The City implemented the Senior Home Improvement Grant (SHIG) Program in FY 2016-17, which provides $5,000 grants to low-income Garden Grove seniors to rehabilitate their homes. Over the past four years, the City has awarded 96 home improvement grants to Garden Grove seniors. The repairs completed though the SHIG Program include: exterior painting, window replacement, termite and pest remediation, electrical, plumbing, heating (HVAC), handicap accessibility (wheelchair ramp, grab bars, walk-in shower, etc.), and roof repair or replacement.

During the preparation of the City’s FY 2020-21 Annual Action Plan (AAP), City staff recommended broadening the eligibility requirements for the SHIG Program to include all low-income Garden Grove residents. This recommendation was based on a decrease in qualified seniors applying for the program during FY 2019-20, and an increase in calls for rehabilitation assistance from residents who are below the age of 62. The FY 2020-21 AAP was approved by City Council on June 23, 2020, which included an allocation of $200,000 for the new Home Repair Program (formerly referred to as the SHIG Program). The Home Repair Program will assist approximately 40 low-income Garden Grove households rehabilitate their homes during FY 2020-21.

SHIG Program participants expressed issues with the process of procuring qualified contractor bids. Each SHIG project required three (3) bids from licensed contractors who are not barred from working on U.S. Department of Housing and Urban Development (HUD) funded projects. In addition, each contractor must meet the City’s insurance requirements prior to entering into an agreement with the homeowner and the City. These requirements for the SHIG Program were put in place to meet both the City’s and HUD’s procurement requirements, but delayed the completion of most projects by several months.

During the preparation for FY 2020-21, City staff worked to address this issue by conducting research to locate non-profit organizations able to administer and facilitate the rehabilitation portion of the Home Repair Program. This would eliminate months of work for the Program participant and would streamline the rehabilitation process for the Program. City Staff reached out to the cities of Rancho Santa Margarita, Newport Beach, Mission Viejo, and Santa Ana to inquire about their rehabilitation programs.  All four (4) cities contract with Habitat for their rehabilitation programs and the responses from the four jurisdictions regarding the service and quality of work provided by Habitat were all positive.  Each of the cities recommended for Garden Grove to utilize Habitat as a service provider to administer our rehabilitation program. Additionally, Habitat is highly recommended by HUD because of their ability and willingness to serve communities in the greatest need through their rehabilitation services. City staff intended to locate multiple non-profit organizations capable of administering the rehabilitation portion of the Home Repair Program, but the research conducted determined the only non-profit organization with the experienced and capacity to carry out the services for the Home Repair Program is Habitat.

In order to satisfy both HUD’s and the City’s procurement policy for small purchases, City Staff received an informal quote from Habitat, which included bids of numerous projects they have performed for other local jurisdictions. City Staff conducted a bid comparison between the bids provided by Habitat and past SHIG project bids. The results of the bid comparison indicate that Habitat has similar pricing when compared to local contractors performing similar work. This analysis includes a 20% administrative fee that Habitat charges local jurisdictions to administer their rehabilitation programs. The administrative fees are in relation to the overhead administrative costs that are incurred during the administration of each project.  

There is no impact to the General Fund.  The City’s adopted 2020-21 budget included $200,000 for the Home Repair Program, but did not included the $40,000 (20% administrative fee) that will be paid to Habitat for Humanity of Orange County to administer the rehabilitation projects. The administrative fee will be funded with unallocated Community Development Block Grant funds that have yet to be designated to a FY 2020-21 project.

It is recommended that the City Council:

• Approve the Home Repair Program Administration Agreement with Habitat; 

• Appropriate an additional $40,000 in FY 20-21 CDBG funds; and
• Authorize the City Manager to execute the agreement on behalf of the City.