Staff requests feedback regarding the proposed ordinance to amend city code and city resolution regarding the acquisition and disposition of city real property.

The City is routinely involved in numerous real property transactions and over the years, City Council has passed resolutions to address the acquisition of City property.  There is currently a brief section in City Code that addresses disposition of City property. However, City staff has seen a need to address these issues in City Code to clarify procedures for both the acquisition and disposition of City property in a way that doesn't require routine policy updates and to clearly delegate appropriate authority. The proposed ordinance incorporates much of what is included in Resolution 21-10954 (establishing a policy related to the purchase of real property) but also includes issues that are not currently addressed in any way in City Code or in any City resolution but should be, like granting and accepting easements. 
 
Currently, BMCC section 22-902 does not provide a clear process to dispose of City property and there has often been confusion about how and when notice is required, how many public hearings are required and when those hearings are to be held.  Additionally, the current code section limits Council to only one process for the sale of property, which is by competitive bid. The proposed ordinance clarifies the process for disposing of property and provides more options to dispose of real property. For example, prior to any sale, exchange or donation of any real property, the Council must find the property is no longer necessary to conduct city business or that the public interest may be furthered by the sale, exchange, or donation. This finding must be made by six Council members. The final decision to transfer City owned property must be made at a subsequent public hearing where the Council will decide whether to approve the specific sale, exchange, or donation. The final decision to approve the sale, exchange, or donation must also be made by six Council members. The proposed ordinance also provides that Council may dispose of property by bid, public auction, or direct negotiated sale.  

The proposed ordinance enables the exchange of City property for property of equivalent value or, if the property is not of equivalent value, for sufficient consideration as determined by a majority of Council. It also addresses transfers with other governmental entities by providing authority to sell at a reduced rate, exchange of property, or donation of real property if the property will continue to be used for governmental purposes.  Additionally, the proposed ordinance provides circumstances for Council to authorize the sale of property at a reduced rate for the following reasons: to preserve historically significant property, for constructing low-income housing or emergency shelter, to aid in economic development, or to further the sustainability goals of the City.

An important aspect of this ordinance provides a clear delegation of authority for the City Administrator to grant and accept rights-of-way or public infrastructure. Council currently reviews these on its consent agenda during regular business meetings. These easements may also come before Council as part of final plat. Examples of other easements frequently seen on the consent agenda include temporary easements to allow for improvements to be completed to public infrastructure. The delegation of this authority to the City Administrator will eliminate unnecessary delay on obtaining the approval of an easement and save staff time. For dedications required as part of a final subdivision plat, in compliance with State law, the acceptance of infrastructure or an easement will require the Council’s approval of the final plat before the dedication or easement can be accepted.

The proposed ordinance also addresses the requirement for appraisals (with some exceptions, e.g., transfers between governmental entities) for the purchase of real property; leases of city property; and some less common issues like water rights and issuing licenses and permits that affect real property. 

City Council may provide staff direction regarding the proposed ordinance.

Adoption of the proposed ordinance will result in efficiencies in process and saving staff time. 

The proposed revisions to this Article incorporate much of what is included in Resolution 21-10954, which provides guidance for the purchase of real property, but it also expands Council's ability to dispose of city owned real property.  The proposed ordinance provides authority for the administrative acceptance of rights-of-way and dedications of infrastructure which will increase efficiencies related to development review and includes some items not currently addressed by any policy or City code section. The intent of this ordinance is to codify or clarify current practices to establish clear delegation of authority.

This proposal will be presented to Council at its regular business meeting on September 25, 2023, for first reading. That agenda packet has already been submitted so any changes made during this work session will not be reflected in the packet materials. However, staff will make any changes requested by a majority of Council and those will be included in the version to be considered on first reading.