Karie A. Price, Assistant City Attorney	Phone: 605-394-4140
City web: www.rcgov.org	Fax: 605-394-6633
	e-mail: karie.price@rcgov.org

MEMORANDUM

TO: Heidi Archie, Administrative Assistant

FROM: Karie A. Price, Assistant City Attorney

DATE: 2/21/06

RE: Bidding surplus items

Per the request of Heidi Archie, Rapid City Public Library Administrative Assistant, I have reviewed the law regarding disposal of surplus government property. Specifically, I considered the steps that the Rapid City Public Library must take regarding the disposal of security gates. State law gives authority to the governing board of a political subdivision to sell property which it has, by appropriate motion, determined is no longer necessary, useful, or suitable for the purpose for which it was acquired. SDCL 6-13-1 (emphasis added). Thus, the Rapid City Common Council, and not the Library Board of Trustees has the authority to dispose of surplus property and the Common Council must be the board to make the determination that the security gates are in fact surplus. After property has been determined to be surplus, an appraisal to determine the value of the surplus property may have to be completed. In regards to the security gates, the Rapid City Finance Office should be consulted as to whether an appraisal will need to be done, and if it does, the proper way to complete such.

Once property has been determined to be surplus, and if it is determined to be worth over five hundred dollars, the governing board of the political subdivision (Rapid City Common Council) must give notice of the sale of the property by publishing a notice of the sale at least twice, with the first publication not less than ten days prior to the date of sale. SDCL § 6-13-4. The first publication must be in the official newspaper of the political subdivision (The Rapid City Journal) and the second may be in any legal newspaper of the state chosen by the governing board of the political subdivision. Id. The notice should describe the property and the time when the bids will be opened. Id. The governing board may open the bids or may designate an official and a witness to open all bids prior to the meeting of the governing board. If a designee and witness will open the bids, such must be disclosed in the notice. Id. Sealed bids received on the surplus property must be filed with the fiscal officer. SDCL § 6-13-5.

The governing board may reject any and all bids. However, if a bid is accepted, it must be the bid of the highest bidder. SDCL § 6-13-5. If no bids are received, the Common Council may have the property reappraised, or may, within twelve months thereafter, sell the property at private sale for not less than ninety percent of the appraised value without further publication or appraisal. Id.

State law does prohibit some persons from purchasing surplus property. A governing board member, an officer of the municipality who was elected or appointed, or an appraiser of the property may not purchase the surplus property except at public auction. SDCL 6-13-7. Lastly, state law dictates that all revenue accruing from the sale of surplus property must be paid into the treasury and credited, at the discretion of the board, to the general fund or to the fund in which such property was inventoried. SDCL § 6-13-8.

Please let me know if you need additional assistance in this matter.

Cc: Jason Green, City Attorney

Kevin Lewis, Assistant City Attorney

Greta Chapman, Library Director

Trustees of the Library Board