Request By:
Willie Mathis, Jr., Esq.
Suite Two
Dixie State Bank Building
Walton, Kentucky 41094
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Thomas R. Emerson, Assistant Attorney General
This is in reply to your letter raising a question concerning the disposition, by the City of Walton, of property to which it holds fee simple title.
The lots in question were conveyed to the city in 1955, and while nobody can recall the specific reason for the conveyance, it appears that the grantors conveyed the property to settle a matter involving delinquent taxes. The city now wishes to dispose of the property and you seek our opinion regarding the appropriate procedures for the city to follow in disposing of this surplus property.
You maintain that the real estate could be sold by either private sale, public auction or sealed bids. Furthermore, you anticipate that a sale, other than a private sale, would be preceded by the passage of an ordinance proposing to sell the property and advertising at least three times in the local newspaper as to the time and place when bids or the auction would take place. You personally prefer the auction method as, in your opinion, this would probably produce the most interest and the highest price for the city.
Any city is authorized to sell any of its real estate that is no longer needed for a public purpose with certain exceptions. KRS 65.010 provides in part that any city may sell and convey any real estate owned by it upon a determination by the legislative body that the real estate is no longer needed for governmental functions. KRS 82.060 states in part that all cities are authorized to sell real estate owned by them and surplus to their needs.
There are, however, no provisions under either of the above mentioned statutes setting forth the manner in which such property may be sold. While KRS 424.260 requires bids for contracts, leases, or other agreements for materials, supplies, equipment and services involving an expenditure of more than $2500.00, this statute would not, in our opinion, apply to the sale by the city of its property. See OAG 73-374, copy enclosed.
As a matter of public policy, such property should be sold in the best interest of the city. We direct your attention to OAG 77-395, copy enclosed, and the reference to McQuillin Mun. Corp. (3rd Ed.), Vol. 10, § 28.45, where we said:
". . . [W]e find it stated as a fundamental rule that sales of public property must be openly and fairly conducted; however, unless the applicable law expressly so provides, a municipal corporation is not required to use competitive bidding or otherwise seek the highest obtainable price in selling its property. . . ."
Since the statutes contain no provisions as to the procedures to be employed by the city in the disposition of its property, "such matters are within the reasonable discretion of the appropriate municipal authorities." McQuillin Mun. Corp. (3rd Ed.), Vol. 10, § 28.44. Selling of the city's property is a matter addressing itself to the sound business judgment of the municipal body. The use of bids is permissive and not required. In the absence of any specific statute requiring the sale of the city's surplus property to be made in a particular manner, the city may sell such property at a public auction. Again see OAG 77-395.