cover
TO: Mayor and City Council
FROM: Finance Department
Law Department
Public Works Department
DATE: July 30, 2021
SUBJECT:
Purchasing authority of department heads; revision of purchasing provisions in the City Code.
PURPOSE:
To increase the authority of the City's Department heads to purchase labor, equipment, goods, services and professional services from $25,000 to $50,000 and to make conforming changes to the City Code.
BACKGROUND:
Under Division 2-V-2 of the Chapter 2 of the City Code, the Council is required to approve all procurements in amounts of $25,000 or more, with very limited exceptions. This threshold has been in place without adjustment since at least 2013. As a result, every purchase requiring Council approval must proceed through the Council's formal three-week deliberative process, which begins after the purchasing division and using department have selected a vendor and the Law Department has had the opportunity to review proposed contract language.
Similarly, Division 2-V-2 contains obsolete language that does not accurately reflect the City's authority as a home rule unit, provide a coherent process for the consideration of bid protests, or provide direction as to source selection when competitive bidding is not employed.
DISCUSSION:
In consultation with the Chairperson of the Finance Committee, staff feels that this purchasing threshold could be responsibly be raised to $50,000 without compromising the City's obligation to spend public funds appropriately. One of the most basic principles of local government law is that public moneys cannot be spent until the public body has budgeted or made an appropriation for a particular purpose. While increasing the purchasing limit may superficially create the perception that the City Council is relinquishing its oversight role, no department will be able to incur a liabilities in excess of its budgetary authority. Further, the Council will continue to review bills for payment as part of its regular order of business during its biweekly meetings and determine through the annual budget process whether the respective departments have used their authority appropriately. The proposed amendments authorize the Chief Financial Officer, as finance director, to establish rules for purchasing in all instances not subject to sealed competitive bidding to ensure that all purchases are vetted appropriately so as to protect the City and its taxpayers. Importantly, the finance director and the purchasing director continue to act as gatekeepers in the procurement process. Approval of the purchasing director will remain necessary for most procurements and no department head will have the authority to issue a purchase order.
The proposed ordinance also modernizes several provisions of Division 2-V-2 of Chapter 2 of the Code to reflect current practices or make conforming changes required by the increased purchasing authority. For example, the proposal enhances the bid protest process allowing the purchasing director an opportunity to correct an error and a disappointed bidder to seek review by the administrative hearing officer. It also clarifies that no bidder, including a successful bidder, is entitled to a city contract. Finally, it recognizes the existence of the City's job order contracting program and makes a specific allowance for its use in the Code.
Finally, the proposal also removes at least one vestigial remnant from the City's days under the commission form as well.
IMPACT STATEMENT:
Approval of this ordinance will provide for a more efficient purchasing process while ensuring that appropriate fiscal controls remain in place.
RECOMMENDATIONS:
That the Council approve this Ordinance
cc: Rules, Administration, and Procedures Committee
Finance Committee
CITY OF AURORA, ILLINOIS
ORDINANCE NO. _________
DATE OF PASSAGE ________________
title
An Ordinance amending various provisions of Division 2-V-2 of Chapter 2 of the Code of Ordinances pertaining to purchases.
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City Council from time to time adopted ordinances, polices, and procedures related to the purchases of labor, goods, equipment, services, and professional services by the City; and
WHEREAS, the City Council has through its various enactments codified many of these aforementioned procedures as Division 2-V-2 of Chapter 2 of the Code of Ordinances, City of Aurora, Illinois (collectively "the Purchasing Article"); and
WHEREAS, the City Council finds it convenient and necessary to update the provisions of the Purchasing Article to reflect current and modern practices;
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Aurora, Illinois, as follows: that The Purchasing Article shall be and hereby is amended as set forth in Exhibit A to this Ordinance; and further
BE IT ORDAINED, that the Corporation Counsel and City Clerk shall be and hereby are directed to undertake the codification of the provisions of Exhibit A into the Purchasing Article and may to the extent necessary correct any technical or scrivener's errors therein contained as may be necessary to reflect the purposes of this Ordinance