Agenda

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City Council Regular Meeting

Meeting Date:

05/12/2020

BACKGROUND

The Purchasing Department with the Support of City Management is proposing to modify the Purchasing Policy to align with Local Government Code 252. With this revision, two changes would be made to the policy.

Change 1: Eliminate the need to take cumulative purchases with a single vendor exceeding $50,000.00 for authorization. With this revision, all purchases/projects with an overall contract value exceeding $50,000 would still be presented to council for review and approval prior to the purchase being made or a contract executed. (Reference Texas LGC 252.041)

The currently policy requires Staff to request authorization from City Council to exceed $50,000 in cumulative purchases with a single vendor during a single fiscal year. For example:

Department 1: Purchases Office Furniture from Vendor A in the amount of $25,000.00 in November
Department 2: Purchases Computer Equipment from Vendor A in the amount of $15,000.00 in January
Department 3: Purchases Warehouse supplies from Vendor A in the amount of $9,000.00 in February
Department 4: Plans to purchase office supplies and a desk chair from Vendor A in the amount of $1,100.00. This purchase would take Vendor A over the cumulative purchase amount of $50,000 so Department 4 now is required to put together a CCM/Resolution for Council approval prior to being able to make their purchase.

The $50K cumulative requirement creates an undue administrative burden on staff to track separate and unrelated purchases across all City departments. As recently discussed, this is a manual, time-consuming process as the City’s financial system is not equipped to properly track or monitor this.

Change 2: Modify the small dollar purchasing threshold from $1,000.00 to $3,000.00 to align with Texas LGC 252.0215

The small dollar purchasing threshold is the threshold that requires a minimum of three (3) bids be obtained by the department prior to making an award. The $1,000 threshold was put in place prior to 2011 and creates a significant amount of workload for staff. As labor and material rates continue to increase, Staff finds it necessary more often than not to seek additional bids ultimately delaying a much-needed repair to facilities such as HVAC, Electrical, and Plumbing.

The proposed changes to the City Purchasing Policy are in alignment with the City's benchmark and surrounding City Operations, other Cities covered by COS Legal Council, and Local Government Code 252 which outlines procurement requirements for municipalities within the State of Texas.

GOAL

The goal with the proposed modifications are to align City of Schertz Purchasing Policy with State of Texas Local Government Code, Benchmark Cities, and other cities covered by COS Legal Council. In addition, City operations would gain efficiencies that would allow smaller repairs and projects to be completed more quickly.

COMMUNITY BENEFIT

The benefit to the community with this change would be to allow City Departments to more effectively and efficiently respond to the needs of the City.

SUMMARY OF RECOMMENDED ACTION

Although the City Charter delegates the approval to make Operational Policy Changes to the City Managers Office, Purchasing and CMO wish to ensure that Council and Staff are in agreement on the recommendations.

FISCAL IMPACT

This policy change does not carry any fiscal impact.

RECOMMENDATION

Staff recommends City Council concur with the recommended changes to the Purchasing Policy.

Attachments
Policy Change Hilights