Asset Disposition
This policy will show how IMD is implementing this new requirement for its subrecipients.

​As of November 15, 2021, Federal Rules changed for the FTA as result of the Infrastructure Investment and Jobs Act (IIJA).  As result, NCDOT updatedtheir disposition policy based on the changing rules.  The updated policy will show how IMD is implementing this new requirement for its subrecipients.

When vehicles, equipment, real property or other assets purchased with Federal Funds have been replaced after meeting the required useful or service life, the recipient shall dispose of the item in a manner that is in compliance with the FTA Circulars 9040.1G (Section 5311), 9070.1G (Section 5310) and 5010.1E, the State Management Plan, 2 CFR Part 200 and N.C.G.S. The following guidelines reflect these requirements.

The Integrated Mobility Division of North Carolina Department of Transportation requires all subrecipients of Federally Funded rolling stock, equipment and aggregate supplies to meet the above new requirement by following the rules and process below. 

The Infrastructure Investment and Jobs Act (IIJA) has determined rules for what agencies can do with proceeds from dispositions.  The language below explains the changes. 

The Infrastructure Investment and Jobs Act (IIJA) changed the provisions for transit asset disposition [49 USC § 5334(h)(4)(B)]. For rolling stock, equipment and aggregate supplies that have met their minimum useful life and were (1) purchased with federal assistance (2) with a fair market value of more than $5,000 and (3) sold after November 15, 2021, the recipient may retain a portion of the funds -- $5,000 plus the percentage of its local share in the original award. Any remaining federal share must be returned to FTA. The federal share of the sales proceeds cannot be retained for public transportation use.

Source - https://www.transit.dot.gov/funding/grants/bipartisan-infrastructure-law-disposition-requirements-frequently-asked-questions​

Per a Dear Colleague letter from the FTA on September 27, 2024​, the rule was amended.

Per 2 CFR 200.313 and 200.314, if an item of equipment or aggregate unused supplies purchased with Federal assistance, and no longer needed for a transit purpose, are sold for $10,000 or less, the recipient may retain the full proceeds from the disposition. 

If the proceeds are greater than $10,000, then per 49 U.S.C. 5334(h)(4)(B) the recipient may retain $5,000 and the percentage of the local share in the original Award of the remaining proceeds, with the remaining federal share returned to FTA. 

In either case, selling and handling expenses are not permitted to be deducted from the amount returned or in determining the sale proceeds. 

This applies to all dispositions on or after October 1, 2024. 

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Disposition Methods & New Process:

IMD has created a process for its subrecipients to submit specific required information.  Depending on the items to be disposed of, subrecipients will be required to choose a Disposition Method and follow the rules in the appropriate section to complete the process.  ​

1. Disposition Methods - Disposition methods are described as follows.
1. Sealed Bids. This method may be used by both public and private non-profit transit systems.
• A minimum of two (2) appraisals of the current fair market value of the vehicle will be required to establish a minimum bid price.
• A Fair Market Value form is included in the Inspection/ Disposition Workbook Packet to assist in getting appraisals from dealers.
• Estimates may be averaged to establish the minimum bid.
• An advertisement in local paper or paper with a large circulation shall be placed at least once allowing for not less than 7 days between the advertisement date and sealed bid opening. 
• Ad must include minimum bid, place and time of bid opening.
• Sealed bids must be submitted, and award shall be made to the highest bid over the minimum established bid.
• The current grant recipient designated in the resolution by the Board of Directors, County Commissioners or City Council may keep 100% of the proceeds.
2. Public Auction. This method may be used by both public and private non-profit transit systems.
• The vehicle(s) may be sold through an advertised public auction.
• Award shall be made to the highest bid. 
• The current grant recipient designated in the resolution by the Board of Directors, County Commissioners or City Council may keep 100% of the proceeds. 
3. State Surplus. This method is only available to public entities. Private non-profit systems may find that their county procurement or finance offices may be able to process dispositions on their behalf. 
• Once the project receives the title, the State Surplus Property Agency can be contacted to arrange the disposition of the vehicle on the Surplus Bid sheet.
• Contacts at State Surplus can be found here - https://www.doa.nc.gov/divisions/state-surplus-property.  Follow their instructions to post your vehicle(s).
4. Transferred Vehicles. This method may be used by both public and private non-profit transit systems.
• On the Inspection/Disposition form, complete the section for transferring a vehicle.
• Identify the agency vehicle will be transferred to.
• Indicate how the vehicle will be used by the agency. 
• The vehicle cannot be used by the agency in a manner that would be in competition with the transit system.
• The vehicle must be removed from the system's fleet inventory and EAM (Assetworks).
• The vehicle will not be eligible for replacement again under any of the Division's administered funding programs.
• IMD's Compliance Manager (Kevin Edwards) will review and if approved, the title will be forwarded to the project with the lien released.
• If a vehicle is not approved for transfer, another method of disposition must be selected. 
5. Electronic Auctioning.
• Equipment may be disposed of electronically on the Internet.
1. Agency can develop their own electronic auction procedure; or
2. Use an existing private or public electronic auction service.
• Prior authorization by your governing board to sell equipment electronically, as with all dispositions, will be required.
• The Federal Trade Commission has information on electronic auctions on their website.
  

2. Notification to IMD of Sale.
1. Within 180 days after the Lien is released from IMD, the agency must submit disposition information including:
• Type of Disposition
• Odometer reading
• Buyer/Recipient
• Provide a Sales Receipt
• Sales Receipt Date (must contain the Odometer reading, Buyer, Sale Date and Sale Amount
• Sale Amount
• Comments
• Attachment of bill of sale/sales receipt that contains the following: Odometer reading, Buyer, Sale Date and Sale Amount
2. A request for this information will be sent by the IMD Compliance Manager (Kevin Edwards) after receiving receipt of the agency's inspection checklist. The request will be emailed to the person completing the inspection checklist and will come in the form of a Smartsheet Update Request. The request for information will trigger the beginning of the 180-day timeline.
3. If you cannot submit this information within 180 days of receiving your replacement vehicles, please notify the IMD Compliance Manager (Kevin Edwards) of the need for an exception.
   
3. Return of Funds.
1. The IMD Official Vehicle Disposition Tracker, as result of the information submitted, and the formula mandated by the
   

Infrastructure Investment and Jobs Act (IIJA) will determine the amount the agency must return. 

• NCDOT-IMD will contact transit agency directors for NCDOT-IMD subrecipients through a SmartSheet Update Request to submit information about how you disposed of your vehicle or asset.  This information requested will include the following:
• Confirmation of the VIN # for the disposed vehicle and the VIN # of the replacement vehicle,
• The Year, Model, Date in and then out of Revenue Service for the vehicle,
• The Date of Disposition, Type and Method of Disposition,
• The Odometer Reading at the Time of Disposition,
• The Buyer or Transferee Type and Name,
• Sales Amount,
• If you paid for any selling or handling fees for the sale.
• You will also need to attach any documentation for selling and handling fees, the sales receipt (which should include the name of buyer, amount sold for and date of sale).

Once that has been fully completed, you will receive a confirmation letter restating what you submitted for you to certify by Docusign.  The letter will also include the amount your agency must return to the FTA, if there are any, and instructions on how to do it.  The formula will allow the agency to retain an amount based on when the disposition took place.  

Dispositions that took place between 11/15/21 and 09/30/24:  These go by the original formula: $5,000 plus the percentage of the local share in the original award. For example, if a bus, purchased with federal assistance at an 80/20 split, is sold for the fair market value of $12,000, the recipient retains $5,000 plus 20% of the remaining $7000, or $1,400, for a total of $6,400. The recipient is required to return 80% of $7,000, or $5,600, to FTA.

Dispositions that take place on 10/01/2024 and going forward:  These dispositions will use the new formula the FTA released on 09/27/2024 that states assets that “are sold for $10,000 or less, the recipient may retain the full proceeds from the disposition.   If the proceeds are greater than $10,000, then per 49 U.S.C. 5334(h)(4)(B) the recipient may retain $5,000 and the percentage of the local share in the original Award of the remaining proceeds, with the remaining federal share returned to FTA.  

In either case, selling and handling expenses are not permitted to be deducted from the amount returned or in determining the sale proceeds.

Every year IMD will add vehicles that will be replaced in an application period into the IMD Official Asset Disposition Tracker.  Once IMD receives the New Vehicle Inspection Form for a new vehicle being delivered, We will release the Lien Title.  We will then send the request to the agency.  At the same time, the clock will start on disposing of the asset.  The agency will have 180 days to dispose of the asset and submit the results.  The agency will need to save that email (or request a new one) until the asset is disposed of officially.

2. The Subrecipient will return the funds to IMD either by electronic means to WBS# 36226.83.2.1 or by mailing a papercheck to the IMD Compliance Manager (Kevin Edwards).

3. The same method will apply to Sales, Transfers and Casualty Losses.  Kevin B Edwards, Safety, Education and Compliance Manager, is managing this process and is the contact on this going forward.  He will approve all Transfers and Casualty Losses as well.  
4. IMD will then periodically mail paper checks to the FTA. 
5. After confirmation of the check clearing, IMD will notate the IMD Official Vehicle Disposition Tracker to complete the process.
   
   

VEHICLES

Disposition of vehicles takes place when the vehicle meets the required mileage (useful life) criteria and has been replaced.  Useful Life Mileage is reflected on the Enterprise Asset Management (EAM/Assetworks) System.

 

1. Criteria and Process for Replacement - The current useful life is 100,000 miles for Minivans, Center Aisle Vans, Conversion Vans, and Lift-equipped Vans. Light-duty Light Transit Vehicles (cutaway type vehicles) must also accumulate 100,000 miles to meet useful life.
1. Once new replacement vehicle(s) are received and placed in service, the replaced vehicle(s) must be disposed.
2. IMD requires all Certificates of Title for vehicles purchased Federal and State funded programs to have a first lien to IMD recorded on the titles. All titles are kept in our office files. Titles will be released when the inspection for the new vehicle has been completed and submitted.
3. The disposition process for the replaced vehicle must be completed within 180 days after delivery of the new vehicle. The Integrated Mobility Division's Regional Grant Specialist (RGS) will review any changes in the vehicle replacement that differs from the vehicle approved in the funded application. The System's Fleet Listing, current FY application, and vehicle replacement log must be kept current to reflect the same vehicle(s) that are requested for    disposition. Approved changes must be indicated/noted under the current Federal Fiscal Year application by the RGS with notification to the Procurement Officer and to the Administrative Assistant. 
4. Within sixty (60) days after delivery of the new vehicle, the system must remove the tag and cancel the insurance on the vehicle to be disposed. 
5. Before vehicles are sold or transferred, all markings, lettering or system logos must be removed from the vehicles. Please note this is a responsibility of the transit system and no vehicle is to be sold or transferred with system name, phone number, or logo displayed on the vehicle.
6. IMD will release titles for replaced vehicles only to the owner (grant recipient). Once the title is received, the project may proceed with the disposition of vehicle.
7. The Grantee must inform the Compliance Manager (Kevin Edwards) by email that they need to report their Vehicle Disposition.  They will then receive a request to submit all required information. 
   

8. Other vehicle disposition Issues.

                     i.     Vehicle(s) that are less than ten (10) years old and have not met the useful life requirement may be disposed of with prior approval by IMD.

                     ii.     Vehicle(s) that are ten (10) years old or more that have not met the useful life requirement for mileage will be eligible for disposition with prior approval of the Division but shall not be replaced.

                     iii.     Disposition proceeds that are retained after the FTA mandated formula is applied, may be retained by the current grant recipient and must be used for transit purposes.

                     iv.     If the vehicle has not met the “useful life" requirement, the procedures outlined in the first two bullets shall apply.

                     v.     Administrative Staff Vehicle. Systems are permitted to retain one replaced vehicle for use as an “Administrative Staff" vehicle. It must be marked for administrative use only and may not be used for revenue service. This is a one-time ONLY event per system.

                     vi.     Disposal Without Replacement (Excess Vehicle Disposition): The option for disposal of vehicles without replacement requires the approval of the Regional Grant Specialist. If a vehicle has met its useful service life, a grantee may request to dispose of it without replacement to reduce their fleet size. If a vehicle is at least ten (10) years old, but has not met the useful service life standard, a grantee may request to dispose of it without replacement. If a vehicle is less than ten (10) years old and it has not met its useful service life, a grantee may request to dispose of it without replacement. However, a monetary reimbursement for the mileage shortage will be required to be remitted to IMD. 

                     vii.     If a transit system elects to excess a vehicle by means of transfer to another transit agency, protocol will depend on whether or not the original local share (10%) was bought out by the transit agency receiving the transferred vehicle. 

1. ​​​If the transit agency receiving a transferred vehicle wishes to have that vehicle replaced at the time of meeting useful life, that agency must pay the local match share to the original purchaser of the vehicle. The remaining local match share will be calculated utilizing straight line depreciation. If the system receiving the transferred vehicle declines to provide the match, then the transferred vehicle(s) will NOT be eligible for replacement upon meeting useful life. A letter will be issued from IMD to both agencies involved in the vehicle transfer dictating the terms of the transfer.
2. Proceeds received from vehicles that are sold or due to casualty loss, originally purchased with state or federal funds, must be used in the Transit Program.

 

TECHNOLOGY GOODS, COMPUTERS AND RELATED ITEMS

1. Technology goods, computers and related items may be disposed of using the Disposition Process and Methods outlined above.
1. Replacement eligibility may be determined by referring to the Capital Replacement Schedule which is distributed each grant cycle with the application.
2. Once the replacement is purchased, the replaced item may be disposed.
3. All data and information should be erased from the drives and the software removed. Contact your local IT support office for assistance. 
4. When transferring these items to other agencies or groups, prior approval by IMD staff is required. Submit your request to the Compliance Manager (Kevin Edwards) by email. You will receive a written approval or disapproval.
   
   

COMMUNICATION EQUIPMENT, OFFICE FURNITURE AND EQUIPMENT, AND OTHER CAPITAL ITEMS

1. Communication equipment may be disposed of using the Disposition Process and Methods outlined above when the equipment has met the required service life and has been replaced.
1. Communication equipment is eligible for replacement at 6 years.
2. Replacement eligibility for office furniture and equipment and other capital equipment may be determined by referring to the Capital Replacement Schedule, distributed with the grant application each fiscal year.
• After the replacement equipment is purchased, the replaced item may be disposed of following the methods using the Disposition Process and Methods outlined above.
  

GENERAL

1. In accordance with FTA Circular 9040.1G (Section 5311), 9070.1G (Section 5310) the State Management Plan, and 2 CFR Part 200, proceeds received from the sale of equipment, purchased with state and federal funds, must be used in the Transit Program.
2. Local property management records or fixed asset inventories should be updated to reflect the type of disposition, date, and value of sale.​
   

VEHICLE INCIDENT OR CASUALTY LOSS PROCEDURES

1. Grantee must report a vehicle incident, accident or casualty to IMD.  NCDOT-IMD Accident-Incident Report form is completed by clicking here - NCDOT-IMD Accident-Incident Report. The report should be completed within 24 hours of the Incident, Accident or Occurrence. Once the form has been saved in the software, an automated email notification will be sent to IMD Compliance Manager (Kevin Edwards) for review and action. A police report and any communications from the insurance companies must be attached as soon as received. If the vehicle has been totaled, the information should also be forwarded to the IMD Procurement Section. If a fatality occurs, the grantee should notify the IMD Compliance Manager (Kevin Edwards) as soon as possible. All incidents and accidents, no matter the circumstances or cost of the damage, must be reported in NCDOT-IMD Accident-Incident Report. Whether the incident or accident is reportable to FTA will be determined by IMD.
2. Vehicles that are damaged, but repairable, must be repaired to the same or better condition prior to the incident.
3. If the vehicle is determined to be a total loss, the following documentation must also be submitted to IMD (Procurement Unit) within 10 working days of the incident.
1. N.C. Accident Report (DMV-349) or N.C. Incident Report (fire casualty)
2. Correspondence from Insurance Company indicating the amount of the settlement of proceeds.
4. Casualty Loss Criteria.
1. Minivans, standard vans, center aisle vans, conversion vans and lift equipped vans with 15 passengers or less must have a minimum of 100,000 miles.
2. Medium-duty transit buses (20'-28') (formerly cutaway buses) must have a minimum of 100,000 miles.
3. Medium-duty transit buses (approximately 30') must have a minimum of 350,000 miles.
4. Heavy-duty transit buses (approximately 30') must have a minimum of 350,000 miles.
5. Heavy-duty transit buses (35'-40') must have a minimum of 500,000 miles.
5. Vehicles that have been totaled and have met the “Casualty loss criteria" may be disposed of as follows:
1. If a replacement vehicle was already budgeted in the current application or on order, the totaled vehicle can be disposed and the insurance proceeds retained. The proceeds must be used in the Transit Program. NCDOT-IMD still retains a financial interest in the replacement vehicle if the value of the casualty loss vehicle is greater than or equal to $5000.
2. If no replacement vehicle has been budgeted for this totaled vehicle in the current application or is on order, the system may use the proceeds towards a replacement vehicle following the correct procurement methods. NCDOT-IMD still retains a financial interest in the replacement vehicle if the value of the casualty loss vehicle is greater than or equal to $5000. If a system wishes to apply for reimbursement for local funds used for vehicle replacement, they may do so on the next available grant cycle.    
3. If the system chooses not to use the proceeds to replace the vehicle at the time of the loss and keeps the proceeds, no other vehicle, either a replacement or expansion, may be ordered for that system now or in the future. If a system wishes to apply for reimbursement for local funds used for vehicle replacement, they may do so on the next available grant cycle.
4. Vehicles that have been totaled, but have not met the above “Casualty loss criteria", may be disposed of and the insurance proceeds applied as follows:
• Return to IMD either the federal and/or state interest of the unamortized value of the vehicle based on straight line depreciation of the original purchase price or the federal and/or state interest of proceeds, whichever is greater; or
• Apply 100% of net proceeds to the acquisition of the same model year, or newer, like-kind vehicle. Any additional costs, if more than the proceeds, are to be met by the grantee. Excess proceeds are to be returned to IMD, with the grantee retaining the pro-rata local share.
5. Once all the required documentation is received by IMD, a letter along with the title will be forwarded to the grantee within 30 days. The letter will address the options to grantee regarding the casualty loss.
• If the vehicle has met or exceeds the “Casualty loss criteria", the grantee can use their settlement proceeds on one of the options listed below:
1. If a replacement vehicle is scheduled to be received by the agency, they may keep the proceeds and use them towards transit related needs.  Documentation for this will be reviewed at the next Compliance Review.
2. The system may apply the settlement proceeds toward a replacement vehicle; or
3. The system may choose to keep the proceeds and use the proceeds for transportation-related needs. No other vehicle, replacement or expansion, may be purchased for the system to replace the shortage in the fleet.
4. Provide in writing or by email to IMD which of the last two actions they will choose within 60 days.
• If the vehicle has not met the “Casualty loss criteria", the grantee will receive instructions in their letter.
1. Return the federal and/or state share to IMD within 30 days. No other vehicle, replacement or expansion, may be purchased for the system.  Provide in writing that they will purchase a “like-kind" vehicle within 60 days.