October 25, 1977

Mr. Sam Tidball, Executive Secretary 
Associated School Boards of South Dakota 
Post Office Box 1211 
Pierre, South Dakota 57501

Official Opinion No. 77-87

Restrictions on sale of school property between school districts

Dear Mr. Tidball:

You have requested an opinion based on the following factual situation:

FACTS: 

Within the last year there have been several instances where school districts have disposed of school property either because the property has become surplus or because of a school closing due to reorganization.  We will probably experience more of this in the immediate future because of declining enrollments.  The most logical purchaser of school property is probably another school district and it also can most likely mean a substantial saving to the taxpayers of the purchasing district. 
    
It is pretty clearly defined in statute and from practice as to lawful procedures in disposing of surplus school property but not so clearly defined is whether a school district can be a purchaser at a public auction.

Based on the above factual situation you have asked the following questions:

QUESTIONS: 

1.  Can a school district be a purchaser at a public auction? 
    
2.  Does the $2,500 limitation as cited in SDCL 5-18-3 apply?

IN RE QUESTION NO. 1:

The answer to your question is not disposed of by any one statutory provisions.  SDCL 13-21 establishes the procedure for disposition of surplus school property by advertising bids but, of course, from the standpoint of the school district selling the property.  No mention is made therein as to the authority of another school district to be a bidder or purchaser.

On the other hand, SDCL 13-20-5 provides:
    
13-20-5.  A school board is authorized to purchase facilities, equipment and supplies from another school district without advertising for bids as provided in § 13-20-3.

SDCL 13-20-3 requires advertising for bids if the expenditure is $2,500 or more.

Another statute of general application is SDCL 6-5-1, which provides: 
    
6-5-1.  All counties, municipalities, sanitary districts, townships and school districts of this state are hereby authorized and empowered to exchange with each other and to transfer and convey from one to the other any land or property belonging to them and under their respective jurisdictions and to perform and exchange work between themselves.  All transfers of property and work as authorized hereby shall be upon such terms and conditions as may be determined and agreed upon by the respective governing bodies thereof.

SDCL 6-5-1 expressly authorizes the conveyance of property between school districts on a negotiated basis while SDCL 13-20-5 does the same by implication.  However, in my opinion, SDCL 13-20-5 does not also impliedly authorize a school district to bid for such items at an auction conducted pursuant to SDCL 13-21, if the bid price is $2,500 or greater.  Purchases of less than $2,500 are excluded from the mandatory competitive bidding requirements of SDCL 5-18 and, therefore, a school board may use its discretion in purchasing such items.  This could include the purchase of surplus property sold pursuant to SDCL 13-20.

The powers of a political subdivision are limited to those expressly authorized by statute or necessarily implied therefrom. City of Watertown v. Mesberg, 82 S.D. 250, 144 N.W.2d 42. Bidding for property of a value of $2,500 or more at a public auction or by sealed bid against private parties is something which I cannot reasonably or necessarily imply from the language of the statutes.  In my opinion, the Legislature has not clearly expressed an intent to authorize such a purchase.

Another consideration is the fact that SDCL 13-21-4 and 13-21-5 require property being auctioned to be sold for not less than ninety percent of appraised value.  This requirement is obviously a protection for the seller and would remove all negotiating or bargaining power of a prospective purchasing school district.  I cannot be certain that appraised value would always be such as to result in a savings to the purchasing district.

Therefore, school districts only have authority to bid for surplus school property pursuant to SDCL 13-21, if the selling price is less than $2,500.

IN RE QUESTION NO. 2:

The answer to your second question, as hereinbefore discussed, is yes.  The competitive bidding provisions of SDCL 5-18, except as provided in SDCL 6-5-1 and 13-20-5 are applicable to school district purchases.

Respectfully submitted,

William J. Janklow
Attorney General

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