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City auditor: Berkeley still lacks central lease inventory, council adopts auditor recommendations
Summary
Auditor Jenny Wong reported that the 2009 leases audit left seven recommendations unimplemented; the council accepted the auditor's follow‑up report and directed staff to develop a central lease inventory, clarify roles, and update Administrative Regulation 6.6.
The Berkeley City Auditor on Feb. 11 presented a follow‑up to the city’s 2009 leases audit, saying the city has not implemented several prior recommendations and lacks a complete central inventory and a single office responsible for lease management.
Auditor Jenny Wong reported that the city could not confirm the total number of leases and licenses because the spreadsheet the auditor's office reviewed was incomplete. "We were unfortunately unable to estimate any revenue amounts," Wong said, noting that missing fields included rent amounts, contract numbers, and start and end dates for many agreements.
Wong told council staff reopened eight recommendations and urged the city manager’s office and Public Works to lead on formalizing roles, creating a central repository of lease information, and updating AR 6.6 to reflect current practices. She said not having a complete list can cause the city to miss opportunities to assess costs and benefits of renting city property and can leave legacy holdover leases in place.
Public Works Director Terrence Davis and the city’s real property administrator told council they plan to create a centralized tracking tool this year and produce a template summary as part of future leases. Davis said some corrective steps—creating a “really good spreadsheet” inventory and boilerplate lease language—are planned as short‑term actions, with longer‑term integration into financial systems to follow.
Councilmembers asked whether the city can estimate the economic magnitude of leased assets; Wong said the incomplete data prevented a reliable estimate but agreed that adding market‑rate fields to a central list would enable future financial analysis. Councilmember Taplin moved to adopt the auditor's recommendations; the council approved the motion unanimously and requested a follow‑up audit in fall 2025 to assess progress.
The auditor’s follow‑up highlighted examples where the city’s approach varied across departments, including below‑market rents to nonprofits without a clear decision framework and a courthouse lease that dates to the 1950s charging a nominal $1 per year. Council members emphasized the need to balance resource constraints with the opportunity to optimize city assets to reduce a reported operating deficit, and staff said they would come back with cost estimates for staffing or systems changes.
