HomeMy WebLinkAboutMINUTES - 12182001 - C.108 T., Q
TO: BOARD OF SUPERVISORS Contra
FROM: JOHN SWEETEN, COUNTY ADMINISTRATOR •;' ,• Costa
DATE: December 18, 2001
County
SUBJECT: APPROVAL OF AMENDMENT TO FACILITY
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LEASE OR FACILITY LEASE WITH TRANSOCEAN FINANCING
COPORATION FOR THE PROPERTY LOCATED AT 1034 OAK GROVE
ROAD, CONCORD
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
1. APPROVE an amendment to the Facility Lease with Transocean Financing Corporation (or
a new Facility Lease) for the property located at 1034 Oak Grove Road in order to reduce
overall interest costs on outstanding debt on the property.
2. AUTHORIZE the Director of General Services, or his designee, to execute all documents
and contracts and take all actions as required to complete the Amendment to the Lease or
new Facility Lease.
FISCAL IMPACT:
The proposed lease amendment (or Facility Lease) relates to a refinancing of outstanding debt
for the facility and improvement costs at 1034 Oak Grove. The balance on the existing debt
issue is $3,486,251. By taking advantage of lower interest rates, this refinancing will result in
a saving of approximately $120,000 (in current dollars) over the remaining term of the loan.
The existing debt was financed at an interest rate of 6.43% and it is anticipated that the new
interest rate will be between 100 and 120 basis points lower.
CONTINUED ON ATTACHMENT: S SIGNATURE:
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RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
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ACTION OF BOARD ON�P(11,lV✓�-(tel Z APPROVE AS RECOMMENDED OTHER
V TE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
UNANIMOUS(ABSENT ) AND ENTERED ON THE MINUTES OF THE
BOARD OF SUPERVISORS ON THE DATE
AYES: NOES: SHOWN.
ABSENT: ABSTAIN:
ATTESTED JeC-MZell' (f/OW
CONTACT: JOHN SWEETEN,Cjer=RK O THE
BOARD OF SUPERVISORS AND
COUNTY ADMINISTRATOR
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BY DEPUTY
Annual lease payments for the facility of $309,678 are budgeted for FY 2001/02 within the
Health Services Department Budget. Savings from the refinancing will be taken up front, so
the amount of the lease payments term will not change.
BACKGROUND:
The Board approved a Facility Lease with Transocean for 1034 Oak Grove Road on March 21,
2000. This Facility Lease refinanced previous debt and secured additional financing of $2.0
million for reconstruction of the facility. The construction project was completed in the Fall of
2001.
The original Lessor, Transocean, assigned the Facility Lease to Transamerica Public Finance
in 2000. At this time, it is anticipated that the existing lease can be reassigned back to
Transocean and amended. If this is not possible, the County will need to terminate the
existing lease and enter into a new lease with Transocean Financing.
Due to budget overruns, the scope of the construction project was reduced and one of four
isolation rooms at the project was eliminated. This has resulted in operational and potential
safety concerns. Seneca, the non profit agency that operates the program at 1034 Oak Grove
Road, has requested that the isolation room be completed. Any remaining balance from the
savings generated by this refinancing will be allocated to other minor capital projects in the
Health Services Department.
There are now 16 adolescents with severe emotional disturbances living at 1034 Oak Grove
Road. Prior to the renovation of this facility, these adolescents were placed in out-of-county
institutions, isolating them from the community and regular family contact. The program
offered at 1034 Oak Grove, provides a home-like environment and a high staff to resident
ratio. There is also an on-site school at 1034 Oak Grove. Based on similar programs in other
counties, this program will greatly improve the chances that these adolescents will be able to
reintegrate into their families, school and community.
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