Town of Atherton Audit and Finance Committee

JOINT AUDIT AND FINANCE COMMITTEE STAFF REPORT TO: AUDIT AND FINANCE COMMITTEE THERESA DELLASANTA, INTERIM CITY MANAGER DEBRA AUKER, INTERIM FINANCE DIRECTOR FOR THE MEETING OF MARCH 13, 2012 REVIEW OF DRAFT PURCHASING ORDINANCE

FROM: DATE: SUBJECT:

RECOMMENDATION Review and comment on the draft Purchasing Ordinance amending Chapter 3.16 of the Atherton Municipal Code which establishes a purchasing policy for goods and supplies, equipment, professional and nonprofessional services and public works contracts. DISCUSSION The Town adopted a purchasing system, Chapter 3.16 of the Atherton Municipal Code, in 1994. The purpose of the purchasing system is to establish efficient procedures for the purchase of goods and supplies, equipment, professional and nonprofessional services to ensure lowest possible cost with qualify needed and transparency. As you are aware, with the passage of time it has become necessary to rewrite and update Chapter 3.16 to better reflect the changes in Town operation and to add clarity to the chapter. Staff presented Council with a draft ordinance in July 2010. The City Council referred it to the Audit Committee for review. The members of the Audit Committee, especially Bill Widmer, have spent several hours reviewing, discussing and developing language to consider in the revised purchasing ordinance. The majority of these comments are included in the draft ordinance. The attached ordinance will revise the current Chapter 3.16 in its entirety. The main objectives to be included in the revised ordinance include: providing checks and balances for the spending of public funds, requiring proper authorizations, clarifying the duties of the purchasing officer, addressing the requirements for surplus assets and inventories, enhancing the

requirements for public works projects, adherence with the California Government Code for general law cities and implementation of best practices. Summary of significant changes. Procurement requirements, approvals and procedures are broken down into three sections: 1. Procurement of goods and supplies, equipment, and nonprofessional services. 2. Procurement of professional services 3. Procurement of public works contracts The City Manager remains as the Purchasing Officer for the Town and the purchasing authority limits are as follows: Mayors Recommended Limits

Type

Proposed Limits

Current Limits

Approval Requirements

Goods, supplies, equipment, materials and nonprofessional services

Purchase Order Required $1,000 $1,000 Department Head and Finance Director Up to and including Purchasing Officer $5,000 and Finance Director $5,001 to $15,000 Purchasing Officer and Finance Director City Council, Greater than Purchasing Officer $15,000 and Finance Director $750

Open market proceduresthree informal quotes recommended Informal proceduresthree written quotes required Formal procedures

Up to and including $10,000 $10,001 to $50,000

Up to and including $5,000 $15,000

Greater than $50,000

$15,000

Professional Contract Services Open market proposals Up to and including $5,000 Informal proposals-three informal proposals desired Formal proposals-Request for Proposal required Public Works Contracts Force account/Open market procedures Informal biddingincluding advertising Formal bidding required

Up to and including $5,000 Up to $15,000 Greater than $15,000

Up to and including City Manager $750 City Manager

$5,001 to $25,000 Greater than $25,000

$750 to $15,000 Greater than $15,000 City Council, and City Manager

Up to and including $25,000 $25,001 to $100,000 Greater than $100,000

Up to and including $10,000 $25,000 Greater than $25,000

Up to and including City Manager $750 $750 to $5,000 City Manager

Greater than $5,000 City Council, and City Manager

Staff looks forward to walking through the details of the proposed ordinance and answering questions.

Prepared by: ________________________ Debra Auker, Interim Finance Director

Approved by: _______________________ Theresa DellaSanta Interim City Manager

Attachment: Draft Chapter 3.16 Purchasing Ordinance