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HomeMy WebLinkAboutF-1 Staff Report -Amended Purchasing Ordinance-2nd ReadingSECOND READING ITEM F-1 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: SERGIO GONZALEZ, CITY MANAGER FROM: TALIKA M. JOHNSON, ADMINISTRATIVE SERVICES DIRECTOR DATE: NOVEMBER 4, 2024 SUBJECT: SECOND READING – AMENDED AND RESTATED ORDINANCE REVISING CHAPTER 2, ARTICLE VII. – BIDDING AND CONTRACTING, AND OTHER PURCHASES OF PROJECT, SUPPLIES, SERVICES AND EQUIPMENT BACKGROUND: The City's procurement ordinance (Article VII, Chapter 2 of the Azusa Municipal Code) provides general rules and regulations for the bidding procedures of equipment, supplies and services for city operations, and specifies levels of purchasing authority. The City’s current procurement ordinance was adopted in January of 2022. To enable the most effective and efficient procurement processes, staff is recommending that the existing procurement ordinance, Article VII, Chapter 2 Section 538 (7), Award of professional, management, general or special services contracts based upon competence, and Section 539, Waiving of Purchasing Procedures, be revised. The City Council approved for introduction and first reading of Ordinance No. 2024-07 revising requirements for waiving of purchasing procedures on October 21, 2024. This action approves second reading of the Ordinance. RECOMMENDATION It is recommended that the City Council take the following action: 1)Waive further reading, read by title only, and adopt Ordinance No. 2024-07. ANALYSIS In order to continue to focus on revenue enhancements, the City Council has approved agreements to outsource tax auditing services from outside consultants to review some of the revenues the City is eligible Approved City Council November 4, 2024 Revised Procurement Ordinance November 4, 2024 Page 2 to receive. To maintain service costs stability, it is to the benefit of the City to continue the contracts as long as possible to maintain the existing service payment rates and revenue sharing terms. The City currently uses HDL and MuniServices for auditing services related to sales tax, transaction use tax (TUT), property tax, business license tax, transient occupancy tax, utility user tax, and other special taxes, and both firms are recognized experts in this field with extensive legal, financial, and auditing experience and have been very successful in their work. The timely compliance audits protect and enhance the City’s revenues. Staff recommends the proposed ordinance change for administrative efficiency. Historically when soliciting bids for services, contract rates or fees tend to increase. By administratively allowing staff to renegotiate with existing providers, the City is able to maintain lower rates. Future amendments will continue with the cost sharing approach so that the audit consultants will only receive a fraction of the revenue collections the City otherwise would not have receive if not for their services. The proposed change to the ordinance includes the following: Revision of Section 2-538 – Updates include Award of professional, management, general or special services contracts based upon competence. Updates the policy to include contract amendments for tax auditing services. The revision will enable staff to increase operational efficiencies, and the contract amendments will be reported to council through the City Manager signed contracts staff reports on a regular basis. Revision of Section 2-539 – Updates include Waiving of purchasing procedures. Updates the policy to waive purchasing procedures to include the renewal of previously bid revenue sharing agreements where the revenue to the City is greater than the revenue the City were to receive if such contracts were not in place. The current policy requires the City to bid revenue sharing agreements every four years. Switching consultants is not in always in the best interest of the City. Consultants who have historical information on file are able to continue services at a lower fee, as switching consultants would require significant initial costs thus increasing the net fee to the City. The proposed ordinance updates the need to re-bid contracts previously awarded, when it is in the best interest of the City to keep fees low. Furthermore, when fees are not maintained or, have more than a nominal increase, these contracts would again go out to bid. The proposed ordinance still maintains robust internal controls and superior accountability as compared to other cities, thus supporting higher procurement thresholds. For example, revenue contracts would again be subject to bidding following all procedures provided in the city's Purchasing Policies and Procedures Manual for Request for Proposal processes, if the renewal fees are not in the City’s best interest. FISCAL IMPACT There is no additional fiscal impact associated with the recommended action. It is expected that the recommended changes to the procurement ordinance will increase efficiencies in the procurement process and reduce staff time required to process city purchases for equipment, supplies and services. Revised Procurement Ordinance November 4, 2024 Page 3 Prepared by: Reviewed and Approved: Adriana Garcia Talika M. Johnson Purchasing Supervisor Director of Administrative Services Reviewed and Approved: Sergio Gonzalez City Manager Attachments: 1. Ordinance No. 2024-07 09845.00500\9753855.5 ORDINANCE NO. 2024-07 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AZUSA AMENDING AND RESTATING ARTICLE VII, CHAPTER 2, SECTIONS 2-538 (7) AND 2-539 OF THE AZUSA MUNICIPAL CODE RELATING TO WAIVING OF PURCHASING PROCEDURES WHEREAS, City Council adopted Ordinance No. 2021-09 on January 18, 2022 WHEREAS, in order to improve the purchasing process certain changes to Article VII, Chapter 2,Section 2-538 and Section 2-539, of the Azusa Municipal Code are necessary. WHEREAS, Staff seeks to improve administrative efficiency and maintain auditing consultant cost stability by having administrative authority to re-negotiate tax auditing contracts. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AZUSA DOES ORDAIN AS FOLLOWS: SECTION 1: Article VII, Chapter 2, Sections 2-538 (7) and 2-539 of the Azusa Municipal Code are hereby deleted in its entirety and restated to read as follows: “Sec. 2-538. Award of professional, management, general or special services contracts based upon competence. “(7) Contract amendments. The purchasing officer is authorized to issue contract amendments as follows: (i)If the contract was originally executed for an amount of $50,000.00 or less, the purchasing officer shall have the authority to issue contract amendments, provided that the sum of all amendments, plus original contract amount, shall not exceed $50,000.00. If the amended contract will exceed $50,000.00, the city council shall make a finding that it is in the best interest of the city to waive the normal selection process and approve the amendment to the contract. (ii)For a contract originally executed for an amount of $50,000.00 and over and originally approved by city council, the purchasing officer shall have authority to issue contract amendments, provided that the sum of all contract amendments for any single contract shall not exceed the amount approved by city council. If the amended contract will exceed the amount previously approved by city council, the contract amendment must be approved by city council. (iii)Tax auditing services.” “Sec. 2-539. Waiving of purchasing procedures. In its discretion, the city council may at any time, without amending this chapter, waive the purchasing procedures or alter these proceedings to fit a specific purchase or contract, when such waiver is not in violation of state or federal law. A request for waiver should occur only when unforeseen circumstances or emergencies arise that justify an exception to following the provisions of this article, the city will not be prejudice by such waiver and is in the best interest of the city and its operations. ORDINANCES/RESOLUTIONS Ordinance No. 2024-07 Page 2 of 3 The city may waive purchasing procedures where revenue sharing agreement renewals are concerned provided that the original contract followed the purchasing policies and remaining with the same consultant is in the best interest of the city as bidding would significantly increase the cost of the agreement. A request for a waiver should only occur when the revenue (net of fees) is greater than the City would receive if the city did not have the consultant’s assistance.” SECTION 2: Severability. If any section, sentence, clause or phrase of this Ordinance or the application thereof to any entity, person or circumstances is held for any reason to be invalid or unconstitutional, such invalidity or unconstitutionality shall not affect any other provisions or applications, of this Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are severable. The City Council of the City of Azusa hereby declares that it would have adopted this Ordinance and each section, sentence, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared unconstitutional, invalid, or unenforceable. SECTION 3: Effective Date. This Ordinance shall become effective thirty (30) days following its adoption. SECTION 4: Publication. The City Clerk shall certify the adoption of this Ordinance. Not later than fifteen (15) days following the passage of the Ordinance, the Ordinance, or a summary thereof, along with the names of the City Council members voting for or against the Ordinance, shall be published in a newspaper of general circulation in the City of Azusa. PASSED, APPROVED and ADOPTED this 4th day of November, 2024. ______________________________ Robert Gonzales, Mayor ATTEST: Jeffrey Lawrence Cornejo, Jr., City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Ordinance No. 2024-07, was duly introduced and placed upon its first reading at a regular meeting of the Azusa City Council on the 21st day of Ordinance No. 2024-07 Page 3 of 3 October, 2024 and that thereafter, said Ordinance was duly adopted and passed at a regular meeting of the Azusa City Council on the 4th day of November, 2024 by the following vote to wit: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ___________________________________ Jeffrey Lawrence Cornejo, Jr., City Clerk APPROVED AS TO FORM: ________________________________ ___________________________________ Best Best & Krieger LLP, City Attorney