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Report regarding a resolution authorizing the City Manager or their designee to execute a First Amendment to the Consulting Services Agreement with Michael Baker International, Inc. for administrative support for the City’s for-sale below market rate (BMR) housing program and Community Development Block Grant to increase the amount by $100,000 for a total amount not to exceed $250,000. (Pierce Abrahamson, Housing Programs Analyst; Mike Noce, Housing Manager)
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RECOMMENDATION
Recommendation
Staff recommends that the City Council adopt a resolution authorizing the City Manager or their designee to execute a First Amendment to the Consulting Services Agreement with Michael Baker International, Inc. for administrative support for the City of South San Francisco’s Housing Programs to increase the amount by $100,000 for a total amount not to exceed $250,000.
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BACKGROUND
In 2025, the Economic and Community Development Department issued a Request for Qualifications (RFQ) for on-call Economic Development and Housing services, including consultant services to support the City’s Below Market Rate (BMR) Program and administrative support for the Community Development Block Grant (CDBG) program. Several firms responded to the RFQ with proposals that staff evaluated based an objective scoring criteria that prioritized understanding and responsiveness, firm expertise, staff qualifications, and cost value. Staff ultimately selected a small number of qualified firms to support the City’s BMR and CDBG programs according to each of their respective specialties. These firms include: (1) Resource Systems Group (RSG), who specializes in Redevelopment Successor Agency regulatory compliance, (2) Hello Housing, who specializes in BMR administration for rental projects, (3) City Consultants, who specializes in CDBG administration (excluding environmental review), and (4) Michael Baker International, Inc. (MBI). MBI, the subject of this staff report, was selected due to their strong expertise in conducting environmental reviews for federally assisted projects and conducting BMR administration for homeowner projects. While environmental reviews are generally both the most expensive and unpredictably priced contracting services for the City’s Housing Division, MBI was the only respondent firm with a reputable history of conducting environmental reviews for federally assisted projects.
DISCUSSION
There are various, specialized services that MBI provides to the City that support the production of affordable housing. Due to an increase in activities that the Housing Division is coordinating in support of City Council priorities, there has been an increase in the rate of spending related to the MBI contract. To date, MBI has neared the limit of the City Manager’s signing authority of $150,000.
The main increase in current spending is due to a previously unexpected $70,444 environmental review required by the Department of Housing and Urban Development to make the 905 Linden affordable housing project eligible for federal funding. As additional background, City Council approved an Exclusive Negotiating Rights Agreement with Habitat for Humanity Greater San Francisco in July 2026 for the development of affordable ownership units as 905 Linden. Notwithstanding, the firm’s services are still needed to administer the City’s for-sale BMR housing program and the City’s CDBG program for the next two years. MBI plays an important role overseeing the lottery procedures and home buyer qualification process for BMR sales, which is best provided by a third party to ensure separation between the approving jurisdiction, the City of South San Francisco, and buyer proceedings. The City is actively working on the sale of four ownership units at 889 McLellan and one at 2210 Gellert. These activities have expected costs; however, the timing of having these ownership units reach the market at one time means those costs are overlapping with other vital housing activities the City relies on MBI services for.
MBI Consulting Services Agreement
Staff recommends amending the contract with MBI to appropriately budget for BMR, CDBG, and environmental review services. In April 2025, the City issued the RFQ to seek a consultant to support the City’s Economic and community development programs. The City entered into an agreement with MBI on August 25, 2025, for the not-to-exceed amount of $150,000.
The RFQ contemplated a three-year consulting services term, beginning August 2025 until June 30, 2028. At the time of contract signing, staff did not forecast a need for MBI services to near the City Manager signing authority in the first one to two years based on prior spending with MBI. However, in light of the unanticipated $70,444 HUD-required environmental review for 905 Linden and continued increases in BMR/CDBG activities, staff recommends amending the consulting services agreement with MBI to increase the amount by $100,000 for the approximately two years remaining of the contract, for a total not-to-exceed amount of $250,000. The draft amendment and scopes of services are included as attachments to the resolution.
FISCAL IMPACT
The Affordable Housing Program consulting services agreement is paid for from the Housing Trust Fund (Fund 205). There are sufficient funds to pay these administrative costs, and there is no impact to the General Fund associated with adopting the associated resolution.
Expenses incurred under the CDBG Program consulting services agreement are reimbursed by CDBG administrative funds in Fund 222. Sufficient funds have been budgeted to pay for these administrative costs.
RELATIONSHIP TO CITY COUNCIL PRIORITIES ACTION PLAN
MBI’s consulting services are in alignment with the Housing and Supportive Services major focus area.
CONCLUSION
Staff recommends that the City Council adopt the resolution authorizing the City Manager or their designee to execute a First Amendment to the Consulting Services Agreement with MBI to increase the amount by $100,000 for a total amount not to exceed $250,000.