Surplus City or Town Property – MRSC

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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.
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.
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). In such cases, the governing body should adopt a resolution declaring the property to be surplus and including documentation that the property has no monetary value or that the cost of disposing of the property would exceed the property’s fair market value.
For policy examples, see:
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).
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.
Below are selected examples of resolutions declaring certain items to be surplus and authorizing their sale or disposal.
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Surplus County Property
Surplus Property for Special Purpose Districts
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