Leases Audit - City of Berkeley

Mar 14, 2017 - departments' real property needs to be addressed. CONTACT PERSON. Dionne Early, Community Development Project Coordinator, Public ...
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40 Office of the City Manager

INFORMATION CALENDAR March 14, 2017 To:

Honorable Mayor and Members of the City Council

From:

Dee Williams-Ridley, City Manager

Submitted by: Phillip L. Harrington, Director, Department of Public Works Subject:

Status Report – Leases Audit: Conflicting Directives Hinder Contract Oversight

INTRODUCTION In June 2009, the City Auditor’s Office issued its report Leases Audit: Conflicting Directives Hinder Contract Oversight1. The objective of the audit was to “determine the effectiveness of the City’s facility lease oversight,” and resulted in recommendations aimed at improving lease oversight and management. The City Auditor requested the City Manager continue to report to Council on the status of those recommendations until all were fully implemented or otherwise addressed. This is the fifth status report on progress to implement the audit recommendations. Another status report will be provided to City Council on September 12, 2017. CURRENT SITUATION AND ITS EFFECTS The Audit Report included twenty-four recommendations, seventeen of which have been closed; fifteen were implemented as recommended; one was implemented with an alternative solution; and one was closed after management reconsidered it and reported it would not be implemented because it would neither be appropriate nor realistic to do so. The status of those recommendations was reported to Council in previous information reports in November 20102, July 20123, January 20134, and November 20135. The November 2013 report stated that implementation of the seven remaining recommendations be suspended until more is known about the outcome of property management responsibilities among City personnel, and any related management and consultant contracts. Currently, property management responsibilities have been placed under the purview of a Public Works Community Development Project Coordinator (CDPC) who is coordinating an interdepartmental team of staff from Public Works, the City Attorney’s Office (CAO), the City Manager’s Office, the Department of Health, Housing and Community Services (HHCS), and the Department of Parks, Recreation and the Waterfront (PRW). This CDPC’s primary function is to ensure all Public Works real estate transactions, including expenditure and revenue lease agreements and amendments, and any real property acquisition or disposal, are conducted according to

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Page 2 of 13 Status Report – Leases Audit: Conflicting Directives Hinder Contract Oversight

INFORMATION CALENDAR March 14, 2017

authorized regulations. This includes but is not limited to leasing and property management responsibilities for Telegraph-Channing Mall, 1947 Center Street Office Building, and commercial/retail space at the new Center Street Garage. Additionally, the CDPC is responsible for completing the revision of AR 6.6 for Real Property

Transactions: Procedures for City Revenue and Expenditure Leases and License Agreements, and the proposed new AR 6.8 for Real Property Transactions: Procedures for Acquisition and Disposal of Property.

Additionally, Public Works entered into an agreement with the County of Contra Costa County Real Estate Public Works Department Real Estate Division (CCCRE) to provide the City of Berkeley with a range of services previously provided by its Real Property Administrator. The CDPC serves as the contract manager and interdepartmental intermediary between all City departments that need real property services and CCCRE. The following services, as directed by the City, are provided by CCCRE: appraisal and appraisal review; negotiations; land rights document preparation and right of way acquisition; relocation; management of all leasing and dispos