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The following procedures and requirements shall apply to property sold as surplus by the city:

A. Determination of Fair Market Value/Minimum Acceptable Price.

1. The city manager may present to the council an appraisal of the surplus property and/or additional information regarding the approximate fair market value of the surplus property for purposes of determining a reasonable return if such property is sold.

2. Whether surplus property is to be disposed of by sealed bid, auction or negotiated sale (excluding special disposition process), interested parties shall be advised that the minimum acceptable price shall be the fair market value determined by an appraisal and/or other information as presented by the city manager above plus reimbursement of 50 percent of the cost of obtaining said appraisal and/or other information.

B. Processes/Bid Deposits/Time to Closing.

1. Disposition by Sealed Bid. Where a surplus property is sold by sealed bids, the bidding procedures for a surplus property shall be established by the city manager before bids are sought, including qualifications for bidders. Such procedures shall contain the criteria on which the winning bid will be selected. Any and all bids submitted must be accompanied by a bid deposit in the form of a cashier check payable to the city finance director in an amount established by the city manager. Such deposit accompanying the successful bid shall be deposited into escrow until closing on the purchase of the surplus property and payment of the remaining amount of the purchase price shall be made within the time established as part of the bidding procedures for the surplus property. In the event the purchaser is unable to pay the remaining amount within the required time, the bid deposit shall become nonrefundable and may be retained by the city as liquidated damages and not as a penalty, since the calculation of actual damages due to time lost, transaction expenses and other factors will be difficult, if not impossible, to accurately calculate (such damages, as just defined, being referenced hereafter as “liquidated damages”). The bidding procedures may permit the purchaser, at its option, to deposit an extension fee in a stated amount (hereinafter “extension fee”), in which case the purchaser’s time to make full payment shall be extended as provided in the bidding procedures. In the event full payment is not made by the conclusion of the extension period, the extension fee may be retained by the city, along with the initial deposit, as liquidated damages. The city council reserves the right to waive, or delegate to the city manager the right to waive, any irregularities in the bid process. The city reserves the right to reject all of the bids if it determines that none of them are responsive to its request for bids or to withdraw a request for bids at any time before it accepts a bid.

2. Disposition by Auction. Where property is sold at auction, the bidding procedures for a surplus property shall be established by the city manager before the auction, including any minimum or reserve price and qualifications for bidders. The prevailing bidder must immediately tender a cash deposit or certified check for deposit into escrow as earnest money to the city finance director in the amount established in the bidding procedures. Payment of the remaining amount of the purchase price shall be made within the time period required in the bidding procedures. In the event the purchaser is unable to pay the remaining amount within the required time, the bid deposit shall become nonrefundable and may be retained by the city as liquidated damages. The bidding procedures may permit that the purchaser may, at its option, deposit an extension fee in a stated amount, in which case the time to make full payment shall be extended as provided in the bidding procedures. In the event full payment is not made by the conclusion of the extension period, the extension fee may be retained by the city, along with the initial deposit, as liquidated damages. The city reserves the right to reject all of the bids if the minimum or reserve price is not met or to withdraw the surplus property from the auction process at any time before the auction commences.

3. Disposition by Negotiated Sale. The city manager may directly negotiate with potential purchasers of surplus property or may publish a Request for Qualifications (“RFQ”) or a Request for Proposals (“RFP”) to identify potential purchasers. The city council reserves all rights to approve any purchase and sale agreement recommended by the city manager. Where property is sold by negotiated sale, said terms shall be controlled by the negotiated purchase and sale agreement.

C. Notification of Sale of Surplus Property. In the event the surplus property is to be disposed of by sealed bid or by auction, the following notification procedures shall be followed:

1. A notice of the city’s intent to dispose of the surplus property shall be conspicuously posted on the surplus property no less than two weeks prior to the date set to commence accepting bids or the date set for the auction.

2. Notice shall be published in the city’s official newspaper no less than once each week in two consecutive weeks preceding acceptance of sealed bids or the public auction. All notices shall include a description of the surplus property, the procedure by which the surplus property is to be disposed of, any qualifications for bidders, any bid deposits that must be made and the minimum price that will be accepted.

D. Failure to Close. In the event that the closing of the sale of surplus property fails to occur under the method selected by the city, or the city fails to conclude a binding purchase and sale agreement with a buyer selected by the city to negotiate with through a special disposition process, RFP, RFQ or other process, the city may terminate the transaction or negotiations and may start a new process (which may be a different process from that previously selected) and/or select the buyer deemed by the city to be the next most responsive in the prior process. (Ord. 2024 § 1, 2009).