government-auctions

As a result, municipalities are under the scrutiny of bond-rating agencies. Demonstrating that municipalities can wring value out of, say, used police cars, and are mindful of the bottom line, Dr. Nikbakht said, can enhance their borrowing power.

“By showing that they don’t keep a lot of junk in their backyard, their ratings will get better and better,” he said.

Auctions may be the most efficient way to clean out the garage, said Jim Potyra, a supervisor at the Connecticut Department of Administrative Services, which handles mostly state-owned surplus goods. Prison lathes, handbags lost at Bradley International Airport near Hartford, and police cars, which often end up as New York City taxicabs, are common items, he said. The auctions, held six times a year, raise up to $1 million combined, he said, which is divided between state agencies and Connecticut’s general fund.

Until 1996, the agency put a price tag on most surplus items and sold them out of a warehouse in Wethersfield, “but we were never sure if we were getting the best value,” Mr. Potyra said.

But all auctions may not be created equally. For years, Westchester County requested that used-furniture dealers submit sealed bids for its unwanted desk chairs, for example, but received few takers, said James Ferrara, a purchasing agent. Westchester wound up losing money, as the cost to dispose of the chairs was usually more than their value.

In 2004, Mr. Ferrara turned to eBay, which allowed the county to rake in $93,000 in 2007 for furniture and other surplus goods, he said.

Westchester-owned backhoes and tractors, though, are still sold at a White Plains garage through live auctions twice a year; last year, 60 vehicles brought in $300,000, he said.

Nationally, online auctions account for about 10 percent of government surplus sales, but that number is growing, said Craig Robbins, marketing director at Buffalo-based Auctions International, whose clients include Nassau County, Scarsdale, N.Y., and Stamford, Conn.

“I used to take winters off,” but now there are too many online auctions, Mr. Robbins said. He said that online auctions cost less to operate, adding that “some items are hard to sell at live auctions, like a pile of bricks.”

Outsourcing sales to a Web-based business or another third party is not preferable when it comes to land, however, said Brian Williams, an administrator in Bridgeport, Conn. The city recently revised the way it sells foreclosed properties.

Decades ago, outside brokers would market properties one at a time on a multiple listings service, and buyers had to get necessary permits before closings, which could take months, Mr. Williams said. Only three properties would trade hands in a year, he said.

Since 2005, though, the city has taken over the process and secures all necessary planning board approvals before selling the land in one fell swoop.

In the last three years, an average of 30 properties have sold annually, he said, for a total of $6 million. It might have taken a decade to take in that much before, Mr. Williams said. “And we are getting nonperforming assets back to work,” he added.

Before December 2007, there had been no official land-bidding process in Newark, where many impoverished residents, as in Bridgeport, are prone to default on city bills, said Stefan Pryor, the deputy mayor for economic development. He also said there had been a huge inventory of abandoned property.

To turn it over, the city created a three-tiered sale system. For large properties, like a 50-acre parcel at the Broad Street railroad station, developers submit proposals by a certain date, and, in this case, 10 had done so by the May deadline, Mr. Pryor said.

At a separate winter auction, which took place over a month, 104 parcels, each about an acre and priced from $2 to $18 per square foot, received 90 bids, though most were for blocks of parcels, Mr. Pryor said. The bids, which he said could bring in $2 million, await Municipal Council approval.

Hundreds of undersize lots that cannot support buildings but could make decent yards for existing homes will go on the auction block soon, he said, with 40 listings likely by the fall. All proceeds will be funneled to a special city real estate fund to be used to buy, say, waterfront property in Newark’s port, Mr. Pryor said.

Every September, Long Beach holds an annual sale at City Hall, with abandoned bicycles lined up outside, and copy machines, computers and printers on display in a room upstairs, said Marianne O’Toole, a city purchasing agent.

“Taxpayers want to know you’re not just throwing things away when you no longer need them,” Ms. O’Toole said. “You’re also showing there’s no flimflamming.”

government-auctions

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Government auctions: Towns Put Their Surplus on the Block