2002-1283-Minutes for Meeting October 25,2002 Recorded 10/31/2002COUNTY OFFICIAL MARY HSUESPENHOLLOW, COUNTYRCLERKS Vd 2002n1213 COMMISSIONERS' JOURNAL 10/31/2001 03:45:57 PM 2 IIIIIIIIIIIIII IIIIIIIIIII1) III 200200128 DESCHUTES COUNTY CLERK CERTIFICATE PAGE This page must be included if document is re-recorded. Do Not remove from original document. Deschutes County Board of Commissioners 1130 NW Harriman St., Bend, OR 97701-1947 (541) 388-6570 - Fax (541) 388-4752 - www.deschutes.org MINUTES OF ADMINISTRATIVE LIAISON DESCHUTES COUNTY BOARD OF COMMISSIONERS FRIDAY, OCTOBER 25, 2002 Present were Commissioners Tom De Wolf, Dennis R. Luke and Michael M. Daly. Also present was Mike Maier, County Administrator; Tammy Credicott, Property Management; Jeanine Faria and Marty Wynne, Finance; Rick Isham, Legal Counsel; Bill Smith and Mary Campbell, William Smith Co.; and David Givans, Commissioners' Office. Commissioner Tom DeWolf opened the meeting at 10:05 a.m. This meeting was a continuation of a meeting held on Thursday, October 24. Mike Daly brought up the question of Bill Smith's licensing through the Oregon Contractors' Board. Bill Smith replied that he is part of a general partnership under Arlen Keeton's license (Keeton King Co.); the partnership is known as Keeton King and Bill Smith LLC, with a separate licensing agreement. Commissioner Luke said that Bill Smith is not a licensed contractor, but has a real estate license and builds his own buildings. Mr. Smith said both parties in the partnership are legally liable. Mary Campbell stated that Mr. Smith's son, Matt Smith, who is also a corporate officer of William Smith Co., is in the process of obtaining his contractor's license, and will likely complete the required work on it within the next two weeks. Commissioner Luke asked how, in this case, the demolition of the houses on Lafayette would be handled; Mr. Smith said his company could contract with Arlen direct for that part of the project. Rick Isham said there is no agreement between the County and Arlen Keeton, and no process has been put in place in this regard. He said it's better to speed up Matt Smith's taking the contractor's exam and obtaining his CCB license. Minutes of Administrative Liaison Friday, October 25, 2002 Page 1 of 5 Pages It was Mr. Isham's recommendation to not break up the project in this manner. He added that this situation is resolvable, and the contract can be changed as necessary. He will finish working on the documents, and will leave a blank for the forthcoming CCB number. Mr. Smith said he feels the County and State are getting a great deal on this project, as in his opinion the property will be worth an additional $1 million when it has been completed. Mike Maier asked the Commissioners if they are okay with this scenario. Commissioners DeWolf and Daly indicated they didn't see any problems with it. Mike Maier then said that a decision needs to be made regarding the future warehouse/archives/building services/Information Technologies facility. Staff recommends going with site #2, as it is the best location and is the least complicated in regard to purchasing property, zoning, obtaining permits and building the facility. Mary Campbell indicated that the State has been advised that signed copies of the contracts need to be made available by Tuesday in order to avoid a possible construction delay of sixty days. She will provide updated maps and information at the next meeting with the County on Thursday. She added that the tenants would be out of one of the properties by November 4. Commissioner DeWolf posed the idea of building the third floor now, as it would cost about 40% less. Qualifying tenants could be the City, the school district, the State, other County departments, taxing districts, and so on. However, the Federal government does not qualify to use the space. It was pointed out that even if it were just shelled in, the County would be money ahead by building it now instead of later. Bill Smith estimated a rough cost of about $2 million to put in the third floor now, which includes the shell, wiring, plumbing, permits and insulation so that he would not need to be heated. Marty Wynne said that the annual debt services would run about $150,000 per year. At this time, Tammy Credicott presented a spreadsheet showing County -owned properties, their approximate market values, what properties have a pending sale, what properties have sold, whether they were sold on contract or for cash, and so on. Minutes of Administrative Liaison Friday, October 25, 2002 Page 2 of 5 Pages A discussion followed that addressed the rate of appreciation, what properties should be sold at a given point, the expected market time, the benefits of selling with terms rather than cash, etc. Ms. Credicott explained that most of the properties are marketable now; however, a few have zoning issues or could be much more valuable if the County was able to rezone or subdivide them. In any case, she feels the numbers on the spreadsheet are conservative. Mike Maier explained that as these properties sell, the four cents would be freed up. Commissioner DeWolf stated that this was the original purpose of setting aside those funds. Commissioner Luke said that the Board must justify using this money, as some of it may be needed to fill future budget gaps. He said he couldn't vote to acquire either site for the warehouse, to purchase the Elliott property (near the Juvenile Justice center), or to put in a third floor. Commissioner DeWolf said that he would agree, except when considering today's dollars, and allowing for the possibility that all departments lose money, that this $400,000 won't buy much. This money would only buy a few positions. In his opinion, it is a better long-term plan for the citizens of the County to buy property that is useful to the County and focus on a ten-year plan. A small amount of money could buy a lot of value, and $400,000 isn't enough to plug the holes in the budget if there are funding shortfalls. Commissioner Luke stated that the Board must also take into account the PERS deficit and health care costs. If growth slows, it will be a struggle in the short term. Mike Maier said that there are several considerations. First, according to staff the preferred site for the warehouse is site #2, and he recommends this property be acquired. The building process would go smoother and it could be used immediately. If the warehouse is built in the corner of the building project property, it ties up that location. It is also marginally large enough for the warehouse building. If the third floor is added and additional parking or a parking structure is necessary, the new warehouse building would be in the way. It would cost much more to have to tear down a specialized building such as that one and rebuild it in another location. He recommended that the Elliott property located adjacent to the Juvenile Justice Center also be purchased, as it will keep appreciating in value and, if the County gets into a financial bind, it could be sold at a profit. Minutes of Administrative Liaison Friday, October 25, 2002 Page 3 of 5 Pages He also explained that the Board must address the virtual courtroom project as soon as possible. Commissioner DeWolf said that the County needs to expand, and all of these changes are logical. In essence, the County would be trading properties that are of no use to the County for those that are advantageous for the County's purposes, both short term and long term. Commissioner Luke asked David Givans for his opinion. Mr. Givans replied that these properties could very well appreciate greater than anticipated, as prior properties and projects have. Marty Wynne said that the third floor could be a political issue. Commissioner DeWolf stated that he would back off on putting in the third floor, but indicated that he strongly advocates site #2 for the warehouse, and purchasing the Elliott property, which will gain in value. It has already greatly increased in value since the County declined to purchase it a few years back. It is also the only available bare land in that area, and the expansion of the jail and associated services is inevitable. Mike Maier stated that these plans should be prioritized on paper. His recommendations are: 1. Site #2 for the warehouse facility 2. $400,000 for the Courts - virtual courtroom upgrade 3. Purchase of Elliott property 4. Building of the third floor - at least the shell Commissioner Luke said that the third floor is a problem for him, especially is it is left empty, even though it might make some sense in planning for the long-term needs of the County. He asked that new numbers be detailed that show the basics, then revised adding the court upgrades for video conferencing, and then site #2. He added that the County is conservative, and must show solid reasoning and numbers. Mike Maier said the Board needs to make a decision no later than the first week of November, as figures must be developed for the bond. He added that they should address the short-term money concerns of Commissioner Luke as soon as possible. Minutes of Administrative Liaison Friday, October 25, 2002 Page 4 of 5 Pages It was decided that the group would meet again on Friday, November 1, at 9:00 a.m. to over the project numbers and to make a decision on what direction to take regarding the various recommendations and alternatives that have been discussed. Being no further items brought before the group, the meeting adjourned at 11:15 a.m. DATED this 28th Day of October 2002 for the Deschutes County Board of Commissioners. ATTEST: Recording Secretary ��W' '1& Michael M. Daly, Co ssioner Minutes of Administrative Liaison Friday, October 25, 2002 Page 5 of 5 Pages