Supes support project in spite of $3 million price increase.
The seemingly inevitable march towards the proposed Consolidated County Office Building in Bishop continued at the Tuesday’s Board of Supervisors meeting. From the remarks by the Supervisors, apparently not enough good things can be said about the benefits of the project. This despite the unsettling news that there has already been a 26 percent increase from the original cost estimate of $11.2 million given to the Board in November of 2013. The new estimate is now $14 million; a $3 million dollar increase in just over 14 months.
The additional $3 million is attributed to estimated labor cost increases as the result of prevailing wage laws.
If the proposal is approved, the County agrees to lease the building for 20 years at a fixed price and then buy it for $1 at the end of twenty years.
According to the information given the Board in the presentation by Sr. Deputy County Administrator Pam Foster, the current move towards a consolidated building was prompted as the result of a 2007 “lease crisis.”
The proposed 42,000 square-foot building, to be built on a 3.3 acre parcel off Wye Road in Bishop, will allow consolidation of six leased offices and one County-owned building and take two years to build.
The terms of the lease with locally-owned Joseph Enterprises are $2 million on commencement of the lease, rent of $675,000 for twenty years, and additional rent payments of $250,000 in Year five, 10, and 15.
What does the new increase estimated cost mean to the original estimates given the Supervisors just 14 months ago? The monthly payment (in rounded numbers) went from $58,000 to $71,000. The annual payment went from $691,000 to $850,000. About the only good news is the interest rate for financing was reduced from 4.5 to 3.7 percent.
Foster told the board that “Despite increased costs, there are still substantial long term savings.” According to her, in 20 years the County will have paid $3.6 million more than renting, but the upside will be that the County will own the building. She went on to say that the County will have saved $1.8 million in 25 years over renting, and in 50 years the County will have saved $43.7 million.
Perhaps an indication of the fait accompli manner in which the project has been presented, without an opportunity for the public to vote on it, no one spoke when invited to do so by Board Chairman Matt Kingsley.
“It’s a bitter pill to swallow on the increases, but it will still save our children lots of money in the future for other [County] services,” said Second District Supervisor Jeff Griffiths. Later, he compared the new $30 million Courthouse project in Bishop to the Consolidated County Office Building, saying, “It [the County building] is half the cost.”
No one challenged him by noting that the courthouse, with its land purchase costs and considerable security requirements, was a different beast altogether.
In an interesting twist, Third District Supervisor Rick Pucci put a positive light on the 25 percent increase in building cost estimate resulting from prevailing wage laws. He said he felt it would benefit the local workforce (provided local contractors and workers are used).
Board Chairman and Fifth District Supervisor Matt Kingsley noted that, while the proposal does little in the way of providing better services to his constituents in the south end of the County, “I want to do the right thing for financial reasons.”
According to County Administrator Kevin Carunchio, the next meeting the Supervisors have on the project should be one asking its approval on the final “go-ahead” to fully (and legally) commit the County to the project. “That meeting,” he said, “depends on the lease negotiations.” And that appears to be possibly within just a few weeks.