SIOUX FALLS, SD - The City of Sioux Falls has made more than $275,000 in the three years it has been auctioning off specialized surplus equipment online, according to the Argus Leader.

By switching from its traditional auction, the city has significantly increased revenue at least 50 percent from the sale of used specialized equipment, Scott Rust, city purchasing coordinator, told the Leader.

Before 2006, all of Sioux Falls' surplus items were sold at an annual local auction or by sealed bids. While those sales still work for smaller vehicles because there are local buyers, few area buyers wanted large specialized equipment, said Dean Borchardt, the city's fleet operations manager. The machinery would be auctioned off for much less than it was worth.

Sioux Falls' fleet and finance departments decided four years ago to pursue alternative ways to sell such machinery, Rust said. What they found was Iron Planet, an auction Web site specific to used construction and agricultural equipment.

State law requires city and county governments to post notice of surplus sales and to sell items either through a sealed bid process or a live auction. No language in the law bans auctions from being held in virtual reality.

The first equipment the city sold online, a large machine used to apply fertilizer, sold for $61,000 - double what it may have gone for in Sioux Falls, Rust told the Leader.