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Mr. Christopher K. Miller March 16, 2005 Page 2 DISCUSSION Let me deal with the donation of surplus computers to the Minnesota Correctional Facility first. That is very straight forward and easy to answer. Under Minn. Stat. � 471.85, a city is empowered to transfer its personal property for a nominal charge, or without any payment whatsoever, to another public corporation for public use. The only requirement is that this be duly authorized by the governing body. Therefore, the City Council should authorize such donations. � As to the sale of surplus property that is deemed to be no longer needed for public purposes, the basic statute that applies is the Uniform Municipal Contracting Law, Minn. Stat. � 471.345, and when we get into matters involving employees or officials of the City seeking to purchase the property, we need to turn to Minn. Stat. y 15.054. I know that you are generally familiar with Minn. Stat. � 471.345, commonly referred to as the bid statute, so I won't in detail discuss it. With that in mind however, there was a specific amendment to the bid law in 2004 to add a subdivision 17. That provides that surplus property may be sold by electronic interactive auction. Sales conducted in this manner may be done without following the other procedural requirements of the statute. Therefore, sales of property conducted through an on-line auction are not now subject to the sealed bidding requirements that we may otherwise have under the bid statute. Therefore, the City may continue to sell its surplus property through the on-line auction services of e-bay and carsoup.com, and other similar interactive electronic auction services. The only thorny issues that arise come up in the area of whether, and to what extent, an � employee or officer of the City can purchase merchandise from the City by such means. It = may in fact be that the City wishes to take a policy position on this. We make no opinion either way on such policy decision. However, the statute that would govern whether, and to what extent officers andlor employees of the City may purchase property or materials owned by the City is Minn. Stat. ,� 15.054. I will state at the outset that the statute seems to be inartfully drafted. There is no case law under the statute. Some things are rather clear. At least one significant item is left undefined. The general rule as set forth in Section 15.054 is that no officer or employee of a political subdivision is allowed to sell property or materials owned by the subdivision to