HomeMy WebLinkAboutReso 2007-045 - Council Policy 1902
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RESOLUTION NO. 2007 - 45
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
REDDING AMENDING COUNCIL POLICY 1902 TITLED "REAL
ESTATE ASSET MANAGEMENT POLICY."
WHEREAS, in order to streamline the acceptance and display of approved public art;
NOW, THEREFORE, BE IT RESOLVED by the City Council ofthe City of Redding that City
Council Policy 1902, Real Estate Asset Management Policy, is hereby amended in its entirety as attached.
I HEREBY CERTIFY that the foregoing resolution was introduced, read, and adopted at a regular
meeting of the City Council on the 20th day of March, 2007, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
Jones, Murray, Stegall, and Dickerson
None
Bosetti
None
tY~ (~
DICK DICKERSON, Mayor
Attest:
Form Approved:
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CITY OF REDDING, CALIFORNIA
COUNCIL POLICY
SUBJECT
RESOLUTION
NUMBER
POLICY EFFECTIVE
NUMBER DATE
PAGE
REAL ESTATE ASSET MANAGEMENT POLICY
2005-78
1902 06-21-05
1 of 4
BACKGROUND
The City of Redding maintains a vast inventory of diverse real estate holdings ranging from public
buildings to utility infrastructure sites to parks & open space. At the same time, the City's real estate
needs for various purposes continue to evolve over time as the City grows and expands. With an
inventory of over 5,500 acres of real estate owned today, and long-term needs for real estate to meet
various capital improvement planning needs on an ongoing basis, it is in the interest of the City of
Redding to begin to strategically manage its real estate assets.
In the context of municipal finance, publicly-owned real estate assets tend to be among the most
underutilized local resources available to a municipal government. When the City's holdings are
analyzed as a "portfolio," it is possible that the composition ofthe City's real estate holdings might be
modified to better serve public purposes. The same is true with respect to the City's future needs for
real estate which are largely anticipated in plans for Capital Improvements, Redevelopment, Parks,
Trails & Open Space, and Utility Master Plans. While many ofthe City's assets or acquisition needs
are not specifically intended to generate revenue, it is nevertheless possible that revenues from real
estate assets can be realized to provide financial resources to achieve the City's goals.
The purposes of this policy are to acknowledge the value and importance of real estate assets to the City
of Redding and to establish a sound framework under which the City can make strategic decisions
about the real estate it owns and needs to acquire.
POLICY OBJECTIVES
The process of strategic decision-making related to acquiring, holding, and disposing of real property
has evolved in the private sector as a core business activity. The fundamental approaches and
techniques used by corporations to meet their goals of maximizing profits and optimizing investment
returns from real estate adapt appropriately to the public sector goals of minimizing costs and
maximizing public benefit. As in the private sector, the City of Redding's real estate assets are
inherently valuable and can be managed in different ways over time to meet the City's goals and
objectives. Applying strategic approaches to the City's real estate asset management and its
acquisitions will help ensure that real estate assets are achieving not only their potential for public
benefit, but also their potential economic benefit to the City.
The objectives ofthis policy are to: (1) establish use categories for classifying public property assets;
(2) set forth asset management strategies; (3) measure and evaluate asset use and performance; and (4)
strategically apply asset management techniques to the City's real estate assets.
CITY OF REDDING, CALIFORNIA
COUNCIL POLICY
SUBJECT
RESOLUTION
NUMBER
POLICY
NUMBER
EFFECTIVE
DATE
PAGE
REAL ESTATE ASSET MANAGEMENT POLICY
2005-78
1902
06-21-05
20f4
City of Redding
Real Estate Asset Management Process
IN\'ENTORY AssETS
AND NEEDS
EVALUATE
PERFORMANCE
MAKE STRATEGIC
DECISIONS
Future Real Estate
Needs
(fo implement plans)
Current Real Estate
Assets
(Classitied by use)
The City, the Redevelopment Agency and the various enterprises such as the water, wastewater and
electric utilities use real estate for a variety of public purposes. These uses are wide ranging and can
change over time. Real property owned or to be acquired by the City typically can be viewed in light
of the following general use categories.
A. Use Categories
· Municipal uses are those providing a basic municipal service and include facilities such as city
hall and the corporation yard, fire and police stations, sewer and water treatment plants, wells,
power plants and substations, and public rights of way.
· Social uses generally enhance the quality oflife for the community and often involve a subsidy
of some nature.
A) Community uses include parks, trails & open space, recreation sites, community gardens,
cultural institutions.
B) Development uses include property owned for such purposes as facilitating affordable
housing, economic development and redevelopment.
· Potential Surplus includes land in excess of current or future needs.
B. Asset Management Strategies
· Maximize efficiency/reliability and minimize cost. This strategy is most applicable to
municipal assets utilized to provide specific, primary services to the citizens such as public
safety, utilities, city administration and governance.
CITY OF REDDING, CALIFORNIA
COUNCIL POLICY
SUBJECT
RESOLUTION
NUMBER
POLICY
NUMBER
EFFECTIVE
DATE
PAGE
REAL EST ATE ASSET MANAGEMENT POLICY
2005-78
1902
06-21-05
3of4
· Maximize public benefit and minimize subsidy. This strategy is applicable to social assets that
are utilized to provide a broad, general benefit that enhances the community or improves the
quality of life for its citizens. It is also applicable to assets utilized to implement
redevelopment, economic and community development goals and plans.
· Optimize returns. This strategy is applicable to assets that are surplus and not critical to the
provision of primary services or a key social use, within the constraints of applicable laws and
regulations.
c. Performance Measurement
The following approach is designed to help measure the performance of real estate assets or
potential acquisitions. Whether applied to an asset currently owned by the City or to a potential
acquisition, the approach enables the City to take a strategic view ofthe real estate in question and
make an informed decision.
1. Use
First, each property is classified into one of four categories based upon the asset's use: Municipal,
Social-Community, Social-Development or Potential Surplus. The table below demonstrates how
each classification relates to the asset management strategies of the City. The table also shows
examples of which properties would fit into each classification as well as what types of information
are needed to effectively manage properties within a particular classification.
Asset Use
Example
Asset Management Strategies
Information Needs
Municipal
City hall, fire or police
stations, sewage
treatment plants
Maximize reliability/ efficiency
and minimize cost
Expenses, internal
rent, value-in-use
Social (Community)
Parks, open space, trails
Maximize valuelbenefit and
minimize subsidy
Expenses, revenues,
market value
Social (Development)
Housing, redevelopment,
economic development
projects
Maximize valuelbenefit and
minimize subsidy
Expenses, revenues,
market value
Potential Surplus
Land lease, fee parking
lots, smalllandlbuilding
parcels
Optimize returns
Expense revenues,
market value
"
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CITY OF REDDING, CALIFORNIA
COUNCIL POLICY
SUBJECT
RESOLUTION
NUMBER
POLICY EFFECTIVE
NUMBER DATE
PAGE
REAL EST ATE ASSET MANAGEMENT POLICY
2005-78
1902 06-21-05
40f4
2. Utilization
Second, after the initial classification of each asset as described above, the intensity of utilization
or potential utilization of each asset is contemplated and classified into the following categories:
· Fully Utilized Property-reflects a municipal or community use.
· Underutilized Property-reflects a municipal or community use with potential for expanded
use.
· Interim Use Property-reflects a short-term, non-municipal use for a property which has a
planned future municipal, community or development use.
· Unused Property-property with no current use, but reflects the possibility offuture municipal
use.
· Excess Property-reflects a decision that the property is no longer needed to serve a particular
municipal, community or development use.
3. Implementation
The final classification involves contemplating the time, capital, and overall difficulty required to
implement the asset management strategy associated with each property. Each property is rated
"simple implementation" or "complex implementation" to capture factors that might include the
following:
· The presence of conflicting proposals;
· The type and amount of investment proposed or necessary to implement the asset management
strategy;
· Consideration of opportunities and constraints;
· The estimated fair market value of the property;
· Change in General Plan and/or zoning requirements required to implement the strategy;
· Extent of Real Property rights retained or acquired; and/or
· Community interest in the property.
D. Real Estate Review and Decision Making Responsibility
The City Manager shall be charged tv ith responsible for overseeing the asset management process
and making recommendations to the City Council regarding real estate asset management decisions.
In relation to art or other displays placed within or on a real estate holding of the City. and subiect to
a fully executable license agreement or lease. the City Manager or designee shall be authorized to
execute such license or lease on behalf of the City. Except as otherwise delegated by ordinance or
policy, all final decisions to dispose, acquire, lease, or improve real estate assets shall be made by the
City Council! in accordance with applicable state and/or federal regulations and guidelines.
Amended March 8, 2007, by Resolution 2007-45