REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
February 25, 2025
FROM
CARRIE HARMON, Director, Community Development and Housing
SUBJECT
Title
Amendments to Property Management Agreement with Quality Management Group, Inc. and Disbursement Account Control Agreement for the Homekey Program Pacific Village Project
End
RECOMMENDATION(S)
Recommendation
1. Approve Amendment No. 4 to Property Management Agreement No. 21-132 with Quality Management Group, Inc., to continue to provide operating and management services for the Homekey Program Pacific Village Project, increasing the amount by $1,532,324, from $3,926,809 to $5,459,133, with no change to the total contract period of February 9, 2021, through February 9, 2026.
2. Approve Amendment No. 2 to Disbursement Account Control Agreement No. 24-123 between San Bernardino County, Haven View Escrow, and Quality Management Group, Inc., effective February 25, 2025, to hold operating funds of $1,532,324 and outline the process for using the established escrow account to disburse funds to Quality Management Group, Inc., for Pacific Village operating expenses.
3. Authorize the Chief Executive Officer, Assistant Executive Officer, or Director of the Community Development and Housing Department to approve and sign Amendment No. 2 to Disbursement Account Control Agreement No. 24-123 and any escrow instructions related to the Disbursement Account, subject to review by County Counsel.
4. Direct the Director of the Community Development and Housing Department to transmit Amendment No. 2 to Disbursement Account Control Agreement No. 24-123 to the Clerk of the Board of Supervisors within 30 days of execution.
(Presenter: Carrie Harmon, Director, 382-3983)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Promote the Countywide Vision.
Operate in a Fiscally-Responsible and Business-Like Manner.
Provide for the Safety, Health and Social Service Needs of County Residents.
Pursue County Goals and Objectives by Working with Other Agencies and Stakeholders.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). The recommended increase to Property Management Agreement No. 21-132 (Agreement) with Quality Management Group, Inc. (QMG) will be funded by the Permanent Local Housing Allocation Program (PLHA) from the California Department of Housing and Community Development (HCD). Additionally, up to $75,000 will be allocated to the Community Development and Housing Department (CDH) to provide oversight and management of the current and future expanded Pacific Village housing campus. Adequate appropriation and revenue have been included in the Community Development and Housing Department (CDH) 2024-25 budget and will be included in the 2025-26 recommended budget.
BACKGROUND INFORMATION
In 2020, San Bernardino County (County) secured funding under the State Homekey Program (Homekey) to expand interim housing opportunities for unhoused residents. The Homekey project known as Pacific Village (Project), is located at the former Salvation Army service site at 2226 Pacific Street in the City of San Bernardino. This Project provides interim housing, case management, and supportive services for 28 households who are at risk of or experiencing homelessness and meet Homekey eligibility requirements prescribed by the state. Supportive services are customized to each individual and include, but are not limited to, life skills, behavioral health services, substance use treatment, senior services, healthcare services, and access to job training.
The County operates the Project in partnership with QMG Per Homekey Grant Agreement No. 20-HK-00130, authorized by Resolution No. 2020-171, and approved by the Board of Supervisors (Board) on September 15, 2020 (Item No. 39), along with a subsequent property management agreement. Under the terms of the existing Agreement for property management, QMG’s responsibilities include verifying participant eligibility per Homekey guidelines; and providing on-site property management services, security, and maintenance. The County is responsible for funding the property’s operating costs and conducting inspections regularly to assure that the Project continues to meet Homekey guidelines. Supportive services are primarily provided and funded through grants administered by the Department of Behavioral Health and the Department of Aging and Adult Services.
The recommended Amendment No. 2 to Disbursement Account Control Agreement No. 24-123 (DACA) will allocate additional funding to the operating fund to ensure the continuity of property management services.
Additionally, funds will be allocated to pay for the future operation and maintenance of the CDH housing campus after the County completes the buildout of Phase II of the Project, which will replace the existing travel trailers with 28 new permanent housing units, under the Capital Improvement Plan (CIP) approved by the Board on May 21, 2024 (Item No. 59). Approval of this item will allocate $1,532,324 of PLHA Round 2 funds to the Project for use as a long-term Operating Subsidy:
Upon approval of Amendment No. 2 to the DACA, the County will fund $1,532,324 into a separate escrow account with Haven View Escrow as an additional Capitalized Operating Subsidy Reserve (COSR) for the Project. Projections indicate that a portion of the COSR funds will remain unspent beyond QMG’s existing contract. Any remaining COSR funds will be used to pay for future operating costs of the expanded Pacific Village Campus, which is scheduled to open in late 2026. The recommended Amendment No. 4 to the Agreement with QMG includes a provision that in the event of a change to the property management service provider in the future, the County reserves the right to recall and reallocate funds designated for the COSR to ensure continued fulfillment of Homekey objectives and participants’ needs.
The disbursement process and requirements are set forth in the DACA. Delegation of authority is being requested for the Chief Executive Officer, Assistant Executive Officer, or Director of CDH to sign Amendment No. 2 to the DACA and escrow instructions, as execution of these documents are contingent on the prior approval and execution of Amendment No. 4 with QMG.
On August 6, 2019 (Item No. 13), the Board accepted California Emergency Solutions and Housing (CESH) Round 1 funds in the amount of $1,459,234. On March 10, 2020 (Item No. 25), the Board accepted CESH Round 2 funds in the amount of $835,737.
On February 9, 2021 (Item No. 33), the Board approved the Agreement with QMG to provide property management services for the 28 Homekey beds at Pacific Village, for a two-year term beginning February 9, 2021, through February 9, 2023, for an estimated cost of $800,000, with up to three additional successive one-year extensions.
On January 24, 2023 (Item No. 20), the Board approved Amendment No. 1 to the Agreement, increasing the annual operating cost from $400,000 to $800,000, for a total of $1,600,000, and extending the term for one year, for a total period of February 9, 2021, through February 9, 2024.
On February 6, 2024 (Item No. 17), the Board approved Amendment No. 2 to the Agreement, extending the term for one additional year, from February 9, 2024, through February 9, 2025, at an annual cost of $800,000, for a total of $2,400,000. Item No. 17 also delegated authority to the Chief Executive Officer, Assistant Executive Officer, or Director of CDH to sign the DACA and escrow instructions, as well as non-substantive amendments to the Agreement with QMG.
On February 27, 2024 (Item No. 22), the Board authorized the Chief Executive Officer to approve the use of the remaining CESH Round 1 funds in an amount of up to $900,000, and Round 2 funds in an amount of up to $626,809, for a total of $1,526,809, and to execute all necessary documents, including agreements.
On April 23, 2024 (Item No. 25), the Board approved Amendment No. 3 to the Agreement, extending the term for one additional year, from February 9, 2025, through February 9, 2026, at an annual cost of $1,526,809, for a total of $3,926,809 of the CESH and PLHA funds. Item No. 25 also delegated authority to the Chief Executive Officer, Assistant Executive Officer, or Director of CDH to sign the DACA and escrow instructions, as well as non-substantive amendments to the Agreement with QMG.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Suzanne Bryant Deputy County Counsel, 387-5455) on February 11, 2025; Auditor-Controller/Treasurer/Tax Collector (Charlene Huang, Auditor-Controller Manager, 382-7022) on January 27, 2025; Finance (Paul Garcia, Administrative Analyst, 386-8392) on February 10, 2025; and County Finance and Administration (Cheryl Adams, Deputy Executive Officer, 388-0332) on February 10, 2025.