To
Surplus Property committees indexThe Law firm is considered an expert in the field. One can compare the proper procedures with the "actions" of the Superintendent in may cases without the board action that is required.
First that Advisory Committee must make a recommendation to the governing board as to whether the property should be declared surplus
And the board must take public action by a 2/3 vote.
Neither of these events have occurred before the publication of the notices which the Superintendent did in July
C.A.S.H. 2000 SCHOOLS FOR THE CENTURY ANNUAL CONFERENCE SACRAMENTO, CALIFORNIA
Real Estate Realities Workshop
February 23, 2000,10:45 a.m. to 12:05 p.m.
SALE [or lease] OF SURPLUS PROPERTY
Presented by: Lysa M. Saltzman, Esq. Best Best & Krieger, LLP
402 West Broadway Thirteenth Floor San Diego, California
Nothing in these materials should be construed as individual legal advice. Readers are cautioned to seek individualized legal assistance based on the detailed analysis of particular facts and situations.
Copyright 2000 by Best Best & Krieger LLP
I. Identifying Surplus Property
A. Definition of Surplus Property (Government Code § 54221(b)).
1. Surplus property is defined as land owned by a school district that is determined to be no longer necessary for school district purposes
2. Applies to both the sale and lease of surplus property.
B. 7-11 Advisory Committee (Education Code §17388 et. seq.)
1. Prior to selling district owned property, the governing board must appoint an advisory committee consisting of no less than 7 members and no more then 11 members in accordance with the criteria set forth in Education Code §17389. Members of the committee must be representative of each of the following:
a. Ethnic, age group, and socio-economic composition of the district
b. Business community (store owners, managers, supervisors)
c. Teachers
d. Landowners or renters with preference to be given to representatives of neighborhood associations
e. Administrators
f. Parents of students
g. Persons with expertise in environmental impact, legal contracts, building codes, land use and planning...
2. The 7-11 Advisory Committee has the duty of examining district enrollment, capacity and other data regarding school facilities needs and making recommendations to the governing board with respect to the identification of surplus property
a. Must establish a priority list of surplus property and provide for community input
II. Declaring School District Property as Surplus
A. Convene 7-11 Advisory Committee to examine the need for the existing school district property (Education Code §17388)
B. The 7-11 Advisory Committee must make a recommendation to the governing board as to whether the property should be declared surplus (Education Code §17388)
C. Upon recommendation by the 7-11 Advisory Committee, the governing board must adopt, at a regularly scheduled public meeting, a declaration of intention to sell surplus property by a 2/3 vote of all board members (Education Code §17466)
1. 5 member board needs 4 affirmative votes
2. 7 member board needs 5 affirmative votes
D. Adoption of Resolution of Intention to Sell Surplus Property (Education Code §17466)
1. The Resolution of Intention must be adopted by the governing board at a regular open meeting and must include:
a. Description of property proposed to be sold
b. Minimum sale price
(1) need recent appraisal
(2) consider zoning, use, etc.
c. Terms and conditions of sale
(1) general vs. specific
d. Commission to licensed real estate broker that district will pay out of the minimum sale price, if any ( See Education Code §17468)
e. Time and place in which sealed written bids will be received and considered by the board
(1) the bid opening must be at least 3 weeks after the date on which the board adopted the resolution of intention
(2) allow sufficient time for required public notices and to attract potential bidders
(3) consider delegating the review and opening of bids to staff and holding bid opening no more than 10 days prior to board meeting in which final bid will be considered (Education Code § 35161)
E. Publication of Resolution of Intention (Education Code §17469)
1. Immediately after adoption of the resolution of intention, the district must publish notice of the resolution at least once a week for 3 successive weeks in a newspaper of general circulation
2. The district must post copies of the resolution of intention signed by the board in 3 public places within the district at least 15 days before the date of the bid opening
F. Notice to Planning Commission (Government Code §65402)
1. The district must provide notice to the local planning commission of its intent to sell the property
G. Compliance with California Environmental Quality Act ("CEQA") (Public Resources Code §21000)
1. Filing of Notice of Exemption if applicable
III. Offering Surplus Property for Sale to Other Public Agencies
A. Prior to requesting bids for the purchase of the property, the district must submit a written offer for the sale of the property for park, recreational or open space purposes to the following: (Education Code 17464)
1. Any park or recreation department of the city and county in which the property is situated pursuant to Government Code §54220
2. Any regional park authority with jurisdiction over the property
3. Any applicable State Resource Agency
B. The district must offer the property for sale at fair market value in the following ways:
1. In writing and mailed no later than the date of the second publication notice (discussed below) to the following:
a. Director of General Services
b. UC Regents
c. Trustees of CSU
d. City in which property is located
e. County in which property is located
f. Public housing authority in the county where property is located
2. By public notice
a. Publish notice of intent to sell surplus property in a newspaper of general circulation in the district once a week for 3 successive weeks
(1) 3 publications in a newspaper of general publication published at least once a week with at least 5 days intervening between the publication dates
b. The public notice must be addressed to the following entities;
(1) Any public district
(2) Any public authority
(3) Any public agency
(4) Any public corporation
(5) Any other political subdivision in the state
(6) Federal government
(7) Non- profit charitable corporations
3. Any public entity has 60 days from the date of the third publication notice to notify the school district of its intent to purchase the property
C. District must take reasonable steps to notify the former property owner of its intent to sell the property in writing, by certified mail, at least 60 days before the board's adoption of the resolution of intention (Education Code §17470)
IV. The Bid Process
A. Preparing Bid Documents
1. Mandatory Bid Form
2. Bid Deposit
3. Purchase Agreement
4. Property Information File
B. Opening of Sealed Written Bids (Education Code §17472)
1. Hold bid opening at regular place of board meetings or regular place for all bids in accordance with the resolution of intention
2. Announce highest written bid
C. Calling for Oral Bids (Education Code §1 7473)
1. Once the highest written bid has been announced, the district must call for oral bids beginning with at least 5% above the highest written bid
2. Oral bidders should complete the bid form and submit a bid deposit prior to the call for oral bids
D. Identifying the Highest Responsible Bid
1. The highest bid submitted which conforms to all of the terms and conditions specified in the resolution of intention which is made by a responsible bidder
E. Accepting the Final Bid (Education Code §17472. §17475, §17476)
1. The board's final acceptance of a bid may be either on the same day as bid opening or at meeting to be held within 10 days of the bid opening
2. The board may accept the highest responsible bid (written or oral)
3. The board may reject all bids
4. The board may reject any and all bids, either written or oral, and withdraw the property from sale if it deems such action to be for the best public interest (Education Code §17476)
F. Failure to Comply with Surplus Property Procedures (Education Code §17483)
1. Failure to comply with Education Code §§ 17455-17484 will not invalidate the transfer or conveyance of real property to a purchaser for value
a. CAVEAT: This does not absolve the district from all liability
V. Waiver by the State Board of Education
A. The State Board of Education may grant waivers of some of the surplus sale provisions (Education Code § 33050-33052)
1. Generally limited to those situations in which the district has already complied with the statutory requirements and has been unable to consummate the sale of the property, or in which the granting of a waiver will not affect another state code provision or another agency's jurisdiction.
2. The following provisions cannot be waived:
a. Review and recommendation by 7-11 Advisory Committee (Education Code §17388)
b. Notice to Public agencies pursuant to Government Code §54220 (Education Code §17459 and §17464(a))
c. Use of sale proceeds (Education Code §17462)
3. Waiver information available at www.cde.ca.gov/waiver
B. Sending out requests for proposals to potential bidders
VI. Use of Funds from Sale of Surplus Property
A. Proceeds must be used for capital outlay or for costs of maintenance of school district property that the governing board determines will not recur within a five year period (Education Code §17462)
B. Proceeds from a lease of school district property with an option to purchase may be deposited into a restricted fund for the routine repair of district facilities for up to a five year period (Education Code §1 7462)
C. Proceeds may be deposited into the district's general fund for any general fund purpose if the district and the State Allocation Board have determined that the district has no anticipated need for additional sites or building construction for the five year period following the sale or lease of the property and that the district has no major deferred maintenance requirements (Education Code §1 7462)
D. Interest earned on the proceeds of a sale or lease of surplus property may be deposited into the general fund in accordance with Education Code §17463
1. Must have ADA of less than 10,001 in any given fiscal year
2. Must submit capital outlay plan to State Allocation Board
VII. Other Considerations
A. Effect on SB 50 School Facilities Needs Analysis (Government Code §65995.5(c)(2) and §65995.6(b)(1))
1. In preparation of the School Facilities Needs Analysis, the governing board must identify and consider any surplus property owned by the district that can be used as a school site or that is available for sale to finance school facilities
2. If a district has declared a site to be surplus, or has proceeds from the sale of a surplus site, the amount of the Level 2 Fee may be decreased
B. Exchange of School District Property (Education Code §17536 et. seq.)
1. As an alternative to the sale of surplus property, a school district may exchange any of its real property for real property owned by another person or private business without complying with the surplus property provisions
2. Prior to any exchange of property, the governing board must adopt a resolution by 2/3 vote of its members declaring its intention to exchange the property
a. Describe the properties to be exchanged
b. Include the terms and conditions of the exchange
C. Leased Land and State Funding
1. Under the Leroy F. Greene School Facilities Act, districts constructing school facilities on leased land cannot receive state funding ((Education Code §17070.70. 2 CCR §1859.74.1)
MANDATORY BID FORM
TO PURCHASE SURPLUS PROPERTY
___________ SCHOOL SITE
SUBMITTED BY
__________________________________________________
Type or Print Name of Bidder
The undersigned Bidder hereby submits the following written bid for the purchase of the real property known as the _______ School Site located at ______________, in the City of _______, State of_______, Assessor Parcel Number _______, (the "Property") from the _______ School District (the "District") on the following terms and conditions:
1. Purchase Price: The minimum written acceptable bid for the Property is ______________ Dollars ($_______). Bidder hereby submits the following bid for the purchase of the Property: __________________________________ Dollars ($ ).
2. Mandatory Bid Deposit: This Bid Form must be submitted with a Bid Deposit in the amount of ______________ Dollars ($_______) payable to the District by certified check or cashier's check. The Bid Deposit of the successful bidder shall be applied to the purchase price of the Property.
3. Interest on Bid Deposit: Interest earned on the Bid Deposit shall be paid to and retained by the District. Such interest shall be in addition to, and shall not apply towards the payment for the purchase price of the Property by the successful bidder.
4. Terms for Payment of Purchase Price: The Purchase Price shall be paid in cash by the successful bidder as follows:
A. Execution of Purchase and Sale Agreement. The successful bidder shall execute a Purchase and Sale Agreement, incorporated herein by this reference, with the District consistent with the terms and conditions herein and with Resolution No. ______ of the Board of Education of the District (the "Board"), upon the final acceptance of the successful bid by the Board.
B. Initial Deposit. The Bid Deposit paid by the successful bidder, excluding any interest paid thereon, shall constitute the "Initial Deposit" (the "Initial Deposit") for the purchase price of the Property, and shall be applied to the purchase price at the close of escrow. If the successful bidder fails to complete the purchase of the Property for any reason, the Initial Deposit and ________________________________________
Type or Print Name of Bidder any interest thereon shall be retained by the District to offset damages the District sustained as a result thereof
C. Additional Deposit. In addition to the Initial Deposit, the successful bidder shall pay to the District the additional sum of______________ Dollars ($_______) (the "Additional Deposit") on or before _______, 2000. The Additional Deposit shall be paid by certified check or cashier's check payable to the District. If the successful bidder fails to complete the purchase of the Property for any reason, the Additional Deposit and Initial Deposit, including any interest earned thereon, shall be retained by the District to offset damages the District sustained as a result thereof.
D. Balance of Purchase Price Due on Close of Escrow. The remaining balance of the purchase price of the Property, after crediting the Initial Deposit and Additional Deposit, excluding any interest earned thereon, shall be deposited by the successful bidder into escrow at least three (3) business days prior to the close of escrow in cash, by cashier's or certified check, or by wire transfer.
5. Escrow. Escrow shall be opened with _______ Title Company in_______, _______, upon delivery to the escrow holder of the executed Purchase and Sale Agreement. The Purchase and Sale Agreement shall constitute the escrow instructions.
A. Close of Escrow. Escrow shall close sixty (60) days after the Board's final acceptance of the successful bid and no later than_______, 2000. Escrow may be extended at the sole discretion of the District.
B. Escrow Costs and Expenses. The District and successful bidder shall each pay one-half (1/2) of all escrow fees and costs. The successful bidder shall pay all recording fees, all documentary transfer taxes, any survey or other due diligence costs, and any other fees and other real estate transaction taxes, fees, or costs by whatever name known as well as any additional premiums and endorsements or other coverage beyond a C.L.T.A. standard owner's policy of title insurance.
6. Taxes, Assessments and Other Fees. No real property taxes have been assessed against the Property while it has been owned by the District, thus there shall be no proration of real property taxes and assessments against the Property. The successful bidder shall be responsible for all real property taxes and assessments against the Property upon transfer of title, and any supplemental taxes and assessments, and other real property taxes assessed against the Property.
_______________________________________ Type or Print Name of Bidder
7. Transfer of Title and Title Insurance. Title to the Property shall be conveyed to the successful bidder by grant deed upon the close of escrow. Upon close of escrow, the District shall provide a C.L.T.A. standard owner's policy of title insurance from _______ Title Company issued in the amount equal to the purchase price of the Property.
8. Return of Bid Deposit If the Board rejects this bid, the Bid Deposit shall be returned to the Bidder within ten (10) work days after the Board's rejection of the bid. If the Board rejects all bids for the Property, all Bid Deposits received by the District shall be returned within ten (10) work days after the Board's final rejection of all bids. If the Board accepts this bid, the Bid Deposit shall be deemed the "Initial Deposit" and shall be applied to the purchase price of the Property at the close of escrow, or retained by the District to offset damages in the event the successful bidder fails to complete the purchase of the Property for any reason.
9. Default In the event the successful bidder fails to perform any if its obligations or satisfy the conditions of the Purchase and Sale Agreement within the specified time, the successful bidder shall forfeit all his or her rights to purchase the Property and the District shall retain the Initial Deposit and Additional Deposit, including all interest paid thereon, to offset damages sustained by the District.
10. Brokers Fees. The successful bidder will be solely responsible for payment of any finder's fee or commissions to real estate brokers or salespersons used or consulted by the successful bidder in connection with the purchase of the Property.
11. As Is Sale. The Property is sold in an "As Is" condition. The sale of the Property shall be made without any warranty, express or implied, and subject to all liens, easements, encumbrances and other exceptions to title, whether recorded or not. The District makes no representations or warranties, express or implied concerning the condition of the Property, locations of property lines, the exact area of the Property, the condition of any improvements on the Property or any environmental condition affecting the Property. The District does not assume any liability for any possible encumbrances on the Property. The District makes no warranty as to existing or future zoning or availability of utilities.
12. Due Diligence and Inspection of Property. Each bidder is responsible for conducting an independent inspection, investigation and analysis of the Property and completing any due diligence prior to submitting the Bid Form and Bid Deposit to the District for the purchase of the Property. Each bidder shall rely solely upon its own due diligence, independent inspection, investigation and analysis in purchasing the Property and shall not rely upon any information provided by the District in the Property Information File or any information otherwise provided by the District or any representative thereof. The information in the
____________________________________________ Type or Print Name of Bidder
Property Information File has been obtained from sources that are considered to be reliable, however, the District makes no warranties, representations or guarantees of any kind with respect to the information contained therein. The submission of the Bid Form and Bid Deposit constitute evidence of Bidder's independent investigation and due diligence with respect to the Property and shall be evidence of Bidder's acceptance of the Property "As Is."
13. Applicability of Developer Fees. The Property is and at all times shall remain subject to the payment of developer fees for school facilities impacts prior to issuance of building permits for construction of any structure on the Property, as mandated by state law and District policies in effect at the time of issuance of building permits.
14. Compliance with Applicable Laws. The successful bidder shall comply with all applicable state, federal, and local laws with respect to the Property.
15. Time is of the Essence. Time is of the essence in the performance of each of the duties and obligations of the successful bidder as provided in the Purchase and Sale Agreement.
16. Deadline for Receipt of Sealed Written Bids. This Bid Form and the Bid Deposit must be place in a sealed envelope marked "Bid Form and Bid Deposit for Surplus Property." The sealed envelope containing this Bid Form and Bid Deposit must be received by the _______ located at ______________, no later than _______, on ______, 2000. Sealed written bids may be delivered to the ______ at ______________, between _______, on _______, 2000, or any date prior thereto. No sealed written bids will be accepted after _______, on _______, 2000.
17. Date, Time and Place for Opening of Sealed Written Bids. All sealed written bids for the purchase of the Property shall be opened, examined, declared and considered by the ______________, or his designee, on _______, 2000, at ______, at the ______ located at _____________. Oral bids will be called for and considered immediately following the opening of all sealed written bids received by the District. Any bidder who has submitted this Bid Form and the Bid Deposit in the manner required herein may participate in the oral bid process during the public auction.
18. Acceptance of Final Bid. The final acceptance of the highest responsible bid, whether written or oral, shall be made by the Board at the regular meeting to be held on ______, 2000, at _______. The Board reserves the right to reject any and all bids, written or oral, and to withdraw the Property from sale . The Board reserves the right to determine who is a responsible bidder and also reserves the right to waive any and all defects in bids and to waive irregularities. In the event that the highest responsible bidder fails to perform, the Board may, at its discretion, remove the Property from sale, call for new bids, or offer the property to the second highest bidder. If the Board elects to offer the
_____________________________________________ Type or Print Name of Bidder
Property to the second highest bidder, and if the second highest bidder accepts the award, the deposit requirements and terms and conditions of purchase of the Property shall be the same as provided in Board Resolution No. _______.
DECLARATIONS OF BIDDER
The undersigned Bidder declares he or she has carefully reviewed Board Resolution No. _______, this Bid Form, the Purchase and Sale Agreement, and the Property Information File, and has completely satisfied him or herself as to the nature and location of the property, and has fully informed him or herself as to all conditions and matters which may in any way affect the purchase price of the Property. The undersigned Bidder further declares that he or she has conducted an independent investigation, inspection and analysis of the Property and that he or she is not relying in any way upon any information contained in the Property Information File.
The undersigned Bidder declares that this Bid for the purchase of the Property is genuine and not collusive. The undersigned Bidder further declares that if this Bid is accepted by the Board as the successful bid for the purchase of the Property, he or she will execute the Purchase and Sale Agreement with the District and will pay to the District the Additional Deposit in the amount of ______________ Dollars ($_______) in the form of a certified check or cashier's check on or before _______, 2000.
___________________________ _________________________ Signature of Bidder Date
________________________________________ Type or Print Name of Bidder
Information About Bidder
Name of Bidder: __________________________
Address: _______________________________
Telephone Number: ( ) ____________________
Facsimile: ( ) ____________________________