EXHIBIT 2-A

DRAFT

MONTEREY PENINSULA WATER MANAGEMENT DISTRICT

Policy Regarding Disposal of Surplus Property

July 21, 2003

Policy Purpose:

Periodically, the District has surplus property that is no longer required for District operations. The purpose of this policy is to provide a systematic and accountable method of monitoring and controlling the disposal of surplus District property.

Authority:

The General Manager or delegated staff shall be responsible for determining the status of and disposing of surplus District property.

Restrictions:

Article 16, Section 6 of the California Constitution prohibits any public entity from making a gift of public property. The District, as a public entity may dispose of property that it no longer needs provided that such property is transferred for fair and adequate value. The District may establish its own internal controls to ensure that value is accurately assessed. In the event the excess property has no value, the District may establish its own rules and protocol for disposal.

Surplus Property Categories and Disposal Guidelines:

a) Surplus District property, including vehicles, with some residual value may be disposed of by trade-in or by public auction. Based on the circumstances and the value of the property to be auctioned, an auction may be held by the District or the District may utilize the auction services of another government agency or a private auction company. All items to be auctioned will be sold on an “as is” basis with no warranties or guarantees expressed or implied.

b) Surplus District property that is determined to have no value may be donated to a non-profit organization that is willing to accept it. If a non-profit organization willing to accept the property cannot be identified, the property may be disposed of at a landfill or by any other appropriate manner.

Accounting:

Appropriate accounting entries, if any, will be made at the time the surplus property is disposed of.

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