City of Richmond Department of Procurement Policies and Procedures Manual NO. 38 SURPLUS PROPERTY 38-1.0

Scope. This regulation applies to all City-owned property, as defined herein, and all using agencies, as defined herein.

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Purpose. This regulation establishes policies and procedures with regard to the reporting, transfer and disposal of surplus property by using agencies.

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References. (a) Richmond City Code § 2-634 (“Appointment, powers and duties of director”) (b) Richmond City Code § 66-348 (“Disposition of certain unclaimed weapons”) (c) Richmond City Code § 74-4 (“Definitions”) (d) Richmond City Code § 74-111 (“Reports of unused property”) (e) Richmond City Code § 74-112 (“Transfer of stock to other using agencies”) (f) Richmond City Code § 74-113 (“Sale or exchange”) (g) Richmond City Code § 74-114 (“Donation”) (h) Richmond City Code § 74-115 (“Special restrictions”) (i) Richmond City Code § 102-365 (“Disposition of impounded motor vehicles”) (j) Richmond City Code § 102-366 (“Notice and disposition of inoperable abandoned motor vehicles”) (k) Richmond City Code § 102-439 (“Impoundment”) (l) Va. Code § 2.2-3101 (“Definitions”) (m) Va. Code § 2.2-3109 (“Prohibited contracts by other officers and employees of local government agencies”)

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Definitions. For purposes of this regulation, the terms defined in this section have the meanings ascribed to them in this section unless the context clearly indicates that another meaning is intended.

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City Employee. “City employee” means a person employed by the City and includes persons appointed or elected to an office of the City. See Va. Code § 2.2-3101. Page 1 of 10

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Director. “Director” means the Director of Procurement Services. Richmond City Code § 74-4.

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Immediate Family. “Immediate family” means (i) a spouse and (ii) any other person residing in the same household as a City employee, who is a dependent of the City employee or of whom the City employee is a dependent. See Va. Code § 2.2-3101.

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Property. “Property” means equipment, materials, supplies, vehicles and other tangible personal property but not real estate.

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Surplus. “Surplus,” when used to refer to property, means that the property is left over after the needs for which it is acquired have been satisfied, that the property is no longer useful because it is out-of-date or worn out and cannot be used safely or economically for any other purpose or that the property is otherwise unused and not anticipated to be used by the using agency.

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Using Agency. “Using agency” means any department, agency, bureau, board, commission, court, City jail or jail farm or other unit in the City government. Richmond City Code § 74-4.

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Policy.

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When Property Becomes Surplus. Property held or controlled by a using agency becomes surplus property upon the signature by the Surplus Property Representative of a Fixed Asset / Controllable Item Disposal Form for that property.

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Who May Dispose of Surplus Property. The Director shall dispose of all surplus property. The Director has designated the Surplus Property Representative to act on the Director’s behalf with regard to all aspects of the disposal of surplus property, except where this regulation or applicable law requires the Director’s action. Using agencies shall not dispose of any surplus property other than through the Department of Procurement Services pursuant to this regulation. See Richmond City Code § 2634(c)(4).

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Disposal of Surplus Property.

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Methods of Disposal. Surplus property will be disposed of by (i) transfer to another using agency, (ii) trade in for replacement property, (iii) sale by competitive bidding or public auction, (iv) sale on a negotiated basis, (v) donation or (vi) scrap.

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Selection of Method of Disposal. The Surplus Property Representative shall determine the most appropriate method of disposing of surplus property based on the following policies:

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(a) If the using agency has requested that surplus property be traded in for replacement property to obtain a reduced price, then the surplus property shall be traded in. (b) If the using agency has not requested that the surplus property be traded in but another using agency can make use of the surplus property, then the surplus property shall be transferred to such other using agency. (c) If neither trade in nor transfer pursuant to subsections (a) and (b) of this section apply, then the surplus property shall be sold. The method of sale shall be competitive bidding or public auction. (d) If the Director determines in writing that the use of competitive bidding or public auction is impractical or if no bids or offers are received during the course of competitive bidding or public auction, then the Surplus Property Representative may arrange for the sale of the surplus property on a negotiated basis. (e) If the Director determines in writing that property cannot be sold through competitive bidding or public auction or on a negotiated basis, then the Director may direct the Surplus Property Representative to put the surplus property up for sale to the general public at fixed or uniform prices. (f) If the Director determines in writing that it is impractical to sell surplus property by any of the means described in subsections (c) through (e) of this section, that surplus property may be donated to another public body or to a nonprofit organization. (g) If the surplus property cannot be disposed of by any of the other methods identified in this section, then the surplus property shall be scrapped. 38-5.3.3

Purchase by City Employees. Va. Code § 2.2-3109 prohibits City employees and members of their immediate families from having a contract with the City to purchase property unless the property is sold at uniform prices available to the general public. Accordingly, City employees and members of their immediate families may not participate in competitive bidding, public auction or negotiated sale of surplus property. However, City employees and members of their immediate families may purchase surplus property sold to the general public at fixed or uniform prices.

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Library Materials. Richmond City Code § 74-114(b) authorizes the Library Director to transfer City-owned books that the Library Director determines to be surplus to private non-profit organizations that will dispose of such books through a public book sale and return the proceeds to the City for the purchase of additional books or materials for the City’s library system. If the Library Director makes such a surplus determination in writing, with a copy to the Surplus Property Representative, then the Library Director shall transfer such books as authorized by Richmond City

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Code § 74-111(b), and the disposal of such books shall not be subject to this regulation. 38-5.3.5

Law Enforcement Sales. After complying with applicable legal requirements, e.g., Richmond City Code § 66-348 (weapons), Richmond City Code § 102-365 (sale of impounded vehicles), Richmond City Code § 102-366 (scrapping of inoperable abandoned vehicles) and Richmond City Code § 102-439(a) (bicycles), the Chief of Police may request that the Director sell certain property acquired through law enforcement activities. Bicycles shall be sold by competitive bidding. Impounded motor vehicles shall be sold at public auction. Weapons shall be sold by competitive bidding or public auction.

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Application of Proceeds. (a) All proceeds from the sale of surplus property after the costs of sale have been paid shall be credited to the General Fund except as provided in this section. (b) Proceeds returned to the Library from the sale of City-owned books donated by the Library Director shall be deposited in the General Fund and applied to the Library account for the purchase of books or materials for the Library. Richmond City Code § 74-114(b). (c) Proceeds from the sale of impounded bicycles shall be applied first to the cost of impounding, removal, storage, investigation as to ownership, notice and sale of the bicycle. Richmond City Code § 102-439. Any residual proceeds remaining after the appropriate accounts have been credited for those costs shall be held for 60 calendar days from the date of the sale for the owner of the bicycle at the time of its impoundment. Id. If the owner has not claimed such residual proceeds within this 60-day period, those proceeds shall be deposited in the General Fund. (d) Proceeds from the sale of impounded motor vehicles shall be applied first to the cost of the public auction, the cost of removing, preserving and storing the motor vehicle, and the cost of legally required notices and publications. Richmond City Code § 102-365. Any residual proceeds remaining after the appropriate accounts have been credited for those costs shall be held for 90 calendar days from the date of the sale for the owner of the motor vehicle at the time of its impoundment. Id. If the owner has not claimed such residual proceeds within this 90-day period, those proceeds shall be deposited in the General Fund.

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Procedures.

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Surplus Declaration. (a) Whenever a using agency determines that any property in its possession or under its control is surplus, the using agency shall declare such property surplus by

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submitting a completed Fixed Asset / Controllable Item Disposal Form to the Surplus Property Representative. (b) The using agency shall submit any requests for trade in or transfer on or with the form. In the case of a trade in, the purchase requisition for the purchase of replacement property must contain a statement similar to the following: “less trade-in on (Tag Number ).” The Tag Number is found on the Fixed Asset / Controllable Item Disposal Form. (c) Using agencies that declare fixed asset items as surplus must notify the Department of Finance in accordance with that department’s procedures. (d) The surplus property shall remain in the custody of the using agency until disposed of unless otherwise directed by the Surplus Property Representative. (e) The Surplus Property Representative shall apply the policy set forth in section 385.3.2 (“Selection of Disposal Method”) to select the method by which the surplus property will be disposed. (f) If necessary, the Surplus Property Representative shall obtain the Director’s signature on any written determinations required by section 38-5.3.2 (“Selection of Disposal Method”). 38-6.2

Sale of Surplus Property.

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Competitive Bidding or Public Auction. (a) The sale of surplus property by competitive bidding or public auction includes the use of live auctions and online auctions performed by contractors. (b) The using agency shall comply with the directions of the Surplus Property Representative concerning the posting or listing of the surplus property with the auction contractor. (c) Throughout the auction process, the surplus property shall remain in the custody of the using agency unless otherwise directed by the Surplus Property Representative. (d) Following the auction, the successful bidder and the Director, or the written designee thereof shall execute a bill of sale for the surplus property. (e) The bill of sale shall be in a form prescribed or approved by a lawyer in Office of the City Attorney assigned to represent the Department of Procurement Services.

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(f) The using agency shall release the surplus property to the successful bidder only upon the successful bidder’s presentation of the bill of sale for the surplus property. (g) The auction contractor shall be paid from the proceeds of the sale on a commission basis as specified in the contractor’s contract with the City. 38-6.2.2

Negotiated Basis Sale. Where the Director has determined in writing that a sale through competitive bidding or public auction is impractical, the Director may negotiate or authorize the Surplus Property Representative to negotiate a contract to sell the surplus property to a purchaser. The contract shall be in a form prescribed or approved by a lawyer in Office of the City Attorney assigned to represent the Department of Procurement Services.

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Uniform Price Sale. Where the Director has determined in writing that property cannot be sold through competitive bidding or public auction or on a negotiated basis, the Surplus Property Representative may offer surplus property to the general public at a fixed, set or uniform price. The Surplus Property Representative shall determine the fixed, set or uniform price based on the asset value supplied by the using agency on the Fixed Asset / Controllable Item Disposal Form and using such other methods and research as the Surplus Property Representative deems appropriate. The Surplus Property Representative shall post the date, time and location of the sale as well as the price and any descriptive information the using agency provides on the website of the Department of Procurement Services at least five working days before the date of the sale. All bills of sale for items sold at auction shall be in a form prescribed or approved by a lawyer in Office of the City Attorney assigned to represent the Department of Procurement Services.

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Donation. (a) For purposes of this Policy and Procedure and Richmond City Code § 74-114(a), a “public body” is any governmental entity, and a “nonprofit organization” is an organization either that is certified by the Internal Revenue Service under 26 U.S.C. § 501(c)(3) or the articles of incorporation of which clearly indicate that the organization is to be operated on a not-for-profit basis. (b) When the Director has determined in writing that it is impractical to exchange or sell surplus property, the Director may authorize the donation of such surplus property to another public body or to a nonprofit organization. (c) Once the Director has authorized a donation of specific surplus property to another public body or to a nonprofit organization, the Surplus Property Representative will provide direction to the using agency in obtaining the appropriate transactional document, approved as to form by a lawyer from the Office of the City Attorney, to be signed by both the authorized representative of the public body or nonprofit organization and the Director. Page 6 of 10

(d) After the Director has signed the appropriate transactional document, the using agency shall arrange with the public body or nonprofit organization to which the City has donated the surplus property for that public body or nonprofit organization to transport the surplus property at the public body’s or nonprofit organization’s expense. (e) After the surplus property has been removed from the using agency’s custody, the using agency shall submit a memorandum to the Surplus Property Representative setting forth (i) the legal name of the receiving public body or nonprofit organization, (ii) the using agency’s name, (iii) a description of the donated surplus property and (iv) the estimated market value of the surplus property at the time of the donation. (f) The Library Director and the Chief of Police shall establish their own procedures for the donation of surplus property for donations they make pursuant to applicable law. 38-6.4

Scrap. (a) For purposes of this Policy and Procedure, the term “scrap” refers to disposing of surplus property by throwing it into the trash. (b) The City may contract with a contractor to scrap of certain types of surplus property, often when specialized destruction or discarding is required or when salvageable materials can be recovered from the surplus property upon its destruction or discarding. All using agencies shall use such contracts for scrapping surplus property. (c) The using agency may make the decision to scrap particular surplus property after the Surplus Property Representative has applied the policy for selecting the method of disposal described in section 38-5.3.2 (“Selection of Method of Disposal”) and found that no other method of disposal is practicable. (d) The using agency shall be responsible for the scrapping of all surplus property of that using agency. Whenever possible, the using agency shall recycle or salvage materials from all surplus property that the using agency scraps. (e) After the surplus property has been scrapped, the using agency shall submit a memorandum to the Surplus Property Representative setting forth (i) the using agency’s name, (ii) a description of the scrapped surplus property, (iii) the method by which the surplus property was scrapped, (iv) whether any materials were recycled or salvaged from the scrapped surplus property and (v) the disposition of such recycled or salvaged materials.

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Responsibilities.

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Director of Procurement Services. The Director is responsible for: (a) Designating an employee of the Department of Procurement Services as the Surplus Property Representative. § 38-5.2. (b) Signing special determinations regarding the method by which specific surplus property is sold. § 38-5.3.2(d), (e) and (f). (c) Executing, or designating an employee of the Department of Procurement Services such as the Surplus Property Representative to execute, contract documents to consummate sale of surplus property. § 38-6.2.1(d). (d) Negotiating, or authorizing the Surplus Property Representative to negotiate, a contract for a negotiated sale of surplus property. § 38-6.2.2. (e) Authorizing the donation of surplus property. § 38-6.3(b). (f) Executing transactional documents for the donation of surplus property. § 386.3(b).

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Surplus Property Representative. responsible for:

The Surplus Property Representative is

(a) Receiving the Fixed Asset / Controllable Item Disposal Form from the using agency and checking the form for completeness. (b) Determining the appropriate method of disposal of surplus property and arranging for any sale of surplus property. See § 38-5.3.2; § 38-6.1(e). (c) Preparing written determinations pursuant to § 38-5.3.2(d), (e) and (f) and obtaining the Director’s signature on those determinations. § 38-6.1(f). (d) Providing direction to using agencies in posting or listing surplus property with contract auctioneers. § 38-6.2.1(b). (e) When directed, negotiating contracts for the negotiated sale of surplus property. § 38-6.2.2. (f) Offering surplus property for sale at fixed or uniform prices—determining price, administering sale and completing all documentation. § 38-6.2.3. (g) Providing direction to using agencies in obtaining appropriate transactional documents for donations of surplus property. § 38-6.3(c).

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(h) Receiving documentation that donated surplus property has been removed from a using agency’s custody. § 38-6.3(e). (i) Receiving documentation related to the scrapping of surplus property. § 386.4(e). 38-7.3

Using Agency. The using agency is responsible for: (a) Requesting trade-ins where appropriate. § 38-5.3.2(a). (b) Completing and submitting to the Surplus Property Representative the Fixed Asset / Controllable Item Disposal Form to evidence the using agency’s determination that property should be declared surplus. § 38-6.1(b). (c) Including requests for transfer or trade-in with the Fixed Asset / Controllable Item Disposal Form and any purchase requisitions. § 38-6.1(c). (d) Retaining custody of surplus property until disposal is completed unless otherwise directed by the Surplus Property Representative. § 38-6.1(d); § 38-6.2.1(c). (e) Complying with the Surplus Property Representative’s directions for posting or listing surplus property with a contract auctioneer. § 38-6.2.1(b). (f) Releasing surplus property to the purchaser upon presentation of a bill of sale. § 38-6.2.1(f). (g) Supplying the Surplus Property Representative with the asset value, basis of valuation and description for surplus property to be sold at fixed or uniform prices. § 38-6.2.3. (h) Obtaining appropriate transactional documents for donations of surplus property as directed by the Surplus Property Representative. § 38-6.3(c). (i) Arranging for the recipient of donated surplus property to assume custody of that surplus property. § 38-6.3(d). (j) Submitting a memorandum to the Surplus Property Representative containing the details of donated surplus property after the recipient has assumed custody of that surplus property. § 38-6.3(e). (k) Making the decision to scrap surplus property after the Surplus Property Representative determines that no other method of disposal is practicable for that surplus property. § 38-6.4(c). (l) Scrapping surplus property. § 38-6.4(d).

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(m) Submitting a memorandum to the Surplus Property Representative containing the details of scrapped surplus property after the using agency has scrapped that surplus property. § 38-6.4(e). 38-7.4

Chief of Police. The Chief of Police is responsible for: (a) Requesting the Director, through the Surplus Property Representative, to sell certain property acquired through law enforcement activities when desired. § 385.3.5. (b) Establishing procedures for the donation by the Chief of Police of surplus property pursuant to applicable law. § 38-6.3(f).

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Library Director. The Library Director is responsible for: (a) Making a determination that books should be transferred to a non-profit organization pursuant to Richmond City Code § 74-114(b). § 38-5.3.4. (b) Furnishing the Surplus Property Representative with a copy of the determination referred to in subsection (a) of this section. § 38-5.3.4. (c) Transferring the books that are the subject of the determination referred to in subsection (a) of this section in accordance with Richmond City Code § 74114(b). § 38-5.3.4. (d) Establishing procedures for the donation by the Library Director of surplus property pursuant to applicable law. § 38-6.3(f).

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City Attorney. The Office of the City Attorney is responsible for reviewing contract documents relating to the disposal of surplus property upon request. §§ 38-6.2.1(e), 38-6.2.2, 38-6.2.3 and 38-6.3(c).

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Modification of Regulation. The Director of Procurement Services shall be responsible for modifications to this Policy and Procedure.

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