COUNTY ADMINISTRATION OFFICE - R. ESPINOSA

Adopt Resolution authorizing the execution and the delivery of a facility sublease for the Jail Expansion Project (AB900) State of California Bond Sale, ratifying all previous actions concerning the San Benito Jail Extension Project, and authorizing certain actions therewith; Approve a cooperation agreement with the California Public Works Board; and   Delegate authority to staff to amend any jail service contracts to include a subordination clause that is acceptable to the California Department Corrections and Rehabilitation. 

SBC FILE NUMBER: 119

RESOLUTION: 2021-18

In 2007, the Public Safety and Offender Rehabilitation Service Act of 2007, "AB 900," authorized California to spend up to $1.2 billion in two phases in lease-revenue bond financing for County Jail construction costs.  

The Board of Supervisors authorized County staff to move forward and expand the current jail utilizing AB900. On May 19, 2015, the Board of Supervisors adopted Resolution No. 2015-40 approving the forms of the ground lease; right entry for construction and operation; easement agreement for grants of access, utilities, and repairs; facility sublease; and project delivery and construction agreement with the State of California.  

On October 20, 2015, the Board of Supervisors adopted Resolution No. 2015-78 delegating authority to the CAO to execute the Jail Construction agreement and other documents related to the San Benito County Jail Expansion Project on behalf of the County of San Benito.

On February 5, 2019, the Board of Supervisors adopted Resolution No. 2019-16, which approved the financing plan for the 2019 Certificate of Participation in the maximum principal amount of $8,500,000.00 to assist with costs related to the Jail Expansion.

On January 15, 2019, the board approved a Memorandum of Understanding Between the County of San Benito and the San Benito County Community Corrections Partnership (CCP) to fund the Jail Construction Project under SB81.  The MOU memorializes the parties' understanding regarding the annual funding of $250,000.00 per year for 20 years. 

The funding for AB900 grant funds was to come from the sale of lease revenue bonds by the State of California. At this time the California Department of Finance is moving forward with the bond sale early in the first half of 2021. The State of California will be selling bonds to reimburse the state for the $15,053,000.00 and require San Benito County to adopt a new Resolution regarding the State's Sale of Bonds, and to approve a cooperation agreement between the State and County. The attached resolution, authorizes the execution and the delivery of a facility sublease and ratifies all previous actions with respect to the San Benito Jail Extension Project. The County consents to the attached terms of the Site Lease and the Facility Lease and acknowledges that the County’s right to occupy the Facility pursuant to the Facility Sublease may be terminated in accordance with Section 10 of the Facility Sublease.

The Cooperation agreement between the State Public Works Board and the County of San Benito is a tool to cooperate and achieve agreement as to certain federal tax law compliance matters prior to the sale of the State Public Works Board Bonds, to help ensure the State issues Bonds in a normal and customary manner. The agreement requires adequate record retention for the life of the bond and three years thereafter.  County staff will have to retain all contracts and implement mechanisms to track and retain the related documents. Staff recommends approving the Cooperation Agreement and authorizing the Chair to sign it.

Financial analysis Jail Expense

The total cost of the Jail Expansions is $26,074,792.00, of which the State of California's AB 900 funding is covering $15,053,000.00; and the County of San Benito is Covering $10,403,792.00 cash match, and $618,000.00 of in-kind match. The County will be utilizing Jail impact fee and realignment funding through AB109 to cover the servicing of certificates of participation issued in 2019.

1. Adopt Resolution 2021-? authorizing the execution and the delivery of a facility sublease for the Jail Expansion Project (AB900) State of California Bond Sale, ratifying all previous actions concerning the San Benito Jail Extension Project, and authorizing certain actions therewith;

2. Approve a cooperation agreement with the State of California Public Works Board and authorize the Board Chair to sign it; and

 3. Delegate authority to staff to amend any jail service contracts to include a subordination clause that is acceptable to the California Department of Corrections and Rehabilitation.