Loading...
HomeMy WebLinkAboutItem 10h - CDBG Housing Rehab Program Management and Administrative Services STAFF REPORT DEVELOPMENT SERVICES DEPARTMENT DATE: March 17, 2026 TO: Honorable Mayor and City Council FROM: Lisa Flores, Interim Development Services Director By: Jeramie Brogan, Senior Management Analyst SUBJECT: AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH WILLDAN ENGINEERING FOR COMMUNITY DEVELOPMENT BLOCK GRANT ("CDBG") HOUSING REHABILITATION PROGRAM MANAGEMENT AND ADMINISTRATIVE SERVICES, ADDING $10,403 FOR FISCAL YEAR 2025-26 CEQA: Not a Project Recommendation: Approve SUMMARY On November 19, 2024, the City Council approved a Professional Services Agreement (“Agreement”) with Willdan Engineering (“Willdan”) for Community Development Block Grant (“CDBG”) Housing Rehabilitation Program Management and Administrative Services, in the amount of $49,150. The Agreement included an option for three, one-year contract renewals at the sole discretion of the City Manager. Since that time, additional home improvement projects have been approved under the program, resulting in a higher level of service demand than originally anticipated. As a result, additional funds in the amount of $10,403 are necessary to complete program services through the remainder of Fiscal Year 2025–26. Accordingly, an amendment to the Agreement is necessary to appropriate the additional funds. It is recommended that the City Council determine that this action does not constitute a project under the California Environmental Quality Act (“CEQA”) and approve, authorize, and direct the City Manager to execute an amendment to the Professional Services Agreement with Willdan Engineering for management of the Community Development Block Grant (“CDBG”) Program for an additional $10,403, for a revised total contract of $59,553 in Fiscal Year 2025-26. Amendment No. 2 – CDBG Housing Rehab and Administrative Services March 17, 2026 Page 2 of 4 BACKGROUND On November 19, 2024, the City Council approved an agreement with Willdan for the administration and management of the CDBG Home Improvement Program in the amount of $49,150, plus a 10% contingency. The City Council also authorized up to three one-year renewals with City Manager approval, provided that the contract rates do not exceed annual inflationary adjustments. Willdan started providing these services for the City midway through Fiscal Year 2024–25 and expanded to full operational capacity in Fiscal Year 2025-26. Through their scope of work, Willdan handles application processing, qualification review, bid preparation, project management, and reporting to the Los Angeles County Development Authority (“LACDA”). Willdan also assisted the City in responding to new, unanticipated federal requirements. In addition, their work has included updating the Home Improvement Program (“HIP”) guidelines, which had not been comprehensively revised in recent years, and implementing a streamlined application process. As the program became fully operational and application processing increased, the associated administrative time and costs exceeded initial estimates. The City anticipates completing up to eight (8) HIP projects by the end of this Fiscal Year, compared to one (1) project that was completed in the previous year. DISCUSSION The City receives CDBG funds annually through LACDA. These funds support programs and projects that benefit Low and Moderate Income residents. A significant portion of the City’s annual CDBG allocation is dedicated to the HIP, which provides grants of up to $25,000 to owner-occupied single-family residences, and up to $20,000 for townhomes and condominiums to assist Low and Moderate homeowners with eligible improvements. Eligible improvements include exterior painting, roof replacement, accessibility modifications for individuals with disabilities or special needs, energy-efficiency upgrades, window replacement, termite damage repair, installation of new air-conditioning units and water heaters, and other necessary improvements. These enhancements improve the livability of the home while helping preserve values and prevent neighborhood deterioration. Each project requires substantial administrative oversight to comply with federal CDBG regulations. The reporting requirements and income verification components of the program are complex and time consuming. For this reason, the administrative Amendment No. 2 – CDBG Housing Rehab and Administrative Services March 17, 2026 Page 3 of 4 funds are used to contract with a program consultant who understands the processes and requirements of the CDBG program and can work closely with applicants. The HIP budget can vary from year to year, and for Fiscal Year 2025-26, the budget totals $243,738. A maximum of 20% of the HIP budget, or approximately $48,747, may be used for program administration. Willdan’s current Purchase Order totals $49,150, which exceeds the allowable administrative cap and results in $403 being ineligible for CDBG reimbursement. To address the increased administrative costs, a General Fund appropriation of $10,000 is requested to complete the pending projects. In addition, $403 is required to cover the portion of the existing Purchase Order that exceeds the CDBG administrative funding cap. The requested appropriation of $10,403 will allow Willdan to complete the remaining projects and resolve the current Purchase Order shortfall, as shown below: Home Improvement Program Budget $243,738 Maximum Administration Reimbursement (20% of Budget) $48,747 Current Purchase Order Amount $49,150 Difference $403 Estimated Willdan Costs for Remainder of Term $10,000 Total Requested General Fund Appropriation $10,403 As a result, it is recommended that $10,403 in General Fund dollars, available from unencumbered funds in the Development Services Department budget, be used to cover the estimated costs needed to complete the pending projects, and address the portion of administrative services that exceeds the CDBG funding cap. If approved, the amended Agreement would total $59,553, with approximately $48,747 reimbursable through the CDBG administrative allocation. ENVIRONMENTAL ANALYSIS This proposed action is exempt from review under the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3), commonly referred to as the “common sense exemption,” as it can be seen with certainty that there is no possibility that the approval of the amended agreement for administrative Amendment No. 2 – CDBG Housing Rehab and Administrative Services March 17, 2026 Page 4 of 4 services may have a significant effect on the environment. As such, the proposed action is not a project under CEQA. FISCAL IMPACT The Fiscal Year 2025–26 Development Services Department budget includes sufficient unencumbered funds to cover the $10,403 amendment; therefore, no additional General Fund appropriation is required. In future contract years, program adjustments such as reducing the number of projects completed annually may be necessary to ensure total administrative costs remain within the 20% administrative cap, minimizing the need for additional cost-related amendments. The November 19, 2024, City Council approval allows for three optional one-year contract renewals and a 10% contingency. This contingency may be used in future years if the administrative cap increases, provided that any such use can be fully funded with CDBG dollars. RECOMMENDATION It is recommended that the City Council determine that this action does not constitute a project under the California Environmental Quality Act (“CEQA”); and approve, authorize, and direct the City Manager to execute an amendment to the Professional Services Agreement with Willdan Engineering for Community Development Block Grant (“CDBG”) Housing Rehabilitation Program Management and Administrative Services, adding $10,403, for a revised total contract of $59,553 in Fiscal Year 2025-26. Attachment: Proposed Amendment No. 2 to the Professional Services Agreement AMENDMENT NO. 2 TO AGREEMENT REGARDING THE HOUSING REHABILITATION PROGRAM MANAGEMENT AND ADMINISTRATIVE SERVICES This Amendment No. 2 (“Amendment No. 2”) is hereby entered into by and between the City of Arcadia, a charter city organized under the Constitution and laws of the State of California, and Willdan Engineering, a California corporation, with its principal place of business at 2401 East Katella Avenue, Suite 300, Anaheim, California 82806, with respect to that certain Professional Services Agreement between the parties dated December 11, 2024 as amended by Amendment No. 1 dated July 23, 2025, and Amendment No. 2 dated , 2026. (“Agreement”). The parties agree as follows: 1. Pursuant to Section 2.b of the “Agreement”, the Compensation is hereby amended to provide an additional compensation (increase) to the original Agreement in the amount of Ten Thousand, Four Hundred Three Dollars ($10,403), for a new total compensation of $59,553, as referenced in the attached Exhibit “B.” 2. All other terms and provisions of the Agreement not amended by this Amendment No. 2 are hereby reaffirmed. In witness whereof the parties have executed this Amendment No. 2 on the date set forth below. CITY OF ARCADIA WILLDAN ENGINEERING By: By: Dominic Lazzaretto Signature City Manager Date: Print Name and Title ATTEST: Date: By: City Clerk Signature APPROVED AS TO FORM: Print Name and Title Date: Michael J. Maurer City Attorney CONCUR: Lisa Flores Interim Development Services Director EXHIBIT “B” Schedule of Charges/Payments The additional compensation shall not exceed Ten Thousand, Four Hundred Three Dollars ($10,403), for a new total compensation of $59,553 for the Fiscal Year 2025-26 term.