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�� , �� Memo To: Mayor and City Council Neal Beets, City Manager �_ - � � From: Chris Miller, Finance Directo f�� . Date: March21,2005 — Re: Discussion on the Disposal of Surplus or Retired City Vehicles & Equipment Date: 03121105 Item: 8. Disposing of Excess City Property Introduction Earlier this year, the Council expressed an inquiry regarding the manner in which the City disposes of surplus or retired vehicles and equipment. The following is a brief overview of the City's current practices. Assessing the Useful Lives and General Condition of City Assets The City employs a variety of vehicles and equipment to support the City's programs and services. Each type of vehicle or equipment has a distinct expected useful life which depends on a variety of factors. Over time, the City is able to track these assets in a manner that fairly accurately predicts when the vehicle or equipment is near the end of its useful life. The decision to replace the vehicle or equipment is made when: a) The cost of maintaining the existing vehicle or equipment is greater than acquiring a new one b) Expected productivity with new vehicles or equipment exceeds productivity levels of existing ones c) The vehicle or equipment is inoperable and the cost of repairs exceeds the cost of purchasing a new one In most cases, two or more of these criteria are met before city assets are replaced. Depending on the type of asset, the City may use a variety of asset disposal methods. Those methods are explained in greater detail below. Disposal of City Vehicles Most city vehicles including; police squad cars, maintenance vehicles, inspection vehicles, etc., are disposed of through public auctions. These auctions take place at multiple times throughout the year and are typically coordinated by State, County or other local jurisdictions. The recent emergence of internet-based auctions has proven to be increasingly beneficial to the City. In comparison to traditional auction houses, on-line auctions have demonstrated to have lower selling costs and greater numbers of potential bidders - both of which results in higher net proceeds. This has been especially true for single-purpose vehicles such as fire trucks.