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HomeMy WebLinkAbout2007 10 22 Regular 605 Values of Surplus Equipment and Proceed with Surplus Assets Disposal Date: October 22, 2007 Due to time constraints, Regular Agenda Item "605" was not discussed during the October 22, 2007 City Commission Regular Meeting. COMMISSION AGENDA ITEM 605 Informational Consent Public Hearing Regular X October 22. 2007 Regular Meeting qJ Mgr. / Dept. Authorization ~ . REQUEST: City Manager and Information Services wishes to inform the Commission on approximate values of surplus equipment sent to auction and request that Commission determine how to proceed with surplus assets disposal. PURPOSE: To inform the Commission on the approximate value of surplus assets received from auction and to ask Commission how to dispose of future surplus assets. CONSIDERATIONS: During the October 8, 2007 Commission meeting, Commission requested information from staff on approximate values to be obtained by sending items to auction. Research was conducted for the past 12 month period to obtain approximate values of items to be sent to auction. While not all items on the surplus asset list for the month of October 2007 were previously disposed of, a comparison of items that have been disposed of in the past was made. From this comparison only two items scheduled to be disposed of in October 2007, were previously sent to auction: computers and vehicles. On average a computer sent to auction over the past 12 months has retuned a value to the City of $27.19. A Vehicle, either a car or a truck, sent to auction over the past 12 months has retuned a value of $1 ,541.67. If the above return for computers and vehicles holds true, the estimated return to the City for the items scheduled for October 2007, would be $3,599.95. This does not include the additional items that are scheduled to be sent to auction for which CITY OF WINTER SPRINGS CITY COMMISSION REGULAR MEETING- OCTOBER 22,2007 REGULAR AGENDA ITEM605 PAGE20F3 an estimated value could not be determined based upon previous sales of such items. This also does not consider variables such as condition or age of the equipment or vehicles. Estimated return on surplus equipment Item Computers Vehicles Price $27.19 $1541.67 Quantity 19 2 Total $516.61 $3,083.34 Grand Total Returned to City $3,599.95 Facts: ~ Code of Ordinances, Chapter 2, Article VI, Division 3, Sec. 2-194. Disposal of surplus property states that: Property of the city that is obsolete or the continued use of which is uneconomical or inefficient or for which there is no useful function which property is not otherwise lawfully disposed of may be disposed of for value to any person or may be disposed of for value without bids to the state or if the property is without commercial value it may be donated, destroyed or abandoned. Property deemed surplus by the city manager shall be sold at public auction after publication of notice not less than fifteen (15) days prior to sale. (Ord. No. 421,99 VI--VIII, 6-13-88; Ord. No. 504,91, 6-10-91) ~ City computers are not normally decommissioned until they reach at least four years of age. At that point, usually, they are either passed down to a less resource-intensive-user unless the computer is problematic at which time the computer is replaced with a new computer immediately. The newer computers are covered under four-year warranties so after four years, refreshing them with newer, faster technology is always recommended. ~ Information Services requests authorization from Commission once a month, on the first Commission meeting of the month, to dispose of City assets via a consent agenda item. ~ City-owned assets that are no longer needed or can no longer be used are disposed of by one of two methods: transfer or disposal. ~ Items that are transferable must be in good usable condition. An item that is still in good condition can be transferred from one department to another. ~ Items that are to be disposed of are disposed of in one of the following methods: auction, destroy, salvage, or trade-in (with Commission approval). ~ Auction - The City uses Gideon Auctions for auctioning all surplus asset items. The auction takes place every third Saturday of every month. The City receives a check from Gideon, along with a statement of the items sold after the auction. Gideon's fee is 10% for performing auction services for the City of Winter Springs. CITY OF WINTER SPRINGS CITY COMMISSION REGULAR MEETING- OCTOBER 22, 2007 REGULAR AGENDA ITEM 605 PAGE30F3 No action of government has caused more heartache and ended more careers, and caused more negative publicity than the real or perceived misuse of public property. No other property management activity has been involved in real or perceived abuses of public property than the method by which public property is disposed. For this reason, the method by which public property is disposed has received substantial scrutiny and careful development to prevent real and alleged actions of the misuse and abuse of public property. The method which best establishes the residual value of taxpayer's property is the auction process because it represents a true test of the marketplace in establishing value returned to the taxpayers. The least effective method establishing the residual value of taxpayer's property, and one which most exposes public officials to allegations of poor judgment and misuse of public property is donations. The process of donating public property by its nature says that public property is still usable but has no value to the City. This is a contradiction. Additionally, this represents a judgment of a public official rather than a test of the marketplace. This is indeed a slippery slope. There are other complications. Surplus assets that are not immediately disposed of must be managed and they take up much needed space around the City. If items are to be kept for donation, the following questions must be answered: y What items will be donated? All or some? y How long will we hold items before they are sent to auction? y Who will decide which charity gets which items? y Who will manage this whole process? In summary, the process of a public auction is the most efficient and least risky method of disposal of surplus public property when compared to donations. Furthermore, in most cases items auctioned by the City have passed their serviceable life. FUNDING: Not applicable RECOMMENDA TIONS: It is highly recommended that the Commission not start down the slippery slope of donating public property and continue the process in place for disposal of public property. ATTACHMENTS: None COMMISSION ACTION: