A new audit reveals that Berkeley's disorganized approach to lease agreements has resulted in a loss of track of a building and potential revenue losses. Despite recommendations for improvement dating back to 2009, the city still lacks a complete inventory of leases and license agreements, highlighting the need for better property management practices.
Berkeley 's system for managing lease agreements has been described as disorganized and lacking cohesion, leading to an unclear picture of the city's facility portfolio. This oversight has resulted in the city losing track of a building and potentially significant revenue losses , despite recommendations for improvements being made 16 years ago.
A recent audit highlighted these persistent issues, revealing that seven out of 24 original recommendations from a 2009 audit remained unimplemented over a decade later.The audit found that the city lacks a comprehensive list of leases and license agreements, essential for tracking property usage and revenue. Crucial details such as property locations, contract numbers, start and end dates, and monthly rent rates were missing for numerous properties, making it impossible to accurately estimate revenue amounts. This lack of clarity extends to physical assets, as the city has completely lost track of a building located at 1890 Alcatraz Ave.To address these shortcomings, the audit recommends developing a detailed inventory of city facilities, including tracking property values. This would enable the city to assess whether it's charging fair rental rates and prevent further financial losses or asset misplacement. The audit also emphasizes the need for standard practices regarding below-market-rate lease agreements and license agreements, and calls for the Public Works Department to be consistently consulted on lease matters, as per existing city policy. Plans to implement a centralized property oversight and lease management system, originally proposed in 2002, have been repeatedly delayed. While a real property administrator position was briefly established, it was ultimately eliminated in 2014.Berkeley City Council members expressed support for rectifying this longstanding issue and pledged to provide necessary resources to city staff. They acknowledged the challenges associated with transitioning from paper-based records to digital systems, but emphasized the importance of prioritizing this effort. City Manager Paul Buddenhagen indicated that a cost analysis for hiring full-time staff dedicated to overseeing leases and license agreements will be presented during the upcoming budget review process. He cautioned that budget constraints and competing staffing demands across various departments, including emergency services, may necessitate tradeoffs. Public Works Director Terrance Davis, who assumed his role in April 2024, stated that while Dionne Early currently serves as the city's real property administrator, this is a working title. Davis expressed optimism that basic administrative tasks could be completed within the current calendar year. He confirmed that city management has endorsed all recommended changes, including creating a comprehensive repository of property information, defining clear roles and responsibilities, updating lease oversight policies, and communicating changes to relevant departments
LEASES AUDIT BERKELEY CITY GOVERNMENT PROPERTY MANAGEMENT REVENUE LOSSES
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