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9.c) Staff Report-Disposal of Old Engine 5180 �� 1, -i #--� ���� � �� SCANDIA Staff Renort Date of Meeting: October 15, 2013 To: City Council From: Kristina Handt,City Administrator Re: Disposal of Old Engine 5180 Background: With the arrival of the new Engine 5180,the Council should determine what to do with the old engine. The City's purchasing policy also covers the disposition of surplus property. Pursuant to that policy,the disposition of any item valued at $100 or more must be preapproved by the City Council. Furthermore, the City Council must approve of the method of disposition. Issue: Should the City Council approve of the disposition of old engine 5180? If so,by what method? Proposal Details: In 2010 when the City last disposed of a fire truck,the City used do-bid.com far auction services. They charged the City a 10%commission(if the sale price would have gone over$7,500 the commission would have been 8%)and over$100 in other fees for advertising,etc. They also charge a buyer's premium. Staff has requested updated information from them but has not received any response at this time. Staff is proposing the Council consider using an alternative online auction site this time. Govdeals could structure the deal so that the entire 7.5%commission fee is paid by the buyer(this is most commonly used by other municipal clients). The City could pay a 5%commission if they wanted Govdeals to handle collecting payment. There are no additional charges for advertising or other processing fees. Staff would recommend having Govdeals collect the payment. This will allow the buyer to use other forms of payment the City is not equipped to handle,i.e. credit cards. Additional information about Govdeals and their standard terms is included in your packet. Govdeals also allows us to set a reserve price for items. If the reserve price is not met,there is no charge to the City. Based on a review of other fire trucks sold on the site, staff would recommend a reserve of � $5,000. Fiscal Impact: Any funds from the sale of the old engine would be placed into the Equipment Replacement Fund. Options: 1) Approve the disposal of old engine 5180 through Govdeals.com(7.5%paid by buyer, 5%paid by City) 2) Approve the disposal of old engine 5180 through do-bid.com 3) Approve the disposal of old engine 5180 through some other means 4) Do not approve the disposal of old engine 5180 Recommendation: Option 1. GovDeals talking points 5200+Sellers in 48 States&Canada—First Online Auction over ten years ago—Sold over$130 Million in last 12 months Welcome to GovDeals.... The experienced government surplus auction service provider with 5200+ sellers in 48 states, including 17 State Surplus programs with expansion into Canada..... GovDeals basics ..... An online solution often described as eBay-like and built for government surplus. Only sells surplus and confiscated items for government entities.... cities, counties, states, school boards, public utilities, law enforcement, etc. � Any registered and verified bidder may buy items on GovDeals.com. 300,000+ GovDeals verified bidders compete online for our 5200+ sellers' surplus items. Doing business with GovDeals ..... GovDeals offers the same fee schedule to all sellers and only charges for sold items.... no other charges to seller. An Annual Volume Discount Program is in place for higher volume sellers and cooperative users. Optional Financial Settlement Services (FSS)to electronically collect funds from winning bidders. Flexible Pricing Options (FPO) allow distribution of fees between seller and buyer. Patented Tiered-Redistribution functionality facilitates the reallocation of assets with no fee. Non-exclusive Online Sign-up Process or use of one of our National Cooperative Awards allows sellers to use GovDeals only when they wish. GovDeals' direct staff of 64 full time employees includes 32 Regionally and field based sales reps and client support reps and continues to work hard in support of your program long after you sign up (onsite training and support, help desk, marketing, asset promotion and press release support). At no additional charge, we actively promote your equipment, more expensive or unusual items after conducting market research to determine the best buyer audience. GovDeals aggressively works to identify, register, monitor and support bidders,which is the key to high prices for your items at auction. This results in a remarkably low auction default rate of<5%. Part of the Liquidity Services, Inc. family (NASDAQ:LQD7�. LSI is a growing and financially strong company that has transacted over 2MM Bidders and transacted over$1.0 Billion in online sales annually. The GovDeals advantages... Our clients use GovDeals because they net considerably more for their surplus on our site. Items may be sold immediately, rather than waiting for your next traditional auction or sealed bid ad. Items are exposed to a huge audience for a longer period of time, creating more competition. GovDeals is a Green Solution as items may be left where they are, `as is',thus eliminating unnecessary storage and costly transportation to an auction site. Results and satisfied governrraent clients best tell the GovDeals story.... Anyone browsing our site may see the complete auction details and results of EVERY auction item sold during the past 12 months. There are no secrets! This allows you to compare our results to your current solution and see how powerful and successful the GovDeals program is. Contact GovDeals'Sales Support Team for additional information:salessupvort(a��ovdeals.com 1 Rev. 1/13 GovDeals Financial Settlement Services (FSS) It is understood the Client elects GovDeals to collect all proceeds due the Client from the winning bidder and remit the proceeds to the Client less the GovDeals fee. Optionally,the Client may elect to not have GovDeals withhold the fees. GovDeals will charge the winning bidder a `Buyer's Premium", therefore, the Client is not allowed to charge the winning bidder an additional "Buyer's Premium". GovDeals will collect all proceeds from the winning bidder, including the `Buyer's Premium" through PayPal, credit card or wire transfer. This is the only means of payment by the bidder. The Client will not release an asset to the winning bidder until the Client has received verification from GovDeals that payment has been received from the winning bidder. Prior to an item being released to the winning bidder, the Client will ensure the winning bidder or his/her agent has signed a"Bill of Sale"containing the following notation: "Asset is sold as is, where is and without warranty. Once the asset is removed from the seller's premises there is no refund of monies previously paid". The Bill of Sale must be printed from the Client Asset Server(CAS). Any other"Bill of Sale" used by the Client must be submitted to GovDeals for approval. No proceeds will be remitted to the Client for any asset sold without verification of payment from GovDeals and verification from the Client the item has been picked up by the winning bidder. Approved payment from the winning bidder through PayPal, credit card or wire transfer will be noted in CAS. It is the Client's responsibility to notify GovDeals when an item has been picked up, which is accomplished by the Client accessing CAS and selecting the "Picked Up" option from the "Paid, not picked up"report. GovDeals will remit all proceeds collected, less the "Buyer's Premium" and the GovDeals fee to the Client on a weekly basis for all assets marked in CAS as `Picked Up'. However, if you choose to be invoiced for the GovDeals' fee, GovDeals will remit all proceeds collected, less the "Buyer's Premium" only. All proceeds will be remitted electronically by Automatic Clearing House (ACH) unless elected on the following page of this exhibit to receive a paper check. Whether proceeds are remitted electronically via ACH or via paper check, a detailed backup will be submitted to the Client to support the amount remitted. Under no circumstance will the Client collect any proceeds directly from the winning bidder and if requested to do so, the Client should refer the winning bidder directly to GovDeals for payment instructions. GovDeals will absorb all costs of Charge Backs by PayPal or a credit card company where an item is released to the winning bidder after the Client receives proper payment notification from GovDeals, GovDeals receives proper pickup notification from the Client and the Client obtained and retained a signed `Bill of Sale"from the winning bidder. GovDeals will refund proceeds collected to the winning bidder in those rare occasions where the winning bidder pays for an asset but never picks it up and subsequently convinces PayPal or the credit card company to withdraw the amount from GovDeals' bank account. It is the Client's responsibility to request a credit on the asset paid for but not picked up as soon as the allowable pick up time passes. By taking the credit, it insures GovDeals will not charge the Client a fee and will allow the Client to resell the asset. If the asset is mistakenly placed in `picked up' status by the Client and GovDeals has remitted payment,the Client agrees to refund this amount back to GovDeals. A GovDeals' Client Services Representative or a GovDeals Help Desk Representative will train the Client on how to effectively use the Financial Settlement Services feature and provide ongoing support as needed. There are no additional costs to the Client for training and support. GovDeals is covered by a Crime lnsurance Policy with a limit of$5,000,000, which will protect the Client against any loss of funds. 2 Rev. 1/13 GovDeals Flexible Pricing Options (FPO) The Client has the option to choose from the following alternative plan: Client Elects GovDeals Financial Settlement Services (FSS) allowing GovDeals to Collect Proceeds. Only one option below can be used and once this option is chosen, it cannot be changed for twelve(12) months. *Option Bl: The Client pays a 7.5%* fee and the winning bidder pays a 5%Buyers Premium. ** Option B2: The Client pays a 5%* fee and the winning bidder pays a 7.5%Buyers Premium. Option B3: The Client pays a 2.5%* fee and the winning bidder pays a 10%Buyers Premium. Option B4: The Client pays zero percent fees(0%)and the winning bidder pays a 12.50%Buyers Premium. *Tiered Fee Reduction Schedule for Option B1 Only GovDeals' Tiered Fee Reduction Schedule below explains how the base auction fee of 7.5%is reduced for assets that sell in excess of$100,000 on www.govdeals.com. 1. When an asset sells for up to$100,000 in a winning bid,the GovDeals fee is seven and one-half percent(7.5%*)of the winning bid,but not less than $5.00. 2. Where an asset sells for more than $100,000,but less than$500,000 the GovDeals fee is seven and one-half percent(7.5%) of the winning bid up to$]00,000, plus five and one-half percent(5.5%)of the winning bid for auction proceeds in excess of $100,000 up to$500,000. 3. Where an asset sells for greater than $500,000 the GovDeals fee is seven and one-half percent(7.5%)of the first$100,000 of the winning bid,plus a fee of five and one-half percent(5.5%)of the next$400,000 of the winning bid,plus a fee of three and one-half percent(3.5%)of the bid amount in excess of$500,000. 4. Where an asset sells for greater than$1,000,000 the GovDeals fee is seven and one-half percent(7.5%)of the first $]00,000 of the winning bid,plus a fee of five and one-half percent(5.5%)of the next$400,000 of the winning bid,plus a fee of three and one-half percent(3.5%)of the next$500,000 of the winning bid,plus a fee of two and one-half percent (2.5%)of the bid amount in excess of$1,000,000. **Subject to a minimum per asset/lot fee of$5.00. 3 Rev. 1/13 GovDeals Client Logo Here Client Name City, State Online Sales - Terms and Conditions All bidders and other participants of this service agree thev have read and fully understand these terms and agree to be bound therebv. Guaranty Waiver. All assets are offered for sale "AS IS, WHERE IS." Seller makes no warranty, guaranty or representation of any kind, expressed or implied, as to the merchantability or fitness for any purpose of the property offered for sale. The Buyer is not entitled to any payment for loss of profit or any other money damages—special, direct, indirect or consequential. Description Warranty. Selier warrants to the Buyer the property offered for sale will conform to its description. Any claim for misdescription must be made prior to removal of the property. If Seller confirms the property does not conform to the description, Seller will keep the property and refund any money paid. The liability of the Seller shall not exceed the actual purchase price of the property. Please note upon removal of the property, all sales are final. Personal and property risk. Persons attending during exhibition, sale or removal of goods assume all risks of damage of or loss to person and property and specifically release the seller and GovDeals from liability therefore. Inspection. Most assets offered for sale are used and may contain defects not immediately detectable. Bidders ma.y inspect the propert�prior to biddin�. Bidders must adhere to the inspection dates and times indicated in the asset description. See special instructions on each asset page for inspection details. Consideration of Bid. Seller reserves the right to reject any and all bids and to withdraw from sale any of the assets listed. Buyer's Certificate. Successful bidders will receive a Buyer's Certificate by email from GovDeals. Buyers Premium. If a Buyers Premium is shown on the auction page bidder box, then that amount (expressed as a percentage of the final selling price) will be added to the final selling price of all items in addition to any taxes imposed. Payment. Payment in full is due not later than 5 business days from the time and date of the Buyers Certificate. Payment must be made electronically through the GovDeals Website. Acceptable forms of pavment are: • PayPal • Wire Transfer • Visa • MasterCard • American Express • Discover PayPal and Credit Card purchases are limited to below$5,000.00. If the winning bid plus applicable taxes, if any indicated, and the buyer's premium, equals more than $4,999.99, PayPal and Credit Cards may not be used. If Wire Transfer is chosen, a Wire Transfer Transaction Summary page will provide payment and account information. The Wire Transfer must be completed within 5 days. Removal. All assets must be removed within ten (10) business days from the time and date of issuance of the Buyer's Certificate. Purchases will be released onlv upon receipt of payment as snecified. Successful bidders are responsible for loading and removal of any and all property awarded to them from the place where the property is located as indicated on the website and in the Buyer's Certificate. The Buyer will make all arrangements and perform all work necessary, including packing, loading and transportation of the property. Under no circumstances will Seller assume responsibility for packing, loading or shipping. See special instructions on each asset page for removal details. A daily storage fee of$10.00 may be charged for any item not removed within the ten (10) business days allowed and stated on the Buyer's Certificate. Vehicle Titles. Seller will issue a title or certificate upon receipt of payment. Titles may be subject to restrictions as indicated in the asset description on the website. Default. Default shall include (1) failure to observe these terms and conditions; (2) failure to make good and timely payment; or (3) failure to remove all assets within the specified time. Default may result in termination of the contract and suspension from participation in all future sales until the default has been cured. If the Buyer fails in the performance of their obligations, Seller may exercise such rights and may pursue such remedies as are provided by law. Seller reserves the ri�ht to reclaim and resell all items not removed b t�specified removal date. Acceptance of Terms and Conditions. By submitting a bid, the bidder agrees they have read, fully understand and accept these Terms and Conditions, and agree to pay for and remove the property, by the dates and times specified. These Terms and Conditions are displaved at the top of each pa�e of each asset listed on GovDeals. Special Instructions apnearin� on the asset pa�e will override certain sections of the terms and conditions. State/Local Sales and/or Use Tax. Buyers may be subject to payment of State and/or local sales and/or use tax. Buyers are responsible for contacting seller or the appropriate tax office, completing any forms and paying any taxes that may be imposed. Sales to Employees. Employees of the Seller may bid on the property listed for auction, so long as they do NOT bid while on duty.