Travis County Commssioners Court
February 10, 2004
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Item 31
Since we have you here, 31-a, consider proposed elements of a Travis County real property asset disposition policy and take appropriate action. 31-b, consider disposition and maintenance and storage facilities at satellite 3 on hamilton pool road in precinct 3 and take appropriate action.
>> when t.n.r. Consolidated its road and bridge at the satellite 2 office, it freed up the fleet or mechanic shop at satellite 3 as well as some storage sheds. We had some expression on the part of the e.s.d. And a private party to lease those facilities or to use those facilities for their purposes. When I brought this to court several months ago, the judge asked us to also precede it with a general policy on how we dispose of real -- real estate properties. So part a was a joint effort on the part of the facilities department and t.n.r. To draft a general policy, but how we would approach the disposition of real property, surplus real property when it becomes available. This may be building, land, right-of-way, all sorts of real estate holdings that the city and that the county has that for one reason or another we don't have a long-term use for or perhaps just a short-term use. So [indiscernible] walked through what that general policy is, and then we can talk specifically about the hamilton pool facility. Once we had the draft policy put together, we used that policy as a guide or that draft policy as a guide for how we would approach the disposition of a satellite 3 shop. And we have now both items ready for discussion and appropriate action.
>> good morning, Commissioners and judge. I'm greg chico with t.n.r. I'm going to kind of give a very brief overview of the policy or recommendation or the process recommendation that t.n.r. Staff and facilities management staff worked up. We identified what we believe are eight critical steps that staff should investigate or follow in the -- making the decision as to what to do, if anything, with a piece of property, real property that the county is considering for disposition. The very first step is to determine how -- if the county owns that property and if so, how. If you look in the backup memo and the information you have on this item, you'll see that there's a research function at the outset to determine how the county acquired the property, and then that leads into determining any kind of encumbrances to the property whether they be physical or legal or -- when I say "physical," I mean perhaps the topography would not allow for development or use of this nature or that. So there are -- that's the next step in the process is to look at some of the encumbrance or try to identify all the encumbrances to any particular real property. That's been broken out into three years. Financial, legal, and physical. And the financial, just to touch on that very briefly, sometimes property that's been acquired by the county is restricted in its use or disposition because of the way in which the property was acquired. Maybe it was park land that was purchased with bond funds or something of that nature. So that's something to consider as well. The third step was to loot the county need and any -- look at the county need and any public need for the property to evaluate not just what the current need may be, but what future needs may be for that property. All of this is in the -- this evaluation is in the -- taken in the framework of ultimately looking for the maximum or the optimum use of that property. Whether it be to hold it for future use or to sell it or lease it, to try to generate alternative non-property tax revenue sources for the county. It's really a -- kind of a best return on investment analysis. Moving on to the fourth step, which is to analyze the current and the future value. In order to really get a good handle what the value of the property is today and in the future, what kind of yield we could get from a hold and lease situation versus a sale, we have to look at what the current value is under a sale scenario or a lisa their kwroe, -- scenario, and that's best done by the specific real estate professionals. The real estate professionals that are specifically attuned to that particular property type or geographic area. Stated otherwise, you wouldn't have someone that does apartment leasing in the del valle area try to assess or determine a value for a warehouse up in Round Rock. That is short of a full-fledged appraisal o a very, very valuable asset, the court may decide that it is best to have a full-fledged commercial appraisal or land appraisal or what have you. All of that's done to determine what the current value of the property is. The next step is to look at what the future value of that property would be. And that requires taking that step requires a fair amount of understanding of real estate markets and trends, what drives prices, what drives value. There's macroeconomics involved and a lot of demographic research or understanding. To try to best project what a future sales price of any given real estate or asset may be. In addition to that, a future lease rate. This is important to evaluate because the court or the county to-know trying to achieve the optimum decision from a financial perspective, strictly financial for the county, it's important to understand where that property value is headed. There's an ax yum in real estate that we all know the location, location, location, but there's also something nothing is statistic nick value. It's either increasing or decreasing in value. There's a lot of truth to that in that recognizing what the potential value of any particular property is is key to maximizing the return that you get on that asset. That's what this step deals with. Finally, moving on, the next step, the fifth step is to quantify disposition costs. What kind of costs would the county face if the county chose to either sell or lease a particular property. The next step is to identify and qutify retention costs. Same thing, but what kind of costs would the county face if a decision were made to retain the asset. The seventh step is develop action and alternatives for Commissioners court. And the final step is to implement what it is the court decides is the directive to give to staff on the decision. That's kind of in a nutshell summary of the recommended policy or process that was developed by t.n.r. And facilities staff, and I'm open to any questions you have on it.
>> I didn't receive any backup on this particular item. I don't know why, but --
>> a rollover.
>> but I don't have it in here for whatever reason. But I don't have the backup. I remember the item, but I just don't have the backup in my hand right now to go through it.
>> we'll get you one shortly, Commissioner.
>> for some reason it's not in here.
>> so what you've presented is a process.
>> yes, sir.
>> so if we were to put the policy -- we were to try to summarize this in policy language in two or three sentences, what would it be?
>> to --
>> as to public property, as to county-owned property for which there is no immediate use, Travis County policy ought to be --
>> we look at market value.
>> well, Travis County poll circumstances if I may add my thought out, would be to evaluate and --
>> first we've got to determine whether there's a county need.
>> right, but assuming that there is no need, it would be to evaluate the maximum or the optimum action to yield the maximum value.
>> okay. In your process you did indicate basically determine whether there is a county need.
>> yes, sir.
>> the only way to do that is check with the other county departments that may have other uses.
>> and we also referenced the master plan which is always our guide on needs. So I mean that would be our bible on determining needs. If -- supposedly all the departments have represented to p.b.o. Their space needs. So if there is a need, it should be reflected in the space master plan as it was adopted by the court.
>> somewhere in there there's the notion that we ought to determine what is the best -- what is in the best interest of Travis County.
>> uh-huh.
>> whether to sell, lease or loan. Right?
>> that's right.
>> because one request we had was [indiscernible] for public benefit, thereby basically I guess making some payment to Travis County unnecessary and the reason being they are picking up a public function so we ought to facilitate them. Which I guess makes sense.
>> now, we have not directly addressed that issue. We have addressed the issue of if there are other county departments that need the space, as a county entity, within the policy we haven't directly addressed whether the court would want to discount the value of our county asset for use by entities out -- public entities outside of the county government. That is a policy decision that we have not made any recommendation on. And perhaps we need some direction here. We're looking at if the county does not have a need, county department, county entity, there is a marked value that's represented in that asset. At that point it's up to the court whether or not you want to make -- get full value out of that by leasing it on the private market or whether or not you want to lease it at a discount to another public entity that has a public purpose for the property. Or sell it, for that matter. We have not addressed that issue. And there are probably a lot of public entities out there that might want the county property. And might want it for a deep discount.
>> and there's a part b to that and that is and what are the policies of those other public entities. You know, I can guarantee you the sauce is not going to give away land at mueller airport to another government. They are going to be looking for a swap. I think it's one of those things of we may want to be a good partner here, but you have to see what's being offered in reserve, because I can guarantee you things that we are looking at for this government that involve another golf, they are not giving -- government, they are not giving things away for free. I think we have to be protecting what assets we have. It doesn't mean gouge, it doesn't mean anything other than get a fair quid pro quo in terms of dealing with some of these other government entities. We've figured out something with school districts, we need something for right-of-way, they need something back, it works out. But the idea of give it to us for free doesn't work for me. It just doesn't.
>> good point, Commissioner.
>> and if I may point out, in the process that was -- the draft process that was put forth to the court today, under the third step of evaluating the potential county and public, I may point that out, and public need, there are three subpoints. The Travis County master plan as the judge mentioned. Also survey all the pertinent and related county departments. And the final to determine public and quasi public requests or needs for that property. The -- at component of this process as drafted, however, it doesn't go beyond the consideration of a request from another school district or a city or something like that. And the reason it doesn't, and we discussed this in working on this, the reason it doesn't is we were looking for a process that could quantify in a mathematical, as close to as scientific a manner as possible, which was the best route from a purely financial standpoint. To quantify the value that you are speaking of, whether it be for some other quasi public or public entity, whether the county, it's in its best interest to loan the property or whatever, that's in -- that's almost a different animal and it's very difficult to actually assign a numerical value to that kind of --
>> but in your recommendations, are you -- I'm going to follow I guess basically what Commissioner Sonleitner has stated, quid pro quo type scenario with other governmental entities, is that part of your recommends that we also look at the possibilities especially with other governmental entities, and even in even swap?
>> that is something that is in this process. The third step of the eight. The eighth step of the recommended process is to implement the direction or the directive from the court. So if there is a situation where there is a huge value or a quid pro quo or some kind of trade or something like that, that exceeds any other benefit or level of benefit to the county, then that's the court's -- that's the court's prerogative to choose that. Option.
>> if we try to pull from other public entities what they are -- what their asset disposition policies are?
>> we did look at other metropolitan counties in Texas.
>> we did?
>> and the city of Austin.
>> okay. Theirs are similar to what's recommended?
>> I can't say they are similar. As a matter of fact, I think they are non-existent.
>> oh, the others don't have any?
>> we may be on the bleeding edge here.
>> which is a good thing.
>> so we think -- couple of quick questions. So legally what is recommended here is a process is okay. There seems to be state laws governing county assets on almost everything. We know this is okay.
>> sure. I think state law vests with Commissioners court the decision whether to dispose of county assets or not. And all you are doing here is putting in place guidelines to help you make that decision.
>> we believe that if we were to act on something like this, we could do so and without advertising conduct public hearings, et cetera? Or do we have those requirements?
>> well, there are requirements. If you make the decision to sell it or lease it, then there are various notice and bidding requirements and so on, but just the decision leading up to whether you sell it or lease it or you keep it, there aren't any sort of notice or public hearing requirements on that. It's your discretionary decision. And up until the point you decide, yeah, we're going to lease it or we're going to sell it, then you don't really need to do anything more, you are not legally required to do anything more than post it on the agenda so that you can deliberate it on an open meeting.
>> we're talking about part a, the policy. But if we moved into part b or c, d, whatever, a specific piece of property, there are very specific things that we have to go through.
>> correct.
>> but just the policy is something that this Commissioners court can go above and beyond the state requirements.
>> correct.
>> and that's all we're really discussing today is the policy? Are we anticipating getting into b? Because I'm ready on b until we get a locked down.
>> I'm going to need another week on a. So a is our best effort basically to outline a process that we believe will enable us to make the decision about disposition as to a particular asset.
>> that's right. And this is not -- this is a -- we are not proposing this policy as a -- perhaps an activist policy. We're not going out and examining all of our surplus assets. It's as one becomes available, we'll run it through this procedure. I mean, unless the court wants us to go look at comprehensively all the surplus assets the county may have, which is a fairly major task, what this policy is set up to do is merely as these things become available or we become aware of a surplus property, we have the discretion to use this policy to dispose of the asset. Because we have requests periodically from -- I know from t.n.r. We have one right now, an old landfill site that we have an adjoining property owner wanting to leave acquire it. So the first question comes up is, well, can we dispose of this old landfill. And if so, what process do we use. Well, this policy will help us guide us through that disposition. >.
>> [one moment, please, for change in captioners]
>>
>> how easy to come up with a list of -- of currently available -- for which the county apparently has no use. See I was thinking of this one building out in precinct 3. It didn't dawn on me that a landfill may be requested. I mean I guess -- spefg examples which may apply.
>> we can certainly give you examples.
>> six or so if that many exist.
>> that's fine, that would be easy to do. Where in here is disclosure -- what do we have to disclose as a public entity about what the land was used for previously, but how long ago. If we are planning to sell it, for instance. We have -- we have a responsibility to disclose, don't we?
>> well, there are certain statutory requirements. For example in the case of a landfill, you are required to disclose to the buyer. So a lot of it is going to depend on what the land was used for. You will have to look at it tract by tract.
>> yeah.
>> I'm saying that only because new people keep moving in, they don't know the history of Travis County and --
>> yeah.
>> is it enough to ask the inquiring person, have you chatted with your lawyer about this? [laughter]
>> good point, Commissioner.
>> judge, you just triggered a good thing in terms of what properties -- I have one in mind without mentioning what it is. Something that needs to be fit into this matrix which is compatibility with the surrounding properties. Because if somebody decides to take, make this hypothetical thing in terms of a piece of property say we want to make that a sludge something. Well, we wouldn't want to be party to this kind of a decision I don't believe. So I think --
>> disclosure on both sides.
>> I think that we have a responsibility if we are going to either lease or dispossess of a particular -- dispose of a particular piece of property we feel comfortable with its new intended use.
>> use, yeah.
>> good point. Commission sneers not be something that we are not proud of. There may be some parcels within people's jurisdictions, I have one piece of property in mind where compatibility with surrounding properties will be a huge issue.
>> yeah.
>> why don't we do this ... What if the members of the court were to review this over the next few days and individually get you whatever comments they have. If you could come up with a revised draft that in a different color indicate highlighted our comments, that way we could maybe pull them out, pull them up or down as we consider this next week. One week enough time to -- to take this down?
>> yes. I think, though, judge --
>> I think on b we may as well have a policy in before we try to act on it.
>> I think so.
>> Monday is a holiday, so it's a short week. Is that going to be sufficient. President's day.
>> smart question -- it's more of a question for you than it is for us. We are expecting to get your feedback and I think that we can import your changes if we get it by --
>> let's take two weeks.
>> I wouldn't dream on working on president's day.
>> two weeks will work for me. Is that okay? Any objection to that? We will have it back on in two weeks.
>> thank you.
Last Modified: Tuesday, February 10, 2004 6:44 PM