Paying $500,000 in rent sparks reaction from supervisors
However, Chapman labeled state policy as idiotic because it allows counties to lease space but not to put up new buildings and charge the state rent. He said such policies help explain the estimated $16 billion state budget deficit.
Before former County Administrative Officer Bill Bixby retired in 2005, Chapman said the county planned to build a complex of buildings for $7 million on Main Street near its intersection with Laurel Street.
“We were basically told if the county was to build that and house it, there would be no reimbursement available to us,” Chapman said. “The only way reimbursements can be made to cover the costs is if we deal with the private sector, basically where we lease the space.”
Chapman called the 7,200-square-foot building nice quarters and he said Child Support Services Director Beth Hyde and her staff run a good program and really enjoy the building.
Hyde’s department was recently rated most improved in the state for very small counties and in the top 10 for all counties.
Hyde said the work her department does “means money in people’s pockets that need the money.”
“I just find it outrageous that we’re going to be paying $9,108 a month — not a year, but a month,” Chapman said. “So, that translates to like $108,000 a year and this is a five-year contract. So now we’re going to spend $500,000 in rent.”
If the county owned the building, the taxpayers of the county and the state would have an investment in the equity, he said at the Feb. 26 meeting.
Calling Lassen County a miniscule part of the overall state budget pie, Chapman said, “If we’re talking about this kind of money here … when you magnify this statewide, the reason why the state of California is broke is because of these kind of fiscal policies.”
If the county had built its own complex 10-15 years ago, it would have a quality facility for all county health and human services programs.
“And the reimbursement factor would be a helluva lot less than $9,100 a month,” he said.
If the state reimbursed the county $9,100 a month in rent, “We’d be rolling in clover,” Chapman said. “Everybody could have raises and we could do all kinds of benefits in terms of finances.”
If the state wants to stop being bankrupt and have funds for programs in schools, counties and cities, ‘They’re going to have to get away from paying $9,100 a month for a 7,200-square-foot building,” he said.
County space needs
Board Chairman and District 5 Supervisor Jack Hanson said the board periodically discusses the possibility of examining county space needs and developing a more strategic approach to housing county departments.
Hanson said he supports moving away from the Roosevelt Building on Richmond Road and developing the health and human services campus on the 1600 block of Susanville’s Chestnut Street, where the child support services building is located.
He said he hopes Kevin Mannel, deputy county administrative officer for health and social services, is coordinating all the departments moving to the campus and that the moves also are being coordinated at the county level.
“But I agree with you, Jim,” Hanson said. “Certainly, it was the rent that caught my eye.”
The rent increase is due based on a lease agreement the county signed in February 2002 with Linda and Dale Soule. In November 2002, James M. Wells Jr. purchased the lease agreement from the Soules.
The original lease set the monthly rent at $7,920. It increased each year by the Consumer Price Index of 3 percent. The increase to $9,108 actually took place in July 2007 and Hyde said her department will have to make up the difference.
When the lease changed hands, the county counsel’s office instructed child support services to develop a new lease agreement.
“The rent was built into the original contract,” Hyde said. “And the original contract wasn’t done by the state of California. It was actually done by the county.”
County Administrative Officer John Ketelsen said “Those rates are the ones I experienced in 1982 in Sacramento.”
He added the state is paying much more to lease commercial property in some other counties.
District 4 Supervisor Brian Dahle said the Sierra Nevada Conservancy pays $30 a square foot to lease office space in a tilt-up building in Auburn. Dahle is the conservancy’s vice chair.
Ketelsen said most of the offices that have moved to Chestnut Street have replaced leased space with different leased space. The county is starting to get into replacing owned space with leased space. He said he’s asked Mannel to bring back a long-term HHS strategic plan for space needs.
Mannel said he would bring the plan to the board in a few weeks, including comparisons of the cost to own and lease office space and the total annual cost of leased space. He estimated the total cost of leasing space at about $35,000 a month.
Dahle said there must be a way to do a public-private venture to build a government center so that members of the public from outlying areas can find needed county offices. He said it’s difficult for people who don’t live in Susanville to find the office they’re looking for when the county offices are spread all over Susanville.
County Counsel R. Craig Settlemire said he would investigate if the county may lease property with an option to purchase.
The board voted 5-0 to approve the lease and to send a letter to Governor Arnold Schwarzenegger pointing out the ludicrousness of state policy on leases.
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