Professional Documents
Culture Documents
Council Report
April 7, 2015
To:
From:
Sharon Friedrichsen
Subject:
RECOMMENDATION(S):
Waive reading in full and introduce on first reading an ordinance amending Title 3,
Chapter 12 of the Citys Municipal Code pertaining to the purchasing system.
EXECUTIVE SUMMARY:
As part of the ongoing review of management oversight of existing contracts and
corresponding purchasing policies, staff have been reviewing the existing purchasing
code. While the review is ongoing, as a first interim measure, staff are putting forth
minor changes for Councils consideration. Other possible amendments will be
forthcoming. The objective of such an undertaking is to provide rules that are easier for
City staff, and the public, to understand and follow appropriately. A clearer code should
help increase accountability, compliance, and transparency as well as allow for a more
effective and efficient process for procuring a variety of goods and services.
The purpose of this agenda item is to consider the first reading of an ordinance to amend
Chapter 3.12 of the Citys Municipal Code pertaining to the Purchasing System. The
second reading and corresponding public noticing will occur at the next appropriate
Council meeting. Changes to the existing ordinance will become effective 30 days after
Councils adoption of the second reading of the proposed new ordinance.
ANALYSIS/DISCUSSION:
Staff puts forth the recommendations contained below for consideration:
Clarification on $25,000 threshold: Amendments to clarify that contracts with a
value of $25,000 or more require Council approval. This is to avoid any confusion
that contracts with a value of $25,000 do not need approval. (The Citys
professional services agreement template has also been updated with new
language that all contracts exceeding $24,999.00 require City Council approval to
be valid.)
Open market purchases: Increase the minimum dollar amount requiring open
market purchases from $1,000 to $4,000 with an inflationary adjustment in order
to promote operational efficiencies. While the intent of this requirement is to help
ensure taxpayers are receiving the most economical price for items purchased on
the open market, adherence to this policy often leads to inefficiencies in terms of
staff time to obtain quotes and the timely execution of the particular activity at
hand. In addition, vendors are often reluctant to provide a written quote for a
project amount of this value. A recent examples of an item that would trigger this
requirement include the removal of a tree estimated to cost $1,200. Staff
reviewed the municipal codes of several jurisdictions and the dollar thresholds
that triggered open market purchases ranged from $1,000-10,000. Neighboring
cities of Monterey and Pacific Grove include inflation adjustment within their
respective municipal codes. This allows for flexibility to adjust purchasing limits for
inflation without needing to formally amend the Municipal Code.
FISCAL IMPACT:
No direct fiscal impacts of adopting the first reading of the ordinance. However, there
may be greater oversight of expenditures if contract procedures are more clearly defined
and easier for City staff to follow as well as savings of staff time by changing the dollar
amount of purchases requiring three bids.
PREVIOUS COUNCIL ACTION/DECISION HISTORY:
Adoption of current purchasing policy in 2003
ATTACHMENTS:
1. Current Ordinance with Amendments in Track Changes
2. Draft Ordinance Amending Title 3, Chapter 12
APPROVED:
____________________________________
Douglas J. Schmitz, City Administrator
Date: __________________
As an alternative to the procedures set out in Articles III and IV of this chapter, in
the case of obtaining consulting and other technical or highly specialized
personal services, the City Administrator or her/his designee may authorize those
services which may be obtained by competitive negotiations when:
A. The service involves a specialized knowledge or personal skill, such as
attorneys, architects, accountants and specialized consultants; or
B. The supplies or equipment are such that suitable technical or
performance specifications are not readily available, the City is not able to
develop descriptive specifications, and proposals for the purchase would
be more advantageous to the City.
The best offer as judged against proposal evaluation criteria shall be
accepted. The use of competitive negotiations is not intended as a vehicle
for the avoidance of the bidding procedures as set forth in this chapter.
Any offer of exceeding $25,000 or more shall require approval by
resolution of the City Council prior to acceptance.
3.12.190 Surplus Supplies and Equipment
All City department heads shall submit to the purchasing agent, at such time and
in such form as she/he shall prescribe, reports showing all supplies and
equipment which are no longer used or which have become obsolete or worn
out. The purchasing agent shall have authority to sell all supplies and equipment
with a value of less than $1,000 5,000 which cannot be used by any other City
department or which have become unsuitable for City use, or to exchange the
same for, or trade in the same on, new supplies and equipment. The purchasing
agent shall utilize all appropriate means to realize maximum return possible on
such sales, exchanges and trades. All income from such dispositions shall be
deposited in the equipment acquisition reserve fund for new purchases approved
by action of the City Council.
Article III. Open Market Purchases/Purchases Under $25,000
3.12.250 Authorized Purchases Under $25,000.
Purchases of supplies, services, materials, equipment and contractual services,
including public works projects, having an estimated market value of more than
$1,000 4,000, but under $25,000 may be made by the purchasing agent in the
open market, as described in this article, without observing the formal contract
procedures prescribed in Articles IV and V of this chapter. Purchases of $4,000
or less may be made without informal bid of obtaining three written quotes at the
discretion of the purchasing agent. The $4,000 limit set forth above shall be
automatically increased by $500 on July 1, 2020 and by the same amount each
fifth year thereafter.
3.12.310 Splitting Purchase Orders.
No purchase orders involving amounts in excess of or equal to $25,000 shall be
split into parts to produce amounts of $25,000 or less for the purpose of avoiding
the provisions and restrictions of this article.
Article IV. Formal Bid Procedures/Purchases Of $25,000 or More
CITY COUNCIL
ORDINANCE NO. 2015AN ORDINANCE (FIRST READING) AMENDING CITY OF CARMEL BY THE SEA
MUNICIPAL CODE TITLE 3, CHAPTER 12 PERTAINING TO PURCHASING
WHEREAS, the City of Carmel-by-the-Sea adopted Ordinance 2003-02 on March 4,
2003 to establish efficient procedures for the purchase of supplies, materials, equipment and
public works projects at the lowest possible cost commensurate with quality needed; to exercise
positive financial control over purchases; to clearly define authority for the purchasing function,
and to assure the quality of purchases; and
WHEREAS, City staff have undertaken a review of the current code, researched other
best practices of local governments, and consulted with subject experts and found the existing
sections of the purchasing system in need of revision; and
WHEREAS, the intent of such revisions is to help make the purchasing code clearer and
more consistent in order to promote accountability, compliance and transparency as well as to
make purchases of goods and services more effective and efficient.
THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES
ORDAIN, AS FOLLOWS:
Section One. Title 3, Chapter 12 of the Municipal Code of the City of Carmel-by-the-Sea
is amended as shown in Exhibit A attached hereto and incorporated herein. All previous
amendments not identified and revised in Exhibit A will remain in effect.
Section Two. All ordinances and parts of ordinances in conflict herewith are hereby
repealed.
Section Three. Severability. If any section, subsection, or part of this Ordinance is held to
be invalid or unenforceable, all other sections, subsections, or parts of subsections of this
ordinance shall remain valid and enforceable.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THESEA this 7th day of April 2015, by the following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
SIGNED:
ATTEST:
_______________________
Jason Burnett, MAYOR
____________________
Lee Price, MMC
Interim City Clerk