TO: Board of Supervisors
FROM: Ryan J. Alsop, County Executive Officer
REPORT BY: Becky Craig, Assistant County Executive Officer
SUBJECT: Pay-off Re-Entry Facility Lease with State
RECOMMENDATION
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Adopt a Resolution authorizing the execution of a Termination Agreement and related documents; and provide payment to defease the County's portion of the State lease for the Re-Entry Facility. (Fiscal Impact: $16 million; Capital Improvement Projects Fund; Budgeted; Discretionary)
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BACKGROUND
The County authorized agreements with the Board of State Community Corrections ("BSCC") in 2013 to provide a portion of construction funding for the Re-Entry Facility. The State Public Works Board ("SPWB") issued leasehold revenue bonds in 2020 and 2023 reimbursing the County $13,474,000 of the total $17 million project cost. Per the enacting legislation, SB 1022, the facility is restricted to operate as a level four detention facility. With COVID and wildfires, the County was granted temporary waivers to use the facility for alternate purposes and subsequently for winter shelter. Once the County was prepared to occupy the facility in 2022, the population of 10-15 eligible inmates didn't warrant the expense of operating a 72-bed facility. The State has granted a temporary waiver since September 2023 for the County to use the facility as an Intensive Navigation Center operated by the Probation Department.
The Board of Supervisors directed staff to initiate discussion with BSCC and SPWB to permanently repurpose the facility; however, the State cannot authorize an alternate use because the issued leasehold revenue bonds include covenants restricting the facility's use. Pay-off (or "defeasance") of the County's portion of the bonds and termination of the lease are an option to affect the County's interest. The State Department of Finance ("DOF") used consultants to prepare the necessary pay-off documents and recommended our request to SPWB on August 9, 2024. The SPWB vo...
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