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Surplus City or Town Property

This page provides an overview of state laws concerning the sale or disposal of surplus real property and personal property by cities and towns in Washington State, including examples of local government codes, policies, and surplus resolutions.

For an overview of county surplus requirements, see our page Surplus County Property. For special purpose districts, see our page Surplus Property for Special Purpose Districts.



Overview

Cities and towns frequently need to sell or convey equipment or property which is no longer needed for municipal purposes. There are relatively few statutes concerning procedures for sale of surplus property. 

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

Cities and towns should also be familiar with the statutes listed below.

  • RCW 39.33.010 – Cities, towns and counties can sell or transfer property to other governmental entities "on such terms and conditions as may be mutually agreed upon." This statute permits transfer for less than value. See AGO 1997 No. 5 for how to harmonize this statute with RCW 43.09.210 which requires that a local government entity receive "full value" when there is an intergovernmental transfer of property.
  • RCW 39.33.015 – Cities, towns, and other political subdivisions may transfer, lease, or dispose of property at low or no cost for affordable housing and related facilities for low-income and very low-income households, as defined under RCW 43.63A.510, consistent with local regulations and comprehensive plans. For more information and examples, see our page Affordable Housing Techniques and Incentives.
  • RCW 39.33.020 – Requires that a public hearing be held if the value of the property being surplussed exceeds $50,000. AGO 1997 No. 5 concluded that the public hearing requirement only applies to intergovernmental transfers.
  • Ch. 35.94 RCW – If a city or town wishes to sell or lease a public utility, or portions of the utility, it can do so by following the procedures in this chapter. Bids are required, and the council must approve the sale by a two-thirds vote, followed by submitting the issue to the voters.
  • RCW 35.94.040 – Requires that a public hearing be held if property (real estate or personal property) originally purchased for utility purposes is no longer needed for that use and the city desires to lease, sell or convey the property. However, no hearing is required for personal property or equipment with an estimated value of $50,000 or less.
  • RCW 42.30.110(1)(b) – Cities and towns can discuss the selection of property for purchase or lease (or the price) in executive session when public knowledge regarding such consideration would cause a likelihood of increased price.
  • RCW 42.30.110(1)(c) – Cities and towns can discuss in executive session the minimum price at which it will sell a particular parcel of real estate if public knowledge regarding such consideration would cause a likelihood of decreased price. This statute enables the council to provide negotiation direction and flexibility to the person delegated to sell real estate.
  • RCW 42.56.260 – Exempts from public disclosure real estate appraisals obtained by the city prior to completion of a sale of the property. The statute was amended in 2015 to clarify the disclosure exemption by adding the following: “The exemptions in this section do not apply when disclosure is mandated by another statute or after the project or prospective project is abandoned or all properties that are part of the project have been purchased, sold, or leased. No appraisal may be withheld for more than three years.”
  • RCW 43.09.210 – Requires that a local government entity receive "full value" when there is an intergovernmental transfer of property. See AGO 1997 No. 5 which concludes that the concept of "full value" is flexible, depending on the facts.

Practice Tips

  • Before the sale, always determine the fair market value of the item to be sold. If you sell it for less, you may be violating the "gift clause," in Article VIII, Sec. 7 of the 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, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation." But see RCW 39.33.010 mentioned in the list of statutes above and remember that "value" does not always mean "cash value."
  • Hold a public hearing, if required by RCW 39.33.020 or RCW 35.94.040. AGO 1997 No. 5 concludes that the public hearing requirement in RCW 39.33.020 only applies to intergovernmental transfers of property.
  • Pass a resolution declaring the property to be surplus, and specifying how the property is to be sold, or delegating that task to a particular administrative official.
  • Proceed with sale as required by the town or city council, or in any commercially reasonable way. Sale can be by auction, private sale, sealed bid, through a broker or agent, etc.
  • Consider adopting policies concerning sale of city property. See the examples below.

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).

For policy examples, see:


Surplus Property Purchased with Grant Funds

Before disposing of surplus grant-funded property, the city 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).


Conflicts of Interest

When obtaining appraisals and valuation services, public agencies 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 city manager, city administrator, 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 agency 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.


Examples of Ordinances and Codes


Examples of Policies


Examples of Surplus Resolutions

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

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 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 per RCW 39.33.020; second authorizes intergovernmental sale at appraised value, with desire to sell property to local school district.

Real Property to be Used for Affordable Housing

Vehicles, Equipment, and Other Personal Property

  • 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.
  • Prosser Resolution No. 14-1470 (2014) – Declares a police dog being retired to be surplus property; authorizes sale to the dog's handler
  • 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 an effort to reduce gun violence
  • Shoreline Resolution No. 490 (2022) – Declares surface water utility street sweeper vehicle to be surplus, establishes estimated value range, 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 (S/N) 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.

Examples of Surplus Bid Documents/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.

Personal Property

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

Last Modified: September 29, 2022