Fresno Municipal Code Art. 2 Sale or Mortgage of Property

The property of the city may not be mortgaged or hypothecated, except that the property of public utilities or quasi-public utilities may be mortgaged or hypothecated as security for bond issues relating to the utility, the property of which is mortgaged or hypothecated, but this section shall not be construed to prevent the issuance of bonds and the making of temporary loans as otherwise provided for in the Charter.

(Rep. and Added Ord. 5314, 1958, based on former Sec. 3-301; Am. Ord. 5418, 1958; Am. Ord. 2007-96, § 3, eff. 1-19-08).

(a) The City Manager and/or the Purchasing Manager may declare as surplus to the city's needs any item of personal property owned by the city free of liens and encumbrances whenever he or she finds that such item has an estimated value equal to or less than the amount for which advertised bidding is required by Section 1208(a) of the Charter, and that such item is no longer needed for use by any department or office of the city or has become unfit or unsuitable for further use by any such department or office because of age, wear, damage, or obsolescence.

(b) The Purchasing Manager may sell any property declared surplus pursuant to subsection (a), at public or private sale with or without notice or bids, for the highest price the Purchasing Manager can obtain, and may contract, in the name of and on behalf of the city, with a licensed auctioneer for the purpose of effecting any such sale. However, prior to disposal of surplus vehicles to the public, the Purchasing Manager, upon request and in accordance with the policies and procedures established by the Purchasing Manager, may offer surplus vehicles to tax exempt charitable nonprofit corporations for sale at fair market value, less any savings realized by direct sale.

(c) As an alternative means of disposition of any property declared surplus pursuant to subsection (a), the Purchasing Manager may transfer any of such property to another governmental agency or to a quasi-public agency by negotiated sale, exchange, loan, or gift; provided, that gifts hereunder to any agency shall not exceed a total of one hundred dollars in estimated value during any twelve-month period. "Quasi-public agency," as used in this subsection, means and is limited to a tax exempt nonprofit corporation which is currently engaged in a public project financed in whole or in part by public funds pursuant to contract or grant agreement with a governmental agency, and the assets of which corporation upon dissolution will not be distributable to or for any private person or purpose.

(d) The proceeds of any sales of property pursuant to this section shall be deposited in the general fund of the city, except where established accounting procedures require deposit of such proceeds in some special fund of the city, and except as provided in subsection (e).

(e) The proceeds of any sales of surplus personal property acquired at any time by the city for the Meux Home shall be paid to the Meux Home Corporation. The Purchasing Manager's sale or other disposition of such items shall be subject to the prior review and approval of the Parks and Recreation Director.

(f) Council finds that retired police dogs of the Police Department's K-9 unit have no value to the City of Fresno and are a financial liability and detriment. Accordingly, said police dogs may be returned to the original supplier, the animal's handler or former handler without compensation. This subsection constitutes an exception to this Section.

(g) The Purchasing Manager may direct the destruction of any property declared surplus pursuant to subsection (a) whenever he or she further finds that the item has no value, is not usable by any other governmental agency or quasi-public agency, is not appropriate for public or private sale, and, if the item is a retired police dog of the Police Department's K-9 unit, that the alternative dispositions in subsection (f) are unavailable.

(Rep. and added Ord. 5314, 1958, based on former Sec. 3-302; Am. Ord. 69-18, 1969; Am. Ord. 79-99, § 2, eff. 7-6-79; Am. Ord. 80-57, § 2, eff. 5-9-80; Am. Ord. 95-75, § 1, eff. 11-10-95; Am. Ord. 2000-12, §§ 1, 3, eff. 3-3-00; Am. Ord. 2002-65, §§ 1, 2, eff. 1-14-03; Am. Ord. 2004-1, § 1, eff. 2-8-04; Am. Ord. 2007-96, § 3, eff. 1-19-08).

(a) "Surplus land" shall mean real property owned by the City that is determined to be no longer necessary for the City's use, except property being held for the purpose of exchange. Property is not surplus if the City has some purpose in mind for its use.

(b) Prior to disposing of real property, Council shall make a determination whether such property is surplus land pursuant to Government Code sections 54220 et seq. (the "Surplus Land Act"). In the case of property valued at $50,000 or less, City Manager shall determine whether property is surplus land.

(c) Prior to disposing of surplus land, City shall comply with the requirements of the Surplus Land Act, as well as 4-204.

(Added Ord. 2019-023, § 1, eff. 9-28-19; Am. Ord. 2021-022, § 1, eff. 7-8-21).

(a) Real property may be sold, encumbered by an option, or leased for period exceeding five years only after an open and competitive request for proposals (RFP) process initiated by Council action and in compliance with state law concerning disposition of surplus land; exclusive negotiating agreements shall not be permitted. No negotiations to sell, lease, or option City real estate shall occur prior to and without full compliance with FMC sections 4-203 and 4-204.

(1) An evaluation committee, to be selected prior to publication of the RFP, shall interview proposers, review and rank all proposals based on a predetermined set of criteria as set forth in the RFP, and make recommendations for selection to present to Council for approval. The committee at a minimum shall consist of two employees from the affected department as well as at least two employees and/or members of the public. The composition of the committee shall be at the discretion of the City Manager. Information provided to and prepared by the committee shall not be deemed a public record until such time as a contract shall be placed on the agenda for Council consideration.

(2) Once an RFP has been finalized, the affected department shall advertise the Notice Inviting Proposals in a local newspaper of general circulation and on the city website. Property owners within 1,000 feet of the subject property shall be provided specific notice of the RFP.

(3) Contracts for the sale or lease of real property are determined on a "best value" basis, not solely price. In determining best value, the factors to be considered may include, without limitation: price; community benefits; record of business with the City and others; credit record; local employment; experience; qualifications; local tax contribution; and any other legal factor the Council expressly finds is applicable to sale of the property.

(4) After proposals are tendered, the full text of all proposals shall be made available to the committee. The committee shall convene, when applicable, and interview no fewer than the top three ranked proposers, request a proposer's "Last, Best and Final" offer based on information and/or clarification provided during the interview, which will be used to support a recommendation to the Council as to which proposer should be selected to purchase or lease the property, or to reject all proposals, including rankings of the top three proposers, along with a written explanation for the rankings, and/or rejection of the proposals.

(5) All documents, ranking criteria, and scores provided to or produced by the committee shall be made available to all Councilmembers no later than the time the contract is placed on the agenda for Council consideration.

(6) Any potential purchaser who does not submit a response to the RFP shall be ineligible to purchase or lease the property for one year following the close of the RFP, except pursuant to a subsequent RFP process.

(b) The competitive process set forth in Subsection (a) shall not be required for the following:

(1) Sale of property to an adjacent property owner who is assembling property for a project;

(2) Sale, lease, or options of property less than 20,000 square feet in size;

(3) Leases of airports facilities in the normal course of airports' business;

(4) Renewal or extensions of commercial leases existing as of the effective date of this section;

(5) However, the competitive process shall apply to all sale, lease, or options of parking facilities, except as provided in the Master Fee Schedule.

(c) The City shall not approve any option to purchase or option to lease, or any similar agreement, except upon the following terms and conditions:

(1) The term of the agreement shall not exceed 12 months from the date of Council approval;

(2) The agreement shall not be extended, except upon a showing of extraordinary good cause, compliance with all terms of the agreement, due diligence, and meeting all performance standards and target dates in the agreement; all extensions must be approved by Council, at the discretion of Council, in open session, and any extension may not exceed 180 days from the date of Council approval. Any agreement that lapses without a Council approved extension prior to expiration may not be extended.

(d) The City shall not approve any purchase and sale agreement, disposition and development agreement, or any other agreement that would cause or allow City owned real property to be conveyed, except upon the following terms and conditions:

(1) The agreement shall require closing of escrow no later than 12 months from Council approval.

(2) The agreement shall not be extended, except upon a showing of extraordinary good cause, compliance with all terms of the agreement, due diligence, and meeting all performance standards and target dates in the agreement; all extensions must be approved by Council, at the discretion of Council, in open session. and any extension may not exceed 180 days from the date of Council approval. No agreement shall be extended more than once. Any agreement that lapses without a Council approved extension prior to expiration may not be extended.

(3) To be effective, the agreement shall require a deposit paid to the City in the amount of at least 10 percent of the purchase price, which shall not be refundable, unless the City is in breach of the agreement; the failure of the City to approve an extension of the agreement shall not be deemed cause to refund a deposit.

(4) Purchase prices shall be at fair market appraised value, unless the Council makes findings there are substantial community benefits resulting from the sales agreement that justify a price less than market value.

(5) The agreement shall contain a standard reverter clause, approved by the City Attorney's Office, if the sale involves property to be utilized for a specified purpose and/or is sold with the city provided any type of subsidy for the project; the agreement shall require a reverter to the city if the project for which the property is sold is not completed within 36 months of the transfer of title, unless the Council makes findings at the time of approving the agreement that the project will require a longer period for completion; in such a case, the longer time for completion may be approved. The Council may approve one or more extensions to complete not exceeding 12 months each upon a finding of good cause.

(e) The Council may not vary from the provisions of this Section, except upon making findings of good cause and clear and convincing benefits to the public, and by a supermajority approval of at least five votes.

(f) This ordinance shall be subject to any applicable federal or state laws, regulations, policies, guidance, or grant terms, and to the extent inconsistent, the latter shall apply.

(Added Ord. 2019-023, § 2, eff. 9-28-19; Am. Ord. 2021-022, § 1, eff. 7-8-21).