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Home My WebLink About12-05-18 F&A Committee Packet 1 OTAY WATER DISTRICT FINANCE AND ADMINISTRATION COMMITTEE MEETING and SPECIAL MEETING OF THE BOARD OF DIRECTORS 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA BOARDROOM WEDNESDAY December 5, 2018 12:00 P.M. This is a District Committee meeting. This meeting is being posted as a special meeting in order to comply with the Brown Act (Government Code Section §54954.2) in the event that a quorum of the Board is present. Items will be deliberated, however, no formal board actions will be taken at this meeting. The committee makes recommendations to the full board for its consideration and formal action. AGENDA 1. ROLL CALL 2. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JU- RISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA DISCUSSION ITEMS 3. ADOPT RESOLUTION NO. 4355 DECLARING THE HILLSIDE DRIVE ASSESSOR’S PARCEL NUMBER (APN 597-041-66), A PORTION OF THE BUENA VISTA AVENUE PARCEL (A PORTION OF APN 579-364-17), THE JAMACHA BOULEVARD PARCELS (APN 505-672-20 AND A PORTION OF APN 505-672-19) AND THE LA PRESA AVENUE PARCELS (APN 579-031-16 AND APN 579-031-18) COMPRISING A TOTAL OF APPROXIMATELY NINE (9) ACRES OF LAND AS SURPLUS, AND AUTHORIZE THE GENERAL MANAGER TO DISPOSE OF THE SURPLUS PROPERTIES IN ACCORDANCE WITH APPLICABLE STATUTES AND LAWS, AND IN THE BEST INTEREST OF THE DISTRICT (KENNEDY) [5 minutes] 4. ADJOURNMENT BOARD MEMBERS ATTENDING: Mark Robak, Chair Mitch Thompson 2 All items appearing on this agenda, whether or not expressly listed for action, may be delib- erated and may be subject to action by the Board. The Agenda, and any attachments containing written information, are available at the Dis- trict’s website at www.otaywater.gov. Written changes to any items to be considered at the open meeting, or to any attachments, will be posted on the District’s website. Copies of the Agenda and all attachments are also available through the District Secretary by contacting her at (619) 670-2280. If you have any disability which would require accommodation in order to enable you to par- ticipate in this meeting, please call the District Secretary at 670-2280 at least 24 hours prior to the meeting. Certification of Posting I certify that on November 30, 2018 I posted a copy of the foregoing agenda near the regular meeting place of the Board of Directors of Otay Water District, said time being at least 24 hours in advance of the meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley, California on November 30, 2018. /s/ Susan Cruz, District Secretary STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: January 2, 2019 SUBMITTED BY: Bob Kennedy Engineering Manager PROJECT: P1210 DIV. NO. 5 APPROVED BY: Dan Martin, Assistant Chief of Engineering Rod Posada, Chief, Engineering Mark Watton, General Manager SUBJECT: Adopt Resolution No. 4355 Declaring the Hillside Drive, a Portion of the Buena Vista Avenue, the Jamacha Boulevard and La Presa Avenue Parcels as Surplus Real Properties and Authorize the General Manager to Dispose of the Surplus Properties in Accordance with Applicable Statues and Laws GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) adopt Resolution No. 4355 declaring the Hillside Drive Assessor’s Parcel Number (APN 597-041-66), a portion of the Buena Vista Avenue parcel (a portion of APN 579-364-17), the Jamacha Boulevard parcels (APN 505-672-20 and a portion of APN 505-672-19) and the La Presa Avenue parcels (APN 579-031-16 and APN 579-031-18) comprising a total of approximately nine (9) acres of land as surplus, and authorize the General Manager to dispose of the surplus properties in accordance with applicable statutes and laws, and in the best interest of the District. COMMITTEE ACTION: Please see Attachment A. 2 PURPOSE: To request the Board to declare real property as surplus and authorize the General Manager to dispose of the declared property in accordance with applicable statutes and laws, and in the best interest of the District. ANALYSIS: As a regular course of business, the District periodically reviews the need and use of real estate (property) it owns. This is done to ensure that the District’s current and future property needs are provided for, and that property that is no longer required is disposed of in order to minimize costs and associated liabilities of property ownership. The retention of real property that is surplus to the District’s needs increases operating expense by increasing the requirement to maintain and manage the property. The properties listed herein were identified after review by District staff. An evaluation of District-owned properties identified the following four properties as not required for District use: Exhibit Area (Acres) Property Location APN A 7.81 Hillside Drive 597-041-66 B 0.29 Buena Vista Avenue 100 Ft. N/S by 127 Ft. E/W (Approx.) Portion of 579-364-17 C 0.23 Jamacha Boulevard 100 Ft. by 100 Ft. (Approx.) 505-672-20 & portion of 505-672-19 D 0.69 La Presa Avenue 234 Ft. N/S by 127 Ft. E/W (Approx.) 579-031-16 & 579-031-18 District Options and Legal Obligations The District can alter the use of the sites and it has broad discretion to determine what to do with the properties, as long as it is in the best interests of the District. If the Board chooses to retain ownership of the properties, it must ensure that future use complies with the law and applicable zoning ordinances. If the Board wishes to dispose of the properties entirely, it may do so by following the statutory procedures required for Surplus Property, outlined in detail in Government Code section 54222. 3 Although, the District is required to make a determination as to what to do with the listed properties, it is not required to either keep or dispose of the properties. The District can dispose of some of the property and reserve some for District use. If the District determines that the properties should be sold as surplus property, it is expected that the boundary of several of the surplus property sites will need to be modified depending on the ultimate use of the properties. For example, the property on Jamacha Road is currently used for a pressure reducing station with a large graded pad for drainage facilities. The buyer of the property may desire to relocate the drainage facilities that conflict with their development plans. The following is an outline of the procedure that the District must use to sell or otherwise dispose of District property: I. General Sale and Disposal Procedures and Priorities Water Code Section 71690 allows the District to dispose of real property of every kind subject to the procedural requirements found in Government Code Section 54220, et seq., pertaining to the disposition of “surplus land” by a local agency. There are certain exemptions that may apply depending on the characteristics of the property in question. Chapter 4 Section 4.05 of the District’s Code of Ordinances provides: DISPOSAL OF SURPLUS PROPERTY. All property, real or personal, which has been declared surplus to the District's needs, shall be disposed of in accordance with the District Purchasing Manual or applicable statutes and laws. The requirements for declaring the property surplus and disposing of the property once it has been declared surplus, are set forth below. 1. Surplus Land "Surplus land" is defined in Gov. Code Section 54221(b) as land owned by the District "that is determined to be no longer necessary for the [District's] use. It excludes property being held by a local agency for the purpose of exchange. There are various exemptions to the surplus land requirements that are not applicable to these properties. 4 The intent behind the disposal procedures is to promote the use of surplus land for affordable housing, parks and recreation purposes, open-space purposes, and transit-oriented development. The District has never designated these properties as surplus property, and it does not qualify as exempt property. If the Board determines that the District no longer has use for the properties and that each property is surplus to the District’s needs, the Board must adopt a resolution which includes: 1. A finding that the properties are not, and will not, be needed by the District; 2. A declaration the properties are surplus to the District's needs; and 3. A statement that the District will solicit offers for the lease or purchase of the properties. Once the resolution has been adopted by the Board, the District may solicit offers for the lease or sale of the surplus properties from Preferred Entities (notify specific entities of the opportunity to purchase or lease the properties for specified priority uses. (Gov. Code § 54222 et seq.) 2. Written Offers to Sell or Lease Property Once the properties are declared surplus, the District must send a written offer to sell or lease the properties to the following entities, in the order set forth below: (1) Local Public Entities A written offer to sell or lease the surplus properties for the purposes of developing low- and moderate-income housing must be sent to any “Local Public Entity” (as that term is defined in Section 50079 of the Health and Safety Code) within whose jurisdiction the surplus land is located. (2) Housing Sponsors Upon written request, “Housing Sponsors” (as defined in Section 50074 of the Health and Safety Code) shall also be sent a written offer to sell or lease the surplus properties for the development of low- and moderate-income housing. 5 Notices to Local Public Entities and Housing Sponsors must be sent by first-class mail and must include the location and description of the properties. Priority is to be given to the development of land to provide affordable housing for lower income, elderly, or disabled persons or households. (3) Parks and Recreational Purposes A written offer to sell or lease the surplus properties are to be made to various entities for parks, and recreational or open space purposes. These written offers are to be sent to the following entities: (a) To any Park and Recreation Department of any city where the surplus land is located. (b) To any Park and Recreation Department of the county within the area on which the land is situated. (c) To any regional park authority having jurisdiction within the area on which the land is located. (d) To the State Resources Agency or any agency which may succeed to its powers. (4) School Districts If the land is suitable for school facilities construction or use by a school district for open space purposes, a written offer to sell or lease the surplus properties are to be made to any school district in whose jurisdiction the land is located. (5) Enterprise Zones If the area is in an "Enterprise Zone," a written offer to sell or lease the surplus properties shall be sent to the nonprofit neighborhood enterprise association in that zone. (6) Infill Opportunity Zone A written offer to lease or sell the surplus properties for the purpose of developing property located within an infill opportunity zone (infill housing and mixed use commercial developments within walking distance of mass transit facilities, downtowns, and town centers) must be sent to any county, city, community redevelopment agency, public transportation agency, or housing authority within whose jurisdiction the surplus land is located. 6 3. Timing for Notices and Written Offers The District may send or publish the notices and written offers to the local planning commission and public agencies at the same time, in order to move through the process as quickly as possible. The notices and written offers should state that the District is concurrently offering the properties to all other entities, as required by the Government Code. The District must also notify the local city or county planning agency, if such city or county has adopted a general plan, which affects or includes the area where the property is located. 4. Sixty (60) Day Window to Accept Offer to Sell or Lease Once the written offer has been sent to the various entities, they have sixty (60) days after receipt of the offer to notify the District in writing of their intent to purchase or lease the properties. 5. Good Faith Negotiations for Sixty (60) Days If the District receives notice from any of the entities listed above expressing their interest in purchasing or leasing the surplus properties, the District must then enter into good faith negotiations to determine a mutually satisfactory sales price or a lease term. If, after a sixty day period of good faith negotiations, the price or terms cannot be agreed upon, then the District may dispose of the land without further regard to the provisions of Section 54220, et seq. It should be emphasized that the basic rule is that the District must offer the land to these agencies, but it is not obligated to sell at less than fair market value. Should the District reach an acceptable price with any entity interested in purchasing the properties, the sale may provide for terms of payment up to twenty years and a contract of sale or sale by deed of trust. The District, under the provisions of Section 54226, may sell or lease the properties at less than, full, or in excess of the fair market value of the property. In addition, an examination of the proposed sale or lease should be made under CEQA. 7 6. Multiple Offers - Priority to Parks and Affordable Housing In the event the District receives interest from one or more entities interested in purchasing or leasing the surplus properties, the District must give first priority to an interested entity that proposes to make at least twenty-five (25) percent of the total number of units developed on the parcel affordable to lower-income households. The twenty-five (25) percent affordability requirement applies to both sales and rentals. If the District receives multiple offers from notified (preferred) entities, the District must give priority to the one that proposes to provide the greatest number of affordable units at the deepest level of affordability (i.e., affordable to households at the lowest income levels). Park and recreational purposes may be given priority if the land being offered is already being used and will continue to be used for park and recreational purposes; or if the land is designated for park and recreational use in the local general plan and will be developed for that purpose. II. Sale of the Property if No Section 54220 Interest is Shown or Negotiations Fail Public Competitive Bidding If the District has offered the properties to public entities as described above, and the properties remain unsold after the expiration of the applicable timeframes, the District may proceed to lease or sell the properties to the public through a competitive and open bidding process. If surplus properties are sold outside the preferred system to an entity that develops the properties for the development of 10 or more residential units, the development must include at least 15% of the units at an affordable housing cost, or affordable rent, for low income households. Rental units must remain affordable to, and occupied by, lower income households for a period of at least 55 years. The initial occupants of all ownership units must be lower income households, and the units are subject to an equity sharing agreement that must provide for the distribution of any appreciation or improvements to the property. These requirements must be recorded against the properties and are enforceable by the local agency or eligible residents. (Gov. C. §§ 54223 and 54233.) 8 There are specific requirements that must be followed before offering the lease or sale of any surplus property through competitive bidding, including (a) Board declaration of intention to lease or sell, (b) notice of resolution, and (c) bid-opening meeting and acceptance of a proposal. (Public Contract Code §§ 20110-20118.4.) FISCAL IMPACT: Joe Beachem, Chief Financial Officer It is anticipated that the District will obtain the fair market value for the properties. The proceeds from the sale of the properties will be credited to the funds that provided for their purchase. Staff anticipates that the Engineering Outside Services budget will be able to cover the cost of appraisal services. Currently, Engineering’s expenses have not exceeded anticipated expenses and it is expected that there will be sufficient funds available to offset the expected appraisal costs. STRATEGIC GOAL: This Project supports the District’s Mission statement, “To provide exceptional water and wastewater service to its customers, and to manage District resources in a transparent and fiscally responsive manner” and the District’s Vision, “To be a model water agency by providing stellar service, achieving measurable results, and continuously improving operational practices.” LEGAL IMPACT: Failure to comply with the statutory provisions for the disposal of surplus properties will expose the District to legal challenges. BK/RP:jf P:\Bob Kennedy\Surplus Property\Staff Report 01-02-19\BD 01-02-19 Surplus Property-2.docx Attachments: Attachment A – Committee Action Attachment B - Resolution No. 4355 Exhibit A – Hillside Drive Location Map Exhibit B – Buena Vista Avenue Location Map Exhibit C – Jamacha Boulevard Location Map Exhibit D – La Presa Avenue Location Map ATTACHMENT A SUBJECT/PROJECT: P1210 Adopt Resolution No. 4355 Declaring the Hillside Drive, a Portion of the Buena Vista Avenue, the Jamacha Boulevard and La Presa Avenue Parcels as Surplus Real Properties and Authorize the General Manager to Dispose of the Surplus Properties in Accordance with Applicable Statues and Laws COMMITTEE ACTION: The Finance and Administration Committee (Committee) reviewed this item at a meeting held on December 5, 2018. The Committee supported staff’s recommendation. NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for Board approval. This report will be sent to the Board as a Committee approved item, or modified to reflect any discussion or changes as directed from the Committee prior to presentation to the full Board. 1 OTAY WATER DISTRICT RESOLUTION NO. 4355 DECLARATION OF THE BOARD OF TRUSTEES DECLARING SURPLUS REAL PROPERTY, AND DIRECTING STAFF TO SOLICIT OFFERS FOR THE PURCHASE OF THE SURPLUS REAL PROPERTY WHEREAS, pursuant to California Water Code Section 31041, the Otay Water District (“District”) is empowered to dispose of District property; and WHEREAS, the District is the owner in fee of real property designated as Hillside Drive Assessor’s Parcel Number (APN 597-041-66), a portion of the Buena Vista Avenue parcel (a portion of APN 579-364-17), the Jamacha Boulevard parcels (APN 505-672- 20 and a portion of APN 505-672-19) and the La Presa Avenue parcels (APN 579-031-16 and APN 579-031-18) comprising a total of approximately nine (9) acres of land and located in the County of San Diego, California (“Properties”); and WHEREAS, said Properties are described in Exhibits “A, B, C, and D” attached hereto and incorporated herein by this reference; and WHEREAS, the District Code of Ordinances Section 4.05 provides for the disposal of surplus property; and WHEREAS, the California Government Code Section 54220 et seq. establishes procedures and requirements for the disposition of surplus land owned by local agencies, including but not limited to a local agency’s responsibility to make written offers to sell the property to various state, county, and local entities and a local agency’s right to sell the property at fair market value; WHEREAS, the Board of Directors has considered a report from staff, and has determined and hereby declares that the Properties are not, and will not be, needed for the District’s use. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Otay Water District that the District real properties, Hillside Drive Assessor’s Parcel Number (APN 597-041-66), a portion of the Buena Vista Avenue parcel (a portions of APN 579-364- 17), the Jamacha Boulevard parcels (APN 505-672-20 and a portion of APN 505-672-19) and the La Presa Avenue parcels (APN 579-031-16 and APN 579-031-18) comprising a total of approximately nine (9) acres of land in the County of San Diego, California, and described in Exhibits “A, B, C, and D”, are surplus properties because they are not, and will not, be needed by the District and are surplus to the District's needs, and BE IT FURTHER RESOLVED that the General Manager is authorized to ATTACHMENT B 2 dispose of said surplus properties in accordance with the District Code of Ordinances Section 4.05 and California Government Code Section 54220 et seq.; and BE IT FURTHER RESOLVED that the General Manager is hereby directed to make the Properties available for sale and provide written notice of the District’s intent to dispose of said surplus properties to those certain public agencies as prescribed in California Government Code Sections 54220 et seq. Such notice shall offer said property for sale to the public agencies at fair market value, and shall request written notification of the intent to purchase said properties, and be submitted to the District within 60 days. BE IT FURTHER RESOLVED that if the General Manager does not receive timely and acceptable written notification of the intent to purchase said Properties from any public agency, the General Manager is hereby authorized to make the Properties available to the general public through a competitive bidding process. BE IT FURTHER RESOLVED that the General Manager is directed to bring all offers and bids on said surplus properties to the Board of Directors for approval and award of bid. PASSED AND ADOPTED by the Board of Directors of the Otay Water District, County of San Diego, State of California, on the 2nd day of January, 2019, by the following vote of the members thereof: AYES: NOES: ABSTAIN: ABSENT: ________________________________ President Attest: _______________________ District Secretary OTAY WATER DISTRICTOWD PARCEL 597-041-66-00LOCATION MAP EXHIBIT A November 2018F P:\DRAFTING DEPARTMENT\Info for Others\OWD\Bob K\District Owned Parcel Research\Exhibit A, Hillside Drive Property.mxd 33 33 33 33$R ¹r$R ¹r l?l? l? l? l? l? l?l? l? l? Campo Rd H ill s i d e D r Maxfield Rd 5961800100 ROW 5970416600 5961803600 5970410100 5961800200 5970421800 5970420600 5970411800 5 9 7 0 4 1 0 4 0 0 5970421900 5970420300 5970420500 5970420400 5970410300 5970413300 5970416500 5 9 7 0 4 1 4 9 0 0 5 9 7 0 4 1 2 9 0 0 5970413200 5970412700 5 9 7 0 4 2 0 1 0 0 5 9 7 0 4 2 0 2 0 0 5 9 7 0 4 1 3 1 0 0 5970413400 5970411700 5970413000 VICINITY MAP PROJECT SITE DIV 5 DIV 1 DIV 2 DIV 4 DIV 3 ÃÅ54 !\ ÃÅ125 ÃÅ94 ÃÅ905 §¨¦805 FNTS Legend OTAY WATER DISTRICT PROPERTY: 7.81 ACRES (approx) SURPLUS PROPERTY: 7.81 ACRES (approx) PARCEL LINES 0 340170 Feet OTAY WATER DISTRICTOWD PARCEL 579-364-17-00LOCATION MAP EXHIBIT B November 2018F P:\DRAFTING DEPARTMENT\Info for Others\OWD\Bob K\District Owned Parcel Research\Exhibit B, Buena Vista Ave Property.mxd "` "` "` "` "` "` "` "` "` "` "` "` "` "`"` "`"` "` "`"` "` "`"` "` "` "` "` "` "` "`"`"` "`"` "` "` 33 33 $R ¹r ¹r $R $R $R ¹r ¹r l? l? l? l? l?l? l?l?l?l? l? l? l?l? 1004-2 PUMP STATION Maria Ave Chestnut St Buena Vista Ave ROW 5793641700 5793580900 5793640800 5793640700 5793581800 5793640100 5793641900 5793641800 5793640600 5793641600 5793642000 5793640500 5793640300 5793640400 5793640200 5793641500 5793810800 5793810700 5793810600 5793810500 5793810400 5793810300 5793582100 5793810200 5793810100 5793750100 5793750200 5793810900 5793570900 5793632300 5 7 9 3 6 3 2 4 0 0 5 7 9 3 6 3 2 5 0 0 5793 6 3 2 6 0 0 5793632000 5793631900 5793640900 5793631800 5793631700 5793572300 VICINITY MAP PROJECT SITE DIV 5 DIV 1 DIV 2 DIV 4 DIV 3 ÃÅ54 !\ ÃÅ125 ÃÅ94 ÃÅ905 §¨¦805 FNTS Legend OTAY WATER DISTRICT PROPERTY: 0.59 ACRES (approx) SURPLUS PROPERTY: 0.29 ACRES (approx) PARCEL LINES 0 10050 Feet 100' (approx) 127' (approx) OTAY WATER DISTRICTOWD PARCEL 505-672-19-00 and 505-672-20-00LOCATION MAP EXHIBIT C November 2018F P:\DRAFTING DEPARTMENT\Info for Others\OWD\Bob K\District Owned Parcel Research\Exhibit C, Jamacha Blvd Property.mxd "` 33 ¹r l? l? l? l? l? l? l? l? îîSRP Jamacha Blvd ROW 5056720300 5056720900 5056721900 5056721000 5056722000 VICINITY MAP PROJECT SITE DIV 5 DIV 1 DIV 2 DIV 4 DIV 3 ÃÅ54 !\ ÃÅ125 ÃÅ94 ÃÅ905 §¨¦805 FNTS Legend OTAY WATER DISTRICT PROPERTIES: 0.63 ACRES (approx) SURPLUS PROPERTY: 0.23 ACRES (approx) PARCEL LINES 0 10050 Feet 850-657 PRS 100' (approx) 100' (approx) OTAY WATER DISTRICTOWD PARCEL 579-031-16-00 and 579-031-18-00LOCATION MAP EXHIBIT D November 2018F P:\DRAFTING DEPARTMENT\Info for Others\OWD\Bob K\District Owned Parcel Research\Exhibit D, Old 1004-1 Res Property.mxd $R l? l? l?l? 5790311400 ROW 5790320100 5790311100 5790311600 5790311100 5790311800 5790311200 VICINITY MAP PROJECT SITE DIV 5 DIV 1 DIV 2 DIV 4 DIV 3 ÃÅ54 !\ ÃÅ125 ÃÅ94 ÃÅ905 §¨¦805 FNTS Legend OTAY WATER DISTRICT PROPERTIES: 0.69 ACRES (approx) SURPLUS PROPERTY: 0.69 ACRES (approx) PARCEL LINES 0 10050 Feet La Presa Av 234' (approx) 127' (approx)