The URL can be used to link to this page

Home My WebLink About32- City AdministratorOIL— CITY OF SAN BERK'r ID' INO REQUEST F I COUNCIL ACTION From: Fred Wilson Subject: Agreement with American Cemetery/ ` Assistant City Administrator Mortuary Consultants, Inc. for D representation of City in sale Date: October 4 , 1995 of Pioneer Memorial Cemetery. Synopsis of Previous Council action: Recommended motion: Adopt resolution. Direct staff to proceed with sale of Pioneer Memorial Cemetery. Signature Contact person: son Phone: 5122 Supporting data attached: yes Ward: 1 FUNDING REQUIREMENTS: Amount: Source: (Acct. No.) JAcct. Description) Finance: Cot, 'totes: ab y �S- r e/'5 9Y7 75-0262 Agenda Item NO_ �'� STAFF REPORT The City of San Bernardino has owned and operated Pioneer Memorial Cemetery since 1852. In recent years, the cemetery has not generated enough revenue to meet expenses, and has begun to accumulate a negative fund balance. By the end of fiscal year 1995-96, the deficit is projected to reach $87,000. While a cemetery rate increase is on this same agenda, this increase is only expected to generate an additional $20,000 - 40,000 in annual revenue. It is the recommendation of staff that the City seek to divest itself of the cemetery property, and sell it to a private operator. In the course of researching this option, one offer for the property has already been received. It is difficult to evaluate this offer, though, because of the unique nature of the potential transaction, and staffs lack of experience in this area. i Additionally, cemetery appraisal is a specialized field, and for the City to obtain such an appraisal would cost in excess of $5,000. Appraisal costs are high because the value of the cemetery's trust funds must be included. Since the City has not established separate trust fund for pre-need accounts, which is customary among private cemeteries, it is especially difficult to determine the cemetery's value. In order to ensure that cemetery services to the community are not negatively impacted by the sale, and to maximize the amount of revenue received for the cemetery, it is recommended that a firm be retained to act as the broker in the sale. Staff contacted three potential companies, and one expressed interest in representing the City. American Cemetery/Mortuary Consultants (ACMC) has an extensive track record of successfully locating interested buyers, performing appraisals, and closing the sales of cemeteries throughout the United States and Canada. If this agreement is approved, ACMC will develop a package of information regarding Pioneer Cemetery, and will distribute the information to potential buyers. This package will include an appraisal of the property, which will be performed at no cost to the City. The firm will also assist City staff in reviewing the qualifications of the buyers, evaluating the offers received, and conducting necessary negotiations. ACMC has already identified several large, multi-national cemetery companies that may be interested in the property. As payment for these services, the City will agree to pay 6% of the gross sale price of the property to ACMC. If no suitable buyer is found for the property, or the Council does not accept any of the offers received, no fee will be paid to ACMC. It is recommended that the Mayor and Common Council: I 1. Direct staff to proceed with the sale of Pioneer Memorial Cemetery; and 2. Adopt the resolution executing the agreement with American Cemetery/Mortuary Consultants, Inc., to represent the City in the potential sale of Pioneer Memorial Cemetery. C I T Y OF S A N B E R N A R D I N O INTEROFFICE MEMORANDUM CITY ADMINISTRATOR'S OFFICE TO: Mayor and Common Council FROM: Fred Wilson, Assistant City Administrator DATE: October 13 , 1995 SUBJECT: Agenda Item #25 - Pioneer Cemetery Sale COPIES: Shauna Clark, City Administrator ------------------------------------------------------------------- A recommendation was placed on the October 16 Council agenda for the hire of American Cemetery/Mortuary Consultants (ACMC) to represent the City in the possible sale of Pioneer Memorial Cemetery. Since that time, it has come to my attention that the legal issues surrounding the sale need to be researched. In order to allow time for this research, and to ensure that the proposed sale is done in accordance with the Charter, it is recommended that a substitute motion be made to authorize ACMC to proceed with an appraisal of the cemetery, with a cost not to exceed $4, 500. This appraisal will be necessary in order to comply with the City Charter provisions related to the sale of real property. The appraisal process will include a site visit by ACMC staff, and a review of the financial condition of the cemetery. During the time it will take to complete the appraisal, we will work with the City Attorney's Office to address the legal issues. FW/ls I vq S'� .2 S' CITY OF SAN BERNARDINO INTEROFFICE MEMORANDUM TO: Fred Wilson,Assistant City Administrator FROM: DIANE CATRAN ROTH,Deputy City Attorney DATE: October 11, 1995 RE: Agenda Item re: Sale of Pioneer Cemetery We received an agenda item regarding an agreement with American Mortuary Consultants for the sale of Pioneer Cemetery. This was not received until October 5, 1995, for the October 16, agenda(a week after our deadline), and it was the first notice we have had that sale of the cemetery was even being considered. There are some obvious problems on the face of the proposed Agreement, and there are also some significant legal issues which we need time to research. The immediately apparent problem on the face of the Agreement is that it does not require compliance with the Charter. Charter § 40 requires an appraisal, a price set by Council and a 5/7 vote in favor of the sale; and prohibits a sale for a sum less than the minimum set by resolution of the Council providing for the notice inviting bids. Other issues that must be looked at include, but are not limited to, whether the cemetery's existing contracts contain any provisions which would affect the ability of or the terms by which the City may sell the cemetery, whether there is any applicable State law for the sale of cemeteries which must be adhered to and which specific funds, assets and property would be included with the sale. (The Agreement includes "all trust funds, all undeveloped land, and all other assets owned or controlled by said cemetery," but they are not specifically defined. If, for example,the City owns a backhoe for use at the cemetery, is that an asset 'owned or controlled by [the] cemetery"? Do the "trust funds" include only the perpetual care (endowment fund), or do they also include the operating fund?) Also,please note that the Agreement provides that the commission will be paid by the buyer, and does not provide that it be paid out of the proceeds of sale or the sales price. The staff report says that the City will pay 6%of the sales price to the consultant, and it should be rewritten to correctly represent the proposal. (Obviously,the proposal in the Agreement is more advantageous to the City.) Please remove this item from the October 16, 1995, agenda, and let me know if there is any particular urgency to is that we should be aware of. DIANE CATRAN ROTH Deputy City Attorney cc: Tom Minor, Mayor Shauna Clark, City Administrator Dan Station, Cemetery Director