To: Board of Supervisors
From: Monica Nino, County Administrator
Report Title: SECOND AMENDMENT TO PROJECT FUND AGREEMENT RELATED TO THE CONTRA COSTA COUNTY FIRE PROTECTION DISTRICT ALLOCATION OF 2021 LEASE REVENUE BOND PROCEEDS
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
Acting as the Governing Board for the County of Contra Costa (the “County”) and the Contra Costa County Fire Protection District (the “Fire District”):
1. APPROVE and AUTHORIZE, the Chair of the Board, County Administrator and the Fire Chief, or designees, to execute a Second Amendment to the Project Fund Agreement to replace the date set forth in Section 1(c) from “March 1, 2026” to “March 1, 2028” to allow time for the construction of the Fire District Communications Center project to be completed.
FISCAL IMPACT:
No fiscal impact. This action facilitates the extension of time by which proceeds of the County’s 2021 Lease Revenue Bond issuance can be used for the construction of the Fire District Communications Center project by two years to March 1, 2028.
BACKGROUND:
On December 15, 2020, the Board of Supervisors, acting in its various capacities, authorized the issuance of up to $150 million in lease revenue bonds (the “2021 Bonds”) for the construction of four, planned capital projects (collectively the “2021 Project”), including:
Construction of New Buchanan Field Airport Terminal (Concord). This project consists of the construction of an approximately 21,000 square foot, one-story multi-function facility to be located at Buchanan Field Airport, a public airport located in Concord, California, which will replace an existing terminal facility and include an approximately 12,525 square foot aircraft rescue and firefighting facility; approximately 2,750 square feet of administrative office space; and an approximately 5,460 square foot general aviation terminal. Construction was originally anticipated to be completed in Summer 2023 but is now scheduled for Summer 2024.
Construction of County Administration Building "B" (Martinez). This project consists of demolition of the decommissioned County Administration Building at 651 Pine Street and the County Jail at 650 Pine Street. The vacated sites will be replaced by a Satellite Administration Building and Public Plaza located at 1026 Escobar Street, Martinez. The Satellite Administration Building will be three stories with 74 parking spaces and a tenant space (likely a café) on Level One. Levels Two and Three will provide approximately 42,000 square feet to house various County departments. The plaza will be a series of outdoor spaces - intimate areas will provide quiet retreat while larger spaces will support various public events. The project is pursuing a LEED Gold certification and Total Resource & Efficiency (TRUE) Gold certification, the first such government project to achieve this certification. Construction is expected to be completed by June 2024.
Fire Station No. 86 (Bay Point). This project consisted of the construction of an approximately 10,000 square foot one-story fire station to be located at Willow Pass Road and Goble Drive in unincorporated Bay Point, California. This fire station contains approximately 5,000 square feet of living area, including seven firefighter dorm rooms and three gender-neutral restrooms; approximately 5,000 square feet containing three apparatus bays, a separate support area for turnout, SCBA, and cleanup spaces; and visitor parking spaces, secured firefighter parking, and a generator and an emergency fuel tank. Construction was completed ahead of schedule, and the Station was placed into service in August 2022.
Fire Station No. 9 (Pacheco). This project consisted of the construction of an approximately 10,000 square foot one-story fire station to be located at Center Avenue and Willow Street in unincorporated Pacheco, California, immediately adjacent to the Buchanan Field Municipal Airport. After further site review was completed, it was determined that construction of the new station should take place on Fire Station No. 9 parcel located at 209 Center Street, Pacheco; however, planning for that project is still underway.
Following approval from the Board of Supervisors in December 2020, the County successfully issued its 2021 Bonds in March 2021 in the amount of $97,420,000, including Series A in the amount of $63,540,000 to fund the construction of new capital projects outlined above and Series B in the amount of $33,880,000 for the refunding of existing County debt at a cost savings. Series A was issued with a true interest cost (TIC) of 2.26% and Series B was issued with a TIC of 1.80%. The TIC for each series is different primarily because the final maturity date of the bonds is different for each series.
The principal amount of the County’s 2021 Series A lease revenue bonds allocated to the Fire District was $21,995,000 and the Fire District has incorporated the annual debt service costs for this amount in its operating budget. The bonds mature in fiscal year 2040/41.
Installment Sale Agreement and Proposed First Amendment
After conferring with the County’s independent registered municipal advisor (IRMA) and bond counsel, the 2021 Bonds included a strategy whereby the County would issue bonds and subsequently enter into an Installment Sale Agreement with the Fire District to allocate a portion of the bond proceeds to the Fire District for construction of its capital projects. This allowed the Fire District to benefit from the County’s superior “AAA” credit rating keeping borrowing costs low and negating the need for the Fire District to establish a credit rating of its own, which likely would not have been “AAA” like that of the County.
After issuance of the 2021 Bonds, it was determined that the Fire Station No. 9 (Pacheco) project was no longer feasible to complete; however, the Fire District consistently has an active portfolio of capital projects that could be eligible for use of the remaining bond proceeds. After meeting with Fire District staff, the Fire District Communication Center project was identified as an appropriate use of proceeds due to the scope of work.
Addition of the Fire District Communications Center Project
In early April 2024, the Fire District concluded a comprehensive Request for Proposals (RFP) seeking interested construction firms to develop a new Fire District Communications Center. Specifically, the project includes the phased renovation of an existing building at 2010 Geary Road, Pleasant Hill, to convert it into a new Communications Center with a square footage of approximately 7,900 square feet and the renovation of the current Communications Center at 2900 Dorothy Drive, Pleasant Hill, to convert it into new Communications Division Offices with a square footage of approximately 7,800 square feet. At the time, the project is estimated to be completed in 2026.
Subsequent to the RFP, the Board authorized a First Amendment to the Installment Sale Agreement adding the Fire District Communications Center Project to the listing of capital projects eligible for the Fire District to reimburse with bond proceeds. As part of that action, the Project Account set up to reimburse those funds from the bond trustee was extended from March 1, 2024 to March 1, 2026, to accommodate the addition of the Fire District Communication Center project.
Today’s action is an administrative action that authorizes the Chair of the Board, the County Administrator and the Fire Chief, including their designees, to execute a Second Amendment to the Project Fund Agreement to allow for an additional two-year draw period for bond proceeds to reimburse for the ongoing construction of the Fire District Communication Center project, which is still in progress. This action has no impact on the payment of debt service by the County or by the District, which is already planned for as part of the respective annual operating budgets.
CONSEQUENCE OF NEGATIVE ACTION:
The Project Account related to the agreements will not be amended resulting in the inability to draw bond funds reserved for Contra Costa County Fire Protection District capital projects to be drawn down for the construction of the Fire District Communications Center Project after March 1, 2026.