That the Housing Authority approve and authorize the Executive Director to execute a five-year agreement with Augusta Communities, LLC, (Augusta) of Upland, California, for asset management, property management and manufactured housing consulting services for Park La Habra Mobile Homes and View Park Estates located at 1731 and 1750 West Lambert Road.

On October 1, 2018, the Housing Authority of the City of La Habra (Housing Authority) entered into a 13-month agreement with Augusta Communities, LLC (Augusta) to provide asset and on-site property management for two mobile home parks owned by the Housing Authority, Park La Habra Mobile Homes and View Park Mobile Home Estates, located at 1731 and 1750 West Lambert Road, after the sudden resignation of the previous property management company, Santiago Communities.  Again on November 4, 2019, the Housing Authority entered into a new one-year agreement with Augusta to continue asset and property management services. In November 2020, the Housing Authority entered into a five-year agreement with Augusta for asset and management services of the two mobile home parks. The 2018 and 2019 agreements allowed for uninterrupted management services at the two mobile home communities and allowed staff the opportunity to determine if the Housing Authority needed to conduct a search for permanent on-site property management or if Augusta was a good fit for the daily management at the two communities, as managing mobile home communities is a unique niche with a unique requirement under Mobile Home Residency Law.

La Habra Ordinance No. 1740 outlines the purchasing requirements for goods and services.  Subject to a few exceptions, this ordinance requires that goods and services being acquired by the City go through a bidding process. Typically, the Housing Authority would conduct a Request for Proposals (RFP) for mobile home park management services before entering into a long-term contract for services. However, due to the unique complexities of operating multiple mobile home communities and the high level of quality service that has been provided by Augusta since October 2018, staff is recommending waiving the bidding requirement and entering into a long-term agreement with Augusta on a negotiated basis.

Pursuant to Section 4.20.080 B of Ordinance No. 1740, exceptions to bidding requirements for purchase of service include instances in which "[a] service firm has established such a successful past history of work with the City that it is clearly in the public interest not to negotiate with any other source."  Staff believes that Augusta's highly effective track record of managing the Housing Authority's mobile home properties since 2018, meets this exemption and that negotiating to secure a long-term management agreement is in the best interest of the public, the Housing Authority, and the residents at the two mobile home communities.

Prior to entering into the October 2018 agreement with Augusta, staff, along with members of the City Council, had received a variety of tenant-related issues and complaints about prior property management.  Since Augusta was hired by the Housing Authority, the situation at the two mobile home communities has vastly improved.  There continues to be an open line of communication between Augusta, its subcontractor Les Frames, who provides daily on-site property management services at the two mobile home communities, and staff.  The following management practices were developed and implemented by Augusta to improve operations:

Approving the five-year agreement with Augusta will allow uninterrupted asset and on-site management to continue in both mobile home communities owned by the Authority.  Should the Housing Authority Directors decide not to approve a negotiated five-year agreement with Augusta at this time, staff would recommend the Authority approve a 12-month extension to the current agreement and direct staff to prepare and release a Request for Proposals soliciting proposals for asset management, property management and manufacturing housing consultation.  

If approved, the cost of the Agreement will not exceed $578,931, plus the Consumer Price Index (CPI).  Contract cost can be adjusted annually beginning November 2026, by the percentage change in the CPI.  Over the five-year term of this agreement, the total cost of this contract will be approximately $2,894,655 plus the adjustments for CPI.  On average, annual rents from both mobile home communities gross approximately $2,800,000.  The gross revenues generated from rents are sufficient to fund the cost of this agreement.  There will be no impact on the City's General Fund.