Surplus City or Town Property

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Overview and General Authority

Cities and towns sometimes need to sell or otherwise dispose of equipment or property that is no longer needed for municipal purposes. In order to do so, the city may need to officially declare the property "surplus" and follow certain requirements in state law or local policy.

The basic authority to dispose of real estate and personal property is set in the following statutes:

• First class cities: RCW 35.22.280(3)
• Second class cities: RCW 35.23.010
• Code cities: RCW 35A.11.010
• Towns: RCW 35.27.010 and RCW 35.27.370(2)

For simplicity’s sake, we will refer to all classifications of cities and towns as “cities” on this page.

There is a threshold question of what types of items need to be declared surplus. Items that are broken, obsolete, or of no monetary value would not necessarily need to be declared surplus before disposing of them, although some agencies do according to local policy. On the other hand, if there is any question of whether an item is usable or has value, it should be declared surplus.

In addition, it is a good idea to formally surplus anything that is part of an asset management system – even if it no longer has value – to document the fact that it is no longer in use. Real property should be declared surplus before being sold or conveyed and the same is true for timber and mineral rights.

There are specific statutory requirements for disposing of certain types of surplus property, while other types of property have few or no statutory requirements. Either way, MRSC recommends adopting written surplus policies and procedures to guide your city. Such policies and procedures can be adopted by ordinance or resolution as a stand-alone policy or incorporated into broader financial management policies.

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General Surplus Procedures and Practice Tips

While there are some unique considerations for certain types of property as discussed later on this page, the general process we recommend for formally disposing of surplus property is similar:

Determine Which Property Is Surplus

This determination should be made by the appropriate staff and managers. Some local government agencies conduct periodic surveys or inventories to identify surplus property, while others identify surplus property on an as-needed basis.

Determine the Fair Market Value

Selling the property for less than its fair market value may be a violation of the “gift of public funds clause” in Article VIII, Sec. 7 of the Washington State Constitution, which states that “No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm…”

There are a number of ways to determine the property’s estimated market value, including (but not limited to) reviewing recent sales of similar items, Kelley Blue Book values, or county assessment records; contacting the manufacturer; or conducting a real estate market analysis or appraisal. Generally speaking, the more valuable the property, the more formal the appraisal or valuation should be.

Hold Public Hearing (If Required)

A public hearing may be required for certain property under state law or local policy; we discuss the statutory requirements for different property types below.

Adopt Surplus Resolution (Unless Authority is Delegated)

The city council should declare the property to be surplus (along with the identifying information mentioned earlier) and specify how the property is to be disposed of or delegate that task to a particular administrative official.

The resolution might also specify what to do with any items that are unable to be sold (such as declaring unsold items to have no value and authorizing them to be scrapped or donated to a particular organization). In some cases such as surplus real estate, the resolution might authorize further appraisal to confirm the property’s value.

A city has the option of delegating some of its surplus authority to an appropriate administrative official, such as the mayor, city manager, city administrator, clerk-treasurer, etc. or their designee. Such delegation is typically capped by the value of the property to be declared surplus. Any delegated authority should be adopted by policy, resolution, or ordinance, but the city council would not need to approve the disposal of any surplus items below the delegation threshold.

Proceed With Sale or Disposal

Proceed with the sale or disposal in the manner determined by the city council or appropriate administrative official, subject to any statutory limitations. In some cases further action may be required, such as the city council’s approval of a purchase and sale agreement. Any proceeds should be deposited in the appropriate fund for each item. Note that certain city staff or officials may be restricted from purchasing the property due to conflict of interest concerns as discussed later on this page.

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Personal Property (Vehicles, Equipment, Etc.)

“Personal property” generally refers to anything other than real property (land and buildings). Common examples of surplus personal property include vehicles, computer equipment, tools, and office furniture.

In general, there are no statutory requirements for cities regarding the disposal of personal property. (AGO 1997 No. 5 concluded that the public hearing requirement in RCW 39.33.020 only applies to intergovernmental property transfers made pursuant to chapter 39.33 RCW.)

However, there are certain exceptions for intergovernmental property transfers, personal property originally acquired for public utility purposes, library reading materials, firearms, or seized/forfeited property, all discussed later on this page.

Items with commercial value can generally be sold by any number of methods, such as online or in-person auctions, sealed bids, “for sale” ads, fleet management services, direct sale to an individual, trade-in, or other methods.

Items with little or no monetary value – sometimes referred to as de minimis items – can be disposed of as the city sees fit. Examples include obsolete or broken equipment or other items with little to no resale value. Such items can be sold, donated, sold for scrap, destroyed, recycled, or tossed in the garbage as appropriate. Cities should consult their local policies and procedures to determine whether the city council needs to approve the disposal of de minimis items or whether that task can be done by staff.

As mentioned earlier, it is a good idea to surplus any items that are part of an asset management system even if they have no remaining value.

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Real Property (Land and Buildings)

Similar to personal property, there are few statutory requirements for cities regarding disposal of surplus real property. However, there are certain exceptions for intergovernmental property transfers and real property originally acquired for public utility purposes, as discussed later on this page. (AGO 1997 No. 5 concluded that the public hearing requirement in RCW 39.33.020 only applies to intergovernmental property transfers made pursuant to chapter 39.33 RCW.)

In addition, RCW 39.33.015 allows cities to transfer, lease, or dispose of surplus real property at low or no cost to a public, private, or nongovernmental body for affordable housing and related facilities. For more information and examples, see our page Affordable Housing Techniques and Incentives.

Depending on the situation and any adopted local policies, real estate sale methods can include methods such as requests for proposals (RFPs), sealed bids, auction, direct negotiations, real estate brokers/agents, or multiple listing services.

Public Disclosure

RCW 42.30.110(1)(c) allows the city council to discuss in executive session the minimum price at which it will sell or lease a particular parcel of real estate if public knowledge regarding such consideration would cause a likelihood of decreased price. This statute allows the city council to provide negotiation direction and flexibility to the person delegated to sell or lease the real property. However, the final action to sell or lease the property must be taken during a public meeting open session.

Similarly, RCW 42.56.260 exempts from public disclosure real estate appraisals or other documents prepared for the purpose of considering the minimum price of real estate to be offered for sale or lease if public knowledge would cause a likelihood of decreased price. However, these exemptions do not apply if disclosure is required by another statute, if the sale or lease has been completed, or if the sale or lease has been abandoned. No appraisal may be withheld for more than three years.

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Property Originally Acquired for Public Utility Purposes

Before selling, leasing, or conveying surplus property originally acquired for public utility purposes, cities must follow the requirements of RCW 35.94.040, including a public hearing. This statute applies to:

• All real property regardless of value, except for affordable housing property transfers under RCW 39.33.015.
• All personal property with an estimated market value of more than $50,000. Personal property with an estimated value of $50,000 or less is exempt from these requirements and no hearing is required by state law, although local policies may still require a hearing.

Following the public hearing, the city council must adopt a resolution declaring that the property is surplus to the city’s needs and is not required for providing continued public utility service. The resolution must state the fair market value or the rent or consideration to be paid, and any other terms and conditions for the disposition that the city council deems to be in the public interest.

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Intergovernmental Property Transfers

Chapter 39.33 RCW governs the intergovernmental disposition of property. In particular, RCW 39.33.010 allows any municipality or political subdivision to sell, transfer, exchange, lease, or otherwise dispose of real or personal property to other governmental entities – which includes any other municipality or political subdivision, any federally recognized Indian tribe, or the state or federal government – “on such terms and conditions as may be mutually agreed upon,” which permits the transfer of property for less than its fair market value.

The same statute also authorizes local jurisdictions to sell, transfer, exchange, lease, or otherwise dispose of personal property (but not weapons or real property) to a foreign entity.

However, RCW 43.09.210 requires that local governments receive the “true and full value” for all property transferred to another governmental entity. The state attorney general’s office has concluded that this statute can be harmonized with RCW 39.33.010 if the government agencies negotiate over the property’s value and that, depending on the nature of the property and circumstances of the transaction, “full value” can have a flexible meaning and could include non-monetary considerations (AGO 1997 No. 5).

If the estimated value of the property being transferred to another government entity is more than $50,000, the city must hold a properly noticed public hearing prior to disposing of the property (RCW 39.33.020). If the agency does not substantially comply with those statutory procedures, the property transfer may be declared invalid by a court if a suit is filed within one year.

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Library Reading Materials

RCW 39.33.070 requires any library – defined in RCW 27.12.010 as “a free public library supported in whole or in part with money derived from taxation” – to dispose of surplus or obsolete reading materials with an estimated value in excess of $1,000 by public auction.

If no reasonable bids are received, or if the reading materials have an estimated value of $1,000 or less, a library may directly negotiate the sale of the reading materials to a public or private entity.

If the reading materials are determined to have no value as reading materials or if no purchaser is found, the reading materials may be recycled or destroyed.

These methods for disposing of surplus or obsolete reading materials are in addition to any other method available to libraries for disposal of the property.

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Surplus Firearms

Generally speaking, firearms purchased and used by a city police department or corrections agency may be sold or transferred like other personal property discussed earlier. However, there are some unique considerations that apply to such sales under state and federal law, and jurisdictions must make sure to comply with any local policies as well.

Sale or Transfer

Agencies can sell most surplus agency-owned firearms directly to the public, to a federally licensed firearms dealer, or to another law enforcement agency, although state law prohibits the sale of certain types of firearms.

For example, law enforcement cannot surplus for sale machine guns, short-barreled shotguns, or high capacity magazines (RCW 9.41.190 and RCW 9.41.370). If sale of a particular type of firearm to a private party is prohibited, the police department could sell them to another law enforcement agency or potentially disassemble the weapons and sell them for parts.

While background checks are required for the purchase of firearms, state law appears to exempt law enforcement and corrections agencies from performing background checks when selling surplus firearms (RCW 9.41.113(4)(e)). However, nothing prevents a law enforcement agency from conducting a background check prior to selling its firearms to a private individual. Doing so is a responsible public safety measure, good risk management, and is consistent with the requirement in RCW 9.41.345 that law enforcement conduct a background check before returning a confiscated firearm.

Some jurisdictions have adopted policies precluding the sale of firearms directly to the public and requiring surplus firearms to be sold, traded, or transferred to another law enforcement agency, a federally licensed firearms dealer, and/or law enforcement or corrections officers employed by the city. However, RCW 39.33.010(1) prohibits the sale, transfer, exchange, or lease of weapons to a foreign entity.

Transferring Duty Weapons to Officers

If a law enforcement or corrections agency wishes to transfer ownership of a service weapon to an individual officer – such as presenting the officer with their duty weapon upon separation or retirement – the weapon must be declared surplus. The agency must be careful to avoid gift of public funds issues, but there are several options for doing so.

The agency may adopt a policy allowing it to present the duty weapon to any officer meeting specifically defined criteria. For example, the policy might state that the duty weapon will be given to any officer who retires in good standing with a minimum of five years’ service to the city. This would be considered an employee incentive program, but note that such an incentive program would need to be in place for a certain period of time before any employee becomes eligible or else it would likely be considered a retroactive compensation increase which is prohibited under state law (see AGO 1995 No. 13).

Alternatively, the officer may purchase the duty weapon at fair market value from the city or through a licensed pass-through firearms dealer.

The weapon may not generally be gifted directly to the employee or sold at a discount due to gift of public funds issues. However, there may be other solutions. For example, the agency could take up a collection from other employees to purchase the weapon at fair market value and then present it as a gift to the employee, or the agency could give the employee the service weapon for free in exchange for the police guild providing the city with a replacement weapon of equal or greater value.

Destruction

Some agencies may want to destroy surplus agency-owned firearms rather than selling them at fair market value. Such a policy is likely permissible, but to avoid any misuse of government funds argument, the policy should state a public purpose for the destruction (such as improving public safety or the safety of law enforcement officers by preventing the guns from potentially being used in new crimes).

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Seized, Forfeited, or Unclaimed Property

State law allows law enforcement agencies and courts to seize real or personal property in certain situations. Once the forfeiture process is completed, the seizing agency is typically authorized to dispose of or sell the property, subject to restrictions.

These statutes contain detailed provisions regarding the seizure and forfeiture processes, property disposition, use of the proceeds, recordkeeping, and more, and local agencies will need to review them carefully.

In addition, state law provides a process for the sale or disposition of lost or unclaimed property if the owner cannot be located.

For example, see the following statutes (this is not an exhaustive list):

• RCW 69.50.505 – Property related to illegal drug activity (also see AGO 1995 No. 11 regarding the use of the proceeds)
• RCW 46.61.5058 – Vehicles forfeited due to driving under the influence
• RCW 9.41.098 – Forfeited firearms
• RCW 10.105.010 – Property involved in a felony
• Chapter 63.21 RCW – Lost and found property
• Chapter 63.32 RCW – Unclaimed property in hands of city police

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Donating Surplus Property

Generally, donating surplus property to a nonprofit organization or other entity is prohibited as a gift of public funds under the state constitution, unless specifically authorized by law (such as transferring real property for affordable housing or transferring property to another government entity for non-monetary considerations as discussed earlier).

However, if the recipient organization provides assistance to the “poor and infirm,” the donation could potentially be allowed under the constitutional exception for the “necessary support of the poor and infirm.” For more information on gifting of public funds generally, see our page Gift of Public Funds.

In addition, the property may likely be donated if the cost of selling or otherwise disposing of it would exceed the fair market value (in which case the agency is saving itself money by donating the property).

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Surplus Property Purchased with Grant Funds

Before disposing of surplus grant-funded property, the agency should consult the award documents and the granting agency to ensure that the sale or disposal is consistent with the granting agency’s requirements.

For information on disposing of property acquired or improved with federal grant funds, see 2 CFR 200 Subpart D, Post Federal Award Requirements – in (particular 2 CFR 200.313 (equipment), 2 CFR 200.311 (real property), and 2 CFR 200.314 (supplies).

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Conflicts of Interest

When obtaining appraisals and valuation services, cities should make sure they are receiving independent and impartial opinions on value. Agencies should not obtain estimates or appraisals from individuals or entities who have expressed interest in purchasing the property, which could result in the agency receiving less than fair market value.

Agency officials who were involved in the decision to surplus the property (the city council) or responsible for administering the sale (the mayor, city manager, city administrator, clerk-treasurer, or other administrative staff) should not purchase the surplus property due to conflict of interest concerns. See RCW 42.23.030; Washington’s common-law conflict of interest doctrine may also apply.

This prohibition also applies to the spouse and dependent children of anyone prohibited from purchasing by RCW 42.23.030. For more information, see our page on Ethics and Conflicts of Interest.

Although a sale at public auction or by sealed bids would seem to avoid direct conflict of interest issues, our conservative guidance has been to treat auction sales the same as direct sales and prohibit those individuals from submitting bids.

However, other city employees who were not involved in the decision to declare the property surplus are generally allowed to purchase surplus property, unless a local code or policy provides otherwise.

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Examples of Surplus Policies and Procedures

Below are selected examples of local surplus property policies and procedures.

Combined Provisions for Real and Personal Property

• Asotin Municipal Code Ch. 4.33 – While this chapter is titled “Disposition of Real Property Surplus,” it also contains provisions for disposition of property other than real estate, including statutory exceptions and found items
• Bellevue Municipal Code Ch. 4.32 – Addresses methods of sale for real and personal property as well as disposition of firearms, property originally acquired for public utility purposes, and intergovernmental transfers
• Deer Park Resolution No. 2012-002 (2012) – Adopting city surplus assets policy; provisions are short and concise. Prohibits elected officials and city staff from acquiring surplus items.
• Fife Municipal Code Ch. 1.28 – Includes sale methods for real and personal property and trade-in requirements

Real Property Only

• Bainbridge Island Real Property Surplus and Sale Procedures (2020) – Detailed policy for selling surplus real property, including fair market value determination; whether sales are subject to SEPA review; different disposition methods such as sealed bid, auction, negotiated sale, and RFP; and annual review and inventory of all city real property.
• Bellingham Municipal Code Ch. 4.84 – Includes real property appraisal and sale procedures, with real estate review committee to advise city council
• Ellensburg Municipal Code Ch. 2.06 – Governs sale, disposition, and lease of surplus real property, including information to be provided in staff report, valuation and sale procedures, public utility real property, and intergovernmental transfers
• Issaquah Ordinance No. 2985 (2022) – Adds municipal code chapter requiring public hearings before disposing of surplus real property with assessed value over $50,000; also adopts policy and procedures for determining that property is surplus, including minimum staff report contents and city council determination.
• Renton Surplus Real Property Policy and Procedure (2004) – Includes separate procedures for enterprise fund and general fund departments/divisions
• Shoreline Municipal Code Ch. 3.55 – Includes policies and procedures, public hearing and notice requirements, and authorized sale methods.
• Tacoma Public Utilities Surplus Real Property Disposition Policy (2020) – Policy and flowchart for disposition of surplus real property, including for affordable housing purposes. Identifies three categories of properties with different disposition processes depending on economic value and potential use.

Personal Property Only

• Ellensburg Municipal Code Ch. 2.07 – City manager may authorize department directors to declare property under $10,000 to be surplus with written certification; addresses methods of sale, property originally acquired for public utility purposes, firearms, and more
• Langley Municipal Code Ch. 3.80 – Authorizes clerk-treasurer to dispose of lower-value property without reporting to council; includes guidelines for decision making as well as exemptions under city code or state law
• Olympia:
  • Guidelines for Auction Surplus (2004) – Procedures for individual departments to get surplus ready for the annual city auction and move surplus to the city storage facility
  • Disposing of Surplus Items Outside of the Annual Citywide Auction (2005) – Includes procedures for documenting fair market value, determining disposal methods, drawing up a bill of sale, and more
• Poulsbo Municipal Code Ch. 3.68 – Finance director must check with department heads and generate surplus list semi-annually for council review; includes decision making guidelines and methods of disposition
• Shoreline Municipal Code Ch. 3.50 – Includes general requirements, specific procedures depending on item’s value, intergovernmental sales, sale of property originally acquired for utility purposes, and trade-in of surplus equipment
• Vancouver Policy and Procedure for Surplus Personal Property Disposal (2009) – Includes items with commercial value, items with little/no value, vehicles, scrap metal, and police seizure items; establishes conflict of interest restrictions.

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Examples of Surplus Resolutions

Below are selected examples of resolutions declaring certain items to be surplus and authorizing their sale or disposal.

Personal Property (Vehicles, Equipment, Etc.)

• Benton City Resolution No. 2017-08 (2017) – Declares two vehicles to be surplus; authorizes staff to dispose of them by intergovernmental transfer, trade-in, sale through sealed bids, public/private sale, consignment, or Internet auction. If vehicles cannot be sold, authorizes city to sell for salvage or junk.
• Forks Resolution No. 494 (2021) – Declares several vehicles formerly used for city purposes or seized per RCW 69.50.505 as surplus. Authorizes mayor and staff to sell them at auction or through fleet management services, whichever will generate the most profitable outcome.
• Puyallup Resolution No. 2426 (2021) – Declares police dog being retired to be surplus property; authorizes sale to the dog's handler
  • Also see Everett K-9 purchase agreement (2015) in which city agrees to sell retired police dog to officer "as-is" and officer releases city from any liabilities and claims
• Seattle Resolution No. 31676 (2016) – Requires all handguns that are no longer needed by the police department to be destroyed instead of being sold out-of-state, in effort to reduce gun violence
• Shoreline Resolution No. 490 (2022) – Declares surface water utility street sweeper vehicle to be surplus, establishes estimated value range of $20,000-$40,000, and authorizes sale by live auction. All proceeds must be directed to surface water enterprise utility fund.
• Toppenish Resolution No. 2017-18 (2017) – Simple resolution authorizing city manager to dispose of surplus police vehicles, fire coats, and phone system in accordance with state law for the best attainable value.
• Walla Walla Resolution No. 2022-67 (2022) – Declares listed equipment to be surplus and authorizes city manager to sell or dispose of the items in such manner as deemed to be in city’s best interests. Items are listed by department along with serial numbers and asset tag numbers.
• White Salmon Resolution No. 2019-02-481 (2019) – Declares listed equipment to be surplus and authorizes sale through bidding process or other commercially reasonable method. Includes quantity, value, and department for each item. Unsold items are declared to have no value and may be donated to designated local nonprofit or other appropriate recipient.

Scrap/De Minimis Value

• Kalama Resolution No. 678 (2019) – Declaring certain broken, outdated, or damaged office equipment and furnishings to be surplus with no value beyond scrap; authorizes staff to dispose of property as scrap or garbage
• North Bend Resolution No. 1893 (2019) – Declares all remaining personal property at current city hall, that is not being moved to new city hall, to be surplus with de minims value; authorizes disposal in "commercially reasonable manner" such as public auction, private negotiation, or destruction. All proceeds must be paid into general fund.
• Snoqualmie Resolution No. 1477 (2019) – Declares one fire department badge and helmet with de minimis value to be surplus and authorizing staff to dispose of it by sale, award, or disposal that complies with state law
• White Salmon Resolution No. 2014-10-395 (2014) – Declares older style police TASERs to be surplus with no value. Authorizes destruction of TASERs for credit against new TASERs; authorizes donation of TASER batteries and holsters to county sheriff's office which still uses them.
• Woodway Resolution No. 19-411 (2019) – Declares several items that are no longer needed or functional to be surplus with de minimis value; authorizes clerk-treasurer to dispose of items in a reasonable fashion. If items have a cash value, directs staff to make an effort to sell them for market value.

Real Property

• Everett Resolution No. 7526 (2020) – Authorizes four parcels to be listed for sale, including two originally acquired for utility purposes; public hearing was held per RCW 35.94.040. Purchase and sale agreements for each property must be submitted to city council for approval.
• Lynden Resolution No. 942 (2016) – Declares city-owned residential property to be surplus following concurrence of public works committee; authorizes administration to dispose of property through acceptance of bids, direct sale with prospective purchaser(s), or a combination thereof.
• Puyallup Resolution No. 2167 (2010) – Declares small strip of detention pond property to be surplus. Authorizes city manager to sell fee interest to adjacent property owner to move the property boundary and resolve a setback issue, provided the city obtains an easement allowing unrestricted use of the strip.
• Shoreline Resolution No. 411 (2017) – Declares former police station to be surplus property; includes staff report. Initial resolution authorizes sale by sealed bid with minimum acceptable price; subsequent resolution (included) changes sale method to licensed real estate broker following change in municipal code.
• Sultan Resolution No. 19-08 (2019) – Authorizing intergovernmental sale of surplus utility property to school district. Includes two resolutions: first declares utility real property to be surplus and sets date for public hearing; second authorizes intergovernmental sale at appraised value, with desire to sell property to local school district.

Real Property for Affordable Housing

• For examples, see our page Affordable Housing Techniques and Incentives.

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Examples of Surplus Bid Forms/RFPs

Below are selected examples of sealed bid invitations or requests for proposals (RFPs) soliciting third parties to purchase surplus property; surplus property may also be disposed of through auctions, trade-ins, real estate professionals, and other methods as discussed earlier on this page. A number of cities post surplus property opportunities on their websites and/or use third-party online auction services.

Personal Property

• Blaine Surplus Timber Bid Form (2017) – Bid form, instructions, and notice of sale for approximately 70 logs in city park.
• Electric City Surplus Property Sealed Bid Form (2020) – Simple packet requesting sealed bids for surplus electronics (iPad Pro and Apple Pencil) with minimum bid of $200; includes bid sheet and bid agreement form
• Long Beach Surplus Equipment Bid Form (2020) – Simple one-page form for parties to bid on two surplus vehicles; includes instructions and minimum bid prices
• Tacoma Surplus Personal Property Request for Bid (2020) – Request for sealed bids to purchase large volume of surplus electronics (set-top boxes); includes bid form and instructions, hold harmless agreement, insurance requirements, pictures of pallets, and user manuals.

Real Property

• Bothell Surplus Real Property RFP (2011) – Request for proposals for private developer to develop six acres of surplus real property near downtown core; includes city’s goals for site. Proposals evaluated based on sale price, developer experience and financial ability to deliver a quality project, and overall approach.
• Tacoma Surplus Real Property Request for Bids (2016) – Bid packet requesting sealed bids to purchase one parcel of real property with minimum bid price of $260,000. Includes bid form, instructions, bid submittal checklist, terms and conditions, and related documents