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Time Set # 41.
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| Board of Supervisors |
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| Subject |
| Adopt resolution authorizing the purchase of the County-occupied office building at 25 N. Cottonwood Street, Woodland, California. (No general fund impact) (4/5 vote required) (Nunes) |
| Recommended Action |
- Adopt resolution authorizing the purchase of 25 N. Cottonwood Street, Woodland, CA, APN 064-010-031-000;
- Authorize County Administrator or Assistant County Administrator to execute Purchase and Sale Agreement and to record grant deed, once property is purchased;
- Authorize Board Chair to sign the Certificate of Acceptance; and
- Adopt budget resolution to utilize contingency funds for payment of a $510,000 good faith deposit.
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| Strategic Plan Goal(s) |
Operational Excellence
Thriving Residents |
| Reason for Recommended Action/Background |
The County currently leases the Health and Human Services Agency (HHSA) facility at 25 N. Cottonwood in Woodland for HHSA programs. Known as the Gonzales Building, the facility houses the Woodland HHSA Service Center among other departmental programs. As part of on ongoing effort to reduce overhead costs associated with facilities, staff reviewed the current lease of Gonzales Building when compared with the debt service associated with purchase of the facility. It was determined the savings of purchase outweighed the continued lease of the facility through the end of the lease term, June 30, 2023. Staff subsequently negotiated with the owner to purchase the facility for $12,750,000 in February of 2020. The negotiated Purchase and Sale Agreement is attached (Attachment A).
The appraised value of the property ranged from $10,300,000 through $18,000,000 depending on the inclusion of the existing lease agreement. The table below reflects the savings estimated to be achieved through purchase:
| TERM/OTHER |
LEASE PAYMENT |
DEBT PAYMENT* |
SAVINGS |
| 03/01/2020-8/31/2020 |
$618,834 |
$387,500 |
+/- $231,334 |
| 09/01/2020-08/31/2021 |
$1,237,668 |
$930,000 |
+/- $307,668 |
| 09/01/2021-08/31/2022 |
$1,361,436 |
$930,000 |
+/- $431,436 |
| 09/01/2022-06/30/2023 |
$1,134,530 |
$775,000 |
+/- $359,530 |
| Property Tax 2020-2023 |
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+/- $600,000 |
| Total Estimated Savings |
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+/- $1,929,968 |
*Assumes a 4% interest rate
The cost of debt would be funded through the Federally allowed depreciation method for property purchased and thus reimbursed through HHSA State and Federal funding. The current plan of finance as approved by the Debt Committee at the January, 2019 meeting is to include the financing with the 2020 Capital Improvement Bonds issuance.
Based upon the savings realized through purchase in lieu of lease, staff recommends approval of the attached resolution authorizing purchase of 25 N. Cottonwood, Woodland, Assessors Parcel Number 064-010-031-000 (Attachment B). |
| Collaborations (including Board advisory groups and external partner agencies) |
| Committee on Capital Investments, Debt Committee, DFS, HHSA, County Counsel, General Services, County Administrator's Office |
| Competitive Bid Process |
| N/A |
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| Fiscal Impact |
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| Source of Funds for this Expenditure |
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Explanation (Expenditure and/or Revenue) |
| Further explanation as needed: |
| County will incur Bond indebtedness which is planned to be issued in 2020 and the repayments of debt will be made by HHSA utilizing state, federal and other department funding as allowed by departmental cost claiming methods. |
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