DEPARTMENT: Facilities Management
FILE TYPE: Consent Action
TITLE
title
Authorization To Execute Management Agreement Between Dakota County And Guild For Space Located At Crisis And Recovery Center And Execute Declaration For Crisis And Recovery Center
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PURPOSE/ACTION REQUESTED
• Authorize execution of a management agreement (Attachment: Draft Management Agreement) with Guild for space located in the Dakota County Crisis and Recovery Center.
• Authorize execution of a State of Minnesota General Obligation Bond Financed Declaration (Attachment: Draft Declaration) for the Crisis and Recovery Center.
SUMMARY
The County recently constructed and opened the Crisis and Recovery Center in West St. Paul to be used for residential mental health services for up to 16 individuals per night.
Community Services staff has contracted with Guild to manage the services and operations on the residential side of the facility with all associated requirements included in that contract. To have Guild operate in a County facility, a management agreement for use of that space is necessary per State and County requirements.
The agreements required from the State result from two State funding sources totaling $9,459,928, of which $6,000,000 is 2023 State General Obligation Bonds and $3,459,928 is a State Department of Human Services (DHS) Grant award. The primary agreement for acceptance of the outside funds is the Grant Agreement which was authorized by two separate County Board actions. The DHS grant was accepted by Resolution No. 22-095 (March 8, 2022). In May 2023, the County was informed that $6,000,000 was awarded in the 2023 legislative session. By Resolution No. 23-291 (June 20, 2023), these funds were incorporated into the project budget.
The Grant Agreement imposes certain restrictive covenants on improvements and related land, particularly that the project area cannot be sold without the approval of the Minnesota Department of Management and Budget, that the property is subject to all terms of the General Obligation Bonds Proceeds Grant Agreement, and that these requirements shall remain in effect for 37.5 years from the date of execution.
The Grant Agreement was signed by all parties in December 2024. One of the requirements of the Grant Agreement is the execution of a Management Agreement between the County and Guild. This agreement takes the place of a typical lease or license agreement and outlines the parties’ responsibilities with respect to the use of the space. Both parties have reviewed and come to an agreement on the terms. The Draft Management Agreement was reviewed by the Assistant Commissioner of Minnesota Management and Budget, starting January 21, 2025, and completed on April 3, 2025. Execution of this agreement is critical to collecting the combined $9,459,928 of State funding.
The key difference between the Management Agreement and a typical lease or license agreement is that Guild does not pay rent. However, a responsibility matrix has been developed that specifies tasks and cost responsibilities by each party. The estimated annual cost for the Facilities Management portion of the Crisis and Recovery Center is approximately $81,000. Guild uses approximately 85 percent of the facility for services and will reimburse the County for actual expenses incurred annually. The reimbursement is estimated to be $69,000.
The Management Agreement will end on December 31, 2034, to align with the Community Services contract with Guild to provide services in the Crisis and Recovery Center.
RECOMMENDATION
recommendation
Staff recommends execution of a State of Minnesota General Obligation Bond Financed Declaration for the Crisis and Recovery Center and a Management Agreement with Guild for space located in the Dakota County Crisis and Recovery Center.
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EXPLANATION OF FISCAL/FTE IMPACTS
Guild will reimburse the County for actual expenses on an annual basis. These are estimated to be approximately $69,000 of the total facility operating costs of approximately $81,000. The 2025 Facilities Management Adopted Budget includes the balance of funds required to operate the facility.
☐ None ☒ Current budget ☐ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
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WHEREAS, Dakota County recently constructed and opened the Crisis and Recovery Center in West St. Paul to be used for residential mental health services for up to 16 individuals per night; and
WHEREAS, Community Services staff has contracted with Guild to manage the services and operations on the residential side of the facility with all associated requirements included in that contract; and
WHEREAS, for Guild to operate in a County-owned facility, a management agreement for use of that space is required; and
WHEREAS, receipt of State funding totaling $9,459,928 is contingent on execution of both the grant agreement and the management agreement; and
WHEREAS, the Grant Agreement imposes certain restrictive covenants on improvements and related land, particularly that the project area cannot be sold without the approval of the Minnesota Department of Management and Budget, that the property is subject to all terms of the General Obligation Bonds Proceeds Grant Agreement, and that these requirements shall remain in effect for 37.5 years from the date of execution; and
WHEREAS, Dakota County may agree to these restrictive covenants by executing a Declaration; and
WHEREAS, the Declaration that will encumber the Crisis and Recovery Center project area legally described as:
Legal Description for Tax Parcel No. 42-52501-01-010
Real property located in the City of West St. Paul, County of Dakota, State of Minnesota, legally described as follows:
Lot 1 (1), Block One (1), NORTHERN SERVICE CENTER 2ND ADDITION, according to the recorded plat thereof.
; and
WHEREAS, the Dakota County Board of Commissioners must approve all leases and licenses for space use; and
WHEREAS, the State of Minnesota requires a management agreement to be in place instead of a lease or license; and
WHEREAS, the residential treatment side of the facility will be used entirely by Guild to provide services; and
WHEREAS, staff from Facilities Management, Community Services, and Guild have agreed to the management agreement terms for their space; and
WHEREAS, the management agreement terms provide for a 90-day notice of termination to align with the contract for services term; and
WHEREAS, the County Board finds that the management agreement is consistent with the County’s interest in cooperating with Guild to provide space in the Dakota County Crisis and Recovery Center; and
WHEREAS, staff recommends the Chair of the Dakota County Board of Commissioners execute a State of Minnesota General Obligation Bond Financed Declaration for the Crisis and Recovery Center; and
WHEREAS, staff recommends the Physical Development Director execute a Management Agreement with Guild for space in the Crisis and Recovery Center.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the Physical Development Director to execute a management agreement with Guild, substantially as attached, for use of space in the Crisis and Recovery Center, for the period of February 10, 2024, through December 31, 2034, subject to approval of the County Attorney’s Office as to form; and
BE IT FURTHER RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the Board Chair to execute a State of Minnesota General Obligation Bond Financed Declaration for the Crisis and Recovery Center, subject to approval of the County Attorney’s Office as to form.
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PREVIOUS BOARD ACTION
22-095; 3/08/22
23-291; 6/22/23
ATTACHMENTS
Attachment: Draft Management Agreement
Attachment: Draft Declaration
BOARD GOALS
☐ Thriving People ☐ A Healthy Environment with Quality Natural Resources
☐ A Successful Place for Business and Jobs ☒ Excellence in Public Service
CONTACT
Department Head: Mike Lexvold
Author: Mike Lexvold