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LCPIC

LASSEN  COUNTY'S MONEY PIT

2950 Riverside Drive

September 22, 2015 Video Tour

Purchase Agreement

 

1996 BLM BUILDING, SUSANVILLE, CA

APN 105-350-50

Purchase Price: $1,300,000

Remodel cost: $ 1,433,709

Expenditures for renovation as of 8/31/17: 1,152,745.01

Certificate of Substantial Completion:  3/31/17

All four Departments moved in on 4/28/17

Change Orders authorized on 9/28/17

 

 

 

9/13/16:United Building Contractors Contract: $ 979,000 +

United Builders must complete this project by March 28, 2017 or face $1900 a day penalties. The Certificate of Substantial Completion was signed on April 3, 2017. County Departments moved in on 4/28/17. On 9/28/17, Change Orders were authorized.

 

Contract     Payments 

Payment errors

Notice to Proceed

  Cert  of Occupancy

Change Orders

Declining population drives real estate prices down. Susanville's business property is 50% empty

Also, 9500 people from the prisons are counted in the statistics below

 

 

Asking Price: $1,600,000

Appraisal:  $1,100,000

Purchase Price: $1,300,000 without any inspections

Remodel Cost: $1,433,709

Move-in cost: unknown

At the time of the sale, the property owner's (Pezzullo relative) taxes were delinquent ($13,174.31).

 

2.46 acres

17,714 square feet

Rentable space: 16,500 square feet

[ The County plan's to give the space to County departments that can pay rent with federal/state funds]

 

 

The County intended to issue Certificates of Participation  to purchase this property and obtain capital to give $1.1 million to the JPA to build a community pool. Kan We Help pointed out that you need to "own" the property.  Lassen County did not own the pool property or the old BLM building.

 

Certificates of Participation are a slippery lease financing agreement in the form of tax exempt securities.

They are marketable to private investors and investors can take possession of the collateral (Juvenile Hall) if the County fails to make base payments to LCPIC who handles the money for the investors.

This action only requires a vote from the Board to proceed but the Board must first identify and add these Capital Improvement Projects to their budget before proceeding. Something the Board has been reluctant to acknowledge. This would expose the Supervisors to a level of scrutiny by the public.

Since the County does not own the community pool property and does not own the BLM property a traditional COP is not possible

 

Next Lassen County signed a Lease/Purchase Agreement with the shell corporation Lassen County Public Improvement Corporation (LCPIC) in order to set up an elaborate scheme to loan itself $ 4,080,000.

After the Lease/Purchase Agreement was signed, Lassen County put the Juvenile Hall up for collateral so the County could secure a loan from TPB Investments, a newly formed company, in Arizona.

Lassen County arranged to borrow $4,080,000 from TPB Investments. The County's first loan payment (base payment amount has not been disclosed.) is due in June of 2016.

Lassen County paid GFS, Inc. $64,000 to find a "Lender"

 

 

October 17, 2017

 

KAN WE HELP ASKS COUNTY TO EXPLAIN ERRORS

ON THE

2950 RIVERSIDE BUILDING PAYMENTS

ERRORS

 

 

October 10, 2017

LASSEN COUNTY'S MONEY PIT

There was a real good reason why Bureau of Land Management moved out of 2950 Riverside.  Nothing worked

Lassen County purchased this 17,714 square foot without any inspections. That fact by itself was irresponsible and you have to ask yourself.......WHY?

After spending over $2,500,000 on this property it continues to be a  money pit of repairs. The IT company practically lives at the building. The electricians are trying to figure out why the motion lights don't work and the heating and air conditioning is sporadic at best.

Lassen County issued a Notice to Proceed to the Contractor on November 28, 2016 Notice to Proceed  and the stated that the project must be completed no later than March 28, 2017. The County signed a Certificate of Substantial Completion on April 3, 2017. The County moved all four Departments into 2950 Riverside on April 28, 2017 without the building being functional  Cert  of Occupancy

The Change Orders were signed on 9/28/2017 Change Orders, five months after the County departments moved in and the building continues to have major problems. The final (?) payment to Modern Building (contractor for 2950 Riverside) just didn't add up and the County has not responded to explaining the final payment. Payments

                                                         Payment #4  April 20, 2017                $409,182.34

                                                         Balance                                                $54,840.00  ($48,640 is the retention)

                                                        *Payment #5  September 28, 2017     $36,607.21

*8 undated Change Orders, $35,475.95 with 3 contract work deductions, $39,907.49 equals an additional amount owed to the contractor of $4,431.54

The Lassen County's Administrative Officer is moving money around to even make the $300,000 annual  payments  on the $4,080,000 2015 loan.

The County has sunk over $2,500,000 into this building and the taxpayers need to know about this gross mismanagement

 

April 11, 2017

KAN WE HELP

TELLS SUPERVISORS

TO

PAY ATTENTION

Exhibits A-H

 

2950 Riverside Remodel Over Budget

by  $1,000,000

...AND STILL NO FIRE SUPPRESSION SYSTEM FOR BUILDING

 

 

September 22, 2015 Video Tour of old BLM Building

 

 CHILD SUPPORT SERVICES DEPARTMENTS NEW OFFICES

NEW CHILD SUPPORT SERVICES OFFICE (FRONT RIGHT SIDE OF BUILDING)

Original space

 

 

 

PROBATION DEPARTMENTS NEW OFFICES

DEPARTMENT OF PROBATION NEW OFFICES   (FRONT LEFT SIDE OF BUILDING)

 

NO MONEY FOR BATHROOM REMODELS

 

NEW TECH ROOM, NOT READY

       

  ALL LIGHTS ON A MOTION SENSOR IN THE BUILDING

 

   

 

                          NEW DISTRICT ATTORNEY OFFICES

 

 

 

 

 

 

 

                                        ORIGINAL SPACE ON AUGUST 10, 2016

 

 

NO FIRE SUPPRESSION SYSTEM FOR THIS 17,000 SQUARE FOOT BUILDING

 

   2016-two fire extinguishersNone now?

 

 

 

 

 

 

April 10, 2017

Lassen County Supervisors Are Scheduled to

Hold Tour of the Riverside Building

on April 11, 2017 @1:30

 

February 28, 2017

Pete Heimbeigner, Deputy Public Works Director, gave a bumbling/mumbling  update on the progress of the County's 2950 Riverside property at the Board of Supervisors meeting today.

Check out the report on Part 3 of the video: BOS mtg video

Mr. Hembeigner solved the fire suppression issue (no fire sprinkler system in the building) by installing "fire walls".  Does he anticipate the occupants to stay in a burning building ?

also:

United Builders has 80 "work" days from November 28, 2016 to March 28, 2017 to finish a million dollar project.  It appears that Public Works is anticipating giving the contractor credits for days they weren't there. This contract states that the contractor will pay a $1,900 a day penalty if they don't finish by March 28.

 

The actual  move-in day cannot be released even to the four County departments that will be occupying this old building. Public Works was not questioned about the "move-in" costs and who will pay for it.

 

And then there's Jim Chapman's elevator that the County has no money for. A million dollars was initially set aside ($4 million loan) to put an elevator in the Old Courthouse but the County will need every penny left of the $200,000 to finish their boondoggle Riverside building.  To date, the County has spent over $2.8 million dollars of the $4 million dollar COP loan on the Riverside building.

Historic marble staircase inside the two story Old Courthouse

 

 

 

February 16, 2017

Balance of Remodel:  $775,012.44

Payments

 

February 14, 2017

When did the clock start ticking

 on the 80 days?

When did Lassen County issue the

"NOTICE TO PROCEED"

On November 28, 2016, United Builders signed a $979,000 contract with Lassen County to remodel the 2950 Riverside building. A Notice to Proceed was issued to United Builders on November 28, 2016.

 

According to the contract, if United Builders does not finish the project in 80 days they must pay Lassen County $1,900 a day penalty until the job is complete

 

January 12, 2017

Lassen County has paid

United Building Contractor Zero

 for the

2950 Riverside remodel

but Lassen County did pay $112,734.60 to

Cinium Risk Management LLC

WHY?

 United Building specified that all payments be made to Cinium Risk Management

There is $1,261,126.04 left of the $4,080,000 CIP Loan

 

 

December 13, 2016

 Riverside building remodel costs estimated at $1,433,709

that doesn't include move-in costs

There is only $1,374,310.14 left of the $4,080,000 loan

LOAN

WATCH FOR THE SUPERVISORS

TO RAID

 OTHER ACCOUNTS TO PAY FOR THIS WHITE ELEPHANT

 

 

 

 

December 1, 2016

Demolition has started and Framing is scheduled for next week

 

       

 

November 11, 2016

2950 Riverside Remains Empty

 


CAO Richard Egan has made no progress

in repairing this old building

 

 

 

 

November 1, 2016

Contractor United Building

is not on the job since they signed a contact with Lassen County on 9/13/16 to remodel the old 2950 Riverside building

The Lassen County Auditor states that no payment has been made to the Contractor, United Building, as of 10/28/16

 

 

October 17, 2016

NO MOVEMENT YET

ON THE  REMODEL

FOR

2950 RIVERSIDE DRIVE?

 

 

 

September 8, 2016

 

 

The cost on Lassen County's

office "acquisition" and "improvements

 is now up to $2,453,628 not the $1,700,000 told to the public

{add another $500,000 by move-in}

 

 

LASSEN COUNTY SUPERVISORS

INTEND TO AWARD

A $1,000,000 CONTRACT

FOR THE REMODEL OF 2950 RIVERSIDE

TO

UNITED BUILDING CONTRACTORS

ON SEPTEMBER 13, 2016  (AGENDA H-3)

 

The Cabinetry portion ($61,000) will most likely go to "favorite son"  Skip Jones

Only $1,383,690.34 is left of the loan

 

 

 

September 5, 2016

LASSEN COUNTY'S DECEPTION

TO THE

CONTRACTORS BIDS

 

 

 

 

September 2, 2016

Lassen County's Third

Riverside Building Remodel Bid

Riverside building

 

 

The real costs

to repair and remodel a 20 year old building,

when you failed to inspect

 a building before purchasing

 

This is what is left of the $4,080,000 Lassen County borrowed

on June 5, 2015

LCPIC

 

The original purpose of this loan was:

to purchase the BLM Building on Riverside in Susanville 

 donate a million dollars to the Honey Lake Valley Community Pool

remodel/restore the Riverside building and move four County Departments into it.................

 remodel the former Superior Court Building on Lassen Street in Susanville vacated by the State of California...........

CHAPMAN IS MOVING MONEY FROM THE GENERAL FUND TO PAY FOR HIS ELEVATOR

 

Lassen County could re-think the use of the Administration Building (on Roop) for relocating Public Works, Planning, the Auditor and the Supervisors Board room.

Kan We Help submitted this plan to the Board of Supervisors more than two years ago.   The bottom of the Administration building has been empty since the Court moved.   The Auditor's space (is street level on Roop) would accommodate a Supervisors Board Room (since their offices are right down the hall) and the Auditor could move to the empty space directly below (the existing staircase gives the Auditor access to the floor above)

 

WILL COMMON SENSE PREVAIL

OR

WILL LASSEN COUNTY RUN OUT OF MONEY

AND COMMON SENSE IS FORCED ON THEM ?

 

 

 

 

August 10, 2016

Lassen County Holds a Walk-through

of

2950 Riverside Building

for the

Third RFP

Bids due: September 1, 2016

4:00 PM @ 220 S. Roop Street, Susanville

Contractors showed up for yet another walk-though before they decide whether or not to bid on this project

Contractors continue to have the same concerns;

incomplete plans, questions unanswered and the County's $600,000 Budget

The only bid so far has been $1.4 million which the County rejected

 

Contractors were concerned that the Change Orders alone (for the unknowns) would exceed their original bid and will Lassen County have the money

 

 

Lassen County purchased this building WITHOUT ANY INSPECTIONS

It is there intentions (according to the plans & specifications) to put a few fire extinguishers around the building.

NO MONEY FOR A SPRINKLER SYSTEM

NO MONEY FOR SAFETY

 

 

 

July 27, 2016

 

Lassen County CAO Issues

Third  Request for Proposal

  for the Remodel of the

"WHITE ELEPHANT"

@ 2950 Riverside Property

Prebid Meeting: August 10, 2016 @ 2:00 PM

Bids Due: August 18, 2016 @4:00 PM

 

 

 

July 12, 2016

Lassen County Supervisors Hide

the

$1,433,709 Bid

to Remodel the Riverside Building

in the Consent Calendar

There is less than $1,317,290.64 left of the Certificate of Participation loan

LCPIC

Kan We Help warned the Supervisors

many times about the cost to remodel 2950 Riverside

Purchase Price: $1,300,000 (assessed @ $1,000,000)

Remodel cost: $ 1,433,709 (bid does not include a Fire Protection System)

Purchase Agreement

September 22, 2015 Video Tour

The Supervisors rejected the bid because they don't have the money.

Bid Rejected

 CAO Richard Egan suggests that the work be bid out in piece work and the County will be the General Contractor. The problem with this is Lassen County does not have ANY PERSONNEL WITH THE SKILLS TO DO THIS.  Also, Egan believes that it will be harder to track the money they spend.

GUARANTEED:

this decision will end up costing the taxpayers double and will delay occupancy until 2017. 

 

 

Supervisor Chapman continued to push for his elevator which wasted 133,000 of this loan.

 

 

 

 

June 22, 2016

Lassen County Receives One Bid

on

Riverside  Remodel

$1,433,709

There is $1,317,290.64 left

of the LCPIC loan

AS WE HAVE SAID MANY TIMES,

THERE IS NO MONEY

FOR CHAPMAN'S ELEVATOR

$4,080,000 loan

 

 

 

 

June 7, 2016

LASSEN COUNTY POSTS

NOTICE TO BIDDERS

ON

THE REMODEL OF THE RIVERSIDE BUILDING

 

 

Public Bid Opening on

Thursday, June 16, 2016

4:00 PM

Administration Building

221 South Roop Street

 

 

 

February 18, 2016

UNCERTAINTY LOOMS

OVER

LASSEN COUNTY'S RIVERSIDE PROPERTY

After six months of studying "space needs" and $37,335 later, the County is no closer to moving four County departments into the old BLM building at 2950 Riverside, Susanville.

The Supervisors told the public that this building could be purchased and remodeled for  $1.7 million. However the County paid more than the property was worth and the improvements that need to be made have far exceeded the original estimates.

The County has $1.3 million left of the Certificate of Participation loan 

LCPIC

MOST OF THE $1.3 MILLION WILL BE USED TO FIX THIS BUILDING........MAYBE ?

 

February 9, 2016

CAO Egan tells the Board that it is uncertain when the Riverside property will be occupied

Budget adjustments ,for the four departments that will occupy the old BLM building,    [ at 2950 Riverside Drive in Susanville] are being delayed due to the uncertainty of the move.

 

 

November 10, 2015

Lassen County's

CAO Egan, Tony Shaw & Public Works Peter Heimbigner

May have not fully disclosed condition of the

County's newly acquired BLM Building

OCCUPANTS AT RISK

NO SPRINKLER SYSTEM FOR FIRE

NO FIRE ALARM AT ALL........

Lassen County paid for an Appraisal and an Architectural Review

prior to the purchase

 

The Architect's report places a comment about

"fire alarm system" under "LOW VOLTAGE"

NO FIRE ALARM SYSTEM THROUGHOUT THE BUILDING

September 22, 2015 Video Tour of old BLM Building

THE "PLANNED" OCCUPANTS MAY HAVE A DIFFERENT OPINION

 

 

 

May 1, 2015

Lassen County Supervisors

$90,000 Exploration of  Borrowing $4 million dollars

for Pet Projects

May Have Hit a Huge Snag

 

Lassen County CAO Richard Egan  hesitant and rambling

about "the use" of the $4,000,000 loan

 

 

Supervisors year after year have had the "cash" to finish capital projects but have failed year after year on promises to County Departments

Decaying Jail Building

Decaying Health and Human Services buildings

Decaying Cemeteries

Decaying infrastructures in the County

Decaying Animal Control Shelter

 

Supervisors have yet to take a VOTE on borrowing $4,000,000

They must first look at the "Surplus" each year in the Budget and start looking at finishing projects

that effect the everyday lives of the citizens of Lassen County.

 

 

April 28, 2015

 

COUNTY COUNSEL HIRES LAW FIRM TO WRITE LEGAL DOCUMENTS FOR LOAN

County Counsel Robert Burns hired the law firm of Meyer/Nave ,

BEFORE PLACING IT ON ANY AGENDA FOR APPROVAL

 BY HIS

"SUPERIORS

This legal contract appears in the April 28, 2015 [ G-3 in the "Consent Calendar"] Board of Supervisors Agenda.  Typically, the Supervisors sneak items in the Consent Calendar and try to approve all with one sweeping vote. This unethical practice is not unique with this Board.

Lassen County paid Meyers/Nave $26,000 to prepare Lease/Purchase documents

 

 

April 22, 2015

Lassen County Hires

Government Financial Strategies, Inc.

...but was not exactly honest

 with their intent.....

Lori Raineri, of GFS, Inc., presented a borrowing  "plan"

at the Board of Supervisors meeting on April 21, 2015

LEASE/PURCHASE FINANCING THROUGH THE 1998 LASSEN COUNTY PUBLIC IMPROVEMENT CORPORATION

 

As of 2011, Lassen County is a "debt free" County and has had a comfortable $4,000,000 surplus for several years now.

The recently hired Deputy CAO Tony Shaw [a Ukiah resident] brought an old concept to the Board of Supervisors to find a revenue source for the construction costs of a community pool, remodel the old Courthouse (a Jim Chapman pet project) and to purchase the recently vacated BLM building in Susanville.

THE CONCEPT:

USE THE OLD SHELL CORPORATION LCPIC AND CREATE A "LEASE/PURCHASE AGREEMENT" TO FUND THE PURCHASE OF THE BLM BUILDING

 

 

December 19, 2014

 

 

LASSEN COUNTY SUPERVISORS GIVE

CAO DIRECTION TO LOOK INTO A

 

$4,000,000

"CERTIFICATE OF PARTICIPATION"

Problem: they cannot do this because the County does not own the pool property or the BLM property !

The Lassen County CAO wants to use the COP as a financing tool for Capital Improvement Projects,

 projects that presently do not exist