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Supervisors OK $75 million bond sale to purchase Press Enterprise building, remodel Public Defender's office

Tuesday, May 14th, 2013
Issue 20, Volume 17.

RIVERSIDE - Putting aside concerns about taking on more debt, Riverside County supervisors today authorized the sale of up to $75 million in bonds to finance the purchase of the Press-Enterprise newspaper headquarters and pay for improvements to a county-owned property where the Office of the Public Defender will be located.

"I think, in general, this is a good deal for the citizens of Riverside County," Board of Supervisors Chairman John Benoit said after hearing a brief report from the Executive Office about the advantages of debt-financing the two projects.

Supervisor Kevin Jeffries initially questioned the wisdom of the county expanding its long-term indebtedness before joining his colleagues in a 4-0 vote to support the plan.

"I'm a little concerned about why we're going with this," Jeffries said. "It doesn't spell out the savings or justify how we're going to come out ahead."

CEO Jay Orr and other Executive Office administrators explained that the county was facing increasing rents at two Riverside facilities that house the Department of Information Technology's operations.

"The payments we're making now are not toward ownership positions," Economic Development Agency Director Rob Field told the board.

The lease payments total around $2 million a year, he said.

The IT department is in the process of a sweeping consolidation that entails taking over computer networking functions spread among a variety of county agencies. The county is seeking to locate the IT data center under one roof. In this case, the Press-Enterprise newspaper building at 3450 14th St. in Riverside was selected as the best, most affordable location.

A.H. Belo Corp., which owns the PE, announced last month that it was selling the five-story 150,000-square-foot complex to the county for $30 million. The newspaper, which has undergone staff reductions due to financial issues, began occupancy of the building in 2007. The paper will be moved to a smaller facility within the city, Advertisement
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likely before year's end, according to A.H. Belo.

Under the board-authorized debt issuance, the county will sell lease- revenue bonds to cover the building acquisition and renovation. The same issuance -- capped at $75 million but expected to be closer to $65 million -- will cover costs associated with remodeling and upgrading the former District Attorney's Office headquarters at 4075 Main St., just across from the Riverside Historic Courthouse.

The Office of Public Defender and several units within the Department of Probation are going to be anchored in the eight-story complex, which has been vacant since D.A.'s personnel moved into a modern office building around the corner on Orange Street in 2010.

Inspections of the Main Street building revealed numerous problems, including the need for a seismic retrofit, a new roof and a new elevator system.

The county IOUs, which still await letter grades from bond rating agencies Standard & Poor's and Fitch, will be sold in $5,000 denominations or greater, with interest rates not to exceed 6 percent and a maximum maturity of 30 years, according to Executive Office documents.

In addition to general fund revenue, internal fees generated by the beneficiary agencies will be used to cover the semi-annual debt service obligations, documents indicated.

Temecula resident Paul Jacobs, a self-described member of the "Government-Spends-Enough-Already" party, criticized the bond sale.

"The county of Riverside is letting the PE unload their building onto taxpayers," Jacobs said. "Was this building listed on the open market, or was this more of an insider deal? How is such a large space for the IT department justified? These expenditures seem to be spur of the moment."

Benoit said the county was making the right move for the long haul and regretted the "bad situation" that precipitated the newspaper's decision to sell its downtown asset.

"Obviously, they had a different objective in mind originally," the chairman said.



Comment Profile Imageanonomous
Comment #1 | Friday, May 17, 2013 at 12:07 pm
It would appear that the Executive Office and CIO have attempted to pull a proverbial Ďfast oneí on the Board and are in the process of moving technology in the County into a direction which may, on the surface, appear to be a cost-saving measure. This direction will ultimately be another costly error that would be devastating to departments that have unique and/or special systems that require unique and/or specialized skill sets that were stated so eloquently by your Auditor Controller. Donít be fooled by a one-size-fit-all philosophy.

It is very disheartening to watch and listen to Information Technology discussions at the Board of Supervisorsí meetings as the CEO and CIO incessantly conjure radical notions for so-called IT improvements and cost-savings for the County. This will ultimately result in excessive unforeseen expenditures in Information Technology, especially considering that the Countyís Executive Management chose not to do a Business Requirement Analysis prior to heading into this direction. This concept is outdated and puts County departments at risk as it poses a considerable threat to information resources and technology investments across the County.

The primary goal for information technology is to support the business objectives of local government and facilitate departmental efforts to provide efficient and effective services to citizens, businesses, and visitors. Information technology has become a strategic partner in governmental efforts to provide high-quality, consistent, and equitable services.
Cities and counties use technology to improve service delivery, enhance efficiency, and increase transparency and accountability. The citizen and business demand for electronic access to building permits, dog licenses, birth certificates, and the like has heightened the need for investing in information technology.
Technology leadership should be driven by a Technology steering committee comprised of technology department heads. Members must have an up-to-date and thorough knowledge of technology, business management and trends. They must be prepared to include the development and continued evolution of an ongoing technology strategy, and the cost-effective means for achieving this strategy.
One of the first efforts of the steering committee should be to identify and establish areas for collaboration. Considerations to explore include funding sources, regulatory and statutory issues, data security requirements, essential and non-essential information storage, support, cost effectiveness, efficiency, hardware standards and infrastructure, and software standards, to name a few. This is not a short-term project, by any stretch. Rather, it will take months to formulate criteria and gather the required information.
The current IT committees and workgroups have been obviously formulated to create improper advantage for Riverside County IT, which could ultimately culminate into deception, fraud, or coercion.
Critics of public-sector IT leadership have said that CIOs need to get out of the proverbial boiler room and replace some of their technological mindset with business savvy. Thatís an important issue because never before have local governments been under so much pressure to quickly streamline and adapt to a new fiscal reality. Technology can help organizations adjust to new business models. But in order for local government to embrace the full benefits of a new technology, it takes someone to manage the necessary change who is both a technocrat and management guru.
The current IT structure and strategic plan follows an illogical methodology and fails to include even basic and truthful foundational information. The most important event in developing a strategic plan is to complete a thorough Business Requirements Analysis. In Riverside Countyís case they are doing the Requirement Analysis after or during departmental assessment, a process never used by IT consultants or IT professionals.
The IT convergence and consolidation is riddled with boldly apparent negative aspects of the project and it is an ill-advised journey which will ultimately incur additional unforeseen costs. Executive Managementís failure to perform the most basic and fundamental process of conducting a requirements analysis and eliciting input from other IT professionals within the agencies of the County, as well as 3rd party objective opinions before beginning a project of this magnitude places all County Departments at serious risk.

Article Comments are contributed by our readers, and do not necessarily reflect the views of The Valley News staff. The name listed as the author for comments cannot be verified; Comment authors are not guaranteed to be who they claim they are.


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