MEETING DATE: 10/22/2019
DEPARTMENT: BEHAVIORAL HEALTH
DEPT HEAD/DIRECTOR: Alan Yamamoto
AGENDA ITEM PREPARER: Dulce Alonso
SBC DEPT FILE NUMBER: 810
SUBJECT:
BEHAVIORAL HEALTH DEPARTMENT - A. YAMAMOTO
Accept informational presentation for the County Behavioral Health Center providing a summary of the fiscal considerations, including the financing plan to support the construction of a new and larger Behavioral Health Department facility and construction overview.
SBC FILE NUMBER: 810
AGENDA SECTION:
REGULAR AGENDA
BACKGROUND/SUMMARY:
The Board of Supervisors requested an update on the Behavioral Health Center on the October 8, 2019 Board of Supervisors Meeting. The San Benito County Behavioral Health Department (BH) has initiated the process of constructing a larger building to accommodate the BH Department’s current and future staff growth required to meet the current and future demands for services. It has been a goal of the Behavioral Health Department for many years to construct a larger facility to house the expansion of service programs to serve the growing needs of our County’s Residents.
Cost
The Behavioral Health Department has historically and remains a very fiscally secure department and not dependent on County General Funds to operate. The current construction boom market place, however, has made construction more expensive than previous years, and our department independent of County General funding assistance will require outside financing funding for a project of this magnitude. The completion of the BH building project is estimated by using a final cost calculation based on a high-end estimate of $14,088,000.
COP
The County will be financing the Behavioral Health project through the issuance of Certificates of Participation (COPs), a borrowing tool commonly utilized by California counties for capital financings. The County issued COPs for 2019 for the construction of the jail facility and will be going through the same process for the Behavioral Health Center.
Timeline
County staff, along with the financing team, will present the County’s information to Standard & Poor’s on the week of December 2nd. The County Board of Supervisors will be presented with the Financing resolution and form of bond and disclosure documents on the Board meeting December 10th. Closing of the COPs is expected in the last week of January. Attached is the preliminary draft financing schedule.
Repayment
The BH Department is planning to pay for the new BH building construction with funds generated through the initiation of a Bond and also a combination of MHSA (Mental Health Services Act) funds that will create the additional construction financing required.
A significant portion of the MHSA funds to be accessed for a new BH building are funds allocated through the MHSA that were explicitly designated by regulation for Capital Facilities (a BH building) and also MHSA funds that are by MHSA regulation permitted to be transferred to the MHSA Capital Facilities category for BH building construction/debt servicing.
It has been documented over many years through BH Department annual budget narrative submissions, Board of Supervisor approved annual MHSA plans and in many and various public meetings that the BH Department has a Goal of expanding BH service programs, with County staff who would require and be housed in a new building large enough to accommodate those expansions.
Additionally, throughout those years of maintaining the vision of someday realizing the achievement of that Goal, the BH Department has been accruing MHSA funds in the amounts that MHSA regulations permit to be transferred and deposited into the categorical MHSA Capital Facilities component. MHSA regulations allow 20% of each most recent five years of averaged unspent funds from several categories of MHSA component funding to be transferred to the MHSA Capital Facilities funds category. For a significant number of years, the BH Department has transferred funds to the Capital Facilities component to have funds available for the construction of a new facility. See attached memo for additional information.
BUDGETED: