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Home My WebLink AboutProposed City Policy-Use of Forfeited Property #TAUTGES, REDPATH & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS May 21, 1992 To the Honorable Mayor and Members of the City Council City of Oak Park Heights 14168 North 57th Street Stillwater, MN 55082 RE: PROPOSED CITY POLICY - USE OF FORFEI'T'ED PROPERTY Pursuant to your request, we have prepared this proposed City policy on the use of forfeited property by the City of Oar_ Park Heights. BACKGR01 TND State 4 tatutes (Chapters 6N3.`31 through 609.5317) allows Cities to apply /irnpose civil penalties for certain cr�rruna! offenses. This civil penalty is in addition to any criminal penalty which may be imposed. The additional civil penalty is the seizure and forfeiture of certain property to carry out the fotjowing remedial purposes R✓:.S.A. 609.531; subdivision 19): 1. T0 enforce the law 2. To deter crin ie 3. To mduce the economic incentive to engage in criminal enterprise 4. To increase the p %cur iary loss resulting from the detection of criminal activity 5. To fbm;.it property unlawfully used or acquired and divert the property to law - enforcement purposes State Statutes and the State Criminal Code define what property is subject to seizure /forfeiture and under what circumstances. Additionally, State administrative procedures are established to define the Process to be foi.lowed to effect the seizure /forfeiture of property. Accordingly, there is no a,eed to establish City policy for this process. The recommended City policy herein relates solely to the City's use of such property after seizure /forfeiture has occurred, The City may obt in seized/forfeited property under one of two methods: 1. Direct seizure/forfeiture initiated by the City. a. Cash assets b. Non -cash assets 2. Indirect cash proceeds from the results of joint activities with other law enforcement agencies (i.e. Federal, State or other local). 4810 White Bear Parkway • White Bear Lake, Minnesota 55110 • 612/426 -7000 • FAX /426 -5004 x Honorable Mayor and ,Members of the City Council .2ity of Oak Park Heights May 21, 1992 Page 2 The City may take action to obtain both cash and non -cash property. Non -cash property can be either. (1) used by the City (for law- enforcement purposes) or (2) sold and converted to cash. State Statutes (Chapter 609.5315) defines and specifies the disposition of forfeited property as follows: 6095315 DISPOSITION OF FORFEITED PROPERTY. Subdivision 1. Disposition. If the court finds under section 609.5313 or 609.5314 that the property is subject to forfeiture, it shall order the appropriate agency to: (1) sell property that is not required to be destroyed by law and is not harmful to the public and distribute the proceeds under subdivision 5; law; (2) take custody of the property and remove it for disposition in accordance with (3) forward the property to the federal drug enforcement administration; (4) disburse money as provided under subdivision 5; or (5) keep property other than money for official use by the agency and the prosecuting agency. Subd. 2. Disposition of administratively forfeited property. If property is forfeited administratively under section 609.5314 and no demand for judicial determination is made, the appropriate agency may dispose of the property in any of the ways listed in subdivision 1. Subd. 3. Use by law enforcement. Property kept under this section may be used only in the performance of official duties of the appropriate agency or prosecuting agency and may not be used for any other purpose. Proceeds from the sale of property kept under this subdivision must be disbursed as provided in subdivision 5. Subd. 4. Distribution of proceeds of the offense. Property that consists of proceeds derived form or traced to the commission of a designated offense must be applied first to payment of seizure, storage, forfeiture, and sale expenses, and to satisfy valid liens against the property; and second, to any court- ordered restitution before being disbursed as provided under subdivision 5. Subd. 5. Distribution of money. The money or proceeds from the sale of forfeited property, after payment of seizure, storage, forfeiture, and sale expenses, and satisfaction of valid liens against the property, must be distributed as follows: (1) 70 percent of the money or proceeds must be forwarded to the appropriate agency for deposit as a supplement to the agency's operating fund or similar fund for use in law enforcement; (2) 20 percent of the money or proceeds must be forwarded to the county attorney or other prosecuting agency that handled the forfeiture for deposit as a supplement to its operating fund or similar fund for prosecutorial purposes; and (3) the remaining ten percent of the money or proceeds must be forwarded within 60 days after resolution of the forfeiture to the state treasury and credited to the general fund. Any local police relief association organized under chapter 425 which received or was entitled to receive the proceeds of any sale made under this section before the effective date of Laws 1988, chapter 665, sections 1 to 17, shall continue to receive and retain the proceeds of these sales. The above State Statute (plus other State Statutes) has the effect of limiting the use of such property by the City. Accordingly, a separate fund has been established by the City to provide separate accounting for the use of cash and/or cash proceeds from the sale of such property. Additionally, any City policy or use of Such property must be in accordance with the limitations of such State Statutes. jie Honorable Mayor and Members of the City Council City of Oak Park Heights May 21, 1992 Page 3 RECOMMENDED CITY POT .TC y A. The ultimate responsibility for the disposition of all City assets rests with the City Council. Accordingly, the City Council should have the ultimate /final authority over the disposition of seized/forfeited property. The City Council exercises its control over all City disbursements/expenditures by means of the annual operating budget plus specific authorization for non - budgeted items. It is anticipated that seizure/forfeiture monies will be spent for operating expenses and/or capital outlay. As such, the City should adopt an annual budget (separate from the regular General Budget) for the Seizure/Forfeiture Fund. The annual budget process can be amended or changed should circumstances require additional (unbudgeted) expenditures. B. State Statutes limit the use of seized/forfeited property to law- enforcement purposes. Accordingly, the chief law enforcement officer of the City (Police Chief) should be involved from several levels: 1. Determination to seize property with the intent to obtain forfeiture. 2. Process of actual seizure plus application to the County Attorney's Office to effect forfeiture. 3. Custody, care and maintenance of such property between initial seizure and eventual forfeiture. 4. Determination of Statutory payments to the State, County Attorney and possibly other Agencies who may have assisted. 5. Recommendation to the City Council as to the disposition of non -cash forfeited Property 6. Recommendation to the City Council as to the final expenditure of cash forfeited Property 7. Work with the City Administrator and Deputy Clerk/Finance Director to maintain normal City controls over cash and non -cash property after forfeiture has been accomplished. 8. Promptly advise/notify the City Council, Administrator and Finance Officer of seized property including: a) Full description and estimated fair market value b) Sharing commitments with other Agencies c) Probable disposition of such property. ,pie Honorable Mayor and Members of the City Council City of Oak Park Heights May 21, 1992 Page 4 9. Periodically advise /notify the City Council, Administrator and Finance Officer of the current status of previously seized but unforfeited property. Promptly advise/notify the City Council, Administrator and Finance Officer of seized Property which has become forfeited including: a) Full description and estimated fair market value b) Sharing commitments with other Agencies C) Probable disposition of such property. i 10. Work with the City Finance Officer to prepare an annual operating budget for the City's Seizure/Forfeiture Fund. C. The City Finance Officer is the direct custodian of all City monies (cash assets) and responsible for the maintenance of the City's fixed asset inventory system. Accordingly, the Finance Officer of the City should be involved at several levels: 1. Work with the Police Chief to affect inventory controls over all seized property prior to effecting forfeiture. 2. Work with the Police Chief to affect normal fixed asset inventory controls over all forfeited non -cash property. 3. Receipt all forfeited cash property to the separate Seizure/Forfeiture Fund and to maintain such monies separate from all other monies of the City by means of separate accounting bX n2t separate bank accounts. 4. Report the activities of the Seizure/Forfeiture Fund to the City Council and the Police Chief separate from all other City monies. S. Prepare a separate annual operating budget for the City's Seizure/Forfeiture Fund for City Council approval. 6. Disburse the proceeds of the Seizure/Forfeiture Fund only in accordance with operating budget and/or specific City Council approval. The purpose of this report is to make specific recommendations as to City Policy over the use of Seizure/Forfeiture monies. The foregoing should assist the City Council in developing its Policy. We are available to meet with the City Council for discussion. We are also available to assist City staff and the City Attorney to prepare a final City Council Resolution on this topic. Respectfully submitted, TAUTGES, REDPATH & CO., LTD. Robert I Voto, CPA RJV/lad