The transfers of title and responsibility for the County facilities under the various documents will relieve the County of the ongoing obligation to provide the Court with necessary and suitable facilities, except for certain bond-related and seismic liabilities described below. The County is obligated, however, to make projected annual “County Facilities Payments” or “CFPs” of approximately $257,911 in perpetuity, as discussed below. These payments are equal approximately to the current year County costs to maintain the transferred facilities, including staff and contract services costs for preventive and major maintenance, utilities, and insurance.
A Joint Occupancy Agreement (JOA) has been negotiated to assign responsibility for the Richmond Bay District Court building where both Court and County departments are occupants. Under the JOA each party is responsible for maintenance of its exclusive space. The cost of maintaining common areas in this building will be split proportionally based on occupancy. Management of the common areas in this building will be the responsibility of the State as the owner of the building, subject to reimbursement from the County. The JOA will therefore require increased coordination between the County and Court for budgeting, billing preparation/review, and agreement on major maintenance and renovation projects. The financial impact of the JOA has not yet been determined.
Although the County Health Center located at 100 38th Street in Richmond is also a shared building, the Court use is limited to a small amount of storage space. Therefore, the transfer agreement for this facility includes a delegation of authority from the State to the Court for maintenance of the Court’s exclusive space. So long as the delegation remains in place, the County is relieved of the obligation to pay the annual CFP (approximately $23,000) for this facility.
Funding for the anticipated CFPs has been included in the FY 2008-2009 County budget.
Beginning with the Lockyer-Isenberg Trial Court Funding Act in 1997, the State passed a succession of legislation to move funding and control of Court operations from counties to the California Judicial Council. The Trial Court Facilities Act of 2002, codified under Government Code sections 70301 et seq., addressed transfer of responsibility for “court facilities” (defined by the Act to include court rooms, judges chambers, administrative support areas, building operating systems, holding cells, common and connecting spaces, parking, and the grounds appurtenant to court buildings) by authorizing the State of California, through the Judicial Council (acting through its staff agency, the Administrative Office of the Courts (AOC)), to assume responsibility for these facilities throughout the State. “Responsibility for facilities” is defined in the Act as the obligation of providing, operating, maintaining, altering and renovating a building that contains court facilities. Under the Act, transfer of court facilities must occur prior to December 31, 2009; however, County Facilities Payments required under the Act are subject to penalties (additional inflators) if the transfer documents are executed after December 31, 2008, and higher penalties if the transfer documents are executed after March 31, 2009.
Following Board approval on December 16, 2008, the County transferred 11 of its remaining 14 court facilities. At this time, staff seeks the Board’s approval and authorization to complete the transfers of 2 of the remaining 3 court facilities.
County Facilites Payment
Commencing upon the transfer of court facilities, Government Code section 70353 requires counties to continue to provide the State with operations and maintenance funding at historic levels, known as “County Facilities Payments” or “CFPs.” The Act specifies the methodology for calculating the CFPs based on expenditures during the five year period from Fiscal Years 1995-1996 to 1999-2000, adjusted for inflation until the date of transfer, at which time it becomes fixed. These facilities expenditures included labor, materials, and contract costs for maintenance, utilities, insurance and major maintenance repairs and
renovations. CFPs were calculated as prescribed and have been transmitted to the AOC. Final approval of the calculations by the State Department of Finance (DOF) is anticipated but has not yet been received for all of the remaining facilities. If approved without changes, total CFP support to the State for the 2 facilities to be transferred will be approximately $257,911 annually.
Benefit to the County
The advantage to the County from completing transfers of court facilities is that the County is relieved of any further responsibility for providing, operating, maintaining, altering and renovating “necessary and suitable” court facilities. This relieves the County of any future obligation to repair, upgrade or replace older existing court facilities. Upon transfer of responsibility these costs will be the sole responsibility of the State, subject to the CFPs and certain liabilities that the Act requires the County to retain (described below).
Under the Act, CFPs will not increase above the current amount and the County’s obligation is fixed.
Seismic
As originally enacted, the Act prohibited transfer of court facilities in a building having a seismic safety rating of Level V under the State’s Seismic Risk Table (SRL-V) absent certain additional concessions. There is one SRL-V building containing court facilities being transferred: Richmond Bay District Court. There were two SRL-V buildings containing court facilities that were transferred this past December: Wakefield Taylor and Walnut Creek/Danville District Courthouse. Recognizing the impracticality of this provision, SB 10 (2006) amended the Act to allow transfer of court facilities in SRL-V buildings provided the County retains all liabilities for seismic-related property loss, injury or death, until relieved of those obligations by the occurrence of certain events set forth in the Act. Consequently, in order to transfer the court facilities in SRL-V buildings, the transfer document before you today requires the County to defend, indemnify and hold harmless the State from any losses and liabilities arising from a seismic event. This same provision was included in the transfer documents for the two SRL-V buildings approved by the Board in December.
Under the Act, the County must retain these liabilities for either (a) 35 years, or until (b) repair, retrofit or replacement of the building raises its seismic-safety rating to level IV or better; or (c) the facilities are no longer used as court facilities; or (d) the County and the Judicial Council agree on a method to address the seismic issue such that the State does not have a financial burden greater than it would have had if the transferred facility had a Level IV rating or better. The latter method, an agreement putting the State in the same financial position it would have been in if the transferred facility had a Level IV or better rating, is available to the County and the AOC until December 2009 and requires DOF approval.
Facilities Proposed for Transfer of Responsibility
The County intends to transfer responsibility for all court facilities in current use within the County. The recommended actions allow for the transfer of responsibility of 2 of the 3 remaining court facilities in the County, which are located at: 100 37th Street, Richmond, CA (Richmond Bay District Court), and 100 38th Street, Richmond, CA (archival and storage facility in the Richmond Health Center). The one court facility that will remain to be transferred is the Family Law Center located at 751 Pine Street, Martinez. “Transfer of Responsibility” is the critical step in relieving the County of its current obligation to provide, operate, maintain, renovate and replace necessary and suitable trial court facilities.
Under the Act, a County must transfer title (as well as responsibility) to those buildings that are occupied 100% by the Court, and can transfer title and responsibility to those buildings in which the Court is the majority occupant. The Court is not the sole occupant in any of the facilities being transferred.
However, the Court is a substantial majority occupant in one facility proposed for transfer of title: Richmond Bay District Court. The County will retain its current occupancy in this building under the type of joint occupancy agreement discussed below.
Transfers of title to the State must be approved by the California Public Works Board (PWB). The AOC has advised that the PWB approval process could take several months in light of the number of court facility transfers that will flood the system on or about March 31, 2009. The County will continue to maintain property insurance during the interim period between the transfer of responsibility and the transfer of actual title, with the State reimbursing the County for a pro rata share of the premiums based on its occupancy.
Joint Occupancy Agreements (JOA)
A Joint Occupancy Agreement has been negotiated and prepared for each building and campus (where applicable) in which the County and the State will share occupancy. These agreements were created to establish the respective rights and responsibilities of the State and County. Specifically, JOAs reflect the role of each party with regard to exclusive use areas, common areas, managing party and contributing party responsibilities, cost allocation methodology for common area maintenance and repairs, central plant operations, security, emergency response, liability allocation and dispute resolution. The County will be the managing party of the Richmond Health Center and the AOC will be the managing party of the Richmond Bay District Court.
Post-Transfer Liabilities
In addition to the seismic liability retention, and the CFP and debt retirement obligations, the County will have additional post-transfer liabilities that are reflected in the transfer documents. Most notable among those are the following:
- Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. sections 9601, et seq. (CERCLA). CERCLA is a body of federal law allocating responsibilities for costs associated with the clean-up of hazardous material released into the environment. The Act requires, as a condition of court transfers, that the County defend, indemnify and hold harmless the State from any post-transfer CERCLA liability imposed on the State that arises out of conditions existing on the properties at the time of transfer, whether or not known to the County.
- Third-Party Liabilities and Personal Property Losses. In shared-use buildings and campuses, each party bears 100% liability for damages and losses occurring in their exclusive-use areas, except to the extent the loss results from the negligence or willful misconduct of an employee of the other party. Liabilities for damages and losses occurring in the common areas are borne proportionally in relation to each party’s share of building occupancy. (As noted above, these sharing concepts are not applicable to seismic events during the requisite period.)
- Property Casualties. Property casualties, other than those resulting from seismic events (explained above), are borne by the parties in relation to their share of occupancy. The parties will share the cost of premiums and deductibles, and any uninsured loss in relation to their share of occupancy.
Transition Schedule
Execution of the remaining transfer agreements prior to March 31, 2009 will allow the parties to meet the requirements of the Act and avoid additional CFP inflators. Additional actions are required to complete the transfer of titles and transition of responsibilities to the AOC.
The key milestones for this transition to occur are: (1) approval of the CFPs by the State Department of Finance; (2) submission of fully executed Transfer Agreements and JOA to the Administrative Office of the Courts; (3) AOC submission of title transfers to PWB; (4) approval of the transfers by PWB; (5) record documents; (6) finalize schedule with State for handover of properties to the Facility Management Unit of the Judicial Council; (7) transfer maintenance documents, records and control codes; (8) complete turnover checklist activities, including coordination meetings, walk-throughs, and assignment of contracts; (9) establish procedures and protocols for communicating among maintenance staff, billing reviews, emergency call-out, etc.
Actual handover of responsibilities for the properties will likely be phased in over a period of time to provide the State time to initiate maintenance contracts, train staff on the buildings, review operations and maintenance documentation, and coordinate activities with County staff.
Environmental Statement
As outlined above, the County proposes to transfer responsibility for, and in some cases title to, trial court facilities currently operating within the County to the State through the Judicial Council. The proposed action involves only a change in responsibility for operations of these existing public facilities with no change in the use or occupancy. As determined by the initial studies, it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment. Therefore, staff recommends that the Board find that the proposed transfers are categorically exempt from the provisions of CEQA pursuant to CEQA Guidelines section 15061(b)(3) because it can be seen with certainty that there is no possibility that the projects (the transfer of trial court facilities to the State with no change in use or occupancy of the facilities) may have a significant effect on the environment.
If the transfer agreements are not approved by March 31, 2009, the annual CFPs that the County must pay will be subject to additional CFP inflators of approximately $21,224 per year. If the transfer agreements are not approved by December 31, 2009, the County will be unable to comply with the requirements of SB 1732 that require Counties to transfer responsibilities for all Court facilities by December 31, 2009.