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P O L I C Y

CITY OF VICTOR HARBOR of 12

Policy Name

Sale & Disposal of Land and other Assets

Policy Category

Statutory

Department / Officer

Corporate and Community Services / Director

Date Adopted

23 June 2008

Date/s Reviewed

24 June 2013, 19 December 2016

Review Frequency

Biennially

Strategic Plan Reference

4.11 Manage Council’s financial assets to improve financial sustainability

4.12 Continue Infrastructure and Asset Management Planning 4.2 Ensure efficient legislative compliance

Attachments

Nil

1. Purpose

The purpose of this policy is to:

Establish the framework for the sale, lease and/or disposal of land or other

Council assets.

Define the methods by which land and assets are disposed of.

Demonstrate accountability and responsibility of Council to ratepayers.

Be fair and equitable to all parties involved.

Enable all processes to be monitored and recorded.

Ensure that the best possible outcome is achieved for the Council.

2. Scope

This policy covers physical assets owned by Council including land, buildings, plant,

machinery and equipment.

This policy does not cover:

Land sold by Council for the non-payment of rates

Disposal of goods which are not owned by Council, such as abandoned vehicles

As these are dealt with in the Act.

Note: For changeover / replacement of light fleet, plant and heavy vehicles – refer to

Council’s ‘Light Fleet, Plant and Heavy Vehicle Change Over/Replacement Policy’

Sale and Disposal of Land & Other Assets


3. Policy Statement (Summary)

Council is committed to a transparent and consistent process for the sale and/or disposal of

land or other Council assets.

4. Legislation and Compliance

Section 49(1) of the Act states that Council must prepare and adopt a Policy on the sale or

disposal of land or other assets and should include:

the circumstances where Council will sell or dispose of land or other assets;

provide a fair and transparent process for calling tenders and entering into

contracts;

provide for the recording of reasons for entering into contracts other than those

resulting from a tender process; and

be consistent with any requirement prescribed by the Regulations.

Section 49(a1) of the Act requires Council to develop and maintain policies, practices and

procedures directed towards:

obtaining value in the expenditure of public money; and

providing for ethical and fair treatment of participants; and

ensuring probity, accountability and transparency in all disposal processes.

Section 201 of the Act makes provision for Council to sell or dispose of an interest in land

and sets out the circumstances under which Council can dispose of community land or land

forming a road or part of a road. All requirements must be complied with.

Other major legislative requirements that may be relevant to the application of this policy

include but may not be limited to the following:

Local Government Act 1999

Local Government (General) Regulations 2013

Regulation 23 – Register of community land

Real Property Act 1886

Land and Business (Sale and Conveyancing) Act 1994

Development Act 1993

Residential Tenancies Act 1995

Retail and Commercial Leases Act 1995 (SA) Roads (opening and closing) Act 1991

Strata Titles Act 1988

Crown Land Management Act 2009

Community Titles Act 1996

Land Acquisition Act 196

5. Definitions

In this Policy, unless the contrary intention appears, these words have the following

meanings:



Asset: any physical item that the Council owns and that has at any time been

treated pursuant to the Australian Accounting Standards as an ‘asset’, and includes Major

and Minor Plant and Equipment. It does not include financial investments or finance

related activities, trees or land.

Land: includes community land, vacant land, operational land, road reserves, any legal

interest in land, and any other land-related assets, including all buildings (community and

operational) on Land.

Major Plant and Equipment: includes all major machinery and equipment owned by the

Council. It includes all trucks, graders, other operating machinery and major plant items. It

does not include Minor Plant and Equipment.(Refer Council’s Light Fleet, Plant and Heavy

Vehicle Change Over/Replacement Policy).

Minor Plant and Equipment: includes all minor plant and equipment owned by Council. It

includes all loose tools, store items, furniture, information and technology (IT)

communication equipment, second hand items removed from Major Plant and Equipment

(such as air conditioners, bricks and pavers, IT equipment) and surplus bulk items (such as

sand and gravel).

Information & Communication Technology Equipment: includes items such as mobile

phones, smart phones, tablet’s, notebooks, desktop computers, lap top computers,

monitors, desk phones, printers, copiers, radios, servers, wireless equipment, routers,

modems, keyboards, mice, cables, digital cameras or other peripherals.

6. Policy Content

6.1. Principles

Council must have regard to the following principles in its disposal of land and assets:

6.1.1. Encouragement of open and effective competition.

6.1.2. Obtaining value for money (this is not restricted to price alone).

6.1.3. An assessment of value for money must include consideration of:

the contribution to Council’s long term financial plan and strategic

management plans;

any relevant direct and indirect benefits to Council, both tangible and

intangible;

efficiency and effectiveness;

the costs of various disposal methods;

internal administration costs;

risk exposure; and

the value of any associated environmental benefits.



6.1.4. Ethical behaviour and fair dealing – Council is to behave with impartiality,

fairness, independence, openness and integrity in all discussions and

negotiations.

6.1.5. Probity, accountability, transparency and reporting.

6.1.6. Ensuring compliance with all relevant legislation (refer heading 4).

As a general rule, the sale of assets to staff/councilors is not to occur outside of a public

process and the tender/interest submitted contains the highest bid.

Direct negotiation between Council and a proponent without first undergoing a genuine

competitive process should be avoided. This should only occur where it can clearly be

shown that there are no other purchasers. However the following circumstances may

warrant or justify such negotiations:

When the value of the transaction is very low relative to the cost of conducting a

competitive process this could include small amounts of redundant office furniture,

IT equipment, and courtesy gifts of a token amount e.g. sale of filing cabinet to the

Mayor not re-elected at the end of a four year term.

When a competitive process has failed to produce an advantageous or satisfactory

offer and Council does not expect a repeat of the process to produce a better result.

In such circumstances Council may choose to negotiate directly with the ‘least

unsatisfactory’ of the available proponents, or another proponent that has

expressed a genuine interest.

6.2. Considerations prior to Disposal of Land and Assets

Any decision to dispose of land and assets will be made after considering (where

applicable):

the usefulness of the land or asset;

the current market value of the land or asset;

the annual cost of maintenance;

any alternative future use of the land or asset;

any duplication of the land or asset or the service provided by the land or asset e.g.

location to a similar facility;

any impact the disposal of the land or asset may have on the community

(community need and sensitivity);

any cultural or historical significance of the land or asset;

the positive and negative impacts the disposal of the land or assets may have on

the operations of the Council;

the long term plans and strategic direction of the Council;

the remaining useful life, particularly of an asset;

a benefit and risk analysis of the proposed disposal;

the results of any community consultation process;



any restrictions on the proposed disposal;

the content of any community land management plan; and

any other relevant policies of the Council, including Internal Financial Control Policy,

Light Fleet, Plant and Heavy Vehicles Change Over/Replacement Policy, Prudential

Policy.

6.4. Methods of Disposal - Land

The Council may resolve to dispose of land.

6.4.1 Where the land forms or formed a road or part of a road, the Council must

ensure that the land is closed under the Roads Opening and Closing Act

1991 (SA) prior to its disposal.

6.4.2 Where land is classified as community land, the Council must:

undertake Public Consultation in accordance with the Act and the

Council’s Public Consultation Policy; and

ensure that the process for the revocation of the classification of land as

community land has been concluded prior to its disposal; and

comply with all other requirements under the Act in respect to the

disposal of community land.

6.4.3 Where the Council proposes to dispose of land through the grant of a

leasehold interest, the Council must have complied with its obligations under

the Act, including its public consultation obligations under Section 202 of the

Act.

6.4.4 Council will, where appropriate, dispose of land through one of the following

methods:

Open Market Sale - advertisement for disposal of the land through

printed and other accepted media or by procuring the services of a

licensed real estate agent and/or auctioneer (where a public auction fails

to realise a sale, the Chief Executive Officer is the delegated authority to

dispose of the land at the best available price, provided that the offer is

at or above the reserve sale price of the land).

Expressions of interest – seeking expressions of interest for the land.

Select tender – seeking tenders from a selected group of persons or

companies.

Open tender – openly seeking bids through tenders, including public

auction.

By negotiation – with owners of land adjoining the land or others with a

pre- existing interest in the land, or where the land is to be used by a

purchaser whose purpose for the land is consistent with the Council’s

strategic objectives for the land or for the purpose of exchanging land.



6.4.5 Selection of a suitable disposal method will include consideration of (where

appropriate):

the number of known potential purchasers of the land;

the original intention for the use of the land;

the current and possible preferred future use of the land;

the opportunity to promote local economic growth and development;

delegation limits taking into consideration accountability, responsibility,

operational efficiency and urgency of the disposal;

the total estimated value of the disposal; and

compliance with statutory and other obligations.

6.4.6 Council will not dispose of land to any Council Member or employee of the

Council who has been involved in any process related to a decision to

dispose of the land and/or the establishment of a reserve price.

6.4.7 If land is to be auctioned or placed on the open market or disposed of by an

expression of interest, then (unless the Council resolves otherwise) one

independent valuation must be obtained to establish the reserve price for the

land. The independent valuation must be made no more than 6 months prior

to the proposed disposal.

6.4.8 If the land is to be disposed of via a select tender or direct sale, then an

independent valuation must be obtained to ensure that an appropriate

market value is obtained. The independent valuation must be made no more

than six months prior to the proposed disposal.

6.4.9 Council will seek to dispose of land at or above current market valuation by

whichever method is likely to provide the Council with a maximum return,

unless there are reasons for the Council to accept a lesser return which is

consistent with the Council’s overall strategic direction.

6.4.10 If the disposal is not to be on the open market, the disposal should be at or

above the current market valuation (with due regard to all associated costs

to achieve the transaction or such other amount as the Council resolves).

6.5 Methods of Disposal - Assets

6.5.1 The sale of assets (both Major and Minor Plant and Equipment) will be the

responsibility of the Chief Executive Officer or delegate including, to

determine the most appropriate method of disposal, managing potential risks

of corruption and to ensure that the process is documented (also refer to

Council’s Light Fleet, Plant and Heavy Vehicle Changeover/Replacement

Policy).

6.5.2 The value of surplus assets should be determined by the Chief Executive

Officer or delegate with reference to both Council’s Asset Register (located

in Synergy) and Market Value unless being disposed to the highest bid in an

open competitive process.



6.5.3 The Council will where appropriate, dispose of Assets through one of the

following methods:

Trade-in: trading in equipment to suppliers

Trading in surplus goods can be an efficient means of disposal, and a

convenient way to upgrade equipment such as plant. Any decision to

trade-in surplus goods must be based on a clear analysis of the benefits

of the trade-in as opposed to separate sale of the surplus goods.

Expressions of interest: seeking expressions of interest from buyers

Council may determine to dispose of items by advertising for expressions

of interest or quotations where:

o The items are of low value;

o The costs of disposal are disproportionate to the expected

returns; or

o There is very limited interest.

The approving officer is to satisfy him/herself that the negotiated prices

are reasonable and where possible equal to, or better than, recent prices

obtained for similar goods by auction or tender.

For items below $500 Council may call for register of interest by

Community groups and individuals, including staff and Elected Members.

Select tender: seeking tenders from a selected group of persons or

companies.

Open tender: openly seeking bids through tenders

o Tendering for the disposal of goods is to be conducted in

accordance with Council’s Procurement Policy.

Public auction: advertising for auction through the local paper and, where

appropriate, a paper circulating in the State, or procuring the services of

an auctioneer in accordance with Council’s Procurement Policy.

Public auction maximises the opportunity for public participation in the

disposal process and is the appropriate method when:

There is a public demand for the items.

Alternative disposal methods are unlikely to realise higher

revenue; and

The costs associated with the auction can be justified in relation

to the expected revenue from the sale.



Sale or Donation to other Agencies

Where low value items are no longer required and there is no realistic

market, a community benefit can be gained or the cost of alternative

disposal methods are excessive in relation to the value, the Chief

Executive Officer may provide approval for the items to be:

o sold at a negotiated price

o donated to approved charities or non-profit organisations.

This method of disposal may not be used for assets with an estimated

value of more than $2,000.

Where a number of community groups express interest in the same

asset (or assets) then Council will conduct a draw to allot the asset (or

assets). If there is a reasonable expectation that similar assets may be

available as donations in the future the Council may allocate the asset

(or assets) to a specific community group or groups on the basis that the

other groups will receive a future donation.

Council occasionally receives requests from community, charity or non-

profit organisations seeking the donation or concessional sales of

surplus goods. At times Council may invite such organisations to submit

proposals for the donation of surplus or obsolete goods.

However before donating items, all avenues for recouping a fair value for

the item in a cost effective manner should be explored. Approval to

donate surplus equipment must be obtained from the Chief Executive

Officer or delegate

Recycle or disposal to landfill

Any item deemed to have no value, or unserviceable equipment beyond

economic repair, may be disposed of at Council’s landfill, preferably by

recycling. Dumping should only be performed where dumping of the

item/s is not wasteful, hazardous or environmentally undesirable. Any

item which is dumped should be documented to indicate that proper

disposal has taken place. Some items such as electrical tools, equipment

and furniture require certification by the Chief Executive Officer or

delegate that they are beyond economical repair.

6.5.4 The disposal method chosen must be appropriate to the nature, quantity and

location of goods/item, and promote fair and effective competition to the

greatest extent possible. The principles of waste hierarchy are to be

applied with all options to reduce, reuse and recycle being considered.



6.5.5 Selection of a suitable method will include consideration of (where

appropriate):

the public demand and interest in the asset;

the method most likely to return the highest revenue;

the costs of the disposal method compared to the expected returns;

compliance with statutory and other obligations.

the value of the asset and whether it is Major Plant and Equipment or

Minor Plant and Equipment.

6.6 Information Technology Equipment

6.6.1 Servers and network equipment, desktop computers, laptop computers,

copiers, servers, wireless equipment and printers

A computer service/retail company may be contracted to provide a

market place valuation of equipment. The Manager Information

Technology and Manager Finance will then determine a sale price based

on the market place valuation and other commercial factors.

6.6.2. Peripheral equipment such as monitors, mobile phones, smart phones,

tablets, notebooks, desk phones, radios, keyboards, routers, mice,

cables, digital cameras or other small IT equipment valued at less than

$200.

The ICT Manager and the Finance Manager will determine a sale price

based on second hand advertisements and other market indicators.

In addition to the methods of disposal set out in this Policy, disposal may

be made via:

Registrations of interest – interests will be sought and recorded,

where the number of items to be offered for sale is less than the

number of registrations of interest, then a ballot will be conducted by

the Manager IT and Manager Finance.

On-line Auction.

External disposal agents may be sought to remove all goods

intended for disposal. The Manager IT will secure quotes from at

least three disposal agencies for an estimate of the value of the

goods (if they have any value) or for the cost of removal. The most

competitive quote will be awarded the work.

6.7 Preparing Assets for Sale

A check must be carried out to ensure assets do not contain:

Additional items not intended for sale;

Confidential documents (records, files, papers);



Documents on Council letterhead or which may be used for fraudulent

purposes;

Software (which could lead to a breach of licence or contain confidential data);

Hazardous materials;

As much as is practical any City of Victor Harbor Council identifying mark should be

removed or obliterated. Spare parts held for a particular item should where possible

be disposed of in one parcel with the asset.

For the sale of IT equipment all Council data and software application should be

removed from any hard drives.

The Chief Executive Officer or delegate should be consulted in relation to setting a

reserve price and/or determining the value of an asset/s.

It is to be made clear to all prospective buyers that assets are sold as-is and at the

buyers risk. Buyers are to rely on their own enquiries regarding the condition and

workability of assets. Purchasers of assets must be required to agree in writing that

before purchasing any asset that no warranty or support is given by Council in

respect of the suitability and condition of the asset for the purchaser and that

Council will not be responsible for the asset in any respect following sale.

The Charity/community group should remove the asset themselves at no cost to the

Council.

6.8 Conflict of Interest

The officer responsible for the disposal of any Council asset and the relevant

Director or Manager must ensure that no conflict of interest occurs in or as a result

of the asset disposal process.

6.9 Gallery

Deaccessioning of assets held in collections at Victor Harbor may occur under the

protocols that apply to the collections. Disposal of deaccessioned items may be by:

Reputable dealers

Public Auction

Donation

Exchange with another gallery

Exchange with the artist for a more relevant or valuable work.

6.10 Museum/Interpretive Centre (Whale Centre)

Deaccessioning of assets held in collections at the Whale Centre may occur under the

protocols that apply to the collections. Disposal of deaccessioned items may be by:

Return to the donor

Exchange, gift or sale to another Centre or institution.

Use for hands-on in the Whale Centre or outside.

Public tender or sale



Recycling or destruction

6.11 Public Consultation

6.11.1 Land

Staff must undertake public consultation in respect of its proposed disposals

in accordance with the Act and its public consultation policy – refer

‘Legislation and Compliance’ section of this Policy.

6.11.2 Major and Minor Plant and Equipment

Pubic consultation need not occur in respect of the sale or disposal of other

assets unless they hold significant community interest and then the decision

to seek public consultation will be a decision of the Council at the time.

Larger items of expenditure and sale will generally have been approved

through the budget process and/or via other Council Policies eg Light Fleet,

Plant and Heavy Vehicles Policy.

7 Risk Management

This policy has been developed to ensure compliance with statutory and other obligations.

Council Officers are responsible for ensuring appropriate practices and procedures of

internal control and risk management are adhered to during sale and disposal activities.

All sale and disposal contracts should be risk assessed in accordance with Council’s Risk

Management Framework and Strategy and consideration given to the use of a probity

auditor for high risk and high value disposals.

The review of this Policy will include presentation to Council’s Audit Committee.

8 Implementation/Delegations

Council delegates the Chief Executive Officer with the authority to make decisions

regarding the matters covered in this policy as detailed in the table below and

acknowledges that the Chief Executive Officer may sub-delegate matters related to this

Policy to other employees (refer Council’s Delegations Register).

Council or its officers with delegated authority will, when making decisions under this

Policy, act in accordance with the Council’s budget, relevant policies, plans and resolutions.

Asset Category Council requirements Delegations

Land Minute of Council to approve sale and disposal

The Chief Executive Officer (or delegate) is Council’s delegated officer for negotiating a sale price of land in accordance with the principles contained in this Policy



Major Plant & Equipment (as defined in this Policy)

Minute of Council to approve Sale and Disposal Exclusions:

Light Fleet, Plant and Heavy Vehicles

Inclusion and identification of sale or disposal within the adopted annual budget.

The Chief Executive Officer (or

delegate) is Council’s delegated officer for negotiating Light Fleet and Heavy Vehicle change over replacement in accordance with Council’s Policy. Sale tenders may be awarded by the Chief Executive Officer in consultation with the relevant Director.

Minor Plant & Equipment (as defined in this Policy)

No specific requirements The Chief Executive Officer (or

delegate) is Council’s delegated officer

for negotiating the sale of minor plant

and equipment.

8.1 Records

Staff must record reasons for utilising a specific disposal method and where it uses a

disposal method other than a tendering process (Section 49(2)(c) of the Act.

8.2 Exemptions from this Policy

This Policy contains general guidelines to be followed by Council in its disposal activities.

There may be emergencies, or disposals in which a tender process will not necessarily

deliver the best outcome for the Council, and other market approaches may be more

appropriate.

In certain circumstances, and subject to Council approval, it may be necessary to waive

application of this Policy and pursue a method which will bring the best outcome for the

Council. Staff must record Council’s reasons in writing for waiving application of this

Policy.

9 Related Documents

Light Fleet, Plant and Heavy Vehicle Change Over/Replacement Policy

Procurement Policy

Major Quotation and Tender Procedure and Tender Evaluation Procedure

Asset Management Policy

Internal Control Policy and Procedures Fraud and Corruption Prevention Policy

Delegation’s Register

Community Land Management Plans

Public Consultation Policy

10 Availability of Policy

This policy is available on Council’s website at www.victor.sa.gov.au. It may also be

inspected or purchased at the Principal Office of the Council at 1 Bay Road, Victor Harbor.

http://www.victor.sa.gov.au/