2018-016 CM Purchasing AuthorityDate: February 16, 2018 Report No. 2018-016
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Informational report of the City Manager’s expenditure authority in fiscal year 2016-2017.
EXECUTIVE SUMMARY:
The purpose of this report is to provide City Council with information on the City Manager’s
expenditure authority for budgeted funds in fiscal year 2016-2017. The intent is to be transparent
and share this information at the conclusion of each fiscal year. A report was last provided in
November of 2016.
BACKGROUND:
In September of 2006, City Council passed Ordinance No. 2006-237 (Attachment 1). This
ordinance raised the City Manager’s general expenditure authority of budgeted funds from
$25,000 to $100,000 due to inflationary trends. General expenditures are defined as fees,
professional services, personal services and other categories exempted from the bid process. The
purpose of granting expenditure authority to the City Manager is to maximize efficiency,
preventing Council and meeting agendas from being burdened with routine purchase approvals.
To further maximize efficiency, the City Manager has delegated expenditure authority to the
City’s Purchasing Manager for non-contractual, general purchases up to $50,000. At least three
quotes are required by state law and are obtained for purchases between $3,000 and $50,000.
State law does not require a formal, competitive bidding process for non-contractual agreements
in this dollar range. The purchases are completed through a purchase order in the City’s financial
software.
In September of 2009, City Council passed ordinance No. 2009-189 (Attachment 2), granting
the City Manager additional expenditure authority specific to Denton Municipal Electric (DME).
This ordinance is separate from the general expenditure authority and allows the City Manager to
authorize up to $500,000 for DME purchases meeting the following criteria:
(a) the procurement is for materials and services for electric production, transmission,
distribution, and station projects;
(b) the project is included in the approved budget/CIP
(c) the cumulative total of purchases for any project does not exceed the amount available for
that project;
(d) purchase, in excess of $250,000, that have been recommended for approval by the PUB
or approved by City Council (whichever meets first) and;
(e) standard purchasing practices have been followed.
Date: February 16, 2018 Report No. 2018-016
DISCUSSION:
The general purchases up to $100,000 that were approved by the City Manager during fiscal year
2016-2017 are provided for informational purposes (Attachment 3). Thirty-eight purchases and
amendments were approved by the City Manager using this authority. The City Manager’s
additional expenditure authority for DME purchases up to $500,000 was not utilized in fiscal
year 2016-2017.
CONCLUSION:
Granting the City Manager expenditure authority for general purchases up to $100,000 provides
Council more time and opportunity to review larger expenses and non-routine purchases. This
also allows the departments to proceed with projects and purchases more expeditiously. These
approvals will be provided to Council at the conclusion of each fiscal year.
ATTACHMENT(S):
1. Ordinance No. 2006-237
2. Ordinance No. 2009-189
3. FY 2016-2017 purchases below $100,000
STAFF CONTACT:
Cassey Ogden
Director of Procurement & Compliance
(940) 349-7195
Cassandra.Ogden@cityofdenton.com
S:\Our Documents\Ordinances\06\expenditure authority.doc
ORDINANCE NO. c1 ()tJP -0<.3 7
AN ORDINANCE INCREASING THE GENERAL EXPENDITURE AUTHORlTY OF THE
CITY MANAGER AND HIS DESIGNATES TO MAKE ROUTINE EXPENDITURES OF
BUDGETED FUNDS, NOT TO EXCEED $100,000, OR SUCH OTHER AMOUNT AS MAY
BE PRESCRIBED IN A PARTICULAR CIRCUMSTANCE BY A MORE SPECIFIC ORDI-
NANCE, RESOLUTION, POLICY DIRECTIVE, OR STATE LAW; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City's budget process provides for the oversight by the City Council and
the public of fund appropriations; and
WHEREAS, decades of experience at the City have demonstrated that efficiency of gov-ernmental operations is promoted by giving the City Manager authority to make general expendi-
tures of public funds without specific Council approval, within a predefined limit; and
WHEREAS, due to inflationary trends, the current expenditure limit of $25,000 has often
proven inadequate to maximize this efficiency, resulting in the consent agenda being burdened
with ordinances approving routine purchases from previously budgeted funds as a matter of
course; and
WHEREAS, the Council believes that increasing this predefined expenditure limit to
100,000 will improve efficiency without substantial risk to public funds, subject to other more
specific limitations imposed by law; NOW, THEREFORE;
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the current general expenditure authority of the City Manager and his
designates is hereby increased to $100,000, or such other amount as may be prescribed in a par-ticular circumstance by a more specific ordinance, resolution, policy directive or State law.
SECTION 2. That to the extent any expenditure is subject to specific competitive bid-
ding or other procurement requirements under state law, including Chapters 252 and 271 of the
Local Government Code the City Manager is hereby delegated the authority to exercise on behalf
of the City any and all rights or duties of the City under such laws.
SECTION 3. That this ordinance shall become effective immediately upon its passageandapproval. )
O h. h ',/ 'J t-lt
day ofPASSEDANDAPPRVEDtISteL<6 uJt/a-JJ1~AJ ,2006.
P~~&l1Jil
codad\departments\legal\our documents\ordinances\09\dme procurement ordinance.doc
ORDINANCE NO. OD - 7
AN ORDINANCE FINDING A PUBLIC PURPOSE AND ESTABLISHING PROCUREMENT
PROCEDURES FOR PURCHASES BY DENTON MUNICIPAL ELECTRIC (DME) FOR
ELECTRIC PRODUCTION, TRANSMISSION, DISTRIBUTION AND STATION SYSTEMS
IN ACCORDANCE WITH TEXAS LOCAL GOVERNMENT CODE 252.022c; PROVIDING
A SEVERABILITY CLAUSE AND AN EFFECTIVE DATE.
WHEREAS, Chapter 252 of the Local Government Code exempts from the requirements
of such Chapter expenditures made by a municipally owned electric utility for any purchases
made by the municipally owned electric utility in accordance with procurement procedures
adopted by an ordinance of its governing body that sets out the public purpose to be achieved by
those procedures; and
WHEREAS, the City of Denton, Texas a home-rule municipal corporation in the State of
Texas, owns and operates a municipal electric utility, Denton Municipal Electric; and
WHEREAS, the Denton City Council desires to adopt this Ordinance in order to modify
purchasing procedures for Denton Municipal Electric; and
WHEREAS, the Denton City Council further finds that these purchasing procedures will
benefit the public purpose, the citizens of Denton, and the customers and ratepayers of Denton
Municipal Electric by providing for Denton Municipal Electric purchases to conform with all
applicable state procurement laws as well as the City Charter and this Ordinance while assuring
that procurements are both beneficial and cost-effective for Denton Municipal Electric and its
customers and fair and equitable to suppliers; and
WHEREAS, Section 252.022(c) of the Texas Local Government Code provides that the
requirements of Chapter 252 of said Code to not apply to expenditures by a municipally owned
electric utility in connection with any purchases by the municipally owned utility or divisions of
a municipally owned utility made in accordance with procurement procedures adopted by a
resolution of the body vested with authority for management and operation of the municipally
owned utility that sets out the public purpose to be achieved by those procedures; NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Council hereby adopts the procurement procedures by a
municipally owned utility, more particularly outlined in Exhibit "A", a copy of which is attached
hereto and made a part hereof for all purposes.
SECTION 2. This Ordinance shall become effective immediately upon its passage and
approval.
i i
sAour documents\ordinances\09\dme procurement ordinance.doc
PASSED AND APPROVED this the day of a~~W&VkL, 2009.
MARK . B HS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY: ~
APPRO ED A TO LEGAL FORM:
4NITA BURGESS, CITY ATTORNEY
BY: f~ ,
EXHIBIT "A"
1. General Policy- Purchases by Denton Municipal Electric of equipment, supplies, materials, and
services used on electric production, transmission, distribution and station systems, including, but not
limited to transformers, cable/wire, and poles, shall be made in a manner that:
a) Conforms with the substance of all applicable state procurement laws, the City Charter, all
applicable City Ordinances, and this Resolution;
b) Is beneficial and cost-effective for Denton Municipal Electric and its customers; and
c) Is fair and equitable to suppliers and service providers.
Actions and procurements not addressed by this ordinance shall be governed by the applicable
provisions of Chapter 252 of the Texas Local Government Code.
2. Solicitation Type- The Purchasing Agent will determine the type of solicitation to be used in a
procurement, taking into account both the fundamental requirements of fairness in selecting parties to
contract with Denton Municipal Electric as well as the competitive needs of Denton Municipal
Electric. Normally, an Invitation for Bid will be used for standard commodity purchases and a Request
for Proposal will be used for procurement of services and for custom built and/or technical equipment,,
including, but not limited to, equipment that is related to the production, transmission, distribution, or
metering of electricity. Procurement of professional services and public works construction not
governed by Chapter 252 of the Local Government Code will not be affected by this section.
Procurements that meet the requirements of critical business need as set forth in Section 7 below may
follow the procedures established therein.
3. Bids and Proposals- The general business practice will be for all responses to solicitations to be
submitted by mail, courier, electronically or by fax. Electronic signatures will be acceptable. However,
this practice may be waived at the discretion of the Purchasing Agent, if there is a business need, to
either permit telephone responses or to require sealed responses. Sealed responses will be required for
solicitations over $100,000, unless the solicitation is for a "Critical Business Need" as set forth in
Section 7.
4. Advertising Requirement- Any solicitation estimated to be in excess of $100,000 will be advertised
for a minimum of seven (7) days prior to the bid opening on the internet, or by such other means,
including newspaper publication, as is determined necessary to reach a wide and diverse number of
potential bidders or proposers. If the newspaper is used, an advertisement will be run at least 7 days
prior to the bid opening date. However, if the Purchasing Agent determines and provides a written
justification that there is a business need, a solicitation may be advertised for a lesser period of time or
in a different fashion.
5. Change Orders- If changes are necessary after the performance of the contract is begun, the
municipality may approve change orders of similar or related items, provided that:
a) Additional money for increased costs is appropriated for that purpose from
available funds or is provided for by the authorization of the issuance of time
warrants.
b) If a change order involves a decrease or an increase of $100,000 or less, the City
Manager or the person acting on his/her behalf may approve the change order.
c) The original contract price may not be increased under this section by more than
25 percent. The original contract price may not be decreased under this section by
more than 25 percent without the consent of the contractor.
6. Project Expenditure Approval- The City Manager is authorized to approve expenditures for
individual purchases up to $500,000 provided that:
a) the procurement is for materials and services for: electric production,
transmission, distribution, and station projects
b) the project is included in the approved budget/CIP;
c) the cumulative total of purchases for any project does not exceed the amount
available for that project;
d) purchases, in excess of $250,000, that have been recommended for approval by
the PUB or approved by City Council (whichever meets first) and;
e) standard purchasing practices have been followed.
Expenditures in excess of $100,000 will reported retroactively to Council and/or PUB.
7. Critical Business Need- The procedures set forth in the above sections may be changed or
modified by the City Manager, or the person acting on his/her behalf, on a case-by case basis as
necessary in order to meet a critical business need of Denton Municipal Electric for the purchases of
goods or services for electric production, transmission, distribution and station systems. The
expenditure shall not exceed. $500,000. Circumstances which could give rise to a finding of critical
business need include:
a) emergency situation, including procurements necessary to protect the public health or
safety of in response to a public calamity;
b) a procurement necessary because of unforeseen damage to public equipment,
machinery, or other property;
c) a procurement for personal services or highly technical services and testing;
d) a procurement of items that are available from only one source;
e) a procurement necessary to protect the competitive interests or position of Denton
Municipal Electric.
A critical business need will be submitted in writing, using the "Critical Business Need Justification"
form, by the General Manager of Denton Municipal Electric, reviewed by the Purchasing Agent, and
approved by the City Manager. The Mayor and/or the Public Utility Board Chairperson shall be
notified of the expenditure before approval by the City Manager. Once it has been determined that a
procurement is necessary to meet a critical business need of Denton Municipal Electric, the Purchasing
Agent will manage the procurement so as to assure that it expeditiously meets the critical business
need while providing competition to the extent possible and maintaining a fair process.
Critical business needs shall be reported retroactively to the PUB and retroactively accepted by the
City Council.
City Manager Signature Contract Log
FY 2016-17 (Attachment 3)
Bid/File Vendor Description Approval Date Total $ Submitting Department
6153 BLC Architecture, PLLC Amendment 2; Carl Young Splash Park Restroom 5/9/2017 50,300.00$ Parks/Facilities Management
4978 Freese and Nichols, Inc.Amendment 2; Additional engineering services for North-South Water Main Phases II & III 7/10/2017 53,800.00$ Capital Projects
5756 Teague Nall & Perkins, Inc.Amendment 4; Additonal engineering design - sewer lines 9/8/2017 58,000.00$ Capital Projects
6620 Dell, Inc.VMWare Annual Maintenance 10/31/2017 58,000.00$ Technology Services
6394 Teague Nall & Perkins, Inc.Amendment; Bike lane striping and signage on Mockingbird Ln 12/8/2017 59,950.00$ City Manager's Office/Engineering
6469 Deloitte & Touche, LLP Amendment; Assessment of DME's Energy Management Organization (EMO)7/25/2017 60,000.00$ DME/City Manager's Office
6626 Eikon Consulting Group American Legion Building Replacement Design 12/4/2017 64,220.00$ Facilities Management
6339 Wesco Distribution, Inc.Raingear for Police, Fire & DME; 3 year Not To Exceed of $65,000 2/22/2017 65,000.00$ Materials Management
6495 Ameri-Mex Construction Housing Imrovement Program - 910 Brittany 6/23/2017 70,136.00$ Community Development
6523 Teague Nall & Perkins, Inc.Lake Forest Dam Upgrade Assessment 9/15/2017 73,500.00$ Parks & Recreation
6376 GTS Technology Solutions Public Safety Mobile Data Computers (MDCs)2/22/2017 74,390.88$ Public Safety/Technology Services
6451 LMS Corporation Public art medallions - North Texas Blvd bridge 6/15/2017 74,559.00$ Parks & Recreation
6303 Castle Branch, Inc.Background Check Services 4/10/2017 75,000.00$ Human Resources
6396 Freese and Nichols, Inc.Organization Assessment Services for Capital Improvement Projects 6/1/2017 75,000.00$ Capital Projects
6431 Garver, Inc.Engineering Services; Solids handling/dewatering study of Lake Lewisville Water plant 7/26/2017 77,772.00$ Water
6508 D&S Engineering Labs Cell 3 Liner Construction and Improvements 8/28/2017 78,310.00$ Solid Waste
6235 National Service Research Community Survey - 3 year Not To Exceed of $80,000 ($25,950/year plus $2,150 Printing)3/9/2017 80,000.00$ City Manager's Office
6446 Freese and Nichols, Inc.Capital Improvement Project Engineering Services - Project Management and Support 4/28/2017 80,000.00$ Capital Projects
6599 Presidio Networked Solutions Group, LLC Data Domain Expansion for DME 11/30/2017 80,672.31$ DME/Technology Services
6322 Forterra, Inc.Precast concrete drainage pipe for the Jim Christal Substation 12/16/2016 82,270.40$ DME
6049 BiblioCommons, Inc. Online Library Catalog Discovery Tool 11/16/2016 83,876.00$ Library
6452 Presidio Networked Solutions Group, LLC Network Switches - Supervisory Control and Data Acquisition; Dept. of Information Resources Contract 4/18/2017 84,595.80$ Technology Services
6326 Wesco Distribution Overhead Capacitor Switches; 3 year Not to Exceed of $85,000 3/21/2017 85,000.00$ DME/Materials Management
6185 Instrumentation Services, Inc.Predictive Maintenance Services - Water Reclamation Plants and Lift Stations 10/11/2016 90,000.00$ Wastewater
5625 Chiang, Patel & Yerby, Inc.Amendment; Development, design and construction services for capital construction projects 4/5/2017 90,000.00$ Solid Waste
6439 Rush Truck Center of Texas Peterbilt Model Vehicle Repair Services 4/14/2017 90,000.00$ Fleet Services
6436 Holt CAT of Texas Caterpillar Equipment Repair Services 7/27/2017 90,000.00$ Fleet Services
6405 Teague Nall & Perkins, Inc.Amendment; Magnolia Drainage Phase II 8/30/2017 90,000.00$ Engineering
6619 Gear Cleaning Solutions, LLC Cleaning, inspection and repair of Personal Protective Equipment (PPE); 3 year Not to Exceed of $90,000 11/16/2017 90,000.00$ Fire Operations
6533 Kimley-Horn and Associates, Inc.Professional Service Agreememnt (PSA); Water and Wastewater Impact Fees 11/28/2017 91,400.00$ Water/Wastewater
6427 Teague Nall & Perkins, Inc.Hickory Street Road West Design 4/10/2017 93,500.00$ Engineering
6354 Entech Signs/Entech Associates Marquee Signage for Recreation Centers 8/17/2017 95,000.00$ Parks & Recreation
6484 T.D. Golf Golf Instruction Services 9/8/2017 95,898.00$ Parks & Recreation
6586 Teague Nall & Perkins, Inc.Drainage and Transportation Criteria Manual Update - Engineering Services 9/15/2017 96,700.00$ Capital Projects
6230 Black & Veatch Corporation Amendment; Additional engineering services - Denton Energy Center 9/26/2017 98,200.00$ DME
6317 Child's Play, Inc.South Lakes Park playground equipment and construction project 4/11/2017 98,398.00$ Parks & Recreation
6022 Presidio, Inc.Isilon Security Camera Storage Upgrade 12/16/2016 98,982.45$ Technology Services
6560 Enterprise Risk Consulting, LLC Amendment; Power Supply Hedge Strategy-Enterprise Risk Consulting; Not to Exceed of $99,000 8/23/2017 99,000.00$ DME/City Manager's Office
2,952,430.84$