BACKGROUND:
When the City of Cathedral City became a Charter City, the City became exempt from the provisions of the California Public Contract Code (CPCC). Although this exemption exists, it shall not prohibit the City Council from future adoption of any section, article, chapter, or part of the CPCC in whole or in part for the City’s own use.
The City Charter states the City shall have the power to establish standards, procedures or regulations to regulate all aspects of the bidding, award and performance of any public works contract, including, but not limited to, the compensation rates to be paid for the performance of such work and use of alternative contracting and project delivery methods, including without limitation, design-build, public private partnerships, construction manager at risk, best value procurement, pre-qualification of bidders, and similar methods. The City shall have the power to perform any work of improvement by use of its own forces and is not required to contract for the construction of public improvements or to award contracts for such work to the lowest responsible bidder. The City may also contract with other public agencies for the construction of works of public improvement.
The City shall have the power to accept gifts and donations, including donations of material and labor, in the construction of any public works project.
The City shall have the power to enter into project labor agreements with applicable labor unions and trade associations for City public works projects having an estimated cost exceeding five million dollars. Any private project with an estimated cost exceeding five million dollars of financial assistance shall enter into a project labor agreement with applicable labor unions and trade associations.
As it relates to Purchasing, the City shall have the power to establish standards, procedures, rules or regulations related to the purchasing of goods, property, or services, including, but not limited to, the establishment of local preferences, and award of vendors on the basis of best value.
At the April 25, 2018 City Council meeting, to incorporate being a new Charter City and to incorporate the Federal mandate to update our Purchasing practices to meet new and improved Federal Procurement grant reporting processes, Chapter 3.12 was approved along with the first reading of the ordinance establishing Chapter 3.12, previously Chapter 3.30 which was deleted after the ordinance became effective.
Subsequently, the second reading of the ordinance was approved by City Council at the May 23, 2018 meeting. As presented, this update provided for and met the Federal Purchasing requirements to be adopted by June 30, 2018. At that time, this updated chapter was renamed from "Purchases (chapter 3.30)" to "Contracts and Purchasing (chapter 3.12)" to better reflect the chapter's contents and topics covered. As a Charter City, with the ability to establish our own policies, the new Chapter 3.12 was arranged into six (6) distinct parts defining the contract procurement policies, procedures and requirements for public works projects, general services, professional services, equipment, materials, supplies and other tangible items (“goods”), and any other similar contracts involving the expenditure of public funds in exchange for items or services of value to the City. The chapter established the contracting authority of the City Council, City Manager, and the purchasing agent to foster and encourage the use of best management practices in contracting; to ensure quality and efficiency in the procurement of goods and services at the lowest cost commensurate with the quality needed; to provide for a fair and equitable procurement process utilizing standardized solicitation procedures; and to maintain honesty and integrity in the procurement process. See Attachment 1 for the outline included in the biennial budget document since this ordinance update.
DISCUSSION:
Since that time, here are the primary activities the Financial Services Department has incorporated into our financial and purchasing processes:
•To reduce the previous manual processes staff previously utilized, Finance implemented the Enterprise Resource Planning (ERP) system and its relevant modules, processes and repositories to facilitate the following: (Attachment 2) oBids, including award
oContracts,
oRequisitions,
oPurchase Orders – grown to more than 50 the past three years oChange Orders for Purchase Orders
•Evaluate each City Council Agenda Item for new:
oBudget Impacts
oBids
oContracts
oPurchases
•Created an internal flow of the relevant steps depending on the type of procurement/purchase
•Centralized Purchasing has been established with specific vendors for types of purchases to ensure the City receives the best quality product for the best price.
These vendors are periodically reviewed and compared to the open market to ensure they still offer the highest quality product for the best price:
oAmazon Business – business account (no longer personal accounts) ▪10-25% additional discount
▪Access to 20K more vendors
▪Local purchasing allows staff to identify our nine Valley cities (plus Thousand Palms) as preferred vendors (5300+)
oCDW-G for desktop PC and related equipment purchases
oDell for IT services and equipment purchases
oSam’s Club for supplies
oStaples for office supplies
oAs more opportunities are uncovered, we will pursue central purchasing •Initial Municipal Code Review, including potential dollar thresholds’ update – see attachment 3
•Joined the 9 Cities Procurement Group as a member with the goal to leverage practices & processes with quarterly meetings, first was 9/2023 with the second scheduled in 12/2023
What needs to be done:
•Review internally the Municipal Code, including gathering inputs from City departments. In addition, compare to other desert cities – we have started with Palm Springs and La Quinta with the goal of including two more cities •Review existing recurring payments and compare to existing contracts oRelevancy to current needs
oUpdate or create each contract
•Reinforce approval thresholds for division managers and department heads:
o$ 5,000 Division
o$10,000 Department
o$20,000 Engineering & Public Works
o$75,000 City Manager, Assistant City Manager & Financial Services Director
•Implement using more vendor requisitions and purchase orders to encumber funds in a timelier manner for:
oProfessional & Technical Services
oMaintenance/Repair & Operations Services
o(Some) Materials & Supplies
Where do we go from here:
•In a 2 nd Study Session, present, recommended changes to City’s Municipal Code, Chapter 3, Section 12
oAdd clarity
oUpdate to coincide with working/valid processes
oDelete inefficiencies
•In a regular City Council meeting, present Ordinance and/or Resolution(s) and then 2nd reading of Ordinance
•Determine the path for implementation starting in our new fiscal year (2024/2025) FISCAL IMPACT:
None. Staff recommends creating a Financial Analyst - Purchasing Agent position in the Financial Services Department. Staff desires to create an active, rather than a reactive procurement program by utilizing and reclassifying a position within the finance team to coordinate procurement activities citywide.
FIVE-YEAR STRATEGIC PLAN:
GOAL C: FISCAL STABILITY AND SUSTAINABILITY
Objective: Cathedral City has economically prospered by facilitating the investment of private dollars in high quality development which benefits the community. We remain financially solvent by instituting prudent fiscal policies and transparent financial practices.
Action C-1: Implement improvements to purchasing practices and procedures to align with procurement code requirements.