HomeMy WebLinkAboutC-3702 - In-Lieu Housing Fee AnalysisPROFESSIONAL SERVICES AGREEMENT WITH
ECONOMIC AND PLANNING SYSTEMS, INC.
FOR IN -LIEU FEE HOUSING PROGRAM
CONSULTING SERVICES
THIS AGREEMENT, entered into this 27th day of April, 2004, by and between
CITY OF NEWPORT BEACH, a Municipal Corporation (hereinafter referred to as
"City "), and ECONOMIC & PLANNING SYSTEMS, INC. (EPS), whose address is 2501
Ninth Street, Suite 200, Berkeley, CA 94710, (hereinafter referred to as "Consultant "), is
made with reference to the following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under
the laws of the State of California with the power to carry on its business as it is
now being conducted under the statutes of the State of California and the
Charter of City.
B. City is planning to establish an affordable housing "in -lieu" fee ordinance
in an effort to generate funds for the City's expenditure on the construction of
new affordable housing units and other affordable housing programs.
C. City desires to engage Consultant to analyze and provide
recommendations on the fees a residential developer should have to pay "in -lieu"
of providing low- and moderate - income housing units as outlined by the SCOPE
OF SERVICES attached hereto as EXHIBIT "A" (with the exception of Tasks 6 and
8) and pursuant to the terms and conditions contained in this Agreement.
D. Consultant possesses the skill, experience, ability, background,
certification and knowledge to provide the services described in this Agreement.
E. The principal member of Consultant, for purpose of this Project, shall be
Walter F. Kieser, Managing Principal and President of EPS.
F. City has solicited and received a proposal from Consultant, has reviewed
the previous experience and evaluated the expertise of Consultant, and desires
to retain Consultant to render professional services under the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned
Parties as follows:
1. TERM
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The term of this Agreement shall commence on the 27th day of April, 2004, and
shall terminate on the 27th day of April, 2005, unless terminated earlier as set
forth herein.
2. SERVICES TO BE PERFORMED
Consultant shall diligently perform all the services described in the Scope of
Services attached as Exhibit "A" (with the exception of Tasks 6 and 6) and
incorporated herein by reference. The City may elect to delete certain tasks of
the Scope of Services at its sole discretion.
3. TIME OF PERFORMANCE
Time is of the essence in the performance of services under this Agreement and
the services shall be performed to completion in a diligent and timely manner.
The failure by Consultant to perform the services in a diligent and timely manner
may result in termination of this Agreement by City.
Notwithstanding the foregoing, Consultant shall not be responsible for delays
due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the services to be provided for the Project, each party hereby
agrees to provide notice to the other party so that all delays can be addressed.
3.1 Consultant shall submit all requests for extensions of time for
performance in writing to the Project Administrator, not later than ten (10)
calendar days after the start of the condition that purportedly causes a
delay. The Project Administrator shall review all such requests and may
grant reasonable time extensions for unforeseeable delays that are
beyond Consultant's control.
3.2 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the
circumstances, by either telephone, fax, hand - delivery or mail.
4. COMPENSATION TO CONSULTANT
City shall pay Consultant for the services on a time and expense not -to- exceed
basis in accordance with the provisions of this Section and the schedule of billing
rates, contained in the SCOPE OF SERVICES attached as EXHIBIT "A ". In no
event shall Consultant's compensation exceed Nineteen Thousand Nine
Hundred and Seventy-Five Dollars ($19,975.00) without additional
authorization from City. No billing rate changes shall be made during the term of
this Agreement without the prior written approval of City. Should any
components of the SCOPE OF SERVICES be eliminated by the City pursuant to
Section 2 of this Agreement, the contracted compensation shall be reduced
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accordingly, consistent with the estimated cost of said components set forth in
the budget included in the SCOPE OF SERVICES.
4.1 Consultant shall submit monthly invoices to City describing the work
performed the preceding month. Consultant's bills shall include the name
of the person who performed the work, a brief description of the services
performed and /or the specific task in the Scope of Services to which it
relates, the date the services were performed, the number of hours spent
on all work billed on an hourly basis, and a description of any
reimbursable expenditures. City shall pay Consultant no later than thirty
(30) days after approval of the monthly invoice by City staff.
4.2 City shall reimburse Consultant only for those costs or expenses
specifically approved in this Agreement, or specifically approved in
advance by City. Unless otherwise approved, such costs shall be limited
and include nothing more than the following costs incurred by Consultant:
A. The actual costs of subconsultants for performance of any of the
services that Consultant agrees to render pursuant to this
Agreement, which have been approved in advance by City and
awarded in accordance with this Agreement.
B. Approved reproduction charges.
C. Actual costs and /or other costs and /or payments specifically
authorized in advance in writing and incurred by Consultant in the
performance of this Agreement.
4.3 Consultant shall not receive any compensation for Extra Work without the
prior written authorization of City. As used herein, "Extra Work" means
any work that is determined by City to be necessary for the proper
completion of the Project, but which is not included within the Scope of
Services and which the parties did not reasonably anticipate would be
necessary at the execution of this Agreement. Compensation for any
authorized Extra Work shall be paid in accordance with the Schedule of
Billing Rates set forth in Exhibit A.
4.4 Notwithstanding any other provision of this Agreement, when payments
made by City equal 90% of the maximum fee provide for in this
Agreement, no further payments shall be made until City has accepted the
final work under this Agreement.
5. PROJECT MANAGER
Consultant shall designate a Project Manager, who shall coordinate all phases of
the Project. This Project Manager shall be available to City at all reasonable
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times during the Agreement term. Consultant has designated Walter F. Kieser
to be its Project Manager. Consultant shall not remove or reassign the Project
Manager or any personnel listed in Exhibit A or assign any new or replacement
personnel to the Project without the prior written consent of City. City's approval
shall not be unreasonably withheld with respect to the removal or assignment of
non -key personnel.
Furthermore, Consultant guarantees that Walter F. Kieser (Project Manager) will
personally perform all services delegated to him in the BUDGET outlined in
EXHIBIT "A ", unless previous arrangements have been made with City.
Consultant, at the sole discretion of City, shall remove from the Project any of its
personnel assigned to the performance of services upon written request of City.
Consultant warrants that it will continuously furnish the necessary personnel to
complete the Project on a timely basis as contemplated by this Agreement.
6. ADMINISTRATION
This Agreement will be administered by the City Manager's Office. Sharon Z.
Wood, Assistant City Manager shall be the Project Administrator and shall have
the authority to act for City under this Agreement. The Project Administrator or
his /her authorized representative shall represent City in all matters pertaining to
the services to be rendered pursuant to this Agreement.
7. CITY'S RESPONSIBILITIES
In order to assist Consultant in the execution of its responsibilities under this
Agreement, City agrees to, where applicable:
A. Provide access to, and upon request of Consultant, one copy of all
existing relevant information on file at City. City will provide all such
materials in a timely manner so as not to cause delays in Consultant's
work schedule.
B. Provide blueprinting and other services through City's reproduction
company for bid documents. Consultant will be required to coordinate the
required bid documents with City's reproduction company. All other
reproduction will be the responsibility of Consultant and as defined above.
C. Provide usable life of facilities criteria and information with regards to new
facilities or facilities to be rehabilitated.
8. STANDARD OF CARE
8.1 All of the services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and
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technical personnel required to perform the services required by this
Agreement, and that it will perform all services in a manner
commensurate with community professional standards. All services shall
be performed by qualified and experienced personnel who are not
employed by City, nor have any contractual relationship with City.
8.2 Consultant represents and warrants to City that it has or shall obtain all
licenses, permits, qualifications, insurance and approvals of whatsoever
nature that are legally required of Consultant to practice its profession.
Consultant further represents and warrants to City that Consultant shall, at
its sole cost and expense, keep in effect or obtain at all times during the
term of this Agreement, any and all licenses, permits, insurance and other
approvals that are legally required of Consultant to practice its profession.
Consultant shall maintain a City of Newport Beach business license
during the term of this Agreement.
8.3 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by
reason of strikes, lockouts, accidents, or acts of God, or the failure of City
to furnish timely information or to approve or disapprove Consultant's
work promptly, or delay or faulty performance by City, contractors, or
governmental agencies.
9. HOLD HARMLESS
To the fullest extent permitted by law, Consultant shall indemnify, defend and
hold harmless City, its City Council, boards and commissions, officers, agents
and employees (collectively, the "Indemnified Parties) from and against any and
all claims (including, without limitation, claims for bodily injury, death or damage
to property), demands, obligations, damages, actions, causes of action, suits,
losses, judgments, fines, penalties, liabilities, costs and expenses (including,
without limitation, attorney's fees, disbursements and court costs) of every kind
and nature whatsoever (individually, a Claim; collectively, "Claims "), which may
arise from or in any manner relate (directly or indirectly) to any work performed or
services provided under this Agreement (including, without limitation, defects in
workmanship or materials and /or design defects [if the design originated with
Consultant)) or Consultant's presence or activities conducted on the Project
(including the negligent and /or willful acts, errors and /or omissions of Consultant,
its principals, officers, agents, employees, vendors, suppliers, consultants,
subcontractors, anyone employed directly or indirectly by any of them or for
whose acts they may be liable or any or all of them).
Notwithstanding the foregoing, nothing herein shall be construed to require
Consultant to indemnify the Indemnified Parties from any Claim arising from the
sole negligence or willful misconduct of the Indemnified Parties. Nothing in this
indemnity shall be construed as authorizing any award of attorney's fees in any
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action on or to enforce the terms of this Agreement. This indemnity shall apply
to all claims and liability regardless of whether any insurance policies are
applicable. The policy limits do not act as a limitation upon the amount of
indemnification to be provided by the Consultant.
10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the work are under the control of Consultant, except to the extent
they are limited by statute, rule or regulation and the expressed terms of this
Agreement. Nothing in this Agreement shall be deemed to constitute approval
for Consultant or any of Consultant's employees or agents, to be the agents or
employees of City. Consultant shall have the responsibility for and control over
the means of performing the work, provided that Consultant is in compliance with
the terms of this Agreement. Anything in this Agreement that may appear to
give City the right to direct Consultant as to the details of the performance or to
exercise a measure of control over Consultant shall mean only that Consultant
shall follow the desires of City with respect to the results of the services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or
interest in the work to be performed. City agrees to cooperate with the
Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and project
direction with City's Project Administrator in advance of all critical decision points
in order to ensure the Project proceeds in a manner consistent with City goals
and policies.
13. PROGRESS
Consultant is responsible for keeping the Project Administrator and /or his /her
duly authorized designee informed on a regular basis regarding the status and
progress of the work, activities performed and planned, and any meetings that
have been scheduled or are desired.
14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of work Consultant shall obtain, provide and maintain at its own expense during
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the term of this Agreement, a policy or policies of liability insurance of the type
and amounts described below and in a form satisfactory to City.
A. Certificates of Insurance. Consultant shall provide certificates of
insurance with original endorsements to City as evidence of the insurance
coverage required herein. Insurance certificates must be approved by City's
Risk Manager prior to commencement of performance or issuance of any permit.
Current certification of insurance shall be kept on file with City at all times during
the term of this Agreement.
B. Signature. A person authorized by the insurer to bind coverage on its
behalf shall sign certification of all required policies.
C. Acceptable Insurers. All insurance policies shall be issued by an
insurance company currently authorized by the Insurance Commissioner to
transact business of insurance in the State of California, with an assigned
policyholders' Rating of A (or higher) and Financial Size Category Class VII (or
larger) in accordance with the latest edition of Best's Key Rating Guide, unless
otherwise approved by the City's Risk Manager.
D. Coverage Requirements.
1. Workers' Compensation Coverage. Consultant shall maintain
Workers' Compensation Insurance and Employer's Liability Insurance for
his or her employees in accordance with the laws of the State of
California. In addition, Consultant shall require each subcontractor to
similarly maintain Workers' Compensation Insurance and Employer's
Liability Insurance in accordance with the laws of the State of California
for all of the subcontractor's employees. Any notice of cancellation or
non - renewal of all Workers' Compensation policies must be received by
City at least thirty (30) days prior to such change. The insurer shall agree
to waive all rights of subrogation against City, its officers, agents,
employees and volunteers for losses arising from work performed by
Consultant for City.
2. General Liability Coverage. Consultant shall maintain commercial
general liability insurance in an amount not less than two million dollars
($1,000,000) per occurrence for bodily injury, personal injury, and property
damage, including without limitation, contractual liability. If commercial
general liability insurance or other form with a general aggregate limit is
used, either the general aggregate limit shall apply separately to the work
to be performed under this Agreement, or the general aggregate limit shall
be at least twice the required occurrence limit.
3. Automobile Liability Coverage. Consultant shall maintain
automobile insurance covering bodily injury and property damage for all
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activities of the Consultant arising out of or in connection with work to be
performed under this Agreement, including coverage for any owned,
hired, non -owned or rented vehicles, in an amount not less than one
million dollars ($1,000,000) combined single limit for each occurrence.
4. Professional Errors and Omissions Insurance. Consultant shall
maintain professional errors and omissions insurance, which covers the
services to be performed in connection with this Agreement in the
minimum amount of one million dollars ($1,000,000).
E. Endorsements. Each general liability and automobile liability insurance
policy shall be endorsed with the following specific language:
i. The City, its elected or appointed officers, officials, employees,
agents and volunteers are to be covered as additional insureds with
respect to liability arising out of work performed by or on behalf of the
Consultant.
ii. This policy shall be considered primary insurance as respects to
City, its elected or appointed officers, officials, employees, agents and
volunteers as respects to all claims, losses, or liability arising directly or
indirectly from the Consultant's operations or services provided to City.
Any insurance maintained by City, including any self- insured retention City
may have, shall be considered excess insurance only and not contributory
with the insurance provided hereunder.
iii. This insurance shall act for each insured and additional insured as
though a separate policy had been written for each, except with respect to
the limits of liability of the insuring company.
iv. The insurer waives all rights of subrogation against City, its elected
or appointed officers, officials, employees, agents and volunteers.
V. Any failure to comply with reporting provisions of the policies shall
not affect coverage provided to City, its elected or appointed officers,
officials, employees, agents or volunteers.
vi. The insurance provided by this policy shall not be suspended,
voided, canceled, or reduced in coverage or in limits, by either party
except after thirty (30) days written notice has been received by City.
F. Timely Notice of Claims. Consultant shall give City prompt and timely
notice of claim made or suit instituted arising out of or resulting from Consultant's
performance under this Agreement.
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G. Additional Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
judgment may be necessary for its proper protection and prosecution of the
work.
15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following
shall be construed as an assignment: The sale, assignment, transfer or other
disposition of any of the issued and outstanding capital stock of Consultant, or of
the interest of any general partner or joint venturer or syndicate member or
cotenant if Consultant is a partnership or joint- venture or syndicate or cotenancy,
which shall result in changing the control of Consultant. Control means fifty
percent (50 %) or more of the voting power, or twenty -five percent (25 %) or more
of the assets of the corporation, partnership or joint- venture.
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16. SUBCONTRACTING
The parties recognize that a substantial inducement to City for entering into this
Agreement is the professional reputation, experience and competence of
Consultant. Assignments of any or all rights, duties or obligations of the
Consultant under this Agreement will be permitted only with the express written
consent of City. Consultant shall not subcontract any portion of the work to be
performed under this Agreement without the written authorization of City.
17. OWNERSHIP OF DOCUMENTS
Each and every report, draft, map, record, plan, document and other writing
produced (hereinafter "Documents "), prepared or caused to be prepared by
Consultant, its officers, employees, agents and subcontractors, in the course of
implementing this Agreement, shall become the exclusive property of City, and
City shall have the sole right to use such materials in its discretion without further
compensation to Consultant or any other party. Consultant shall, at Consultant's
expense, provide such Documents to City upon written request.
Documents, including drawings and specifications, prepared by Consultant
pursuant to this Agreement are not intended or represented to be suitable for
reuse by City or others on any other project. Any use of completed documents
for other projects and any use of incomplete documents without specific written
authorization from Consultant will be at City's sole risk and without liability to
Consultant. Further, any and all liability arising out of changes made to
Consultant's deliverables under this Agreement by City or persons other than
Consultant is waived against Consultant and City assumes full responsibility for
such changes unless City has given Consultant prior notice and has received
from Consultant written consent for such changes.
18. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the services in this Agreement, shall be kept
confidential unless City authorizes the release of information.
19. OPINION OF COST
Any opinion of the construction cost prepared by Consultant represents his
judgment as a design professional and is supplied for the general guidance of
City. Since Consultant has no control over the cost of labor and material, or over
competitive bidding or market conditions, Consultant does not guarantee the
accuracy of such opinions as compared to contractor bids or actual cost to City.
20. INTELLECTUAL PROPERTY INDEMNITY
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The Consultant shall defend and indemnify City, its agents, officers,
representatives and employees against liability, including costs, for infringement
of any United States' letters patent, trademark, or copyright infringement,
including costs, contained in Consultant's drawings and specifications provided
under this Agreement.
21. RECORDS
Consultant shall keep records and invoices in connection with the work to be
performed under this Agreement. Consultant shall maintain complete and
accurate records with respect to the costs incurred under this Agreement and
any services, expenditures and disbursements charged to City, for a minimum
period of three (3) years, or for any longer period required by law, from the date
of final payment to Consultant to this Agreement. All such records shall be
clearly identifiable. Consultant shall allow a representative of City to examine,
audit and make transcripts or copies of such records during regular business
hours. Consultant shall allow inspection of all work, data, documents,
proceedings and activities related to the Agreement for a period of three (3)
years from the date of final payment under this Agreement.
22. WITHHOLDINGS
City may withhold payment of any disputed sums until satisfaction of the dispute
with respect to such payment. Such. withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant
shall not discontinue work as a result of such withholding. Consultant shall have
an immediate right to appeal to the City Manager or his designee with respect to
such disputed sums. Consultant shall be entitled to receive interest on any
withheld sums at the rate of return that City earned on its investments during the
time period, from the date of withholding of any amounts found to have been
improperly withheld.
23. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional
inexperience of Consultant which result in expense to City greater than what
would have resulted if there were not errors or omissions in the work
accomplished by Consultant, the additional design, construction and/or
restoration expense shall be borne by Consultant. Nothing in this paragraph is
intended to limit City's rights under any other sections of this Agreement.
24. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the
Project.
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25. CONFLICTS OF INTEREST
The Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act "), which (1) requires such
persons to disclose any financial interest that may foreseeably be materially
affected by the work performed under this Agreement, and (2) prohibits such
persons from making, or participating in making, decisions that will foreseeably
financially affect such interest.
If subject to the Act, Consultant shall conform to all requirements of the Act.
Failure to do so constitutes a material breach and is grounds for termination of
this Agreement by City. Consultant shall indemnify and hold harmless City for
any and all claims for damages resulting from Consultant's violation of this
Section.
26. NOTICES
All notices, demands, requests or approvals to be given under the terms of this
Agreement shall be given in writing, and conclusively shall be deemed served
when delivered personally, or on the third business day after the deposit thereof
in the United States mail, postage prepaid, first -class mail, addressed as
hereinafter provided. All notices, demands, requests or approvals from
Consultant to City shall be addressed to City at:
City of Newport Beach
Attention: Patricia Temple, Planning Director
Planning Department
3300 Newport Boulevard
P.O. Box 1768
Newport Beach, CA, 92658 -8915
(949) 644 -3222
Fax 644 -3020
All notices, demands, requests or approvals from City to Consultant shall be
addressed to Consultant at:
Attention: Walter F. Kieser
Economic and Planning Systems, Inc.
2501 Ninth Street, Suite 200
Berkeley, CA 94710 -2515
(510) 841 -9190
FAX 841 -9208
27. TERMINATION
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In the event that either parry fails or refuses to perform any of the provisions of
this Agreement at the time and in the manner required, that party shall be
deemed in default in the performance of this Agreement. If such default is not
cured within a period of two (2) calendar days, or if more than two (2) calendar
days are reasonably required to cure the default and the defaulting party fails to
give adequate assurance of due performance within two (2) calendar days after
receipt of written notice of default, specifying the nature of such default and the
steps necessary to cure such default, the non - defaulting party may terminate the
Agreement forthwith by giving to the defaulting party written notice thereof.
Notwithstanding the above provision, City shall have the right, at its sole
discretion and without cause, of terminating this Agreement at any time by giving
seven (7) calendar days' prior written notice to Consultant. In the event of
termination under this Section, City shall pay Consultant for services
satisfactorily performed and costs incurred up to the effective date of termination
for which Consultant has not been previously paid. On the effective date of
termination, Consultant shall deliver to City all reports and other information
developed or accumulated in the performance of this Agreement, whether in
draft or final form.
28. COMPLIANCE WITH ALL LAWS
Consultant shall at its own cost and expense comply with all statutes,
ordinances, regulations and requirements of all governmental entities, including
federal, state, county or municipal, whether now in force or hereinafter enacted.
In addition, all work prepared by Consultant shall conform to applicable City,
county, state and federal laws, regulations and permit requirements and be
subject to approval of the Project Administrator and City.
29. WAIVER
A waiver by either party of any breach, of any term, covenant or condition
contained herein shall not be deemed to be a waiver of any subsequent breach
of the same or any other term, covenant or condition contained herein, whether
of the same or a different character.
30. INTEGRATED CONTRACT
This Agreement represents the full and complete understanding of every kind or
nature whatsoever between the Parties hereto, and all preliminary negotiations
and agreements of whatsoever kind or nature are merged herein. No verbal
agreement or implied covenant shall be held to vary the provisions herein.
31. CONFLICTS OR INCONSISTENCIES
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In the event there are any conflicts or inconsistencies between this Agreement
and the Scope of Services or any other attachments attached hereto, the terms
of this Agreement shall govern.
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32. AMENDMENTS
This Agreement may be modified or amended only by a written document
executed by both Consultant and City and approved as to form by the City
Attorney.
33. SEVERABILITY
If any term or portion of this Agreement is held to be invalid, illegal, or otherwise
unenforceable by a court of competent jurisdiction, the remaining provisions of
this Agreement shall continue in full force and effect.
34. CONTROLLING LAW AND VENUE
The laws of the State of California shall govern this Agreement and all matters
relating to it and any action brought relating to this Agreement shall be
adjudicated in a court of competent jurisdiction in the County of Orange.
35. EQUAL OPPORTUNITY EMPLOYMENT
Consultant represents that it is an equal opportunity employer and it shall not
discriminate against any subcontractor, employee or applicant for employment
because of race, religion, color, national origin, handicap, ancestry, sex or age.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on
the day and year first written above.
APPROVED AS TO FORM:
C'tj�'
Robi Clauson,
Assistant City Attorney
for the City of Newport Beach
LaVonne Harkless
City Clerk
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CITY OF NEWPORT BEACH
A Municipal Corporation
By: �'K c /
Tod W. Ridgew y Mayor
for the City of Newport B ch
CONSULTANT
Economic and Planning Systems, Inc.
Walter F. Kieser, Managing Principal
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EXHIBIT "A"
SCOPE OF SERVICES
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PROPOSAL TO PERFORM
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AFFORDABLE MOUSING IN -LIEU FEE STUDY
Prepared for:
City of Newport Beach
Prepared by:
Economic & Planning Systems, Inc.
February 2004
EPS »14020
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Economic &
Planning Systems
Real Errare Erononua
Regional Economics
Public Finance
LartC Use Policy
BERKELEY ..�q SACRAMENTO DENVER
2101 Ninth St., Suim 200 phone: 510 -841 -9190 Phonc 916.649 -8010 Phone: 303.623 -3557
6crkeley. CA 94710 -2515 Fax: 510 -841 -9208 Fax: 916 -649 -2070 Fax: 303.623 -9049
www.cpsys.com
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Economic S
Planning Systems
Real Estate Economic,
Regional Eronomla
Poblic Finance
Land Use Policy
February 17, 2004
Tamara J. Campbell, AICP
Senior Planner
City of Newport Beach, Planning Department
3300 Newport Boulevard, Building C
Newport Beach, CA 92658
Subject: Proposal for the Newport Beach Affordable Housing In -Lieu Fee Study;
EPS #14020
Dear Ms. Campbell:
Economic & Planning Systems (EPS) is pleased to present this proposal to conduct an
Affordable Housing In -Lieu Fee study for the City of Newport Beach. As you will see in
our qualifications, affordable housing policies and programs represent one of EPS's
primary areas of practice, and we welcome the opportunity to provide our assistance
and technical expertise in the City's consideration of the important economic issues
surrounding affordable housing. EPS has assisted numerous jurisdictions throughout
California and beyond with studies and ordinance preparation for inclusionary housing,
in -lieu fee programs, and workforce housing fee programs.
In addition to our work on affordable housing issues for public agencies, EPS has
extensive experience providing project feasibility analyses for private sector developers.
This experience has been extremely valuable in generating trust and goodwill during
studies of affordable housing programs, impact fees, and other policy actions to which
developers often object on the basis of economic hardship. Through objective analysis,
EPS has proven effective in assuaging those concerns, while still formulating polities
that are effective in addressing communities' goals to increase the supply of affordable
housing.
This proposal first presents EPS's "Understanding and Approach to the Assignment,"
followed by our "Proposed Scope of Services." The "Project Administration" section
then details the budget estimate, work schedule, and staffing commitments of EPS. The
final section of this proposal presents our "Qualifications, References, and Resumes."
In this last section, EPS has described our work on affordable housing policies, including
inclusionary zoning policies, in -lieu fee calculations, and workforce housing impact fees
linking affordable housing demand to growth in employment- generating development.
You will note that several of these relevant project have been conducted in coastal
communities in southern, central, and northern California.
BERKELEY �q �� SACRAMENTO DENVER
2501 Ninth St., Suite 200 phone: 510 - 841 -9190 .�iR Phonc: 916 -649 -8010 Phone: 303-623557
Berkeley, CA 94710.2515 Fax: 510. 841.9208 •1w Fax: 916- 649 -2070 Fax: 303 - 623 -9049
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February 17, 2004
Page 2 of 2
If you have any questions regarding this proposal, please call me or Darin Smith at:
Economic & Planning Systems, Inc.
2501 Ninth Street, Suite 200
Berkeley, CA 94710
(510) 541 -9190
Thank you again for this opportunity to provide consulting services to the City of
Newport Beach.
Sincerely,
WALTER YJESER
MANAGING PRINCIPAL
ECONOMIC & PLANNING SYSTEMS, INC.
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UNDERSTANDING AND APPROACH
TO THE ASSIGNMENT
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
UNDERSTANDING AND APPROACH TO THE ASSIGNMENT
The Housing Element for the City of Newport Beach contains a policy requiring
residential developers to provide a certain percentage of homes in new developments as
income - restricted affordable housing units, or to pay a fee in lieu of directly providing
the affordable units. The amount of the in -lieu fee was established several years ago,
and no longer accurately reflects the cost of subsidizing the production of an affordable
housing unit. The City of Newport Beach is seeking consultant assistance to update the
in -lieu fee calculation to achieve a more effective and equitable program for requiring
developers to contribute to the City's affordable housing needs.
This consulting effort will require a review of the Housing Element and the Southern
California Association of Governments' Regional Housing Needs Determination for the
City; an assessment of the City's policies regarding the types of units desired to serve
lower- income households; a comparison of affordable prices to the costs of residential
unit construction; and a calculation of an in -lieu fee that can achieve the City's
affordable housing goals while not undermining the production of housing generally.
In addition, the City has requested that the consultant review the policies of comparable
cities to compare and contrast the amounts and effectiveness of the in -lieu fee programs.
Economic & Planning Systems (EPS) has worked on numerous projects comparable in
scope to the Affordable Housing In -Lieu Fee Study requested by the City of Newport
Beach (see "Firm Qualifications" section), including several assignments in Cal forn a
coastal communities. Through these experiences, EPS has developed an efficient and
effective approach to addressing these complex and controversial issues.
Paramount in our approach is coordination with stakeholders who will be affected by
the outcome of the analysis and implementation of affordable housing programs. These
stakeholders include not only City staff, City Council, and affordable housing advocates,
but also the homebuilders whose development cost structures will be directly affected
by the implementation of such programs. By incorporating the input of such
stakeholders early and often in the analytical process, EPS has been successful at
reducing or eliminating controversy regarding the technical accuracy of the analysis,
and placing the issue squarely in the realm of policy debate rather than debate over
assumptions and mathematics.
EPS also provides a strong understanding of the overall economic implications of
inclusionary housing programs. Objectors to such policies frequently cite the potential
for the requirements to actually slow housing development, which would have negative
implications for a City's economic development goals. Through an objective analysis of
the experiences of other jurisdictions where such policies have long been in place, EPS
will provide answers to those questions which policy- makers can consider when
evaluating and possibly implementing the programs.
G.U3 2Onevp!\34PO0 Ldoc
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
In addition, EPS has developed a strong understanding of the potential alternative
approaches to meeting the desired goals of increasing affordable housing through
inclusionary zoning and in -lieu fees. Specifically, EPS has investigated ways in which
developers can satisfy the same goals, including land dedications, "affordable -by-
design" small units and second units, nonprofit participation, City partnerships, and
density bonuses. While such alternatives are not described in the City's Request for
Proposals, EPS's familiarity with them, as well as optional waivers and exemptions, can
be of great value in discussing inclusionary housing and in -lieu fee options in a dynamic
context.
Even with the potential for variations and exceptions, EPS deems it critical that the
inclusionary housing programs be consistent in furthering their goals. To validate the
nexus arguments that are critical to the formation of the ordinances, all variations in the
application of the requirements should generally result in an equal amount of affordable
housing. Moreover, the application of the programs should set specific requirements for
the price points for the affordable housing produced, which may vary from one type of
project to another (e.g., single - family versus multifamily development) but should be
consistently applied rather than subject to significant negotiation. EPS's quantitative
analysis can establish parameters for trade -offs that policy- makers can then use to
ensure that each applicable development project receives equal treatment under the law.
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PROPOSED SCOPE OF SERVICES
Economic &
Planning Systems
Real E wre Emnomia
Regional Economic
Public Finance
Land Use Policy
PROPOSED SCOPE OF SERVICES
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
The City of Newport Beach has an established inclusionary affordable housing policy
that requires that residential projects provide a portion of units at price points affordable
to households at designated income levels. For projects of fewer than 50 total units,
developers may pay an in -lieu fee to the City as an alternative to directly providing
these affordable units, which fee the City can then use to fund other affordable housing
projects.
The proposed Scope of Services addresses the analysis of potential revisions to the City's
Affordable Housing In -Lieu Fee Program. Significant interaction will be required
between EPS, City staff (including the City Attorney's Office), and stakeholders such as
homebuilders, and affordable housing advocates.
TASK 1. PROJECT INITIATION
The Consultant will meet with City staff to discuss the assignment, establish necessary
liaison; and set a schedule for meetings, decision points, and deliverables. Refinements
to the Scope of Services resulting from this review and direction can be made at this
time.
TASK 2. CURRENT INCLUSIONARY POLICY REVIEW
EPS will review the City's current Inclusionary Housing Ordinance provisions to further
understand the specific application of the ordinance in terms of the types of projects
affected; the characteristics of the units that must be provided (income category price
points, size and design compared to market rate units, tenure, etc.); the amount of the in-
lieu fees; and the previous methodology for calculating the in -lieu fees. Using City data,
EPS will also document the actual results of the policy during its existence, including the
number and type of inclusionary units directly constructed by developers, the amount of
in -lieu fees paid, and the number and types of units constructed using those in -lieu fees.
TASK 3. ANALYSIS OF POLICIES IN COMPARABLE CITIES
EPS will investigate the application of affordable housing in -lieu fee programs in other
California jurisdictions. As part of this investigation, EPS will review the amounts of the
fees, the application of the fees to projects of various types or sizes, and the relationships
between the in -lieu fees and the inclusionary housing requirements or other affordable
housing programs (such as "workforce housing" requirements placed on non - residential
development). EPS will issue a Technical Memorandum relating the findings of this
analysis.
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
TASK 4. STAKEHOLDER MEETING WITH LOCAL BUILDERS
To ensure that the assumptions used in the technical analysis can withstand critical
scrutiny, EPS will conduct a stakeholder meeting with representatives of local builders
of market rate and affordable housing. At this meeting, EPS will present the basic
framework for the analysis of the inclusionary housing program, and request input
regarding the costs of development for various product types. Cost variables to be
discussed will include land costs; hard costs for labor and materials; and soft costs such
as marketing, design, financing, and impact fees. These assumptions will form the
foundation for several economic analyses, including the affordable housing subsidy
calculation, analysis of financial impacts, and in -lieu fee calculation. If the City elects to
have EPS conduct the optional Task 6 Impact Analysis, EPS will also seek input from the
stakeholder builders to establish a representative sample of projects against which the
economic impacts of inclusionary housing policies will be measured. As necessary, EPS
wilt continue correspondence with meeting attendees to ensure that issues and
questions are adequately addressed. EPS anticipates that City staff will assist in
identifying appropriate attendees, coordinating meeting logistics; and overseeing
continued correspondence between stakeholders and EPS.
TASK 5. AFFORDABLE HOUSING SUBSIDY CALCULATION
With input from local builders of market rate and affordable housing, EPS will develop
static pro forma worksheets that estimate the cost of developing housing units of three
different types — single - family detached homes, townhomes, and apartments— assuming
an average unit size as determined jointly by EPS and City staff. EPS will also work
with City staff to determine an appropriate mix of unit types and tenures (renters vs.
homeowners) for households in each income category. For instance, it may be
determined that 100 percent of housing for very low- income households should be
rental apartments, while housing for low - income households may be 75 percent rental
apartments and 25 percent for -sale townhomes. To determ ne the affordable housing
subsidy required for each income category, EPS will then compare the housing
production costs to the price that households in each income category can afford to pay
for housing. EPS will work with City staff to determine if these subsidy calculations
should be limited to low- and very- low- income households, or also include moderate
income households. These subsidy calculations will serve as the basis of the optional
impact analysis performed in Task 6, as well as the in -lieu fee calculation performed in
Task 7.
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
TASK 6. INCLUSIONARY HOUSING IMPACT ANALYSIS
(optional)
If the City believes such analysis is valuable, EPS will determine the economic impact
that various applications of the inclusionary housing policy may have. EPS will create
static pro formas for market -rate development projects of various types and sizes, and
calculate the impact that various applications of the inclusionary housing policy will
have on project economics. Variables will include the types and sizes of the units, the
prices of the market rate units, the percentage of units that must be provided as
affordable units, and the level of affordability of those units. This analysis may
determine, for instance, that a 25 -unit project of 20 market rate single - family detached
homes may suffer little economic consequence of providing five townhomes affordable
to low- income households, while a 200 -unit apartment complex may have considerable
feasibility issues if 40 of the units must be provided to very low- income households.
EPS will work with City staff and local builders (in Task 4) to develop a representative
sample of projects against which to test the inclusionary housing polies economic
impact.
TASK 7. IN -LIEU FEE CALCULATION
EPS will calculate an in -lieu fee that housing builders could pay the City instead of
Providing affordable units within their projects. These in -lieu fees would aim to be
revenue - neutral, meaning they would subsidize the production of the same number of
affordable housing units as would otherwise be required through an inclusionary policy.
EPS will work with City staff to determ ne if the policy should differentiate the in -lieu
fee requirement by housing unit size and type. EPS will also work with City staff to
determine if the in -lieu fee amount should be partially reduced to reflect the availability
of other funding sources for affordable housing developed by the City or nonprofit
entities.
TASK 8. INCLUSIONARY HOUSING POLICY OPTIONS
(optional)
If the City believes such analysis is valuable, EPS will work with City staff to prepare a
range of policy options related to the types and sizes of housing projects that will be
subjected to the requirement, the recommended amount of the in -lieu fee, and updating
procedures (indexing v. active reset). In addition, EPS will outline optional ways in
which a builder facing the inclusionary requirement can meet the obligation, including
small units, second units, nonprofit participation, City partnerships, land dedication,
and density bonuses. EPS will also explore various concepts for setting the in -lieu fee,
5 G ;%Ia WR�t\ aza pimp
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
such as a sliding scale based on unit types and sizes. Such concepts may be necessary to
create incentives for more market rate housing units that happen to meet lower income
households' affordability levels ( "affordable by design" units).
TASK 9. ADMINISTRATIVE REVIEW DRAFT REPORT
EPS will issue an Adnunistrative Review Draft Report detailing the findings of the
previous analyses. This report will inform preliminary discussions regarding the
options the implementation the in -lieu fee program. EPS will attend a meeting with City
staff to discuss the findings presented in the Draft Report, and to establish priorities for
the preliminary policy recommendations prior to presentations to City Council.
TASK 10. PRESENTATIONS OF FINDINGS AND
RECOMMENDATIONS
EPS will prepare a Public Review Draft Report that states preliminary recommendations
regarding the implementation of a revised affordable housing in -lieu fee policy. EPS
will also prepare a formal presentation of the findings and preliminary
recommendations, wh ch we can then present to various stakeholders including
homebuilder groups, affordable housing advocates, and the City Council as directed by
City staff. EPS's budget for this task anticipates our participation in not more than one
(1) public presentation, although the budget can be adjusted if more presentations are
requested. The logistics for all presentations will be organized by City staff.
TASK 11. REFINEMENT OF FINDINGS AND ORDINANCE
REVISIONS
Following guidance from decision - makers, a preferred policy will be articulated. With
input from the City Attorney's Office, EPS will suggest specific ordinance revisions that
can be used as the basis for City Council legislative action, and incorporates the
technical findings by reference. A Final Report will also be issued at this time, and a
final presentation to City Council will be conducted.
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PROJECT ADMINISTRATION
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PROJECT ADMINISTRATION
BUDGET
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
EPS estimates that the full Scope of Services for this project (including the optional tasks)
will require a total budget not- to-exceed $24,715. If the City elects not to request the
optional services described in Tasks 6 and 8, the total project budget would be reduced
to $19,975. These budget estimates include costs for professional services as well as
direct expenses for travel, which are billed at cost without mark -up. Table 1 presents a
breakdown of project costs by EPS employee and by task. EPS will be pleased to discuss
possible amendments to the Scope of Services if this budget exceeds the City's
expectations.
SCHEDULE
EPS anticipates that this assignment can be completed within eight (8) weeks of
receiving a Notice- to-Proceed from the City of Newport Beach.
STAFFING
EPS's Principal -in- Charge for this assignment will be Walter Kieser, Managing Principal
and President of the firm. Mr. Kieser has extensive experience in analyzing and
formulating affordable housing policies for numerous jurisdictions throughout
California Darin Smith, Vice President of EPS, will serve as the firm's Project Manager
for this assignment. Mr. Smith also has experience managing several related projects,
and provides strong quantitative skills in addition to his detailed understanding of the
pertinent policy issues. As necessary, Mr. Smith and Mr. Kieser will be assisted by other
EPS staff who have also participated in related projects. Please see the attached
"Qualifications, References and Resumes" section for a full description of several related
projects recently conducted by EPS.
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Table 1
Proposed Budget
Newport Beach Affordable Housing In -Lieu Fee Study
Economic & Planning Systems, Inc.
Task 1
Project Initiation
Task 2
Current Inclusionary Polity Review
Task 3
Analysis of Policies in Comparable Cities
Task 4
Stakeholder Meeting with Local Builders
Task 5
Affordable Housing Subsidy Calculation
Task 6
Indusionary Housing Impact Analysis (Optional)
Task 7
In -Lieu Fee Calculation
Task 8
Indusionary Housing Policy Options (Optional)
Task 9
Administrative Review Draft Report
Task 10
Presentation of Findings and Recommendations
Task 11
Refinement of Findings and Ordinance Revisions
6
8
0
0
$300
Total Project Hours
0
Billing Rates ($ /Hour)
4
Total Professional Services
0
Total Direct Expenses
$1,350
Total Project Budget
2
Total Project Hours
12
Billing Rates ($IHour)
$0
Total Professional Services
0
Total Direct Expenses
4
Total Project Budget
0
6
6
8
0
0
$400
Hours by Employee
0
0
TOTAL
Managing
Vice Research
Support
Direct
BUDGET
Principal
President Associate Analyst
Staff
Expenses
by TASK
6
6
8
0
0
$400
$3,540
0
0
2
a
0
$0
$200
0
2
8
8
0
$0
$1,750
0
6
8
0
0
$300
$2,030
0
2
4
8
0
$0
$1,350
0
2
4
12
0
$0
$1,670
0
1
4
4
0
$0
$875
4
6
12
0
0
$0
$3,070
4
8
12
8
4
$300
$4,560
6
a
12
0
2
$400
$4,370
2
2
4
0
2
$0
$1,300
Total
22
43
78
40
8
191
$235
$155
$100
$80
$60
$5,170
$6,665
$7,800
$3,200
$480
$23,315
$1,400
Total
18
35
62
28
8
151
$235
$155
$too
$SO
$60
$4,230
$5,425
$5,200
$2,240
$480
$18,575
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$1,400
=.
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Economic &
Planning Systems
Real IDuafe Economics
Regional Economics
Pudic Finance
Land U. Poliry
QUALIFICATIONS, REFERENCES, AND
RESUMES
0 •
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
ABOUT ECONOMIC & PLANNING SYSTEMS
The Firm Economic & Planning Systems (EPS) is a land economics
consulting firm experienced in the full spectrum of
services related to real estate development market
analysis, public/private partnerships, and the financing of
government services and public infrastructure.
Guiding Principle EPS was founded on the principle that real estate
development and land use - related public policy should be
built upon realistic assessment of market forces and
economic trends, feasible implementation measures, and
recognition of public policy objectives, including
provisions for required public facilities and services.
Areas of Expertise • Real Estate Market and Feasibility Analysis
• Public Finance
• Fiscal Impact Analysis
• Economic Impact Analysis
• Reuse, Revitalization and Redevelopment
• Real Estate Transactions and Negotiations
• Regional Economics and Industry Analysis
• Land Use Planning and Growth Management
• Open Space and Resource Conservation
• Government Organization
• Information Systems
Clients Served Since 1933 EPS has provided consulting services to
hundreds of public and private sector clients in California
and throughout the United States. Clients include cities,
counties, special districts, multi - jurisdictional authorities,
property owners, developers, financial institutions, and
land use attorneys.
Staff Capabilities Each of the firm's three Managing Principals has over 25
years of professional experience providing a broad range
of economics consulting services. The professional staff
includes specialists in public finance, real estate
development, land use and transportation planning,
government organization, and computer applications. The
firm excels in preparing concise analyses that disclose risks
and impacts, support decision making, and provide
solutions to real estate development and land use - related
problems.
Office Locations Berkeley, California
Sacramento, California
Denver, Colorado
EPS Website www.epsys.com
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FIRM QUALIFICATIONS
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
AFFORDABLE AND WORKFORCE HOUSING PROJECTS
Sonoma County Workforce Housing Program (2002)
Sonoma County, California
The Bay Area housing market has become increasingly expensive in recent years, with
median home prices rising nearly 100 percent over five years in some areas. Rapid
employment growth coupled with limited land supply have led to this situation. In
Sonoma County, home prices have increased significantly and, for new workers in the
County's expanding employment base, finding housing that is affordable has become
increasingly difficult.
A coalition of the nine cities in the County and the County government commissioned
EPS to conduct a study of the nexus between employment and housing, and to propose
a countywide approach to the affordable- housing shortage. This study has involved an
evaluation of the employment and commuting patterns trends in Sonoma County, the
income distribution among future jobs in the County, the costs to build and to acquire
market rate and affordable housing, and the various programs currently in place to
address housing affordability issues. EPS established the relationship between
employment growth and housing prices, and recommended an impact fee that assigns
some of the financial costs of developing affordable housing back to the employers
whose expansion contributes to housing demand.
Walter Kieser served as EPS's Principal -in- Charge for this assignment, while Darin
Smith served as EPS's Project Manager.
Santa Barbara Affordable Housing Program (2003)
Santa Barbara, California
In the midst of rapidly escalating housing costs, the City of Santa Barbara experienced a
housing crisis along with many other California cities. As a relatively wealthy
municipality, Santa Barbara had a number of programs in place to address the needs of
very low- and low- income families, but housing remained unaffordable to many
moderate- and above moderate - income households. The City sought assistance in
developing an affordable housing fee program that better addressed the needs of these
middle- income families. EPS was detained by the City to prepare a comprehensive
study of affordable housing needs, and to create a two -tiered fee structure to fund future
affordable housing development.
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
In order to estimate existing and future need for affordable housing in Santa Barbara,
EPS examined employment growth, commuting patterns, and other economic and
demographic changes in the region. This information was used to estimate the amount
of funding that would be needed to bridge the gap between market housing costs and
the ability of families at different income levels to pay for housing. Using the housing
needs assessment as a basis, EPS developed an indusionary housing fee program that
requires residential developers to make a certain percentage of all new housing units
developed affordable to moderate- and above moderate - income households. EPS also
designed a yobs - housing linkage fee, again based upon the housing needs assessment.
The jobs- housing linkage fee established the connection between nonresidential
development in the City and increased demand for affordable housing, and set a fee
based on nonresidential development's "fair share' of affordable housing costs.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
Napa Inclusionary Housing Ordinance (2003)
City of Napa, California
The City of Napa, pursuant to Housing Element policy, sought to expand the provisions
of its Affordable Housing Inclusionary Ordinance by increasing the inclusionary
requirement from 10 to 20 percent in selected portions of the City zoned for multifamily
housing. Concern was initially expressed to the City Council that such an increase could
be economically infeasible and actually deter desired housing projects from occurring.
EPS was retained to participate with an ad hoc committee of stakeholders and prepare
an economic analysis of the proposed increase in affordable housing requirements. The
economic analysis included a review of market conditions, a pro forma analysis of
development prototypes, and consideration of the beneficial effects of City- sponsored
incentives for affordable housing. The analysis concluded that the proposed increase in
inclusionary requirement from 10 to 20 percent would not deter desired housing
developments. The City Council adopted the Affordable Housing Overlay District in
November 2003.
Walter Kieser served as EPS's Princpal-in- Charge for this assignment, while Darin
Smith provided technical analysis.
Sonoma County Housing Element (2001)
Sonoma County, California
Sonoma County was under court -order to update its 1992 Housing Element. EPS was
retained to 1) prepare technical analyses regarding current and projected housing needs
and an analysis of market, environment, governmental, and other factors which affect
the extent to which housing needs are satisfied; and 2) prepare a comprehensive
Housing Element to be adopted and included in the County's Comprehensive Plan.
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
EPS first prepared a series of six Technical Memoranda. These Memoranda served as
the technical basis of the Housing Element, along with other information prepared by
staff and other participating agencies. The Memoranda were designed and used to
facilitate discussions with the State Housing and Community Development Department
and interest groups. The Memoranda informed these groups and the public at large of
the technical underpinnings of the Housing Element and allowed them the opportunity
to review and comment on data used, specific findings, assumptions, and technical
conclusions. The Memoranda addressed demographic and housing market trends,
current affordable housing supply and programs, affordable housing need projections,
special housing needs, inventory of potential housing sites (prepared in conjunction
with County staff), and housing strategies and five -year quantified objectives.
After the Memoranda were completed, they were released for public review and
workshops were held to solicit comments from the public as well as from appointed and
elected officials. Comments, suggestions, and corrections were incorporated in the Draft
Housing Element, which was subsequently completed in approximately four weeks.
Walter Kieser served as EPS's Principal -in- Charge for this assignment, while Darin
Smith served as EPS's Project Manager.
Santa Rosa Affordable Housing In -Lieu Fee (2002)
Santa Rosa, California
Like many cities in the Bay Area, housing prices in the City of Santa Rosa increased
rapidly throughout the latter half of the 1990s, making housing increasingly
unaffordable to very low -, low -, and even median- income households. In the midst of a
statewide affordable housing crisis, the City of Santa Rosa examined a number of
policies in order to better meet the housing needs of its lower income residents.
As part of this effort, EPS was retained to update the City's pre - existing Affordable
Housing In -Lieu Fee to reflect current housing production prices, and to address its
Regional Housing Need, as determined by the Association of Bay Area Governments.
EPS estimated the cost of subsidizing affordable housing in Santa Rosa, and based on
this subsidy amount, EPS estimated affordable housing in -lieu fees under different
incidence assumptions and discussed policy options for achieving affordable housing
goals.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
Santa Barbara Affordable Housing Feasibility Analysis (2003)
Santa Barbara, California
The City of Santa Barbara seeks to understand the feasibility and policy implications of
developing affordable housing on nine City -owned properties located in its Downtown
area. These nine properties are currently used for surface parking. While the City faces
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
a challenge in meeting its affordable housing goals and must consider the full range of
possible solutions, it will be important to understand the financial, parking, and other
policy implications of such disposition of City property. The City retained EPS to assist
in determining which, if any, of the selected properties have merit as affordable housing
sites and, if so, what steps can be taken to achieve this objective. EPS conducted an
analysis of the feasibility of residential development (and possibly other supporting
uses) occurring on the selected properties, and the ability to replace existing parking
capacity and assure adequate parking for new uses on the site. EPS worked with an
architectural /planning firm to prepare development scenarios for the different sites.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
Santa Rosa Affordable Home Ownership Program Analysis (2003)
Santa Rosa, California
In response to the City of Santa Rosa's updated Housing Allocation Plan Ordinance,
several local developers offered to build and dedicate on -site single - family ownership .
units, with an initial sales price affordable to low- income households, instead of paying
the City's in -lieu fee. In the City's consideration of the proposals to develop these
affordable homeownership units, two primary issues emerged: 1) is there a
homeownership program model that will ensure affordability at resale for a term similar
to that required of rental housing; and, 2) if such a model exists, what is the City's
responsibility for the administration, enforcement, and cost of a home ownership
program.
EPS was retained by the City to help address these two issues, as well as to provide an
overall summary of the components necessary to implement a home ownership model
for meeting the City's on -site inclusionary housing requirement. EPS surveyed
affordable home ownership programs in various cities throughout the State and around
the country that have successfully obtained, sold, and assured long term affordability of
ownership units. These case studies included the resort communities of Aspen,
Telluride, and Vail, Colorado; as well as the California cities of Monterey, Napa, San
Francisco, Santa Barbara, and Santa Monica; and Marin County, California.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
Aspen Affordable Housing Master Plan (2002)
Aspen, Colorado
The City of Aspen had an inventory of acquired or available sites suitable for
development of affordable housing as well as two dedicated revenue streams designed
to support this type of development (a sales tax and real estate transfer tax). However,
because of intense community debate about housing costs and the impacts from growth
and sprawl, there had been no new affordable housing proposals for several years and
no clear direction on how to proceed.
13 G:\ 102aumpn]sOZaepl.eoc
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
The City of Aspen retained EPS to provide a strategy for increasing the inventory of
affordable housing in the City. The primary purpose of the strategy was to help the City
understand where it could leverage its resources and capitalize on the greatest
opportunities in a cost - effective manner. As a first step in formulating the strategy, EPS
developed a housing needs assessment which provided aggregate targets for housing
production for specific income levels. EPS evaluated multiplehousing development
options, including those involving the public and private sectors. Based on detailed pro
forma models developed for seven sites and three prototypical infill projects, EPS
prioritized the development opportunities using policy -based evaluation, including an
estimate of the subsidy required for each site. In addition, EPS provided a financial
analysis of the costs and revenues associated with the aggregate housing program over a
ten -year period to document how the City could accomplish its goals. Based on the
analysis provided by EPS, the City adopted the recommended ten -year action plan and
is proceeding with the highest priority project identified. The City also restructured the
Housing Authority Board based on recommendations contained in the plan.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
Marina Jobs/Housing Study (2002)
Marina, California
The City of Marina, historically a military community for the former Fort Ord Army
base on Monterey Peninsula, was concerned about its status as a bedroom community
for Peninsula workers and increasingly for commuters to Silicon Valley. The City
wished to increase employment opportunities in the City and to correct fiscal
imbalances that had been created by housing growth in the absence of significant
commercial or retail development. At the same time the City wished to address an
increasing housing affordability problem that was exacerbated by higher -paid workers
from other parts of the County and beyond seeking housing in Marina.
EPS was retained to conduct a Jobs/Housing Balance Improvement Study that includes
analysis of housing supply and demand, current and projected employment, and
opportunities and constraints for attracting new higher-paying jobs. This technical
analysis, in combination with input from public officials, citizens groups, and the public
at large, will culminate in an implementation plan. The implementation plan will
outline key priorities and policies for promoting employment retention and
development and for providing a variety of housing options affordable to a range of
income levels.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
14 6:114020nvyf \14020w I.do
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Folsom jobs/Housing Linkage (2002)
Folsom, California
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
The City of Folsom, like many California communities, faced a shortage of housing units
affordable to lower- income residents. Employment growth in the City had resulted in
an increased demand for housing, contributing to higher home prices throughout the
City, thereby exacerbating the housing supply shortage. .
EPS was retained to evaluate the linkage between employment growth and housing
demand in the City of Folsom, and to calculate a fee to be paid by nonresidential
development for the purpose of constructing additional affordable housing. For this
analysis, EPS projected future employment growth by industry and occupation expected
to take place within the City. Specifically, EPS identified the number of new employees
likely to seek residence in the City of Folsom that earned wages in the low- income and
very low- income brackets. Next, EPS conducted extensive market analysis to identify
the cost of housing production in Folsom. These costs were compared with the ability of
low- income and very low- income families to pay for housing, and a per -unit subsidy
requirement was estimated. Using this information, EPS calculated the nonresidential
affordable housing fee under different policy scenarios, and provided recommendations
to the City for implementation.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
Napa Resort Affordable Housing (2001)
Napa, California
A developer proposed to construct and operate a resort development in the Napa
Valley. Because of the serious lack of affordable housing in the area, the County of Napa
requested that the developer prepare a program to address issues of affordable housing
resulting from the development. EPS helped the developer structure a program to
define the affordable housing needs of employees of the development, review options
for accommodating those needs, and evaluate the related costs. The resulting program
specified an amount of funds that would address housing needs without adversely
affecting the feasibility of the development, and prioritized the use of funds first to the
needs of very low- income employees. Unlike other resort developments (e.g., ski
resorts), this project relied on full -time employees living in the.region; therefore, the
housing program was based on a rent subsidy program.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
15 c:\Ia 2N tnI�20, 1.do�
9
Newark Parks and Affordable Housing Fees (2001)
Newark, California
E
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
Like many cities in the Bay Area, the City of Newark experienced a significant amount
of new residential and nonresidential development activity throughout the latter half of
the 1990s. As a result of this development, the value of remaining land in the City
increased, making new housing developments less affordable to low -, very low -, and
median- income families. In addition, the increased land values rendered the City's Park
Dedication In -Lieu Fee out of date.
EPS assisted the City of Newark by performing the analysis needed to 1) update its Park
Land Dedication Fee to current land values, 2) establish an inclusionary housing policy
and calculate an Affordable Housing In -Lieu Fee to be charged to residential
development, and 3) calculate an Affordable Housing Linkage Fee to be charged to
nonresidential development. For the Affordable Housing In -Lieu fee, EPS compared the
cost of providing housing with the ability of low- income families to pay for it to
calculate a funding gap and thus a fee. A similar funding gap was calculated for the
Linkage Fee based on an estimate of the number of new lower paying jobs expected to
be created in the City. The Quimby fee update was based on current market values for
undeveloped land in the City as well as a residual land value analysis. The City is
currently in the process of adopting all three fees.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
Lafayette Affordable Housing Fee (1998)
Lafayette, California
The City of Lafayette's recently revised Housing Element of the General Plan includes a
policy to establish an inclusionary housing ordinance. Negotiations over approvals for a
single - family residential project in the RDA in spring of 1998 resulted in the payment of
an in -lieu affordable housing fee. The City decided to look into the feasibility of
adopting a broader Citywide in -lieu affordable housing fee.
EPS was retained to review the City's affordable housing policies and prepare a
feasibility study of an affordable housing in -lieu fee. EPS estimated the cost of
subsidizing affordable housing in the City of Lafayette in order to meet the City's
affordable housing goals. Based on this subsidy amount EPS estimated affordable
housing in -lieu fees under different incidence assumptions and discussed policy options
for achieving affordable housing goals.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
16 GA1402Nn f \3402p Tl.do
�J
REFERENCES
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
1. Sonoma County Workforce Housing
Santa Rosa Affordable Housing In -Lieu Fee
Client Contact: Chuck Regalia, Deputy Director of Planning, City of Santa Rosa
Phone: 707 -543 -3189
2. Santa Barbara Affordable Housing Program
Client Contact: Paul Casey, Assistant Community Development Director, City of
Santa Barbara
Phone: 805 -597 -1971
3. Napa Inclusionary Housing Ordinance
Client Contact: Jean Hasser, Planner, City of Napa
Phone: 707 - 257 -9530
4. Sonoma Housing Element
Client Contact: Gregg Carr, Sonoma County Development Manager,
Sonoma County
Phone: 707 -565 -1900
17 c:\19 200 .PA i4woeyU.
0 •
Economic &
Planning Systems
Real Estate Economic
Regional Economics
Public Finanre
Land Use Polity
WALTER F. KIESER
Background Walter Kieser is a land use planner and urban economist who, during his
29 -year professional career, has specialized in designing and managing
complex technical analyses, communicating the results of planning,
preparing and evaluating economic and financial analyses, and facilitating
transactions. This broad -based expertise provides balanced and pragmatic
solutions, ensuring that land use and conservation plans can be
successfully implemented, that infrastructure and government services can
be adequately funded, and that real estate projects meet private- sector
financial objectives while supporting public policy objectives.
Mr. Kieser is founder, Managing Principal, and President of Economic &
Planning Systems, Inc., an urban economics consulting firm with offices in
Berkeley, Sacramento, and Denver. The firm serves a diversity of public
and private - sector clients throughout the United States.
Expertise Land use planning — Participated in the preparation of comprehensive
and specific plans for many cities and counties, with emphasis upon
demographic and economic forecasts, real estate market analyses, land use
analyses, and policies and programs related to growth management,
transportation, urban revitalization, recreation and open space, public
services and infrastructure, and housing.
Economic development and revitalization — Assisted cities with preparing
economic development and revitalization strategies associated with
downtown business areas, visitor- serving resort development, and retail
shopping centers. These strategies have involved the use of traditional
redevelopment techniques, public /private partnerships, and
implementation of transit - oriented mixed use development,
Resource conservation — Participated in numerous programs and projects
designed to preserve open space and natural habitats, preserve
agricultural lands, and ensure productive and sustainable use of natural
resources. These programs applied creative regulatory mechanisms
(planning and zoning), compensatory regulations, and public acquisition
techniques.
BERKELEY .,yam ��,. SACRAMENTO DENVER
2501 Ninth A., Sol,, 200 phone: 510 -Adi -9190 .%W Phone: 916 -649 -8010 Phone: 303 - 623-3557
Bcckticy, CA 9473045/5 Fax: 510 -841 -9209 Fev 9161649.2070 Fax: 303 -62i 19049
www,cpsys.com
0
i
WALTER F. KIESER
ECONOMIC & PLANNING SYSTEMS
PAGE
Government organization — Prepared numerous governance feasibility
studies addressing municipal incorporation, major annexations, special
district formations and consolidations, and inter - governmental
agreements. These feasibility studies typically involved preparation of
detailed pro forma operational and capital budgets, and analysis of
impacts of reorganization upon existing agencies.
Negotiated agreements — Participated in numerous real estate
development and infrastructure financial negotiations involving public
and private participants. These negotiations have resulted in successful
agreements, including mitigation and tax sharing agreements,
development agreements, owner participation agreements, and real estate
disposition agreements.
Fiscal and economic impact analysis — Prepared fiscal and economic
impact analysis on a wide variety of land use plans, development projects,
and infrastructure improvements. These quantitative analyses have
focused upon determining the cost of growth, policy refinement, and
ensuring implementation within the context of land use plans,
environmental impact analyses, and initiative ballot measures.
Public finance — Established public financing strategies for a wide variety
of public services and infrastructure projects, including development
project - related infrastructure, area -wide capital improvement programs,
and specific infrastructure projects. Financing techniques applied include
formulation of area - specific and facility- specific development impact fees,
special tax bonds, and redevelopment tax increment financing.
Employment 1983 — Present Managing Principal, Economic & Planning Systems, Inc.
1977 -1983 Managing Associate, Angus McDonald and Associates
1971 -1976 Associate Planner, Sonoma County Planning Department,
Advanced Planning Division
1967 -1970 U.S. Army Military Intelligence
Education Bachelor of Arts degree in Environmental Studies and Biology from
Sonoma State University in 1974. Completed graduate courses in
economics and public administration at Sonoma State University and the
University of California, Berkeley.
Affiliations American Planning Association, Member
California Association of Local Agency Formation Commissions, Associate
Member
International Society for Ecological Economics, Member
i
DARIN SMITH
Economic &
Planning Systems
Real Estate Econnmi¢
Regional Econanna
Pubiic Finance
Land Use Pall,
Background Darin Smith has extensive professional experience in the areas of strategic
development planning and implementation, market and feasibility analysis,
transit- oriented development planning, housing strategies, fiscal and social
impact analysis, and corporate site selection.
Mr. Smith is a Vice President at Economic & Planning Systems, Inc., an urban
economics consulting firm with offices in Berkeley, Sacramento, and Denver.
EPS serves public and private sector clients throughout the United States.
Expertise Development Planning and Implementation — Mr. Smith has planned large
and small market -based development programs, and worked to implement
such plans through developer solicitation and negotiations.
Real Estate Market and Financial Feasibility Analysis — Mr. Smith has
experience analyzing the market conditions and financial feasibility of
residential, office, retail, lodging, industrial, and recreational development.
Transit - Oriented Development Plannine — Mr. Smith has studied the unique
economic and logistical opportunities in transit station areas and prepared
land use plans and development programs for such areas.
Housing Strategies — Mr. Smith has evaluated housing demand, production
feasibility, gap financing strategies, regulatory incentives, and developer
exactions for affordable and market -rate housing development.
Fiscal and Social Impact Analvsis — Mr. Smith has developed and refined
models to evaluate the fiscal and social impacts of prospective development or
policies in counties and municipalities.
Corporate Site Selection — Mr. Smith has developed specific multi -year real
estate acquisition strategies for a national retailer, as well as developing sales
projection models based on demographic and real estate characteristics.
BERKELEY SACRAMENTO DENVER
2501 Ninth St., Suite 200 Phone: 510- 641 -9190 1 Phone: 916- 649 -9010 Phone: 303 -623 -3557
Berkeley, CA 94710 -2515 Fax: 5 1 0-941-9208 Fax: 916 -649 -2070 Fax: 303 - 623 -9040
www.epsys.cont
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DARIN SMITH
ECONOMIC & PLANNING SYSTEMS
PACE 2
Employment 2000 -2002 Vice President, Economic & Planning Systems, Inc.
1997 -1999 Associate/Project Manager, ZHA Inc., Annapolis, MD
1991-1997 Site Selection Consultant, Pep Boys, Philadelphia, PA
Education Master of City Planning, University of Pennsylvania, 1997
Bachelor of Arts Degree in Psychology, University of Pennsylvania, 1993
Awards 2002 California APA "Award of Merit for Planning Implementation'
for the Sonoma County Housing Element
2001 -2002 California AIA and APA "Ahwanee Award of Honor" for the
Hayward Cannery Area Design Plan
2001 Congress for the New Urbanism "Award of Excellence" for the
Robert Mueller Municipal Airport Reuse Plan
(3a����?���
CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 12
April 27, 2004
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY
BY
FROM: PLANNING DEPARTMENT
TAMARA CAMPBELL AICP, SENIOR PLANNER APR �V 2004
(949) 644 -3238
tcampbell a city. newport- beach. ca. us
SUBJECT: PROFESSIONAL SERVICES AGREEMENT WITH ECONOMIC AND
PLANNING SYSTEMS, INC. TO CONDUCT AN IN -LIEU HOUSING FEE
ANALYSIS AND BUDGET AMENDMENT TO APPROPRIATE FUNDS
ISSUE
Should the City initiate a Professional Services Agreement with the consulting firm of
Economic and Planning Systems, Inc. (EPS) to conduct an in -lieu housing fee analysis
for purposes of establishing an updated in -lieu housing fee?
RECOMMENDATIONS
1. Approve the Professional Services Agreement (PSA) with EPS for an in -lieu
housing fee analysis.
2. Approve a budget amendment to appropriate $19,975 from the General Fund
unappropriated reserves to cover the cost of the analysis.
DISCUSSION:
The City's Housing Element requires that all new residential developments allocate a
certain percentage of the homes in a residential project to low- and moderate - income
households or pay an "in -lieu" housing fee. This program was originally adopted to
assist the City in attracting units to fulfill the "fair share" requirement imposed by the
Regional Housing Needs Assessment (RHNA) developed by the Southern California
Association of Governments.
The current "in -lieu fee" originated with the development agreement for One Ford Road
in the late 1990's. It has not been codified in an ordinance, it is not based on a market
study and is no longer an accurate reflection of current market conditions for the
• PROFESSIONAL SEPCES AGREEMENT AND
BUDGET AMENDMENT FOR IN -LIEU HOUSING FEE ANALYSIS
April 27, 2004
Page 2
development of affordable housing. With the in -lieu fee now an adopted program in the
Housing Element, it needs to be codified and supported by a market analysis.
Staff circulated a Request for Proposals (RFP) to 11 consulting firms in mid - January
and received three proposals. Interviews were conducted with two firms on March 11,
2004 to further evaluate the submittals and review qualifications. After in -depth
discussions with each firm, staff recommends awarding the contract to EPS given their
extensive background with numerous cities in establishing in -lieu housing fees.
EPS Proposal
The EPS proposal (attached as Exhibit A to the PSA) contains nine tasks and two
optional tasks. Staff recommends that the scope only include the necessary tasks with
the elimination of the two optional tasks. The desired tasks include: 1) Project Initiation,
2) Current Policy Review, 3) Analysis of Policies in Comparable Cities, 4) Stakeholder
Meeting with Local Builders, 5) Affordable Housing Subsidy Calculation, 7) In -Lieu Fee
Calculation, 9) Administrative Draft Report, 10) Presentation of Findings and
Recommendations, and 11) Refinement of Findings and Ordinance Revisions
Budget
The consultant is proposing a budget of $19,975. Given the importance of having a fee
that accurately reflects the cost of providing new affordable housing and the number of
issues likely to be addressed as part of their analysis, this amount is justified. It should
be noted that the budget reflects that the Principal -in- Charge for the analysis is Walter
Kieser, President of EPS. The agreement requires City approval for a change in any
EPS personnel.
Funding for this project is recommended to come from the General Fund Reserves and
would be appropriated to Planning Professional Technical Services Account #2710
8080.
Pr pared by: Submitted by:
NVA AA
Tamara Campbell, ICP Senior Planner Sharon Z. Wood, &stant City Manager
Attachment: Professional Services Agreement (Exhibit A — Proposal)
PROFESSIONAL SERVICES AGREEMENT WITH
ECONOMIC AND PLANNING SYSTEMS, INC.
THIS AGREEMENT, entered into this 27th day of April 2004, by and between
CITY OF NEWPORT BEACH, a Municipal Corporation (hereinafter referred to as
"City "), and Economic and Planning Systems (EPS), Inc., whose address is 2501
Ninth Street, Suite 200, Berkeley, CA 94710, (hereinafter referred to as "Consultant "), is
made with reference to the following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under
the laws of the State of California with the power to carry on its business as it is
now being conducted under the statutes of the State of California and the
Charter of City.
B. City is planning to establish an affordable housing "in -lieu" fee ordinance
in an effort to generate funds for the City's expenditure on the construction of
new affordable housing units and other affordable housing programs.
C. City desires to engage Consultant to analyze and provide
recommendations on the fee a residential developer should have to pay "in -lieu" of
providing low- and moderate - income housing units as outlined by the SCOPE OF
SERVICES attached hereto as EXHIBIT "A" (with the exception of Tasks 6 and 8)
and pursuant to the terms and conditions contained in this Agreement.
D. Consultant possesses the skill, experience, ability, background,
certification and knowledge to provide the services described in this Agreement.
E. The principal member of Consultant, for purpose of this Project, shall be
Walter F. Kieser, Managing Principal and President of EPS.
F. City has solicited and received a proposal from Consultant, has reviewed
the previous experience and evaluated the expertise of Consultant, and desires
to retain Consultant to render professional services under the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned
Parties as follows:
1. TERM
The term of this Agreement shall commence on the 27th day of April 2004, and
shall terminate on the 27th day of April 2005, unless terminated earlier as set
forth herein.
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2. SERVICES TO BE PERFORMED
Consultant shall diligently perform all the services described in the Scope of
Services attached as Exhibit "A" (with the exception of Tasks 6 and 8) and
incorporated herein by reference. The City may elect to delete certain tasks of
the Scope of Services at its sole discretion.
3. TIME OF PERFORMANCE
Time is of the essence in the performance of services under this Agreement and
the services shall be performed to completion in a diligent and timely manner.
The failure by Consultant to perform the services in a diligent and timely manner
may result in termination of this Agreement by City.
Notwithstanding the foregoing, Consultant shall not be responsible for delays
due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the services to be provided for the Project, each party hereby
agrees to provide notice to the other party so that all delays can be addressed.
3.1 Consultant shall submit all requests for extensions of time for
performance in writing to the Project Administrator not later than ten (10)
calendar days after the start of the condition that purportedly causes a
delay. The Project Administrator shall review all such requests and may
grant reasonable time extensions for unforeseeable delays that are
beyond Consultant's control.
3.2 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the
circumstances, by either telephone, fax, hand - delivery or mail.
4. COMPENSATION TO CONSULTANT
City shall pay Consultant for the services on a time and expense not -to- exceed
basis in accordance with the provisions of this Section and the schedule of billing
rates, contained in the SCOPE OF SERVICES attached as EXHIBIT "A ". In no
event shall Consultant's compensation exceed Nineteen Thousand Nine
Hundred and Seventy -Five Dollars ($19,975) without additional authorization
from City. No billing rate changes shall be made during the term of this
Agreement without the prior written approval of City. Should any components of
the SCOPE OF SERVICES be eliminated by the City pursuant to Section 2.1 of
this Agreement, the contracted compensation shall be reduced accordingly,
consistent with the estimated cost of said components set forth in the budget
included in the SCOPE OF SERVICES.
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•
3.1 Consultant shall submit monthly invoices to City describing the work
performed the preceding month. Consultants bills shall include the name
of the person who performed the work, a brief description of the services
performed and /or the specific task in the Scope of Services to which it
relates, the date the services were performed, the number of hours spent
on all work billed on an hourly basis, and a description of any
reimbursable expenditures. City shall pay Consultant no later than thirty
(30) days after approval of the monthly invoice by City staff.
3.2 City shall reimburse Consultant only for those costs or expenses
specifically approved in this Agreement, or specifically approved in
advance by City. Unless otherwise approved, such costs shall be limited
and include nothing more than the following costs incurred by Consultant:
A. The actual costs of subconsultants for performance of any of the
services that Consultant agrees to render pursuant to this
Agreement, which have been approved in advance by City and
awarded in accordance with this Agreement.
B. Approved reproduction charges.
C. Actual costs and /or other costs and /or payments specifically
authorized in advance in writing and incurred by Consultant in the
performance of this Agreement.
3.3 Consultant shall not receive any compensation for Extra Work without the
prior written authorization of City. As used herein, "Extra Work" means
any work that is determined by City to be necessary for the proper
completion of the Project, but which is not included within the Scope of
Services and which the parties did not reasonably anticipate would be
necessary at the execution of this Agreement. Compensation for any
authorized Extra Work shall be paid in accordance with the Schedule of
Billing Rates set forth in Exhibit A.
3.4 Notwithstanding any other provision of this Agreement, when payments
made by City equal 90% of the maximum fee provide for in this
Agreement, no further payments shall be made until City has accepted the
final work under this Agreement.
5. PROJECT MANAGER
Consultant shall designate a Project Manager, who shall coordinate all phases of
the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Walter F. Kieser to
be its Project Manager. Consultant shall not remove or reassign the Project
Manager or any personnel listed in Exhibit A or assign any new or replacement
3
• !
personnel to the Project without the prior written consent of City. City's approval
shall not be unreasonably withheld with respect to the removal or assignment of
non -key personnel.
Furthermore, Consultant guarantees that Walter F. Kieser (Project Manager) will
personally perform all services delegated to him in the BUDGET outlined in
EXHIBIT "A ", unless previous arrangements have been made with City.
Consultant, at the sole discretion of City, shall remove from the Project any of its
personnel assigned to the performance of services upon written request of City.
Consultant warrants that it will continuously furnish the necessary personnel to
complete the Project on a timely basis as contemplated by this Agreement.
6. ADMINISTRATION
This Agreement will be administered by the City Manager's Office. Sharon Z.
Wood, Assistant City Manager shall be the Project Administrator and shall have
the authority to act for City under this Agreement. The Project Administrator or
his /her authorized representative shall represent City in all matters pertaining to
the services to be rendered pursuant to this Agreement.
7. CITY'S RESPONSIBILITIES
In order to assist Consultant in the execution of its responsibilities under this
Agreement, City agrees to, where applicable:
A. Provide access to, and upon request of Consultant, one copy of all
existing relevant information on file at City. City will provide all such
materials in a timely manner so as not to cause delays in Consultant's
work schedule.
B. Provide blueprinting and other services through City's reproduction
company for bid documents. Consultant will be required to coordinate the
required bid documents with City's reproduction company. All other
reproduction will be the responsibility of Consultant and as defined above.
C. Provide usable life of facilities criteria and information with regards to new
facilities or facilities to be rehabilitated.
8. STANDARD OF CARE
8.1 All of the services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and
technical personnel required to perform the services required by this
Agreement, and that it will perform all services in a manner
commensurate with community professional standards. All services shall
C!
be performed by qualified and experienced personnel who are not
employed by City, nor have any contractual relationship with City.
8.2 Consultant represents and warrants to City that it has or shall obtain all
licenses, permits, qualifications, insurance and approvals of whatsoever
nature that are legally required of Consultant to practice its profession.
Consultant further represents and warrants to City that Consultant shall, at
its sole cost and expense, keep in effect or obtain at all times during the
term of this Agreement, any and all licenses, permits, insurance and other
approvals that are legally required of Consultant to practice its profession.
Consultant shall maintain a City of Newport Beach business license
during the term of this Agreement.
8.3 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by
reason of strikes, lockouts, accidents, or acts of God, or the failure of City
to furnish timely information or to approve or disapprove Consultant's
work promptly, or delay or faulty performance by City, contractors, or
governmental agencies.
9. HOLD HARMLESS
To the fullest extent permitted by law, Consultant shall indemnify, defend and
hold harmless City, its City Council, boards and commissions, officers, agents
and employees (collectively, the "Indemnified Parties) from and against any and
all claims (including, without limitation, claims for bodily injury, death or damage
to property), demands, obligations, damages, actions, causes of action, suits,
losses, judgments, fines, penalties, liabilities, costs and expenses (including,
without limitation, attorney's fees, disbursements and court costs) of every kind
and nature whatsoever (individually, a Claim; collectively, "Claims "), which may
arise from or in any manner relate (directly or indirectly) to any work performed or
services provided under this Agreement (including, without limitation, defects in
workmanship or materials and /or design defects [if the design originated with
Consultant]) or Consultant's presence or activities conducted on the Project
(including the negligent and /or willful acts, errors and /or omissions of Consultant,
its principals, officers, agents, employees, vendors, suppliers, consultants,
subcontractors, anyone employed directly or indirectly by any of them or for
whose acts they may be liable or any or all of them).
Notwithstanding the foregoing, nothing herein shall be construed to require
Consultant to indemnify the Indemnified Parties from any Claim arising from the
sole negligence or willful misconduct of the Indemnified Parties. Nothing in this
indemnity shall be construed as authorizing any award of attorney's fees in any
action on or to enforce the terms of this Agreement. This indemnity shall apply
to all claims and liability regardless of whether any insurance policies are
applicable. The policy limits do not act as a limitation upon the amount of
indemnification to be provided by the Consultant.
10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the work are under the control of Consultant, except to the extent
they are limited by statute, rule or regulation and the expressed terms of this
Agreement. Nothing in this Agreement shall be deemed to constitute approval
for Consultant or any of Consultant's employees or agents, to be the agents or
employees of City. Consultant shall have the responsibility for and control over
the means of performing the work, provided that Consultant is in compliance with
the terms of this Agreement. Anything in this Agreement that may appear to
give City the right to direct Consultant as to the details of the performance or to
exercise a measure of control over Consultant shall mean only that Consultant
shall follow the desires of City with respect to the results of the services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or
interest in the work to be performed. City agrees to cooperate with the
Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and project
direction with City's Project Administrator in advance of all critical decision points
in order to ensure the Project proceeds in a manner consistent with City goals
and policies.
13. PROGRESS
Consultant is responsible for keeping the Project Administrator and /or his /her
duly authorized designee informed on a regular basis regarding the status and
progress of the work, activities performed and planned, and any meetings that
have been scheduled or are desired.
14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of work, Consultant shall obtain, provide and maintain at its own expense during
the term of this Agreement, a policy or policies of liability insurance of the type
and amounts described below and in a form satisfactory to City.
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A. Certificates of Insurance. Consultant shall provide certificates of
insurance with original endorsements to City as evidence of the insurance
coverage required herein. Insurance certificates must be approved by City's
Risk Manager prior to commencement of performance or issuance of any permit.
Current certification of insurance shall be kept on file with City at all times during
the term of this Agreement.
B. mature. A person authorized by the insurer to bind coverage on its
behalf shall sign certification of all required policies.
C. Acceptable Insurers. All insurance policies shall be issued by an
insurance company currently authorized by the Insurance Commissioner to
transact business of insurance in the State of California, with an assigned
policyholders' Rating of A (or higher) and Financial Size Category Class VII (or
larger) in accordance with the latest edition of Best's Key Rating Guide, unless
otherwise approved by the City's Risk Manager.
D. Coverage Requirements.
1. Workers' Compensation Coverage. Consultant shall maintain
Workers' Compensation Insurance and Employer's Liability Insurance for
his or her employees in accordance with the laws of the State of
California. In addition, Consultant shall require each subcontractor to
similarly maintain Workers' Compensation Insurance and Employer's
Liability Insurance in accordance with the laws of the State of California
for all of the subcontractor's employees. Any notice of cancellation or
non - renewal of all Workers' Compensation policies must be received by
City at least thirty (30) days prior to such change. The insurer shall agree
to waive all rights of subrogation against City, its officers, agents,
employees and volunteers for losses arising from work performed by
Consultant for City.
2. General Liability Coverage. Consultant shall maintain commercial
general liability insurance in an amount not less than two million dollars
($1,000,000) per occurrence for bodily injury, personal injury, and property
damage, including without limitation, contractual liability. If commercial
general liability insurance or other form with a general aggregate limit is
used, either the general aggregate limit shall apply separately to the work
to be performed under this Agreement, or the general aggregate limit shall
be at least twice the required occurrence limit.
3. Automobile Liability Coverage. Consultant shall maintain
automobile insurance covering bodily injury and property damage for all
activities of the Consultant arising out of or in connection with work to be
performed under this Agreement, including coverage for any owned,
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hired, non -owned or rented vehicles, in an amount not less than one
million dollars ($1,000,000) combined single limit for each occurrence.
4. Professional Errors and Omissions Insurance. Consultant shall
maintain professional errors and omissions insurance, which covers the
services to be performed in connection with this Agreement in the
minimum amount of one million dollars ($1,000,000).
E. Endorsements. Each general liability and automobile liability insurance
policy shall be endorsed with the following specific language:
i. The City, its elected or appointed officers, officials, employees,
agents and volunteers are to be covered as additional insureds with
respect to liability arising out of work performed by or on behalf of the
Consultant.
ii. This policy shall be considered primary insurance as respects to
City, its elected or appointed officers, officials, employees, agents and
volunteers as respects to all claims, losses, or liability arising directly or
indirectly from the Consultant's operations or services provided to City.
Any insurance maintained by City, including any self - insured retention City
may have, shall be considered excess insurance only and not contributory
with the insurance provided hereunder.
iii. This insurance shall act for each insured and additional insured as
though a separate policy had been written for each, except with respect to
the limits of liability of the insuring company.
iv. The insurer waives all rights of subrogation against City, its elected
or appointed officers, officials, employees, agents and volunteers.
V. Any failure to comply with reporting provisions of the policies shall
not affect coverage provided to City, its elected or appointed officers,
officials, employees, agents or volunteers.
vi. The insurance provided by this policy shall not be suspended,
voided, canceled, or reduced in coverage or in limits, by either parry
except after thirty (30) days written notice has been received by City.
F. Timely Notice of Claims. Consultant shall give City prompt and timely
notice of claim made or suit instituted arising out of or resulting from Consultant's
performance under this Agreement.
G. Additional Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
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judgment may be necessary for its proper protection and prosecution of the
work.
15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following
shall be construed as an assignment: The sale, assignment, transfer or other
disposition of any of the issued and outstanding capital stock of Consultant, or of
the interest of any general partner or joint venturer or syndicate member or
cotenant if Consultant is a partnership or joint- venture or syndicate or cotenancy,
which shall result in changing the control of Consultant. Control means fifty
percent (50 %) or more of the voting power, or twenty -five percent (25 %) or more
of the assets of the corporation, partnership or joint- venture.
16. SUBCONTRACTING
The parties recognize that a substantial inducement to City for entering into this
Agreement is the professional reputation, experience and competence of
Consultant. Assignments of any or all rights, duties or obligations of the
Consultant under this Agreement will be permitted only with the express written
consent of City. Consultant shall not subcontract any portion of the work to be
performed under this Agreement without the written authorization of City.
17. OWNERSHIP OF DOCUMENTS
Each and every report, draft, map, record, plan, document and other writing
produced (hereinafter "Documents "), prepared or caused to be prepared by
Consultant, its officers, employees, agents and subcontractors, in the course of
implementing this Agreement, shall become the exclusive property of City, and
City shall have the sole right to use such materials in its discretion without further
compensation to Consultant or any other parry. Consultant shall, at Consultant's
expense, provide such Documents to City upon written request.
Documents, including drawings and specifications, prepared by Consultant
pursuant to this Agreement are not intended or represented to be suitable for
reuse by City or others on any other project. Any use of completed documents
for other projects and any use of incomplete documents without specific written
authorization from Consultant will be at City's sole risk and without liability to
Consultant. Further, any and all liability arising out of changes made to
Consultant's deliverables under this Agreement by City or persons other than
Consultant is waived against Consultant and City assumes full responsibility for
such changes unless City has given Consultant prior notice and has received
from Consultant written consent for such changes.
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18. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the services in this Agreement, shall be kept
confidential unless City authorizes the release of information.
19. OPINION OF COST
Any opinion of the construction cost prepared by Consultant represents his
judgment as a design professional and is supplied for the general guidance of
City. Since Consultant has no control over the cost of labor and material, or over
competitive bidding or market conditions, Consultant does not guarantee the
accuracy,of such opinions as compared to contractor bids or actual cost to City.
20. INTELLECTUAL PROPERTY INDEMNITY
The Consultant shall defend and indemnify City, its agents, officers,
representatives and employees against liability, including costs, for infringement
of any United States' letters patent, trademark, or copyright infringement,
including costs, contained in Consultant's drawings and specifications provided
under this Agreement.
21. RECORDS
Consultant shall keep records and invoices in connection with the work to be
performed under this Agreement. Consultant shall maintain complete and
accurate records with respect to the costs incurred under this Agreement and
any services, expenditures and disbursements charged to City, for a minimum
period of three (3) years, or for any longer period required by law, from the date
of final payment to Consultant to this Agreement. All such records shall be
clearly identifiable. Consultant shall allow a representative of City to examine,
audit and make transcripts or copies of such records during regular business
hours. Consultant shall allow inspection of all work, data, documents,
proceedings and activities related to the Agreement for a period of three (3)
years from the date of final payment under this Agreement.
22. WITHHOLDINGS
City may withhold payment of any disputed sums until satisfaction of the dispute
with respect to such payment. Such withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant
shall not discontinue work as a result of such withholding. Consultant shall have
an immediate right to appeal to the City Manager or his designee with respect to
such disputed sums. Consultant shall be entitled to receive interest on any
withheld sums at the rate of return that City earned on its investments during the
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time period, from the date of withholding of any amounts found to have been
improperly withheld.
23. ERRORS AND OMISSIONS
In the event of. errors or omissions that are due to the negligence or professional
inexperience of Consultant which result in expense to City greater than what
would have resulted if there were not errors or omissions in the work
accomplished by Consultant, the additional design, construction and /or
restoration expense shall be borne by Consultant. Nothing in this paragraph is
intended to limit City's rights under any other sections of this Agreement.
24. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the
Project.
25. CONFLICTS OF INTEREST
The Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act "), which (1) requires such
persons to disclose any financial interest that may foreseeably be materially
affected by the work performed under this Agreement, and (2) prohibits such
persons from making, or participating in making, decisions that will foreseeably
financially affect such interest.
If subject to the Act, Consultant shall conform to all requirements of the Act.
Failure to do so constitutes a material breach and is grounds for termination of
this Agreement by City. Consultant shall indemnify and hold harmless City for
any and all claims for damages resulting from Consultant's violation of this
Section.
26. NOTICES
All notices, demands, requests or approvals to be given under the terms of this
Agreement shall be given in writing, and conclusively shall be deemed served
when delivered personally, or on the third business day after the deposit thereof
in the United States mail, postage prepaid, first -class mail, addressed as
hereinafter provided. All notices, demands, requests or approvals from
Consultant to City shall be addressed to City at:
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City of Newport Beach
Attention: Patricia Temple, Planning Director
Planning Department
3300 Newport Boulevard
P.O. Box 1768
Newport Beach, CA, 92658 -8915
(949) 644 -3222
Fax 644 -3020
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All notices, demands, requests or approvals from City to Consultant shall be
addressed to Consultant at:
Attention: Walter F. Kieser
Economic and Planning Systems, Inc.
2501 Ninth Street, Suite 200
Berkeley, CA 94710 -2515
(510) 841 -9190
FAX 841 -9208
27.. TERMINATION
In the event that either party fails or refuses to perform any of the provisions of
this Agreement at the time and in the manner required, that party shall be
deemed in default in the performance of this Agreement. If such default is not
cured within a period of two (2) calendar days, or if more than two (2) calendar
days are reasonably required to cure the default and the defaulting party fails to
give adequate assurance of due performance within two (2) calendar days after
receipt of written notice of default, specifying the nature of such default and the
steps necessary to cure such default, the non - defaulting party may terminate the
Agreement forthwith by giving to the defaulting party written notice thereof.
Notwithstanding the above provision, City shall have the right, at its sole
discretion and without cause, of terminating this Agreement at any time by giving
seven (7) calendar days' prior written notice to Consultant. In the event of
termination under this Section, City shall pay Consultant for services
satisfactorily performed and costs incurred up to the effective date of termination
for which Consultant has not been previously paid. On the effective date of
termination, Consultant shall deliver to City all reports and other information
developed or accumulated in the performance of this Agreement, whether in
draft or final form.
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28. COMPLIANCE WITH ALL LAWS
Consultant shall at its own cost and expense comply with all statutes,
ordinances, regulations and requirements of all governmental entities, including
federal, state, county or municipal, whether now in force or hereinafter enacted.
In addition, all. work prepared by Consultant shall conform to applicable City,
county, state and federal laws, regulations and permit requirements and be
subject to approval of the Project Administrator and City.
29. WAIVER
A waiver by either party of any breach, of any term, covenant or condition
contained herein shall not be deemed to be a waiver of any subsequent breach
of the same or any other term, covenant or condition contained herein, whether
of the same or a different character.
30. INTEGRATED CONTRACT
This Agreement represents the full and complete understanding of every kind or
nature whatsoever between the Parties hereto, and all preliminary negotiations
and agreements of whatsoever kind or nature are merged herein. No verbal
agreement or implied covenant shall be held to vary the provisions herein.
31. CONFLICTS OR INCONSISTENCIES
In the event there are any conflicts or inconsistencies between this Agreement
and the Scope of Services or any other attachments attached hereto, the terms
of this Agreement shall govern.
32. AMENDMENTS
This Agreement may be modified or amended only by a written document
executed by both Consultant and City and approved as to form by the City
Attorney.
33. SEVERABILITY
If any term or portion of this Agreement is held to be invalid, illegal, or otherwise
unenforceable by a court of competent jurisdiction, the remaining provisions of
this Agreement shall continue in full force and effect.
34. CONTROLLING LAW AND VENUE
The laws of the State of California shall govern this Agreement and all matters
relating to it and any action brought relating to this Agreement shall be
adjudicated in a court of competent jurisdiction in the County of Orange.
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35. EQUAL OPPORTUNITY EMPLOYMENT
Consultant represents that it is an equal opportunity employer and it shall not
discriminate against any subcontractor, employee or applicant for employment
because of race, religion, color, national origin, handicap, ancestry, sex or age.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on
the day and year first written above.
APPROVED AS TO FORM:
Robin Clauson,
Assistant City Attorney
for the City of Newport Beach
ATTEST:
CITY OF NEWPORT BEACH
A Municipal Corporation
By:
Tod W. Ridgeway, Mayor
for the City of Newport Beach
CONSULTANT
Economic and Planning Systems, Inc.
By: By:
LaVonne Harkless Walter F. Kieser, Managing Principal
City Clerk
Attachments: Exhibit A — Scope of Services
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PROFESSIONAL SERVICES AGREEMENT WITH
ECONOMIC AND PLANNING SYSTEMS, INC.
THIS AGREEMENT, entered into this 27th day of April 2004, by and between
CITY OF NEWPORT BEACH, a Municipal Corporation (hereinafter referred to as
"City "), and Economic and Planning Systems (EPS), Inc., whose address is 2501
Ninth Street, Suite 200, Berkeley, CA 94710, (hereinafter referred to as "Consultant"), is
made with reference to the following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under
the laws of the State of California with the power to carry on its business as it is
now being conducted under the statutes of the State of California and the
Charter of City.
B. City is planning to establish an affordable housing "in -lieu" fee ordinance
in an effort to generate funds for the City's expenditure on the construction of
new affordable housing units and other affordable housing programs.
C. City desires to engage Consultant to analyze and provide
recommendations on the fee a residential developer should have to pay "in -lieu" of
providing low- and moderate - income housing units as outlined by the SCOPE OF
SERVICES attached hereto as EXHIBIT "A" (with the exception of Tasks 6 and 8)
and pursuant to the terms and conditions contained in this Agreement.
D. Consultant possesses the skill, experience, ability, background,
certification and knowledge to provide the services described in this Agreement.
E. The principal member of Consultant, for purpose of this Project, shall be
Walter F. Kieser, Managing Principal and President of EPS.
F. City has solicited and received a proposal from Consultant, has reviewed
the previous experience and evaluated the expertise of Consultant, and desires
to retain Consultant to render professional services under the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned
Parties as follows:
1. TERM
The term of this Agreement shall commence on the 27`h day of April 2004, and
shall terminate on the 27`h day of April 2005, unless terminated earlier as set
forth herein.
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2. SERVICES TO BE PERFORMED
Consultant shall diligently perform all the services described in the Scope of
Services attached as Exhibit "A" (with the exception of Tasks 6 and 8) and
incorporated herein by reference. The City may elect to delete certain tasks of
the Scope of Services at its sole discretion.
3. TIME OF PERFORMANCE
Time is of the essence in the performance of services under this Agreement and
the services shall be performed to completion in a diligent and timely manner.
The failure by Consultant to perform the services in a diligent and timely manner
may result in termination of this Agreement by City.
Notwithstanding the foregoing, Consultant shall not be responsible for delays
due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the services to be provided for the Project, each party hereby
agrees to provide notice to the other party so that all delays can be addressed.
3.1 Consultant shall submit all requests for extensions of time for
performance in writing to the Project Administrator not later than ten (10)
calendar days after the start of the condition that purportedly causes a
delay. The Project Administrator shall review all such requests and may
grant reasonable time extensions for unforeseeable delays that are
beyond Consultant's control.
3.2 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the
circumstances, by either telephone, fax, hand - delivery or mail.
4. COMPENSATION TO CONSULTANT
City shall pay Consultant for the services on a time and expense not -to- exceed
basis in accordance with the provisions of this Section and the schedule of billing
rates, contained in the SCOPE OF SERVICES attached as EXHIBIT "A ". In no
event shall Consultant's compensation exceed Nineteen Thousand Nine
Hundred and Seventy -Five Dollars ($19,975) without additional authorization
from City. No billing rate changes shall be made during the term of this
Agreement without the prior written approval of City. Should any components of
the SCOPE OF SERVICES be eliminated by the City pursuant to Section 2.1 of
this Agreement, the contracted compensation shall be reduced accordingly,
consistent with the estimated cost of said components set forth in the budget
included in the SCOPE OF SERVICES.
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3.1 Consultant shall submit monthly invoices to City describing the work
performed the preceding month. Consultants bills shall include the name
of the person who performed the work, a brief description of the services
performed and /or the specific task in the Scope of Services to which it
relates, the date the services were performed, the number of hours spent
on all work billed on an hourly basis, and a description of any
reimbursable expenditures. City shall pay Consultant no later than thirty
(30) days after approval of the monthly invoice by City staff.
3.2 City shall reimburse Consultant only for those costs or expenses
specifically approved in this Agreement, or specifically approved in
advance by City. Unless otherwise approved, such costs shall be limited
and include nothing more than the following costs incurred by Consultant:
A. The actual costs of subconsultants for performance of any of the
services that Consultant agrees to render pursuant to this
Agreement, which have been approved in advance by City and
awarded in accordance with this Agreement.
B. Approved reproduction charges.
C. Actual costs and /or other costs and /or payments specifically
authorized in advance in writing and incurred by Consultant in the
performance of this Agreement.
3.3 Consultant shall not receive any compensation for Extra Work without the
prior written authorization of City. As used herein, "Extra Work" means
any work that is determined by City to be necessary for the proper
completion of the Project, but which is not included within the Scope of
Services and which the parties did not reasonably anticipate would be
necessary at the execution of this Agreement. Compensation for any
authorized Extra Work shall be paid in accordance with the Schedule of
Billing Rates set forth in Exhibit A.
3.4 Notwithstanding any other provision of this Agreement, when payments
made by City equal 90% of the maximum fee provide for in this
Agreement, no further payments shall be made until City has accepted the
final work under this Agreement.
5. PROJECT MANAGER
Consultant shall designate a Project Manager, who shall coordinate all phases of
the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Walter F. Kieser to
be its Project Manager. Consultant shall not remove or reassign the Project
Manager or any personnel listed in Exhibit A or assign any new or replacement
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personnel to the Project without the prior written consent of City. City's approval
shall not be unreasonably withheld with respect to the removal or assignment of
non -key personnel.
Furthermore, Consultant guarantees that Walter F. Kieser (Project Manager) will
personally perform all services delegated to him in the BUDGET outlined in
EXHIBIT "A ", unless previous arrangements have been made with City.
Consultant, at the sole discretion of City, shall remove from the Project any of its
personnel assigned to the performance of services upon written request of City.
Consultant warrants that it will continuously furnish the necessary personnel to
complete the Project on a timely basis as contemplated by this Agreement.
6. ADMINISTRATION
This Agreement will be administered by the City Manager's Office. Sharon Z.
Wood, Assistant City Manager shall be the Project Administrator and shall have
the authority to act for City under this Agreement. The Project Administrator or
his /her authorized representative shall represent City in all matters pertaining to
the services to be rendered pursuant to this Agreement.
7. CITY'S RESPONSIBILITIES
In order to assist Consultant in the execution of its responsibilities under this
Agreement, City agrees to, where applicable:
A. Provide access to, and upon request of Consultant, one copy of all
existing relevant information on file at City. City will provide all such
materials in a timely manner so as not to cause delays in Consultant's
work schedule.
B. Provide blueprinting and other services through City's reproduction
company for bid documents. Consultant will be required to coordinate the
required bid documents with City's reproduction company. All other
reproduction will be the responsibility of Consultant and as defined above.
C. Provide usable life of facilities criteria and information with regards to new
facilities or facilities to be rehabilitated.
8. STANDARD OF CARE
8.1 All of the services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and
technical personnel required to perform the services required by this
Agreement, and that it will perform all services in a manner
commensurate with community professional standards. All services shall
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be performed by qualified and experienced personnel who are not
employed by City, nor have any contractual relationship with City.
8.2 Consultant represents and warrants to City that it has or shall obtain all
licenses, permits, qualifications, insurance and approvals of whatsoever
nature that are legally required of Consultant to practice its profession.
Consultant further represents and warrants to City that Consultant shall, at
its sole cost and expense, keep in effect or obtain at all times during the
term of this Agreement, any and all licenses, permits, insurance and other
approvals that are legally required of Consultant to practice its profession.
Consultant shall maintain a City of Newport Beach business license
during the term of this Agreement.
8.3 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by
reason of strikes, lockouts, accidents, or acts of God, or the failure of City
to furnish timely information or to approve or disapprove Consultant's
work promptly, or delay or faulty performance by City, contractors, or
governmental agencies.
HOLD HARMLESS
To the fullest extent permitted by law, Consultant shall indemnify, defend and
hold harmless City, its City Council, boards and commissions, officers, agents
and employees (collectively, the "Indemnified Parties) from and against any and
all claims (including, without limitation, claims for bodily injury, death or damage
to property), demands, obligations, damages, actions, causes of action, suits,
losses, judgments, fines, penalties, liabilities, costs and expenses (including,
without limitation, attorney's fees, disbursements and court costs) of every kind
and nature whatsoever (individually, a Claim; collectively, "Claims "), which may
arise from or in any manner relate (directly or indirectly) to any work performed or
services provided under this Agreement (including, without limitation, defects in
workmanship or materials and /or design defects [if the design originated with
Consultant]) or Consultant's presence or activities conducted on the Project
(including the negligent and /or willful acts, errors and /or omissions of Consultant,
its principals, officers, agents, employees, vendors, suppliers, consultants,
subcontractors, anyone employed directly or indirectly by any of them or for
whose acts they may be liable or any or all of them).
Notwithstanding the foregoing, nothing herein shall be construed to require
Consultant to indemnify the Indemnified Parties from any Claim arising from the
sole negligence or willful misconduct of the Indemnified Parties. Nothing in this
indemnity shall be construed as authorizing any award of attorney's fees in any
action on or to enforce the terms of this Agreement. This indemnity shall apply
to all claims and liability regardless of whether any insurance policies are
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applicable. The policy limits do not act as a limitation upon the amount of
indemnification to be provided by the Consultant.
10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the work are under the control of Consultant, except to the extent
they are limited by statute, rule or regulation and the expressed terms of this
Agreement. Nothing in this Agreement shall be deemed to constitute approval
for Consultant or any of Consultant's employees or agents, to be the agents or
employees of City. Consultant shall have the responsibility for and control over
the means of performing the work, provided that Consultant is in compliance with
the terms of this Agreement. Anything in this Agreement that may appear to
give City the right to direct Consultant as to the details of the performance or to
exercise a measure of control over Consultant shall mean only that Consultant
shall follow the desires of City with respect to the results of the services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or
interest in the work to be performed. City agrees to cooperate with the
Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and project
direction with City's Project Administrator in advance of all critical decision points
in order to ensure the Project proceeds in a manner consistent with City goals
and policies.
13. PROGRESS
Consultant is responsible for keeping the Project Administrator and /or his /her
duly authorized designee informed on a regular basis regarding the status and
progress of the work, activities performed and planned, and any meetings that
have been scheduled or are desired.
14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of work, Consultant shall obtain, provide and maintain at its own expense during
the term of this Agreement, a policy or policies of liability insurance of the type
and amounts described below and in a form satisfactory to City.
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A. Certificates of Insurance. Consultant shall provide certificates of
insurance with original endorsements to City as evidence of the insurance
coverage required herein. Insurance certificates must be approved by City's
Risk Manager prior to commencement of performance or issuance of any permit.
Current certification of insurance shall be kept on file with City at all times during
the term of this Agreement.
B. Signature. A person authorized by the insurer to bind coverage on its
behalf shall sign certification of all required policies.
C. Acceotable Insurers. All insurance policies shall be issued by an
insurance company currently authorized by the Insurance Commissioner to
transact business of insurance in the State of California, with an assigned
policyholders' Rating of A (or higher) and Financial Size Category Class VII (or
larger) in accordance with the latest edition of Best's Key Rating Guide, unless
otherwise approved by the City's Risk Manager.
D. Coverage Requirements.
1. Workers' Compensation Coverage. Consultant shall maintain
Workers' Compensation Insurance and Employer's Liability Insurance for
his or her employees in accordance with the laws of the State of
California. In addition, Consultant shall require each subcontractor to
similarly maintain Workers' Compensation Insurance and Employer's
Liability Insurance in accordance with the laws of the State of California
for all of the subcontractor's employees. Any notice of cancellation or
non - renewal of all Workers' Compensation policies must be received by
City at least thirty (30) days prior to such change. The insurer shall agree
to waive all rights of subrogation against City, its officers, agents,
employees and volunteers for losses arising from work performed by
Consultant for City.
2. General Liability Coverage. Consultant shall maintain commercial
general liability insurance in an amount not less than two million dollars
($1,000,000) per occurrence for bodily injury, personal injury, and property
damage, including without limitation, contractual liability. If commercial
general liability insurance or other form with a general aggregate limit is
used, either the general aggregate limit shall apply separately to the work
to be performed under this Agreement, or the general aggregate limit shall
be at least twice the required occurrence limit.
3. Automobile Liability Coverage. Consultant shall maintain
automobile insurance covering bodily injury and property damage for all
activities of the Consultant arising out of or in connection with work to be
performed under this Agreement, including coverage for any owned,
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hired, non -owned or rented vehicles, in an amount not less than one
million dollars ($1,000,000) combined single limit for each occurrence.
4. Professional Errors and Omissions Insurance. Consultant shall
maintain professional errors and omissions insurance, which covers the
services to be performed in connection with this Agreement in the
minimum amount of one million dollars ($1,000,000).
E. Endorsements. Each general liability and automobile liability insurance
policy shall be endorsed with the following specific language:
i. The City, its elected or appointed officers, officials, employees,
agents and volunteers are to be covered as additional insureds with
respect to liability arising out of work performed by or on behalf of the
Consultant.
ii. This policy shall be considered primary insurance as respects to
City, its elected or appointed officers, officials, employees, agents and
volunteers as respects to all claims, losses, or liability arising directly or
indirectly from the Consultant's operations or services provided to City.
Any insurance maintained by City, including any self- insured retention City
may have, shall be considered excess insurance only and not contributory
with the insurance provided hereunder.
iii. This insurance shall act for each insured and additional insured as
though a separate policy had been written for each, except with respect to
the limits of liability of the insuring company.
iv. The insurer waives all rights of subrogation against City, its elected
or appointed officers, officials, employees, agents and volunteers.
V. Any failure to comply with reporting provisions of the policies shall
not affect coverage provided to City, its elected or appointed officers,
officials, employees, agents or volunteers. .
Vi. The insurance provided by this policy shall not be suspended,
voided, canceled, or reduced in coverage or in limits, by either party
except after thirty (30) days written notice has been received by City.
F. Timely Notice of Claims. Consultant shall give City prompt and timely
notice of claim made or suit instituted arising out of or resulting from Consultant's
performance under this Agreement.
G. Additional Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
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judgment may be necessary for its proper protection and prosecution of the
work.
15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following
shall be construed as an assignment: The sale, assignment, transfer or other
disposition of any of the issued and outstanding capital stock of Consultant, or of
the interest of any general partner or joint venturer or syndicate member or
cotenant if Consultant is a partnership or joint- venture or syndicate or cotenancy,
which shall result in changing the control of Consultant. Control means fifty
percent (50 %) or more of the voting power, or twenty -five percent (25 %) or more
of the assets of the corporation, partnership or joint-venture.
16. - SUBCONTRACTING
The parties recognize that a substantial inducement to City for entering into this
Agreement is the professional reputation, experience and competence of
Consultant. Assignments of any or all rights, duties or obligations of the
Consultant under this Agreement will be permitted only with the express written
consent of City. Consultant shall not subcontract any portion of the work to be
performed under this Agreement without the written authorization of City.
17. OWNERSHIP OF DOCUMENTS
Each and every report, draft, map, record, plan, document and other writing
produced (hereinafter "Documents "), prepared or caused to be prepared by
Consultant, its officers, employees, agents and subcontractors, in -the course of
implementing this Agreement, shall become the exclusive property of City, and
City shall have the sole right to use such materials in its discretion without further
compensation to Consultant or any other party. Consultant shall, at Consultant's
expense, provide such Documents to City upon written request.
Documents, including drawings and specifications, prepared by Consultant
pursuant to this Agreement are not intended or represented to be suitable for
reuse by City or others on any other project. Any use of completed documents
for other projects and any use of incomplete documents without speck written
authorization from Consultant will be at City's sole risk and without liability to
Consultant. Further, any and all liability arising out of changes made to
Consultant's deliverables under this Agreement by City or persons other than
Consultant is waived against Consultant and City assumes full responsibility for
such changes unless City has given Consultant prior notice and has received
from Consultant written consent for such changes.
I
18. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the services in this Agreement, shall be kept
confidential unless City authorizes the release of information.
19. OPINION OF COST
Any opinion of the construction cost prepared by Consultant represents his
judgment as a design professional and is supplied for the general guidance of
City. Since Consultant has no control over the cost of labor and material, or over
competitive bidding or market conditions, Consultant does not guarantee the
accuracy..of such opinions as compared to contractor bids or actual cost to City.
20. INTELLECTUAL PROPERTY INDEMNITY
The Consultant shall defend and indemnify City, its agents, officers,
representatives and employees against liability, including costs, for infringement
of any United States' letters patent, trademark, or copyright infringement,
including costs, contained in Consultant's drawings and specifications provided
under this Agreement.
21. RECORDS
Consultant shall keep records and invoices in connection with the work to be
performed under this Agreement. Consultant shall maintain complete and
accurate records with. respect to the costs incurred under this Agreement and
any services, expenditures and disbursements charged to City, for a minimum
period of three (3) years, or for any longer period required by law, from the date
of final payment to Consultant to this Agreement. All such records shall be
clearly identifiable. Consultant shall allow a representative of City to examine,
audit and make transcripts or copies of such records during regular business
hours. Consultant shall allow inspection of all work, data, documents,
proceedings and activities related to the Agreement for a period of three (3)
years from the date of final payment under this Agreement.
22. WITHHOLDINGS
City may withhold payment of any disputed sums until satisfaction of the dispute
with respect to such payment. Such withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant
shall not discontinue work as a result of such withholding. Consultant shall have
an immediate right to appeal to the City Manager or his designee with respect to
such disputed sums. Consultant shall be entitled to receive interest on any
withheld sums at the rate of return that City earned on its investments during the
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time period, from the date of withholding of any amounts found to have been
improperly withheld.
23. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional
inexperience of Consultant which result in expense to City greater than what
would have resulted if there were not errors or omissions in the work
accomplished by Consultant, the additional design, construction and /or
restoration expense shall be borne by Consultant. Nothing in this paragraph is
intended to limit City's rights under any other sections of this Agreement.
24. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the
Project.
25. CONFLICTS OF INTEREST
The Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act "), which (1) requires such
persons to disclose any financial interest that may foreseeably be materially
affected by the work performed under this Agreement, and (2) prohibits such
persons from making, or participating in making, decisions that will foreseeably
financially affect such interest.
If subject to the Act, Consultant shall conform to all requirements of the Act.
Failure to do so constitutes a material breach and is grounds for termination of
this Agreement by City. Consultant shall indemnify and hold harmless City for
any and all claims for damages resulting from Consultant's violation of this
Section.
26. NOTICES
All notices, demands, requests or approvals to be given under the terms of this
Agreement shall be given in writing, and conclusively shall be deemed served
when delivered personally, or on the third business day after the deposit thereof
in the United States mail, postage prepaid, first -class mail, addressed as
hereinafter provided. All notices, demands, requests or approvals from
Consultant to City shall be addressed to City at:
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0
City of Newport Beach
Attention: Patricia Temple, Planning Director
Planning Department
3300 Newport Boulevard
P.O. Box 1768 -
Newport Beach, CA, 92658 -8915
(949) 644 -3222
Fax 644 -3020
i
All notices, demands, requests or approvals from City to Consultant shall be
addressed to Consultant at:
Attention: Walter F. Kieser
Economic and Planning Systems, Inc.
2501 Ninth Street, Suite 200
Berkeley, CA 94710 -2515
(510) 841 -9190
FAX 841 -9208
27. TERMINATION
In the event that either party fails or refuses to perform any of the provisions of
this Agreement at the time and in the manner required, that party shall be
deemed in default in the performance of this Agreement. If such default is not
cured within a period of two (2) calendar days, or if more than two (2) calendar
days are reasonably required to cure the default and the defaulting party fails to
give adequate assurance of due performance within two (2) calendar days after
receipt of written notice of default, specifying the nature of such default and the
steps necessary to cure such default, the non - defaulting party may terminate the
Agreement forthwith by giving to the defaulting party written notice thereof.
Notwithstanding the above provision, City shall have the right, at its sole
discretion and without cause, of terminating this Agreement at any time by giving
seven (7) calendar days' prior written notice to Consultant. in the event of
termination under this Section, City shall pay Consultant for services
satisfactorily performed and costs incurred up to the effective date of termination
for which Consultant has not been previously paid. On the effective date of
termination, Consultant shall deliver to City all reports and other information
developed or accumulated in the performance of this Agreement, whether in
draft or final form.
12
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28. COMPLIANCE WITH ALL LAWS
Consultant shall at its own cost and expense comply with all statutes,
ordinances, regulations and requirements of all governmental entities, including
federal, state, county or municipal, whether now in force or hereinafter enacted.
In addition, all work prepared by Consultant shall conform to applicable City,
county, state and federal laws, regulations and permit requirements and be
subject to approval of the Project Administrator and City.
29. WAIVER
A waiver by either party of any breach, of any term, covenant or condition
contained herein shall not be deemed to be a waiver of any subsequent breach
of the same or any other term, covenant or condition contained herein, whether
of the same or a different character.
30. INTEGRATED CONTRACT
This Agreement represents the full and complete understanding of every kind or
nature whatsoever between the Parties hereto, and all preliminary negotiations
and agreements of whatsoever kind or nature are merged herein. No verbal
agreement or implied covenant shall be held to vary the provisions herein.
31. CONFLICTS OR INCONSISTENCIES
In the event there are any conflicts or inconsistencies between this Agreement
and the Scope of Services or any other attachments attached hereto, the terms
of this Agreement shall govern.
32. AMENDMENTS
This Agreement may be modified or amended only by a written document
executed by both Consultant and City and approved as to form by the City
Attorney.
33. SEVERABILITY
If any term or portion of this Agreement is held to be invalid, illegal, or otherwise
unenforceable by a court of competent jurisdiction, the remaining provisions of
this Agreement shall continue in full force and effect.
34. CONTROLLING LAW AND VENUE
The laws of the State of California shall govern this Agreement and all matters
relating to it and any action brought relating to this Agreement shall be
adjudicated in a court of competent jurisdiction in the County of Orange.
13
• i
35. EQUAL OPPORTUNITY EMPLOYMENT
Consultant represents that it is an equal opportunity employer and it shall not
discriminate against any subcontractor, employee or applicant for employment
because of race, religion, color, national origin, handicap, ancestry, sex or age.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on
the day and year first written above.
APPROVED AS TO FORM:
Robin Clauson,
Assistant City Attorney
for the City of Newport Beach
ATTEST:
CITY OF NEWPORT BEACH
A Municipal Corporation
By:
Tod W. Ridgeway, Mayor
for the City of Newport Beach
CONSULTANT
Economic and Planning Systems, Inc.
By: By:
LaVonne Harkless Walter F. Kieser, Managing Principal
City Clerk
Attachments: Exhibit A — Scope of Services
14
• •
EXHIBIT A - EPS PROPOSAL /SCOPE OF
SERVICES
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Economic &
Planning Systems
Real EStateEronond.
Regional Eeonooule
Pubhc Finance
Land Use Paliey
PROPOSAL TO PERFORM
AFFORDABLE HOUSING IN -LIEU FEE STUDY
Prepared for:
City of Newport Beach
Prepared by:
Economic & Planning Systems, Inc.
February 2004
EPS #14020
BERKELEY SACRAMENTO DENVER
VA&W 2501 Ninth St., Suite 200 Phone: 510 -841 -9190 Phone: 916 - 649 -8010 Phone: 303 -621 -3557
Berkeley, CA 94710 -2515 Fax: 510- 841 -9208 Fax: 916 -649 -2070 Fax: 303 -623 -9049
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Economic &
Planning Systems
Real Estate Eeanaenks
Regloswl Ecanmiex
Po6lie Flna,rce
Land Use Pollry
February 17, 2004
Tamara J. Campbell, AICP
Senior Planner
City of Newport Beach, Planning Department
3300 Newport Boulevard, Building C
Newport Beach, CA 92658
Subject: Proposal for the Newport Beach Affordable Housing In -Lieu Fee Study;
EPS #14020
Dear Ms. Campbell:
Economic & Planning Systems (EPS) is pleased to present this proposal to conduct an
Affordable Housing In -Lieu Fee study for the City of Newport Beach. As you will see in
our qualifications, affordable housing policies and programs represent one of EPS's
primary areas of practice, and we welcome the opportunity to provide our assistance
and technical expertise in the City's consideration of the important economic issues
surrounding affordable housing. EPS has assisted numerous jurisdictions throughout
California and beyond with studies and ordinance preparation for inclusionary housing,
in -lieu fee programs, and workforce housing fee programs.
In addition to our work on affordable housing issues for public agencies, EPS has
extensive experience providing project feasibility analyses for private sector developers.
This experience has been extremely valuable in generating trust and goodwill during
studies of affordable housing programs, impact fees, and other policy actions to which
developers often object on the basis of economic hardship. Through objective analysis,
EPS has proven effective in assuaging those concerns, while still formulating policies
that are effective in addressing communities goals to increase the supply of affordable
housing.
This proposal first presents EPS's "Understanding and Approach to the Assignment,"
followed by our "Proposed Scope of Services." The "Project Administration' section
then details the budget estimate, work schedule, and staffing commitments of EPS. The
final section of this proposal presents our "Qualifications, References, and Resumes."
In this last section, EPS has described our work on affordable housing policies, including
inclusionary zoning policies, in -lieu fee calculations, and workforce housing impact fees
linking affordable housing demand to growth in employment- generating development.
You will note that several of these relevant project have been conducted in coastal
communities in southern, central, and northern California.
BERKELEY SACRAMENTO DENVER
2501 Ninth St., Suite 200 Phone: 510 -941 -9190 Phone: 916 - 649 -8010 Phone: 303- 623 -3557 vor Bcrkeley, CA 94710 -3515, Fax: 510- 841 -9208 Fax: 916 -649 -2070 Fax: 303 - 623 -9049
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February 17, 2004 • •
Page 2 of 2
If you have any questions regarding this proposal, please call me or Darin Smith at:
Economic & Planning Systems, Inc.
2501 Ninth Street, Suite 200
Berkeley, CA 94710
(510) 841 -9190
Thank you again for this opportunity to provide consulting services to the City of
Newport Beach.
Sincerely,
WALTER KIESER
MANAGING PRINCIPAL
ECONOMIC & PLANNING SYSTEMS, INC.
Economic &
Planning Systems
Rea /Estate E.ro
Regional Fm.I6
P.blk Fl..
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UNDERSTANDING AND APPROACH
TO THE ASSIGNMENT
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
UNDERSTANDING AND APPROACH TO THE ASSIGNMENT
The Housing Element for the City of Newport Beach contains a policy requiring
residential developers to provide a certain percentage of homes in new developments as
income - restricted affordable housing units, or to pay a fee in lieu of directly providing
the affordable units. The amount of the in -lieu fee was established several years ago,
and no longer accurately reflects the cost of subsidizing the production of an affordable
housing unit. The City of Newport Beach is seeking consultant assistance to update the
in -lieu fee calculation to achieve a more effective and equitable program for requiring
developers to contribute to the City's affordable housing needs.
This consulting effort will require a review of the Housing Element and the Southern
California Association of Governments' Regional Housing Needs Determination for the
City; an assessment of the City's policies regarding the types of units desired to serve
lower- income households; a comparison of affordable prices to the costs of residential
unit construction; and a calculation of an in -lieu fee that can achieve the City's
affordable housing goals while not undermining the production of housing generally.
In addition, the City has requested that the consultant review the policies of comparable
cities to compare and contrast the amounts and effectiveness of the in -lieu fee programs.
Economic & Planning Systems (EPS) has worked on numerous projects comparable in
scope to the Affordable Housing In -Lieu Fee Study requested by the City of Newport
Beach (see "Firm Qualifications' section), including several assignments in California
coastal communities. Through these experiences, EPS has developed an efficient and
effective approach to addressing these complex and controversial issues.
Paramount in our approach is coordination with stakeholders who will be affected by
the outcome of the analysis and implementation of affordable housing programs. These
stakeholders include not only City staff, City Council, and affordable housing advocates,
but also the homebuilders whose development cost structures will be directly affected
by the implementation of such programs. By incorporating the input of such
stakeholders early and often in the analytical process, EPS has been successful at
reducing or eliminating controversy regarding the technical accuracy of the analysis,
and placing the issue squarely in the realm of policy debate rather than debate over
assumptions and mathematics.
EPS also provides a strong understanding of the overall economic implications of
inclusionary housing programs. Objectors to such policies frequently cite the potential
for the requirements to actually slow housing development, which would have negative
implications for a City's economic development goals. Through an objective analysis of
the experiences of other jurisdictions where such policies have long been in place, EPS
will provide answers to those questions which policy- makers can consider when
evaluating and possibly implementing the programs.
G:V?OZOnvyP. 140204�p1.da' i
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
In addition, EPS has developed a strong understanding of the potential alternative
approaches to meeting the desired goals of increasing affordable housing through
inclusionary zoning and in -lieu fees. Specifically, EPS has investigated ways in which
developers can satisfy the same goals, including land dedications, "affordable -by-
design" small units and second units, nonprofit participation, City partnerships, and
density bonuses. While such alternatives are not described in the City's Request for
Proposals, EPS's familiarity with them, as well as optional waivers and exemptions, can
be of great value in discussing inclusionary housing and in -lieu fee options in a dynamic
context.
Even with the potential for variations and exceptions, EPS deems it critical that the
inclusionary housing programs be consistent in furthering their goals. To validate the
nexus arguments that are critical to the formation of the ordinances, all variations in the
application of the requirements should generally result in an equal amount of affordable
housing. Moreo, ,.er, the application of the programs should set specific requirements for
the price points for the affordable housing produced, which may vary from one type of
project to another (e.g., single - family versus multifamily development) but should be
consistently applied rather than subject to significant negotiation. EPS's quantitative
analysis can establish parameters for trade -offs that policy- makers can then use to
ensure that each applicable development project receives equal treatment under the law.
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PROPOSED SCOPE OF SERVICES
Economic &
Planning Systems
Real atam Ecma
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PROPOSED SCOPE OF SERVICES
0
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February I7, 2004
The City of Newport Beach has an established inclusionary affordable housing policy
that requires that residential projects provide a portion of units at price points affordable
to households at designated income levels. For projects of fewer than 50 total units,
developers may pay an in -lieu fee to the City as an alternative to directly providing
these affordable units, which fee the City can then use to fund other affordable housing
projects.
The proposed Scope of Services addresses the analysis of potential revisions to the City's
Affordable Housing In -Lieu Fee Program. Significant interaction will be required
between EPS, City staff (including the City Attorney's Office), and stakeholders such as
homebuilder4 and affordable housing advocates.
TASK 1. PROJECT INITIATION
The Consultant will meet with City staff to discuss the assignment; establish necessary
liaison; and set a schedule for meetings, decision points, and deliverables. Refinements
to the Scope of Services resulting from this review and direction can be made at this
time.
TASK 2. CURRENT INCLUSIONARY POLICY REVIEW
EPS will review the City's current Inclusionary Housing Ordinance provisions to further
understand the specific application of the ordinance in terms of the types of projects
affected; the characteristics of the units that must be provided (income category price
points, size and design compared to market rate units, tenure, etc.); the amount of the in-
lieu fees; and the previous methodology for calculating the in -lieu fees. Using City data,
EPS will also document the actual results of the policy during its existence, including the
number and type of inclusionary units directly constructed by developers, the amount of
in -lieu fees paid, and the number and types of units constructed using those in -lieu fees.
TASK 3. ANALYSIS OF POLICIES IN COMPARABLE CITIES
EPS will investigate the application of affordable housing in -lieu fee programs in other
California jurisdictions. As part of this investigation, EPS will review the amounts of the
fees, the application of the fees to projects of various types or sizes, and the relationships
between the in -lieu fees and the incusionary housing requirements or other affordable
housing programs (such as "workforce housing' requirements placed on non - residential
development). EPS will issue a Technical Memorandum relating the findings of this
analysis.
GA 1402N.,A WM ,1 da
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
TASK 4. STAKEHOLDER MEETING WITH LOCAL BUILDERS
To ensure that the assumptions used in the technical analysis can withstand critical
scrutiny, EPS will conduct a stakeholder meeting with representatives of local builders
of market rate and affordable housing. At this meeting, EPS will present the basic
framework for the analysis of the inclusionary housing program, and request input
regarding the costs of development for various product types. Cost variables to be
discussed will include land costs; hard costs for labor and materials; and soft costs such
as marketing, design, financing, and impact fees. These assumptions will form the
foundation for several economic analyses, including the affordable housing subsidy
calculation, analysis of financial impacts, and in -lieu fee calculation. If the City elects to
have EPS conduct the optional Task 6 Impact Analysis, EPS will also seek input from the
stakeholder builders to establish a representative sample of projects against which the
economic impacts of inclusionary housing policies will be measured. As necessary, EPS
will continue correspondence with meeting attendees to ensure that issues and
questions are adequately addressed. EPS anticipates that City staff will assist in
identifying appropriate attendees, coordinating meeting logistics, and overseeing
continued correspondence between stakeholders and EPS.
TASK 5. AFFORDABLE HOUSING SUBSIDY CALCULATION
With input from local builders of market rate and affordable housing, EPS will develop
static pro forma worksheets that estimate the cost of developing housing units of three
different types— single - family detached homes, townhomes, and apartments — assuming
an average unit size as determined jointly by EPS and City staff. EPS will also work
with City staff to determine an appropriate mix of unit types and tenures (renters vs.
homeowners) for households in each income category. For instance, it may be
determined that 100 percent of housing for very low- income households should be
rental apartments, while housing for low- income households may be 75 percent rental
apartments and 25 percent for -sale townhomes. To determine the affordable housing
subsidy required for each income category, EPS will then compare the housing
production costs to the price that households in each income category can afford to pay
for housing. EPS will work with City staff to determine if these subsidy calculations
should be limited to low- and very low- income households, or also include moderate
income households. These subsidy calculations will serve as the basis of the optional
impact analysis performed in Task 6, as well as the in -lieu fee calculation performed in
Task 7.
cn iwm "t. 1402o-'Ldo'
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
TASK 6. INCLUSIONARY HOUSING IMPACT ANALYSIS
(optional)
If the City believes such analysis is valuable, EPS will determine the economic impact
that various applications of the inclusionary housing policy may have. EPS will create
static pro formas for market-rate development projects of various types and sizes, and
calculate the impact that various applications of the inclusionary housing policy will
have on project economics. Variables will include the types and sizes of the units, the
prices of the market rate units, the percentage of units that must be provided as
affordable units, and the level of affordability of those units. This analysis may
determine, for instance, that a 25 -unit project of 20 market rate single - family detached
homes may suffer little economic consequence of providing five townhomes affordable
to low- income households, while a 200 -unit apartment complex may have considerable
feasibility issues if 40 of the units must be provided to very low- income households.
EPS will work with City staff and local builders (in Task 4) to develop a representative
sample of projects against which to test the inclusionary housing policy's economic
impact.
TASK 7. IN -LIEU FEE CALCULATION
EPS will calculate an in -lieu fee that housing builders could pay the City instead of
providing affordable units within their projects. These in -lieu fees would aim to be
revenue - neutral, meaning they would subsidize the production of the same number of
affordable housing units as would otherwise be required through an inclusionary policy.
EPS will work with City staff to determine if the policy should differentiate the in -lieu
fee requirement by housing unit size and type. EPS will also work with City staff to
determine if the in -lieu fee amount should be partially reduced to reflect the availability
of other funding sources for affordable housing developed by the City or nonprofit
entities.
TASK 8. INCLUSIONARY HOUSING POLICY OPTIONS
(optional)
If the City believes such analysis is valuable, EPS will work with City staff to prepare a
range of policy options related to the types and sizes of housing projects that will be
subjected to the requirement, the recommended amount of the in -lieu fee, and updating
procedures (indexing v. active reset). In addition, EPS will outline optional ways in
which a builder facing the inclusionary requirement can meet the obligation, including
small units, second units, nonprofit participation, City partnerships, land dedication,
and density bonuses. EPS will also explore various concepts for setting the in -lieu fee,
c: v�wo�uo�� iaazaPiAuo
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
such as a sliding scale based on unit types and sizes. Such concepts may be necessary to
create incentives for more market rate housing units that happen to meet lower income
households' affordability levels ( "affordable by design' units).
TASK 9. ADMINISTRATIVE REVIEW DRAFT REPORT
EPS will issue an Administrative Review Draft Report detailing the findings of the
previous analyses. This report will inform preliminary discussions regarding the
options the implementation the in -lieu fee program. EPS will attend a meeting with City
staff to discuss the findings presented in the Draft Report, and to establish priorities for
the preliminary policy recommendations prior to presentations to City Council.
TASK 10. PRESENTATIONS OF FINDINGS AND
RECOMMENDATIONS
EPS will prepare a Public Review Draft Report that states preliminary recommendations
regarding the implementation of a revised affordable housing in -lieu fee policy. EPS
will also prepare a formal presentation of the findings and preliminary
recommendations, which we can then present to various stakeholders including
homebuilder groups, affordable housing advocates, and the City Council as directed by
City staff. EPS's budget for this task anticipates our participation in not more than one
(1) public presentation, although the budget can be adjusted if more presentations are
requested. The logistics for all presentations will be organized by City staff.
TASK 11. REFINEMENT OF FINDINGS AND ORDINANCE
REVISIONS
Following guidance from decision - makers, a preferred policy will be articulated. With
input from the City Attorney's Office, EPS will suggest specific ordinance revisions that
can be used as the basis for City Council legislative action, and incorporates the
technical findings by reference. A Final Report will also be issued at this time, and a
final presentation to City Council will be conducted.
Economic &
Planning Systems
Rea! F=tr Ecow.t
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La Use Policy
PROJECT ADMINISTRATION
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PROJECT ADMINISTRATION
BUDGET
•
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
EPS estimates that the full Scope of Services for this project (including the optional tasks)
will require a total budget not -to- exceed $24,715. If the City elects not to request the
optional services described in Tasks 6 and 8, the total project budget would be reduced
to $19,975. These budget estimates include costs for professional services as well as
direct expenses for travel, which are billed at cost without mark -up. Table 1 presents a
breakdown of project costs by EPS employee and by task. EPS will be pleased to discuss
possible amendments to the Scope of Services if this budget exceeds the City's
expectations.
SCHEDULE
EPS anticipates that this assignment can be completed within eight (8) weeks of
receiving a Notice- to-Proceed from the City of Newport Beach.
STAFFING
EPS's Principal -in- Charge for this assignment will be Walter Kieser, Managing Principal
and President of the firm. Mr. Kieser has extensive experience in analyzing and
formulating affordable housing policies for numerous jurisdictions throughout
California. Darin Smith, Vice President of EPS, will serve as the firm's Project Manager
for this assignment. Mr. Smith also has experience managing several related projects,
and provides strong quantitative skills in addition to his detailed understanding of the
pertinent policy issues. As necessary, Mr. Smith and Mr. Kieser will be assisted by other
EPS staff who have also participated in related projects. Please see the attached
"Qualifications, References and Resumes" section for a full description of several related
projects recently conducted by EPS.
G: V1020nnyt \I40Ma7l.doc
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Table 1
Proposed Budget
Newport Beach Affordable Housing In -Lieu Fee Study
Economic & Planning Systems, Inc.
.
Managing
Principal
Hours by Employee
Vice
President Associate
Research
Analyst
Support
Staff
Direct
Expenses
TOTAL
BUDGET
by TASK
Task 1
Projed Initiation
6
6
8
0
0
5400
$3,540
Task 2
Current Indusionary Policy Review
0
0
2
0
0
$0
$200
Task 3
Analysis of Policies in Comparable Cites
0
2
8
8
0
56
$1,750
Task 4
Stakeholder Meeting with Loral Builders
0
6
6
0
0
$300
$2,030
Task 5
Affosdabla Housing Sub" Calculation
0
2
4
a
0
s0
si,w
Task
Inclusionary Housing Impact Analysis (Optional)
0
2
4
12
0
$0
51,870
Task 7
In -Lieu Fee Calculation
0
1
4
4
0
s0
$875
Task 8
Indusionary Housing Policy Options (Optional)
4
6
12
0
0
$0
$3,070
Task 9
Administrative Review Draft Report
4
a
12
8
4
$300
$4,580
Task 10
Presentation of Findings and Recommendations
6
8
12
0
2
5400
$4,370
Task 11
Refinement of Findings and Ordinance Revisions
2
2
4
0
2
$0
$1,300
.
Total
u
Total Project Hours
22
43
78
40
8
191
Billing Rates ($/Hour)
$235
$155
$100
$80
$60
_ Total Professional Services
55,170
$6,665
$7,800
$3,200
$480
523,315
Total Direct Expenses
51,400
Total Project Budget
• .
Total
Total Project Hours
is
35
52
28
6
151
Billing Rates (SlHour)
$235
5155
$100
$80
$60
Total Professional Services
54,230
$5,425
$6,200
$2,240
5480
518,575
Total Direct Expenses
$1,400
Total Project Budget
v,r(twr �.a2arow ns
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Economic &
Planning Systems
Real Ewe¢ Emmmla
QUALIFICATIONS, REFERENCES, AND
RESUMES
Regional Em is
Public F na rc
IaM U. Poitry
0 0
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
ABOUT ECONONIIC & PLANNING SYSTEMS
The Firm Economic & Planning Systems (EPS) is a land economics
consulting firm experienced in the full spectrum of
services related to real estate development market
analysis, public/private partnerships, and the financing of
government services and public infrastructure.
Guiding Principle EPS was founded on the principle that real estate
development and land use - related public policy should be
built upon realistic assessment of market forces and
economic trends, feasible implementation measures, and
recognition of public policy objectives, including
provisions for required public facilities and services.
Areas of Expertise • Real Estate Market and Feasibility Analysis
• Public Finance
• Fiscal Impact Analysis
• Economic Impact Analysis
• Reuse, Revitalization and Redevelopment
• Real Estate Transactions and Negotiations
• Regional Economics and Industry Analysis
• Land Use Planning and Growth Management
• Open Space and Resource Conservation
• Government Organization
• Information Systems
Clients Served Since 1993 EPS has provided consulting services to
hundreds of public and private sector clients in California
and throughout the United States. Clients include cities,
counties, special districts, multi - jurisdictional authorities,
property owners, developers, financial institutions, and
land use attorneys.
Staff Capabilities Each of the firm's three Managing Principals has over 25
years of professional experience providing a broad range
of economics consulting services. The professional staff
includes specialists in public finance, real estate
development, land use and transportation planning,
government organization, and computer applications. The
firm excels in preparing concise analyses that disclose risks
and impacts, support decision making, and provide
solutions to real estate development and land use - related
problems.
Office Locations Berkeley, California
Sacramento, California
Denver, Colorado
EPS Website www.epsys.com
G: � �i0zonmpn 1 #OlOmpi.aoa
0
FIRM QUALIFICATIONS
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
AFFORDABLE AND WORKFORCE HOUSING PROJECTS
Sonoma County Workforce Housing Program (2002)
Sonoma County, California
The Bay Area housing market has become increasingly expensive in recent years, with
median home prices rising nearly 100 percent over five years in some areas. Rapid
employment growth coupled with limited land supply have led to this situation. In
Sonoma County, home prices have increased significantly and, for new workers in the
County's expanding employment base, finding housing that is affordable has become
increasingly difficult.
A coalition of the nine cities in the County and the County government commissioned
EPS to conduct a study of the nexus between employment and housing, and to propose
a countywide approach to the affordable- housing shortage. This study has involved an
evaluation of the employment and commuting patterns trends in Sonoma County, the
income distribution among future jobs in the County, the costs to build and to acquire
market rate and affordable housing, and the various programs currently in place to
address housing affordability issues. EPS established the relationship between
employment growth and housing prices, and recommended an impact fee that assigns
some of the financial costs of developing affordable housing back to the employers
whose expansion contributes to housing demand.
Walter Kieser served as EPS's Principal -in- Charge for this assignment, while Darin
Smith served as EPS's Project Manager.
Santa Barbara Affordable Housing Program (2003)
Santa Barbara, California
In the midst of rapidly escalating housing costs, the City of Santa Barbara experienced a
housing crisis along with many other California cities. As a relatively wealthy
municipality, Santa Barbara had a number of programs in place to address the needs of
very low- and low- income families, but housing remained unaffordable to many
moderate- and above moderate - income households. The City sought assistance in
developing an affordable housing fee program that better addressed the needs of these
middle- income families. EPS was retained by the City to prepare a comprehensive
study of affordable housing needs, and to create a two-tiered fee structure to fund future
affordable housing development.
10 GA 14 20na,pH 140M, da
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
In order to estimate existing and future need for affordable housing in Santa Barbara,
EPS examined employment growth, commuting patterns, and other economic and
demographic changes in the region. This information was used to estimate the amount
of funding that would be needed to bridge the gap between market housing costs and
the ability of families at different income levels to pay for housing. Using the housing
needs assessment as a basis, EPS developed an inclusionary housing fee program that
requires residential developers to make a certain percentage of all new housing units
developed affordable to moderate- and above moderate - income households. EPS also
designed a jobs - housing linkage fee, again based upon the housing needs assessment.
The jobs - housing linkage fee established the connection between nonresidential
development in the City and increased demand for affordable housing, and set a fee
based on nonresidential development's "fair share' of affordable housing costs.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
Napa Inclusionary Housing Ordinance (2003)
City of Napa, California
The City of Napa, pursuant to Housing Element policy, sought to expand the provisions
of its Affordable Housing Inclusionary Ordinance by increasing the inclusionary
requirement from 10 to 20 percent in selected portions of the City zoned for multifamily
housing. Concern was initially expressed to the City Council that such an increase could
be economically infeasible and actually deter desired housing projects from occurring.
EPS was retained to participate with an ad hoc committee of stakeholders and prepare
an economic analysis of the proposed increase in affordable housing requirements. The
economic analysis included a review of market conditions, a pro forma analysis of
development prototypes, and consideration of the beneficial effects of City- sponsored
incentives for affordable housing. The analysis concluded that the proposed increase in
inclusionary requirement from 10 to 20 percent would not deter desired housing
developments. The City Council adopted the Affordable Housing Overlay District in
November 2003.
Walter Kieser served as EPS's Principal -in- Charge for this assignment, while Darin
Smith provided technical analysis.
Sonoma County Housing Element (2001)
Sonoma County, California
Sonoma County was under court -order to update its 1992 Housing Element. EPS was
retained to 1) prepare technical analyses regarding current and projected housing needs
and an analysis of market, environment, governmental, and other factors which affect
the extent to which housing needs are satisfied; and 2) prepare a comprehensive
Housing Element to be adopted and included in the County's Comprehensive Plan.
11 c:uazo��yn i.wzw.�i n«
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
EPS first prepared a series of six Technical Memoranda. These Memoranda served as
the technical basis of the Housing Element, along with other information prepared by
staff and other participating agencies. The Memoranda were designed and used to
facilitate discussions with the State Housing and Community Development Department
and interest groups. The Memoranda informed these groups and the public at large of
the technical underpinnings of the Housing Element and allowed them the opportunity
to review and comment on data used, specific findings, assumptions, and technical
conclusions. The Memoranda addressed demographic and housing market trends,
current affordable housing supply and programs, affordable housing need projections,
special housing needs, inventory of potential housing sites (prepared in conjunction
with County staff), and housing strategies and five -year quantified objectives.
After the Memoranda were completed, they were released for public review and
workshops were held to solicit comments from the public as well as from appointed and
elected officials. Comments, suggestions, and corrections were incorporated in the Draft
Housing Element, which was subsequently completed in approximately four weeks.
Walter Kieser served as EPS's Principal -in- Charge for this assignment, while Darin
Smith served as EPS's Project Manager.
Santa Rosa Affordable Housing In -Lieu Fee (2002)
Santa Rosa, California
Like many cities in the Bay Area, housing prices in the City of Santa Rosa increased
rapidly throughout the latter half of the 1990s, making housing increasingly
unaffordable to very low -, low -, and even median- income households. In the midst of a
statewide affordable housing crisis, the City of Santa Rosa examined a number of
policies in order to better meet the housing needs of its lower income residents.
As part of this effort, EPS was retained to update the City's pre - existing Affordable
Housing In -Lieu Fee to reflect current housing production prices, and to address its
Regional Housing Need, as determined by the Association of Bay Area Governments.
EPS estimated the cost of subsidizing affordable housing in Santa Rosa, and based on
this subsidy amount, EPS estimated affordable housing in -lieu fees under different
incidence assumptions and discussed policy options for achieving affordable housing
goals.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
Santa Barbara Affordable Housing Feasibility Analysis (2003)
Santa Barbara, California
The City of Santa Barbara seeks to understand the feasibility and policy implications of
developing affordable housing on nine City -owned properties located in its Downtown
area. These nine properties are currently used for surface parking. While the City faces
12 c:�i+ozo�u,Pn +maup�soc
• •
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
a challenge in meeting its affordable housing goals and must consider the full range of
possible solutions, it will be important to understand the financial, parking, and other
policy implications of such disposition of City property. The City retained EPS to assist
in determining which, if any, of the selected properties have merit as affordable housing
sites and, if so, what steps can be taken to achieve this objective. EPS conducted an
analysis of the feasibility of residential development (and possibly other supporting
uses) occurring on the selected properties, and the ability to replace existing parking
capacity and assure adequate parking for new uses on the site. EPS worked with an
architectural /planning firm to prepare development scenarios for the different sites.
Walter Kieser served as EPS's Principal-in-Charge for this assignment.
Santa Rosa Affordable Home Ownership Program Analysis (2003)
Santa Rosa, Califomia
In response to the City of Santa Rosa s updated Housing Allocation Plan Ordinance,
several local developers offered to build and dedicate on -site single- family ownership
units, with an initial sales price affordable to low- income households, instead of paying
the City's in -lieu fee. In the City's consideration of the proposals to develop these
affordable homeownership units, two primary issues emerged: 1) is there a
homeownership program model that will ensure affordability at resale for a term similar
to that required of rental housing; and, 2) if such a model exists, what is the City's
responsibility for the administration, enforcement, and cost of a home ownership
program.
EPS was retained by the City to help address these two issues, as well as to provide an
overall summary of the components necessary to implement a home ownership model
for meeting the City's on -site inclusionary housing requirement. EPS surveyed
affordable home ownership programs in various cities throughout the State and around
the country that have successfully obtained, sold, and assured long term affordability of
ownership units. These case studies included the resort communities of Aspen,
Telluride, and Vail, Colorado; as well as the California cities of Monterey, Napa, San
Francisco, Santa Barbara, and Santa Monica; and Marin County, California.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
Aspen Affordable Housing Master Plan (2002)
Aspen, Colorado
The City of Aspen had an inventory of acquired or available sites suitable for
development of affordable housing as well as two dedicated revenue streams designed
to support this type of development (a sales tax and real estate transfer tax). However,
because of intense community debate about housing costs and the impacts from growth
and sprawl, there had been no new affordable housing proposals for several years and
no clear direction on how to proceed.
13 c: � 2402OnalptU4020mpia�
r
0
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
The City of Aspen retained EPS to provide a strategy for increasing the inventory of
affordable housing in the City. The primary purpose of the strategy was to help the City
understand where it could leverage its resources and capitalize on the greatest
opportunities in a cost - effective manner. As a first step in formulating the strategy, EPS
developed a housing needs assessment which provided aggregate targets for housing
production for specific income levels. EPS evaluated multiple housing development
options including those involving the public and private sectors. Based on detailed pro
forma models developed for seven sites and three prototypical infill projects, EPS
prioritized the development opportunities using policy -based evaluation, including an
estimate of the subsidy required for each site. In addition, EPS provided a financial
analysis of the costs and revenues associated with the aggregate housing program over a
ten -year period to document how the City could accomplish its goals. Based on the
analysis provided by EPS, the City adopted the recommended ten -year action plan and
is proceeding with the highest priority project identified. The City also restructured the
Housing Authority Board based on recommendations contained in the plan.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
Marina jobs/Housing Study (2002)
Marina, California
The City of Marina, historically a military community for the former Fort Ord Army
base on Monterey Peninsula, was concerned about its status as a bedroom community
for Peninsula workers and increasingly for commuters to Silicon Valley. The City
wished to increase employment opportunities in the City and to correct fiscal
imbalances that had been created by housing growth in the absence of significant
commercial or retail development. At the same time the City wished to address an
increasing housing affordability problem that was exacerbated by higher -paid workers
from other parts of the County and beyond seeking housing in Marina.
EPS was retained to conduct a Jobs/Housing Balance Improvement Study that includes
analysis of housing supply and demand, current and projected employment, and
opportunities and constraints for attracting new higher- paying jobs. This technical
analysis, in combination with input from public officials, citizens groups, and the public
at large, will culminate in an implementation plan. The implementation plan will
outline key priorities and policies for promoting employment retention and
development and for providing a variety of housing options affordable to a range of
income levels.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
14 cni ozo pr.iaozaq.a�
�2
Folsom jobs/Housing Linkage (2002)
Folsom, California
L
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
The City of Folsom, like many California communities, faced a shortage of housing units
affordable to lower - income residents. Employment growth in the City had resulted in
an increased demand for housing, contributing to higher home prices throughout the
City, thereby exacerbating the housing supply shortage.
EPS was retained to evaluate the linkage between employment growth and housing
demand in the City of Folsom, and to calculate a fee to be paid by nonresidential
development for the purpose of constructing additional affordable housing. For this
analysis, EPS projected future employment growth by industry and occupation expected
to take place within the City. Specifically, EPS identified the number of new employees
likely to seek residence in the City of Folsom that earned wages in the low- income and
very low- income brackets. Next, EPS conducted extensive market analysis to identify
the cost of housing production in Folsom. These costs were compared with the ability of
low- income and very low- income families to pay for housing, and a per -unit subsidy
requirement was estimated. Using this information, EPS calculated the nonresidential
affordable housing fee under different policy scenarios, and provided recommendations
to the City for implementation.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
Napa Resort Affordable Housing (2001)
Napa, California
A developer proposed to construct and operate a resort development in the Napa
Valley. Because of the serious lack of affordable housing in the area, the County of Napa
requested that the developer prepare a program to address issues of affordable housing
resulting from the development. EPS helped the developer structure a program to
define the affordable housing needs of employees of the development, review options
for accommodating those needs, and evaluate the related costs. The resulting program
specified an amount of funds that would address housing needs without adversely
affecting the feasibility of the development, and prioritized the use of funds first to the
needs of very low- income employees. Unlike other resort developments (e.g., ski
resorts), this project relied on full -time employees living in the region; therefore, the
housing program was based on a rent subsidy program.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
15 G: W20nu- prv402wDi.d«
0
Newark Parks and Affordable Housing Fees (2001)
Newark, California
0
Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
Like many cities in the Bay Area, the City of Newark experienced a significant amount
of new residential and nonresidential development activity throughout the latter half of
the 1990s. As a result of this development, the value of remaining land in the City
increased, making new housing developments less affordable to low -, very low -, and
median- income families. In addition, the increased land values rendered the City's Park
Dedication In -Lieu Fee out of date.
EPS assisted the City of Newark by performing the analysis needed to 1) update its Park
Land Dedication Fee to current land values, 2) establish an indusionary housing policy
and calculate an Affordable Housing In -Lieu Fee to be charged to residential
development, and 3) calculate an Affordable Housing Linkage Fee to be charged to
nonresidential development. For the Affordable Housing In -Lieu fee, EPS compared the
cost of providing housing with the ability of low- income families to pay for it to
calculate a funding gap and thus a fee. A similar funding gap was calculated for the
Linkage Fee based on an estimate of the number of new lower paying jobs expected to
be created in the City. The Quimby fee update was based on current market values for
undeveloped land in the City as well as a residual land value analysis. The City is
currently in the process of adopting all three fees.
Walter Kieser served as EPS's Prindpal -in- Charge for this assignment.
Lafayette Affordable Housing Fee (1998)
Lafayette, California
The City of Lafayette's recently revised Housing Element of the General Plan includes a
policy to establish an inclusionary housing ordinance. Negotiations over approvals for a
single - family residential project in the RDA in spring of 1998 resulted in the payment of
an in -lieu affordable housing fee. The City decided to look into the feasibility of
adopting a broader Citywide in -lieu affordable housing fee.
EPS was retained to review the City's affordable housing policies and prepare a
feasibility study of an affordable housing in -lieu fee. EPS estimated the cost of
subsidizing affordable housing in the City of Lafayette in order to meet the City's
affordable housing goals. Based on this subsidy amount EPS estimated affordable
housing in -lieu fees under different incidence assumptions and discussed policy options
for achieving affordable housing goals.
Walter Kieser served as EPS's Principal -in- Charge for this assignment.
16 G: i+o_o «pn ua:o- ryLda
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Proposal to Perform
Affordable Housing In -Lieu Fee Study
February 17, 2004
REFERENCES
1. Sonoma County Workforce Housing
Santa Rosa Affordable Housing In -Lieu Fee
Client Contact: Chuck Regalia, Deputy Director of Planning, City of Santa Rosa
Phone: 707 -543 -3189
2. Santa Barbara Affordable Housing Program
Client Contact: Paul Casey, Assistant Community Development Director, City of
Santa Barbara
Phone: 805- 897 -1971
3. Napa Inclusionary Housing Ordinance
Client Contact: Jean Hasser, Planner, City of Napa
Phone: 707 - 257 -9530
4. Sonoma Housing Element
Client Contact: Gregg Carr, Sonoma County Development Manager,
Sonoma County
Phone: 707 -565 -1900
17 L: 1 O:OnapR t402U p6da
{ter
• •
_
Economic &
Planning Systems
Real Estate Emmmles
Regional Economla
Public Finance
land Use Pollry
WALTER F. KIESER
Background Walter Kieser is a land use planner and urban economist who, during his
29 -year professional career, has specialized in designing and managing
complex technical analyses, communicating the results of planning,
preparing and evaluating economic and financial analyses, and facilitating
transactions. This broad -based expertise provides balanced and pragmatic
solutions, ensuring that land use and conservation plans can be
successfully implemented, that infrastructure and government services can
be adequately funded, and that real estate projects meet private - sector
financial objectives while supporting public policy objectives.
Mr. Kieser is founder, Managing Principal, and President of Economic &
Planning Systems, Inc., an urban economics consulting firm with offices in
Berkeley, Sacramento, and Denver. The firm serves a diversity of public
and private - sector clients throughout the United States.
Expertise Land use planning — Participated in the preparation of comprehensive
and specific plans for many cities and counties, with emphasis upon
demographic and economic forecasts, real estate market analyses, land use
analyses, and policies and programs related to growth management,
transportation, urban revitalization, recreation and open space, public
services and infrastructure, and housing.
Economic development and revitalization — Assisted cities with preparing
economic development and revitalization strategies associated with
downtown business areas, visitor - serving resort development, and retail
shopping centers. These strategies have involved the use of traditional
redevelopment techniques, public/private partnerships, and
implementation of transit- oriented mixed use development.
Resource conservation — Participated in numerous programs and projects
designed to preserve open space and natural habitats, preserve
agricultural lands, and ensure productive and sustainable use of natural
resources. These programs applied creative regulatory mechanisms
(planning and zoning), compensatory regulations, and public acquisition
techniques.
BERKELEY .�q �.. SACRAMENTO DENVER
2501 Ninth $s., Suite 200 Phone: 510 -841 -9190 +jt�s-T Phone: 9 16-649-80 10 Phone: 303 -623 -355]
Berkeley, CA 94] 10 -2515 _ Fax: 510- 841 -9208 �7� Faz: 916- 649 -2070 Fax: 303 -623 -9049
www.epsys.com
•
WALTER F. KLESER
EcoNomic & PLANNING SYSTEMS
PAGE 2
Government organization — Prepared numerous governance feasibility
studies addressing municipal incorporation, major annexations, special
district formations and consolidations, and inter - governmental
agreements. These feasibility studies typically involved preparation of
detailed pro forma operational and capital budgets, and analysis of
impacts of reorganization upon existing agencies.
Negotiated agreements — Participated in numerous real estate
development and infrastructure financial negotiations involving public
and private participants. These negotiations have resulted in successful
agreements, including mitigation and tax sharing agreements,
development agreements, owner participation agreements, and real estate
disposition agreements.
Fiscal and economic impact analysis — Prepared fiscal and economic
impact analysis on a wide variety of land use plans, development projects,
and infrastructure improvements. These quantitative analyses have
focused upon determining the cost of growth, policy refinement, and
ensuring implementation within the context of land use plans,
environmental impact analyses, and initiative ballot measures.
Public finance — Established public financing strategies for a wide variety
of public services and infrastructure projects, including development
project - related infrastructure, area -wide capital improvement programs,
and specific infrastructure projects. Financing techniques applied include
formulation of area - specific and facility- specific development impact fees,
special tax bonds, and redevelopment tax increment financing.
Employment 1983 - Present Managing Principal, Economic & Planning Systems, Inc.
1977 -1983 Managing Associate, Angus McDonald and Associates
1971 -1976 Associate Planner, Sonoma County Planning Department,
Advanced Planning Division
1967 -1970 U.S. Army Military Intelligence
Education Bachelor of Arts degree in Environmental Studies and Biology from
Sonoma State University in 1974. Completed graduate courses in
economics and public administration at Sonoma State University and the
University of California, Berkeley.
Affiliations American Planning Association, Member
California Association of Local Agency Formation Commissions, Associate
Member
International Society for Ecological Economics, Member
Economic &
Planning Systems
Real Eurte Ecanumles
Regimui Ecanornic,
Public Finance
I o,; U. Pollry
DARIN SMITH
Background Darin Smith has extensive professional experience in the areas of strategic
development planning and implementation, market and feasibility analysis,
transit- oriented development planning, housing strategies, fiscal and social
impact analysis, and corporate site selection.
Mr. Smith is a Vice President at Economic & Planning Systems, Inc., an urban
economics consulting firm with offices in Berkeley, Sacramento, and Denver.
EPS serves public and private sector clients throughout the United States.
Expertise Development Planning and Immplementation — Mr. Smith has planned large
and small market -based development programs, and worked to implement
such plans through developer solicitation and negotiations.
Real Estate Market and Financial Feasibility Analysis — Mr. Smith has
experience analyzing the market conditions and financial feasibility of
residential, office, retail, lodging, industrial, and recreational development.
Transit - Oriented Development Planning —Mr. Smith has studied the unique
economic and logistical opportunities in transit station areas and prepared
land use plans and development programs for such areas.
Housing Strategies — Mr. Smith has evaluated housing demand, production
feasibility, gap financing strategies, regulatory incentives, and developer
exactions for affordable and market -rate housing development.
Fiscal and Social Impact Analysis — Mr. Smith has developed and refined
models to evaluate the fiscal and social impacts of prospective development or
policies in counties and municipalities.
Corporate Site Selection — Mr. Smith has developed specific multi -year real
estate acquisition strategies for a national retailer, as well as developing sales
projection models based on demographic and real estate characteristics,
BERKELEY SACRAMENTO DENVER
2501 Ninth St., Suite 200 Phone: 510 -841 -9190 WW Phone: 916. 649 -8010 Phone: 303 -623 -3557
Berkeley, CA 94710 -2515 Fax: 510- 841 -9208 Fax: 916 - 649 -2070 Fax: 303 - 623 -9049
www.epsys.com
• 0 DARIN SMITH
ECONOMIC & PLANNING SYSTEMS
PAGE 2
Employment 2000 -2002 Vice President, Economic & Planning Systems, Inc.
1997 -1999 Associate/Project Manager, ZHA Inc., Annapolis, MD
1996 -1997 Site Selection Consultant, Pep Boys, Philadelphia, PA
Education Master of City Planning, University of Pennsylvania, 1997
Bachelor of Arts Degree in Psychology, University of Pennsylvania, 1993
Awards 2002 California APA "Award of Merit for Planning Implementation'
for the Sonoma County Housing Element
2001 -2002 California AIA and APA "Ahwanee Award of Honor" for the
Hayward Cannery Area Design Plan
2001 Congress for the New Urbanism "Award of Excellence' for the
Robert Mueller Municipal Airport Reuse Plan
J��
f ty of Newport Beat* NO. BA- 04BA -049
BUDGET AMENDMENT
2003 -04 AMOUNT: $1s,s7s.00
EFFECT ON BUDGETARY FUND BALANCE:
Increase Revenue Estimates Increase in Budgetary Fund Balance
Increase Expenditure Appropriations AND Decrease in Budgetary Fund Balance
PX Transfer Budget Appropriations PX No effect on Budgetary Fund Balance
SOURCE:
from existing budget appropriations
from additional estimated revenues
from unappropriated fund balance
EXPLANATION:
This budget amendment is requested to provide for the following:
To increase expenditure appropriations for an agreement to conduct an In -lieu Housing Fee analysis.
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE
Fund Account Description
010 3605 General Fund Fund Balance
REVENUE ESTIMATES (3601)
Fund/Division Account
EXPENDITURE APPROPRIATIONS (3603)
Division
Number
Account
Number
Division
Number
Account
Number
Division
Number
Account
Number
Division
Number
Account
Number
Signed
Signed:
Signed:
Description
Description
2710 Planning - Administration
8080 Services - Professional & Technical
Financial Approval: Administrative Services Director
Administ� oval: City Manager
City Council Approval: City Clerk
Amount
Debit Credit
$19,975.00
$19,975.00
Date
/ate
Date
Q*y of Newport Beado NO. BA- 04BA -049
BUDGET AMENDMENT
2003 -04 AMOUNT: $19,975.00
EFFECT ON BUDGETARY FUND BALANCE:
Increase Revenue Estimates Increase in Budgetary Fund Balance
Increase Expenditure Appropriations AND Decrease in Budgetary Fund Balance
PX Transfer Budget Appropriations PX No effect on Budgetary Fund Balance
SOURCE:
X from existing budget appropriations
from additional estimated revenues
from unappropriated fund balance
EXPLANATION:
This budget amendment is requested to provide for the following:
To increase expenditure appropriations for an agreement to conduct an In -lieu Housing Fee analysis.
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE
Fund Account Description
010 3605 General Fund Fund Balance
REVENUE ESTIMATES (3601)
Fund /Division Account Description
EXPENDITURE APPROPRIATIONS (3603)
Division
Account
Division
Account
Division
Account
Division
Account
Signed:
Signed:
Description
Number 2710 Planning - Administration
Number 8080 Services - Professional & Technical
Number
Number
Number
Number
Number
Number
Approval:
city
Signed: iJ(Q(/07Vn F._ 411, T
City Council Approval: City Clerk
Services Director
Amount
Debit Credit
$19,975.00 *
$19,975.00
Date
d
pate
��74Z
Date