City compiles its first property inventory, and recommends surplusing some of it to shore up ailing reserves.
The city has always held swaths of property on the island, but until recently it was not sure exactly what property was owned.
Last week, the city completed its first property inventory list, a list that will be used to sell surplus land in order for the city to shore up its general fund and reserves, and relieve itself of land that has gone unmanaged for years.
“The city has never done a real property inventory,” said City Manager Mark Dombroski. “This is the result of thousands of staff hours.”
A total of 372 acres of land have been identified as city-owned or co-owned farm, open space, operations, housing, park and other properties. Previous estimates had pegged city-owned property at about 500 acres. Based on the Kitsap County Assessor’s figures, all of the city’s property is worth a combined total of about $46.2 million.
Attached to the property inventory that will be reviewed at Wednesday’s City Council meeting is a list of recommendations for offloading unused city land: 87.4 acres could be transferred to the park district; and another 47.5 acres may be sold as surplus land (see attached document for complete list of recommended surplus property).
“The main reason that (these properties) made the list is that they were no longer used or useful for city operations,” Dombroski said.
The release of the list comes after a March ordinance was passed by the council asking staff to compile a property inventory. The council agreed that some of those properties would likely be sold in order to shore-up city reserves that have been deprived of funds.
“I think it’s essential that the city take active steps to consider selling property,” said council member Barry Peters. “It’s import to restoring our reserves.”
According to the 2009-10 budget, the city is supposed to maintain reserves of approximately $2.3 million, including: a rainy-day reserve ($900,000); Suyematsu sinking fund ($500,000); police investigation and marine operations ($60,000); agricultural development rights ($357,000); public arts ($125,000); and equipment reserves ($400,000).
“We haven’t been able to meet any of those for some time,” said Finance Director Elray Konkel.
The sale of property is also imperative to allow the city to end the year with cash in the bank. The city administration has budgeted for the sale of roughly $880,000 in property in 2009, which would help the city end the year with $1.2 million in its general fund and reserves.
However, there is a long list of procedures to follow before the city can sell a piece of surplus property. There must be property appraisals, a council-approved declaration of surplus property, an independent citizen committee assessment, a State Environmental Policy Act review, public hearings and sale agreements.
There is also the matter of selling land in a time of decreased marketability, although Dombroski said the city would not consider taking a loss on properties the council declares surplus.
“This isn’t a fire sale. We’re not looking to give away property. We should be wise about what we do,” Dombroski said. “Large pieces like the Suzuki property, you may not want to put on the market this year.”
The 14.3-acre Suzuki property on the corner of New Brooklyn Road and Sportsman Club Road would be worth significantly more if the proposed Housing Design Demonstration Project goes into effect, which would allow for increases in density on the property.
Although many of the eight properties recommended for surplus may not be sold this year, some are being lined up for quick sells.
According to Dombroski, many of the properties on the list would be of interest to neighbors or those currently leasing the land from the city.
A portion of the Vincent Road landfill might be of interest to Bainbridge Island Disposal, for example. The so-called Head of the Bay property, two parcels near Cooper Creek, is also being considered by Puget Sound Energy as a site for a proposed substation that would deal with the island’s peak-energy demands.
But the sale of surplus land is not likely to go without controversy.
The Head of the Bay properties (called the old decant site and the Myer’s pit in the attached document) have seen extensive work on nearby streams and culverts by groups trying to restore salmon habitat.
Another property, the inland Manitou/Kane parcel, was acquired through Open Space funding. As stated in the surplus document, the sale of the property would go to paying off the purchase of the Williams and Meigs Farm properties, which are also on a list to be transferred to the park district.
At least one ex-officio member of the Open Space Commission (OSC) thought any money made in the sale of the Kane property should go to new open space purchases, not to the payment of past bonds for open space.
“It’s been clear the OSC has always recommended the sale of the property, with the reservation of a little room for parking,” said Dave Shorett. “I would question whether that money can be used for anything other than new open space acquisition. I doubt it could go to reimburse open space purchases that were bonded for.”
In 2007, the council mandated the sale of at least $850,000 in surplus property to offset the cost of the Williams property purchase.
According to Dombroski, if the sale of surplus property exceeds the amount needed to fund reserve accounts, excess cash will be credited to the general fund and used for one-time expenses.
“One-time revenues should go to one-time costs, you don’t want surplus land going to fund ongoing operations,” he said.
Peters doubts the city will be able to sell enough land to exceed its reserves this year.
“I think it is unlikely we’ll sell much of it now that we only have half of 2009 left and we have a limited number of buyers,” Peters said. “I think it’s unlikely that we would exceed our essential reserve accounts.”
List of properties the city is recommending to be designated surplus
Of the 97 parcels identified as city owned, 22 have been recommended for transfer to the parks district and a further eight have been recommended for surplus.
The document below indicates the parcels slated to be declared surplus. The City Council may move to declare the property surplus this evening at its regularly scheduled council meeting.
The map below indicates where potential surplus properties are located.
View Untitled in a larger map
