Metro - File #: 2019-0482

• File #: 2019-0482
• Type: Policy
• Status: Agenda Ready
• File created: 6/6/2019
• In control: Finance, Budget and Audit Committee
• On agenda: 9/18/2019
• Title: AUTHORIZING the Chief Executive Officer (CEO) to: A. ESTABLISH just compensation for the acquisition of real property based on an approved appraisal of the fair market value as long as the amount is within the overall Life of Project (LOP) budget or within the approved current annual budget if LOP has not yet been adopted; B. APPROVE administrative or litigated settlements (including goodwill, furniture, fixtures, and equipment, and other acquisition costs) of up to $1,000,000 above the appraised value or 20% above the appraised value (up to $5 million), whichever is greater, if the amount is within the overall LOP budget or within the approved current annual budget if LOP has not yet been adopted; C. DIRECT the CEO to report back to the Board quarterly on just compensation and/or settlements over $500,000; and AUTHORIZE the Inspector General to perform periodic random spot-check audit of these transactions to ensure to the Board that the system and policy are performing in the ma...
• Sponsors: Finance, Budget and Audit Committee
• Indexes: Audit, Budget, Budgeting, Construction, Eminent domain, Equipment Acquisitions, Federal Transit Administration, Market value, Measure M, Policy, Property acquisition, Property management, Property values, State laws, Strategic planning
• Related files: 2019-0755

Date	Action By	Action	Result
9/26/2019	Board of Directors - Regular Board Meeting

Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
SEPTEMBER 18, 2019

Subject
SUBJECT: DELEGATION OF AUTHORITY TO APPROVE REAL ESTATE TRANSACTIONS

Action
ACTION: APPROVE RECOMMENDATIONS

Heading
RECOMMENDATION

Title
AUTHORIZING the Chief Executive Officer (CEO) to:

A. ESTABLISH just compensation for the acquisition of real property based on an approved appraisal of the fair market value as long as the amount is within the overall Life of Project (LOP) budget or within the approved current annual budget if LOP has not yet been adopted;

B. APPROVE administrative or litigated settlements (including goodwill, furniture, fixtures, and equipment, and other acquisition costs) of up to $1,000,000 above the appraised value or 20% above the appraised value (up to $5 million), whichever is greater, if the amount is within the overall LOP budget or within the approved current annual budget if LOP has not yet been adopted;

C. DIRECT the CEO to report back to the Board quarterly on just compensation and/or settlements over $500,000; and

AUTHORIZE the Inspector General to perform periodic random spot-check audit of these transactions to ensure to the Board that the system and policy are performing in the manner described in the recommendation.

Issue
ISSUE

The Real Estate Department estimates that Metro will need to acquire thousands of parcels over the next three to ten years for Measure M projects. Currently, the authority for the CEO to establish just compensation or to enter into settlement agreements is limited to $500,000; amounts above $500,000 require Board approval. With the current threshold, and the nature of the property rights that will be required, the number of acquisitions that will require Board approval will be significantly increased. Therefore, delegating additional authority to the CEO will expedite the acquisition process, improve the ability to deliver the properties for construction in the necessary timeframes, and avoid placing unneces...