O-2004-2736-A (done at 1/14/08 meeting)

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REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested January 14,2008 Requested By: Susan Kelle .xi ADDfoDriation Source of Funds: Department: Account Number: Report: Resolution: Ordinance: x Amount Budgeted: Amount Requested: Exhibits: Ordinance #2004-2736 -A Budgeted Item: YES NO Exhibits: Exhibits: SUMMARY & RECOMMENDATION DlU'ing the 2007 Legislative Session the Legislature amended Section 252.002 of the Texas Local Government Code to increase the dollar value threshold for requiring that municipal contracts be subject to competitive sealed bids or proposals, from $25,000 to $50,000. At the City level, Section 5.02 of the City Charter requires that city contracts comply with Chapter 252 of the Local Government Code, for all contracts in excess of $5000. Furthelmore, Section 5.02 of the Charter allows City Council by ordinance to increase the dollar value threshold for city contracts to match periodic increases in state law. An ordinance was subsequently passed for this purpose, and was codified in Chapter 2 of the Code of Ordinances, as Section 2-82. Section 2-82 of the Code of Ordinances was worded to formally adopt the provisions of Chapter 252 of the Local Government Code and allow Chapter 252 to supersede the City Charter. By doing so it also has the effect of automatically adjusting the dollar value threshold for city contracts to match any increases incorporated into state law, without City Council action, by providing that "The city council hereby elects to have the provisions ofV.T.C.A., Local Government Code Sec. 252.001 et seq., 'Purchasing and Contracting Authority of Municipalities' supersede the provisions of the City Charter that relate to the notice of contracts, advertisement of notice, requirements for the taking of sealed bids based on specifications for public improvements or purchases, the manner of publicly opening bids or reading them aloud or the manner of letting contracts that are in conflict with V.T.CA, Local Government Code Sec. 252.001 et seq." ~ The authority for Section 2-82 of the Code of Ordinances is twofold: 1) Local Government Code Section 252.002, which provides that a municipality may elect to have Chapter 252 controi over charter provisions governing bidding of public contracts; and 2) Chalter Section 5.02, which provides that "Before the city may enter into a contract that requires an expenditure of more than five thousand dollars ($5000), the city must comply with the procedure prescribed by V.T.C.A. Local Government Code Sec. 252.001 et seq. for competitive sealed bidding or competitive sealed proposals..." and that "Council by ordinance may increase the five thousand dollar ($5000) limitation herein provided to confOlm to subsequent increases authorized by state law" . As such, since Section 2-82 of the Code of Ordinances is self-executing, it is not necessary for the City Council to take action to increase the dollar value threshold for city contracts to $50,000, to agree with the recent amendment made to Chapter 252 of the Local Government Code. However, Charter Section 5.02 also provides that "Council may by ordinance confer upon the city manager general authority to contract for expenditures without futther approval of council for budgeted items not exceeding five thousand dollars ($5000.00). All contracts for expenditures involving more than five thousand dollars ($5000.00) must be expressly approved by council in advance". Whereas the dollar value threshold for city contracts to be competitively bid is automatically adjusted to agree with changes in state law, this is not the case with city manager purchasing authority. Instead, an ordinance must be passed each time an increase is desired. Past City Councils have