SECOND AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT DATE: August 22, 2016 PARTIES: "CLIENT" THE CITY OF BURBANK, a municipal corporation Designated Official: Name: Patrick Prescott Title: Community Development Director Telephone: (818) 238-5176 Mailing Address: 275 E. Olive Avenue P. O. Box 6459 Burbank, CA 91510 "CONSULTANT" Economic & Planning Systems, Inc. Representative: Name: Jason Moody Title: Principal Telephone: (510) 841-9190 Mailing Address: One Kaiser Plaza, Suite 1410 Oakland, CA 94612 TERM: Original Commencement date: September 24, 2014 Original Completion date: September 24, 2015 1 st Amended Completion date: September 24, 2016 2 nd Amended Completion date: September 24, 2017 COST OF SERVICE: Original Cost of Service: $139,670.00 1 st Amendment to Cost of Service: No Change 2 nd Amendment to Cost of Service: $25,300.00 Revised Cost of Service: $164,970.00 THIS AMENDMENT TO THE AGREEMENT MUST BE EXECUTED BY THE CONSULTANT OR ITS REPRESENTATIVE AND THEN APPROVED AS TO FORM BY THE CITY ATTORNEY BEFORE THIS AGREEMENT MAY BE EXECUTED ON BEHALF OF THE CITY OF BURBANK.
1.0 Amendment. Client and Consultant entered into a written agreement dated September 23, 2014, for Consultant to provide a development impact fee update and nexus study. On August 17, 2015, Client and Consultant agreed to amend the Agreement in order to extend the completion date to September 24, 2016. Now, Client and Consultant desire to amend the Agreement in order to increase the cost of service by $25,300.00 and extend the completion date to September 24, 2017. 2.0 Services. Consultant, as an independent Contractor agrees to perform during the term of this Agreement, each and every service set forth on the "Scope of Services" attached hereto as Exhibit A-2. The initiation of Service by the Consultant will commence upon receipt of a written notice from the Designated Official authorizing Consultant to proceed, and only to the extent of such authorization. The services of the Consultant shall include the making of all investigations, studies, and analysis required by the conditions involved in each request of the Designated Official. 3.0 Compensation. The Client shall pay the services of Consultant on a fixed-price-basis as indicated on the Schedule of Compensation set forth in Exhibit B-2. 4.0 Ratification of Professional Services Agreement. All other provisions of the Agreement dated September 23, 2014, up to and including the first Amendment, not inconsistent with this Amendment shall remain in full force and effect. In recognition of the obligations stated in this Amendment, the parties have executed this Agreement on the date indicated above. "CONSULTANT" Signature Name (please print) Title ATTEST: Office of the City Clerk By: Signature Name (please print) Title "CLIENT" Signature Patrick Prescott Name (please print) Community Development Director Title Approved as to Form Office of the City Attorney By: Signature Name (please print) Title
EXHIBIT A-2 SCOPE OF SERVICES Consultant to conduct an affordable housing nexus study to establish the nexus between the development of market-rate ownership, rental housing, and non-residential projects and the demand for affordable housing units. The nexus study will help establish an affordable housing fee to be assessed to new developments that occur in the City. Specific tasks include: Task 1: Project Initiation Consultant will participate in a project initiation work session with City staff to refine the technical work program, data requirements, and the schedule for project deliverables, as necessary. Consultant to engage the City Attorney or other legal advisors to gain their input and assure their comfort with the proposed approach. During the initiation work session, the group will discuss the history of the current affordable housing policies, the successes and challenges of its implementation to date, and potential approaches to amending current requirements. In addition, Consultant will discuss the methodologies Consultant has used in recent assignments for other jurisdictions and the linkage of the affordable housing fee nexus to the broader ongoing development impact fee update effort being conducted by the City under separate contract. Consultant will list the desired data requirements and City will help provide available data and information and policy direction necessary for the affordability analysis. Task 2: Residential Nexus Analysis Consultant will provide analysis of the nexus between development of market-rate ownership and rental housing and the demand for affordable housing units. For each tenure type, the process involves three general steps, as described below. Step 1: Compute Demand for Affordable Housing Generated by Market Rate Units The first step is to estimate the impact that the addition of market-rate housing has on job creation and household formation. Using data regarding consumer expenditure patterns and wage levels for specific types of business, Consultant will estimate the demand for local goods and services generated by the addition of market-rate housing and its occupants, convert that demand to a number for local jobs and worker households, and estimate the proportion who cannot afford market-rate housing. These figures are driven by the incomes of the households occupying the market-rate housing the higher the cost of the housing, the higher the occupants income, and the more spending and job creation is expected. Consultant will calculate impacts for a range of unit types and/or price levels to illustrate these effects. Step 2: Estimate Affordability Gap Analysis The second step is to determine whether and how much subsidy is required to provide new housing units for worker households of various income levels (e.g., moderate, low, and very low). Determination of a required subsidy amount involves an estimation of the costs of development (construction, land, fees, required financial returns, etc.), as well as an estimation of the unit values based on the prices at which the units are affordable to income-qualified households. Consultant will provide detailed initial assumptions and calculations to City staff for
review and comment and make adjustments as appropriate. If further vetting or corroboration is desired, Consultant will work with the City to identify appropriate participants (for-profit and nonprofit developers, etc.) to review the development cost and value assumptions and calculations. Following these initial discussions and further consultation with City staff, Consultant will make adjustments to the assumptions and calculations as may be appropriate. The subsidy or financing gap equals the difference between development costs and unit values under allowable rents. Step 3: Compute Impact Fee per Market Rate Unit The third step is to calculate the aggregate subsidy required to produce housing affordable and appropriate for those new worker households and allocate that aggregate subsidy back to the market-rate project driving that demand. Consultant will calculate a technically derived amount for the maximum justifiable impact fee, consistent with this nexus logic. The results will include different nexus-based fees for housing units at various sizes or price levels because the household spending and job creation associated with such households will vary by their income, as represented by price levels. Consultant will also illustrate the equivalent number of units required at different income levels, which may be used as a standard for allowing developers to address their impacts through provision of units on site rather than payment of the impact fee. It is likely that the nexus-based impacts and resulting impact fees or unit requirements will be different than the City s current or past requirements. Consultant will present the results of the nexus analysis in draft reports for City staff review. Upon receipt of comments from City staff and stakeholders, Consultant will issue revised versions of the reports for initial public workshops and hearings, and will provide final versions for City adoption. Task 3: Commercial Linkage Nexus Analysis The nexus (i.e., linkage) between new non-residential development and the demand for affordable housing will be derived by preparing employment density and compensation estimates of future employees for several non-residential land use types (e.g., retail, office, industrial, lodging, etc.). New household formation resulting from new employment will be categorized by income category (moderate, low, very low) to estimate total housing demand. These calculations include consideration of local trends in household formation (e.g., size and location of household formation). The demand by land use category will be converted into a fee, on a per-buildingsquare-foot basis, based on the affordability gap calculations. Consultant is aware of the potential double-counting of income-qualified households generated by residential and non-residential uses. For example, the same grocery store worker who needs affordable housing may be represented in the residential nexus studies, as well as the non-residential nexus study. Consultant will discuss options for reconciling these double-counting issues through implementation of the fee program for different uses. Consultant will prepare a draft report summarizing the results of the non-residential nexus impact analysis. After incorporating City staff comments, Consultant will issue a revised report for purposes of the public hearing process. Consultant will prepare a final report for City adoption.
Task 4: Meetings and Presentations Consultant will work with the City staff to develop meeting/presentation materials that offer an easily understood synopsis of the technical analysis and summary of the primary policy issues. Consultant will endeavor to coordinate any on-site meetings or presentations with those being conducted as part of the broader comprehensive fee update.
EXHIBIT B-2 SCHEDULE OF COMPENSATION The fee schedule for Consultant services shall be on a not-to-exceed basis as defined in this Exhibit B. The following hourly rates shall apply by position: Principal: $260 per hour Project Manager: $205 per hour Research Analyst: $125 per hour Production Staff: $85 per hour Reimbursable expenses include travel costs, meals, shipping, printing, and data acquisition.