§ 3.13.040. Disposal of Assets.

A.

Surplus Property Disposal. The division supervisor or department manager is responsible for the transfer and disposition of surplus District property. "Surplus property" is used generically to describe any District property that is no longer needed or useable by the holding department/division. The division supervisor or department manager has the authority to declare item(s) surplus according to the authorization table in subsection B.

Surplus property that may result from the termination of a lease agreement shall be specifically reported to the Purchasing Agent prior to the termination of the lease. The report shall include all information about the lease, including purchase price at the commencement of the lease, residual value at the end of the lease, the total payments through the end of the lease and the fair market value at the end of the lease. In determining the fair market value, each department shall document the methods used to make such determination including tools such as Kelly Blue Book, classified advertisements, and local vendors with similar products available.

Each department shall periodically review its equipment, material, and inventory, and shall promptly notify the Finance Department of any surplus property. A memo shall be completed to document the reason(s) that the property is surplus and the recommended method of disposal. This memo must then be submitted to the Finance Department. The Accounting Division will then make the appropriate adjustments to the Capital Assets Subsidiary Ledger.

B.

Authority.

Salvage Value up to:	Approval Level (Except when items are scrap)
$500	Supervisors
$2,000	Managers
$5,000	Directors
$10,000	General Manager/Assistant General Managers
$10,001+	Board of Directors

 

C.

Method. The staff member requesting disposal shall determine one of the following methods of disposition that is most appropriate and in the best interest of the District.

a.

Transfer to Another Department. Surplus property may be transferred between District departments. Departments wishing to transfer surplus property to or from another department shall complete a memo to document the request and submit it to the AGM for approval. All transfers of items require approval of the Department Manager from each department affected by the transfer.

b.

Trade-In. Property declared as surplus may be offered as a trade-in for credit toward the acquisition of new property. All trade-in offers will be submitted for the review and approval of the AGM. If surplus property is to be applied to a purchase order, the trade-in value shall be itemized on the Purchase Order. The amount charged against the expense account will be the value of the purchase before application of the trade-in credit.

c.

Sale. Surplus property may be offered for sale by the Department Manager. All surplus property is for sale "as is" and "where is", with no warranty, guarantee, or representation of any kind, expressed or implied, as to the condition, utility or usability or the property offered for sale. Appropriate methods of sale are as follows:

• Public Auction—Surplus property may be sold at public auction. Public Auctions may be conducted by District staff, or the District may contract with a professional auctioneer including professional auction services.

• Sealed Bids—Sealed bids may be solicited for the sale of surplus property. Surplus property disposed of in this manner shall be sold to the highest responsible bidder.

• Selling for Scrap—Surplus property may be sold as scrap if the Department Manager deems that the value of the raw material exceeds the value of the property as a whole.

• Negotiated Sale—Surplus property may be sold outright if the Department Manager determines that only one known buyer is available or interested in acquiring the property.

• No Value Item—Where the Department Manager determines that specific supplies or equipment are surplus and of minimal value to the District due to spoilage, obsolescence or other cause or where the Department Manager determines that the cost of disposal of such supplies or equipment would exceed the recovery value, the Department Manager shall dispose of the same in such a manner as he or she deems appropriate and in the best interest of the District.

d.

Donation. Surplus property may be donated, in accordance with the authority table, to non-profit organizations such as school districts within CVWD boundaries. When property is donated, a donation receipt letter must be obtained from the receiving organization and kept on file by the department manager.

D.

Proceeds. Proceeds from the sale or trade-in of surplus property shall be recorded in the gain/loss on sale account in the related fund. Proceeds from the sale of scrap will be recorded in the scrap metal miscellaneous revenue account. Proceeds from the sale of surplus property or scrap may not be used to offset Departmental Operating Expenses.

( Res. No. 2016-2-4, (Policy No. 8.7, § 4), 2-23-2016 ; Res. No. 2019-2-5 , § 1(Policy No. 1.7, § 4), 2-12-19)