1992-03-23 Regular Meeting - Laserfiche WebLink

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e e REQUEST FOR CITY COUNCIL AGENDA ITEM AGENDA DATE REQUESTED March 9. 1992 REQUESTED BY Jeff Litchfield DEPARTMENT Director of Finance REPORT RESOLUTION xx ORDINANCE EXHIBITS: Memorandum to John Joerns, Assistant City Manager Ordinance SUMMARY AND RECOMMENDATION Throughout its existence, the City of La Porte has been asked by property owners to sell them unimproved street and/or alley rights-of-ways that are adjacent to their property. When the City, and appropriate utility companies have no foreseeable uses for the property, the property is normally "sold" to the property owner. The method of calculating the value of the property being "sold" to the property owner was changed in 1987. Prior to 1987, the process required that an appraisal be obtained by an independent fee appraiser. This process was determined to be time consuming and costly. In some instances, the cost of the appraisal exceeded the value of the property being sold. In May of 1987, the City Council changed the method by which the property values were obtainpd. The method included the obtainment of a base "prime" square foot rate from the Harris County Appraisal District (HCAD) and multiplying this rate by 150% to arrive at the "selling" square foot rate. Because of apparent discrepancies between the "prime" rates obtained from HCAD and the City's inability to receive this information on a timely basis, I reviewed the process and have concluded that we can meet the objectives of the ordinance in an easier and more understandable manner. Staff recommends that, in lieu of the "prime" square foot rate at a factor of 150%, the City use the square foot rate that is on the most recent certified tax roll and apply a factor of 175%. This change will provide a "selling" price that is easier to obtain and more understandable for the parties involved, without any apparent financial impact on the City. In addition, because of the sporadic nature of the closings, the revenue stream that is provided varies greatly from year to year. The sales of these types of property are a loss of a City asset. They are not properties that the City has purchased and held for resale. I believe that the loss of a City asset of this type should be reinvested into another asset and not be used in ordinary maintenance and operation. To use these funds for maintenance and operation expenses could greatly upset continuity between the City's revenue and expense streams. Staff recommends that the proceeds received from the sale of streets and/or alleys be deposited into the General Capital Improvement Fund for use in general capital improvements. ACTION REQUIRED BY COUNCIL: Approve or deny the passage of the Ordinance which changes the method of valuation and provides instructions on the deposit of the proceeds. AVAILABILITY OF FUNDS: GENERAL FUND UTILITY FUND OTHER ACCOUNT NUMBER: N/A FUNDS AVAILABLE: YES NO APPROVED FOR CITY COUNCIL AGENDA QMT~ ROBERT T HERRERA CITY MANAGER 8...~...~"1/ DATE