TO: Board of Supervisors
FROM: Ryan J. Alsop, Chief Executive Officer
REPORT BY: Steve Lederer, Public Works Director, and Becky Craig, Assistant Chief Executive Officer
SUBJECT: Facilities Master Plan Implementation
RECOMMENDATION
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Receive presentation of Facilities Master Plan development including conceptual design, financing plan, and recommended implementation plan. (No Fiscal Impact, Discretionary)
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BACKGROUND
In January 2023, Staff provided a facilities assessment that outlined the maintenance needs and space limitations of county facilities in Downtown Napa including the 1) County Administration Building at 1195 Third Street, 2) Hall of Justice, 3) 1127 First Street, and 4) 650 Imperial Drive. Board’s direction was to prepare phase one of a facilities master plan to determine potential solutions with the dual goals of A) vacating the Hall of Justice and 1127 First Street and B) accommodating projected space needs. Board direction further noted that future phases could contemplate review of HHSA facility space utilization and Agricultural Commissioner relocation, likely in the northern part of the County.
The County’s chosen consultant, Gensler, gathered and assessed staffing and facility data and provided five alternative solutions. In spring 2024, staff recommended the most cost-effective solution to renovate three county-owned facilities, 1) County Administration Building, 2) 650 Imperial Drive, and 3) South Campus Building 4, and to construct a new Court Holding facility. The Board concurred with the recommendation and directed staff to hire an architect (LPA was selected) to commence design with the goal of maintaining County governance functions downtown. Outside of this plan, staff has studied options for housing the Probation Department who vacated the Hall of Justice in summer 2023 and the best long-term use of the Reentry Facility.
LPA has prepared a conceptual design that accomplishes the direction provided with some revisions. More space needed to be allocated to the District Attorney and Public Defender in the County Administration Building than was previously understood. This resulted in the need to relocate the Auditor Controller and Child Support Services. Additional buildout of Building 4 will accommodate the Auditor Controller at a marginal expense. Child Support Services was paired with Probation for determining leasing options outside of the facilities master plan. Other revisions include identifying an offsite location for relocating key communications equipment operating in the Hall of Justice and the need for seismic improvements at 650 Imperial Drive like those planned at the other two sites. The architect further consulted for project costing and included construction cost escalation to match the proposed phased implementation (the original estimates were in 2024 dollars without escalation).
Construction trades representatives and Staff are developing a Project Labor Agreement for improvements to Building 4 and Staff consulted with the County’s municipal advisor, KNN, to determine project financing options. The Debt Advisory Committee discussed the proposed project’s fiscal impact and other variables and advised the CEO. The County has budget capacity, adequate collateral, and a strong credit position to support a tax-exempt debt issuance. KNN recommended issuing certificates of participation (COPs) in two tranches about eighteen months apart (early 2026 and mid-2027) to provide approximately $200 million needed to fund all projects and provided a second option to fund a reduced project scope of $155 million. Further, KNN estimated the annual debt payments for the two issuances and the two options with conservative interest rate assumptions and multiple payment terms ranging from 20-30 years. The estimated annual commitment ranges from $10.4 million ($155 million proceeds paid over thirty years) to $16.3 million ($200 million proceeds paid over twenty years). The key funding variables are project costs and payment terms. The Debt Service Summary is attached.
The economic outlook has changed, and has become less certain, since the Board directed design of the facilities. Further, the true construction cost is significantly higher than anticipated due to project revision and cost escalation with phasing. The wine industry is grappling with a combination of oversupply, shifting consumer preferences, and significant economic headwinds. County revenue growth is flat, with sales and transient occupancy tax revenue coming in even lower than projected, which we anticipate may be the case for an extended period of time. Pressure on the County’s General Fund continues to mount, driven primarily by increases in the cost of doing business, unfunded State mandates, and uncertainty around the levels of funding the County has historically received to implement State and Federal mandated programs. Further, working within the current footprint of existing facilities significantly limits design and space layout options. For these reasons, the CEO recommends pausing our current plan and seeks the Board’s consideration of a more minimalist alternative that extends use of all facilities, requires less immediate investment to improve failing systems, provides the additional space needed immediately for certain business areas of the County, and allows more time to more comprehensively plan for a new facility of the future. Postponed improvements will cost more over the long-term because the solutions will be more significant and construction costs will outpace inflation; however, the County will have the opportunity to limit expenditures to space and functional needs in the short-term, define a new project, potentially develop a savings plan, and wait for a healthier economy.
The short-term improvements envisioned will cost approximately $15-$20 million and be executed over the next two years with a combination of cash and debt, including (likely in order of need and execution):
1. Move Child Support Services with Probation Department (lease forthcoming) and furnish the vacated space in 1127 First Street facility for the District Attorney’s office use. This creates needed space for the DA, provides Probation an adequate permanent home, and frees up the Reentry Facility for mandated Behavioral Health programs;
2. Restore integrity to Building 4 roof and heating, air conditioning and ventilation (HVAC) and boiler systems. These improvements will stop the ongoing water damage to the building, provide a proper environment for the operations located at Building 4, and provide additional overflow and emergency office space for the County;
3. Make modest improvements to the Hall of Justice for Public Works staff to relocate from 1195 Third Street. This will open up space in the Administration Building for departments that are overflowing and allow Fire Administration (currently in leased space) to return. It could also provide space to move Elections if additional space is needed by existing departments at 1127 First;
4. Improve County Administration Building for seismic, plumbing, and heating, ventilation, air conditioning and allow Planning, Building and Environmental Services to occupy vacated space or further modify space on the second floor to accommodate their needs; and
5. Make modest safety and security improvements to 650 Imperial Drive.
Procedural Requirement:
1. Staff report
2. Public comment
3. Discuss and provide direction
Requested Action:
1. Receive presentation
2. Provide direction
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
No |
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Is it Mandatory or Discretionary? |
Discretionary |
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Future fiscal impact: |
Significant maintenance projects are projected to continue occupancy and will be programmed when useful life expires. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California Code of Regulations 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.