Governing policy: Surplus Property Disposal Policy

Department: Finance & Property Services - Procurement

Last revised: April 15, 2024

Procedure

Scope

This procedure applies to the disposition of all personal property owned by the City of Minneapolis but that is no longer necessary for City operations.

Definitions

1. Surplus property: Personal property owned by the City of Minneapolis but that is no longer necessary for City operations, including but not limited to: damaged, obsolete or unnecessary personal property such as vehicles, equipment, furnishings, movable fixtures, tools, wires and cabling and clothing.
2. Donation-eligible surplus property (or DESP): a) equipment used by the public works department; and b) cellular phones and emergency medical and firefighting equipment that is no longer needed because it does not meet industry standards for emergency medical services, police, or fire departments or has minimal or no resale value.
3. Notice: Written notice given by the city to customers to announce the availability of surplus property.
4. Customers: Donees, Governmental Entities or Purchasers of surplus property.
5. Purchasers: Any customer that responds to a Notice and provides to the City an offer or bid to acquire surplus property.
6. Federal Funds: Grant proceeds provided by the United States by or through any of its departments or agencies.
7. Donee: The recipient of surplus property approved for donation.

Roles and responsibilities

Surplus Property Disposal Procedures

Authority: Based upon Minnesota Statutes § 471.3459 and Minneapolis Code of Ordinances § 18.160

Disposition of surplus property: Departments that wish to dispose of surplus property (as defined herein) shall follow the procedures indicated in the Policy and Procedures.

1. Determination of surplus property and potential disposal options
   1. The Department must complete a Surplus Property Notification Form that is available in the Forms section of CityTalk.
   2. Submit the Surplus Notification Form in duplicate to the Department Head and to the Procurement Director.
   3. The Procurement Director will review the surplus property Notification form and initially make note of the preferred disposition method, source of funds for the city’s acquisition of the surplus property and whether or not it should be classified as surplus property.
   4. If the Procurement Director confirms that the surplus property was acquired with federal or state funds, then the Procurement Director will contact the City Attorney to determine permitted disposition methods.
      1. Property acquired with federal funds may be subject to 2 CFR Section 200.313-316 or other regulations that may require disposition by sale only.
      2. Property acquired with state of Minnesota funds may be subject to the requirements contained in the state grant or funding agreement.
   5. Determine value of surplus property.
      1. The Procurement Director will provide to the Finance Officer and the inquiring City department a written estimate of the value of the surplus property.
      2. Surplus property valued at less than $500 may be sold, donated or considered solid waste to be recycled or placed in the refuse stream. For surplus property to be recycled, departments should reference the valuation guidelines contained in the “Disposal and Recycling of Surplus Property Procedures”.
      3. Property valued at greater than $500 may only be sold or donated.
2. Sale of surplus property.
   1. The Procurement Director will arrange for the sale of or authorize a department to sell surplus property. The transfer of the surplus property may occur by bid or auction after Notice upon terms advantageous to the city in the opinion of the Procurement Director.
   2. Any sale or disposition of surplus property to the United States of America or any agency thereof, the State of Minnesota, or any other political subdivision located in the State may occur pursuant to Minnesota Statutes § 471.64. Any such surplus property disposition to the U.S. shall occur in accordance with its rules and regulations.
   3. Any sale of the surplus property does not require City Council approval. All sales of surplus property, whether conducted by a department that regularly conducts auctions or sales or the Finance Department, are reported to the Procurement Director. The Procurement Director compiles a list and dollar amount received by the city upon the sale of surplus property. The list and dollar amount received from sales of surplus property will be in a form compatible with audit requirements.
   4. The City Attorney shall draft any written agreement to transfer the surplus property to the buyer.
   5. The sale or disposal of surplus property that is deemed to be “scrap metal” or other “recyclable material” shall follow the “procedures” contained in the “Disposal and Recycling of surplus property”.
3. Donation of surplus property.
   1. The following surplus property may be eligible for donation (“Donation-Eligible surplus property” or “DESP”):
      1. Equipment used by the public works department; and
      2. Cellular phones and emergency medical and firefighting equipment that is no longer needed because it does not meet industry standards for emergency medical services, police, or fire departments or has minimal or no resale value.
   2. Donation-Eligible surplus property may be donated to Non-profit entities formed under Section 501(c)(3) of the Internal Revenue Code.
   3. City employees and officials are prohibited from taking possession of any DESP on behalf of an eligible donee.
   4. The donating Department shall prepare a Request for Council Action (RCA) and proposed resolution, The RCA shall contain the Finance Director’s estimated value of the DESP and the name of the intended recipient. The City Council may authorize, by adoption of a resolution, the donation of DESP regardless of its value.
   5. Upon City Council adoption of a donation resolution, the Finance Director or designee will effect the donation of the DESP pursuant to this procedure.
   6. Costs associated with the Donation of surplus property
      1. The Donee shall pay all of the costs associated with the City’s donation of the surplus property. These costs shall include, but not be limited, to transportation and shipping costs, including loading and unloading, taxes, tariffs, storage costs upon the surplus property leaving the city facility, any governmental permits or fees, and all labor costs associated with the transportation and storage of the surplus property.
      2. Donee shall indicate, to the satisfaction of the City Finance Officer, its responsibility and financial means to assume the costs in D.3.a.
      3. City shall not transfer title to or convey the surplus property until the Donee has provided evidence satisfactory to the City that Donee possesses the funds to pay for the costs in D.3.a.
   7. Time limitations for donation of surplus property.
      1. The Department donating the DESP will establish an outside date for the Donee to pay for and take title to surplus property.
      2. Donee’s failure to pay for and claim donated surplus property will result in forfeiture of Donee’s rights and City may dispose of the surplus property by other means.
   8. The City Attorney shall draft the written agreement to transfer the donated surplus property.
4. Notice requirements for donations of surplus property.
   1. Requirement for written disclaimer:
      1. As required by Minnesota Statues, Section 471.3459, the City will provide notice to all donees that the surplus property is being donated in an “as is” condition and, further, that the surplus property may be defective and cannot be relied upon for safety purposes.
      2. The written disclaimer will appear in the written agreement to transfer the donated surplus property.
   2. Preparation of written disclaimer. The written notice as required by statute should provide the following disclaimer:
      “The (equipment, goods, vehicles, etc.) are being provided to (Donee) “as is” without any warranties, express, implied or oral, including, but not limited to, warranties of merchantability or fitness for a purpose or use. It may be defective and cannot be relied upon for safety purposes.”