County to Borrow $31M for New Animal Shelter


Written by Neil Farrell

Neil has been a journalist covering the Estero Bay Area for over 27 years. He’s won numerous journalism awards in several different categories over his career.

April 23, 2020

County Supervisors have given the go-ahead to borrow up to $31 million with the sale of bonds to build a new animal shelter and refinance a roads project.

The County Auditor-Controller-Treasurer-Tax Collector and Public Administrator’s Office was given permission for issuance, sale and delivery of lease revenue bonds not to exceed $25 million for the new animal shelter and $6M to refinance the “Vineyard Drive Interchange Project” certificates of participation in Paso Robles.

According to a staff report from James Hamilton, a CPA in the Auditor-Controller’s Office, the bond would be sold sometime in March. Estero Bay News tried to contact Hamilton to better firm up when these bonds would be sold, but he was unavailable due to the coronavirus work closures.

County Supervisors last Dec. 10 awarded a contract for the new animal shelter and the County Department of Animal Services headquarters to F&H Const., of Lodi, Calif., for $15.2 million to design and build it.

The new shelter is planned for County-owned land on Oklahoma Avenue, down the street from the old shelter.

The County’s cost estimates have varied greatly as the project has evolved since February 2017 when Supervisors agreed to replace the aged shelter, which has numerous problems including a leaky roof and outmoded kennels and offices.

Originally, the County pegged the construction at $10.1 million ($13.2M over all budget) but bidders expressed concern with that hard limit, plus “the current boom in the building market, shortage of labor, tariffs on materials and State-mandated skilled labor requirements,” according to a report. One company, Specialty Const., of SLO dropped out of the bidding over the issues.

Breaking down the costs, the County has now budgeted the construction costs at $15.2 million; $575,000 “interior hard costs” (furniture, fixtures, equipment, etc.); and $4.4 million in so-called soft costs (professional services, administration, permits/fees, testing, etc.) for a total of $25M in potential borrowing.

With money pretty cheap to borrow at this time, the County is also rolling into the bond sale some $5.4M in outstanding costs from the Vineyard Drive project completed in 2018 in order to save some money in interest costs. Those savings would revert back into the County Roads Budget.

How will this be repaid? Each incorporated City in SLO County contracts with the DAS for animal control services, which are mandated by State Law.

Every City and/or County must provide such services including sheltering of stray and homeless pets, rabies surveillance and control, investigation of animal cruelty complaints, the capture and control of dangerous animals, and the resolution of animal related nuisances.

Though Cities are authorized to have their own animal services, none in SLO County do so.

The bonds will carry a 2.88% all-in interest cost with maximum annual debt service of $1.1 million (based on Jan. 9 market conditions plus 25 basis points).

The refunded Vineyard Drive COPs are estimated to issue at 2.28% all-in interest cost with maximum annual debt service of $362,000 (also based on Jan. 9 market conditions plus 25 basis points).

The Cities will pay a pro rata share of the costs for the new shelter — minus $1M the County agreed to pay off the top — based on the actual usage of the shelter.

In essence the more animal services a City requires, the more construction costs it will pay.

It’s the same system used to apportion annual costs amongst the Cities with the latest contracts that were signed last December and run from July 1, 2019 through June 30, 2022.

The highest annual bills and thus the community that uses the County services the most was Paso Robles at $310,000 with Atascadero second at $292,000.

Others are: SLO at $151,000; Arroyo Grande, $67,000; Grover Beach, $62,000; Morro Bay, $44,000; and Pismo Beach the lowest at $23,000.

New shelter construction costs would be added to these annual fees, until the bonds are paid off. If readers want to track the project go to:

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