Special Notice / Hearing: None__
Vote Required: 4/5th
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Manager
Adam Ely, Project Development Unit Director
Subject: Reappropriating HSA Funds for the COB3 Project
RECOMMENDATION:
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Approve an Appropriation Transfer Request (ATR) re-appropriating funds in the amount of $45,000,000 from the Accumulated Capital Outlay budget unit to the Major Capital Construction budget unit for the Human Services Agency's purchase of office space in County Office Building 3.
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BACKGROUND:
On March 28, 2017, this Board gave direction to the County Manager and the Project Development Unit to move forward with preparations for multiple recommended capital improvements, including the County Office Building 3 (COB3) project. The project is currently under construction.
Subsequently, the Human Services Agency (HSA) submitted a proposal to the County Manager's Office (CMO) to purchase office space in COB3. The proposal was accepted, and, on June 23, 2020, a Memorandum of Understanding (MOU) reflecting terms of the purchase was finalized. Based on the original project budget estimate, payment in full for construction costs for HSA's space in COB3 was calculated at $45,000,000 for 45,856 square feet at baseline standards. As a result of this one-time payment, HSA will not pay debt service in connection with the lease revenue bond financing, or any subsequent refinancing, of COB3. The HSA's $45,000,000 payment constitutes payment in full for construction of the space in COB3 at baseline standards, not inclusive of certain costs, including among others, Furniture, Fixtures, and Equipment (FF&E), whether the actual construction costs of COB3 are less than or exceed the original project estimate.
The HSA is not currently planning to pass through the $45,000,000 payment in connection with HSA federal or state costs and is not developing a schedule with respect to amortizing the $45,000,000 paym...
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