TO: LINDA REICH, CITY MANAGER
FROM: NADYNE LOWRY, ACTING DIRECTOR OF FINANCE
SUBJECT
title
Introduction of Ordinance No. 2024-013, Repealing Chapters 3.32 and 3.34 of the Chino Municipal Code and Adopting a new Chapter 3.32 Purchasing Ordinance.
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RECOMMENDATION
recommendation
Approve the introduction of Ordinance No. 2024-013, to be read by number and title only, and waiving further reading of the Ordinance, repealing Chapters 3.32 and 3.34 of the Chino Municipal Code and adopting a new Chapter 3.32, to update the Purchasing Ordinance, including the adjustment of the capitalization threshold, with an effective date retroactive to Fiscal Year 2024.
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FISCAL IMPACT
Adopting this Ordinance will not have immediate or direct fiscal impacts. However, increasing approval authority levels and competitive bidding thresholds is anticipated to reduce administrative processing times for smaller purchases and contracts, leading to modest cost savings and improved overall efficiency and service delivery.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above furthers the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Financial Stability
• Responsible Long-Range Planning
• Positive City Image
• Exemplary Leadership
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Expenditure: |
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BACKGROUND
The City’s purchasing approval authority levels and competitive bidding thresholds, last updated in 2019, were initially revised to achieve cost savings. However, these changes have inadvertently prolonged procurement timelines without delivering significant financial benefits, resulting in decreased operational efficiency. In response, several departments requested a review to identify improvements that balance accountability with efficiency.
Staff conducted a comprehensive analysis of purchasing practices in neighboring cities, including Chino Hills, Eastvale, Fontana, Ontario, and Pomona. This review aimed to align the City’s thresholds with regional standards while addressing current operational demands. Findings indicate that adjusting these thresholds will streamline purchasing processes, enhance departmental responsiveness, and improve service delivery to the community.
By adopting a modernized Purchasing Ordinance, the City will establish clear guidance for procurement practices, ensure compliance with State and Federal regulations, and enhance operational efficiency across departments. These updates reflect the City's dedication to optimizing processes while maintaining ethical standards and regulatory compliance. This balanced approach will support both City operations and the community.
ISSUES/ANALYSIS
The Purchasing Division collaborated with City departments and the City Attorney’s Office to develop Ordinance No. 2024-013. This proposed ordinance updates approval authority levels and competitive bidding thresholds to streamline processes, reduce administrative burdens, and enhance procurement efficiency. Additionally, it introduces provisions to reinforce ethical standards, promote sustainability, and ensure greater transparency in procurement practices. The proposed changes are outlined below:
Approval Authority Limits
The proposed updates to approval authority limits aim to increase operational flexibility, allowing staff to address departmental needs more effectively while preserving City Council oversight for significant transactions. The table below compares the approval authority limits set in 2001, 2019, and the proposed updates:
|
Position |
2001 Limit |
2019 Current Limit |
Proposed Limit |
|
City Manager |
Up to $25,000 |
Up to $50,000 |
Up to $150,000 |
|
City Council |
Over $25,000 |
Over $50,000 |
Over $150,000 |
Competitive Thresholds for Goods, Services, and Public Projects
The proposed ordinance introduces updated competitive bidding thresholds, aligning with regional best practices and the California Uniform Public Construction Cost Accounting Act (CUPCCAA). These adjustments aim to enhance purchasing efficiency, enabling the City to address urgent needs more swiftly while maintaining compliance and upholding procurement standards. The updated thresholds are as follows:
Goods
|
Requirement |
2001 |
2019 / Current |
Proposed |
|
Open Market |
Up to $5,000 |
Up to $10,000 |
Up to $25,000 |
|
Informal Bid |
> $5,001 - $25,000 |
> $10,001 - $100,000 |
> $25,000 - $100,000 |
|
Formal Bid |
Over $25,000 |
Over $100,000 |
Over $100,000 |
Professional Services
|
Requirement |
2001 |
2019 / Current |
Proposed |
|
Open Market |
Up to $5,000 |
Up to $10,000 |
Up to $75,000 |
|
Informal Bid |
> $5,001 - $25,000 |
> $10,001 - $100,000 |
N/A |
|
Formal Bid |
Over $25,000 |
Over $100,000 |
Over $75,000 |
Public Projects
|
Requirement |
2001 |
2019 / Current |
Proposed* |
|
Open Market |
Up to $5,000 |
Up to $50,000 |
Up to $75,000 |
|
Informal Bid |
> $5,001 - $25,000 |
> $50,001 - $100,000 |
> $75,000 - $220,000 |
|
Formal Bid |
Over $25,000 |
Over $100,000 |
Over $220,000 |
*Proposed to reference amounts authorized under CUPCCA, as amended from time-to-time. Current amounts proposed.
Additional Consideration: Effective Date of Capitalization Threshold
To facilitate a smoother transition and align the new purchasing practices with the fiscal year, staff recommends backdating the implementation of the change in the capitalization threshold from $5,000 to $10,000 to July 1, 2024. Including an effective date in the ordinance to reflect this adjustment would enhance clarity and ease the administrative burden. Aligning the change with the start of the fiscal year ensures operational consistency, simplifies the adoption process across departments, and minimizes disruptions to ongoing operations.
Newly Introduced Sections in the Purchasing Ordinance
The revised Ordinance introduces new sections that focus on transparency, ethical standards, and environmental responsibility, reflecting the City’s commitment to sustainable and responsible governance. These sections include:
§ Ethics Statement (3.32.040): Ensures adherence to ethical standards.
§ Supplemental Regulations (3.32.080): Allows regulatory adjustments via resolutions.
§ Use of Electronic Means (3.32.090): Authorizes electronic procurement methods.
§ Budgeted Funds Required (3.32.110): Ensures purchase orders align with available funds.
§ Environmentally Preferred Procurement (3.32.150): Prioritizes eco-friendly products.
§ Unauthorized Purchases (3.32.160): Disallows payment for unauthorized purchases.
§ Design/Build (3.32.240): Enables design-build procurement for projects.
§ Change Orders (3.32.250): Allows for change order within established limits.
Adopting Ordinance No. 2024-013 will streamline the City’s purchasing process, improving efficiency and reducing administrative burdens. The proposed updates align with best practices, enhance transparency, and support ethical and sustainable procurement. These changes will contribute to the City’s financial stability and better service delivery.
Attachment: Ordinance No. 2024-013