This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
FIRE DISTRICTS -- Apparatus and Equipment (procedures for sale of)
REFERENDUM -- Mandatory (need for to sell fire truck in fire district) -- Permissive (need for to sell fire truck in fire district)
PERSONAL PROPERTY -- Disposition (procedures for sale of unneeded truck by fire district)
TOWN LAW, §176(23): If a board of fire commissioners makes a reasoned determination that a negotiated, rather than a public, sale of an unneeded pumper truck will yield the best price or maximum financial benefits, it may resolve to sell by negotiated sale subject to applicable referendum requirements. The board should take steps, such as soliciting quotations or obtaining appraisals, to ensure that the negotiated sale is upon the best or most beneficial terms.
You ask whether a fire district is required to solicit bids for the sale of an unneeded pumper truck. You state that the board of fire commissioners wishes to maximize the sale price, but is concerned that a competitive bidding procedure would result in a lower return than a negotiated sale.
Town Law, §176(23) contains provisions governing the sale of unneeded real and personal property by a fire district. Neither section 176(23) nor any other statute requires that competitive bids be solicited for the sale of unneeded fire district property (cf. County Law, §215[6], providing a competitive bidding requirement for the sale of unneeded county real property; General Municipal Law, §103, containing competitive bidding requirements for purchases by political subdivisions).
In describing a municipality's responsibility when selling unneeded property if public sale is not required by statute, the courts have stated that municipal officials have a fiduciary duty to secure the best price obtainable in their judgment or the most beneficial terms in the public interest for any lawful use (see, e.g., Ross v Wilson, 308 NY 605; Orelli v Ambro, 41 NY2d 952, 394 NYS2d 636; Matter of New City Jewish Center v Flagg, 111 AD2d 814, 490 NYS 560, affd 66 NY2d 980, 499 NYS2d 395; Davis v Board of Education of the Hewlett-Woodmere Union Free School District, 125 AD2d 534, 509 NYS2d 612, lv den 69 NY2d 613, 512 NYS2d 1028; see also 1990 Opns St Comp No. 90-37, p 84; 1986 Opns St Comp No. 86-78, p 124). The method of sale chosen is within the sound discretion of the governing board, but should be the one which the board believes will yield the best price or maximum financial benefits (Feldman v Miller, 151 AD2d 755, 542 NYS2d 777; Opn No. 90-37, supra; Opn No. 86-78, supra). To fulfill its fiduciary duty, a governing board should take appropriate measures to ensure that the sale price is upon the best or most beneficial terms.
We also note that pursuant to Town Law, §176(23), a resolution to sell a pumper truck may be subject to voter approval. Section 176(23) provides that, with certain exception not applicable here, a fire district may sell or dispose of unneeded real and personal property valued in excess of $25,000 "if, when and in the manner and to the extent authorized" by a proposition submitted at a special or annual election conducted in the manner prescribed by Town Law, §179. Thus, if the truck is valued at greater than $25,000, the resolution to sell would be subject to mandatory referendum. Under section 176(23), if the truck is valued at less than $25,000 but greater than $5,000, the resolution would be subject to permissive referendum conducted in the manner provided in General Municipal Law, §6-g(4). No referendum would be required pursuant to section 176(23) if the truck is valued at less than $5000.
In conclusion, if the board of fire commissioners, in the exercise of its fiduciary duty, makes a reasoned determination that a negotiated, rather than public, sale will yield the best price or maximum financial benefits, it may resolve to sell by negotiated sale, subject to applicable referendum requirements. The board should take steps, such as soliciting price quotations from several prospective purchasers and obtaining one or more appraisals, to ensure that the negotiated sale is upon the best or most beneficial terms.
July 5, 1993
Jack Stewart, Chairman, Board of Fire Commissioners
Cottekill Fire District