Chapter 3.08 — DISPOSITION OF SURPLUS PROPERTY

• A. "Disposition" in the context of real property, as defined in HMC § 1.04.010(N), means either the sale of surplus real property or the entering of a lease for surplus real property for a term longer than 15 years, inclusive of any extension terms in a lease entered on or after January 1, 2024. Disposition in the context of personal property, as defined in HMC § 1.04.010(K), means the transfer of ownership of personal property.

• B. "Exempt surplus property" means real property, as defined in HMC § 1.04.010(N), that is not required to follow the public notice and bidding requirements, as described under HMC § 3.08.020 or the Surplus Land Act because it meets one or more criteria under Government Code Section 54221(f)(1).

• C. "Surplus personal property" means personal property, as defined in HMC § 1.04.010(K), owned by the city, for which the city declares at a regular public meeting is not necessary for the city's use.

• D. "Surplus real property" is real property, as defined in HMC § 1.04.010(N), owned by the city, for which the city declares at a regular public meeting is not necessary for the city's use.

• (Ord. 25-01 § 1 (Att. A), 2025)

• A. Prior to disposing of any real property the city owns, the city shall declare real property as either "surplus" real property or "exempt" surplus property, as supported by written findings. The city shall provide a copy of the written declaration to the California Department of Housing and Community Development ("HCD") at least 30 days prior to disposition.

• B. If HCD determines that the property is exempt surplus property, the city is not required to follow disposition requirements under this section and instead may dispose of the exempt surplus property in any way consistent with state and federal law and approved by the city council.

• C. If HCD determines that the real property is not exempt surplus property, the following disposition requirements apply:

  1. By December 31st of each year, the city shall prepare an inventory of all surplus real property it owns and submit an annual report to HCD identifying this surplus real property using forms prescribed by HCD.

  2. Before the city can sell any surplus real property or start negotiations with a potential buyer, it must send a notice of availability ("NOA") notifying the following eligible entities of the availability of the surplus property:

     • a. Housing sponsors for low- and moderate-income housing;

1. Prior legislation: Ord. 78-6.

• b. Local public entities with proper jurisdiction where the surplus real property is located; and

• c. Regional park authorities with proper jurisdiction where the surplus real property is located.

3. Eligible entities have 60 days from the date the city issues the NOA to submit a written notice of interest in purchasing or leasing surplus real property. If a timely notice is received, the city must engage in good faith negotiations with the entity for a minimum of 90 days, beginning with the day immediately after the conclusion of the 60-day notification period. If no eligible entity expresses interest within 60 days of the notice or if negotiations do not result in a sale, the city council may then authorize the city manager to sell the property to other prospective buyers for a price equal to or greater than the minimum price established by a current appraisal. No appraisal shall be required if the city manager reasonably determines the property's estimated fair market value is less than $5,000.

• (Ord. 25-01 § 1 (Att. A), 2025)

• A. The city may only dispose of surplus personal property in the following ways:

  1. Public Auction. Sales at a public auction shall be to the highest bidder. No later than 10 days prior to the scheduled date of the auction, the city must publish notice of the auction on the official website and newspaper of general circulation, including the time and location of the auction, and a description of items to be sold at the auction.

  2. Online Auction. Sales at an online auction shall be to the highest bidder. Sale may occur through any publicly accessible online auction platform customarily used for the sale of surplus government property.

  3. Donation. The city may donate surplus personal property to any other city department, public agency, or to any other party as may be authorized by state law.

  4. Disposal. If the head of a department, in consultation with the city manager, determines that an item has little or no resale value, or that the item is broken and irreparable, the department or office may dispose of the item without further action.

  5. Incidental Sale. A department or office may sell any item of surplus personal property by "incidental sale" when it determines that the item:

     • a. Is scrap or salvage material, including but not limited to a discarded fire hose, a tire casing, a dead storage battery, or worn-out or wrecked automobile or machine part;

     • b. Is perishable; or

     • c. Has been offered for public sale and no offer to purchase has been received within 60 days.

• B. The city manager may reject a bid received for any item, but only if one of the following situations applies:

  1. The highest bid fails to meet the reserve amount set by the city prior to the auction.

  2. There is reasonable evidence of collusion, unethical behavior, or conflicts of interest on the part of the bidder.

  3. There is a pending lawsuit between the bidder and the city.

  4. The bidder has unpaid utility bills, liens, assessments, or other debts owed to the city.

• C. The city manager, or his or her designee, shall have the authority to determine whether and how to dispose of surplus personal property pursuant to this chapter, except that the city council approval is required for disposition of surplus personal property when the total estimated market value of any item is greater than or equal to $2,500.

• D. The city manager may, from time to time, require that the head of each department in the city submit a list of all surplus personal property belonging to such city department.

• (Ord. 25-01 § 1 (Att. A), 2025)

The city manager, or his or her designee, shall maintain records which identify all surplus real property and surplus personal property disposed of, the method of disposal, and the amounts received from the disposal and shall maintain such records for a period of time in compliance with the city's records retention schedule.

(Ord. 25-01 § 1 (Att. A), 2025)

All proceeds received from the sale of surplus real property and surplus personal property shall be delivered to the finance director for deposit in the city's general fund, or in that fund from which the property was originally purchased.

(Ord. 25-01 § 1 (Att. A), 2025)