COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Health Department

DATE:

March 3, 2008

BOARD MEETING DATE:

March 11, 2008

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Four-fifths vote

TO:

Honorable Board of Supervisors

FROM:

Charlene A. Silva, Director, Health Department

Steve Alms, Director, Real Property Services

SUBJECT:

Appropriation Transfer Request for Leased Facility Moving Costs

RECOMMENDATION:

Approve an Appropriation Transfer Request (ATR) transferring $2,181,138 from Health Administration Intrafund Transfers and $667,324 from Behavioral Health and Recovery Services Reserves to various expenditure accounts within the Health Department totaling $2,848,462 to fund costs associated with the move, including annual rent, to the leased facility on Alameda del las Pulgas, and making corresponding appropriations of $1,220,000 in the Real Property Services rent budget to make lease payments to the property owner.

VISION ALIGNMENT:

Commitment: Ensure basic health and safety for all.

Goal 5: Residents have access to healthcare and preventive care.

The Agreement contributes to this commitment and goal by consolidating administrative and service functions in a convenient location that will enable the Health Department to efficiently provide and support services to those in the central part of the County and beyond.

BACKGROUND:

Since 1990 Mental Health (now Behavioral Health and Recovery Services) has occupied the building at 3080 LaSelva Street, San Mateo, as its primary central-county administrative and services facility. The rental history, quality and condition of the facility, and staff increases led to the search for an alternative location. The search for alternative space provided an opportunity to consolidate multiple Health Department leased facilities in a single location, and to co-locate related functions from the County-owned facility at 225 37th Avenue. Relocation of certain functions from 37th Avenue will help alleviate current conditions, and provide adequate space to accommodate changes resulting from the recent County reorganization. It will also facilitate the relocation of the Environmental Health Division from its current location at 455 County Center to more appropriately sized facility. Approximately 400 staff will be accommodated at the facility including Behavioral Health and Recovery Services Administration, Family Health Services and Environmental Health.

Real Property Services negotiated a lease of approximately 81,223 square feet in the office project at 2000 Alameda de las Pulgas, San Mateo. The premises

include a separate two-story building commonly known as 1950 Alameda de las

Pulgas, and multiple suites in the adjacent 2000 Alameda de las Pulgas.

On June 5, 2007, your Board authorized the execution of a Lease Agreement with Hines REIT 1900/2000 Alameda de las Pulgas LLC, a Delaware limited liability company for a portion of the office project at an initial monthly rent of $210,423 for a term of ten years with two options to extend for an additional five years each.

DISCUSSION:

Since the execution of the lease, work has commenced to ready the facility for move-in. Health Department staff have been working with the County’s Purchasing Division to obtain suitable furnishings for the space and with the Information Services Department (ISD) to accommodate the facility’s technical needs. In order to streamline the process and optimally manage costs, all purchases are being made through Health Administration and later applied to the appropriate divisions.

FISCAL IMPACT:

The ATR, which totals $4,068,462, transfers $2,181,138 from existing appropriations in Health Department divisions and $667,324 from Reserves in order to fund the annual rent of $1,220,000 as well as one-time furniture, moving, and ISD costs totaling $1,628,462. The ATR also makes corresponding appropriations of $1,220,000 within the Real Property Services budget for the receipt and payment of rent proceeds from the Health Department to the property owner. There is no Net County Cost impact associated with this ATR. Ongoing rent payments will be appropriated in future budgets.