Good morning, everyone, and welcome to this session of the Government Operations and Fiscal Policy Committee.

We are continuing our conversations regarding uh the FY27 operating budget.

Today we have 11 on department uh without budgets we're gonna review today.

Uh so it's uh kind of like speed dating.

Um but we're gonna uh start with uh leases, a non-departmental account uh, and I'm gonna turn it over to our staff to walk us through the packet and uh the decision items today.

Sounds good.

Thank you.

Good morning, members of the GO committee.

Um, this is the leases NDA.

This is the account that manages all the county's uh leases of non-county owned space.

Uh the county executive is recommending a budget of 22.8 million dollars, which is a 5.7 million dollar increase for 33 percent, 33 percent over uh FY26.

Um there are a few changes and additions, but um nothing that according to the council president's approach would go on the reconciliation list.

So if you'd like, I can just walk through all of them and uh you there.

So you can see on page two, table one just summarizes each of the changes, and I'll just walk through each item.

So starting with item 2.1, um, these are the lease costs supporting the relocation of the MCPS bus depot from Crabs Branch over to uh Goody Drive, and then there's also an adjacent property, Old Dover, um, which has a parking lot, and so that's all being consolidated.

The lease has been executed.

Um it's a 30-year base term with a 10-year extension option.

Um on page three, you can see how the number was derived, just sort of see the full roll-up of the amount.

You can also see that the rent is being paid for 11 months because they've already executed the lease and there was an abatement term, and so that's just very accurately reflecting exactly what the rent would be for FY27 uh for both of those properties.

Um just keep moving on to the next slide.

I think we can oh actually, nope.

We have a question by Councilmember Katz.

It's not a question.

I just wanted to clarify this is not the same bus depot as the discussions that we were having.

Uh this, I guess it's this week.

But with the days of run together.

This is the current and and how we're changing it.

Uh good morning, Greg Hawson, Department of General Services.

So it is related to the conversation you had with MCPS earlier this week, but it's not the same.

We are relocating the depot operations, so there's about a 50,000 square foot complex or campus at Crabs Branch that we're going to relocate to this location at GUTI.

There will be some ancillary accessory parking associated with that, but the repairs will happen at this building.

Uh we will renovate the building and we'll be back to brief you.

We have a mandatory referral coming up at a community meeting next week, as a matter of fact.

Um but the balance of the parking will remain at Crabs Branch.

The conversation with MCPS on the two other locations were related to how they plan to deal with the remaining buses that are left at Crabs Branch and that we cannot accommodate or are not accommodating as part of this particular project.

But it is not those two ports.

Correct.

For years and years and years, we attempted to find a complete replacement in kind for the full facility.

Not a not a not possible over the years we've determined.

And so this is a uh uh uh I want to call it a piecemeal approach, but it is a partial uh solution to the end game.

Thank you.

Thank you.

And I will just note, and you know this very well, Councilmember Cass, there's been a lot of public engagement on this piece of it.

Uh and a lot of discussion.

Okay.

Yes.

Um moving on to item number two.

Um yes, so item number two is an increased cost.

It's a restoration of uh a decrease in FY26.

So uh the council of the county's uh supports rents at 1401 Rockville Pike, and last year uh they had renegotiated the lease uh for the upcoming or the for the new lease term, and so there was an abatement, and so there was a net saving.

So in FY26, effectively there was no rent that needed to be paid, but now the rent payments need to are kicking in, and so this is being added back into the into the NDA.

We can continue.

Great.

Um questi uh number 2.3.

So this is uh an increased cost related to the net change in rent and maintenance chargeback.

So this is interesting.

Um within the NDA, they maintain an amount to support maintenance across the properties that we lease, um, particularly for triple net properties where the maintenance falls on the tenant.

Um and so they maintain a certain amount generally based on a per square footage for which they need to provide those maintenance services.

In FY26, they had the amount that they had budgeted was roughly equal to four dollars and seventy-four cents per square foot that needed to be maintained.

This year they're rec recommending an increase which would equal a $517 rate per square foot.