Chapter 41.76
DISPOSAL OF SURPLUS PROPERTY
Sections:
41.76.030 Methods of disposal.
41.76.040 Allocation of proceeds.
41.76.070 Disposal of grant-funded equipment.
41.76.010 General.
The final step in the procurement cycle is disposition of an item or items when they are no longer useful to the City. The timely identification of surplus and obsolete material(s) is essential to an effective disposition program. Delayed identification ties up capital, resulting in higher maintenance and salvage costs and further deterioration of items.
(Res. 04-12 (§ 19.1), 1-16-12)
41.76.020 Policy.
The Purchasing Manager is authorized to conduct and monitor the City’s surplus property program. The following are the City’s general policies for disposition of surplus:
(a) The Purchasing Manager may require Division Managers to provide periodic departmental reports of all supplies which are no longer used or which have become obsolete, worn out or unusable.
(b) The Purchasing Manager shall have authority to transfer stock or other surplus inventory items or surplus equipment that has become unsuitable for public use.
(c) All sales shall be made to be in the best interest of the City.
(d) The Purchasing Manager has authority to forgo an auction or sealed bid process when the surplus material(s), supply(ies) and equipment can be donated or sold to other governmental entities or nonprofit organizations as is in the best interest of the City.
(Res. 04-12 (§ 19.2), 1-16-12)
41.76.030 Methods of disposal.
When items become excess, obsolete or surplus, the using department must report them to the Purchasing Division. In cases of disposal of items with an original purchase cost of $10,000 or more, the Accounting Division shall be notified in order to update the department’s fixed asset accounts. The following are the methods of disposition that may be used for the items:
(a) Transfer. Transferring to another department with a use for the item is the best method of disposition. A department wishing to accept an item available for transfer shall notify Purchasing and receive approval for the transfer. Both the transferring and receiving departments must update their inventory records to document the disposition of the item. The surplus transfer form can be found on the intranet under Forms – Purchasing.
(b) Sale. There are several methods of selling excess and surplus items.
(1) Auctions. The City contracts with auctioning services to sell items to the highest bidder at advertised public auctions.
(2) Sealed Bids. The Purchasing Manager may determine that items shall be sold at sealed bid sale. Public notice of the sale is made and solicitations are mailed to prospective bidders. This method assures reaching a large number of prospective bidders and allows potential purchasers from outside the immediate geographic area to participate in the bidding.
(3) Commercial Markets. The Purchasing Manager may determine that items may be offered for sale to established commercial markets. Candidates for this method of sale include antiques, art and specialized equipment.
(4) Sale of Scrap. Many items that are no longer usable may have a residual value. The Purchasing Division may arrange for the sale of scrap items with the money returned to City’s general fund.
(5) Posted Prices. From time to time, where there is no regular market and demand is erratic, an item may be marked with a pre-established price and sold to the public on a first-come basis.
(c) Trade-In. The Purchasing Manager may determine that it is advantageous to the City to seek bids on replacement items with the bidders allowing/offering trade allowance and no trade allowance pricing. Award may be made in the manner that is most advantageous to the City.
(d) Cannibalization. Disassembling an item to use its components for repair or maintenance of a similar item is authorized only if cannibalization has more value and benefit than disposal or trade-in of the item. The Purchasing Manager must grant approval before an item is cannibalized and removed from the Department’s property list.
(e) Donation. Only the City Council may dispose of an item by donation to a party outside of City government if the item has a value in excess of $50,000. Items valued at less than $50,000 shall be approved by the City Manager.
(f) Waste Disposal Hazardous Materials. There are strict federal and State laws regarding the disposal of hazardous materials. Departments that generate hazardous materials shall use City contracts for the proper disposal of these materials. Disposal of hazardous materials shall be directed by the City’s Fire Chief or environmental specialist. Departments shall contact the Fire Chief or environmental specialist before moving, transferring or selling any hazardous materials.
(Res. 04-12 (§ 19.3), 1-16-12)
41.76.040 Allocation of proceeds.
Unless otherwise directed by the City Council or required by a grant, the proceeds from the disposition of surplus or excess property shall be deposited in the City’s general fund.
(Res. 04-12 (§ 19.4), 1-16-12)
41.76.050 Sales to employees.
To avoid any appearances of impropriety in the disposition program, employees of the City may not purchase items unless the sale is to the highest bidder at a public auction or by sealed bid after appropriate public notification of the sale.
(Res. 04-12 (§ 19.5), 1-16-12)
41.76.060 Documentation.
The surplus items form is used to report a surplus or excess item to the Purchasing Division. This form is required to report the transfer or disposition of an excess item. The form can be found on the intranet under Forms – Purchasing.
(Res. 04-12 (§ 19.6), 1-16-12)
41.76.070 Disposal of grant-funded equipment.
When equipment was purchased using funds from State or federal grant funds, the provisions of the grant must be followed during disposal. It is the disposing department’s responsibility to notify Purchasing at the time of the surplus property report of any grant provisions that must be followed. If required by the grant provisions, proceeds from disposal may be returned to the grant-funding agency.
(Res. 04-12 (§ 19.7), 1-16-12)