LAKEPORT, Calif. – After weeks of lobbying by Lakeport businesses and officials, the Board of Supervisors on Tuesday went ahead with approving an agreement to lease a new Mental Health facility that will be built for the department in Lucerne.
The board was split over the decision, with a final 3-2 vote approving it. Supervisor Anthony Farrington, whose district includes Lakeport, and Supervisor Jeff Smith, whose district includes Clearlake, were the dissenting votes.
The agreement calls for Bruno and Associates to build a new, two story, 11,157-square-foot building on Lucerne's 13th Avenue, which leads up to the county-owned Lucerne Hotel, now under renovation. Mental Health would rent 10,343 square feet of the new building, which also would include additional retail space for rent.
According to the plans, the building is to be completed by Aug. 1.
County officials had crafted the plan as part of a way to aid redevelopment efforts in Lucerne, where additional private investment is interested in locating.
However, Supervisor Denise Rushing said at the Tuesday meeting that some of those private interests didn't want to go first in developing facilities on 13th Avenue, slated to be the town center.
The board had originally approved the idea in concept last October in a 4-1 vote, with Farrington voting no. The vote also included directing staff to issue a request for proposals to build and lease a Mental Health office building.
At its Feb. 1 meeting, the board again voted 4-1, Farrington again voting no, to move forward with plans to lease a new facility for Mental Health in Lucerne, selecting Bruno and Associates' proposal. Farrington argued against the move because he was concerned about moving 40 jobs out of his district.
Nancy Ruzicka, owner of 991 Parallel Drive, where Mental Health's Lakeport office currently is located, had spoken to the board repeatedly against the move, offering a purchase proposal to the county for the building. She also addressed the Lakeport City Council last month to seek support for stopping the move.
Since the board's Feb. 1 vote, a lobbying effort had arisen among Lakeport businesses, with the Lakeport Main Street Association starting a petition drive to block the move from Lakeport that yielded more than 100 signatures that were submitted to the board this month.
The supervisors were due to make a decision at the March 8 meeting, but Cliff Ruzicka came before the board to offer to “gift” the Parallel Drive building to the county over 15 years in exchange for more than $4.1 million in payments.
The board delayed that decision while administrative staff considered the offer, which was more expensive than two previous purchase options the Ruzickas had offered, one requiring $750,000 down with a monthly payment of $11,880 per year for 10 years, for a total of $2,175,000; or no down payment with 20 years of monthly payments of $20,790, for a total of $2,494,800.
Deputy Administrative Officer Matt Perry told the board at its Tuesday meeting that the “gift” offer was essentially a lease option. “In analyzing that offer last week, we've determined that that offer would actually be less advantageous to the county from a financial perspective than the original offer.”
He said staff analysis concluded that the Ruzickas' latest offer would cost the county between $900,000 and $1 million more for the building under that offer, which comes out to paying $55,000 to $76,000 more per year. “That's money that could be used for client services.”
Entering into a lease option agreement could result in problems for the county if the state were to decide that such a purchase didn't qualify for state funds. Perry said that would mean the obligation would fall to the county. In purchasing the Ruzickas' property, the county also would be removing the building from the tax roll.
For Mental Health, leasing a building is better than owning, Perry said, explaining that Mental Health funding is complex and requires a balancing act. “We feel that leasing the building in Lucerne is the best option to meet that balancing act.”
The county needs to keep costs as low as possible but, on the other hand, they need to incur some costs to support the overhead rate that Mental Health charges state and federal sources, Perry said.
Perry explained there would be countywide benefits to moving to Lucerne. While he said they weren't ignoring the effect that it would have on Lakeport, there would be a benefit that “would have a significant impact upon Northshore communities and Lucerne in particular.”
The board has made significant investment in Lucerne already, he said, referring to the Lucerne Hotel.
“That's just the first step, it's not he final one,” said Perry, explaining that in order to make Lucerne more welcoming for visitors, they needed to help develop 13th Avenue, an effort which he said is critical in order to attract investors.
Perry said there are already hundreds of county jobs in Lakeport, and the city would continue to benefit from those jobs.
“It's also significant that we can use state money to advance this local objective” with no cost to the county's general fund, he said. That's important because redevelopment agencies are on the ropes, with Gov. Jerry Brown targeting redevelopment for elimination.
If the offices are moved to Lucerne, Kelseyville residents can obtain services at Mental Health's Clearlake office, Perry said. He explained that 66 percent of the department's clients live in Cobb, Middletown, Kelseyville and Clearlake, with 34 percent in Lakeport and on the Northshore. Perry said of that 34 percent, 14 percent of the clients come from Lakeport and the remainder from Northshore communities.
“There might be a legitimate argument to be made that that area's underserved,” Perry said.
Farrington asked about funding availability over the next 20 years. Perry said the proposed lease agreement includes a clause that allows the county to terminate without penalty if appropriations for the building cease.
County Administrative Officer Kelly Cox said the county's intention was to have long-term funding, which he didn't think would be an issue.
Rushing called the issue a complicated one. She said moving the 40 jobs to Lucerne was a “seed effort.”
“We're trying to bring Lucerne up and investment from out of county in, and that idea will be benefiting all of Lake County,” she said.
Rushing said the University of California, San Francisco is looking at having a facility in Lucerne, and others also are interested but nobody wants to go first. “So we're going first,” she said, adding that she believed more Lucerne residents will be able to take advantage of the county services as a result.
Farrington said he didn't think it was a fair way to do business, calling it a “Trojan horse” for moving jobs and decentralizing county jobs in the future. He also didn't agree with hinging redevelopment efforts on government services, which he said he hadn't seen work. Rushing said it worked with a conference center built in Fortuna.
Mayor argues against move
During the meeting the board heard arguments against the move from the perspective of its possible impact on clients of the services, and also heard from two Lucerne residents, one in support, one not because of concerns for existing Mental Health clients having services moved.
But the strongest opposition voiced at the meeting Tuesday came from Lakeport Mayor Suzanne Lyons, who had spoken against the action in previous meetings and also had taken a hand in the lobbying effort.
“I keep hearing this is going to be a benefit to all of Lake County,” she said, but she questioned the benefit for Lakeport.
Rushing asked her to imagine that the county had established a conference center in the Lucerne Hotel and that Lucerne also had a university satellite campus. There would need to be housing for faculty and accommodations for visitors, and Rushing said Lakeport would benefit by offering those services.
Lakeport and the rest of the county also will benefit if more people are drawn to the county through the efforts in Lucerne. Rushing said they wanted to use the new building to “show how it can be,” with offices above and retail below along 13th Avenue.
“It's not a zero sum game,” said Rushing, who said it was “painful” to see a fight over 40 jobs.
She said the kinds of educational programs and business opportunities they're trying to bring to Lucerne would involve the environment, culinary arts and sustainability. “Certainly it would be all about Lake County.”
Cox said the Northshore Redevelopment Area is important because that's what people traveling along Highway 20 see. He said there wasn't much nice to see there before redevelopment.
He said the goal is to get people to stop and see what the rest of the county is about. That's why a visitor center is located in Lucerne, where it helps capture visitors and send them elsewhere in the county.
“The more we can improve the economic conditions on that Northshore corridor of Highway 20, the more that's going to attract investment to all of Lake County,” Cox said.
Lyons wasn't convinced. “I think you’re really, really pushing it with that one,” she said, adding she didn't see any benefit to Lakeport “any time soon” from the plan.
She asked how they could reconcile decentralizing services with being “green.” Cox replied, “You're assuming everybody lives in Lakeport then, nobody travels.”
Supervisor Rob Brown told Lyons, “I don' think it's going to hurt Lakeport at all.” He reminded Lyons of the county's effort to fight in support of building a new courthouse in Lakeport and not near the jail. He said he believes the county has done a lot to help Lakeport.
He then pulled out a copy of an e-mail that Lyons sent to Rebecca Curry, a local Democratic Party leader, asking Curry to get people to contact Brown to get him to vote against the proposal. In the e-mail Lyons suggested that awarding the contract was not about helping Lucerne but about making a gift of public funds to Origin Construction, as well as Bill Brunetti of Bruno and Associates and Dr. Bob Gardner.
Lyons replied that it was a private e-mail.
“We're not gifting public funds,” said Brown. If that were the case, he said the county would have been gifting public funds to the Ruzickas, which he didn't think was the case.
Brown continued reading the e-mail – a copy of which he shared with Lake County News – which said Brunetti was going to run against Farrington, which Brown said he had confirmed was not true.
She also wrote in the e-mail, “At the BOS meeting it was announced that the new county policy is to decentralize social services and spread them all around the Lake. In times of rising gas prices this is lousy policy.”
Brown asked her where she came up with the decentralization statement.
Cox emphasized that there was no such county policy. “That is absolutely untrue,” he said.
“I heard it here,” she said.
“No, you didn't,” Cox replied, with Board Chair Jim Comstock tapping the gavel to calm down the exchange between Cox and Lyons.
Brown said he'd received no e-mails advocating against the move.
Comstock asked Lyons to find the date and time of the decentralization statement, and who made it.
Mental Health Director Kristy Kelly said the whole discussion had arisen because the rents they are paying for the Parallel Drive facility are “excessive for what we can afford,” and that Nancy Ruzicka was confident in her rates and was staying with them.
The county came up with an estimate of $1.44 per square foot for the new building, and the proposal is within three cents of that, Kelly said. Because of their current rent, they will need to look for another location anyway.
The estimated $55,000 annual difference between the old and new locations was enough to pay for a case manager or another staffer. “It's a significant amount of money,” said Kelly, noting that what's good for the county is the maximum number of people available to work with clients.
At the meeting Cliff Ruzicka came forward with another offer to sell the county the Parallel Drive building, offering what he said was a savings of $860,000 over the term of the lease.
Cox said while he thought highly of the Ruzickas, the matter had gone through a competitive process.
“We could go on and on with counter proposals,” said Cox. “There's got to be some integrity maintained in the process,” he added, noting the other firm had won the bid “fair and square.”
Rushing moved to accept the proposed lease with Bruno and Associates, which was approved 3-2.
In other board action Tuesday, the board voted 4-1 – with Rushing voting no – to turn down the Friends of Cobb Mountain's appeal of the Lake County Planning Commission's certification of the final environmental impact report for Bottle Rock Power's expansion. The board also voted 4-1 – with Rushing again voting no – to approve Bottle Rock's rezone of nearby lands for the project.
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