AGENDA TITLE:
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Adopt a Resolution Authorizing the City Manager to Execute a Lease, Regulatory, and Operator Agreement with Inner City Action, Inc., a California Nonprofit Corporation, for the Main Street Transitional and Supportive Housing Project for a Term of Five Years with an Option to Extend Five Years and the City of Lodi Covering All Utility Costs for the First Eighteen Months of the Agreement Term in an Amount Not to Exceed $80,000 Direct to Utility Companies (CD)
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MEETING DATE:
August 7, 2024
PREPARED BY:
Jennifer Rhyne, Neighborhood Services Manager
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RECOMMENDED ACTION:
Adopt a resolution authorizing the City Manager to execute a lease, regulatory, and operator agreement with Inner City Action, Inc., a California Nonprofit Corporation, for the Main Street Transitional and Supportive Housing Project for a term of five years with an option to extend five years and the City of Lodi covering all utility costs for the first eighteen months of the agreement term in an amount not to exceed $80,000 Direct to Utility Companies.
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BACKGROUND INFORMATION:
Procurement and Selection:
A Request for Proposals (“RFP”) for operation and management of the facility was released on October 24, 2023 and reposted November 8, 2023 due to questions received and clarifications made to the RFP. The RFP was posted on the City’s website which is emailed to our listserv group of ninety contacts and was directly emailed out to six known social service providers that offer similar services, including Lodi House, Housing Authority of San Joaquin, Central Valley Low Income Housing, The Salvation Army, Lodi Corp., Inner City Action, and Compassion Residio Services. Additionally, Staff hosted site visits to interested parties to view the project, of which two organizations participated.
Staff received feedback from several organizations indicating they would not submit a proposal. Only one response was received from Inner City Action Inc. The proposal specifies that the project will be supported by program income, with only the first 18 months of utilities supported by the City through grant resources allocated to this use. The proposal requires that the project become fully self-supporting through program income. Based on their knowledge of the community, good will established with social services providers, and demonstrated performance at the temporary Access Center and Harmony Homes, Staff requests that City Council authorize the City Manager to execute a lease, regulatory, and operator agreement with Inner City Action, Inc., a California Nonprofit Corporation, for the Main Street Transitional and Supportive Housing Project for a term of five years, with an option to extend five years and the City of Lodi covering all utility costs through available grant resources for the first eighteen months of the agreement term at an estimated amount of $80,000 over 18 months.
Timeline Recap:
- 2021: DHCS Releases HHIP Funding Opportunity
- 2022: Staff discuss potential second round funding opportunity with HPSJ
o Staff identify blighted hotel on Main Street for a potential transitional housing project
- April 26, 2023: City of Lodi Awarded $3,000,000 of HHIP funds by HPSJ
- June 7, 2023: City Council accepted and appropriated HHIP grant funds
- August 2023: City Acquired 22 S Main Street property
- August- October: 2023: Design/Permitting finalized
- October 24, 2023: Request for Proposal (RFP) issued to identify an operator
- October 31, 2023: Staff released the advertisement for bids and received three bids over available resources on December 5, 2023
- November 8, 2023: Operator RFP re-opened to add additional clarifications and received one proposal on November 10, 2023 from Inner City Action, Inc.
- December 20, 2023: City Council authorized the rejection of all bids and allowed a re-bid
- January 18, 2023: Staff released the second advertisement for bids and received four bids on February 12, 2024. Several bids came within available resources, however due to several anomalies in the two lowest bids City Council authorized the rejection and rebid of the project and execution of agreement with lowest responsible and responsive bidder.
- February 24, 2024: Staff released the third advertisement for bids and received four bids and All About Building, Inc. was the lowest responsible and responsive bidder.
- April 10, 2024: Contract executed with All About Building, Inc. and notice to proceed issued April 16, 2024.
- April 16, 2024 - September 2024: Rehabilitation of property including, elevator, paint, new lobby and common area, new storefront, fire sprinklers, security cameras, stair railing, and door repairs.
- August 7, 2024: City Council meeting to request authorization to execute lease, regulatory, operator agreement.
- September/October 2024: Anticipated Main Street Opening/Ribbon Cutting
Program Description:
On November 4, 2020, the City Council adopted the San Joaquin Community Response to Homelessness - 2020 San Joaquin Strategic Plan (Strategic Plan). The Strategic Plan includes goals and strategies developed from community feedback, which includes increasing access and reducing barriers to homeless crisis response services and ensure households experiencing homelessness have access to affordable housing.
With the Access Center Project moving forward and the Temporary Access Center currently open for operation, the need for transitional and supportive housing in Lodi is more apparent.
In 2021 the Department of Health Care Service (DHCS) developed a Medi-Cal Home and Community-Based Services (HCBS) Spending Plan detailing a series of initiatives to enhance, expand and strengthen HCBS in California. The Housing and Homelessness Incentive Program (HHIP) is one of the HCBS Transition Initiatives and is intended to support the delivery and coordination of health and housing services for Medi-Cal members statewide. HHIP is intended to bolster housing and homelessness-focused efforts and investments at local levels, with the aim of building or expanding capacity and partnerships to connect Medi-Cal members to needed housing services and achieving progress in reducing and preventing homelessness. As part of these efforts to meet HHIP program priorities and measures, Health Plan of San Joaquin (HPSJ) is partnering with local partners and organizations which deliver housing, or supportive services to Medi-Cal members who are homeless or at risk of homelessness.
When City Staff became aware of this potential funding opportunity, they began discussions with HPSJ and submitted a proposal to purchase an existing hotel at 22 S. Main Street and convert it to 40 +/- units of transitional and supportive housing units. The project would allow for individuals that have jobs or other steady income (Social Security, Social Security Disability Insurance, Veterans Administration benefits, etc.) to be housed in a transitional setting with continued wraparound services until they are able to progress to other permanent housing opportunities. After the second round of funding became available, HPSJ staff presented the Lodi proposal to their Board and it was approved with a $3,000,000 award to the project on April 26, 2023. City Council accepted and appropriated the funds on June 7, 2023. The transitional and supportive housing project on Main Street (AKA Reimagined housing on Main) is especially important following the certification of the City’s 2023-2031 Housing element which identified there to be a significant need for this type of housing in Lodi.
The City Council accepted and appropriated several grant resources towards the project and authorized the City Manager to Execute all agreements to acquire and rehabilitate the building which is anticipated to be ready for opening by late September 2024.
The HHIP grant resources require the City to perform tasks necessary to meet project milestones for HHIP and provide HPSJ with information necessary to demonstrate progress towards HHIP program goals and measures. This includes demonstration of all 40+ transitional housing units being occupied by eligible Medi-Cal recipients and providing applicable support services. Additionally, there will need to be demonstrated progress towards permanent housing goals for the program participants. HPSJ has made concessions to extend milestone terms due to delays in the rehabilitation of the building. However, per the grant agreement, the City must meet these objectives in year two which began at the beginning of 2024. If goals and performance metrics are not met, the City could be determined in breach of the agreement and potentially have to pay back grant resources or hinder future funding opportunities with DHCS and HPSJ.
The model for Reimagined Housing on Main needed to be primarily self-sustaining through rent and subsidies or grants obtained by the service provider/operator. Program income, including client rent and/or program fees, and any identified subsidies, and self-procured grants, must cover administration, facility management, day-to-day maintenance, janitorial, on-site security, case management of clients, and utilities. The model was developed in an effort to avoid reliance on City funds or other funding sources for operational purposes, Staff looked at other models that utilize project income (rent, tuition, donations, grants, etc.) to operate this project long term. The City will retain ownership of the facility and will be responsible for deferred maintenance of major mechanical and facility items. This information was provided in the Request for Proposal (RFP) documents for organizations to consider when developing proposals.
Housing referrals will be received from local social service providers such as Access Center and Hope Harbor, and will be evaluated based on eligibility criteria. Eligibility criteria includes, but is not limited to, income, Medi-Cal recipient, and status as currently unsheltered living in a shelter and/or program of referring agency. Per the agreement, referrals and demographics reports from the Homeless Management Information System (HMIS) will be audited on an annual basis to ensure equitable and inclusionary practices are demonstrated. Lodi referral agencies will have initial priority, however countywide referrals will be accepted when bed space is available and if referred individual meets eligibility requirements.
STRATEGIC VISION:
4B. Housing: Create more residential opportunities downtown.
FISCAL IMPACT:
Permanent Local Housing Allocation (PLHA) is already appropriated as part of the Community Development FY 2024-2025 budget. The grant application approved required for use towards housing programs to assist individuals experiencing homelessness.
FUNDING AVAILABLE:
PLHA-21001.Contracts - $80,000 (Not to exceed) paid directly to utility companies
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John Della Monica
Community Development Director
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Scott R. Carney
City Manager