HomeMy WebLinkAboutagenda.council.worksession.20080520Citizen's Budget Task Force--Housing Subcommittee
Recommendations and Status Report to City Council
Outline of Comments
May 20, 2008
Our Appreciation for Opportunity to Work on Aspen's Most Complex Issue
Team Members: Danny Aronson, Alan Fletcher, Jenny Elliot, Don Davidson, Jim DeFrancia,
Marcia Goshorn, Ward Hauenstein, Pete Louras, Howie Mallory, Marilyn Marks, Paul Menter
(facilitator),
City Resources: Barry Crook, Bentley Henderson, Don Taylor, Chris Everson, Steve Bossart
Subject Matter Exoerts: John Olson Builder, Mike Maple, Ironbridge Homes
Our Work (February through May, 2008)
(March 08) Divided work plan into:
Moie Urgent--Issues which could have impact on Bond
Important-- not directly Bond related
Primary focus since April -Bond related housing issues
Housing Subcommittee---Size of need, use of proceeds-- Burlingame focused.
Bringing Two Recommendations for Council Consideration 5.20.08
Finance Subcommittee- Undertaking Debt Structure and Repayment Assumptions Review
Representatives Present at 5.20 OS Work Session for Informal Dialogue
Initial work covered topics of:
• Supply/Demand Analysis and Need for Updated Information
• Increasing Capacity Utilization Through:
o Compliance and Enforcement
o Developing Optional Financial Incentives for Freeing Up Existing Units
More Recently, Burlingame Costs/Plans Have Been Our Focus
Significant Variances from 01 2005 Plan:
($62.5K/unit subsidy estimate 01 2005 vs. $370K+ 02 2008)
($14.7 million subsidy 01 2005 vs. $85.5million 02 2008)
(Total cost of $74million 012005, vs. approx. $140 million 02 2008)
( -0- financing cost 01 2005 vs. TBD 02 2008)
How Do We Optimize Burlingame 2,3?
Two Key Recommendations:
-Rec. #2 --Post Completion Financial/Process Review of Burlingame 1
o Learn from Burlingame 1 experience.
o Enhance Voter Confidence in Spending/Reporting
o Develop Reporting Template for Burlingame 2,3.
o How?-Likely use current CPA audit firm with extension of
engagement scope.
o When?-begin ASAP, with results expected in August, 2008.
See attached recommendation #2 for Council Action.
Rec #3-Expert Construction/Design Task Force for Burlingame 2,3 Review
o Expert Citizen Task Force to undertake short term brainstorming
of Burlingame 2,3 opportunities to better leverage limited
resources.
o Consider technology, modular construction, density,
standardization, category mix, business model, floor plans,
finishes, etc.
o Size the cost/benefits, complexity, and time requirements on each '
option
o Output to be array of options with comparison of roughly
estimated benefits, costs, complexity and time to implement.
(Likely NOT a recommendation. Council would drive further more
detailed analysis for any options of interest.)
o How?-Group of construction/design experts have volunteered
and ready to start work. Cost estimation done at no cost by John
Olson Builder Cost Estimation Team.
o Who?- Dwayne Romero, John Olson Builder, RA Nelson, Shaw
(TBD), Poss (TBD), Semrau, BRIKOR, Jamie Fitzpatrick (VP
Corum, Denver based AH developers), Aspen SkiCo-Don
Schuster, Marsha Cook, Dirk Gosda--Sunrise, Mike Maple-
facilitator. Request City Staff participation from Asset
Management and Comm. Dev.
o When?-Immediately upon Council approval. Report expected in
30-45 days.
Requested Council Action for Recommendation #3:
Endorsement of the Expert Task Force Concept and Scope of
Work
• Authorize Staff Participation
• Authorize Sharing of Burlingame Plans and Materials with Team
• Recommend Additional Resources if Desired
Status of Other Work Plan Items:
-Recommendations on Size of Bond Issue-
Premature for our comment at this time. Will be primary focus of our work after
Burlingame estimates are refined.
-Status of Other In-Process Recommendations:
(Copies of recommendations as presented to CBTF available if desired.)
Recommendations below made to full CBTF on 4.30.08. Further
discussion/amendments and voting to follow at 5.28.08 meeting for those indicated
before they will be brought to Council.
Rec #1 Employer Sponsored Comprehensive Study of Supply/Demand, Goals, Future
Needs
Status: Approved by CBTF 4.30.08
Dave Ressler (AVH) in discussions with other employers on needs analysis
awaiting results of current City/APCHA sponsored work.
Rec #4 Specialized Task Force on Housing Incentives
Develop potential optional financial incentive programs to allow existing AH
residents to downsize, sell, bridge to free-market, etc. Explore providing loan support
programs for bridging to free market ownership for AH and free-market renters.
Status: Approved by CBTF 4.30. 08
Housing Subcommittee to initiate with help of expert citizens with specialized
background. Plan to initiate work soon, and bring Council ideas in late summer. (Has
taken secondary priority to Burlingame work.)
Rec. #5 Establish Independent Compliance Advisory Board
Establish small independent board to advise housing executives on compliance
matters, and monitor compliance complaints. Adds additional free resources and builds
community confidence in the system.
Status: Presented to CBTF 4.30. To be presented for vote 5.28.
To be discussed with APCHA board on 6.18.
Rec. #6 Establish Outsourced 24 hour Help Line for Compliance
Establish outsourced service for accepting anonymous compliance inquires and
complaints. Board in Rec. #5 above would help monitor follow up.
Status: Presented to CBTF 4.30.08. Present for vote/amendments at 5.28.08
Presenting to APCHA for discussion 6.18.08
Rec. #7 Outsource Eligibility Testing to Specialized Firm
Status: Presented to CBTF 4.30.08. Present for vote/amendments at 5.28.08
Discuss with APCHA board 6.18.08
Rec. #8 Legal Review of All Contracts for Maximizing City Rights
Status: Presented to CBTF 4.30.08, without vote. Update at 5.28.08
Discuss with APCHA board on 6.18.08. Determine if this is merely
reinforcing/supporting present practice or whether additional work recommended.
Rec. # 9 Establish Public Policy Review Committee
Purpose to advise on major Capital Spending prior to legal commitments
Status: Presented to CBTF 4.30.08. Vote/amend on 5.28.08.
Rec #10 Update City Procurement/RFPsystern
Status: Presented to CBTF 4.30.08. Vote/amend on 5.28.08
Other Topics In Workplan for Future Discussions:
-Consideration of various site optioris for AH.
-Rental vs. Ownership Housing philosophy and economic Impacts.
-Housing Operations Structure and Efficiencies
-Category Mix issues in context of future trends
-Business model for AH development
-Public Private Partnerships in Aspen's affordable housing future
-Efficient budgeting practices for AH development
-Routine financial reporting processes for AH projects.
-Other topics as Council may request.
Recommendation # 2
Post-Completion Review of Burlingame Phase 1
Goal: To review Burlingame 1 performance to enhance the cost efficiencies for
Burlingame 2 and 3.
Recommendation: Immediately engage an independent audit/consulting firm to
conduct a performance review of the Burlingame Phase 1 project, rio or to
approving Burlingame phases 2 and 3. The purpose of the review would be to
determine areas for process improvement, causes for spending variances, and
perform a quality evaluation. The independent review report should also include
a list of recommendations for improvement.
We recommend that this report be made available to Citizens Budget Task Force
and the public.
The potential scope of the post completion review of Burlingame Phase 1 would
be to:
- Review the Staff reconciliation of BG Brochure to Burlingame project
(costs to date and the projected costs to completion for all phases) for
completeness and accuracy, and ensure that the staff reconciliation of
costs is accurate in "all material respects"
- Conduct a review of controls and policies to show that everything is
adequate
- Determine areas that could benefit from process improvement efforts
(looking at accounting, budgeting and planning processes in the area of
project development and project management)
Direct staff to either add this cost review to the existing
Council Action contract with McMahan & Associates (the City's
Requested external auditors) or issue an RFP to seek additional
services; AND prepare a supplementary budget
amendment to a for such work.
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69
Recommendation # 3 (As presented to and approved by CBTF 4.30.08 in this
form. (Progress has been made since that meeting. This recommendation
is updated by the bullet points for Council in the 5.20.08 Outline.)
Reconsider Burlingame 2 and 3 Assumptions
Goal: To update Burlingame 2 and 3 development plan to increase cost efficiency using lessons
from Burlingame 1 and new technology.
Recommendation: It appears that there may be considerable cost efficiencies available to
Burlingame 2 and 3, which should be studied prior to committing to a construction plan or
contract. We encourage a thorough review of that alternatives including:
Consider modular construction
reduce number of building designs
increase standardization of unit designs
increase density to reduce cost per unit reconfigure category and size mix to better match
anticipated demand
review pricing model for high value units
Budgeting and financial control systems to be implemented to monitor and control spending.
We encourage a process which will involve developers and construction firms bringing their
informal recommendation and expertise to the re-engineering exercise. This should happen
prior to a contract being awarded, or bond issue being taken to the public.
Next Step: Our subcommittee would like to invite City staff to meet with us and some expert
resources (developers, contractors), to have a strategic level discussion of potential
costs/benefits of various levels of redesign efforts. We want to better understand the cost
saving, increased capacity potential.
Background:
There appear to have been very significant variances from voter expectations. Reconsidering
the design assumptions and financial control and reporting systems seem critical prior to
undertaking phase 2 and 3.
Moving forward with the previous plan seems likely to result in losing opportunities for savings
and housing efficiency.
At a time when construction costs and demand for housing greatly outstrip what was assumed
for Burlingame in 2004, the plan should be updated with the goal to house more people more
efficiently in quality homes.
We recognize that potential re-design, including site plan modifications may cause delays in the
construction plan. However, we believe that the savings and additional homes provided are may
justify the effort and potential delay. We also believe that during the planning process, it allows
the city to implement proper control and reporting systems to prepare for a more successful
project with Burlingame 2 and 3, as well as future projects.
We urge the decision makers to spend some time considering the potential cost of delay
against the potential benefits of re-design. We feel that it is important to use the limited
resources in very efficient ways.