Agenda No. 7.
CITY COUNCIL MEMORANDUM
| City Council Meeting: | June 6, 2023 |
| Department: | Purchasing |
| Subject: | City Staff will conduct a workshop on proposed changes to the Real Property Acquisition process and procedures. (S. Gonzalez/J. Gohlke) |
BACKGROUND
The City has been operating on an outdated methodology in regard to the acquisition of Real Property such as Right Of Way, Easements, and general land purchases.
The current process involves an agenda item to obtain permission to enter negotiations up to a "Not to Exceed" amount based on a Comparative Market Analysis or Appraisal on a piece of property whether it is to obtain a Right of Way/Easement for a project or for the purchase of property for general City use. Negotiations are then entered into with the property owner. Once a purchase price has been agreed upon, staff is then going back to council with a resolution for the property purchase.
In speaking with benchmark Cities in the area, it was found that generally speaking real estate transactions are handled in the same way as other procurement contracts/purchases. Provided the “project” and/or land purchase has been approved and funds are available for the purchase, anything under $50,000 does not require additional council approval.
Special circumstances such as land purchases not related to a project, the need for a budget adjustment, and/or purchases that exceed $50,000 are still taken for Council approval as protocol.
Seguin, New Braunfels, and San Marcos all have a dedicated Real Estate specialist on staff. They have a variety of titles, but all of them have experience as either a licensed Realtor, or in public land acquisitions. Prior to adding that position, they all contracted with a consultant in much the same way we are doing now.
In efforts to streamline City processes, make the acquisition of land more efficient, and save staff time and effort, ultimately resulting in cost savings for the City, Staff is proposing the following modified procedure:
Going forward, real estate transactions are handled in the same way as other procurement contracts/purchases. For situations where a construction/maintenance project includes the requirement to obtain a Right of Way or Easement and has been approved with funds are available, anything under $50,000 would not require additional council approval.
For land purchases unrelated to a construction/maintenance project, staff would bring the proposed purchase before council to attain commitment and a not to exceed threshold for negotiations. Upon completed negotiations, if the agreed upon price is with-in the approved not to exceed and under $50,000, additional council approval would not be required.
For any purchase exceeding the approved not to exceed OR exceeding the $50,000 threshold, a resolution would be brought to council for further approval.
The current process involves an agenda item to obtain permission to enter negotiations up to a "Not to Exceed" amount based on a Comparative Market Analysis or Appraisal on a piece of property whether it is to obtain a Right of Way/Easement for a project or for the purchase of property for general City use. Negotiations are then entered into with the property owner. Once a purchase price has been agreed upon, staff is then going back to council with a resolution for the property purchase.
In speaking with benchmark Cities in the area, it was found that generally speaking real estate transactions are handled in the same way as other procurement contracts/purchases. Provided the “project” and/or land purchase has been approved and funds are available for the purchase, anything under $50,000 does not require additional council approval.
Special circumstances such as land purchases not related to a project, the need for a budget adjustment, and/or purchases that exceed $50,000 are still taken for Council approval as protocol.
Seguin, New Braunfels, and San Marcos all have a dedicated Real Estate specialist on staff. They have a variety of titles, but all of them have experience as either a licensed Realtor, or in public land acquisitions. Prior to adding that position, they all contracted with a consultant in much the same way we are doing now.
In efforts to streamline City processes, make the acquisition of land more efficient, and save staff time and effort, ultimately resulting in cost savings for the City, Staff is proposing the following modified procedure:
Going forward, real estate transactions are handled in the same way as other procurement contracts/purchases. For situations where a construction/maintenance project includes the requirement to obtain a Right of Way or Easement and has been approved with funds are available, anything under $50,000 would not require additional council approval.
For land purchases unrelated to a construction/maintenance project, staff would bring the proposed purchase before council to attain commitment and a not to exceed threshold for negotiations. Upon completed negotiations, if the agreed upon price is with-in the approved not to exceed and under $50,000, additional council approval would not be required.
For any purchase exceeding the approved not to exceed OR exceeding the $50,000 threshold, a resolution would be brought to council for further approval.
GOAL
To streamline City processes, make the acquisition of land more efficient, and save staff time and effort, ultimately resulting in cost savings for the City by modifying the real property acquisition process
COMMUNITY BENEFIT
Making the process more efficient will free staff up for other critical City functions. In addition, the citizens involved in the process on the seller's side will have the confidence of knowing a specific timeline for completing transactions with less delays in obtaining their funding for the sold property.
SUMMARY OF RECOMMENDED ACTION
Modify the process for real property acquisitions.
RECOMMENDATION
Modify the process for real property acquisitions.