That the Housing Authority:
A.  Award a contract with Reds General Construction Inc., of West Covina, California, for the remodel of an Authority owned apartment located in Park La Habra Mobile Homes, located at 1731 West Lambert Road, space 129; and,

B.  Authorize the Executive Director to execute an agreement with Reds General Construction Inc., and authorize staff to issue a purchase order to Reds General Construction Inc. in the amount of $401,920.80, which includes a twenty percent (20%) contingency.

The Housing Authority of the City of La Habra owns and operates two mobile home parks within the City of La Habra; View Park Estates (VP), located at 1750 West Lambert Road, and Park La Habra Mobile Homes (PLH), located at 1731 West Lambert Road. Both mobile home communities are managed by Augusta Communities (Augusta) and their subcontract management company, Les Frames. In addition to mobile homes, PLH includes one Authority owned apartment unit. The apartment is located on the second floor of a two-story fixed wood construction building that is located adjacent to the PLH Club House. The apartment consists of two bedrooms, one bathroom, a kitchen, and a living/dining area. Below the apartment is a dedicated carport for the unit.

In 2018, during a general inspection of PLH, staff asked Augusta to contact the tenants living in the apartment to arrange a tour of the unit. The apartment had been occupied by the same tenants for about five years, so current staff had not previously had an opportunity to inspect the unit. During the inspection of the apartment, staff found the unit to be in need of a complete renovation.  The preliminary inspection found deficient flooring throughout the unit, as well as degraded kitchen cabinets and countertops, and significant deficiencies in the bathroom bath/tub, vanity, sink and toilet, all of which needed to be replaced.  Due to the complete renovation needed for the apartment, it became necessary to relocate the tenants before the rehabilitation could commence. Staff worked with property management to purchase and install a new manufactured home in PLH and, once complete, staff were able to relocate the tenants from the apartment unit to the new manufactured home. This was completed in July 2023.

In January 2024, staff began working with its Residential Rehabilitation Consultant, MDG, to prepare a Work Description and Bid Proposal Form for the rehabilitation of the apartment.

On October 21, 2024, in order to fund the project, the City Council, following a public hearing, approved a Substantial Amendment to the CDBG Annual Action Plan to include a new project, the Fiscal Year 2024-2025 Rehabilitation of Existing Apartment at Park La Habra Mobile Home Park Program, and allocated $300,000 of CDBG funds to be used for the rehabilitation of the apartment.

The City's Residential Rehabilitation Program has a list of approved contractors that meet all requirements for Federal Bidding, including being registered with Systems for Award Management, and not being debarred from receiving Federally funded projects. In order to be an approved contractor, the following are required:

On December 27, 2024, staff provided notice to the approved contractors of a mandatory Pre-Bid Conference and Job Walk, which was held on January 6, 2025. The notice included the Work Description and Bid Proposal Form prepared by MDG, which included the following required items:

In February 2025, the Chief Building Official reviewed the Work Description and Bid Proposal Form and identified a list of plans that would need to be submitted by the contractors for his review and approval. On March 6, 2025, the Permit Services Supervisor sent an email to the contractors that attended the mandatory Pre-Bid Conference and Job Walk explaining that complete remodel plans would be required. Staff provided the interested contractors with additional time to submit an Addendum to revise their proposal, as needed, to reflect the costs associated with the required plans, which include the following:

In April 2025, staff worked with the City Attorney to identify whether the City's Residential Rehabilitation Agreement or the City's Public Works Agreement would be the applicable contract for this project. The City Attorney advised that this rehabilitation project would need to use the City's Public Works Contract, which requires bonding.  Staff granted additional time and attempted to work with the contractors on the bond requirements necessary for Public Works Contracts and provided additional time for amendments to the bids due to the bond requirements.

The following bids were received:
 

After reviewing the bids and conducting a thorough analysis of the bids, staff determined that Reds General Construction Inc. submitted the lowest responsive bid in the amount of $334,934. The other two contractors failed to provide the required bonds, due to the cost of obtaining the bonds, with no guarantee of receiving the work.  Reds General Construction Inc. is the newest contractor on the Authority's Residential Rehabilitation approved contractors list, but so far both staff and the Authority's consultant have had no issues with their work on residential rehabilitation projects. The Work Description and Bid Proposal Form submitted by Reds General Construction Inc. is Exhibit A and Exhibit B to the attached Contract.

The total cost of the apartment rehabilitation project, including a twenty percent contingency, is $401,921. As noted above, on October 21, 2024, City Council approved a Substantial Amendment to the CDBG Annual Action Plan that allocated $300,000 of CDBG funds for this project. Staff has identified that the remainder of the costs can be covered by reallocating other CDBG funding to the project because the City of La Habra's CDBG Citizen Participation Plan allows minor changes to the City's Annual Action Plan. Minor changes consist of increases or decreases to an approved CDBG Project that are no less than or no greater than $250,000. These minor changes do not require public review or public hearing and approval before the City Council, nor does it require an additional budget appropriation for this project, if approved by Council.

There is currently $104,921 from the Fiscal Year 2022-2023 Child Development Playground Program that could be reallocated to this apartment rehabilitation project. The Child Development Playground Program was anticipated to be implemented in part by St. Jude Grant Funding, which has expired, as well as additional money that was previously earmarked for the playground, which had to be reallocated to cover expenses related to an emergency project that needed to be completed in the Child Development Center's building. Therefore, the playground project does not have adequate funding to move forward at this time. Reallocation of this funding to the apartment rehabilitation project falls within the category of a minor change to the Annual Action Plan, so no further City Council action is needed. Approval of this project will have no impact on the General Fund.