HomeMy WebLinkAbout10/21/1997, C-9 - DISPOSAL OF SURPLUS COMPUTER EQUIPMENT council °�o-1,--?-7
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CITY O F SAN LUIS O B I S P O
FROM: Bill Statler, Director of Finance
SUBJECT: DISPOSAL OF SURPLUS COMPUTER EQUIPMENT
CAO RECOM MNDATION
Adopt a resolution establishing procedures for disposing of surplus computer equipment.
DISCUSSION
Overview
Staying current with changes in technology was one the key strategies adopted by the Council in
1995 as part of the Information Technology Master Plan. With the funding approved by the
Council as part of the 1997-99 Financial Plan to implement this strategy, we will be replacing a
number of network workstations and printers every year. While we could follow our general
guidelines in disposing of surplus computer equipment, we believe that an alternative process is
appropriate in this case summarized as follows:
■ After determining that there are no other City uses for them, computer equipment
declared surplus by the Council will first be offered for sale to City employees.
■ Remaining computer equipment declared surplus by the Council will them be offered for
sale to non-profit organizations, and then to other governmental agencies.
■ Whatever these agencies do not purchase will be consigned to the City's auction firm for
sale, or other method of disposal as determined by the Director of Finance.
Background
In the past, our computer equipment replacements have taken place only after they were "very
old"— at least from a technology perspective. This has meant that there was very little value in
our surplus computer equipment. Because of this, in our most recent computer dispositions
from the Windows 95 project,we donated all of them to non-profit groups.
However, within the next few months, we will be embarking on our first true ongoing
workstation replacement program, replacing about 65 computer workstations. As opposed to
our past replacements, these will have some tangible value; how much is uncertain, but clearly
in excess of the $100 value requiring Council approval to declare them surplus under the City
Charter.
This means we should follow a more formal process in surplusing and disposing of replaced
computers than in the past. Options for disposing of them along with the pros and cons of each
are discussed below,but common to any approach will be the following:
Council Agenda Report-Disposal of Surplus Computer Equipment
Page 2
■ Before declaring replaced computer equipment as surplus and disposing of it, we will
ensure that there are no other City uses for it for standalone applications or back-up
purposes. For example, Chief Neumann has requested that we retain the best of the
replaced computers for our emergency operations center. The "City" in this case would
also include the Downtown BIA.
■ They will need to be declared surplus property by the Council before any disposition
occurs regardless of process. For simplicity, we are presenting the proposed disposition
procedures for Council approval at this time before bringing specific surplus equipment
recommendations to you.
Current Procedures
Our current general guidelines for disposing of surplus equipment are as follows (on a case-by-
case basis, we may dispose of surplus personal property in other ways when we believe it will
best serve the City's interests):
■ Based on the department's estimated value, first offer them for sale to other local
government agencies(Housing Authority, School District, County).
■ Then offer them for sale to non-profit organizations (we generally use United Way as a
clearing house for this).
■ Whatever these agencies do not purchase, consign them to the City's auction firm for sale
or other method of disposal as determined by the Finance Director.
ALTERNATIVES
There are several options (and combinations of options) available to us in disposing of surplus
computer equipment,but the key questions common to all of these are:
■ Should employees be allowed to directly purchase surplus computer equipment from the
City?
■ Should non-profit groups be moved-up in priority?
The following summarizes the key alternatives to our current procedures, and the pros and cons
of each:
Offer Surplus Computer Equipment Directly to Our Employees
Several employees have expressed an interest in purchasing surplus City computer equipment.
While we do not currently prohibit employees from purchasing surplus property (unless they
were involved in declaring it surplus), we do not provide them with a preferential opportunity to
do so: they must purchase at auction like everyone else (and only after other governmental
agencies or non-profits have had first"dibs"on the best stuff).
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Council Agenda Report-Disposal of Surplus Computer Equipment
Page 3
However, under our employee computer purchase program adopted by the Council in December
of 1996, we encourage employees to have software-compatible computers at home. Because of
this, a case could be made for offering City surplus computers to them first (or after other
governmental agencies/non-profits but before offering them for general sale). In some cases, this
might result in an employee having a computer at home who might otherwise not be able to
afford one. Based on the survey we conducted last December when we were preparing our loan
program, several cities in California do this.
Guidelines for Offering Surplus Computer Equipment to Employees
If we make surplus computer equipment available to City employees, we recommend the
following guidelines:
■ Exclusions. The Director of Finance and Information Systems staff would be excluded
from purchasing surplus computer equipment under all circumstances; and Department
Heads whenever any surplus computer equipment is from their department.
■ Pricing. Sales prices would be set in advance by Information Systems based on
researched market values, which would also be the basis for sales offers to other
government agencies and non-profit groups.
■ "As is" condition. Computer equipment will be offered on an "as-in" condition basis.
All components needed to make it operational (like monitors) may not be available, and
no guarantee will be made about their current or future performance.
■ Lottery. Some computer equipment will be in better shape (or have better features) than
others; and there may be greater interest at any one time than we have surplus equipment.
To ensure fair access, some type of lottery system will be established.
■ Software. Consistent with guidelines of the employee computer loan program,
employees must demonstrate that they own personal copies of the City's desktop
operating system software (currently Windows 95 or NT) and word processing software
(currently Word 7.0 or higher).
■ Employee use. The predominant use of surplus computer equipment purchased from the
City should be restricted to employees and their immediate family members.
■ Term. Employees will be allowed to purchase surplus computer equipment no more
often than once every twentyfour months.
■ Employee loan program. Employees may purchase surplus computer equipment
through the employee computer loan program; however, the term may not exceed twelve
months.
Pros and Cons
The following is a summary of the pros and cons of this option:
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Council Agenda Report-Disposal of Surplus Computer Equipment
Page 4
Pros and Cons of Offering Surplus Computer Equipment to Employees
• Consistent with current policy of • Possible perceived"stewardship—
encouraging employees to have ethics"concerns in giving employees
computers at home. "first"dibs.
• Difficulty in setting fair market values
and determining who can buy what
computer.
• Morale problems if computer does not
perform well soon after purchase("as
is"is more easily managed —and
doesn't have morale issues—with
people you don't know).
Move-Up Position of Non-Profits Relative to Government Agencies
In our most recent replacements, we donated our surplus computers to non-profit organizations.
While these computers were of little commercial value due to their age, this was very well-
received by non-profit agencies with limited resources. While we do not believe it is appropriate
to provide the surplus computer equipment we will have in the future at no cost, we do believe
there is merit in offering it to non-profits before offering it to other governmental agencies
Pros and Cons of Moving-up Non-Profits
Pros Coils
• Non-profits would benefit from this • Clearer case can be made that other
more than other government agencies, government agencies meet community
and they provide equally important needs.
community services.
CONCURRENCES
The MIS Steering Committee concurs with this recommendation.
FISCAL IMPACT
There is no fiscal impact associated with this procedure; we expect to receive market value for
surplus computer equipment regardless of who it is offered to first.
ATTACHMENT
Resolution establishing procedures for disposing of surplus computer equipment
G:MIS Policy/Surplus Computer Equipment Agenda Report
RESOLUTION NO. (1997 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO
ESTABLISHING PROCEDURES FOR DISPOSING OF
SURPLUS COMPUTER EQUIPMENT
WHEREAS, the City has initiated an ongoing computer equipment replacement program
in accordance with the Information Technology Master Plan adopted on April 4, 1995; and
WHEREAS, this will result in an ongoing need to surplus and dispose of replaced
computer equipment.
. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San Luis
Obispo hereby establishes procedures for disposing of surplus computer equipment as set forth in
Exhibit A.
Upon motion of , seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was adopted this day of , 1997.
ATTEST:
City Clerk Mayor Allen Settle
APPROVED AS TO FORM:
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Surplus Computer Equipment Disposal Procedures
PURPOSE AND SCOPE
The purpose of these procedures is to set forth guidelines for disposing of computer equipment
after it has been declared surplus by the Council in accordance with City Charter requirements.
Disposal of surplus computer equipment with an estimated market less than the amount requiring
Council approval under the City Charter will continue to be made in accordance with the City's
general procedures for disposing of surplus property.
SURPLUS PROCEDURES
■ The determination that computer equipment is surplus to the City's needs will be made
by the Council prior to its disposal whenever its estimated market value exceeds the
amount set forth in the City Charter.
■ Before presenting recommendations to the Council to declare computer equipment as
surplus and disposing of it in accordance with these procedures, the Director of Finance
will ensure that there are no other reasonable City uses for it.
DISPOSAL PROCEDURES
■ All surplus computer equipment offered for sale will be on an "as-is"basis.
■ Surplus computer equipment will fust be offered for purchase to City employees subject
to the following conditions:
• The Director of Finance and Information Systems staff are excluded from
purchasing surplus computer equipment under all circumstances; and Department
Heads whenever any surplus computer equipment is from their department.
• Employees purchasing surplus computer equipment under this program must
demonstrate that they legally own licensed copies of the City's standard desktop
operating system and word processing software for their personal use.
■ Remaining computer equipment declared surplus by the Council will then be offered to
non-profit organizations, and then to other governmental agencies.
■ Whatever is not purchased by these agencies will be consigned to the City's auction firm
for sale, or other method of disposal as determined by the Director of Finance.
■ The Director of Finance will establish further administrative guidelines as needed to
implement these procedures.
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