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HomeMy WebLinkAboutOrdinance No. 2575-2011thr ofr KENAI, ALASKA Suggested by: Administration CITY OF KENAI ORDINANCE NO. 2575 -2011 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AMENDING KENAI MUNICIPAL CODE SECTION 22.05.135, ACQUISITION OF REAL PROPERTY, TO ALLOW THE CITY TO PURCHASE REAL PROPERTY WITHOUT AN INDEPENDENT APPRAISAL UPON A BEST INTERESTS FINDING OF THE COUNCIL. WHEREAS, the Kenai Municipal Code requires that the City may not purchase real property until the City obtains an appraisal of the full and true value of the property from a qualified appraiser; and, WHEREAS, there are a variety of circumstances where the information from an appraisal would have little discernable benefit to the City and would not serve to protect the City's finances, such as where the cost to purchase the property is far below its assessed value (as is often the case in government -to- government transactions). NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, as follows: Section 1. Form: This is a Code ordinance. Section 2. Amendment of Section 22.05.135 of the Kenai Municipal Code: The Kenai Municipal Code, Section 22.05.135, Acquisition of real property, is hereby amended as follows: 22.05.135 Acquisition of real property. (a) The City, by authorization of the City Council, expressed in a resolution for such purpose, may lease, purchase or acquire an interest in real property needed for a public use on such terms and conditions as the council shall determine,[, but n] No purchase shall be made until a qualified appraiser has appraised the property and given the council an independent opinion as to the full and true value thereof[;] unless the council, upon resolution so finding, determines that the public interest will not be served by an appraisal. (b) Because of the unique value of real property, the City need not acquire or lease real property by competitive bidding. (c) Rights -of -way and easements may be accepted or issued by the City Manager after approval by the City Council for utility lines and services of all types and for necessary rights -of -way easements. New Text Underlined [DELETED TEXT BRACKETED] Ordinance No. 2575 -2011 Page 2 of 2 Section 3. Severability: If any part or provision of this ordinance or application thereof to any person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, provision, or application directly involved in all controversy in which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances. The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision, or application. Section 4. Effective Date: Pursuant to KMC 1.15.070(f), this ordinance shall take effect one month after adoption. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this seventeenth day of August, 2011. ATTEST: Corene Hall, Deputy City Clerk PAT PORTER, MAYOR Introduced: August 3, 2011 Adopted: August 17, 2011 Effective: September 17, 2011 New Text Underlined; [DELETED TEXT BRACKETED] E �Wft e with a Past, G/ with a Future 210 Fidalgo Avenue, Kenai, Alaska 99611- 7794el Telephone: 907 - 283 -7535 / FAX: 907 - 283 -3014 1IIIII 1992 O: TO: City Council FROM: Rick Koch DATE: August 11, 2011 SUBJECT: Ordinance No. 2575 -2011 — Amending KMC Section 22.05.135, Acquisition of Real Property, to Allow the City to Purchase Real Property Without an Independent Appraisal Upon a Best Interests Finding of the Council. The purpose of this correspondence is to recommend Council approval of the above referenced ordinance. On average, about once a year, the City acquires property from political subdivisions or through donations for far less than the appraised value of the property. In each instance, the independent appraisal, as presently required by City Code, cost more than the purchase /acquisition of the property. For example, the City recently purchased 4.2 acres from the Alaska Department of Natural Resources. The agreed upon purchase price was $3,500 and the independent appraisal cost was $6,000. The appraised value for the property was $20,000. Presently, the City is purchasing 60 acres from the Kenai Peninsula Borough for well head protection in the area of Municipal Production Well #2. The sale price is $2. Administration estimates the independent appraisal cost to be $6,000 to $10,000. I estimate the fair market value of the property at $30,000 - $50,000. Administration's position is that the costs of independent appraisals, in certain circumstances, are not an efficient use of public monies, and that the Council should have the ability to determine if an independent appraisal is warranted given the specific circumstances. Thank you for your attention in this matter.