In a bid to address inefficiencies and improve revenue from its properties, Sausalito has hired Kimber Management, an external property management firm, to oversee 37 leases. The City Council has approved a 30-day trial contract costing $8,500 per month, with a one-year contract valued at $102,000 awaiting approval. This strategic move stems from identified gaps in expertise and administrative burden in Sausalito’s current property management approach.
Selection of Kimber Management
A Competitive Bidding Process
Kimber Management emerged as the preferred choice among three bidders due to its cost-effective proposal. While other bids were priced at $132,000 and $140,124, Kimber’s bid proved to be the most financially viable option. The firm has been entrusted with a range of responsibilities, including handling maintenance requests, rent collection, conflict resolution, lease negotiation, and tenant acquisition. Last fiscal year, city-owned properties managed to generate approximately $2.3 million, and the hope is that Kimber’s involvement will increase this figure.
The decision to hire an external firm comes after city staff identified inefficiencies and a lack of specialized skills in the current hybrid property management strategy. Particularly for older leases, there has been a noticeable gap in institutional knowledge. Kimber Management’s fee structure includes charging 4% to 5% of the rent for new tenants, with the percentage decreasing annually for long-term leases. While routine maintenance tasks are covered under the management fee, larger projects will require approval from the City Council.
Divergent Views Among Council Members
The decision to contract out property management was not without controversy among City Council members. Janelle Kellman and Jill Hoffman opposed the move for varying reasons. Kellman emphasized the necessity for a formal leasing policy to guide the city’s property management endeavors. Hoffman, on the other hand, sought a clearer scope of work before committing to the contract. Despite these reservations, Vice Mayor Joan Cox championed the decision, stating that Kimber’s expertise and the urgent need to manage the city’s extensive property portfolio justified the contract.
Community reaction was mixed; some residents echoed concerns about the lack of a formal leasing policy, while others appreciated the new direction. Resident Babette McDougal stressed the importance of creating benchmarks for success through a formal leasing policy. Conversely, Peter Van Meter commended the decision, noting Kimber’s local roots and potential benefits for Sausalito. Overall, the council voted in favor of the trial contract, reflecting an acknowledgment of immediate needs while also recognizing areas needing detailed future policies.
Anticipated Benefits of the New Strategy
Improving Operational Efficiency
One of the primary benefits of contracting Kimber Management is expected to be a significant alleviation of administrative burdens on city staff who were previously stretched thin. Delegating tasks such as maintenance request handling, rent collection, and conflict resolution to a specialized firm allows the city to focus on core governance matters. The expectation is that this will not only streamline operations but also lead to more consistent and professional management of city-owned properties.
Moreover, Kimber Management’s expertise is anticipated to fill the knowledge gaps identified by city staff. Older leases that require more nuanced understanding and management will benefit from the firm’s experience and institutional knowledge. As part of their fee structure, Kimber will receive a percentage of rents collected, incentivizing them to maximize lease income. This alignment of interests between the firm and the city is hoped to lead to higher overall revenues and better tenant management.
Enhancing Revenue and Community Relations
Sausalito’s properties generated around $2.3 million last fiscal year, and the city aims to increase this with more professional property management. By improving the lease negotiation and tenant acquisition processes, Kimber Management is expected to bring in tenants who are more aligned with the city’s long-term goals. This approach should enhance property utilization and revenue. Additionally, the firm’s local presence—managing 65,000 square feet in Sausalito and 700,000 square feet across three states—adds a community-centric element to their engagement, potentially leading to better tenant relations and more investment in maintaining the properties.
Another potential benefit to the community is the prospect of clearer performance benchmarks. As the city moves towards formalizing leasing policies, input from Kimber’s professional management practices could guide these policies. This would create predictable and sustainable revenue streams for the city while also ensuring a high standard of property maintenance and tenant satisfaction. The decision, though initially contentious, could pave the way for a more effective and profitable property management system in Sausalito.
Future Prospects and Needed Adjustments
Moving Toward Formal Leasing Policies
While the introduction of Kimber Management is expected to bring immediate relief and efficiency, the discussions during the council meeting highlighted the need for formal leasing policies. Such policies would provide a structured framework for property management and ensure that roles and responsibilities are clearly delineated. This would address concerns raised by council members and residents about the need for benchmarks and a clear scope of work.
Establishing a formal leasing policy could involve setting specific criteria for lease agreements, outlining maintenance responsibilities, and establishing guidelines for lease renewals and tenant relations. Additionally, these policies could include performance metrics to evaluate the effectiveness of Kimber Management’s performance over time. By having these standards in place, the city can better ensure that the property management arrangement aligns with its overall goals and community interests.
Ensuring Accountability and Success
Sausalito is taking steps to fix inefficiencies and boost revenue from its properties by bringing in Kimber Management, an external property management firm, to handle 37 leases. The initiative arose from the City Council identifying gaps in expertise and administrative burdens within Sausalito’s current property management system. To address these issues and streamline operations, the Council has approved a 30-day trial contract with Kimber Management at a cost of $8,500 per month. If the trial proves successful, there is a planned one-year contract waiting for approval, valued at $102,000. This strategic move aims not only to optimize property management but also to free up internal resources, allowing city officials to focus on other critical issues and projects. Transparency and efficiency are key goals in this decision, as Sausalito hopes to see a marked improvement in property management outcomes and overall city revenue during the trial period and beyond if the extended contract is approved.
