CR 11-053 Unclaimed and Surplus PropertyJune 21, 2011 M Council Report 2011-053
UNCLAIMED AND SURPLUS PROPERTY
Proposed Action
Staff recommends that the Council approve the following motion: Move that the Hopkins City Council
approve Ordinance 2011-1029 for first reading.
Adoption of this motion will begin the process of amending Section 305 of the Hopkins City Code to
expedite the sale of surplus property.
Overview
Section 305 of the City Code outlines the process for disposing of unclaimed and surplus property.
Unclaimed property is property which once belonged to someone else but has come into the possession of
the City. Recovered bicycles are one example of this type of property. Surplus property is property which the
City purchased but has outlived its usefulness.
Currently Section 305 authorizes the same methods for disposing of both kinds of property: 1) Public
auction, 2) direct sale to the public; 3) donation to a nonprofit organization or other governmental unit; or 4)
in the case of damaged property or property which has no significant value, the property may be recycled or
disposed of as refuse; or 5) any other method that is approved of by State Statute.
Section 305 also details the process of using either public auction or direct sale which is currently the same
for both unclaimed as well as surplus property. The process is set up to be fair and open and thereby produce
a good price for the item. Unclaimed property, however, needs additional safeguards to ensure that the
original owner has an opportunity to claim the property before the sale or recover a portion of the value after
the sale.
Staff proposes to separate the processes for disposing of unclaimed and surplus property. The process for
disposing of unclaimed property would essentially remain the same. The process for disposing of surplus
property would be streamlined.
Primary Issues to Consider
• How will the processes differ for disposing of unclaimed and surplus property?
Supporting Information
Analysis of Issues
Alternatives
• Ordinance number 2011-1029
Ames.Genellie
Assistant City Manager
Council Report 2011-053
Page 2
Analysis of Issues
How will the processes differ for disposing of unclaimed and surplus property?
As stated above the process for disposing of unclaimed property will remain essentially the same. The few
changes which are made to this section bring the City's ordinance more in line with state law.
Several changes are proposed for disposing of surplus property. Notices will be placed on the City's website
instead of in a newspaper. Staff has found that, for some surplus property, placing the ad costs more than the
City will get for the piece of equipment. Surplus property may also be sold using the League of Minnesota
Cities website. Many cities use this site to advertise equipment which is of special interest to cities. In every
case, the City will be using whatever method, or methods, which produce the best price for the property
while making sure that the process is fair and open.
Alternatives
1. Adopt Ordinance number 2011-1029 for first reading.
2. Do not adopt Ordinance number 2011-1029.
Staff recommends Alternative #1.
CITY OF HOPKINS
COUNTY OF HENNEPIN
ORDINANCE NO. 2011-1029
AN ORDINANCE AMENDING
SECTION 305 OF THE HOPKINS CITY CODE
THE COUNCIL OF THE CITY OF HOPKINS HEREBY ORDAINS AS FOLLOWS:
Section 1. That Section 305 be amended as follows:
305.07. Disposition of Unclaimed Property. Subdivision 1.
Notice of auction or sale. If the property is going to be sold,
either by auction or directly, an advertisement must be placed
in the official newspaper of the city. The sale shall be held
not less than six days following the date of the publication of
the notice.
Subd. 2. Content of notice. The notice shall eentain
) a -general des cA trete--e f the e i terms -e fp ep e r t -y te be
s e l d;(2) the-general manner unaeic obl:Ae-p rep e rty-eaffie
int e -tepee s ess i en efthe -ei y; (3) --whether the r r- = r = r t y
will -be-adetiened er seld direand 4) the time -ate
plaee-ef the-aidetien er sale. must describe the property
found or recovered and to be sold, and must specify the
time and place of the auction or sale.
Subd. 3. Postponement. The auction or sale may be
postponed from time to time by inserting a notice of such
postponement as soon as practicable in the newspaper in
which the original notice was published.
Subd. 4. Certificate of sale. When the sale of the
property is made, Vie -man, shall deli-er te-the
purchaser shall receive a bill of sale containing a
description of the property sold and the price paid for
each item.
Subd. 5. Proceeds of sale. Proceeds of the sale shall be
deposited by the manager in the appropriate fund of the
city. Within six months from the date of the sale the
former owner of any item of such property may make
application to the city for payment of the proceeds of the
sale and after satisfactory proof of ownership furnished to
the city within six months from the date of sale, the city
council shall order the sale price to be paid to the former
owner, after deducting therefrom the actual or reasonable
cost and expenses necessarily expended by the city in the
conduct of the sale and the storage and care of the
property.
305.09. Disposition of Surplus Property. Subdivision 1. Notice
of auction or sale. If the property is going to be sold, either
by auction or directly, notice must be placed on the city's
website. The sale shall be held not less than six days
following the date of the publication of the notice.
Subd. 2. Content of notice. The notice shall contain:
(1) a general description of the items of property to be
sold; and (2) whether the property will be auctioned or
sold directly; and 3) the time and place of the auction or
sale.
Subd. 3. Advertising. Items for sale must be advertised in
a newspaper of general circulation, or on an appropriate
website detailing the method of sale, or the City may
contract to sell items using an electronic selling process
in which purchasers compete to purchase the surplus
supplies, materials, or equipment at the highest purchase
price in an open and interactive environment.
Subd. 4. Certificate of sale. When the sale of the
property is made, the purchaser shall receive a bill of
sale containing a description of the property sold and the
price paid for each item.
Subd. 5. Proceeds of sale. Proceeds of the sale shall be
deposited by the manager in the appropriate fund of the
city.
Section 2. The effective date of this ordinance shall be the
date of publication.
First Reading: June 21, 2011
Second Reading: July 5, 2011
Date of Publication: July 14, 2011
Date Ordinance Takes Effect: July 14, 2011
Gene Maxwell, Mayor
ATTEST:
Terry Obermaier, City Clerk
APPROVED AS TO FORM AND LEGALITY:
City Attorney Signature Date