ITEM TITLE:
title
Community Development Lease Work Session Discussion
body
SUBMITTED BY: Nicole LeRoy, Community Development Planning Technician
FISCAL NOTES:
Expenditure Required: N/A
Unencumbered Balance: N/A
Funding Source: N/A
RECOMMENDATION:
rec
Receive and file
end
SUMMARY STATEMENT:
Staff is seeking to work with the Planning and Zoning Commission to develop a recommendation to City Council for setting policies and procedures for determining "fair rental value" for leased property as well as setting a prepaid fee schedule for lease applications by resolution per Valdez Municipal Code 4.08.050. As City Council is the lessor, and City Manager or her designee is responsible for negotiating and maintaining city leases on Council's behalf, we want to ensure lease management is in accordance with City Council's priorities. As a quasi-judicial body named in voting on recommendations to approve new lease applications in Title 4, we felt it was important to solicit your feedback as well.
Negotiated vs. Formulaic Determination of "Fair Rental Value" for Leased Property:
Valdez Municipal Code Title 4 Lease of City Property allows for relative latitude in interpretation of determining fair rental value. The definition of fair rental value under section 4.08.010 is 10% of fair market value annually and the fair market value is synonymous with the appraised value under Valdez Municipal Code. However, calculating the fair rental value as 10% of the appraised value is a baseline for calculating a rental rate and not a ceiling. No lease shall be leased for less than the fair rental value unless approved by a vote of not less than six Council members but leases can be negotiated to a higher rate if deemed in the best interest of lessor (see attached attorney comments on fair rental value.)
In the past, it has been mostly standard practice by Community Development to use the formulaic approach, with some instances of negotiated determination of fair rental valu...
Click here for full text