50A - ORD AMND MANAGER'S CONTRACT AUTHORITY

Home Browse Search

Amend City Manager's Contracting Authority for Non -Public Works and Public Works Contracts December 4, 2018 Page 2 DISCUSSION Pursuant to Sections 421(b) (non-public works contracts) and 422(c) (public works contracts) of the City of Santa Ana Charter, the City Council may, by ordinance, authorize the City Manager to bind the City on contracts at amounts that may be established from time to time by the City Council. Currently, the City Manager is authorized to bind the City to non-public works and public works contracts in an amount not to exceed twenty-five thousand dollars ($25,000). All contracts and agreements over $25,000 must be approved by the City Council. Regardless of the contract amount, all contracts and agreements must comply with the City's Purchasing Policies & Procedures designed to ensure fair, transparent, and competitive procurement practices. When an agency identifies a need to enter into a contract to purchase materials and supplies or an agreement for services, the agency budgets for those items. The recently adopted Public Works Agency's FY 18-19 budget, for example, has approved $43,082,785 in contract expenditures. On average, the Council is presented with over 250 contracts and agreements for approval annually. Due to the nature of the services provided by the Public Works Agency (PWA), nearly half of these contracts and agreements are for PWA -related materials and services. In order to obtain City Council approval of a contract or agreement in excess of $25,000, staff must prepare a Request for Council Action (RFCA) report. Preparing an RFCA takes a substantial amount of staff time and effort from various agencies within the City. Specifically, the RFCA is first prepared by the initiating division and approved by the initiating agency. The document must then be reviewed and approved by the City Attorney and other affected agencies. The RFCA's are then submitted to the City Manager Office (CMO) for consideration and final review of the report's content. Upon approval from the CMO, the Finance and Management Services Agency reviews and approves the RFCA for consistency with the approved budget and accounts. Once all financial -related matters have been reviewed and approved, the RFCA is finally submitted to the Clerk of the City Council to be included in the City Council meeting agenda documents. The above-described process is lengthy and requires substantial staff time from various City agencies for each contract approval. Thus, significant savings in staff time will be achieved by reducing the number of contracts and agreements that must be presented to the City Council for approval. Additionally, Staff has determined that streamlining the process to execute PWA contracts and agreements for the construction, rehabilitation, maintenance, testing and inspection of public infrastructure would improve the City's ability to provide efficient and timely service delivery. The City Council last adopted an Ordinance revising the City Manager's contracting authority on July 3, 2006, when it increased the City Manager's authority from $10,000 to the current $25,000 level for all contracts and agreements. Costs of goods, services, and construction are on the rise in recent years. A $25,000 contract requires a lot of administration costs and does not buy much in services or goods. Staff surveyed Orange County cities (Exhibit 2) and others in the region and found that the City Manager contracting authority ranges widely from a low of $20,000 (Stanton and Seal Beach) to a high of $1,000,000 (Irvine). All of the cities comparable to Santa Ana in 50A-2