title
Authorize the Auditor-Controller to reduce the General Fund loan due from Mission Solano Rescue Mission, Inc. by $65,450.15 each year for ten years, representing 1/10 of the principal balance outstanding as of May 1, 2018 of $654,501.47, to reflect the terms of the Contribution Agreement between Shelter Solano, Inc. and the County of Solano; and Authorize the County Administrator, in consultation with the Auditor-Controller, to make any technical adjustment to the appropriations to reflect this transaction (4/5 vote required)
body
Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
The County Administrative Office and the Auditor-Controller recommend the Board authorize the Auditor-Controller to reduce an outstanding General Fund loan due from Mission Solano Rescue Mission, Inc., which closed in 2018, by $65,450.15 each year for ten years, representing 1/10 of the principal balance outstanding as of May 1, 2018 of $654,501.47, to reflect the terms of the Contribution Agreement between Shelter Solano, Inc (new facility operator). and the County of Solano; and Authorize the County Administrator, in consultation with the Auditor-Controller, to make any technical adjustment to the appropriations to reflect this transaction
SUMMARY:
In accordance with the Contribution Agreement, approved by the Board of Supervisors on January 22, 2019, the County agreed to forgive and waive its right to seek any cash or other repayment of the outstanding loan balance and interest under the Amended and Restated Loan Agreement with Mission Solano Rescue Mission, Inc. (Mission Solano) used in the construction of the Bridge to Life Shelter Facility. In return, Shelter Solano, the subsequent, successor operator of the Shelter Facility, agreed to dedicate one bed for the next ten (10) years at the Shelter Facility to support the County’s social service programs. Therefore, each fiscal year, the County will recognize supportive services of $65,401.15 and reduce the General Fund Loan receivable by $65,401.15. A technical adjustment is necessary to reflect the appropriation resulting from this arrangement outlined in the Contribution Agreement.
FINANCIAL IMPACT:
The current outstanding balance of the Amended and Restated Loan Agreement with Mission Solano is $654,501.47. The recommendation to reduce the loan balance will result in a reduction in long term reserves of $65,450.15 annually for ten years. The costs associated with preparing the agenda item are nominal and absorbed by the department’s FY2018/19 Adopted Budget.
DISCUSSION:
On May 29, 2009, the County entered into a loan agreement with Mission Solano to partly fund the construction of Phase 2 of the Bridge to Life center, a transitional residential housing project, commonly referred to as the Bridge to Life Center at 310 Beck Avenue, Fairfield, CA (“Shelter Facility”). On June 12, 2012, the Board approved a request from Mission Solano for a new 10 year loan agreement to supersede the terms and conditions of the May 29, 2009 5 year loan agreement. On April 10, 2018, Mission Solano notified City of Fairfield and County staff that it would close the Shelter Facility due to financial difficulties and discontinued loan payments to the County effective May 2018.
The City of Fairfield issued a Request for Proposal to select a new operator and selected Shelter Solano, Inc. (subsidiary of Shelter, Inc.) in September 2018. Shelter Solano met with County staff, City of Fairfield staff, other Solano County cities’ staff, and community stakeholders to discuss sustainable funding and contracts for services to be provided at 310 Beck. The Contribution Agreement approved in January 2019 provides that the County will waive its right to seek any cash or other repayment of the outstanding loan balance in consideration for Shelter Solano operating the Shelter Facility and guaranteeing a minimum of one bed on a daily basis for a ten year period.
ALTERNATIVES:
The Board could choose not to approve the request to reduce the Mission Solano Loan by 1/10 each year; however, Mission Solano is no longer operating, there remains a long term receivable for the loan in the County’s financials.
OTHER AGENCY INVOLVEMENT:
The County Administrator’s Office and the Auditor-Controller’s Office prepared the agenda item.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION