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W A T E R E UY F lA 6c Y k T F k� PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES RIVERSIDE PUBLIC UTILITIES Board Memorandum DATE: NOVEMBER 21, 2014 ITEM NO: 10 SUBJECT: REAL PROPERTY FINANCIAL MANAGEMENT POLICY ISSUE: The item for Board of Public Utilities consideration is approval of the Real Property Financial Management Policy. RECOMMENDATION: That the Board of Public Utilities approve the Real Property Financial Management Policy. COMMITTEE RECOMMENDATION: The Customer Relations /Finance Committee considered this policy at a specially scheduled meeting on October 31, 2014. After requesting certain changes and clarifications, the Customer Relations /Finance Committee unanimously recommended that the Board of Public Utilities approve the Real Property Financial Management Policy. BACKGROUND: The City of Riverside (City), through its Public Utilities Department (RPU), holds significant real property interests in San Bernardino and Riverside Counties, possessing 776 and 854 acres in each county, respectively. Although the City is the record title owner, the property was acquired through rate -payer funds and is managed by RPU as a steward (such properties are referred to herein as "RPU real property assets "). The vast majority of RPU real property assets—over 400 parcels —were acquired over fifty years ago at very low cost and much of it remains vacant. However, the acquisition and Tong -term retention of these properties, with their associated water rights, have proven to be an invaluable asset of RPU. This Real Property Financial Management Policy shall serve as a guide to the Board of Public Utilities to assist when carrying out their Charter prescribed duties. The guiding principles are as follows: - Maximization of ratepayer value guides all decisions - Stewardship, which includes both acquisition, use and disposition, shall be done in conformance with California law Given the strategic value of real property and the significant financial value of the real property portfolio, having an effective framework and policy for managing (including acquiring, transferring, leasing, selling, valuing, etc.) real property is a necessity for RPU. RPU's mission statement, "Riverside Public Utilities is committed to the highest quality water and electric services at the lowest possible rates to benefit the community," underscores the need for an effective real property management policy. In consideration of its mission statement, RPU has prepared this Real Property Financial Management Policy (Policy) with the intent of establishing guidelines for RPU's stewardship of real property assets for the benefit of RPU's ratepayers.