Title
Adopt a Resolution to approve a thirty-six month loan from the Workers' Compensation Internal Service Fund to the Information Technology Department to finance critical upgrades, equipment replacement, and seismic upgrades to 1590 Moffett Street in the amount of $3,054,491; and, authorize the Director of ITD and the Risk Manager to sign the required loan agreement. (ADDED VIA ADDENDUM)
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
Adopt a resolution to approve a thirty-six month loan from the Workers' Compensation Internal Service Fund to the Information Technology Department to finance critical upgrades, equipment replacement, and seismic upgrades to 1590 Moffett Street in the amount of $3,054,491; and, authorize the Director of ITD and the Risk Manager to sign the required loan agreement.
SUMMARY AND DISCUSSION:
The Information Technology Department has identified critical upgrades, maintenance, and seismic improvements necessary to maintain the county systems. The plan calls for a 5 year implementation plan at a cost of approximately $11,000,000. Expenditures required during Fiscal Year 2014-15 total $4,240,225 which is offset by charges to departments reflected in the adopted budget of $1,185,734, leaving a funding requirement of $3,054,491. ITD identified third-party financing with a lease-type structure. The Capital Improvement Committee and Department Heads preferred leasing to spread the charges over the implementation period. However, provisions of the third party financing would require a vote pursuant to the California Constitution. Those financing agreements were structured to be a "master" agreement with each purchase of equipment constituting a separate "lease". Significant costs would have been incurred due to requirements for bond counsel opinions for each lease and higher than market rate imputed interest costs. When informed of the proposed third party financing, the CAO Budget Director and C...
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