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Regular-General Government # 41.
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| Board of Supervisors |
General Services |
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| Subject |
| Approve purchase of real property located at 500 Jefferson Street in West Sacramento from the City of West Sacramento for $4,735,639 and adopt budget resolution adjusting the Debt Service Fund 2018-19 budget by $4,877,639; and declare County-owned unimproved property located at the NW Corner of 3rd Street and B Street in West Sacramento as surplus property and approve sale of that surplus property to the City of West Sacramento for $7,500. (No general fund impact) (4/5 vote required) (Yarris) |
| Recommended Action |
- Approve purchase of real property located at 500 Jefferson Street in West Sacramento for $4,735,639 and authorize the Assistant County Administrator to execute the purchase agreement upon receipt from the City;
- Adopt resolution authorizing the purchase of real property located at 500 Jefferson Street in West Sacramento;
- Execute a Certificate of Acceptance of grant of interest in real property located at 500 Jefferson Street in West Sacramento;
- Adopt budget resolution adjusting Debt Service Fund fiscal year 2018-19 budget to represent an increase of $4,877,639;
- Adopt resolution declaring County-owned unimproved property at NW Corner of 3rd Street and B Street, West Sacramento as surplus to the needs of the County; and
- Approve sale of surplus unimproved real property located at NW Corner of 3rd Street and B Street in West Sacramento for $7,500 and authorize the Assistant County Administrator to execute the purchase and sale agreement upon receipt from the City.
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| Strategic Plan Goal(s) |
Operational Excellence
Thriving Residents
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| Reason for Recommended Action/Background |
In 1994, Yolo County and the City of West Sacramento entered into a long term lease agreement for Assessor Parcel Number 010-559-001, commonly known as 500 Jefferson Street in West Sacramento. The County currently pays in excess of $370,000 in annual rental payments for this property, a number that steadily increases to over $1,000,000 annually in the final three years of the lease payment. The county could have continued to lease the building when the lease expires or purchase at that time for over $3,000,000. However, the City has agreed to sell it to the county for the remainder of the lease payments up front. In its analysis of this lease agreement, the General Services Department, in cooperation with the County Administrator's Office and the Department of Financial Services, has determined the purchase of the facility at 500 Jefferson Street, West Sacramento now to be in the County's best interest.
On January 8, 2019, the County Debt Committee approved staff recommendation of the purchase and issuance of debt to acquire the property. Data shows the savings to the county over the next 7 years to by over $1,700,000. Financing will be spread over the remaining life of facility, likely 15-20 years and the county would use internal borrowing in the short term until the longer term bonds are issued. The budget resolution includes anticipated interest and bond issuance costs to be incurred as part of the bond issuance.
Additionally, the City of West Sacramento has agreed to purchase unimproved County owned property, commonly known as a communication tower, located at the NW Corner of 3rd Street and B Street, West Sacramento. As the city develops its Parkway Plan, purchase of the tower will allow for unencumbered planning and future access to the riverwalk. The County has no future need for the tower or property and efforts to lease space on the tower have been unsuccessful. |
| Collaborations (including Board advisory groups and external partner agencies) |
| City of West Sacramento, Yolo County General Services, Department of Financial Services, County Counsel, 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: |
Other Financing Sources will be secured for the purchase through the Capital Improvement Bonds to be issued in June 2019. The County will temporarily finance internally in the interim.
As building occupant, HHSA will be paying a rental rate that will be the revenue source that is pledged to repay the debt. The rental rate will need to comply with state and federal regulations and as the land portion of the acquisition isn't depreciable, there is still ongoing exploration of other funding sources that may be available to reduce the need for debt financing the entire acquisition. |
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