HomeMy WebLinkAbout11-05-2013 c8 surplus designation & autho of sale
FROM: Daryl R. Grigsby Director of Public Works
Prepared By: Timothy S. Bochum, Deputy Director of Public Works
Jeremy Schmidt, Fleet Maintenance Supervisor
SUBJECT: SURPLUS DESIGNATION AND AUTHORIZATION OF SALE
RECOMMENDATIONS
Authorize the surplus designation and disposal of surplus units by sale, auction, trade-in, or other
disposal methods in accordance with the City’s policies and procedures as prescribed in the
Financial Management Manual Sections 405-L and 480-B.
DISCUSSION
Staff has identified eight vehicles and pieces of equipment meeting the criteria for surplus. In
accordance with the City’s Financial Management Manual Sections 405 and 480 (as attached),
when a unit is replaced, it will be declared surplus and be disposed. The vehicles and equipment
units listed below have since been replaced or were removed from service per California Air
Resources Board regulations. These eight equipment items are ready to be designated as surplus.
Any surplus items that may have value in excess of $1,000 per item require City Council
approval for disposal.
No. Asset No. Description Program
1 9525 1995 WESTECH Portable Water
Pump
Utilities
2 0306 2002 Ford Think Electric Car Utilities
3 8628 1986 150 KW Portable Generator Utilities
4 9106 1991 GMC Topkick Dump truck Streets
5 9109 1991 GMC Top Kick Water Truck Parks Maint
6 9511 1995 Bandit Wood Chipper Parks Maint
7 9107 1991 GMC Topkick Dump Truck Streets
8 0423 Clark Forklift Fire
The vehicles and equipment listed above have been removed from the active fleet record as per the
City’s vehicle replacement plan and can be sent to auction. Most of the equipment has degraded
significantly to the point of low market value. Additionally, the current conditions of the stored
vehicles and equipment at the Corporation Yard have added concerns for workplace health and
safety. Due to the advanced age of these units and declining value for spare parts and scrap
metal, staff recommends designating these units as surplus and authorizing the sale or other
means of disposal.
11/05/2013
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Surplus Designation and Authorization for Sale Page 2
Standard government consignment rates for auction sales are typically 5%, less smog and
transportation costs (estimated total cost of $150). These rates are standard throughout municipal
government auctioneers and include all charges. In addition, any certifications required for out-
of-state sales will be provided from the auctioneer to the City.
CONCURRENCE
The Finance and IT Department concurs with the recommendation to designate these units as
surplus and disposal of, in accordance with the City’s policies and procedures.
FISCAL IMPACT
Staff anticipates the designation and sale of these vehicle and equipment surplus items to
generate revenues of $15,000. Any funds received by sale of these surplus items will be returned
to the Fleet Replacement Fund balance and available to support future purchases of replacement
vehicles.
ALTERNATIVE
Deny Surplus designation and sale. The City Council could reject the surplus designation
request and direct staff to pursue vehicle rehabilitation and repairs. Staff does not recommend
this option as the advanced age and storage conditions of the vehicles and equipment has not
made this a viable option. Additionally, the alternative to repair these vehicles and return as
active fleets conflicts with the City’s fiscal sustainability goal for reduction of the overall fleet
size by 10%.
ATTACHMENT
Financial Management Manual, Section 405-L and 480-B
\\chstore4\team\council agenda reports\2013\2013-11-05\fleet vehicle surplus designation (grigsby-bochum-schmidt)\ecar surplus
designation 2013.doc
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405-17
Section 405-L: Procedures
DISPOSING OF SURPLUS UNITS
1. When a unit is replaced or otherwise permanently removed from service, report to
Accounting that it is surplus and available for sale.
2. Include in each such report the following information for each unit reported:
City identification number (e.g., 9901)
Vehicle identification number (VIN)
License number
Model year (e.g.,2005), make (e.g., Ford), and model (e.g., F-350)
Description (e.g., one-ton truck)
Assigned department (e.g., Public Works)
Assigned program (e.g., Signal and Light Maintenance)
Acquisition year (e.g., 2004-05)
Estimated surplus value
Basis of estimated surplus value (e.g., blue book, previous auction proceeds)
Current odometer or hourmeter reading
Justification for replacement
Current location
Authorization to surplus (e.g., budget document that authorized replacement or
other Council authorization to replace or dispose of the unit)
3. Finance Division will dispose of surplus vehicles in accordance Section 480 of the
Finance Management manual.
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480-10
Section 480-B
AUCTION FIRM SERVICES
OVERVIEW
To reduce staff time in the sale and disposal of property, to reduce the amount of space being
used to store surplus and unclaimed property, to improve the process of estimating the value of
surplus property, and to maximize the value of return on surplus property, the Department of
Finance & IT is authorized to contract with an auction firm to assist staff in the sale and disposal
of personal property, consumable supplies and unclaimed property on an "as available basis"
after authorization is given by the Council or the Director of Finance & IT to sell or dispose of
City property.
The policies and procedures provided below in conjunction with the City's auction firm will
provide the staff with the opportunity to systematize the sale and disposal of this property.
AUCTION FIRM RESPONSIBILITIES
The following responsibilities will normally be assigned to the City's auction firm by Agreement
between the City and the firm selected:
A. The auction firm will be required to pickup any and all "marketable" surplus property by
consignment and deliver this property to their premises where it shall be inventoried,
sorted, identified, and catalogued. An auction will be conducted within 30 days of
receipt of property and supplies.
B. The auction firm will make the necessary arrangements for offering the property for sale
by auction to the most qualified buyers to obtain the highest return possible. The auction
firm will advertise the auction in a manner that will obtain the maximum participation by
the public in at least one newspaper of general circulation in the City of San Luis Obispo
for a minimum of five days prior to a scheduled auction.
C. The property consigned to the auction firm will remain the property of the City until sold
or disposed in accordance with these procedures.
D. Property not sold at auction will be disposed by on of the following methods:
1. Consignment to a sub-contractor specializing in unique or special equipment and
material for which there is no local market.
2. Direct sale to a buyer of unique or special equipment and material for which there
is no local market.
3. By sale as salvage to a local dealer or any recycling firm.
4. By destruction at an appropriate landfill site and certification thereto.
5. Returned to the City.
E. The material and equipment not sold at auction will be disposed of by one of the methods
described above within 15 days from the date offered at auction. For the purpose of these
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