In Legal Terms
- Volume 51, Number 3 - 2007
Frequently Asked Questions on county purchases and sales.
In the course of a week or so, I am asked the same questions repeatedly. Good questions, I might add. Other members of the staff have the same experience, and we have discussed the fact that we should really have a “frequently asked questions” section on the web site for counties to use as a quick reference for some of these frequently-encountered subjects. We hope that will be coming soon. In the meantime, I thought I would use this space as an “FAQ” on the purchase and sale of county property – one of the top question categories. Of course, this barely scratches the surface, but it is a start.
Q: What are the proper procedures for the county to declare surplus property?
A: There are no general statutes which address specifically how to declare county property as surplus. Many counties have a process to declare property as surplus prior to sale, and this is certainly a good idea. However, while there are specific statutory procedures setting out how the state must declare property as surplus, there are no coinciding procedures for counties.
Q: Is the county required to sell personal or real property through a competitive bid process?
A: Alabama law does not require that the county sell property – real or personal – through a competitive bid process. (See, e.g., AG’s Opinion # 88-323 and # 81-082.) Again, there really are no general statutes dealing with the sale of property. The Attorney General’s office has issued several opinions stating that property must be sold at fair market value, which of course, can be a very subjective determination. It is recommended that counties “research” the fair market value, and document the steps taken to determine the value of the property. For example, when selling real property, the county should note the assessed value and look at the price of comparable properties recently sold in the area. When selling vehicles or equipment, look at the book value and check the prices of similar items offered for sale in the paper or on various websites. And, while not required to sell through a competitive bid process, that is certainly always a good way to establish that the property was sold at the best price possible.
Q: Can the county buy from or sell property to another governmental entity without competitively bidding the item?
A: Again, while there is no statutory law specifically addressing this issue, the Attorney General’s office has consistently held that governmental entities can buy and sell property from each other without going through a competitive bid process. (See, e.g., AG’s Opinion # 271 and #91-131.) In this instance, public funds are being used for the purchase of public property – and each governmental entity involved in the transaction has the same public interest in obtaining the best value at the lowest and fairest cost to the taxpayer.
Q: Can the county buy or sell property through an auction?
A: The county can sell property through an auction. This can be a very good way to show that the county received the best price available. However, it is sometimes a good idea to set a minimum bid to ensure that there is a reasonable effort to get a reasonable price, and much consideration should be given to the “cost” of selling property in this manner.
The county CANNOT, however, purchase property at a public auction. (See AG’s Opinion # 91-037.) The competitive bid law requires that counties purchase most goods and services through a sealed bid process, and that it purchase from the lowest responsible bidder. These requirements cannot be met through an auction, where the prices are not sealed and the award is made to the highest bidder.
There may be one very limited exception to this rule. As noted above, counties can buy and sell property to other governmental entities without competitive bidding. Therefore, counties can probably purchase items from a government auction, but ONLY if the auction is performed directly by employees of the governmental entity selling the property and none of the purchase price is a service fee or percentage paid to an auctioneer or sales person.
Q: Must the county competitive bid for the services of an auctioneer?
A: While there do not appear to be any cases or attorney general’s opinions directly on point to this issue, it has generally been the view of the Office of the Examiners of Public Accounts that an auctioneer would fall under the “professional services” exception to the competitive bid law, and that the services of the auctioneer need not be let out for bid. As mentioned above, however, it is a good idea to “shop” these services where possible to ensure that the fees paid for auctioneering services are not cutting too deeply into the proceeds received by the county from the sale.
Q: Can the sheriff purchase real or personal property and hold title in his or her name?
A: The Attorney General’s office has consistently held that the sheriff does not have the statutory authority to enter into contracts or to hold title to real or personal property. For example, in AG’s Opinion # 99-187, that office stated, “The sheriff is not given the statutory authority to own or lease real property, nor is he given the authority to enter into a contract for . . . an office building. The county commission is charged with providing the sheriff necessary equipment and quarters.” In AG’s Opinion # 2001-202, that office held that any property deeded to the sheriff vests title in the county commission.
I hope this information is helpful – and that I can add to it in the future. Of course, this is not intended to discourage calls from county officials and employees, which I thoroughly enjoy, but we all are very busy and usually need quick answers to complex questions. Far too often, there is no clear answer – so it is nice to have the few available answers at our fingertips.
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