The City Spot Café: Donation of Surplus City Property to Nonprofits

What you need to know about the new surplus property donation law right now, served up by the LMC Research and Information Service team.

Definition: Have you ever put an item in the classifieds only to hear crickets? What did you do next? For most people, usable goods with little demand end up being donated to a nonprofit. But for cities, that option hasn’t been allowed by law. For the purposes of this discussion “surplus property” (the stuff in the metaphorical cardboard box) is defined by statute as “equipment used by a local government public works department, and cellular phones and emergency medical and firefighting equipment that is no longer needed by the local government because it does not meet industry standards for emergency medical services, police, or fire departments or has minimal or no resale value.”

Plain-language explanation: Trucks, tools, cell phones, gurneys, ice augers—where can these items go when your city upgrades, updates, and needs to clean out the garage? When the items aren’t in high demand and are outmoded for the industry, a new law allows local government to donate unneeded surplus property to one or more nonprofit organizations, effective Aug. 1, 2016.

Pros: The authority for cities to donate anything is very limited, so it’s somewhat a big deal that cities can give nonprofits unneeded public works, EMS and firefighting equipment, as well as old cell phones, simply because it doesn’t meet industry standards or has little to no resale value.

Cons: Well, more clarifications than cons. This law doesn’t allow donation of absolutely any personal property to absolutely anyone, and it does not authorize donation of money to anyone. (See Public Purpose Expenditures to see who may receive donations of money.) A caveat to all of this is that a city first needs a policy in place that determines what equipment will be “surplus” and how recipient nonprofits will be selected. The policy must also be clear about how the city will disclose that the equipment "may be defective and cannot be relied upon for safety purposes” and other things just to keep the attorneys happy.

League position: The League does not have a legislative policy concerning donations of surplus property, but the League generally supports local government having authority to support and improve its community. If a local nonprofit can put that old truck to good use, that’s for your city to decide.

Resource: Prior to Chapter 87 taking effect, the League of Minnesota Cities plans to have a model policy available that addresses the most basic requirements. Stay tuned!

This information has been compiled by attorney Ed Cadman. Contact: ecadman@lmc.org or (651) 281-1229.

This blog post conveys general information. It’s not legal advice. Please check with your city attorney before acting on this information.