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TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: FINANCE DIRECTOR
DATE: AUGUST 28, 2002
SUBJECT: PURCHASING ORDINANCE REVISION – INFORMAL BID AND SALE OF OBSOLETE PERSONAL PROPERTY PROCEDURES
Staff Coordinator: Kathryn Downs, Accounting Manager
Adopt Ordinance No. 380, an Ordinance of the City of Rancho Palos Verdes regarding the purchasing and disposition of certain supplies and equipment and amending the Rancho Palos Verdes Municipal Code.
Ordinance No. 380 is an amendment to the Rancho Palos Verdes Municipal Code that was introduced at the August 6, 2002 meeting of the City Council. The City Council may now choose to adopt this Ordinance. Following is the information provided in the August 6, 2002 staff report to the City Council.
Currently, subsection A of Section 02.44.040 of the Rancho Palos Verdes Municipal Code requires that "Purchases in excess of five hundred dollars shall be based on at least three bids". Subsection B of Section 02.44.040 provides that the bids may be solicited by direct mail request or by telephone. These bid requirements, adopted prior to 1990, are commonly referred to as the Informal Bid procedures.
The informal bid procedures apply to all purchases over the $500 threshold, including routine purchases such as copier paper and maintenance supplies. During FY 2001-2002, purchase amounts between $500 and $2,000 accounted for 782 of 3,091 total purchase transactions, or 25% of total purchase transactions. However, this same group of purchases accounted for only $784,191 (less than 6%) of total purchases of $13,698,436.
To compare informal bid thresholds for other agencies, Finance Staff surveyed an email group of the California Society of Municipal Finance Officers. The average informal bid threshold for the 68 responding agencies was $3,980. Staff believes adopting a $2,000 informal bid threshold will contribute to a more efficient purchasing process without sacrificing adequate control within the Open Market Procedure.
In addition, the City Manager is currently authorized to approve the sale or exchange of worn-out, scrap, or obsolete personal property with a value of $500 or less. The City Council must approve sale or exchange transactions for personal property with a value more than $500. To consistently apply the recommended threshold, staff recommends an amendment to Section 02.44.120 of the City’s Municipal Code, regarding the sale of obsolete personal property, to authorize the City Manager to approve sale or exchange transactions for personal property with a value of $2,000 or less.
There is no foreseeable fiscal impact resulting from the recommended revision to the informal bid threshold and procedures for the sale of obsolete personal property as defined within the City’s Municipal Code.
ORDINANCE NO. 380
AN ORDINANCE OF THE CITY OF RANCHO PALOS VERDES REGARDING THE PURCHASING AND DISPOSITION OF CERTAIN SUPPLIES AND EQUIPMENT AND AMENDING THE RANCHO PALOS VERDES MUNICIPAL CODE
THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DOES ORDAIN AS FOLLOWS:
Section 1. Section 2.44.040 of Chapter 2.44 of Title 2 of the Rancho Palos Verdes Municipal Code is hereby amended by amending paragraph A thereof to read as follows:
"A. Purchases in excess of two thousand dollars shall be based on at least three bids, and shall be awarded based on the applicable criteria contained in subsection A of Section 2.44.030."
Section 2. Section 2.44.120 of Chapter 2.44 of Title 2 of the Rancho Palos Verdes Municipal Code is hereby amended to read as follows:
"The city manager shall sell worn-out, scrap, or obsolete personal property, or exchange the same for, or trade in the same on new supplies and equipment, including property of all departments, by soliciting bids. No bids will be accepted from city employees or contractors. If the value of the property to be sold is of a value of two thousand hundred dollars or less, the sale shall be approved by the city manager. In the event the value of the property to be sold is more than two thousand dollars, the sale shall be subject to the approval of the city council."
PASSED, APPROVED AND ADOPTED this _________ day of ______________, 2002.