Unless otherwise provided in your municipality's charter, MTAS recommends that the municipality's governing body declare property as surplus in a resolution. The board’s decision should be reflected in a resolution – one that itemizes and describes the items being declared surplus and authorizes the municipality staff to proceed with the sale. Such a policy serves to insulate the municipal staff from accusations of improperly selling (or giving away) municipal assets.

Recommendations to declare personal property items as surplus would best be made by department heads, supervisors, managers, etc. But governing boards should make the final decision. The recommendations made by the staff should be in writing and provide defensible reasons for making the declaration. For its part, board members should carefully question recommendations to sell high value items, withholding their support for the proposed sale until they are satisfied that the public interest is being served.

The governing board’s decision to declare property as being surplus should be made by means of a written resolution. For each item proposed for sale, the resolution should include two key pieces of information:

• The reason(s) for declaring the property to be surplus. The reasons for selling the property should be specific and verifiable.
• In the case of surplus municipal equipment, the resolution should refer to the make, model, serial number, and age of each item proposed for sale. Additionally, automobiles should be referred to by the Vehicle Identification Number (VIN) and the approximate mileage of the vehicle.

Prior to the vote, each board member should carefully read the proposed resolution and ascertain for themselves that sound reasons exist for declaring the property surplus to the municipality’s needs.

Prior to the Sale
While there are no state laws regulating a municipality’s authority to advertise and sell surplus property, care must still be taken to assure that the municipality has the legal right to sell the items proposed for classification as surplus property. To prevent trouble after the sale, the following sources should be checked before seeking the board’s approval for the sale:

• The Municipal Charter. It is possible that a portion of your municipality’s charter may disallow the sale of certain high value properties, at least without a referendum of the citizens. Selling the municipal gas or electric utility, for example, might require such a vote. In rare cases, the charter may also specify a general procedure for disposing of surplus property that the municipality should follow.
• The Municipal Code. Here again, the municipality may have enacted an ordinance that prescribes a procedure for selling municipal property. Similarly, it would be wise to see if any resolutions or motions of the board exist pertaining to surplus property sales. Your municipality’s purchasing policy may also include provisions for selling surplus municipal property.
• State Statutes. State law generally recognizes the municipality’s authority to decide what constitutes surplus property. But every municipal official and employee needs to be aware of Tennessee Code Annotated § 6-54-125, which makes it unlawful for any municipal official or employee to purchase surplus property from their municipality except by means of a bid at a public auction. This prohibition extends for six months after the employee or official leaves office. Violation is a Class A misdemeanor.
• Contracts and Agreements with Other Parties. You should be aware that contracts may exist that preclude the municipality from selling certain properties that were acquired by means of donations or grants. Certain pieces of equipment purchased with grant funds might be complicated to sell. The terms of the grant may either prohibit the sale or require that the sale proceeds are shared with the grantor. It would be wise to review the grant documents signed by the municipality prior to offering such equipment for sale.