Task 3,1 — Household Affordability Trends EPS will identify historic trends and conditions in the distribution of households by income level using data from the U.S. Census, American Community Survey, and other reliable and accepted secondary data sources. Documentation of these trends will be translated to area median income (AMI) for direct comparison to housing price distribution trends. This analysis will also look at the distribution of people living in the City by income level as compared to the distribution of people working in the City. Such an analysis will inform a complementary perspective of housing affordability conditions. Economic & Planning Systems, Inc. 2 Proposal Fort Collins Inclusionary Housing Ordinance Study November 22, 2013 Task 3.2 - For -Sale and Rental Housing Trends This task will document trends and conditions in for -sale and rental housing. FPS will analyze the distribution of housing sales volumes and rental rates for direct comparison to household income levels. As surrounding areas often serve to mitigate affordable housing needs, FPS also proposes to look at housing conditions in surrounding cities (Loveland, Windsor, and Greeley), which will facilitate a more realistic assessment of housing need. Task 3.3 - Gaps FPS will document the housing gaps by AMI level as identified by the independent assessment currently underway. This task will synthesize various sources of information from the previous tasks and other documents to provide a quantitative framework for whichever affordable housing mitigation tool is appropriate to the City. Task 4: Stakeholder Workshop The purpose of this task is to initiate a public involvement process and begin a dialogue with the community and stakeholders. FPS will prepare an overview of the findings and summary of best practices for presentation in the first of several public involvement activities. FPS, working with Clarion Associates, will facilitate a workshop to review the findings to date and best practices options, pertinent issues in adopting an ordinance, and identify which options are the most appropriate for the City. This initial workshop will be geared towards key stakeholders; as such we are proposing that participants would include key housing developers and housing advocates, with targeted invitations to ensure that we are involving the appropriate stakeholders. FPS and Clarion will prepare the presentation materials and facilitate the workshop. City staff will determine the appropriate stakeholders and coordinate the invitation and notification process, and will be responsible for securing the meeting location. Task 5: Affordable Housing Program Option Task 5.1 - Affordable Housing Options Based on feedback from the client and stakeholder workshop, FPS will identify the appropriate affordable housing mitigation tools to structure and present for consideration. This task will document the appropriate analytical structure, such as used in a nexus analysis or a pro -forma model used to test feasibility, that: • Outlines and verifies all inputs and assumptions used in the estimation process; • Identifies developer and/or City feasibility and impacts; • Tests a range of implementation options, such as mitigation/construction requirement, or payment of fees in -lieu; • Tests a range of incentives, such as cash subsidies, unit equivalencies, on- or off -site options; and • Identifies exemptions to the program. Task 5.2 - Recommended Program FPS will prepare a recommended course of action for moving toward implementation after a review of the options and issues. We will prepare a summary of the affordable housing mitigation program options and their basis to include the nexus analysis for establishing a housing impact fee, as Economic & Planning Systems, Inc. 3 Proposal Fort Collins Inclusionary Housing Ordinance Study November 22, 2013 well as issues to discuss concerning the feasibility and impact to the development community and City as a result of such a program. These recommendations will be reviewed by City staff followed by the second public involvement component as described in the following task. Task 6: Stakeholder Workshop Following preparation of a recommended affordable housing mitigation, tool, Clarion Associates (Don Elliot) and EPS will facilitate a workshop to review this recommended structure and next steps. EPS will prepare a presentation of the potential options and recommended policy. The purpose of this task is to continue the public dialogue and stakeholder buy -in process. Similar to the first workshop, this will also be geared towards key stakeholders (housing developers —both private and not -for -profit, and housing advocates) with targeted invitations to ensure that we are involving the appropriate stakeholders. EPS and Clarion will prepare the presentation materials and facilitate the workshop. City staff will determine the appropriate stakeholders and coordinate the invitation and notification process, and will be responsible for securing the meeting location. Task 7: Reports and Presentations EPS will incorporate feedback, comments, and suggestions from the stakeholder workshop and provide City staff with a revised affordable housing mitigation tool summary. Task 7.1 — Recommendations and Report A report will be prepared of the analysis, findings, and recommendations for staff review. The report will include documentation of all historical trends and conditions relevant to the affordability and gap analysis, as well as documentation of the methodologies used in identifying the gap and target. Task 7.2 — Meetings and Presentation EPS proposes that in advance of adopting an inclusionary housing ordinance, EPS discuss the analysis and policy recommendations with staff. As a third public process component, EPS proposes to present the final report and recommendations to City staff, City Council, and the public, likely at a scheduled Council meeting. Task 8: Ordinance Preparation and Adoption In this task, Clarion Associates will work with City staff to prepare a draft ordinance and work with staff and the City Council through the adoption process. This process is estimated to require an additional 2 to 3 months for completion. Economic & Planning Systems, Inc. 4 Proposal Fort Collins Inclusionary Housing Ordinance Study November 22, 2013 Project Budget and Schedule EPS proposes to complete the above work program on a time and materials basis up to a maximum fee of $60,000 including all time and direct expenses billed at cost. The approximate breakdown of costs by task and staff level is shown in Table 1. Table 1 Proposed Project Budget Billing Rate Labor Costs Task 1: Project Initiation Task 2: Best Practices Task 3. Establishment of Neetl Task 3.1: Household Affordability Trends Task 3.2: For -Sale and Rental Housing Trends Task 3.3: Gaps Task 4: Stakeholder Workshop Task 5: Affordable Housing Program Option Task 5.1: Affordable Housing Options Task 5.2: Recommended Program Task 6: Stakeholder Workshop Task 7. Report, Meetings, and Presentation Task 7.1: Recommendations and Report Task 7.2: Meetings and Presentation Task 8: Ordinance Preparation and Adoption Subtotal as % of Total Staff Hours Total Staff Hours Direct Costs Local Tratel Miscellaneous Subtotal Economic B Planning Systems Sub Principal Senior Production/ Clarion In Charge Associate Research Associates Gd.w Somardz $215 $145 $90 $180 8 16 4 0 8 12 24 8 4 8 8 4 8 8 4 4 8 8 8 0 8 12 0 8 8 0 8 8 0 8 20 8 B 12 0 8 8 0 84 124 60 31% 46% 22% EPS Sub Total $4,400 $0 $4,400 $5620 $1440 $7060 0 $2,740 $0 $2,740 0 $2,740 $0 $2,740 0 $2,160 $0 $2,160 20 $2,880 $3,600 $6,480 0 $3,460 $0 $3,460 0 $2.880 $0 $2,880 20 $2.880 $3,600 $6,480 0 $5,34o $0 $5,340 0 $3,460 $0 $3,460 52 $2_,880 12M $1y240 100 $41.440 $18,000 $59,440 268 100 368 $260 $200 $460 SI00 $0 $100 $360 $200 $560 Total Project Cost $41,800 $18,200 $60,000 Source: rsoramc B damn, Systems _ otom..ven eoe..i.iu.ion..rnou.ugwiw,c. srwryosma oew_»noaa»ewaar aewm Economic & Planning Systems, Inc. 5 Proposal Fort Collins Inclusionary Housing Ordinance Study November 22, 2013 Figure 1 Proposed Project Schedule Economic & Planning Systems, Inc. 6 Proposal