[El Dorado County] Sheriff’s facility loan OK

Blog note: this article references a 2013-14 grand jury report.

The El Dorado County Board of Supervisors approved a resolution to accept a $57 million loan for construction of a new public safety facility during a special meeting Dec. 28. Offered through a program of the United States Department of Agriculture, the vote allowed the county to take advantage of a lower interest rate that was set to rise by one percentage point Jan. 1. Thus the Dec. 28 vote gave county officials the time to sign off on a volume of loan-related documents before the deadline.

As the next step in the process of building a the new facility to house the county sheriff’s headquarters and related law enforcement functions on property purchased in Diamond Springs, Wednesday’s unanimous vote moves the project forward and secures funding for upcoming stages of design and construction. The project has been in the works for more than two years since a Vanir Management Construction report advised the county not to spend any money trying to upgrade or rehabilitate the current sheriff’s facility on Fair Lane in Placerville.

Quoting an El Dorado County Grand Jury report in 2013-14, the sheriff’s website notes, “The (current) facility does not have adequate space for the number of personnel assigned to the building, that crowding of office furniture results in very poor working conditions, including improper lighting and ergonomic problems, that storage areas containing ammunition and explosives as well as confiscated marijuana do not have adequate ventilation or proper refrigeration, and that officers’ dressing and shower area is too small for the number of personnel using it.”

The loan is guaranteed by the USDA’s rural public safety division and carries a maximum term of 40 years. Loan service is planned at about $2.3 million a year and county officials have repeatedly said they hope to pay it off sooner than the term date.

In a Dec. 20 letter to the Board of Supervisors, Chief Administrative Officer Don Ashton wrote, “While this is likely the most significant long-term investment this county has ever taken, and it will impact the flexibility the board has in identifying funding for other very important mandated and discretionary programs, I encourage the board to approve this recommendation.”

Ashton’s letter, however, included a recognition that the loan amount is about $3 million less than the county had requested and the $2.3 million annual payments are likely to “limit … county General Fund support for other important services and programs.” He named funding for roads, senior and veterans programs as well as aid to rural fire districts, libraries, marijuana enforcement, tree mortality programs and CalPERS increases. Without an “unanticipated increase in revenues,” such programs could suffer in the future, he said.

Ashton further noted that rejecting the USDA loan would not alter the need to find suitable accommodations for the sheriff’s department. Financing the project without the USDA loan would also be considerably more expensive because of higher interest rates and construction costs.

In a separate letter to supervisors, county Auditor-Controller Joe Harn added his voice to Ashton’s.

“I strongly support the CAO’s recommendation to ‘accept’ the USDA loan and ‘lock in’ the 2.375 percent interest rate being offered through Dec. 30, 2016,” Harn wrote. “As I told the Board of Supervisors on July 18, 2014, the construction of a new sheriff’s headquarters is long overdue and much-needed. We must get our sheriff and his staff out of the clearly unacceptable facility in which they now protect and serve the public.”

Harn’s letter, however, continued in a harsher vein.

“I am disappointed that the county is in the position that we must borrow $57 million,” he wrote. “It is my opinion that the government that borrows least governs best. For the past six years our CAO’s office has been dominated by individuals with no roots in our community who were not concerned about the long-term well-being of our county. The county should have been saving for this facility and other capital improvement needs for the last six years. If we would have set aside funds over the past six years for this project we would be borrowing significantly less than $57 million today. Further, I am disappointed that the county did not put this borrowing question to a vote of the people as I requested on July 18, 2014. I am confident that our residents would support this borrowing at the ballot box because our sheriff has a history of being frugal.”

During public comment, local residents Sue Taylor and Lori Parlin challenged the board for not taking the issue directly to the voters and Kris Payne asked supervisors why they had not done so.

County Counsel Mike Ciccozzi explained later that because the deal represented a lease agreement rather than an issuance of revenue bonds, under the state constitution and the county’s Measure A, the board had the authority to take such action and did not require a vote of the people.

Before taking their vote Wednesday, supervisors agonized over the commitment of funds and the “difficult decisions” that loom in the future regarding other programs and services and acknowledged Ashton’s warning, “There is not another viable option.”

“Due to the county’s prior decisions to not set aside money for deferred maintenance and capital improvements,” Ashton’s letter concluded, “all of us are now faced with having to prioritize funding for essential infrastructure needs, both facility and IT needs, rather than expanding discretionary services or even increasing service levels for mandated programs. If we fail to make these difficult decisions, it will simply force more difficult choices in the future.”

Supervisors in turn shared common feelings about the commitment.

“I’ll be more frugal going forward, but we’ve got to do it,” District 2 Supervisor Shiva Frentzen acknowledged.

District 3’s Brian Veerkamp, on teleconference phone from Montana, added, “We started something and we’ve got to follow through with it. It is what it is.”

Sue Novasel, District 5, concluded, “It has to be done and in future we’ll start with the basics that we are (fiscally) conservative …”

Saying he “appreciated the gravity of the action,” Michael Ranalli, District 4, called the decision, “scary, scary … but a no-brainer. The scariness is probably what prevented other boards from taking this decision.”

Outgoing supervisor and board chairman Ron “Mik” Mikulaco voted against the loan proposal in July, saying he was not convinced the county could handle the debt and still provide the level of services and programs residents demand and expect. Acknowledging his earlier concerns, however, he joined his colleagues in the affirmative vote.

“We identified the sheriff’s facility as our first priority,” he said. “It’s been three years of effort. We went through a lot of effort to select a property, then we had to look at how to pay for it. Of all the options the USDA loan was the best. But 40 years to pay it off? I’ll be almost 90 years old,” Mikulaco joked.

Just before the vote, he added, “Six years and two weeks from now, none of us will be here and future boards will have to deal with this.” Moments later, he announced, “Clerk of the Board, the motion carries 5-0.”

January 2, 2017

Village Life

By Chris Daley