Agenda Item
City Council
Item #: 9.1. 9/12/2023 File #: 23-0577
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Trang Nguyen, Finance Director
1. SUBJECT
Introduction and First Reading of an ordinance amending Chapter 3.08 of Title 3 of the Orange Municipal Code updating the City’s purchasing system. Ordinance No. 12-23.
2. SUMMARY
Ordinance No. 12-23 amends several sections of Chapter 3.08 related to the threshold for the use of purchase orders in connection with the procurement of materials, supplies or equipment, public projects, and professional services.
3. RECOMMENDED ACTION
Introduce and conduct First Reading of Ordinance No. 12-23. An Ordinance of the City Council of the City of Orange Amending Sections 3.08.080 and 3.08.410 of the Orange Municipal Code to update City’s Purchasing System.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 2: Be a fiscally healthy community
a: Expend fiscal resources responsibly.
d: Effectively manage and develop City assets.
6. DISCUSSION AND BACKGROUND
Chapter 3.08 of the Orange Municipal Code (OMC) sets the City’sprocedures for the purchase of materials, supplies and equipment, professional services, and the selection of contractors to perform public works projects.
OMC Section 3.08.080 requires the procurement of all materials, supplies or equipment, public projects, and professional services of One Thousand Dollars ($1,000) or more to be made only by written purchase order (PO), requiring one reasonable quote. Procurements less than One Thousand Dollars ($1,000) are approved by departments at the invoice level.
Staff analyzed all purchases orders processed over the last three years, noting that of the approximately 4,000 POs issued, 1,800 (45%) of the total had a value between $1,000 and $5,000.
These POs generally consisted of one-time purchases of materials, supplies, or minor services City of Orange Printed on 9/7/2023Page 1 of 2
powered by Legistar™
Item #: 9.1. 9/12/2023 File #: 23-0577
These POs generally consisted of one-time purchases of materials, supplies, or minor services where most of the services were provided by small businesses or self-employed consultants with a single deliverable project rather than a large ongoing project.
As the purchasing thresholds have been in place for over 18 years, staff recommends OMC Section
3.08.080 and other related sections of Chapter 3.08 be amended to raise the dollar threshold for a written purchase order from $1,000 to $5,000.
This allows both the Purchasing Officer and department staff to use simplified and cost-effective operational procedures and forms, without the use of formal or informal bid procedures, while also reducing the number of annual purchase orders by almost 50%. Staff believes the standard department level invoice review process for purchases less than $5,000 will provide an appropriate level of safeguard on these purchase transactions.
The attached Ordinance No. 12-23 provides suggested revisions to the OMC Section 3.08.080 raising the dollar threshold for a written purchase order from $1,000 to $5,000.
At this time, staff recommends introducing and conducting the First Reading of Ordinance No. 12-23.
7. ATTACHMENTS
· Ordinance No. 12-23 - Clean
· Ordinance No. 12-23 - Redlined
City of Orange Printed on 9/7/2023Page 2 of 2
powered by Legistar™