County of Los Angeles CHIEF EXECUTIVE OFFICE...

DATE: February 12, 2020 TIME: 2:00 p.m. – 4:00 p.m. LOCATION: Kenneth Hahn Hall of Administration, Room 830

AGENDA

Members of the Public may address the Operations Cluster on any agenda item by submitting a written request prior to the meeting.

Two (2) minutes are allowed for each item.

1. Call to order – Rick Velasquez/Gevork Simdjian

2. INFORMATIONAL ITEM(S):(5 minutes)

A) Board Letter:MOU AND SECURITY AGREEMENT WITH CALIFORNIA HIGHWAYPATROL FOR UNINCORPORATED COMMUNITIES TRAFFIC COLLISIONDPW – Mark Pestrella, Director or designee

B) Board Memo:NOTIFICATION OF INTENT OF SOLE SOURCE EXTENSION ON PRINTOPTIMIZATION AND RELATED SERVICES CONTRACT #77909 WITHXEROX CORPORATIONISD – Christie Carr, Division Manager

C) Board Memo:NOTIFICATION OF INTENT TO ENTER INTO SOLE SOURCENEGOTATIONS AND EXTEND CONTRACT 76501 WITH AT&T GLOBALSERVICES FOR TELECOMMUNICATIONS SERVICESISD – Christie Carr, Division Manager

D) Board Letter:ISSUANCE AND SALE OF THE CALIFORNIA COUNTY TOBACCOSECURITIZATION AGENCY TOBACCO SETTLEMENT BONDSTTC – Keith Knox, Treasurer and Tax Collector andDaniel Wiles, Assistant Treasurer and Tax Collector

SACHI A. HAMAIChief Executive Officer

County of Los Angeles CHIEF EXECUTIVE OFFICE

OPERATIONS CLUSTER

CONTINUED ON PAGE 2

Page 2 of 2

E) Board Letter: EIGHT YEAR LEASE DEPARTMENT OF MENTAL HEALTH – 4510 E. PACIFIC COAST HIGHWAY, LONG BEACH CEO RE – Michael Navarro, Chief Program Specialist

F) Board Letter: EIGHT-YEAR LEASES DEPARTMENT OF HEALTH SERVICES AUDITOR-CONTROLLER – 350 SOUTH FIGUEROA STREET, LOS ANGELES CEO RE – Michael Navarro, Chief Program Specialist

G) Board Letter: FIVE-YEAR LEASES DEPARTMENT OF PUBLIC SOCIAL SERVICES AND DEPARTMENT OF PUBLIC HEALTH – 9800 LA CIENEGA BOULEVARD, INGLEWOOD CEO RE – Michael Navarro, Chief Program Specialist

3. PRESENTATION/DISCUSSION ITEMS:

None available.

4. Public Comment (2 minutes each speaker)

5. Adjournment

FUTURE AGENDA TOPICS

CALENDAR LOOKAHEAD: (5 minutes)

Board Letter: DELEGATION OF AUTHORITY TO INVEST AND ANNUAL ADOPTION OF THE TREASURER AND TAX COLLECTOR INVESTMENT POLICY

Board Letter: REQUEST AUTHORITY TO AWARD AND EXECUTE THREE MASTER AGREEMENTS FOR MANAGED PRINT SERVICES AND AMEND CONTRACT WITH XEROX CORPORATION

CLOSED SESSION: CONFERENCE WITH LEGAL COUNSEL – Anticipated Litigation (subdivision (d) of Government Code Section 54956.9) (1 case)

BOARD LETTER/MEMO – FACT SHEET OPERATIONS CLUSTER

OPS CLUSTER AGENDA REVIEW DATE

2/12/2020

BOARD MEETING 3/3/2020

SUPERVISORIAL DISTRICT AFFECTED

All

DEPARTMENT Public Works

SUBJECT Master Memorandum of Understanding/Agreement (MMOU/A) and Interconnection Security Agreement between Los Angeles County and the California Highway Patrol (CHP)

PROGRAM Transportation Planning and Programs Division – Vision Zero-Complete Streets Section

SOLE SOURCE CONTRACT

Yes No If Yes, please explain why:

DEADLINES/ TIME CONSTRAINTS

None

COST & FUNDING Total cost: $0

Funding source: N/A

TERMS (if applicable): The MMOU/A will be in effect for 5 years from the date on the signed MMOU/A document. The Interconnection Security Agreement will be issued every 3 years or whenever any significant changes have been made to any of the interconnected systems. Explanation: There will be no fiscal impact to the County General Fund and no negative impact on current County services or projects. Both parties agree to incur any hardware/software/service costs necessary within their respective organization to establish and maintain a secure web service interconnection.

PURPOSE OF REQUEST

To continue receiving traffic collision data electronically directly from the CHP headquarters in Sacramento.

BACKGROUND (include internal/external issues that may exist)

The CHP provides traffic enforcement services and responds to traffic collisions on unincorporated County roadways. When a collision occurs, the CHP completes a Traffic Collision Report (TCR). Currently, Public Works receives TCRs directly from each of the nine CHP offices that serve the unincorporated communities. On August 17, 2017, the CHP requested Public Works to enter into an MMOU/A and Interconnection Security Agreement between Los Angeles County and the CHP, which would allow Public Works to electronically receive traffic collision data from CHP Headquarters in Sacramento in preference of the CHP area offices (All Districts). The new process will enhance the efficiency and reliability of receiving traffic collision data. These TCRs are used to assist in recommending traffic safety enhancements on unincorporated County roadways.

DEPARTMENTAL AND OTHER CONTACTS

Name, Title, Phone # & Email: • Elaine Kunitake, Principal Engineer, (626) 458-3922, [email protected] • Matthew Dubiel, Senior Civil Engineer, (626) 300-4795, [email protected]

mailto:[email protected]




The Honorable Board of Supervisors March 4, 2020 Page 1

H:\TSMHOME\BDL\VZ\2019\CHP MOU\CHP MOU BDL.DOCX

March 4, 2020 The Honorable Board of Supervisors County of Los Angeles 383 Kenneth Hahn Hall of Administration 500 West Temple Street Los Angeles, California 90012 Dear Supervisors:

TRANSPORTATION CORE SERVICE AREA APPROVE THE MASTER MEMORANDUM OF UNDERSTANDING/AGREEMENT

AND INTERCONNECTION SECURITY AGREEMENT BETWEEN LOS ANGELES COUNTY AND THE CALIFORNIA HIGHWAY PATROL

(ALL SUPERVISORIAL DISTRICTS) (3 VOTES)

CIO RECOMMENDATION: APPROVE (X)

SUBJECT Public Works is seeking Board approval to authorize the Director of Public Works or his designee to execute a Master Memorandum of Understanding/Agreement and Interconnection Security Agreement between Los Angeles County and the California Highway Patrol to electronically receive traffic collision data for unincorporated County roadways. IT IS RECOMMENDED THAT THE BOARD:

1. Find this Master Memorandum of Understanding/Agreement and Interconnection Security Agreement are not a project under the provisions of the California Environmental Quality Act.

2. Approve and authorize the Director of Public Works or his designee to execute a Master Memorandum of Understanding/Agreement and Interconnection Security Agreement with the California Highway Patrol to electronically receive traffic collision data for unincorporated County roadways.

PURPOSE/JUSTIFICATION OF RECOMMENDED ACTION

The purpose of the recommended action is to execute a Master Memorandum of Understanding/Agreement (MMOU/A) and Interconnection Security Agreement (ISA) with the California Highway Patrol (CHP) for Los Angeles County Public Works to electronically receive traffic collision data from the CHP. Under the MMOU/A, Public Works will receive traffic collision data from a secure server made available by the CHP. The data will assist Public Works in analyzing collision data and developing strategies to reduce traffic-related injuries and fatalities. Implementation of Strategic Plan Goals The County Strategic Plan directs the provision of Strategy lIl.2.1, Enhance Information Technology Platforms to Securely Share and Exchange Data. Receiving traffic collision data electronically from CHP will expedite the transfer and improve the quality and reliability of the data. FISCAL IMPACT/FINANCING There will be no impact to the County General Fund. FACTS AND PROVISIONS/LEGAL REQUIREMENTS The CHP provides traffic enforcement services and responds to traffic collisions on unincorporated County roadways. When a collision occurs, the CHP completes a Traffic Collision Report. Currently, Public Works receives traffic collision reports directly from each of the nine CHP area offices that serve the County unincorporated communities. The CHP, in its capacity as the custodian of Traffic Collision Reports for County unincorporated communities, requested Public Works to enter into an agreement with CHP, which would allow Public Works to receive traffic collision data from CHP headquarters in Sacramento in preference of the CHP area offices. The new process will enhance the efficiency and reliability of receiving traffic collision data. The MMOU/A establishes a management agreement between CHP and Los Angeles County Public Works regarding the development, management, operation, and security of interconnections to electronically exchange data between the CHP and County. The MMOU/A will be in effect for 5 years from the date on the signed MMOU/A document. The ISA will be issued every 3 years or whenever any significant changes have been made to any of the interconnected systems. The MMOU/A and ISA have been reviewed and approved as to form by County Counsel. The MMOU/A and ISA are not enclosed since they contain confidential information and are exempt from public release under the Freedom of Information Act (5 U.S.C. 552).

The Chief Information Officer (CIO) has reviewed this request and recommends approval. It determined that the recommended actions do not constitute a technology related action and no formal CIO Analysis is required. Also, the County’s Chief Information Security Officer reviewed the ISA and has no information security concerns. ENVIRONMENTAL DOCUMENTATION The proposed action is not a project pursuant to the California Environmental Quality Act because it is an activity that is excluded from the definition of a project by Section 15378(b) of the California Environmental Quality Act Guidelines. This proposed activity is an administrative activity of government, which will not result in direct or indirect physical changes to the environment. IMPACT ON CURRENT SERVICES (OR PROJECTS) There will be no negative impact on current County services or projects during the performance of the services under the agreement. CONCLUSION Please return one adopted copy of the Board letter to Public Works, Transportation Planning and Programs Division. Respectfully submitted, Reviewed by: MARK PESTRELLA WILLIAM S. KEHOE Director of Public Works Chief Information Officer MP:EKT:la Enclosure cc: Chief Executive Office (Chia-Ann Yen) Chief Information Office County Counsel Executive Office bc: Information Technology – Systems & Applications (Libid)

_____________________________________________________________________________________

_____________________________________________________________________________________

Master Memorandum of Understanding/Agreement

Between

California Highway Patrol Information Management Division Information Technology Section

And

County of Los Angeles

January 28, 2020

- FOR OFFICIAL USE ONLY - MASTER MEMORANDUM OF UNDERSTANDING/AGREEMENT

_____________________________________________________________________________________________

_____________________________________________________________________________________________

- I -

CONTENTS

INTRODUCTION ................................................................................................................................. 1

AUTHORITY ........................................................................................................................................ 1

BACKGROUND .................................................................................................................................... 1

COMMUNICATIONS ............................................................................................................................. 1

- SECURITY INCIDENTS.............................................................................................................. 2

- DISASTERS AND OTHER CONTINGENCIES ................................................................................ 2

- MATERIAL CHANGES TO SYSTEM CONFIGURATION .................................................................. 3

- NEW INTERCONNECTIONS ....................................................................................................... 3

- PERSONNEL CHANGES ............................................................................................................. 3

INTERCONNECTION SECURITY AGREEMENT ........................................................................................ 3

SECURITY .......................................................................................................................................... 4

- DISCLOSURE ........................................................................................................................... 4

- APPROPRIATE USE .................................................................................................................. 4

- LIMITATION OF USE ................................................................................................................ 4

- PRIVACY PROTECTION ............................................................................................................. 5

- INVESTIGATIONS OF MISUSE/SECURITY BREACH ..................................................................... 5

COST CONSIDERATIONS ..................................................................................................................... 5

TIMELINE ........................................................................................................................................... 5


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NIST 800-47 08/2002 P a g e | 1

INTRODUCTION The purpose of this MMOU/A is to establish a management agreement between the California Highway Patrol (CHP) and the County of Los Angeles (COUNTY), regarding the development, management, operation, and security of interconnections to electronically exchange data between the CHP and the COUNTY. This agreement will govern the relationship between the CHP and the COUNTY.

AUTHORITY The governing authority for this agreement is 18 U.S.C. 2721 et seq., (commonly known as the Driver Privacy Protection Act), and other applicable federal laws, as appropriate. The Driver Privacy Protection Act provides for the release of driver information sought by the COUNTY in connection with its review of unincorporated COUNTY roadways to improve traffic safety.

BACKGROUND Los Angeles COUNTY Public Works requires an accurate account of traffic collisions that occur within the unincorporated communities of the COUNTY. The data the COUNTY will receive from the CHP will be entered into the COUNTY’s Traffic Collision database. The COUNTY seeks collision data to analyze the COUNTY roadways for traffic controls/measures. The data may assist Public Works in identifying traffic safety enhancements to reduce future occurrences of collisions, injuries, and deaths on unincorporated COUNTY roadways.

The COUNTY seeks the cooperation of the CHP to participate in the electronic exchange of data as described within an Interconnection Security Agreement (ISA) for each system/dataset the COUNTY has requested from the CHP. The parties enter into this MMOU/A to expedite the processing of data critical to the COUNTY activities in furtherance of motor vehicle and highway safety.

COMMUNICATIONS Frequent formal communications are essential to ensure the successful management and operation of the established interconnections. The parties agree to maintain open lines of communications between designated staff at both the managerial and technical levels.


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_____________________________________________________________________________________________ NIST 800-47 08/2002 P a g e | 2

Critical communications described herein must be conducted in writing unless otherwise noted. The principal contacts for this MMOU/A are as detailed below:

California Highway Patrol County of Los Angeles Chief Scott Howland David MacGregor Chief Information Officer (CIO) Information Management Division

Assistant Deputy Director Public Works Transportation Planning & Programs Division

601 North 7th Street Sacramento, CA 95811

1000 South Fremont Avenue Alhambra, CA 91803

Phone: (916) 843-4000 Phone: (626) 458-3900 e-Mail: [email protected] e-Mail: [email protected]

The system/data owners agree to designate and provide contact information for technical leads for their respective system, and to facilitate direct communication between technical leads to support the management and operation of the interconnection. To safeguard the confidentiality, integrity, and availability of the interconnected systems and the data they store, process, and transmit, the parties agree to provide notice of specific events within the time frames indicated below:

- SECURITY INCIDENTS The parties agree to notify their designated counterparts by telephone or e-mail at the earliest opportunity in the event a security incident has been detected, so the other party may take steps to determine whether its system has been compromised and to take appropriate security precautions. This communication should include a description of the incident and status on containment and/or resolution efforts. The system owner will receive a formal written incident summary within ten (10) business days after the incident has been remediated.

- DISASTERS AND OTHER CONTINGENCIES The parties agree to provide notification to their designated counterparts by telephone or e-mail as they are reasonably able to in the event of a disaster or other contingency which disrupts the normal operation of one or both of the connected systems. This communication should include the cause of the outage and reasonable forecasts pertinent to the restoration of services. The system


_____________________________________________________________________________________________

_____________________________________________________________________________________________ NIST 800-47 08/2002 P a g e | 3

owner will receive formal written event summary within ten (10) business days after restoration of services.

- MATERIAL CHANGES TO SYSTEM CONFIGURATION Planned technical changes to the system architecture that affect the efficacy of the ISA will be reported to technical staff before such changes are implemented. If the change(s) are determined to be significantly different so that the terms of the ISA associated with the MMOU/A are no longer applicable, the initiating party agrees to conduct a risk assessment based on the new system architecture and to modify and re-sign a new ISA within one (1) month of implementation. If planned changes will cause a disruption in service, notification of such shall be made a minimum one (1) week in advance.

- NEW INTERCONNECTIONS Each party agrees to ensure that all information security safeguards are maintained with respect to all data exchanged under this agreement when it connects its Information Technology (IT) system with any other IT system, including systems that are owned and operated by third parties.

- PERSONNEL CHANGES Both parties shall allocate the appropriate human resources to ensure the continual function of the interconnection that is the subject of this MMOU/A, irrespective of changes in personnel. Each party agrees to provide the other with notification of any changes in point of contact information.

INTERCONNECTION SECURITY AGREEMENT The technical details of interconnections will be documented in an ISA. Both parties agree to work together to develop the ISAs, which must be signed by both parties before the interconnection is activated. Proposed changes to either the system or the interconnection medium will be reviewed and evaluated to determine the potential impact on the interconnection. If change(s) are determined to be significantly different so that the terms of the ISA are no longer applicable, the ISAs will be modified and re-signed within one (1) month of the implementation. Signatories to the ISAs shall be the designated approving authority (DAA), or other authorizing management official, of each organization for each system.


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_____________________________________________________________________________________________ NIST 800-47 08/2002 P a g e | 4

SECURITY Both parties agree to work together to ensure the joint security of the interconnected systems and the data they store, process, and transmit, as specified in the ISA. Each party certifies that its respective system is designed, managed, and operated in compliance with all relevant federal and state laws, regulation, and policies pertaining to such systems.

- DISCLOSURE The COUNTY agrees not to re-disclose any information in records provided by the CHP which identifies or can be used to identify an individual person except for the same statutory use for which it was received. This may include, but not limited to a person’s name, date of birth, telephone number, social security number, driver’s license number, medical or health information, vehicle identification sequence number (positions 13-17), death certificate number, their photograph, or address (other than the county and five digit zip code).

Any personal information contained in the Traffic Collision reports is private and exempt from disclosure under the Freedom of Information Act (FOIA). No such information will be disclosed except as required by federal law or by order of a court of competent jurisdiction.

- APPROPRIATE USE Except in furtherance of a COUNTY activity under chapter 301 of title 49 of the United States Code or chapter 4 of title 23 of the United States Code, the COUNTY agrees not to use personal information in records provided by the CHP to contact or distribute bulk surveys, marketing, solicitations or for other purposes, unless the person whose information is used has provided express written consent for such disclosure.

- LIMITATION OF USE The COUNTY agrees not to provide any information obtained from CHP records pursuant to this MMOU/A to any other person without entering into an agreement including disclosure, appropriate use and limitation of use identified herein, except in furtherance of COUNTY activities under chapter 301 of title 49 of the United States Code or chapter 4 of title 23 of the United States Code or as required by Federal Law.


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_____________________________________________________________________________________________ NIST 800-47 08/2002 P a g e | 5

- PRIVACY PROTECTION The COUNTY agrees to ensure that its personnel are familiar with the provisions of the Driver Privacy Protection Act and adhere to Federal laws and policies which protect personal identifying information in government records and systems, including the Privacy Act of 1974.

- INVESTIGATIONS OF MISUSE/SECURITY BREACH The COUNTY agrees to promptly investigate any alleged misuse of CHP data or related security breach, and to cooperate reasonably with CHP personnel in connection with any alleged breaches involving its data.

The COUNTY agrees to respond to all of CHP’s requests designed to ensure that the COUNTY is adhering to the use and access limitations set forth in this agreement. The COUNTY’s response shall be in writing and provided within ten (10) business days of The COUNTY’s receipt of the request.

COST CONSIDERATIONS Unless otherwise specified in an ISA, datasets will be provided via web service. Both parties agree to incur any hardware/software/service costs necessary within their respective organization to establish and maintain a secure web service interconnection. Modifications to any system which are necessary to support an established interconnection are the responsibility of the respective system owner’s organization.

TIMELINE This agreement will remain in effect for five (5) years after the last date on either signature in the signature block below. After five (5) years, this agreement will expire without further action.

If the parties wish to extend this agreement, they may do so by reviewing, updating, and reauthorizing this agreement. The newly signed agreement should explicitly supersede this agreement, which should be referenced by title and date.

If one or both of the parties wish to terminate this agreement, they may do so at any time upon written 30-day advanced notice or immediately in the event of a security incident that necessitates a rapid response.


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_____________________________________________________________________________________________ NIST 800-47 08/2002 P a g e | 6

SIGNATORY AUTHORITY

The signatories below attest to having signing authority for the entities they represent and agree to the terms of this MMOU/A. By signing this MMOU/A, The COUNTY is not consenting, on behalf of the Federal Government, its employees or its agents, to be subject to the jurisdiction of any judicial or administrative body in the State of California. Authorized Signatory on behalf of California Highway Patrol Official

Authorized Signatory on behalf of County of Los Angeles

Signature Date Signature Date Scott R. Howland, Chief Information Management Division California Highway Patrol

Phil Doudar, Deputy Director Public Works Los Angeles County APPROVED AS TO FORM MARY C. WICKHAM County Counsel By:

Deputy Date

CONFIDENTIAL – EXEMPT (Government Code § 6254.19) FOR OFFICIAL USE ONLY

ISA between CHP California Collision Reporting System and

Los Angeles County Public Works

Information Technology Systems & Applications Traffic Collisions Database (TCD)

California Highway Patrol

Interconnection Security Agreement between

Organization A Organization B

California Highway Patrol Information Management Division Information Technology Section

Los Angeles County, Public Works

Information Technology Systems & Applications

System A System B

California Collision Reporting System (CCRS) Traffic Collision Database (TCD)

January 28, 2020

WARNING: This document is FOR OFFICIAL USE ONLY (FOUO). It contains information that may be exempt from public release under the Freedom of Information Act (5 U.S.C. 552). It is to be controlled, stored, handled, transmitted, distributed, and disposed of in accordance with federal, state, and/or local policy relating to FOUO information and is not to be released to the public or other personnel who do not have a valid “need-to-know” without prior approval of the California Highway Patrol and the County of Los Angeles.


ISA between CHP California Collision Reporting System] and

County of Los Angeles Public Works

Information Technology Systems & Applications Traffic Collision Database (TCD) _____________________________________________________________________________________________________________________

Ver. [1]Jan. 28, 20 ii

CONTENTS

1.0 PURPOSE .............................................................................................................................................. 1

Security Network Connectivity Policy.................................................................................................... 1

ISA Requirements for Types of System Interconnections ................................................................. 2

Scope ......................................................................................................................................................... 2

Point of Contact ........................................................................................................................................ 3

2.0 INTERCONNECTION JUSTIFICATION .............................................................................................. 4

3.0 SECURITY CONSIDERATIONS .......................................................................................................... 4

General Information/Data Description .................................................................................................. 4

ISA Requirements Within and Across Organizational Boundaries ................................................... 5

Physical Security and Environmental Controls .................................................................................... 5

Data Sensitivity/System Classification .................................................................................................. 5

Required and Restricted Services/Equipment ..................................................................................... 6

Period of Operation ................................................................................................................................. 6

User Community ...................................................................................................................................... 6

Information Exchange Security .............................................................................................................. 6

Trusted Behavior/Rules of Behavior ..................................................................................................... 7

Formal Security Policy ............................................................................................................................ 7

Incident Reporting .................................................................................................................................... 8

System Monitoring ................................................................................................................................... 8

Security Audit Trail ................................................................................................................................... 9

Remote Connectivity ............................................................................................................................... 9

Training and Awareness ......................................................................................................................... 9

Security Documentation .......................................................................................................................... 9

Change Control ...................................................................................................................................... 10

4.0 TOPOLOGICAL DRAWING ............................................................................................................... 10

Recommended Contents ...................................................................................................................... 10

Location of Drawings ............................................................................................................................. 10

5.0 SIGNATORY AUTHORITY ................................................................................................................. 12

6.0 SIGNATURES ...................................................................................................................................... 12


ISA between CHP California Collision Reporting System] and


Information Technology Systems & Applications Traffic Collision Database (TCD) _____________________________________________________________________________________________________________________

Ver. [1]Jan. 28, 20 iii

APPENDIX A .............................................................................................................................................. 13

APPENDIX B .............................................................................................................................................. 14

APPENDIX C .............................................................................................................................................. 15




Information Technology Systems & Applications Traffic Collision Database (TCD)

Ver. [1] Jan. 28, 20 B-1

FOR OFFICIAL USE ONLY

1.0 PURPOSE Interconnection Security Agreements (ISA) are required by federal, state, local, and/or departmental policy and establishes individual and organizational security responsibilities for the protection and handling of data provided from the California Highway Patrol, hereinafter CHP, and the County of Los Angeles, hereinafter COUNTY. Any specific requirements of both signatory organizations are also included.

Security Network Connectivity Policy Each organization shall adhere to the National Institute of Standards and Technology (NIST) Special Publications (SP) listed below and detailed within this ISA.

- NIST SP 800-53, Security and Privacy Controls for Federal Information Systems, provides guidelines for selecting and specifying security controls for information systems supporting the executive agencies of the federal government. The guidelines apply to all components of information systems that process, store, or transmit data in this ISA.

- NIST SP 800-47, Security Guide for Interconnecting Information Technology Systems, provides guidance in preparing and establishing connectivity between networks.

- NIST SP 800-41, Guidelines on Firewalls and Firewall Policy, provides practical guidance on developing firewall policies and selecting, configuring, testing, deploying, and managing firewalls.

- NIST SP 800-123, Guide to General Server Security, provides guidance in securing and maintaining the security of servers which provide services over network communications as a main function.

a. Each organization shall ensure appropriate identification and authentication controls, audit logging, and access controls are implemented on every network component.

b. Each organization shall ensure interconnections between their respective organization and non-organization information systems shall be established only through controlled interfaces and via approved service providers. The controlled interfaces shall be accredited at the highest security level of information on the network. Connections with other organizations shall be documented based on interagency agreements, memoranda of understanding, service level agreements and/or ISAs signed by the appropriate authorizing official (AO) and the Chief Information Officer (CIO). The CIO shall approve all ISAs between organization and non-organization information systems with an ISA including component interconnection documents for





Ver. [1] Jan. 28, 20 B-2


each connection. The CIO shall ensure that connections with other entities are properly documented.

c. Either organization may complete a Master Memorandum of Understanding/Agreement (MMOU/A). Each associated interconnection to a MMOU/A shall be required to have a separate ISA. A single ISA may be used for multiple connections provided that the security accreditation is the same for all connections covered by that ISA.

d. Interconnections between organizations shall require a new or revised ISA whenever there is a difference in the security categorizations for confidentiality, integrity, and availability between the systems.

e. The appropriate Change Control Board shall ensure that documentation associated with an approved change to an information system is updated to reflect the appropriate baseline.

f. The ISAs shall be reissued every three (3) years or whenever any significant changes have been made to any of the interconnected systems.

g. The ISAs shall be reviewed and updated, as needed, as a part of the annual self-assessment.

ISA Requirements for Types of System Interconnections System interconnections may be characterized as either direct or networked. Direct connections are single purpose point-to-point connections that support only the two connected systems. Directly connected systems do not rely on another network for their connectivity or security and are physically and electronically isolated from other networks and systems. Networked systems1 connect via an intervening network that exists as a general support system, not a single-purpose connection. Systems that are connected via an encrypted tunnel are considered networked systems. The interconnection between the CHP CCRS and the COUNTY TCD is a network connection over the internet.

Scope This ISA addresses the interconnection of the CHP CCRS and the COUNTY’s TCD. Additionally, this ISA covers application and/or control data traversing the networks.

1 For networked United States (U.S.) Government systems, the ISA must include the owner and AO of the network as well as the owners of the applicable systems.





Ver. [1] Jan. 28, 20 B-3


Point of Contact For all issues associated with this agreement, the established points of contact (POC) are as follows: POC Role California Highway Patrol County of Los Angeles AO/CIO Chief Scott Howland

Information Management Division (916) 843-4001 [email protected]

Jesse Juarros Departmental Chief Information Officer Chief Information Office Public Works 626-458-4117 [email protected]

System Owner

Jay Song Commander Information Technology Section (ITS) (916) 843-4100 [email protected]

David MacGregor Assistant Deputy Director Transportation Planning & Programs Division Public Works 626-458-3900 [email protected]

Program Manager

Kimberly Holder Information Technology Supervisor II Application Services Group (916) 843-4100 [email protected]

Matthew Dubiel Senior Civil Engineer Transportation Planning & Programs Division Public Works 626-300-4731 [email protected]

ISO Pam Greeley Information Management Division Desk (916) 843-4012 Cell (916) 208-9412 [email protected]

Paul Lam Departmental Information Security Officer Chief Information Office Public Works 626-458-5929 [email protected]





Ver. [1] Jan. 28, 20 B-4


ISSM Mike Mason Information Technology Section (916) 843-4133 [email protected]


Security Incident Reporting

ISO, Pam Greeley (above) or 24/7 Emergency Notification & Tactical Alert Center (916) 843-4199 [email protected]


AO = Authorizing Official, CIO = Chief Information Officer, ISO = Information Security Officer, ISSM = Information Systems Security Manager

2.0 INTERCONNECTION JUSTIFICATION The requirements for an interconnection between two systems is for the express purpose of exchanging collision-related data between the CHP CCRS owned and operated by CHP, and COUNTY TCD owned by COUNTY. The COUNTY TCD requires the use of the CHP CCRS as a transport system for wide area network services and interconnectivity to the CHP infrastructure. The expected benefit is to expedite the transfer and processing of data between organizations. The CHP CCRS is a data exchange used to provide access to records collected by the CHP.

3.0 SECURITY CONSIDERATIONS This section describes the security mechanisms in place to secure the connections between both systems. It outlines the security considerations and which organization is responsible for each. In some cases, both organizations will share the security responsibility.

General Information/Data Description The purpose of the interconnection between the CHP CCRS and the COUNTY’s TCD is to provide collision information along unincorporated Los Angeles County roadways to COUNTY.





Ver. [1] Jan. 28, 20 B-5


ISA Requirements Within and Across Organizational Boundaries Information Technology (IT) equipment within the boundary of the CHP network hosting the CHP CCRS is owned, operated, and maintained by CHP contracted services or state employees. All CHP IT equipment interconnected with the COUNTY’s TCD will be hardened and managed in accordance to NIST SP 800-41, 800-53, and 800-123 or by specific waivers to hardening guidelines requested, documented, and approved by the appropriate ISO and/or ISSM. All IT equipment within the boundary of the COUNTY network hosting TCD is owned, operated, and maintained by COUNTY contracted services or government employees. All COUNTY’s TCD IT equipment interconnected with the CHP CCRS will be hardened and managed in accordance to NIST SP 800-41, 800-53, and 800-123. The CHP and the COUNTY shall protect the data in order to maintain confidentiality, integrity, and availability of the data and information systems. The data and information systems will be protected in accordance with NIST SP 800-53 assigned minimum security controls, and Federal Information Processing Standard (FIPS) Publication 199, Security Categorization, of both systems to ensure that the connection will be protected to the requirements of the higher categorized system.

Physical Security and Environmental Controls Physical security, at a minimum, will be governed by NIST SP 800-53 controls established in the Physical and Environmental Protection control family. Both organizations shall provide physical security and system environmental safeguards adequate to provide protection of the system components. Components and connections to both systems shall reside within an environmentally controlled secure data center with restricted and monitored personnel access at each respective location.

Data Sensitivity/System Classification The highest level of data that traverses the CHP CCRS is Sensitive but Unclassified (SBU). This may include, but is not limited to, Sensitive Personally Identifiable Information, For Official Use Only, financial, and/or Law Enforcement Sensitive data. The FIPS 199 system classification; Confidentiality=Low, Integrity=Low, and Availability=Low. The highest level of data that traverses the COUNTY’s TCD is SBU. This may include, but is not limited to, Sensitive Personally Identifiable Information, For Official Use Only, financial, and/or Law Enforcement Sensitive data. The FIPS 199 system classification; Confidentiality=Low, Integrity=Low, and Availability=Low.





Ver. [1] Jan. 28, 20 B-6


Required and Restricted Services/Equipment The interconnection between the CHP CCRS and the COUNTY’s TCD are supported by Windows Communication Foundation services through the internet. Services and ports required to access the systems, as well as restricted services/equipment, shall be placed in an appendix to be easily updated when needed without impacting the primary document. Any additional interconnections to either system shall be documented in the appropriate security documentation and each party shall be notified of the new interconnections.

Period of Operation The CHP CCRS will be operational 24-hours a day, 5-days a week excluding holidays. In the event of failure, CHP agrees to restore services within 72-hours.

User Community The user community is comprised of CHP and COUNTY employees and contract employees. Additionally, other users may include employees or contract employees of other organizations. All users of both systems will have appropriately adjudicated suitability background investigations and will be U.S. citizens. If non-U.S. citizens have access to either system, appropriate exceptions will be documented in accordance with either or both organization’s policy.

Information Exchange Security Information exchange will be encrypted web protocols using Transport Layer Security (TLS) 1.2 with Advanced Encryption Standard AES 256 as the minimum standard encryption algorithm signed by a public signing authority. The CHP maintains the following Intrusion Detection Service/Intrusion Prevention Service (IDS/IPS) and firewalls on the CCRS Data Exchange:

- IDS/IPS: CheckPoint

- Data Firewalls: Cisco ASA The COUNTY maintains the following IDS/IPS and firewalls on the TCD:

- IDS/IPS: Palo Alto IPS

- Data Firewalls: Palo Alto Both organizations will ensure that virus and spyware detection and eradication capabilities are used where appropriate (e.g., workstations, laptops, servers, etc.) and





Ver. [1] Jan. 28, 20 B-7


that adequate system access controls are in place and maintained on all components connected to the systems. Specific protocols and ports that are needed to support this interconnection are provided in Appendix A. Ports and protocols not specifically defined in Appendix A will be approved by the CHP firewall change control procedures.

Trusted Behavior/Rules of Behavior The CHP CCRS users and COUNTY’s TCD users, to include system administrators, are expected to protect data in accordance with the policies, standards, and regulations specified for each system. This includes CHP and COUNTY policy and the documented rules of behavior for each system. The following documents specify specific rules of behavior for each system:

California Highway Patrol County of Los Angeles

• CHP 101, Appropriate Use of Automated Systems Statement

• CHP Manual 40.4, Information Security and Administration Manual, Chapter 1, General, and Chapter 18, Acceptable Use Policy

• 6.101 - Use of County Information Technology Resources Policy. Agreement for Acceptable Use and Confidentiality of County Information Technology Resources.

Formal Security Policy Policy documents that govern the protection of the data between the two organizations systems are:

- NIST SP 800-53, Security and Privacy Controls for Federal Information Systems and Organizations

- NIST SP 800-47, Security Guide for Interconnecting Information Technology Systems

- NIST SP 800-41, Guidelines on Firewalls and Firewall Policy

- NIST SP 800-123, Guide to General Server Security

- FIPS 199, Standards for Security Categorization of Federal Information & Information Systems

Organization Specific Policies:

California Highway Patrol County of Los Angeles





Ver. [1] Jan. 28, 20 B-8


• California State Administration Manual 5300, Information Security

• CHP Manual 40.4, Information Security and Administration Manual

• CHP Written Information Security Program

• Board Policy 6.100 - Information Security Policy

• Board Policy 6.101 - Use of County Information Assets

• Board Policy 6.102 – Endpoint Security Policy

• Board Policy 6.103 – Information Security Incident Reporting and Response

• Board Policy 6.105 - Information Technology Audit and Risk Assessment Policy

Incident Reporting The organization discovering a security incident will report it in accordance with the organization’s incident reporting procedures and ensure that the other connecting organization is notified. Incident reporting contact information is listed in Section 1.4, Point of Contact, of this ISA. The CHP CCRS personnel will be notified of any security incident that may have an operational or security impact on CHP resources. Likewise, the COUNTY’s TCD personnel shall be notified of any security incident that may have operational or security impact on the Traffic Collision Database connected to the CHP CCRS.

System Monitoring The CHP CCRS performance and operations are monitored and managed using the following products and tools:

- Microsoft Systems Center Operations Manager The CHP CCRS is deploying and/or using the following products and capabilities to monitor security vulnerabilities and compliance:

- NCircle IP360 The COUNTY’s TCD performance and operations are monitored and managed using the following products and tools:

- Microsoft Systems Center Operations Manager The COUNTY’s TCD is deploying and/or using the following products and capabilities to monitor security vulnerabilities and compliance:





Ver. [1] Jan. 28, 20 B-9


- McAfee MOVE and SolarWinds LEM

Security Audit Trail Each organization is responsible for auditing system security events and user activities involving the interconnection. Activities that will be recorded include:

- Event type

- Date and time of event

- User identification

- Workstation/server identification

- Success or failure of access attempts

- Security actions taken by system administrators or ISOs Audit logs will be retained for at least one (1) year (as long as the entries do not contain personal identifiable information).

Remote Connectivity Neither organization requires remote access into the other organization’s systems for the purpose of this agreement.

Training and Awareness Each organization will ensure that all individuals using the CHP CCRS and COUNTY’s TCD have attended initial basic and annual refresher Information Security and Privacy Awareness and Training. Additionally, each organization will ensure that persons with significant security responsibilities for the systems receive annual role-based training covering their specific areas of responsibility. This training should ensure that staff members know how to report suspicious or prohibited activities.

Security Documentation The CHP CCRS and COUNTY’s TCD (PWTNLCHP01) Certification and Accreditation documentation (e.g., system security plan, contingency plan, risk and security assessments, ISAs, etc.) and all other security related documents will be made available to each party for review and acceptance. Security agreement documentation will be updated to reflect the establishment of this interconnection and whenever a significant system change occurs or at least annually. This ISA shall be updated should any of the information contained within change. The following information, at a minimum will be maintained accurately within this ISA:

- Names of interconnected systems

- Organizations owning the other systems





Ver. [1] Jan. 28, 20 B-10


- Type of interconnection

- Name and title of authorizing management officials (e.g. CIO or designated AO)

- Interaction among the systems

- Hardware inventory

- Software inventory

- Rules of behavior All future changes relating to the security architecture of either system will be updated within the corresponding security documents. The assigned ISO for each system shall provide the security documentation to each organization upon request.

Change Control Significant changes to the system architecture, documentation, or configurations will be reviewed, approved, and documented in accordance with each organization’s configuration/change control process. Each organization shall notify the other if a system change significantly changes the approved security posture of the system or introduces new significant residual risk to either system. Whenever significant changes are made at one or both organizations, (e.g., through additional staff, service, etc.), these changes should be recorded as an addendum to the original ISA.

4.0 TOPOLOGICAL DRAWING

Recommended Contents All communications paths, circuits, etc., used for the interconnection beginning with the customer-owned system(s) traversing through all interconnected systems to the non-customer end-point. The drawing should depict the logical location of all components (e.g., mainframe computers, host processors, hubs, firewalls, encryption devices, routers, frame relay devices, secure frame units, communications service units, data service units, customer personal computers, etc.). Topological drawings will be placed in an appendix so the drawing can be easily updated when needed without impacting the primary document. The point of demarcation should be clearly identified at each end of the circuit. Note: Any sensitive information such as IP addressing schemas should not be included in these drawings.

Location of Drawings The ISO/CISO for each ISA should have the appropriate facility to house the detailed version of these supporting documents if needed for review or audit. Topological drawing showing the system interconnection is contained in Appendix C.





Ver. [1] Jan. 28, 20 B-11






Ver. [1] Jan. 28, 20 B-12


5.0 SIGNATORY AUTHORITY This ISA is valid for three (3) years after the latest date on either signature listed below, if the technology documented herein does not change or if there are no other intervening requirements for updates. At that time, the ISA must be reviewed, updated, and reauthorized. The security controls for this interconnection will be reviewed at least annually or whenever a significant change occurs. Either party may terminate this agreement with thirty (30) days advanced notice. Noncompliance on the part of either organization or its users or contractors with regards to security policies, standards, and procedures explained herein may result in the immediate termination of this agreement.

6.0 SIGNATURES

California Highway Patrol Information Management Division

CCRS California Collision Reporting System

Los Angeles County

Public Works Traffic Collision Database (TCD)

Authorizing Official Signature Date Chief Scott Howland Information Management Division

Authorizing Official Signature Date Jesse Juarros Departmental Chief Information Officer Los Angeles County Public Works





Ver. [1] Jan. 28, 20 B-13






Ver. [1] Jan. 28, 20 B-14


APPENDIX A Ports, protocols, and services required to support functionality of the interconnection between the California Highway Patrol and the COUNTY’s TCD security domains by default.

Ports, Protocols, Services California Highway Patrol


Port Number (Server/ Destination)

Port 443 https://ccrsexchange.chp.ca.gov

Port 443 on 159.83.123.127, 59.83.123.8, 159.83.123.202

Protocol (IP/TCP/UDP) TCP TCP

Software Application

Internet Information Services (IIS) .NET Framework

Data Type/Purpose

Collision data/PDFs provide data to downstream applications at various government agencies. For crash data analysis.

PII Data Yes Yes

Financial Data No No

Encryption Used Secured Socket Layer (SSL) SSL





Ver. [1] Jan. 28, 20 B-15


APPENDIX B

Use of prohibited or restricted services, protocols, and ports, if any, are listed below. This appendix requires signatures from the system authorizing officials. The following ports, protocols, and services are prohibited or restricted between the California Highway Patrol and the COUNTY’s TCD security domains by default.

Ports, Protocols, Services California Highway Patrol


Port Number (Server/ Destination)

Protocol (IP/TCP/UDP)

Software Application

Data Type/Purpose

PII Data

Financial Data

Encryption Used

Describe any restriction(s) to be placed on terminals, including their usage, location, and physical accessibility. Add any specific restrictions on either system.

Authorizing Official Signature Date Chief Scott Howland Information Management Division

Authorizing Official Signature Date Jesse Juarros Departmental Chief Information Officer Los Angeles County Public Works





Ver. [1] Jan. 28, 20 B-16


APPENDIX C

General Description of Process to Initiate Connection Between Systems Requestor presents user identification and password from a predetermined IP address and data is released as defined in Section 3.1, General Information/Data Description, of this ISA. Topological Drawing The California Highway Patrol CCRS to the COUNTY’s TCD interconnection architecture diagram.



2/12/2020



ALL DISTRICTS

DEPARTMENT Internal Services Department (ISD)

SUBJECT REQUEST AUTHORITY TO ENTER INTO SOLE SOURCE NEGOTIATIONS TO EXTEND CONTRACT # 77909 WITH XEROX CORPORATION

PROGRAM Print Optimization and Related Services (PORS)


Yes No

If Yes, please explain why: Requesting Board approval to enter into negotiations for a sole source contract extension to allow for sufficient time for County departments to transition managed print services to the new Managed Print Services 2.0 (MPS 2.0) contracts without disruption.


Current contract expires on July 31, 2020. Extension of the current contract is necessary to transition departments to new contracts; full transition of departments to MPS 2.0 is expected to take from 4-24 months, depending on department size: number of facilities and number of devices.

COST & FUNDING Total cost: Approximately $21,000,000 annual cost Countywide

Funding source: Expenditures over the extended term will be budgeted by departments annually in their FY Budgets for such services.

TERMS: Amendment of current contract with Xerox Corporation for a one-year period with twelve month-to-month extension options with no rate increases. The term of the extension will be finalized during the negotiation process with Xerox.Explanation: Approval for the new MPS 2.0 contracts (3) will be requested from the Board on March 10, 2020; however, an extension to the current contract is necessary to allow departments to successfully transition from the current contract to new MPS 2.0 contracts, including replacement of 17,000 devices throughout County departments and implementation of new software.

PURPOSE OF REQUEST

The recommended action is to authorize the Director of ISD, or designee, to proceed with entering into contract negotiations for a sole source contract amendment to extend the current contract with Xerox Corporation to continue providing managed print services to County departments during the transition to MPS 2.0.


On January 15, 2013, the Board awarded the current contract to Xerox Corporation to provide managed print services to County departments. On the same date, the Board mandated that all County Departments participate in a managed print program. Under the current contract, the County utilizes approximately 17,000 print devices at an annual cost of approximately $21 million. Extension of the current contract will ensure departments successfully transition to the new contracts without disruption.


Christie Carr Division Manager (323)267-3101 [email protected]

County of Los Angeles INTERNAL SERVICES DEPARTMENT

1100 North Eastern Avenue Los Angeles, California 90063

SCOTT MINNIX Director “Trusted Partner and Provider of Choice”

Telephone: (323) 267-2101 FAX: (323) 264-7135

December 24, 2019

To: Supervisor Kathryn Barger, Chair Supervisor Hilda L. Solis Supervisor Mark Ridley Thomas Supervisor Sheila Kuehl Supervisor Janice Hahn

From: Scott Minnix Director

NOTIFICATION OF INTENT OF SOLE SOURCE EXTENSION ON PRINT OPTIMIZATION AND RELATED SERVICES CONTRACT #77909 WITH XEROX CORPORATION

This is to advise the Board of the Internal Services Department’s (ISD) intent to negotiate an extension of the existing ISD contract with Xerox Corporation (Xerox) to continue providing Print Optimization and Related Services (PORS) to County departments.

BACKGROUND

On January 15, 2013, the Board of Supervisors (Board) awarded the PORS contract to Xerox to provide managed print services to County departments. The managed print services program optimizes office printing while reducing cost to County departments by standardizing equipment, measuring usage and managing costs. The current contract will expire on July 31, 2020.

On September 16, 2019, ISD released a Request for Statement of Qualifications for Managed Print Services 2.0. The deadline to submit a Statement of Qualifications was on October 30, 2019. In order to provide ISD with the time necessary to complete the evaluation process and testing phase, an extension to the current contract is being requested on a sole source basis. Additionally, an extension to the contract will allow sufficient time for County departments to transition managed print services to the new service contracts.

Each Supervisor December 24, 2019 Page 2

JUSTIFICATION

An extension to the subject contract is imperative to allow ISD sufficient time to finalize the testing phase of the solicitation which will provide County departments with the most optimized managed print services under the new contracts. Further, the extension of the current contract will ensure that County departments continue receiving managed print services without a gap in services and successfully and seamlessly transition services to the new contracts. The term of the extension will be finalized during the negotiation process with Xerox.

Board Policy No. 5.100 requires written notice of a department’s intent to enter into sole source negotiations for the extension of a Board approved contract at least six months prior to the contract’s expiration date. The subject contract expires on July 31, 2020, therefore this notice is timely.

CONCLUSION

Unless otherwise instructed by your Board, ISD will proceed with negotiations of the contract extension with Xerox. ISD will work closely with both County Counsel and the Chief Executive Office during the contracting process.

If you have any questions or require additional information please contact Michael Owh, General Manager of Purchasing and Contract Services at (323) 267-2109, via email [email protected] or your staff may contact Christie Carr at (323) 267-3101, via email [email protected].

SM:MO:CC:SO:ew

c: Executive Office, Board of Supervisors County Counsel Chief Executive Officer ISD Board Deputies





2/12/2020



ALL DISTRICTS

DEPARTMENT Internal Services Department (ISD)

SUBJECT REQUEST AUTHORITY TO ENTER INTO SOLE SOURCE NEGOTIATIONS TO EXTEND CONTRACT # 76501 WITH AT&T GLOBAL SERVICES FOR TELECOMMUNICATIONS SERVIECS

PROGRAM Countywide Telecommunication Services


Yes No

If Yes, please explain why: Requesting Board approval to enter into negotiations for a sole source contract extension to allow for sufficient time for County departments to transition Countywide telecommunication services to the new telecommunications services Master Agreements (MAs) without disruption.


Current contract expires on May 1, 2020. Extension of the current contract is necessary to transition departments to new MAs; full transition of departments is expected to take up to 24 months.

COST & FUNDING Total cost: Approximately $45,000,000 annual cost Countywide

Funding source: Expenditures over the extended term will be budgeted by departments annually in their FY Budgets for such services.

TERMS: Amendment of current contract with AT&T Global for a one-year period with twelve month-to-month extension options.

Explanation: The Board approved the new Telecommunication Services Master Agreements on August 13, 2019; however, an extension to the current contract is necessary to allow departments to successfully transition from the current contract to new MAs.

PURPOSE OF REQUEST

The recommended action is to authorize the Director of ISD, or designee, to proceed with entering into contract negotiations for a sole source contract amendment to extend the current contract with AT&T Global to continue providing telecommunication services to County departments during the transition to new MAs.


On March 18, 2008, the Board awarded the current contract to AT&T Global to provide telecommunication services to all County departments, with a contract effective date of May 2, 2008. Under the current contract, the contract cost is approximately $45 million. Extension of the current contract will ensure departments successfully transition to the new contracts without disruption.


Christie Carr Division Manager (323)267-3101 [email protected]

County of Los Angeles INTERNAL SERVICES DEPARTMENT

1100 North Eastern Avenue Los Angeles, California 90063

SCOTT MINNIX Director “Trusted Partner and Provider of Choice”

Telephone: (323) 267-2101 FAX: (323) 264-7135

December 24, 2019

To: Supervisor Kathryn Barger, Chair Supervisor Hilda L. Solis Supervisor Mark Ridley Thomas Supervisor Sheila Kuehl Supervisor Janice Hahn

From: Scott Minnix Director

NOTIFICATION OF INTENT TO ENTER INTO SOLE SOURCE NEGOTATIONS AND EXTEND CONTRACT 76501 WITH AT&T GLOBAL SERVICES FOR TELECOMMUNICATIONS SERVICES

This is to advise your Board of the Internal Services Department’s (ISD) intent to negotiate an extension of the existing ISD contract with SBC Global Services, d.b.a. AT&T Global Services (AT&T) to continue providing countywide telecommunications services.

BACKGROUND

On May 2, 2008, the Board of Supervisors (Board) awarded the telecommunications services contract to AT&T. Under the existing contract, AT&T provides Local and Long-Distance Telecommunications and Managed Internet Protocol (IP) Services Countywide. The current contract will expire on May 1, 2020.

On July 9, 2018, ISD released a Request for Statement of Qualifications (RFSQ) for Telecommunication Services for replacement services provided under the subject contract. On August 13, 2019, the Board authorized ISD to award and execute Master Agreements for the provision of Telecommunication Services with vendors as they become qualified effective upon Board approval, for an initial term of five years, with two additional one-year extensions, for a maximum total Master Agreement (MA) term of seven years.

While the existing contract with AT&T will expire on May 1, 2020, there are critical services provided under this contract which provides the Registrar-Recorder’s Voter Center Network Project and Elections Security Program with critical election-related information to the constituents of Los Angeles County and cybersecurity services needed to ensure that any and all risks to the elections are properly mitigated.

Each Supervisor December 24, 2019 Page 2

JUSTIFICATION

ISD conducted an initial review and assessment of the current AT&T contract. Further, as a part of that review, ISD conducted a Gap Analysis to ensure proper closure of the projects under this contract. During this analysis, ISD identified that the Registrar-Recorder’s Voter Center Network Project necessitates an extension of the current AT&T contract in order to continue providing the Registrar-Recorder with Consulting Support; Data Network Services; Secure Architecture Design; Governance, Risk, and Compliance; Secure Architecture Design and Implementation; Cybersecurity Operations Center; Engagement Management and Quality Assurance services for the March 2020 Primary Election and continuation of services are also needed to avoid risk to the Registrar-Recorder’s infrastructure for the November 2020 General Election.

Board Policy No. 5.100 requires written notice of a department’s intent to enter into sole source negotiations for the extension of a Board approved contract at least six months prior to the contract’s expiration date. The subject contract will expire on May 1, 2020, and although this notice is not timely, it will provide the department with sufficient time to finalize negotiations and execute the recommended contract extension with AT&T to provide the Registrar-Recorder and County departments with continued telecommunication services.

The extension of the current contract is imperative to enable ISD to continue providing telecommunication services to the Registrar-Recorder and various County departments.

The term of the extension will be finalized during the negotiation process with AT&T.

CONCLUSION

Unless otherwise instructed by your Board, ISD will proceed with negotiations of the contract extension with AT&T. ISD will work closely with both County Counsel and the Chief Executive Office during the contracting process.

If you have any questions or require additional information please contact Michael Owh, General Manager of Purchasing and Contract Services at (323) 267-2109, via email [email protected] or your staff may contact Christie Carr at (323) 267-3101, via email [email protected].

SM:SH:MO:CC:ew Attachment

c: Executive Office, Board of Supervisors Chief Executive Officer County Counsel ISD Board Deputies





2/12/2020



All Districts

DEPARTMENT Treasurer and Tax Collector

SUBJECT Issuance and Sale of the California Tobacco Securitization Agency Tobacco Settlement Bonds (Los Angeles County Securitization Corporation), Series 2020

PROGRAM N/A


Yes No

If Yes, please explain why:


3/4/2020

COST & FUNDING Total cost: TBD

Funding source: Tobacco Settlement Revenues

TERMS (if applicable): TBD

Explanation:

PURPOSE OF REQUEST

The Treasurer and Tax Collector (the “Treasurer”) is requesting that the Board of Supervisors (the “Board”) consent to the issuance and sale by the California County Tobacco Securitization Agency (the “Agency”) of not to exceed $400 million in initial principal amount of Tobacco Settlement Bonds (Los Angeles County Securitization Corporation), Series 2020 (the “Refunding Bonds”).


On November 23, 1998, the attorneys general of 46 states, including the State of California (collectively the “Plaintiffs”), reached agreement with the then four largest United States tobacco manufacturers (the “Participating Manufacturers”) to resolve cigarette smoking-related litigation. The resulting Master Settlement Agreement (the “MSA”) required the Participating Manufacturers to make annual payments in perpetuity, known as tobacco settlement revenues (TSRs), to the Plaintiffs in exchange for the release of all past and present smoking-related claims, and the continuing release of future smoking-related claims. The amount of TSRs is directly correlated to smoking participation rates; therefore, the projected decline of smoking participation rates has resulted in a decline of TSR payments.

In 2006, the County joined the California County Tobacco Securitization Agency (Agency), a joint powers authority, who issued $319.8 million in Tobacco Settlement Asset-Backed Bonds (2006 Bonds) on behalf of the County and loaned the proceeds to the Los Angeles County Securitization Corporation (Corporation), a California nonprofit public benefit corporation. With the bond proceeds, the Corporation purchased 25.9% interest in the County’s TSRs, and the County used the proceeds to fund a portion of the LAC+USC Medical Center Replacement Project.

The proposed issuance of the Refunding Bonds will result in a $118 million or 30% present value savings, which shortens the anticipated final maturity of the 2006 Bonds by approximately 38 years and enables the County to recover the 25.9% of TSRs pledged as security much earlier than currently projected.


Name, Title, Phone # & Email:

Keith Knox, Treasurer and Tax Collector, (213) 974-0703, [email protected]

Daniel Wiles, Assistant Treasurer and Tax Collector, (213) 974-7175,[email protected]

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KEITH KNOX TREASURER AND TAX COLLECTOR

COUNTY OF LOS ANGELES TREASURER AND TAX COLLECTOR

Kenneth Hahn Hall of Administration

500 West Temple Street, Room 437, Los Angeles, California 90012 Telephone: (213) 974-2101 Fax: (213) 626-1812

ttc.lacounty.gov and propertytax.lacounty.gov

Board of Supervisors

HILDA L. SOLIS First District

MARK RIDLEY-THOMAS Second District

SHEILA KUEHL Third District

JANICE HAHN Fourth District

KATHRYN BARGER Fifth District

March 4, 2020

The Honorable Board of Supervisors County of Los Angeles 383 Kenneth Hahn Hall of Administration 500 West Temple Street Los Angeles, CA 90012

Dear Supervisors:

ISSUANCE AND SALE OF THE CALIFORNIA COUNTY TOBACCO SECURITIZATION AGENCY

TOBACCO SETTLEMENT BONDS (LOS ANGELES COUNTY SECURITIZATION CORPORATION), SERIES 2020

(ALL DISTRICTS) (3 VOTES)

SUBJECT

The Treasurer and Tax Collector (the “Treasurer”) is requesting that the Board of Supervisors (the “Board”) consent to the issuance and sale by the California County Tobacco Securitization Agency (the “Agency”) of not to exceed $400 million in initial principal amount of Tobacco Settlement Bonds (Los Angeles County Securitization Corporation), Series 2020 (the “Refunding Bonds”).

The proceeds from the sale of the Refunding Bonds will be used to refund all of the Agency's Tobacco Settlement Asset-Backed Bonds (Los Angeles County Securitization Corporation), Series 2006 (the “2006 Bonds”), which were issued on February 8, 2006.

IT IS RECOMMENDED THAT THE BOARD:

Adopt the resolution: a) consenting to the issuance and sale by the Agency of not to exceed $400 million in initial principal amount of the Refunding Bonds in one or more series; b) authorizing the execution and delivery of the Consent and Agreement and the Certificate of the County in connection with the issuance of the Refunding Bonds; c) authorizing consent to the Amendment and Restatement of the Residual Certificate; andd) authorizing the execution and delivery of and approving other related documents andactions in connection with the issuance of the Refunding Bonds.

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Honorable Board of Supervisors March 4, 2020 Page 2 PURPOSE/JUSTIFICATION OF RECOMMENDED ACTION Approval of the above recommendations will authorize the issuance and sale of the Refunding Bonds by the Agency and the execution and delivery of all related documents. The proceeds from the sale of the Refunding Bonds will be used to refund approximately $398.6 million of the outstanding 2006 Bonds issued by the Agency on February 8, 2006, that were used to finance a portion of the construction costs related to the LAC+USC Medical Center Replacement Facility. On November 23, 1998, the attorneys general of 46 states (including the State of California), the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, American Samoa and the Territory of the Northern Marianas (collectively the “Plaintiffs”) reached agreement with the then four largest United States tobacco manufacturers (the “Participating Manufacturers”) to resolve cigarette smoking-related litigation. The resulting Master Settlement Agreement (the “MSA”) required the Participating Manufacturers to make annual payments in perpetuity to the Plaintiffs in exchange for the release of all past and present smoking-related claims, and the continuing release of future smoking-related claims. To facilitate the sale of the 2006 Bonds, the County joined the Agency, a joint exercise of powers authority formed by the counties of Stanislaus, Merced, Kern, Sonoma, Marin, Fresno, Placer and Alameda, pursuant to the Third Amendment of the Joint Exercise of Powers Agreement dated as of January 24, 2006. Pursuant to the California Government Code, the Agency is authorized to issue bonds for financing capital improvements and for any other purposes allowed thereunder. In February 2006, the Agency issued the 2006 Bonds on behalf of the County in a par amount of $319.8 million, and loaned the proceeds to the Los Angeles County Securitization Corporation, a California nonprofit public benefit corporation (the “Corporation”), pursuant to a Loan Agreement by and between the Agency and the Corporation. The Corporation used the proceeds of the loan to purchase 25.9% of the County's interest in future TSRs. Debt service on the 2006 Bonds is secured by loan repayments from the Corporation to the Agency, which is in turn secured by the Corporation’s purchase of the 25.9% interest in the County's TSRs. The issuance of the Refunding Bonds will result in a significant reduction in the interest cost from the 2006 Bonds. The lower interest cost of the Refunding Bonds will enable the County to regain access to the 25.9% of tobacco settlement revenues (the “TSRs”), which are currently pledged as security for the repayment of the 2006 Bonds, much earlier than currently projected. The 25.9% portion of the County’s TSRs will continue to be pledged as security for the Refunding Bonds. According to a recent cigarette consumption report published by IHS Global Inc. (“IHS Global”), a globally recognized economic research firm with expertise in the tobacco securitization bond market, U.S. cigarette consumption is projected to continue declining at

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Honorable Board of Supervisors March 4, 2020 Page 3 a faster rate compared to the original projections for the 2006 Bonds. IHS Global is the standard source for economic research and analysis of the tobacco market that is used by public agencies and market participants to evaluate tobacco bond transactions and the overall tobacco market. Based on the recent IHS Global report, which was prepared in conjunction with the Refunding Bonds, the continued decline in smoking participation rates will result in a reduction in the future TSRs received by the County and extend the repayment of the 2006 Bonds by 56 years. Based on current market conditions and the decline in TSRs as projected in the current IHS Global forecast, the 2006 Bonds, which were originally expected to be fully repaid by 2030, will not be repaid until 2086. By taking advantage of favorable market conditions, including historically low interest rates and strong market demand for tobacco bonds, the County has an opportunity to achieve significant interest cost savings with the Refunding Bonds, and mitigate the risk of future default if the TSRs continue to decline at a faster rate than currently projected by IHS Global. Based on current market conditions, the Refunding Bonds would achieve present value savings of approximately $118 million or 30%. The lower interest cost of the Refunding Bonds will shorten the anticipated final maturity of the 2006 Bonds by approximately 38 years, such that the 2006 Bonds may be fully repaid by 2048 instead of by 2086. This will allow the County to recover the 25.9% of TSRs pledged as security for the Refunding Bonds much earlier than currently projected. To illustrate the magnitude of the annual revenue stream related to the TSRs, in Fiscal Year 2018-19, the County’s share of the TSRs was approximately $100.7 million, of which $26.1 million was allocated to pay debt service on the 2006 Bonds. Implementation of Strategic Plan Goals This action supports the County’s Strategic Plan Goal #III.3: Pursue Operational Effectiveness, Fiscal Responsibility, and Accountability by providing a cost-effective source of financing. FISCAL IMPACT/FINANCING There is no fiscal impact to the County General Fund. The Refunding Bonds will be repaid from the annual TSRs received by the County pursuant to the Master Settlement Agreement, as described below. FACTS AND PROVISIONS/LEGAL REQUIREMENTS The Refunding Bonds will be issued at a true interest cost not to exceed five percent (5%) per annum. The maximum initial principal amount of the Refunding Bonds will not exceed $400 million, with the proceeds received by the County used to retire the 2006 Bonds, pay costs of issuance and to fund debt service reserves. The final maturity of the Refunding Bonds is projected to be June 1, 2048, but will be determined at pricing.

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Honorable Board of Supervisors March 4, 2020 Page 4 Due to the technical complexities involved with issuing tobacco securitization bonds and to secure the lowest possible borrowing costs, the Treasurer is recommending a negotiated sale of the Refunding Bonds. Subsequent to a modified bid request to the County Underwriter Pool, the Treasurer selected Jefferies LLC and Citigroup Global Markets Inc. to be the senior managing underwriter and co-senior managing underwriter, respectively, for the sale of the Refunding Bonds. Additional co-managers from the Underwriter Pool will be selected closer to the sale date. Public Resources Advisory Group was selected from the Board-approved pool of municipal advisors to serve as the municipal advisor. Orrick, Herrington & Sutcliffe LLP was selected by County Counsel to serve as bond counsel, with Hawkins Delafield & Wood LLP as disclosure counsel. IMPACT ON CURRENT SERVICES (OR PROJECTS) There is no impact on current services. CONCLUSION Upon approval of the attached Resolution, it is requested that the Executive Officer of the Board return two originally executed copies to the Public Finance Office of the Treasurer. Respectfully submitted, KEITH KNOX Treasurer and Tax Collector KK:DW:TG:JP:JW ad:doc/Tobacco Sec Agency Settlement Refunding Bonds, Ser2020_030420

Attachments c: Chief Executive Officer Auditor-Controller County Counsel Executive Officer, Board of Supervisors

TOBACCO SETTLEMENT BONDSOPERATIONS CLUSTER MEETING – FEBRUARY 12, 2020

TOBACCO SETTLEMENT BONDS

1998

Settlement AgreementBetween Tobacco Manufacturers and 46 States

(including California)Counties receive Tobacco Settlement Revenues (TSR)

2006

County joined the California County Tobacco Securitization Agency and formed the

Los Angeles County Securitization Corporation to Issue $319.8 mm 2006 Tobacco Settlement

Asset Backed Bonds

2020

Proposed Refunding Tobacco Settlement

BondsProjected Present Value

Savings of $118 mm, 30% of Bonds to be issued

2

LAC+USC Hospital

AgencyJPA consists of

9 Counties authorized to

issue Tobacco Bonds

CorporationFormed by the

County to facilitate the

Tobacco Bond Issuance

Bond Proceeds funded a portion of LAC+USC Medical Center

LAC+USC Med. Ctr.

Factors Tobacco Bonds Lease Revenue Bonds

Purpose: Monetize future tobacco settlement revenues to fund health related capital projects

Lease structure is established to finance County capital projects

Source of Payment: Annual TSRs from Tobacco Manufacturers Lease payments paid from County General Fund

Issuer: California County Tobacco Securitization Agency, a Joint Powers Authority

County sponsored Joint Powers Authority

Security/Collateral: 25.9% of Annual TSRs County Assets/Buildings subject to lease

Bond Rating Based On: 1) Projected TSR amounts;2) Bond Structure3) Only Standard & Poors

1) Creditworthiness of the County;2) Bond Structure3) Moody’s, S&P and Fitch

Projected Ratings: Mid to low quality: A to unrated High quality: Aa2, AA+, AA

Bond Default Triggered By: Non-payment caused by a decline in TSRs due to declining cigarette consumption

Non-payment caused by insufficient County General Funds

Impact of Non-payment/Default: 1) Investor Takes Risk of non-payment2) No impact on County’s Credit Ratings3) Delay in realizing 25.9% of TSRs

1) County’s Credit Rating2) Increased cost of future borrowing

TOBACCO BONDS COMPARED TO LEASE REVENUE BONDS

3

TOBACCO SETTLEMENT REVENUES TIED TO CONSUMPTION

Tobacco Settlement Revenue

County TSRsPledged TSRs for Debt Service

25.9%

74.1%

4

0

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200

6

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0

Historical Forecasted 2006 ProjectedShipments (billions)

Tobacco Consumption Lower than Initially Forecast

2006 TOBACCO BONDS REFUNDED BY SERIES 2020

5

0

5

10

15

20

25

30

35

40

200

7

200

9

201

1

201

3

201

5

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9

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1

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204

5

204

7

204

9

205

1

205

3

205

5

205

7

205

9

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1

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9

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1

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5

$M

M

2006 Bonds Original Debt Service 2006 Actual Projected Debt Service 2020 Refunding Bonds Debt Service

• The 2006 Bonds, which were originally expected to be repaid in 2030, are currently not expected to be fully repaid until 2086• The 2020 Refunding Bonds will shorten the maturity period by 38 years resulting in the pledged TSRs returned to the County sooner.

BOARD LETTER / MEMO – FACT SHEET OPERATIONS CLUSTER


2/12/2020



4th

DEPARTMENT Department of Mental Health (DMH)

SUBJECT Approve the proposed eight-year leases for approximately 13,347 square feet of office space and 53 on-site parking spaces at 4510 East Pacific Coast Highway, Long Beach

PROGRAM




Existing lease for DMH is currently on month-to-month holdover since December 31, 2018.

COST & FUNDING Total cost: $5,535,587 total lease rental costs including parking and tenant improvement costs.

Funding source: The rental costs for DMH will be funded by Mental Health Services Act Funds and other State and Federal funding sources.

TERMS (if applicable): The proposed base rent is subject to annual increases of 4 percent per annum as a result of the high demand for office space. The leases include a cancellation provision that allows the County to terminate the proposed lease at 60 months with 270 days’ prior written notice. The proposed leases contain a holdover provision, wherein there is a monthly holdover fee of 25% of the then existing base rent for the first twelve months following expiration of the lease term. Thereafter, the monthly holdover fee shall be 50% of the base rent at the time of the lease expiration. The County’s holdover tenancy may be terminated upon 30 days’ notice from the Landlord. Explanation: Funding for the proposed option is included in the Fiscal Year 2019-20 Rent Expense budget and will be billed back to DMH.

CO-WORK SPACE ASSESSMENT

Extensive research has been completed to evaluate the option of utilizing co-working as an alternative site for DMH at 4510 East Pacific Coast Highway, Long Beach. We looked at WeWork, Regus, Easy Offices, Instant Offices (3 locations in Long Beach), Ironfire, Work Evolution and We Labs, Inc, and all but two of the locations are in Downtown Long Beach (DTLB) which is over 5 miles away. Instant Offices offers two co-working premises with Greater Long Beach not in DTLB, but neither can accommodate the size of the DMH requirement (they are both offering 400-600 square foot units adjacent to Long Beach airport). Therefore, co-work space is not a viable alternative.

PURPOSE OF REQUEST

Approval of the recommended action will authorize and continue to adequately provide the necessary office space for DMH.


The County has leased these premises at 4510 East Pacific Coast Highway, Long Beach since November 2010. DMH currently uses the premises for its Long Beach Asian Pacific Islander Family Mental Health Center. This facility is a directly operated clinic which provides outpatient services, including individual, group and family psychotherapy, case management and medication services to adults, children and families.

The Hono

“To Enrich Lives Through Effective And Caring Service”

March 4, 2020 The Honorable Board of Supervisors County of Los Angeles 383 Kenneth Hahn Hall of Administration 500 West Temple Street Los Angeles, CA 90012 Dear Supervisors:

EIGHT-YEAR LEASE DEPARTMENT OF MENTAL HEALTH

4510 E. PACIFIC COAST HIGHWAY, LONG BEACH (FOURTH DISTRICT)

(3 VOTES) SUBJECT Approval of a proposed lease to provide the Department of Mental Health with continued use of 10,344 rentable square feet of office space and an additional expansion area of 3,003 rentable square feet and up to 53 on-site parking spaces. IT IS RECOMMENDED THAT THE BOARD:

1. Find that the proposed lease is exempt from the California Environmental Quality Act (CEQA), for the reasons stated in this Board letter and in the record of the project.

2. Authorize the Chief Executive Officer, or her designee, to execute the proposed

lease with Circle Business Center, LLC, (Landlord), for approximately 13,347 rentable square feet of office space, and 53 on-site parking spaces at 4510 E. Pacific Coast Highway, Long Beach, CA to be occupied by the Department of Mental Health (DMH). The estimated maximum first-year base rental cost is $360,369. The total base rental cost payable to the Landlord under the proposed lease would approximate $3,320,530 over the eight-year term. The rental costs for DMH will be 100 percent funded by Mental Health Services Act Funds and other State and Federal funding sources.

SACHI A. HAMAI Chief Executive Officer Board of Supervisors

HILDA L. SOLIS First District MARK RIDLEY-THOMAS Second District SHEILA KUEHL Third District JANICE HAHN Fourth District KATHRYN BARGER Fifth District


Kenneth Hahn Hall of Administration 500 West Temple Street, Room 713, Los Angeles, California 90012

(213) 974-1101 http://ceo.lacounty.gov


3. Authorize the Chief Executive Officer, or her designee, to reimburse the Landlord, for additional tenant improvements (TI) up to $1,601,640, if paid in a lump sum, or up to $1,902,865 if amortized at 7 percent per annum over five years, pertaining to the leased space for DMH referenced above. The total lease costs payable to the Landlord would not exceed $5,535,587 over the eight-year term, which is comprised of the $ 3,320,530 base rental cost, estimated $312,192 parking cost, and the $1,902,865 maximum County’s TI contribution.

4. Authorize the Director of DMH to contract with and direct the Internal Services

Department, in coordination with the Chief Executive Officer, or her designee, for the acquisition and installation of telephone, data, and low-voltage systems and vendor installation (Low Voltage) at a total cost not to exceed $127,500, which is based on the Low Voltage cost if fully expended The cost for the Low Voltage will be paid in a lump sum payment. The cost for the Low Voltage is in addition to the rental costs and County’s TI contribution payable to the Landlord.

5. Authorize and direct the Chief Executive Officer, or her designee, to execute any

other ancillary documentation necessary to effectuate the terms of the proposed lease and to take other actions necessary and appropriate to implement and effectuate the terms of the proposed lease, including, without limitation, exercising early termination rights and the right of first offer to lease additional premises. The proposed lease will become effective upon approval by the Board.

PURPOSE/JUSTIFICATION OF RECOMMENDED ACTION Since November 2010, the DMH has occupied 10,344 square feet of office space at 4510 E. Pacific Coast Highway, Long Beach. DMH currently uses the premises for its Long Beach Asian Pacific Islander Family Mental Health Center. This facility is a directly operated clinic in the service area, which provides mental health outpatient services, including individual, group, and family psychotherapy, case management, and medication services to adults, children, and families. These programs provide a variety of administration and clinical services. The lease expired on October 31, 2017 and has been on a month-to-month holdover basis. Starting on January 1, 2018, the existing lease has been subject to a monthly holdover fee of 25 percent of the prevailing monthly base rent. The proposed lease will continue to provide DMH with its current office and clinical space for its ongoing operations. However, due to the expansion of these services, this lease will provide an additional 3,003 square feet of office and clinical space to alleviate the current overcrowded conditions and to allow for growth in services and programs. With the expansion space, the proposed premises will accommodate 30 employees and visitors with much needed adjacent parking.

The Honorable Board of Supervisors March 3, 2020 Page 3 The Landlord will provide $200,205 in base TI allowance and up to $1,601,640 in additional TI dollars, if necessary, to be reimbursed by the County, to suit the needs of DMH and its programs. The existing area with the expansion area will adequately meet the space needs of DMH and is accessible to public transportation routes. Implementation of Strategic Plan Goals The Countywide Strategic Plan Goal 3 - “Realize Tomorrow’s Government Today” -provides that our increasingly dynamic, and complex environment, challenges our collective abilities to respond to public needs and expectations. We want to be an innovative, flexible, effective, and transparent partner focused on advancing the common good. The proposed lease will support this goal by allowing DMH and its programs to continue its operations without interruption of service. The proposed lease is in conformance with the Asset Management Principles as outlined in Attachment A. FISCAL IMPACT/FINANCING The proposed lease will have the following financial impact:

The costs for Low Voltage will be paid by DMH. There is sufficient appropriation in the Fiscal Year (FY) 2019-20 Rent Expense Budget to cover the first-year costs, which will then be billed to DMH. DMH has sufficient appropriation in DMH’s Fiscal Year (FY) 2019-20 operating budget to cover these costs for the first year. Beginning with FY 2020-21, ongoing funding for the proposed lease will be part of the budget for DMH. These costs are 100 percent funded by Mental Health Services Act Funds and other State and Federal funding sources. FACTS AND PROVISIONS/LEGAL REQUIREMENTS In addition to the terms described herein, the proposed lease includes the following provisions:

− The proposed lease is on a gross basis whereby the Landlord will be responsible for all operating and maintenance costs associated with the facility.

- The square footage of the proposed lease premises has increased slightly due to

the Landlord remeasuring of the office space per current industry standards. − The maximum first-year base rental cost is $360,369 or $27.00 annually per

square foot, with annual rental adjustments of 4 percent per annum.


- Total parking costs are estimated to be $39,024 per year based on DMH’s right to purchase 47 stalls at prevailing rates (currently $60 per stall per month) and a right to purchase 6 additional stalls at 120 percent of prevailing rates (currently $72 per stall per month).

− The Landlord will provide a non-reimbursable base TI allowance of $200,205 or $15 per square foot, included in the lease.

− The Landlord will provide additional reimbursable TI dollars in the amount up to $1,601,640 or $120 per square foot, which the County may reimburse in a lump sum payment or $1,902,865 if amortized over a five-year period at 7 percent per annum.

− The County will pay up to $127,500 for the lump sum cost of the Low Voltage needed for the expansion space.

− The aggregate cost of the proposed lease over the eight-year term, including rent expense, parking, and TI reimbursement, if fully utilized, and low voltage costs would be approximately $5,663,087. Attachment B provides an overview of the total proposed lease costs.

− A cancellation provision that allows the County to terminate the proposed lease at

60 months with 9 months prior written notice.

− The proposed lease contains a holdover provision, which includes in addition to the monthly rent, a monthly holdover fee of 25 percent of the base rent at the time of lease expiration, for the first twelve months of holdover. Thereafter, the monthly holdover fee shall be 50 percent of the base rent at the time of the lease expiration. The County’s holdover tenancy may be terminated upon 30 days’ notice from the Landlord.

− The proposed lease gives the County a right of first offer to lease additional contiguous space on the sixth floor of the building. If Landlord intends to offer such space or receives a third party offer to lease such space, Landlord shall give the County first rights to match the proposed rental rate and lease the space, which right County must exercise within 30 days from Landlord’s notice.

− The proposed lease renewal will be effective upon approval by the Board.

The Honorable Board of Supervisors March 3, 2020 Page 5 The Chief Executive Office (CEO), through its broker representative, CBRE, conducted a survey within the project area to determine the availability of comparable office space options. CBRE was unable to identify any sites in the survey area that could accommodate this requirement more economically. Based upon a review of available industry data, CBRE has established that the average annual rental range for similar space is between $19.44 and $33.00 dollars per square foot on a full-service gross basis (with a base year for operating expense increases). In comparison, the base rental rate of $27.00 per square foot per year, gross (no operating expenses), for the proposed lease is within market range for the area. Research has been completed to evaluate the option of utilizing co-working as an alternative location for this Mental Health program. There are a number of co-working providers in greater Long Beach, but all but two of the locations are in downtown Long Beach which is over 6 miles away and in a more costly part of the city for rent and parking charges. The other two locations cannot accommodate the size and do not allow for clinical use. Therefore, co-work locations were not pursued. Attachment C shows County-owned or leased facilities in the proximity of the service area, and there are no suitable County-owned or leased facilities available for the program. The Department of Public Works has inspected the facility and found it seismically suitable for County occupancy. Construction of any TIs will be completed in compliance with relevant building and construction codes, laws and regulations, including the Americans with Disabilities Act. A notification letter to the City of Long Beach has been sent pursuant to Government Code Section 25351. County Counsel has reviewed the attached proposed lease and has approved it as to form. The proposed lease will continue to provide an appropriate location for the applicable programs which is consistent with the County’s Facility Location Policy, as adopted by the Board of Supervisors on July 24, 2012, as outlined in Attachment D. ENVIRONMENTAL DOCUMENTATION The proposed lease is exempt from CEQA. The proposed lease, which replaces the existing lease space with minor TIs within an existing building, is within a class of projects that have been determined not to have a significant effect on the environment and which meets the criteria set forth in Section 15301 of the State CEQA Guidelines (Guidelines) and Class 1 of the County's Environmental Document Reporting Procedures and Guidelines, Appendix G. In addition, based on the proposed lease records, it will comply with all applicable regulations, and there are no cumulative impacts, unusual circumstances, damage to scenic highways, listing on hazardous waste site lists compiled, pursuant to Government Code Section 65962.5, or indications that it may cause

The Honorable Board of Supervisors March 3, 2020 Page 6 a substantial adverse change in the significance of a historical resource that would make the exemption inapplicable. Upon the Board's approval of the recommended actions, a Notice of Exemption will be filed with the Registrar-Recorder/County Clerk in accordance with Section 21152 of the California Public Resources Code. IMPACT ON CURENT SERVICES (OR PROJECTS The proposed lease will adequately provide the necessary office space for this County requirement. The effected department(s) concur with the proposed recommendation. CONCLUSION It is requested that the Executive Office, Board of Supervisors return one certified copy of the Minute Order, and the adopted stamped board letter to the CEO, Real Estate Division, at 320 West Temple Street, 7th Floor, Los Angeles, CA 90012 for further processing. Respectfully submitted, SACHI A. HAMAI Chief Executive Officer SAH:FAD:DMH:DL JLC:MAN:CB:gw Enclosures c: Executive Office, Board of Supervisors County Counsel Auditor-Controller Internal Services Mental Health

ATTACHMENT A

DEPARTMENT OF MENTAL HEALTH 4510 E. PACIFIC COAST HIGHWAY, LONG BEACH

Asset Management Principles Compliance Form1

1. Occupancy Yes No N/A

A Does lease consolidate administrative functions? X

B Does lease co-locate with other functions to better serve clients? X

C Does this lease centralize business support functions? X

D Does this lease meet the guideline of 200 sq. ft of space per person? Ratio = 197 per person. X

E Does lease meet the 4/1000 sq. ft. parking ratio guideline? Available parking is at 3.5/1000 X

F Does public parking and mass-transit exist to facilitate employee, client and visitor access to the proposed lease location? X

2. Capital

A Is it a substantial net County cost (NCC) program? X

B Is this a long-term County program? X

C If yes to 2 A or B; is it a capital lease or an operating lease with an option to buy? X

D If no, are there any suitable County-owned facilities available? X

E If yes, why is lease being recommended over occupancy in County-owned space? No other County owned space available for this program. X

F Is Building Description Report attached as Attachment C? X

G Was build-to-suit or capital project considered? The County already occupies the facility and a capital project was not considered.

X

3. Portfolio Management

A Did department utilize CEO Space Request Evaluation (SRE)? X

B Was the space need justified? X

C If a renewal lease, was co-location with other County departments considered? X

D Why was this program not co-located?

1. The program clientele requires a “stand alone” facility.

2. No suitable County occupied properties in project area.

3. X No County-owned facilities available for the project.

4. Could not get City clearance or approval.

5. The Program is being co-located.

E Is lease a full service lease? X

F Has growth projection been considered in space request? X

G Has the Dept. of Public Works completed seismic review/approval?1 X

1As approved by the Board of Supervisors 11/17/98

2If not, why not?

ATTACHMENT B

Page 1 of 2

OVERVIEW OF THE PROPOSED LEASE COSTS

4510 E. Pacific Coast Highway, Long Beach

Existing Lease

Proposed Lease

Change

Area (Square Feet) 10,344 sq.ft. 13,347 sq.ft. +3,003 sq. ft.

Term (years)

7 years but currently on holdover

8 years

+1 year

Annual Base Rent (1)

$351,872 (holdover rent is $34.02 per sq. ft. annually. Prior to holdover fee, rate was $27.21 per sq. ft. annually)

$360,369 ($27.00 per sq. ft. annually)

+$8,496

Annual TI Reimbursement

N/A $380,573

+$380,573

Parking (2) Included in rent $39,024 +$39,024

Rental rate adjustment

Annual CPI increases capped at 3 percent

Annual 4 percent per year

+1 percent

Cancellation Terminate on 60 days prior written notice

County at 36th month with 180 days’ notice

Term set for 3 years and need to provide +120 days’ notice

(1) The existing and proposed leases are both gross, with the landlord responsible for paying all costs associated with operational and building maintenance.

(2) The proposed lease requires that the County pay prevailing rates (currently $60 per parking space per month) (2/1000) and may pay for an additional 2/1000 at 120% of prevailing rates (currently $72 per parking space per month). The amount set forth assumes all parking spaces are utilized.

ATTACHMENT BPage 2

Leased Area (sq.ft.) 10,344Expansion Space (sq. ft.) 3,003Term (months) 96Annual Rent Adjustment 4.00%

Cost Per RSF Per Month

Cost Per RSF Per Year

$2.25 $27.00

Cost Per Space Per Month

Cost Per Space Per Year

Parking (47 parking spaces)$60.00 $720.00



Parking (6 parking spaces) $72 $864.00Lump Sum Amortized$1,601,640 $1,902,863.50

1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year 8th Year Total 8 Year Rental Costs

Annual Base Rent Costs for Existing Space 279,288 290,460 302,078 314,162 326,728 339,797 353,389 367,524 2,573,426Base Rent Costs for Expansion Space ¹ 81,081 84,325 87,698 91,206 94,854 98,648 102,594 106,698 747,104Parking Costs ² 39,024 39,024 39,024 39,024 39,024 39,024 39,024 39,024 312,192

Tenant Improvement Costs ³ 380,573 380,573 380,573 380,573 380,573 0 0 0 1,902,865Subtotal Annual Lease Costs Paid to Landlord 779,966 794,382 809,373 824,965 841,179 477,469 495,007 513,246 5,535,587Low Voltage Costs 4 127,500 0 0 0 0 0 0 0 127,500

Total Annual Lease Costs 907,466 794,382 809,373 824,965 841,179 477,469 495,007 513,246 5,663,087

4 The low voltage cost of $127,500 will be paid via lump sum payment.*Calculation note: All numbers are rounded up to ensure sufficient funds available to pay the specified expense.

² The parking costs includes 47 parking spaces at the prevailing annual market rate ($720 per parking space) and 6 parking spaces at 120% of the prevailing annual market rate ($864 per parking space) for a total of 53 parking spaces. Prevailing rate may increase over the term of the lease.³ The tenant improvement cost of $1,601,640 will be amoritzed into the monthly rent at an interest rate of seven percent (7%) over 5 years.

OVERVIEW OF THE PROPOSED LEASE AMENDMENT COSTDepartment of Mental Health

4510 Pacific Coast Highway, Suites 600 & 630

Base Rent

Tenant Improvements ($120 per sq. ft.)

¹ Annual base rent includes fixed 4 percent annual increases.

ATTACHMENT C DEPARTMENT OF MENTAL HEALTH SPACE SEARCH – 3 MILE RADIUS

4510 E. PACIFIC COAST HIGHWAY, LONG BEACH

LACO Name Address Proprietor Ownership Property Use Gross SqFt

Net SQFT

Vacant

0194 Tucker School 2221 Argonne Ave Long Beach 90815

Public Health Permit School 285,318 285,318 NONE

10240 DMH - Long Beach 2600 Redondo Ave Long Beach 90806

Mental Health Leased Multiple Use Building - Office

50,814 48,274

NONE

30301 PW Flood - Alamitos Maintenance Yard

881 Iroquois Ave Long Beach 90815

Public Works Owned Maintenance Yard 3,306 2,976

NONE

30311 PW Flood - Alamitos Yard Fuel Station


Public Works Owned Fueling/Charging Station

80 NONE

6672 Sheriff - Aero Bureau Main Hangar & Admin Building

3235 Lakewood Blvd Long Beach 90808

Sheriff Ground Lease Aircraft Storage 16,805 14,958

NONE

6673 Sheriff - Aero Bureau Admin Bl. Suite 201

4324 Donald Douglas Dr Long Beach 90808

Sheriff Leased Aircraft Storage 2,750 2,613

NONE

6749 Fire Station 60 (Old Fire Station 154)

2300 E 27th St. Signal Hill 90806

Fire Department Owned Fire Station 4,330 3,681

NONE

A400 Fire Station 154 401 N 2nd Ave Covina 91723

Fire Department Contract Fire Station 10,359 8,805

NONE

A468 DMH - Long Beach Asian 4510 E Pacific Coast Hwy Long Beach 90804

Mental Health Leased Multiple Use Building - Office

10,334 9,817

NONE

A547 Assessor - South District Office Building

1401 E Willow St. Signal Hill 90755

Assessor Leased Multiple Use Building - Office

34,051 29,284

NONE

A548 Assessor - South District Storage Building


Assessor Leased Storage Special Condition

2,818 2,536

NONE

A555 Former Long Beach General Hospital (Warehouse)


Health Services Owned Storage Misc > 1000 SQFT

232,650 NONE

A773 DC&FS - Children's Advocacy Center - Long Beach Poly

1600 Atlantic Ave Long Beach 90813

Children and Family Services

Gratis Use Multiple Use Building - Office

- - NONE

B010 Sheriff - Aero Bureau King Air Storage Hangar


Sheriff Leased Aircraft Storage 12,100 NONE

B035 Mental Health - Long Beach Mental Evaluation Team

3501 N Lakewood Blvd Long Beach 90808

Mental Health Gratis Use Aircraft Storage 72 72

NONE

F045 PW Flood - Old Hamilton Bowl

1986 N Walnut Ave Long Beach 90806

Public Works Easement Flood Control Containment Areas

17,359 17,359

NONE

F130 PW Flood - Los Altos Pumping Station

6560 E Anaheim Rd Long Beach 90815

Public Works Owned Infrastructure Service Building

1,584 NONE

F346 PW Flood - Alamitos Yard Garage



1,900 1,710

NONE

F347 PW Flood - Alamitos Yard Office


Public Works Owned Multiple Use Building - Office

700 630

NONE

F403 PW Flood - Hamilton Bowl Pump Station

1810 N Gaviota Ave Long Beach 90806


3,840 NONE

F561 PW Flood - West Hamilton Pump House

1912 N Walnut Ave Long Beach 90806


560 NONE

LACO Name Address Proprietor Ownership Property Use Gross SqFt

Net SQFT

Vacant

F692 PW Flood - W Toledo Pumping Plant

20 Rivo Alto Canal Long Beach 90803

Public Works Permit Infrastructure Service Building

340 NONE

F693 PW Flood - Alamitos Bay Pumping Plant

5425 E Ocean Blvd Long Beach 90803

Public Works Permit Infrastructure Service Building

1,193 NONE

F695 PW Flood - Belmont Pumping Station

222 Claremont Ave Long Beach 90803


2,155 NONE

L089 Sheriff - Aero Bureau Aircraft Parking Ramp


Sheriff Ground Lease Parking Lot 160,687 NONE

Y248 Sheriff - Aero Bureau North Storage Hangar

3235 Lakewood Blvd Long Beach 90808,

Sheriff Ground Lease Aircraft Storage 9,878 9,596

NONE

ATTACHMENT D

FACILITY LOCATION POLICY ANALYSIS

Proposed lease renewal: Eight-year Lease agreement for the Department of Mental Health – 4510 E. Pacific Coast Highway, Long Beach – Fourth Supervisorial District. A. Establish Service Function Category – Regional and local public service function.

B. Determination of the Service Area – The proposed lease will provide an eight-year

lease extension & expansion for the existing DMH program within Service Planning Area 8.

C. Apply Location Selection Criteria to Service Area Data

• Need for proximity to service area and population: Continuing need for existing operation in the Long Beach region in support of Asian Pacific Islander mental health programs.

• Need for proximity to existing County facilities: Close to other County departments.

• Need for proximity to Greater Long Beach: The current site provides a central location, just east of Downtown Long Beach and is accessible to public transportation.

• Economic Development Potential: N/A

• Proximity to public transportation: The location is adequately served by local transit including a nearby Metro station.

• Availability of affordable housing for County employees: The surrounding area

provides for affordable housing and rental opportunities.

• Use of historic buildings: N/A

• Availability and compatibility of existing buildings: There are no alternative existing County buildings available to meet the Department’s needs.

• Compatibility with local land use plans: The site is currently zoned commercial, and the current use is consistent with the building’s use and zoning and not in conflict with the goals and policies of the City of Long Beach. A notification letter has been sent pursuant to Government Code Section 25351.

• Estimated acquisition/construction and ongoing operational costs: The first-year

maximum costs associated with the proposed lease are $779,966, which includes base rent of $360,369, estimated parking costs of $39,024, and up to $380,573 in additional TI costs. Rental costs for DMH are paid via grant funding, health fees and net County cost.

D. Analyze results and identify location alternatives

Based upon the space and service needs of DMH, CBRE surveyed the immediate area to determine the availability of comparable and more economical site alternatives. Based upon a review of available industry data, CBRE has established that the average annual rental range for similar space is between $19.44 and $33.00 dollars per square foot on a full-service gross basis. In comparison, the base rental rate of $27.00 per square foot per year, gross, for the proposed lease is within market range for the area.

E. Determine benefits and drawbacks of each alternative based upon functional needs, service area, cost and other Location Selection Criteria The existing facility provides proper accommodations for DMH within the indicated service area. The proposed lease is in conformance with the Asset Management Principles as outlined in Attachment A. The existing services provided by DMH within the existing facility will continue to provide an appropriate location, which is consistent with the County’s Facility Location Policy, adopted by the Board of Supervisors on July 24, 2012.



2/12/2020

BOARD MEETING

3/4/2020


1

DEPARTMENT DHS; A-C

SUBJECT Approve the proposed eight-year leases for DHS of 15,601 rentable square feet of office space and 62 on-site parking spaces, and for the Auditor-Controller of 25,854 square feet of office space and 103 parking spaces at 350 S. Figueroa Street, Los Angeles.

PROGRAM Ambulatory Care Network (ACN) of DHS. The Audit, Ombudsman and Contract Monitoring divisions of the Auditor-Controller.




Existing lease is currently on month-to-month holdover since November 2018.

COST & FUNDING

Total cost: $8,710,747 total lease rental and parking over 8 years for DHS lease. $14,438,851 total lease rental and parking over 8 years for A-C lease.

Funding source: Rental costs for DHS and the A-C are net County cost.

TERMS (if applicable): The proposed base rent is subject to annual fixed 4 percent increases. The parking rent is subject to increases per the lease(s). Explanation: Funding for the proposed lease(s) is included in the Fiscal Year 2019-2020. Rent Expense budget and will be billed back to DHS and the A-C departments as necessary.


The available co-working office spaces in the subject area were assessed, including meeting with Patrick Grubok of WeWork, ISD’s contact. There is insufficient availability of space to satisfy these requirements.

PURPOSE OF REQUEST

Approval of the recommended action will authorize and will adequately provide the necessary office space for DHS and the A-C.


The proposed lease(s) will allow DHS and the A-C to continue its operations at the existing offices at 350 S. Figueroa Street, Los Angeles, in proximity to ongoing constituencies and programs served as well as in the Kenneth Hahn Hall of Administration. The proposed lease for DHS and the A-C will have $15 per square foot as a Base Tenant Improvement (TI) allowance to be paid by the Landlord.


Name, Title, Phone # & Email: Michael Navarro CEO- Real Estate Division 213-974-4364 [email protected]



EIGHT-YEAR LEASES DEPARTMENT OF HEALTH SERVICES

AUDITOR-CONTROLLER 350 SOUTH FIGUEROA STREET, LOS ANGELES

(FIRST DISTRICT) (3 VOTES)

SUBJECT Approval of two proposed leases to replace an existing lease to provide the Department of Health Services and the Auditor-Controller continued use of 41,455 rentable square feet of office space and up to 165 on-site parking spaces. IT IS RECOMMENDED THAT THE BOARD:

1. Find that the proposed leases are exempt from the California Environmental Quality Act (CEQA), for the reasons stated in this Board letter and in the record of the project.

2. Authorize the Chief Executive Officer, or her designee, to execute the two

proposed leases with 350 South Figueroa, LLC, (Landlord), for approximately 41,455 rentable square feet of office space, and 165 on-site parking spaces at 350 South Figueroa Street, Los Angeles to be occupied by the Department of Health Services (DHS), and the Auditor-Controller (Auditor). The estimated aggregate maximum first year base rental cost is $1,616,745. The total base rental cost payable to the Landlord under the two proposed leases would approximate

SACHI A. HAMAI Chief Executive Officer

Board of Supervisors HILDA L. SOLIS First District MARK RIDLEY-THOMAS Second District SHEILA KUEHL Third District JANICE HAHN Fourth District KATHRYN BARGER Fifth District





$14,897,062 over the eight-year lease terms. The breakdown of rent for these two leases is as follows:

a) A proposed lease for approximately 15,601 square feet of office space, to

include up to 62 on-site parking spaces at 350 South Figueroa Street, Los Angeles, to be occupied by DHS. The estimated maximum first year rental cost, including parking and tenant improvements (TI), is not to exceed $996,495. The total rental cost under this proposed lease would not exceed $5,606,299 over the eight-year term. The rental costs for DHS are funded with State and Federal funds and local fees.

b) A proposed lease for approximately 25,854 square feet of office space, to

include up to 103 on-site parking spaces at 350 South Figueroa Street, Los Angeles, to be occupied by the Auditor. The estimated maximum first year rental cost, including parking and TIs, is not to exceed $1,651,817. The total rental cost under this proposed lease would not exceed $9,290,763 over the eight-year term. The rental costs for Auditor are funded primarily by billings to departments that receive Auditor services.

3. Authorize the Chief Executive Officer, or her designee, to reimburse the Landlord

up to $3,316,400 in a lump sum for the County’s TI contribution, or $4,340,632 if amortized at 7 percent per annum over eight years. The total lease costs payable to the Landlord would not exceed $23,149,598 over the eight-year term, which is comprised of the $14,897,062 rental cost, $3,911,904 parking cost and the $4,340,632 maximum County’s TI contribution. The breakdown of the Tenant Improvements (TI) for these two leases are as follows:

a) For the DHS leased space, up to $1,248,080 in a lump sum for the County’s TI

contribution, or $1,633,536 if amortized at 7 percent per annum over eight years. The total lease costs payable to the Landlord would not exceed $8,710,747 over the eight-year term, which is comprised of the $5,606,299 base rental cost, $1,470,912 parking cost and the $1,633,536 maximum County’s TI contribution.

b) For the proposed Auditor leased space, up to $2,068,320 in a lump sum for the County’s TI contribution, or $2,707,096 if amortized at 7 percent per annum over eight years. The total lease costs payable to the Landlord would not exceed $14,438,851 over the eight-year term, which is comprised of the $9,290,763 base rental cost, $2,440,992 parking cost and the $2,707,096 maximum County’s TI contribution.


other ancillary documentation necessary to effectuate the terms of the proposed leases, and to take other actions necessary and appropriate to implement and


effectuate the terms of the proposed leases, including, without limitation, exercising early termination rights, and the right of first offer to lease additional space. The proposed leases will become effective upon approval by the Board.

PURPOSE/JUSTIFICATION OF RECOMMENDED ACTION The World Trade Center (WTC) building located at 350 South Figueroa Street, Los Angeles, provides necessary office space for various County departments, including DHS and the Auditor, that have been in operation at WTC since November 2008. The lease expired on October 31, 2018 and has been on a month-to-month holdover basis, without a holdover fee, pending renewal of the proposed lease. DHS will continue to house office space for the its Ambulatory Care Network (ACN) in Suite 990, as well as backfill existing built-out County office space in Suite 188, previously occupied by the Chief Information Office who recently moved to the Hall of Records (HOR). The Board previously approved the restructure of the ACN and its services to comply with the Affordable Care Act and the California 1115 Medicaid Waiver. The program serves 24 free-standing health centers as well as non-profit and university partners, under a single organization that is the basis for an integrated delivery system prepared for the management of patients. ACN executive and support staff are housed in a single location which enhances operational efficiency and effectiveness. This space accommodates approximately 68 employees and visitors with adjacent parking. The Auditor’s existing divisions at the site include the Audit Division, Countywide Contract Monitoring Division (CCMD), and Ombudsman. Audit Division performs financial, compliance, management, and performance audits of County departments and Commissions; audits agencies and companies doing business with the County; oversees contracts for audit and consulting services requested by County departments; and responds to the Board’s special requests for investigations and audits. CCMD enhances the County’s oversight of its contractors by conducting monitoring reviews of County contractors, providing training and technical support to the County departments’ contract monitoring and contract development operations, and responding to Board inquiries and other special projects. The Ombudsman serves as a personal rights advocate, providing a confidential and informal process to resolve concerns that arise for children placed in group homes. This space accommodates approximately 120 employees and visitors with adjacent parking. The proposed leases will continue to provide DHS and the Auditor with sufficient office space for their respective ongoing operations. The existing facility adequately meets the space needs of the current departments and is accessible to public transportation routes. Approval of the recommended actions will find that the proposed leases are exempt from CEQA and will allow the existing programs to continue operations at the subject facility.

The Honorable Board of Supervisors March 4, 2020 Page 4 Implementation of Strategic Plan Goals The Countywide Strategic Plan Goal 3 - “Realize Tomorrow’s Government Today” - provides that our increasingly dynamic, and complex environment, challenges our collective abilities to respond to public needs and expectations. We want to be an innovative, flexible, effective, and transparent partner focused on advancing the common good. The proposed leases will support this goal by allowing DHS and the Auditor to continue their operations without interruption of service. The proposed leases are in conformance with the Asset Management Principles as outlined in Attachment A. FISCAL IMPACT/FINANCING The proposed leases will have the following financial impact:

Sufficient funding to cover the two additional lease costs including proposed rent, parking and County TI costs for the first year will be appropriated in the Rent Expense Budget as part of the mid-year budget adjustment to cover additional lease costs of $1,500,039. DHS and the Auditor have sufficient funding in their Fiscal Year (FY) 2019-20 operating budget to cover these costs for the first year. Beginning with FY 2020-21, ongoing funding for the proposed leases will be part of the budget for the departments. Rental costs for DHS are funded with State/Federal funds and local fees and the Auditor by billing to departments that receive Auditor services. FACTS AND PROVISIONS/LEGAL REQUIREMENTS In addition to the terms described herein, the proposed DHS and Auditor leases include the following provisions:

− The proposed DHS and Auditor leases are on a gross basis whereby the Landlord will be responsible for all operating and maintenance costs associated with the facility.

- The square footage of the proposed lease premises has increased slightly due to

the Landlord remeasuring of the office space per current industry standards. − The maximum first year base rental cost for DHS is $608,439, and for the Auditor

it is $1,008,306 which equates to $39 annually per square foot, with annual rental adjustments of 4 percent per annum.

- Total parking costs are estimated to be $488,988 per year for both leases based on each department’s right to purchase 123 stalls at prevailing rates (currently $235 per stall per month) and a right to purchase 42 additional stalls at 120% of


prevailing rates (currently $282 per stall per month). When the leases originally commenced, parking was included in the lease rate, however, the market has changed, and the Landlord is requiring that the County pay separately for parking.

− The Landlord will provide a non-reimbursable base TI allowance of $15 per square foot to DHS equal to $234,015 and to Auditor equal to $387,810.

− The Landlord will provide an aggregate of additional reimbursable TI dollars in the amount up to $3,316,400 or $80 per square foot, which the County may reimburse in a lump sum payment or $4,340,632 if amortized over an eight-year period at 7 percent per annum.

− The aggregate cost of the proposed leases over the term for DHS and the Auditor, including rent expense, parking, and TI reimbursement, if fully utilized, would be approximately $23,149,598. Attachment B provides an overview of the total proposed lease costs.

− A cancellation provision that allows the County to terminate at 60 months with 180

days’ prior written notice, subject to payment of a termination fee.

− The proposed leases contain a holdover provision, wherein in addition to the base rent, there will be a monthly holdover fee of 25 percent over the then existing base rent for the first twelve months following expiration of the lease term. Thereafter, the monthly holdover fee shall be 50 percent of the base rent at the time of the lease expiration. The County’s holdover tenancy may be terminated upon 30 days’ notice from the Landlord.

− Both of the proposed leases give the County a right of first offer to lease additional contiguous space in the building. If Landlord intends to offer such space or receives a third party offer to lease such space, Landlord shall give the County first rights to match the proposed rental rate and lease the space, which right County must exercise within 30 days from Landlord’s notice

− The proposed leases will be effective upon approval by the Board. The Chief Executive Office (CEO), through its broker representative CBRE Group, Inc. (CBRE), conducted a survey within the project area to determine the availability of comparable office space options. CBRE was unable to identify any sites in the survey area that could accommodate this requirement more economically. Based upon a review of available industry data, CBRE has established that the average annual rental range for similar space is between $30 and $48.60 dollars per square foot on a full service gross basis (with base year for operating expense increases). In comparison, the base rental

The Honorable Board of Supervisors March 4, 2020 Page 6 rate of $39 per square foot per year, gross (no operating expenses), for the proposed lease is within market range for the area. The available co-working office spaces in the subject area were assessed and there is insufficient availability to satisfy these requirements. Attachment C shows county-owned or leased facilities in the proximity of the service area, and there are no suitable County-owned or leased facilities available for the program. The Department of Public Works has inspected the facility and found it seismically suitable for County occupancy. Construction of any TIs will be completed in compliance with relevant building and construction codes, laws and regulations, including the Americans with Disabilities Act. A notification letter to the City of Los Angeles has been sent pursuant to Government Code Section 25351. County Counsel has reviewed the attached proposed lease and has approved it as to form. The proposed lease will continue to provide an appropriate location for the applicable programs which is consistent with the County’s Facility Location Policy, as adopted by the Board of Supervisors on July 24, 2012, as outlined in Attachment D. ENVIRONMENTAL DOCUMENTATION The proposed leases are exempt from CEQA. The proposed leases, which replace the existing lease space with minor tenant improvements within an existing building, is within a class of projects that have been determined not to have a significant effect on the environment and which meets the criteria set forth in Section 15301 of the State CEQA Guidelines (Guidelines) and Class 1 of the County's Environmental Document Reporting Procedures and Guidelines, Appendix G. In addition, based on the proposed lease records, it will comply with all applicable regulations, and there are no cumulative impacts, unusual circumstances, damage to scenic highways, listing on hazardous waste site lists compiled, pursuant to Government Code Section 65962.5, or indications that it may cause a substantial adverse change in the significance of a historical resource that would make the exemption inapplicable. Upon the Board's approval of the recommended actions, a Notice of Exemption will be filed with the Registrar-Recorder/County Clerk in accordance with Section 21152 of the California Public Resources Code. IMPACT ON CURENT SERVICES (OR PROJECTS The proposed leases will adequately provide the necessary office space for these County requirements. The effected departments concur with the proposed recommendation.

The Honorable Board of Supervisors March 4, 2020 Page 7 CONCLUSION It is requested that the Executive Office, Board of Supervisors return one certified copy of the Minute Order, and the adopted stamped board letter to the CEO, Real Estate Division at 320 West Temple Street, 7th Floor, Los Angeles, CA 90012 for further processing. Respectfully submitted, SACHI A. HAMAI Chief Executive Officer SAH:FAD:DPH:DL JLC:MAN:NH:gw Enclosures c: Executive Office, Board of Supervisors County Counsel Auditor-Controller Health Services Internal Services

ATTACHMENT A

DEPARTMENT OF HEALTH SERVICES AUDITOR-CONTROLLER

350 SOUTH FIGUEROA STREET, LOS ANGELES Asset Management Principles Compliance Form1





D Does this lease meet the guideline of 200 sq. ft of space per person? Ratio = 220 per person w/conference rooms and reception. X

E Does lease meet the 4/1000 sq. ft. parking ratio guideline? X


2. Capital

A Is it a substantial net County cost (NCC) program? X




E If yes, why is lease being recommended over occupancy in County-owned space? X


G Was build-to-suit or capital project considered? The County already occupies the facility and a capital project was not considered.

X




C If a renewal lease, was co-location with other County departments considered? X

D Why was this program not co-located? X



3. No County-owned facilities available for the project.


5. X The Program is being co-located.





2If not, why not?

ATTACHMENT B-1

Page 1 of 2

OVERVIEW OF THE PROPOSED LEASE COSTS DEPARTMENT OF HEALTH SERVICES

350 S. Figueroa Street Los Angeles

Existing Lease

Proposed Lease

Change

Area (Square Feet) 5,407 sq.ft. 15,601 sq.ft +10,194 sq. ft.

Term (years)

Ten years (11/01/2008-10/31/2018) currently on month-to-month holdover

Eight years

-2 years



$608,439 ($39 per sq. ft. annually)

+$392,559


N/A $204,192

+$204,192



Annual 3 percent increases


+1 percent

Cancellation County after 5 years with 180 days’ notice

County at the 60th month with 180 days’ notice none

(1) The existing and proposed leases are both gross, with the landlord responsible for paying all costs associated with operational and building maintenance.


ATTACHMENT B - 1Page 2

Leased Area (sq.ft.) 15,601Term (months) 96Annual Rent Adjustment 4.00%


Cost Per RSF PerYear

$3.25 $39.00



Parking (46 parking spaces)$235 $2,820

Additional Parking (16 parking spaces)$282 $3,384

Lump Sum Amortized$1,248,080 $1,633,533.08


Annual Base Rent Costs for Existing Space ¹ 608,439 632,777 658,088 684,412 711,788 740,260 769,870 800,665 5,606,299Parking Costs ² 183,864 183,864 183,864 183,864 183,864 183,864 183,864 183,864 1,470,912Tenant Improvement Costs ³ 204,192 204,192 204,192 204,192 204,192 204,192 204,192 204,192 1,633,536Total Annual Rental Costs 996,495 1,020,833 1,046,144 1,072,468 1,099,844 1,128,316 1,157,926 1,188,721 8,710,747

*Calculation note: All numbers are rounded up to ensure sufficient funds available to pay the specified expense.

² The parking costs includes 46 parking spaces at the prevailing annual market rate ($2820 per parking space per month) and 16 parking spaces at 120% of the prevailing annual market rate ($3384 per parking space per month) for a total of 62 parking spaces. Prevailing rate may increase over the term of the lease.³ The tenant improvement cost of $1,248,080 is an assumption based on budget approval. This cost will be amoritzed into the monthly rent at an interest rate of seven percent (7%) over 8 years.

OVERVIEW OF THE PROPOSED LEASE COSTDepartment of Health Services

350 South Figueroa, Suites 188 & 990

Base Rent



ATTACHMENT B-2 Page 1 of 2


AUDITOR-CONTROLLER

350 S. Figueroa Street, Los Angeles

Existing Lease

Proposed Lease

Change

Area (Square Feet) 23,353 25,854(3) +2,501 sq. ft.

Term (years)

Ten years (11/01/2008 – 10/31/2018) currently on month-to-month holdover

Eight years

-2 years



$1,008,306 ($39.00 per sq. ft. annually)

+$75,913


N/A $338,387 +$338,387





+1 percent

Cancellation County after 5 years with 180 days’ notice

County at the 60th month with 180 days’ notice none

(1) The existing and proposed leases are both on a gross basis, with the landlord responsible for paying all costs associated with operational and building maintenance.


(3) Auditor is in the same space. Remeasuring the existing premises resulted in a small increase in square footage.

ATTACHMENT B - 2 Page 2




$3.25 $39.00



Parking (77 parking spaces) $235 $2,820

Additional Parking (26 parking spaces) $282$3,384



Annual Base Rent Costs for Existing Space ¹ 1,008,306 1,048,639 1,090,584 1,134,208 1,179,576 1,226,759 1,275,829 1,326,862 9,290,763Parking Costs ² 305,124 305,124 305,124 305,124 305,124 305,124 305,124 305,124 2,440,992Tenant Improvement Costs ³ 338,387 338,387 338,387 338,387 338,387 338,387 338,387 338,387 2,707,096Total Annual Rental Costs 1,651,817 1,692,150 1,734,095 1,777,719 1,823,087 1,870,270 1,919,340 1,970,373 14,438,851


² The parking costs includes 77 parking spaces at the prevailing annual market rate ($2820 per space per month) and 26 parking spaces at 120% of the prevailing annual market rate of ($3384 per space per month) for a total of 103 parking spaces. Prevailing rate may increase over the term of the lease.³ The tenant improvement cost of $2,068,320 is an assumption based on budget approval. This cost will be amoritzed into the monthly rent at an interest rate of seven percent (7%) over 8 years.

OVERVIEW OF THE PROPOSED LEASE COSTAuditor Controller

350 South Figueroa, Suite 800

Base Rent



ATTACHMENT B - 3Page 1



Cost Per RSF PerYear

$3.25 $39.00



Parking (123 parking spaces)$235 $2,820

Additional Parking (42 parking spaces)$282 $3,384



Annual Base Rent Costs for Existing Space ¹ 1,616,745 1,681,416 1,748,672 1,818,620 1,891,364 1,967,019 2,045,699 2,127,527 14,897,062Parking Costs ² 488,988 488,988 488,988 488,988 488,988 488,988 488,988 488,988 3,911,904Tenant Improvement Costs ³ 542,579 542,579 542,579 542,579 542,579 542,579 542,579 542,579 4,340,632Total Annual Rental Costs 2,648,312 2,712,983 2,780,239 2,850,187 2,922,931 2,998,586 3,077,266 3,159,094 23,149,598


² The parking costs includes 123 parking spaces at the prevailing annual market rate ($2820 per parking space per month) and 42 parking spaces at 120% of the prevailing annual market rate ($3384 per parking space per month) for a total of 165 parking spaces. Prevailing rate may increase over the term of the lease.

³ The tenant improvement cost of $1,248,080 is an assumption based on budget approval. This cost will be amoritzed into the monthly rent at an interest rate of seven percent (7%) over 8 years.

OVERVIEW OF THE PROPOSED LEASE COSTDepartment of Health Services & Auditor Controller

350 South Figueroa, Suites 188, 800 & 990

Base Rent



ATTACHMENT C

DEPARTMENT OF HEALTH SERVICES AUDITOR-CONTROLLER

SPACE SEARCH – GREATER DOWNTOWN AREA 350 SOUTH FIGUEROA STREET, LOS ANGELES

LACO Name Address Proprietor Ownership Type

Property Use

Gross SqFt

Net SqFt Vacant

A405 BOS/Arts Commission - Wilshire - Bixel Building

1055 Wilshire Blvd Ste. 800 Los Angeles 90017


Leased Multi Use Bldg - Office

9,906 9,410 NONE

A675 DA - Metro Court/DCFS Metro North/ERCP/Call Center

1933 S Broadway Los Angeles 90007



148,483 141,059 NONE

A216 DPSS - Appeals & State Hearings

811 Wilshire Blvd Suite 1118 Los Angeles 90017

Public Social Services


5,665

5,439 NONE

A118 Citizens Commission On Jail Violence

355 S Grand Ave Los Angeles 90071

Chief Executive Office (CEO)

Gratis Use Multi Use Bldg - Office

60,984 60,984 NONE

B500 DHS - Workforce Development Program

500 S Virgil Ave Los Angeles 90020

Health Services Permit Multi Use Bldg - Office

8,000 7,200 NONE

A578 Auditor - Shared Services Initiative

3470 Wilshire Blvd Los Angeles 90010

Auditor-Controller


21,500 20,425 NONE

A627 County Admin Offices - LA World Trade Center

350 S Figueroa St. Los Angeles 90071

County Counsel Leased Multi Use Bldg - Office

68,314 65,511 NONE

A632 Office of Inspector General 312 S Hill St. Grand Central Market Los Angeles 90012

Public Defender Leased Multi Use Bldg - Office

9,782 9,293 NONE

Y193 Parks & Recreation - Headquarters Building

433 S Vermont Ave Los Angeles 90020

Parks and Recreation

Owned Multi Use Bldg - Office

31,862 21,777 NONE

5456 Health Services Administration Building

313 N Figueroa St. Los Angeles 90012

Health Services Owned Multi Use Bldg - Office

221,359 130,143 NONE

10108 Parks and Recreation Planning and Development




30,788 NONE

10112 Regional Parks and Open Space District




NONE

5266 Metropolitan Courthouse 1945 S Hill St. Los Angeles 90007


CA - Superior Courts

Multi Use Bldg - Office

303,433

136,422 NONE

X317 DCSS - Le Sage Complex 4 Story Building

3175 W 6th St. Los Angeles 90020

WDACS Owned Multi Use Bldg - Office

52,230 40,146 NONE

A369 DCFS - Headquarters Annex 501 Shatto Pl Los Angeles 90020



17,751 15,976 NONE

A413 Human Resources - Wilshire Square Two Building


Human Resources


85,991 72,804 NONE

A425 DCFS - Headquarters Building

425 Shatto Pl Los Angeles 90020



81,912 77,816 NONE

X550 Mental Health - Le Sage Complex Tower


Mental Health Owned Multi Use Bldg - Office

171,651 148,400 NONE

A336 Sheriff - Wilshire Centre Building


Sheriff Leased Multi Use Bldg - Office

7,755 7,115 NONE

A360 DPSS - Metro North AP/Calworks District Office




62,000 60,140 NONE

L360 DPSS - Metro North/CalWORKs District




501,000 40 NONE

X510 Parks & Rec - Le Sage Complex 2 Story Building


Public Health Owned Multi Use Bldg - Office

31,540 24,835 NONE

A429 CEO - Real Estate Division/Service Integration

222 S Hill St. Los Angeles 90012



34,737 30,798 NONE

A424 DPSS - Equitable Plaza Building




65,871 62,577 NONE

3154 Clara Shortridge Foltz Criminal Justice Center

210 W Temple St. Los Angeles 90012


CA - Superior Courts

Multi Use Bldg - Office 1,036,283 516,275 NONE

3155 Performing Arts Center - De Lisa Building/The Annex

301 N Grand Ave Los Angeles 90012

WDACS Owned Multi Use Bldg - Office

27,582 17,978 NONE

0181 Kenneth Hahn Hall of Administration

500 W Temple St. Los Angeles 90012



958,090 557,268 NONE

0156 Hall of Records 320 W Temple St. Los Angeles 90012

District Attorney Owned Multi Use Bldg - Office

438,095 260,776 NONE

A532 PH Health - Wilshire Metroplex Building


Public Health Leased Multi Use Bldg - Office

113,027 101,920 NONE

B922 DPSS - Wilshire Special District Office

2415 W 6th St. Los Angeles 90057



46,228 42,065 NONE

B695 PH - Immuniz&Envir Health/Mental Health


Public Health Leased Multi Use Bldg - Office

125,622 118,605 NONE

ATTACHMENT D


Proposed lease renewal: Eight-year Lease agreements for the Department of Health Services and the Auditor-Controller’s office – 350 South Figueroa Street, Los Angeles – First Supervisorial District. A. Establish Service Function Category – Regional and local public service function.

B. Determination of the Service Area – The proposed lease will provide an eight-year

lease extension for the existing DHS and Auditor programs within Service Planning Area 4.


• Need for proximity to service area and population: Continuing need for existing operation in the greater SPA 4 region in support of Health Services and Auditor programs.

• Need for proximity to existing County facilities: Close to other County departments.

• Need for proximity to Los Angeles Civic Center: The current site provides a central location within greater Downtown Los Angeles and is accessible to public transportation.


• Proximity to public transportation: The location is adequately served by local transit including a nearby Metro station.

• Availability of affordable housing for County employees: The surrounding area

provides for affordable housing and rental opportunities.


• Availability and compatibility of existing buildings: There are no alternative existing County buildings available to meet the Department’s needs.

• Compatibility with local land use plans: The site is currently zoned commercial, and the current use is consistent with the building’s use and zoning and not in conflict with the goals and policies of the City of Los Angeles. A notification letter has been sent pursuant to Government Code Section 25351.

• Estimated acquisition/construction and ongoing operational costs: The initial

annual maximum costs associated with the proposed DHS lease is $996,495, which includes base rent of $608,439, parking of $183,864, and up to $204,192 in additional TI costs. The initial annual maximum costs associated with the proposed Auditor lease is $1,651,817, which includes base rent of $1,008,306, estimated parking of $305,124, and up to $338,387 in additional TI costs. Rental costs for DHS are funded with State/Federal funds and local fees and the Auditor by billing to departments that receive Auditor services.

D. Analyze results and identify location alternatives

Based upon the space and service needs of the Departments, CBRE surveyed the immediate area to determine the availability of comparable and more economical site alternatives. Based upon a review of available industry data, CBRE, as CEO’s representative, has established that the annual average rental rate for similar space is $41.90 per square foot per year on a full service gross basis. Therefore, the base annual rent of $39 per square foot per year gross for the proposed leases, represents a rate below the average market rate for the area.

E. Determine benefits and drawbacks of each alternative based upon functional needs, service area, cost and other Location Selection Criteria The existing facility provides proper accommodations for the Departments within the indicated service area. The proposed leases area in conformance with the Asset Management Principles as outlined in Attachment A. The consolidation of services for DPH within the existing facility will continue to provide an appropriate location, which is consistent with the County’s Facility Location Policy, adopted by the Board of Supervisors on July 24, 2012.

BOARD LETTER / MEMO – FACT SHEET OPERATIONS CLUSTER


2/12/2020



2nd

DEPARTMENT Department of Public Social Services (DPSS); Department of Public Health (DPH)

SUBJECT Approve the proposed five-year leases for approximately 60,172 square feet of office space and 240 on-site parking spaces at 9800 La Cienega Boulevard, Inglewood.

PROGRAM




Existing lease for DPSS is currently on month-to-month holdover since June 22, 2018. Existing lease for DPH is currently on month-to-month holdover since June 14, 2017.

COST & FUNDING Total cost: $11,128,641 total lease rental costs including parking.

Funding source: The rental costs for DPSS are funded 82.88 percent with State and Federal funds and 17.12 percent with net County cost. The rental costs for DPH are 100 percent funded from revenue generated by license and permit fees.

TERMS (if applicable): The proposed base rent is subject to annual increases of 4 percent per annum as a result of the high demand for office space. The leases include a cancellation provision that allows the County to terminate the proposed leases at the 36th month, with at least nine months’ notice. Both departments in the building have the right of first offer to lease any contiguous space that arises after execution of the lease and prior to the last 12 months of the term. The proposed leases contain a holdover provision, wherein there is a monthly holdover fee of 25% of the then existing base rent for the first twelve months following expiration of the lease term. Thereafter, the monthly holdover fee shall be 50% of the base rent at the time of the lease expiration. The County’s holdover tenancy may be terminated upon 30 days’ notice from the Landlord. The proposed leases contain one, four-year option to extend the leases at the then current fair market rental rate and terms, with six months’ prior written notice. Explanation: Funding for the proposed option is included in the Fiscal Year 2019-20 Rent Expense budget and will be billed back to the DPSS and DPH.


Extensive research has been completed to evaluate the option of utilizing co-working as an alternative site for DPSS and DPH at 9800 La Cienega Boulevard. There is only one co-working location in the LAX submarket, which is heavily multi-tenanted and would not allow for anything more than an 800-1,000 square foot user group. There are other co-working options in less than a five mile radius to this site, but not any that can accommodate a 55,000 or 5,000 square foot user group. Therefore, co-work space is not a viable alternative.

PURPOSE OF REQUEST

Approval of the recommended action will authorize and continue to adequately provide the necessary office space for DPSS and DPH.


The County has leased these premises at 9800 La Cienega Boulevard, Inglewood since 2008 and 2012 respectively. DPSS and DPH currently occupy space under separate leases. DPSS occupies 55,318 square feet of office space required for its Customer Service Center, a direct service program, which services CalWorks, CalFresh, Medi-Cal, and General Relief participants. DPH occupies 4,854 square feet of office space required for its Environmental Health (EH) program which inspects retail food facilities and multiple family dwellings with five or more units. DPH holds administrative hearings on the premises. The existing facility adequately meets the space needs of the County departments. The location is freeway accessible and will accommodate all employees and visitors with sufficient parking.


Name, Title, Phone # & Email: Michael Navarro CEO-Real Estate Division 213-974-4364 [email protected]



FIVE-YEAR LEASES DEPARTMENT OF PUBLIC SOCIAL SERVICES

AND DEPARTMENT OF PUBLIC HEALTH 9800 LA CIENEGA BOULEVARD, INGLEWOOD

(SECOND DISTRICT) (3 VOTES)

SUBJECT Approval of two proposed leases to replace two existing leases to provide the Department of Public Social Services and the Department of Public Health with continued use of 60,172 rentable square feet of office space and up to 312 on-site parking spaces. IT IS RECOMMENDED THAT THE BOARD:

1. Find that the proposed leases are exempt from the California Environmental Quality Act (CEQA), for the reasons stated in this Board letter and in the record of the project.

2. Authorize the Chief Executive Officer, or her designee, to execute two proposed leases with 9800 La Cienega LLC (Landlord), for an aggregate of approximately 60,172 square feet of office space, and up to 312 on-site parking spaces at 9800 La Cienega Boulevard, Inglewood, to be occupied by the Department of Public Social Services (DPSS), and the Department of Public Health (DPH). The estimated maximum first year rental cost for both leases is not to exceed $1,732,955. The total rental cost payable to the Landlord under both of the proposed leases would not exceed $9,386,241 over the five-year terms. The break down of rent for these two leases are as follows:

SACHI A. HAMAI Chief Executive Officer Board of Supervisors

HILDA L. SOLIS First District MARK RIDLEY-THOMAS Second District SHEILA KUEHL Third District JANICE HAHN Fourth District KATHRYN BARGER Fifth District





a) A proposed lease for DPSS, of approximately 55,318 square feet of office space, to include up to 285 on-site parking spaces at 9800 La Cienega Boulevard, Inglewood. The estimated maximum first year rental cost is not to exceed $1,593,159. DPSS’ total lease costs payable to the Landlord would not exceed $10,783,302 over the five-year term, which is comprised of the $8,629,062 rental cost and estimated $2,154,240 parking cost. The rental costs for DPSS are funded 82.88 percent with State and Federal funds and 17.12 percent with net County cost.

b) A proposed lease for DPH, for approximately 4,854 square feet of office space, and up to 27 on-site parking spaces at 9800 La Cienega Boulevard, Inglewood. The estimated maximum first year rental cost is not to exceed $139,796. DPH’s total lease costs payable to the Landlord would not exceed $963,099 over the five-year term, which is comprised of the $757,179 rental cost and estimated $205,920 parking cost. The rental costs for DPH are 100 percent funded from revenue generated by license and permit fees.


other ancillary documentation necessary to effectuate the terms of the proposed leases and to take other actions necessary and appropriate to implement and effectuate the terms of the proposed leases, including, without limitation, exercising early termination rights, the right of first offer to lease additional premises and exercising any options to extend. The proposed leases will become effective upon approval by the Board.

PURPOSE/JUSTIFICATION OF RECOMMENDED ACTION The County has leased these premises at 9800 La Cienega Boulevard, Inglewood, since 2008 for DPSS and 2012 for DPH respectively. DPSS and DPH currently occupy space under separate leases. The lease for DPSS expired on June 22, 2018, and has since been on a month-to-month holdover basis, with a 25 percent monthly holdover fee. The lease for DPH expired on June 14, 2017, and has been on a month-to-month holdover basis, with no holdover fee. Both departments desire to enter into new separate five-year leases. The costs associated with each lease are itemized in Attachment B. DPSS currently houses its Customer Service Center in the building, a direct service program, which services CalWorks, CalFresh, Medi-Cal, and General Relief participants. DPH currently provides direct service in the community through its Environmental Health (EH) program which inspects retail food facilities and multiple family dwellings with five or more units. DPH also holds administrative hearings on the premises. Both departments desire to continue leasing at this location and the proposed leases will allow them to continue their respective operations without interruption of services.

The Honorable Board of Supervisors March 4, 2020 Page 3 DPSS also has a separate License Agreement (No. L-1176) for 40 additional parking spaces in the building. The proposed lease will include these 40 spaces and the license will be cancelled upon execution of the proposed lease. The Landlord will provide a total of $902,580 in base TI allowance, based on $15 per square foot for DPSS and DPH. The existing facility adequately meets the space needs of DPSS and DPH. The location is freeway accessible and will accommodate approximately 315 employees and visitors with sufficient parking. Approval of the recommended actions will find that the proposed leases are exempt from CEQA and will allow DPSS and DPH to continue operations at the subject facility. Implementation of Strategic Plan Goals The Countywide Strategic Plan Goal 3 - “Realize Tomorrow’s Government Today” - provides that our increasingly dynamic, and complex environment, challenges our collective abilities to respond to public needs and expectations. We want to be an innovative, flexible, effective, and transparent partner focused on advancing the common good. The proposed leases will support this goal by allowing DPSS and DPH to continue their operations without interruption of service. The proposed leases are in conformance with the Asset Management Principles as outlined in Attachment A. FISCAL IMPACT/FINANCING

There is sufficient appropriation in the Fiscal Year (FY) 2019-20 Rent Expense Budget to cover the first-year costs, which will then be billed to DPSS and DPH. DPSS and DPH have sufficient funding in their Fiscal (FY) 2019-20 operating budget to cover these costs for the first year. Beginning with FY 2020-21, ongoing funding for the proposed leases will be part of the budget for each department. The rental costs for DPSS are funded 82.88 percent by State and Federal funds and 17.12 percent by net County cost. The rental costs for DPH are funded 100 percent by revenue generated from license and permit fees. FACTS AND PROVISIONS/LEGAL REQUIREMENTS In addition to the terms described herein, the proposed leases include the following provisions:

− The proposed leases are gross leases whereby the Landlord will be responsible for all the operating and maintenance costs associated with the premises, including janitorial costs.


- The square footage of the proposed spaces increased slightly due to the Landlord remeasuring the existing premises per industry standard.

Public Social Services - The maximum first year rental cost for DPSS is not to exceed $1,593,159, or

$28.80 annually per square foot, with annual rental adjustments of 4 percent per annum.

- Total parking costs are estimated to be $430,848 per year based on DPSS’ right to purchase 110 stalls at prevailing rates (currently $110 per stall per month), 111 additional stalls at 120 percent of prevailing rates (currently $132 per stall per month), and 64 additional stalls at 130 percent of prevailing rates (currently $143 per stall per month).

- The Landlord will provide DPSS with a base TI allowance of $829,770 based on $15 per square foot.

- The aggregate cost of the proposed lease for DPSS over the five-year term,

including rent expense and estimated parking costs, would be approximately $10,783,302. Attachment B provides an overview of the total proposed lease cost for DPSS.

Public Health - The maximum first year rental cost for DPH is not to exceed $139,796, or $28.80

annually per square foot, with annual rental adjustments of 4 percent per annum.

- Total parking costs are estimated to be $41,184 per year based on DPH’s right to purchase 10 stalls at prevailing rates (currently $110 per stall per month), nine additional stalls at 120 percent of prevailing rates (currently $132 per stall per month), and eight additional stalls at 130 percent of prevailing rates (currently $143 per stall per month).

- The Landlord will provide DPH with a base TI allowance of $72,810, based on $15 per square foot.

- The aggregate cost of the proposed lease for DPH over the five-year term, including rent expense and estimated parking would be approximately $963,099. Attachment B provides an overview of the total proposed lease cost for DPH.

− A cancellation provision that allows the County to terminate the proposed leases

as of the last day of the 36th month with at least nine months prior written notice subject to payment of a termination fee.


− The proposed leases contain a holdover provision, wherein in addition to the base rent, there is a monthly holdover fee equal to 25 percent over the then existing base rent for the first twelve months following expiration of the lease term. Thereafter, the monthly holdover fee shall be increased to 50 percent over the base rent at the time of the lease expiration. The County’s holdover tenancy may be terminated upon 30 days’ notice from the Landlord.

− Both of the proposed leases give the County a right of first offer to lease additional contiguous space in the building. If Landlord intends to offer such space or receives a third party offer to lease such space, Landlord shall give the County first rights to match the proposed rental rate and lease the space, which right County must exercise within 30 days from Landlord’s notice.

− The proposed leases contain one, four-year option to extend the leases at the then current fair market rental rate and terms, provided the County gives not less than six months prior written notice.

− The proposed leases will be effective upon approval by the Board.

The CEO, through its broker representative CBRE, conducted a survey within the project area to determine the availability of comparable office space options. CBRE was unable to identify any sites in the survey area that could accommodate this requirement more economically. The existing rent is under the average market rate for this area. Based upon a review of available industry data, CBRE has established that the average annual rental rate for similar space is $32.04 per square foot on a full-service gross basis (with a base year for operating expense increases). In comparison, the base rental rate of $28.80 per square foot per year, gross (no operating expenses), for the proposed leases represents a rate below the average market rate for the area. Research has been completed to evaluate the option of utilizing co-working space as an alternate location for DPSS or DPH at 9800 South La Cienega Boulevard. The co-working locations nearby do not have available space to satisfy these requirements. Attachment C shows County-owned or leased facilities in the proximity of the service area and there are no suitable County-owned or leased facilities available for the program. The Department of Public Works has inspected the facility and found it seismically suitable for County occupancy. Construction of any TIs will be completed in compliance with relevant building and construction codes, laws and regulations, including the Americans with Disabilities Act. A notification letter to the City of Inglewood has been sent pursuant to Government Code Section 25351. County Counsel has reviewed the attached proposed leases and has approved them as to form.

The Honorable Board of Supervisors March 4, 2020 Page 6 The proposed leases will continue to provide a suitable office location for the Departments’ existing programs which is consistent with the County’s facility location policy, as adopted by the Board of Supervisors on July 24, 2012, and further outlined in Attachment D. ENVIRONMENTAL DOCUMENTATION The proposed leases are exempt from CEQA. The proposed leases, which replace the existing lease spaces with minor TIs within an existing building, are within a class of projects that have been determined not to have a significant effect on the environment and which meet the criteria set forth in Section 15301 of the State CEQA Guidelines (Guidelines) and Class 1 of the County's Environmental Document Reporting Procedures and Guidelines, Appendix G. In addition, based on the proposed lease records, it will comply with all applicable regulations, and there are no cumulative impacts, unusual circumstances, damage to scenic highways, listing on hazardous waste site lists compiled, pursuant to Government Code Section 65962.5, or indications that it may cause a substantial adverse change in the significance of a historical resource that would make the exemption inapplicable. Upon the Board's approval of the recommended actions, a Notice of Exemption will be filed with the Registrar-Recorder/County Clerk in accordance with Section 21152 of the California Public Resources Code. IMPACT ON CURENT SERVICES (OR PROJECTS The proposed leases will adequately provide the necessary office space for the County requirements. DPSS and DPH concur with the proposed lease recommendations.

The Honorable Board of Supervisors March 4, 2020 Page 7 CONCLUSION

It is requested that the Executive Office, Board of Supervisors return one certified copy of the Minute Order, and the adopted stamped Board letter to the CEO, Real Estate Division, at 320 West Temple Street, 7th Floor, Los Angeles, CA 90012 for further processing. Respectfully submitted, SACHI A. HAMAI Chief Executive Officer SAH:FAD:DPH:DL JLC:MN:CB:gw Enclosures c: Executive Office, Board of Supervisors County Counsel Auditor-Controller Internal Services Public Health Public Social Services

ATTACHMENT A

9800 LA CIENEGA BOULEVARD, INGLEWOOD Asset Management Principles Compliance Form1





D Does this lease meet the guideline of 200 sq. ft of space per person?2 No, ratio is approximately 191 square feet per person for DPSS and 180 square feet per person for DPH.

X

E Does lease meet the 4/1000 sq. ft. parking ratio guideline? X


2. Capital

A Is it a substantial net County cost (NCC) program? The rental costs for DPSS are funded 82.88 percent by State and Federal funds and 17.12 percent with net County costs. The rental costs for DPH are funded with revenue generated from license and permit fees.

X




E If yes, why is lease being recommended over occupancy in County-owned space? X


G Was build-to-suit or capital project considered? The County already occupies a portion of the facility and a capital project was not considered.

X




C If a renewal lease, was co-location with other County departments considered? 2 X

D Why was this program not co-located? X



3. No County-owned facilities available for the project.


5. The Program is being co-located.





2If not, why not?

ATTACHMENT B-1 Page 1 of 2

PUBLIC SOCIAL SERVICES OVERVIEW OF THE PROPOSED LEASE COSTS

9800 La Cienega, Inglewood

Existing Lease

Proposed Lease

Change

Area (Square Feet) 54,722 sq.ft. 55,318 sq.ft. +596 sq. ft.

Term (years) Currently in holdover on expired 10-year County lease (expired – 6/22/18 on month to month)

5 years -5 years


$1,841,942 (holdover rent is $33.66 per sq. ft. annually. Prior to holdover fee, rate was $26.92 per sq. ft. annually)

$1,593,159 ($28.80 per sq. ft. annually)

-$248,783 annually


$-0- $-0-

None

Parking(2)

Included in rent

$430,848

+$430,848

Rental rate adjustment Annual CPI increase at 4 percent per year

Annual 4 percent per year. now fixed 4%

Cancellation Provision At or after the 54th month with 6 months’ prior written notice

At the end of the 36th month with at least 9 months’ prior written notice

Fixed first 3 years and thereafter if right is not exercised

(1) The existing and proposed leases are both gross, with the landlord responsible for paying all costs associated with operations, building maintenance and repairs.

(2) The proposed lease requires that the County pay prevailing rates (currently $110 per parking space per month) (2/1000) and may pay for an additional 2/1000 at 120 percent of prevailing rates (currently $132.00 per parking space per month) and an additional 64 spaces at 130 percent of prevailing rates (currently $143 per parking space per month). The amount set forth assumes all parking spaces are utilized.

(3) DPSS is in the same space. Remeasuring the existing premises resulted in a slight increase in square footage.

ATTACHMENT B-1Page 2




$2.40 $28.80Cost Per Space

Per MonthCost Per Space

Per YearParking (110 parking spaces) $110 $1,320.00Parking 20% increase of prevaling market rate (111 parking spaces) $132 $1,584.00

$143 $1,716.00

1st Year 2nd Year 3rd Year 4th Year 5th Year Total 5 Year Rental Costs

Annual Base Rent Costs ¹ 1,593,159 1,656,885 1,723,161 1,792,087 1,863,770 8,629,062Parking Costs ² 430,848 430,848 430,848 430,848 430,848 2,154,240Total Annual Lease Costs 2,024,007 2,087,733 2,154,009 2,222,935 2,294,618 10,783,302


OVERVIEW OF THE PROPOSED LEASE COST

¹ Annual base rent includes fixed 4 percent annual increases.² The estimated parking costs includes 110 parking spaces at the prevailing annual market rate ($110 per parking space per month) and 111 spaces at 20% of the prevailing annual market rate ($132 per parking space per month) and an additional 64 parking spaces at 30% of the prevaling market rate ($143 per parking space per month) for a total of 285 parking spaces. Prevailing rate may increase over the term of the lease.

9800 La Cienega Boulevard, 10th & 11th Floor

Base Rent

Department of Public Social Services

Parking 30% increase of prevaling market rate (64 parking spaces)

ATTACHMENT B-2

Page 1 of 2 PUBLIC HEALTH DEPARTMENT


9800 La Cienega, Inglewood Existing Lease

Proposed Lease

Change

Area (Square Feet) 4,347 sq.ft. 4,854 sq.ft. +507 sq.ft.

Term (years) Currently in holdover on expired 5-year County lease (expired – 6/14/17 on month to month)

5 years None




+$44,521 annually


$-0- $-0-

None

Parking(2)

Included in rent

$41,184

+$41,184

Rental rate adjustment Annual CPI increase capped at 3 percent per year

Annual 4 percent per year +1 percent

Cancellation Provision At any time after the 36th month, with 4 months’ prior written notice

At the end of the 36th month with at least 9 month’s prior written notice

Fixed first 3 years and thereafter if right is not exercised

(1) The existing and proposed leases are both gross, with the landlord responsible for paying all costs associated with operations, building maintenance and repairs.

(2) The proposed lease requires that the County pay prevailing rates ($110 per parking space per month) (2/1000) and may pay for an additional 2/1000 at 120 percent of prevailing rates ($132.00 per parking space per month) and an additional 8 spaces at 130 percent of prevailing rates (currently $143 per parking space per month). The amount set forth assumes all parking spaces are utilized.

(3) DPH is in the same space. Remeasuring the existing premises resulted in a slight increase in square footage.





$2.40 $28.80Cost Per Space

Per MonthCost Per Space

Per YearParking (10 parking spaces) $110 $1,320Parking 20% increase of prevaling market rate (9 parking spaces) $132 $1,584

$143 $1,716


Annual Base Rent Costs ¹ 139,796 145,388 151,203 157,251 163,541 757,179Parking Costs ² 41,184 41,184 41,184 41,184 41,184 205,920Total Annual Lease Costs 180,980 186,572 192,387 198,435 204,725 963,099


9800 La Cienega Boulevard, Suite 850

OVERVIEW OF THE PROPOSED LEASE COST


² The estimated parking costs includes 10 parking spaces at the prevailing annual market rate ($110 per parking space per month), an additional 9 parking spaces at 20% of the prevailing annual market ($132 per parking space per month) and an addtional 8 parking spaces at 30% of the prevaling annual market rate ($143 per parking space per month) for a total of 27 parking spaces. Prevailing rate may increase over the term of the lease.

Base Rent

Department of Public Health






$2.40 $28.80



Parking (120 parking spaces) $110 $1,320Parking 20% increase of prevaling market rate (120 parking spaces) $132 $1,584

$143 $1,716


Annual Base Rent Costs ¹ 1,732,955 1,802,273 1,874,364 1,949,338 2,027,311 9,386,241Parking Costs ² 472,032 472,032 472,032 472,032 472,032 2,360,160

Total Annual Lease Costs 2,204,987 2,274,305 2,346,396 2,421,370 2,499,343 11,746,401


² The parking costs includes 120 parking spaces at the prevailing annual market rate ($110 per parking space per month) and 120 parking spaces at 20% of the prevailing annual market rate ($132 per parking space per month) and an addtional 72 parking spaces at 30% of the prevailing annual market rate ($143 per parking space per month) for a total of 312 parking spaces. Prevailing rate may increase over the term of the lease.

OVERVIEW OF THE PROPOSED LEASE COSTDepartment of Public Health & Department of Public Social Services

9800 La Cienega Boulevard, 8th, 10th, & 11th Floor

Base Rent



ATTACHMENT C Page 1

SPACE SEARCH – 3 MILE RADIUS

9800 LA CIENEGA BOULEVARD, INGLEWOOD LACO Name Address Proprietor SD Owner-

ship Property Use Gross

SqFt Net SqFt

Available SQFT

A242 DPSS - Medical Inglewood Office/Public Health

9800 S La Cienega Blvd Inglewood 90301

Public Social Services 2 Leased Multiple Use Building - Office

59,069

56,116 NONE

0346 Lennox Constituent Service Center

4343 Lennox Blvd Lennox 90304

Public Library 2 Owned Multiple Use Building - Office

8,261

5,917 NONE

A557 DCSS - Adult Protective Services

4300 W 120th St. Hawthorne 90250


2 Leased Multiple Use Building - Office

7,500

6,750 NONE

6330 Inglewood Courthouse 1 E Regent St. Inglewood 90301


2 CA - Superior Courts

Multiple Use Building - Office

140,674

89,483 NONE

10243 ISD - Enterprise Data Center

444 N Nash St. El Segundo 90245

Internal Services 4 Leased Multiple Use Building - Office

4,625

4,425 NONE




4,625

4,425 NONE




4,625

4,425 NONE

A551 DPSS - WFP&I & South Reg IV IHSS/Adult Services

12000 Hawthorne Blvd Hawthorne 90250


132,996

106,397 NONE

A338 DCFS - Compton West (SPA 6)

11539 S Hawthorne Blvd Hawthorne 90250



31,832

27,057 NONE

A378 DPSS - Airport/Westside Gain Region I Office

5200 W Century Blvd Westchester 90045


50,147

47,640 NONE

X301 Los Angeles Airport Courthouse

11701 S La Cienega Blvd Los Angeles 90045


2 CA - Superior Courts

Multiple Use Building - Office

292,000

157,380 NONE

LACO Name Address Proprietor SD Owner-ship

Property Use Gross SqFt

Net SqFt

Available SQFT

A415 Ag Comm/Wts & Meas - LAX Inspection Office

5600 W Century Blvd Westchester 90045

Agricultural Commissioner/Weights & Measure


1,079

1,079

NONE

F387 PW Flood - El Segundo Yard Office

2155 El Segundo Blvd El Segundo 90245

Public Works 4 Owned Multiple Use Building - Office

1,600

1,440 NONE

0012 PW Road - Maint District 3 Office

5530 W 83rd St. Westchester 90045


1,400

1,260 NONE

0013 PW Road - Div #233/333/433 Yard Office



2,400

2,160 NONE

0014 PW Road - Div #233/333/433 Office/Garage



5,500

4,950 NONE

2527 Lennox Park - Director's Office/Comfort Station

10828 S Condon Ave Lennox 90304

Parks and Recreation 2 Owned Multiple Use Building - Office

623

249 NONE

F222 PW Flood - 83rd St Yard Office



702

632 NONE

F224 PW Flood - 83rd St Yard Office



1,920

1,824 NONE


Proposed lease renewal: Five-year Lease agreements for DPSS and DPH – 9800 La Cienega Boulevard, Inglewood – Second District. A. Establish Service Function Category – Direct Service programs, inspections and

administrative hearings

B. Determination of the Service Area –The proposed lease will allow DPSS and DPH to continue their respective functions housed in the building and continue operations without interruption.


• Need for proximity to service area and population: DPSS and DPH need to be in this service area. This location meets the service area criteria and remains in an appropriate area.

• Need for proximity to existing County facilities: DPSS and DPH are both located in the building, facilitating the sharing of facility resources.

• Need for proximity to Los Angeles Civic Center: N/A


• Proximity to public transportation: The location is adequately served by local transit

services including the bus lines.

• Availability of affordable housing for County employees: The surrounding area provides for affordable housing and rental opportunities.


• Availability and compatibility of existing buildings: There is no space available in

existing County-owned buildings to meet the departments service needs.

ATTACHMENT D

Page 2 of 2

• Compatibility with local land use plans: The proposed use is consistent with the building’s use, zoning, and not in conflict with the goals of the City of Inglewood. The Department of Public Works inspected the facility and found it suitable for County occupancy. A notification letter has been sent pursuant to Government Code Section 25351.

• Estimated acquisition/construction and ongoing operational costs: The initial

aggregate annual maximum costs associated with both of the proposed leases are $2,204,987 which includes base rent of $1,732,955 and estimated parking costs of $472,032. The rental costs for DPSS are 82.88 percent funded from State and Federal funds and 17.12 percent from net County costs. DPH is 100 percent funded from revenue generated from license and permit fees.

D. Analyze results and identify location alternatives Based upon the space and service needs of the departments, CBRE surveyed the immediate area to determine the availability of comparable and more economical site alternatives. Based upon a review of available industry data, CBRE, CEO’s representative, has established that the annual average rental rate for similar space is $32.04 per square foot per year on a full-service gross basis. Therefore, the base annual rent of $28.80 per square foot per year gross for the proposed lease renewal, represents a rate below the average market rate for the area.

E. Determine benefits and drawbacks of each alternative based upon functional needs, service area, cost and other Location Selection Criteria The renewal of the subject lease agreements for both departments will continue to provide suitable space for their respective programs, which is consistent with the County’s Facility Location Policy, adopted by the Board of Supervisors on July 24, 2012. The lease renewals will allow the departments to provide continuity of operations. The cost to move to another location would require additional TIs that would probably further increase overall costs.

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