CITY COUNCIL REPORT. Adopt a Resolution Declaring Surplus Property and Authorize the Disposition of said Property

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1 CITY COUNCIL REPORT SUBJECT: SUBMITTED BY: DEPARTMENT: Adopt a Resolution Declaring Surplus Property and Authorize the Disposition of said Property John Lee, Purchasing Manager Support Services DATE: August 23, 2016 STRATEGIC RELEVANCE: Organizational Efficiency STAFF RECOMMENDATION(S): Staff recommends the City Council adopt a resolution declaring three vehicles and one generator as surplus property and authorize the disposal of said property through First Capital Auction Inc. BACKGROUND / INTRODUCTION: City staff periodically reviews inventory to determine if materials and/or equipment are appropriate to be declared as surplus. In making its recommendation, Staff evaluate the age of equipment, the life cycle, cost of repairs, and usage. Upon the application of these criteria, Staff have found the vehicles and generator in Attachment A are surplus and request authorization to dispose of said property through First Capital Auction Inc. FINDINGS/ANALYSIS: Unit 150, 2001 Dodge Dakota Unit 150 is a 2001 Dodge Dakota two wheel drive extended cab pickup truck. The vehicle has 94,110 miles on the odometer, the air conditioning requires a new compressor, the transmission slips, and the vehicle will not pass a smog test. Due to the age of the vehicle and the cost of needed repairs, the vehicle has reached the end of support life and should be sold at auction. Unit 179, 2001 Dodge Ram Unit 179 is a 2001 Dodge Ram 1500 four wheel drive four door extended cab short bed pickup truck. The vehicle has 76,040 miles on the odometer. The rear axle is very noisy, the upholstery is worn, the headliner is falling off, and the vehicle is difficult to start. Due to the age of the vehicle and the cost of needed repairs, the vehicle has reached the end of support life and should be sold at auction.

2 Unit 870, 2004 Dodge Dakota Unit 870 is a 2004 Dodge Dakota two wheel drive extended cab pickup truck. The vehicle has 114,522 miles on the odometer. The engine burns oil, the driver side door sags when open and the repair costs have been very high during the last couple of years. Due to the age of the vehicle has the cost of needed repairs the vehicle has reached the end of support life and should be sold at auction. Unit 896, Ingersoll Rand Generator Unit 896 is a 2002 Ingersoll Rand 50KW generator with an Isuzu A-4JG1 NAACA HP engine. Due to the age of the generator it will no longer meet the emission standards in Placer County. The County will not sign off on a permit to run the generator; staff has moved the generator to the corporation yard in preparation for the unit to be sold at auction. CONCLUSION: Due to the age of the items listed in Attachment A, staff requests the City Council declare the items to be surplus and authorize staff to dispose of the items using First Capital Auction Inc. First Capital Auction will provide a higher return on sales due to the lower cost of commissions of 3.5% for vehicles and equipment and no cost for the following: State of California Vehicle Inspections, Smog Service, Carb Administrative Fee, Exempt Plate Processing, and Storage Fees. Auction houses previously used by the City charged commissions of 8%-15% and charged for the fees listed above, excluding storage fees. First Capital Auction's transportation and towing fees are also half the price of other auctions at $75.00 per hour (see attached contract). ALTERNATIVES: Adopt a resolution declaring the items identified in Attachment A as surplus and authorize their disposal using First Capital Auction Inc. Provide staff with further direction. FISCAL IMPACT: The receipt of funds will be placed in Fund 610, Vehicle Replacement Fund, and fund 600, the General Fund CITY MANAGER REVIEW OF CONTENT: APPROVED AS TO LEGAL FORM: MWS, LZW CONTRACT ACCOUNTABILITY: Department: Support Services Staff member: John Lee

3 ATTACHMENTS: Resolution Attachment A, Surplus List Attachment B, First Capital Auction Agreement Attachment C, First Capital Auction Information

4 RESOLUTION NO ADOPT A RESOLUTION DECLARING SURPLUS PROPERTY AND AUTHORIZE THE DISPOSAL OF SAID PROPERTY THROUGH FIRST CAPITAL AUCTION INC. WHEREAS, staff has submitted a list of obsolete vehicles and equipment as shown in Attachment A, to the City Council and requests the City Council declare the property as surplus; and WHEREAS, it is the City s intention to conduct a public auction using First Capital Auction Inc. in order to sell the vehicles and equipment listed in Attachment A; WHEREAS, the funds obtained from the sale of the vehicles and equipment listed in Attachment A will be placed in Fund 610, Vehicle Replacement Fund, and Fund 600, the General Fund. NOW, THEREFORE, BE IT RESOLVED, The City Council of the City of Lincoln declares property described in the inventory list, filed with this resolution as Attachment A, to be surplus property and authorizes the disposal of said property through First Capital Auction Inc. PASSED AND ADOPTED this 23rd day of August AYES: NOES: ABSENT COUNCILMEMBERS: COUNCILMEMBERS: COUNCILMEMBERS: Spencer Short, Mayor ATTEST: Gwen Scanlon, City Clerk

5 Attachment A Surplus Vehicle List Unit Dodge Dakota extended Cab two wheel drive pickup truck VIN# 1B7GL22X71S ,110 miles.

6 Unit Dodge Ram 1500 four wheel drive extended cab, 4-door short bed pickup truck VIN# 1B7HF13Y21J ,040 miles. Unit Dodge Dakota extended cab two wheel drive pickup truck VIN# 1D7HG32K64S ,522 miles.

7 Unit 896, 2002 Ingersoll Rand 50KW Unit 896, 2002 Ingersoll Rand 50KW Generator Unit 896, 2002 Ingersoll Rand 50KW Generator

8 Attachment B AUCTION AGREEMENT For City of Lincoln ATTN: _John Lee Submitted by: Stephen Martinez Director of Government Relations FIRST CAPITOL AUCTION INC. 50 SOLANO AVENUE VALLEJO, CA PHONE: (707) FAX: (707) Stephen@1stcapitolauction.com DATE: _March 9, 2015

9 AUCTION AGREEMENT FIRST CAPITOL AUCTION INC., now hereinafter referred to as ( Auctioneer ) and the undersigned ( Seller ) agree as follows: 1. AGENCY. Seller hereby appoints Auctioneer as its agent to conduct a Public Auction of personal property described below. Auctioneer shall be an independent contractor. Seller authorizes and confers upon Auctioneer the power to take all actions on its behalf necessary to complete the auction. Such as accepting cash or checks on behalf of Seller in payment for property sold, signing on behalf of Seller as the registered and/or legal owner of any motor vehicles sold to affect a transfer, and satisfying or compromising secured parties who hold or assert a lien on any Property sold at auction. Seller hereby agrees to sell the Property to the highest bidder with no minimums or reserves. 2. AUCTIONS AND PROPERTY. First Capitol Auction Inc conducts public auction about six to eight times a year at 50 Solano Avenue, City of Vallejo, State of California. None of the property may be sold before the auction without the written consent of both parties, in which case the sales proceeds shall be treated as part of the gross proceeds of the auction. Auctioneer shall tow the Property to the auction at least one week prior to the auction. Should Seller fail to make Property available for pick-up, or if Seller shall breach this contract, Seller agrees to pay the other costs as provided below. First Capitol Auction, Inc. is a fully licensed auto dealer and is bonded with the State of California. Vehicles will not be offered at auction unless the Certificates of Ownership and all other documents necessary to affect a transfer of title for Motor Vehicles, Trailers and Towable Property are submitted to Auctioneer at least seven (7) business days prior to the sale. All property submitted for auction shall be free and clear of any toxic waste and/or environmental hazards, other than those that make the vehicle/equipment operational. If these items are not environmentally safe, they may incur additional fees or disposal costs. 3. First Capitol Auction Inc is in compliance with all State of California environmental requirements as well as in compliance with all current California Air Resource Board (CARB) requirements. For all CARB sales, the consignor must identify all non-compliant vehicles & equipment to First Capitol Auction Inc. The consignor, as the legal owner, must complete the VIN Stop Request form and submit it to CARB. The two (2) pages Out of State Sales Verification forms should to be submitted to First Capitol Auction Inc upon delivery of the vehicle with Selling Party s Information, Vehicle Information and Engine Information filled out. First Capitol Auction Inc will in turn complete the Purchaser Information at the time of the sale notifying the buyer the item(s) cannot be registered or operated in the State of California without being retrofitted to meet CARB requirements. First Capitol Auction Inc will provide seller with copies of the purchaser s information (disclosure statement) and maintain records for three (3) years as required by Section 2449(j) of the Air

10 Resource Board regulation. All CARB sales are sold Demand Title. In order to complete the sale First Capitol Auction Inc must have the original title otherwise the sale cannot be completed. The Auctioneer will submit all forms back to the Seller for their records with payment. 4. COMMISSION AND EXPENSES. A. Commission (Selling Fees) 1. Motor Vehicles and Off Road Vehicles 3.5% 2. Miscellaneous Property (Non-motor or Off Road Vehicles) 20% 3. Non running vehicles 3.5% 4. State of California Vehicle Safety Inspection No Charge 5. Smog Service No Charge 6. CARB Administrative Fee No Charge 7. Duplicate Title $30.00/Veh B. Transportation Charges and Other Services (All charges based on full loads) 1. Standard Towing: Running Vehicles (6-8 Vehicles) $75.00/Veh 2. Standard Towing: Non-Op Units. See low bed 3. Low Bed Trailer Service (Equip/Med to Large Trucks) $75.00/Hr 4. Surplus Personal Property (Miscellaneous) $75.00/Hr 5. Minor De-Logo (no paint) $50.00/Veh 6. Exempt Plates: Processing E Plates No Charge 7. Storage Fees No Charge C. Additional Services Provided to the Public 1. Free Color Sales Brochure 2. Free Permanent Bidder Program (encouraging return bidders) 3. Free Auction Sale Catalog (this is an important selling aid for the buyer)

11 4. Three (3) way to bid at First Capitol Auction Inc.; live, absentee or online 5. SECURITY INTEREST. Seller hereby gives Auctioneer a security interest in the Property and Equipment listed herein and now owned and hereinafter acquired by Seller (including insurance) and in the sales proceeds, in order to secure any and all advances which may be made to or on behalf of the Seller by Auctioneer and to secure any and all other obligations that the Seller may owe Auctioneer arising out of or in connection with this Agreement, the Property, and or any other agreement, transaction, or Property involving Seller and Auctioneer. Auctioneer shall have all the rights of a secured creditor under the Uniform Commercial code and Seller agrees to execute a financing statement enabling Auctioneer to perfect this security interest as a first lien on the Property listed herein. 6. REPRESENTATION AND INDEMNITY BY SELLER. Seller represents and warrants that title to the Property is and will be at the time of the auction, free and clear of any and all liens, security interests, encumbrances, rights and claims other than those of Auctioneer pursuant to this Agreement, Seller further represents and warrants that Seller has used no other business name or address other than the names and addresses specified in this Agreement. Auctioneer hereby indemnifies, defends and holds Seller harmless from and against any and all losses, costs, expenses, demands, claim, causes of action and liabilities (including without limitation, reasonable attorney s fees) (collectively losses and liabilities ) related directly or indirectly to, arising out of, or in connection with the performance of services by Auctioneer under this Agreement, caused in whole or in part by the willful misconduct or any negligent act or omission of the Auctioneer, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, except where caused by the active negligence, sole negligence, or willful misconduct of Seller. First Capitol Auction, Inc. and its consignors will indemnify and hold harmless Selling agency, its boards, commissions, officers and employees in performance of services here under. First Capitol Auction, Inc. will provide comprehensive general liability insurance not less than $1,000, GENERAL PROVISIONS 1. Within fifteen (15) banking days after the auction date, Auctioneer shall present a full accounting of the sales proceeds and expenses, and shall, if requested, document the accounting by invoices and/or vouchers. With such accounting, Auctioneer shall present Seller with a check for all monies due from such action unless delayed by legal proceedings or inability of Auctioneer, through no fault of its own, to transfer title or to comply with the Uniform Commercial code or other laws. Auctioneer reserves the right to eliminate from settlement any property for which payment has not been made and Seller agrees

12 to accept responsibility for reclaiming same wherever located. Auction may at their own discretion charge a buyer s premium. 2. The duration of this contract shall be for a minimum of three (3) years with the option of a one (1) year extension. First Capitol Auction Inc 50 Solano Avenue Vallejo, Ca By: Print: Title: Date: City of Lincoln 600 Sixth Street Lincoln, CA By: Print: Title: Date:

13 Attachment C First Capital Auction Information Thank you for considering First Capitol Auction Inc as your auction services provider. I would like to tell you a little about First Capitol Auction Inc and provide you with information detailing our Ten Point Asset Recovery Program and list of references. For the past 30 years First Capitol Auction Inc has become the fastest growing auction company in Northern California specializing in government surplus and construction equipment sales. Since our establishment in 1985, we have developed a working knowledge of both market conditions and buyers. Our marketing is designed to enhance our client s image through printed media such as brochures and trade journals as well as using web 2.0 tools to harness the vast buying network that the internet provides utilizing a combination of resources such as ebay, Craigslist, Facebook, Twitter, LinkedIn and our latest use of our U-Tube channel and videos. First Capitol Auction Inc is a supporter of our environment and practices green policies such as recycling and utilizing energy efficient appliances. Our brochures are printed on recycled paper using soy based inks. First Capitol Auction Inc distinguishes itself by being the largest Bay Area auction company that specializes in no minimum, no reserve public auctions. This single factor, more than any other, attracts quality buyer s resulting in a higher dollar return for our consignors. First Capitol Auction Inc conducts auctions year round. The majority of our auctions are conducted at our Vallejo facility. This facility is strategically located between the major metropolitan areas of Northern California, First Capitol Auction Inc was one of the first municipal auction companies to offer both on-line and on-site bidding capabilities. First Capitol Auction Inc utilizes a state of the art computer system with our own proprietary software that combines the latest in auction and dealer technology, providing our consignors accurate timely auction results and inventory control. As a licensed and bonded California auto dealer, First Capitol Auction Inc does all safety checks and smog procedures at no cost to our consignors as well as having on site notary and vin verifiers. The latest State requirements that affect all California cities, counties and municipalities are the CARB regulations. First Capitol Auction Inc complies with all the required regulations including the recording of all noncompliant sales with disclosure contracts and keeping these sale contracts for three (3) years. Please feel free to contact us at if you need anything.

14 TEN POINT ASSET RECOVERY PROGRAM (A.R.P.) 1. First Capitol Auction, Inc. conducts public auctions of surplus construction equipment, vehicles and asset seizure property in accordance with Section 535 of the California Penal Code and the provisions of the California Auctioneer Licensing Act. 2. First Capitol Auction, Inc. is a State of California Corporation, licensed auto dealer and bonded with the State of California. Auction services are provided on/off site to accommodate selling agency requirements. 3. First Capitol Auction, Inc currently maintains a comprehensive general liability insurance policy of $2,000,000. First Capitol Auction, Inc. and consignors shall indemnify and hold harmless selling agency, boards, commissions, officers and employees in performance of auction services. 4. First Capitol Auction, Inc. offers vehicle and equipment transportation and storage to our auction facility. The facility is bonded and electronically monitored 24 hours per day. Indoor storage is available. 5. First Capitol Auction Inc will design, print and distribute auction brochures and will advertise in newspapers and periodical trade journals, as well as publicize items selling at auction on our worldwide website E-bay, Face book, Craigslist, LinkedIn, Twitter and Pinterest. 6. First Capitol Auction, Inc. will coordinate sales site including alignment of equipment and/or items to be sold providing minor repairs (flat tires, batteries) as authorized by agency. Upon completion of the sale, First Capitol Auction will oversee the orderly disbursement of vehicles and/or equipment. First Capitol Auction Inc receiving staff are all trained and certified forklift operators. 7. First Capitol Auction, Inc. will perform all State of California vehicle safety inspections and provide customers with a smog certificate at no cost to selling agency. As a licensed auto dealer First Capitol Auction Inc. will process all Department of Motor Vehicle sales reports and file them with the State of California. 8. First Capitol Auction Inc provides the general public three (3) ways to purchase at our auction; live onsite, absentee bid and simulcast on the internet. Bidders are provided with free sales catalogs and may apply for a permanent bidder number to help facilitate quicker and easier access through the auction process.

15 9. First Capitol Auction, Inc. will itemize, audit and present a complete accounting and settlement statement in accordance to selling agencies fiscal reporting requirements in a timely manner as required in the RFP and/or auction agreement. 10. First Capitol Auction Inc., when notified by the Agency, shall comply with all diesel vehicle engine destination or compliance laws as required by the California Air Resource Board (CARB).