Title
Grant Debt Manager authority to execute documents to facilitate the issuance of Certificates of Participation to finance tenant improvements at Schilling Place and to rehabilitate the East and West Wings of the Courthouse in an amount not to exceed $52,500,000. (ADDED VIA ADDENDUM)
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
Grant Debt Manager authority to execute documents to facilitate the issuance of Certificates of Participation to finance tenant improvements at Schilling Place and to rehabilitate the East and West Wings of the Courthouse in an amount not to exceed $52,500,000.
SUMMARY:
The Monterey County Capital Improvement Committee ("CIC") and the Monterey County Budget Committee ("BC") determined that rehabilitation of the East and West Wings of the Courthouse at an estimated cost of $36 million and completion of tenant improvements at Schillings Place at an estimated cost of $16 million are priority projects and that said projects should be financed through the issuance of Certificates of Participation ("COPs"). The County Budget Office has identified funds to cover the approximate debt service requirement of approximately $1.33 million during FY 2016 for a level debt service amortization. Maximum annual debt service during the 30 year term will approximate $2.95 million, depending on market conditions at the date of sale.
DISCUSSION:
COPs are essentially the securitization of capital leases which do not count toward constitutionally imposed debt limitations. Properties, in this case the entire Schillings complex and the East and West Wings, are transferred to the Monterey County Public Improvement Corporation, which then leases those properties to the County. The leases contain an "Abatement Clause" which states that should the properties become uninhabitable for any reason, the County is not required to appropriate lease payments until those buildings become usable. Once the debt has been paid, the ...
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