Item 7CAGENDA ITEM # 7C
MAY 27, 2008
CITY OF ALANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: ORDINANCE 5-08-49 TO AMEND THE CITY OF
ATLANTIC BEACH CODE OF ORINDNACES, RAISING
THE CITY MANAGER'S PURCHASING AUTHORITY TO
$25,000 AND ALSO RAISING THE BID THRESHOLD TO
$25,000.
SUBMITTED BY: Nelson Van Liere, Finance Director
DATE: May 5, 2008
BACKGROUND: In 1999, the City Commission approved a change in the purchasing
procedures by raising the bid threshold from $5,000 for enterprise
funds and $2,500 for other funds to a uniform amount of $10,000.
Since that change, the cost of preparing bids has risen significantly.
Advertisements for a bid are now averaging from $350 to $650 per
ad, depending on the project. By raising the bid threshold and
increasing the City Manager's approval limit, the City will avoid
the high cost of preparing bids for smaller purchases. This change
will also enable the City to award some projects sooner by not
having to wait for City Commission approval. T'he proposed
increase is from $10,000 to $25,000.
Currently, the City exempts purchases from the bid process if the
purchase is from another governmental agency or their contracts.
This exemption would remain in place for purchases over $25,000.
The staff proposes to expand that exemption to allow the City to
purchase items that are over $25,000 without going out to bid
based on a contract from another governmental agency by either
procuring the goods or services at that contract price from the
vendor awarded the contract or from any other vendor that beats
that price. This would be done by acquiring at least three formal
written quotes from alternate vendors.
In order to streamline the purchasing process for those purchases
within the City Manager's approval authority, and under the bid
threshold, the City Manager proposes the following changes to the
quote requirements previously approved by the City Commission.
These requirements are not part of the City's code. They are set as
a matter of internal policy by the City Manager and are proposed
as follows:
AGENDA ITEM # 7C
MAY 27, 2008
Purchasing Bid and Quote Guidelines
Eaistin R uirements Pro osed Re uirements
No Additional No Additional
U to $500 uotes U to $500 uotes
Two Additional
From $501 to From $501 to Documented
$2,500 One Additional $5,000 uotes
From $2,501 to
$5,000 Two Additional
Three Additional
formal written
From $5,001 to From $5,001 to quotes from the
$10,000 Three Additional $25,000 vendor
Bid Required unless Bid Required
exempted by Sec 2- unless exempted
Over $10,000 336 Over $25,000 b Sec 2-336
Exceptions to these limits depend on various circumstances
such as the lack of vendors providing the service or non-
responses to requests for quotes in a timely manner from
known vendors.
BUDGET: No identifiable hard dollar budget impact.
RECCOMENDATION: Approve Ordinance No. 5-08-49 to change the City Code
of Ordinances raising the bid threshold and City Manager's
approval level to $25,000; to modify the exceptions to the
bid requirements; and to adopt a revised internal
requirement for the number of quotes required for smaller
purchases.
REVIEWED BY CITY MANAGER
AGENDA ITEM # 7C
MAY 27, 2008
ORDINANCE NO. S-(18-49
AN ORDINANCE OF THE CITY OF ATLANTIC
BEACH, FLORIDA, AMENDING CHAPTER 2,
ADMINISTRATION, ARTICLE VII, FINANCE,
DIVISION 2, PURCHASING, SECTION 2-331, WHEN
BIDS ARE REQUIRED, TO INCREASE THE BID
THRESHOLD, AMENDING SECTION 2-336,
EXCEPTIONS, ADDING AN ADDITIONAL
EXCEPTION, AMENDING SECTION 2-337, OPEN
MARKET PROCEDURES, RAISING THE AMOUNT
FOR WHICH NO ADVERTISING IS REQUIRED,
AMENDING SECTION 2 338 SCOPE OF
PURCHASING AUTHORITY TO INCREASE THE
CITY MANAGER'S AUTHORITY FOR DOLLAR
LIMITS, AND TO PROVIDE AN EFFECIVE DATE
WHEREAS, the City has not amended the purchasing code to reflect the increased
cost of goods and services since 1999, and
WHEREAS, the resources devoted to preparing and awarding a bid including the
cost of advertising has become an increasingly significant portion of
the total cost for each bid, and
WHEREAS, the staff will continue to exercise due diligence with respect to seeking
the best price and product for the City under the internal guidelines
set forth by the City Manager for those items under $25,000.
NOW, THEREFORE, BE IT ENACTED BY THE CITY COMMISSION ON
BEHALF OF THE PEOPLE OF THE CITY OF ATLANTIC BEACH, FLORIDA,
that;
SECTION 1: Chapter 2, Administration, Article VII, Finance, Division 2,
Purchasing is hereby amended to read as follows (words
stricken are deletions and words underlined are additions):
Sec. 2-331. Bids--When required.
All supplies and contractual services, when the estimated cost thereof shall exceed
twenty-five thousand dollars 025,000.00) shall be
purchased by formal, written contract from the lowest responsible bidder after due notice
inviting proposals.
Ordinance No. 5-08-49 Page 1
AGENDA ITEM # 7C
MAY 27, 2008
Sec. 2-336. Same--Exceptions.
The formal bid procedure as defined in this division is not required in the following
cases:
(1) When the city commission, by a vote of the majority of those members present,
waives a formal bid procedure;
(2) When the goods or services to be procured are procurable from only one source,
such as contracts for telephone service, electrical energy and other public utility services;
books, pamphlets, periodicals, specifically designed business and research equipment and
related supplies;
(3) Where the services required aze for professional, artistic skills or insurance,
pursuant to a written contract;
(4) In emergencies involving public health, safety or where immediate expenditure is
necessary for repairs to city property in order to protect against further loss of or damage
to the city property to prevent or minimize serious destruction of city services;
(5) Contracts for the maintenance or servicing of equipment which are made with the
manufacturer or authorized service agent of equipment when the maintenance or
servicing can best be performed by the manufacturer or authorized service agent where
such a contract would otherwise be advantageous to the city;
(6) When the goods or services are procured from other governmental agencies or at
or below the cost of their competitivelybid contracts;
('~ Purchase and contracts for the use or purchase of data processing equipment or
data processing systems software and reproduction equipment.
(8) When the goods or services are procured from government-related state-wide or
national associations.
Sec. 2-337.Open market procedures.
All purchases of supplies and contractual services of less than the estimated value of
twenty-five thousand dollars ($25.000.00 may be
made in the open mazket without newspaper advertisement and without observing the
procedure prescribed by section 2-331 except. for the award of formal contracts. The city
manager shall keep a record of all open market orders and orders for the purchase of
supplies and services in accordance with the Public Records Act of the state and
generally accepted accounting internal control procedures.
Sec. 2-338. Scope of purchasing authority.
The city manager shall have the authority to:
(1) Award contracts within the purview of this division. Provided, that no purchase
order or contract for an amount in excess of twenty-five thousand dollazs~$25.000.00,~
be executed without city commission approval unless
there is an emergency involving public health, safety or where immediate expenditure is
necessary for repairs to city property in order to protect against further loss of or damage
to the city property to prevent or minimize serious destruction of city property to prevent
or minimize serious destruction of city services. In that event, the city manager shall
report the action taken and expense incurred to the city commission;
Ordinance No. 5-08-49 Page 2
AGENDA ITEM # 7C
MAY 27, 2008
(2) Prepaze purchase procedures necessary for the function of purchasing;
(3) Act or procure for the city the highest quality in supplies and contractual services
at least expense to the city;
(4) Discourage uniform bidding and endeavor to obtain as foil and open competition
as possible on all purchases and sales;
(5) Establish all rules and regulations authorized by this division and any others
necessary to its operation;
(6) Prescribe and maintain such forms as he shall find reasonably necessary to the
operation of this division;
(7) Prepare and adopt standard purchasing nomenclature for using agencies and
suppliers;
(8) Exploit the possibilities of buying in bulk so as to take full advantage of
discounts;
(9) Sign on behalf of the city any contract authorized by the city commission,
excepting where the city commission directs that some other officer or officers shall do
so.
(10) Approve purchase orders and contracts in excess of twenty-five thousand dollars
($25,000.00) when the services or goods aze related to
items also exempted to the formal bid procedures as listed in section 2-336, except for
professional, artistic skills or insurance, which are in excess of twenty-five thousand
dollars $25,000.001
SECTION 2, Effective Date,
This ordinance shall take effect immediately upon its final passage and adoption.
PASSED by the City Commission on first reading this day of , 2008.
PASSED by the City Commission on second and final reading this day of
2008.
ATTEST:
Donna L. Bussey, CMC
City Clerk
John S. Meserve
Mayor, Presiding Officer
Approval as to Form and Correctness:
Alan C. Jensen, Esquire
City Attorney
Ordfnance No. 5-08-49 Page 3