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A resolution approving a Memorandum of Understanding to transfer public property administration responsibilities from the Department of Finance to the Department of General Services along with the related operational activities and personnel.
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WHEREAS, Section 5.04.065 A of the Metropolitan Code of Laws provides in pertinent part that any department, board, commission or agency of the metropolitan government allocating funds, services, property, or equipment valued in excess of five hundred thousand dollars to another department, board, commission, or agency of the metropolitan government shall enter a formal memorandum of understanding, to be submitted to the department of finance, which must be approved by resolution adopted by the metropolitan council by twenty-one affirmative votes; and,
WHEREAS, Metro’s current real estate activities are decentralized with responsibility spread across multiple Departments which prevents Metro from having a unified real estate portfolio strategy, and a single point of coordination, responsibility, and accountability for providing efficient and sustainable real estate asset management and workplaces for all Metro Departments; and,
WHEREAS, it is desirable to consolidate portions of the responsibility for Metro’s real estate activities including selected strategy, analytics, space planning, transactions, design, construction, and property management within the Metropolitan Government, in order to improve management of the portfolio and operations through a best practice organizational structure and decision-making process; and,
WHEREAS, a central real estate function in DGS will allow for appropriate portfolio development and asset management through streamlined operations, contributing to cost-effective, metrics-based solutions for meeting the real property needs of selected departments, from initial real estate and space planning through leasing, property acquisition, development, management and ultimately adaptive re-use, redevelopment, or disposition; and,
WHEREAS, the Metropolitan Charter § 8.112 establishes the Division of Public Property Administration (Public Property Division) and creates the position of Director of Public Property Administration to be appointed for an indefinite term by the mayor. Metropolitan Charter §§ 8.103 (k) and (l) define the duties of the Public Property Division as to establish standard procedures for acquiring and disposing of land for Metropolitan departments, boards and commissions, exclusive of land acquisition for the Nashville Electric Service and the Nashville Housing Authority, to maintain an inventory of public property and equipment, and perform such other duties as may be assigned by the director of finance or by ordinance; and,
WHEREAS, the Metropolitan Code of Ordinances, Chapter 2.24, Article III, “Division of Public Property Administration” (Code 2.24, Article III) further establishes responsibilities of the Public Property Division; and,
WHEREAS, DGS was established through the Metropolitan Code of Ordinances Chapter 2.32 to, among other things, consolidate general government functions such as building design and construction management, building management and operations, fleet management, certain personal property and equipment functions, sustainability functions including strategic energy management and renewal energy planning, print management, and mail management into a central department to support the operations of Metro government departments, boards, and commissions; and,
WHEREAS, the functions of the Public Property Division are an integral part of Metro’s broader real estate responsibilities, and consolidating the existing real estate responsibilities of the Public Property Division and DGS will both align with the intent of the Metropolitan Charter § 8.112 and ensure that subject matter experts in real estate strategy, transactions, development, asset management, and property management are coordinated to provide appropriate analysis and guidance for decision-making, for the betterment of Metro’s real estate activities and valuable assets in coordination with other Metro partners; and,
WHEREAS, a consolidated real estate office will align the key functions of a modern real estate organization with strategy, development, delivery, operations, and asset management portfolios so that the key functions create the structure needed to provide best value to the taxpayers of the Metropolitan Government; and,
WHEREAS, pursuant to the terms of the Memorandum of Understanding attached hereto, the parties have proposed that the public interest will best be served by placing the personnel and operational activities relating to the Public Property Responsibilities with the Department of General Services; and,
WHEREAS, it is to the benefit of the citizens of The Metropolitan Government of Nashville and Davidson County that this memorandum of understanding be approved.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1. The Memorandum of Understanding to transfer public property administration responsibilities from the Department of Finance to the Department of General Services along with the related operational activities and personnel, a copy of which is attached hereto, is hereby approved.
Section 2. The Finance Director is authorized to reallocate funds previously appropriated by the Metropolitan Council to the Finance Department in the amount of $360,800 for carrying out the Public Property Division responsibilities to DGS as necessary.
Section 3. This resolution shall take effect from and after its adoption, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.
Agenda Analysis
Analysis
This resolution approves a Memorandum of Understanding (“MOU”) between the Department of Finance (“Finance”) and the Department of General Services (“DGS”) to transfer public property administration responsibilities and its related operational activities and personnel from Finance to the DGS.
Section 8.112 of the Metropolitan Charter states that Finance shall include “a division of public property administration, which shall consist of the director of public property and such other officers and employees, organized into such units as may be provided by ordinance or by the director consistent with ordinance.”
The MOU states that this transfer would consolidate portions of the responsibilities for the real estate activities of the Metropolitan Government.
The MOU provides that all Public Property Division employees, including the Director of Public Property Administration and staff, would transfer their offices, materials, and equipment to the administration of DGS. After their transfer, the Public Property Division employees would become employees of DGS. The responsibility of the Public Property Division would fall to DGS, with the exception of Personal Property or Equipment, which would be retained by Finance.
Annual reports would be made from DGS to the Finance Director detailing activities undertaken and funds expended through the responsibilities of Public Property Division through the previous year and detailing projects expected to be approved in the following year’s Capital Improvement Budget. Quarterly meetings between DGS and Finance would also occur to discuss projects and funds undertaken through the Public Property Division.
The term of the MOU begins on January 1, 2025, and ends on December 31, 2029. The MOU may be terminated upon 90 days written notice by either department. If the agreement is terminated, the employees involved in activities relating to the Public Property Division would be transferred back to Finance.
The Finance Director would be authorized to reallocate funds previously appropriated by the Metropolitan Council to the Finance Department for carrying out the Public Property Division to DGS as necessary. The MOU states that it should not be construed as a transfer of or limitation on the authority of Finance to assure other functions contemplated by the Metropolitan Charter and Code are performed.
Section 5.04.065 of the Metropolitan Code provides that the transfer of any funds, services, property, or equipment valued in exceed of $500,000 from one department to another must be formalized by MOU and approved by a resolution adopted by the Metropolitan Council by 21 affirmative votes.
The Council Office would note that it is questionable whether a permanent transfer of the Department of Finance Division of Public Property Administration and its responsibilities is consistent with the Metro Charter. Section 8.112 of the Charter provides that “there will be a division of public property administration in the department of finance, which shall consist of the director of public property...” The director of public property is a position appointed by the mayor for an indefinite term. The MOU indicates that all staff and positions will become DGS employees, but it is unclear whether the director of public property position will continue as provided in the Charter. And further, Section 2.01(36) of the Metro Charter provides that “when any power is vested by this Charter in a specific officer, board, commission, or other agency, the same shall be deemed to have exclusive jurisdiction within the particular field.”
With that said, the transfer of functions between two departments in not unprecedented. In 2002, the stormwater division was transferred from Public Works to Metro Water Services by MOU. And again in 2021, the solid waste collection functions were transferred from Public Works to Metro Water Services. In the first instance, the Charter was amended to make the transfer official. In the second instance, the Charter was amended to create NDOT in the place of Public Works which removed solid waste collection and disposal from its functions and those functions remain with Metro Water Services. The Council Office recommends that a future Charter amendment resolution be considered to effectuate the removal of the division of public property administration and its functions from the Department of Finance and follow with an amendment to the Metro Code by increasing the responsibility of the Department of General Services to include public property administration.