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Department Approval <br />MEQUEST FOR, COUNCIL ACTION <br />Date: 04/28/OV, <br />Item No.: 13.a <br />City Manager Approval <br />Item Description: Discussion on the City Manager Purchasing Authority <br />1� BACKGROUND <br />2 In 2002, the City Council established City Code section 103.05 which required that all general purchases <br />1 3 and/or contracts in excess of $5,000 be approved by the Council. Prior to this action, City purchases fell <br />41 under the limits established by MN State Statutes for Council-Manager forms of government. During <br />5 budget policy discussions held earlier this year, the Council expressed a desire to revisit the City Manager <br />6 purchasing authority limit. The following information is presented for discussion purposes. <br />Purchasing Authority for Council-Manager forms of government is prescribed under MN State Statute <br />Manager is authorized to make purchases and enter into contracts <br />412.691, which establishes that the City <br />up to a maximum of $20,000 (unless the Council sets a lower limit) . All purchases made under this <br />1 � authority must adhere to all other statutory purchasing and auditing requirements. Purchases in excess of <br />1� 2 $20,000 must be approved by the City Council. <br />Since City Code 103.05 was enacted, approximately 400 purchases ranging from $ have been <br />1� 5 submitted to the Council for separate approval. This represents the items that were brought forth for <br />1� 6 approval under locally-imposed limits, but would not have been brought forth had the City followed the <br />1� 7 purchasing limits prescribed by State Statute. To the best of Staff's knowledge, all 400 items were <br />1 f: approved by the Council. <br />2C), While City Code 103.05 has placed added Council scrutiny on some purchases, it has not necessarily had a <br />2"i� direct influence on the types or amounts of purchases actually made. It would appear that the City's other <br />22 purchasing controls, such as the annual budgeting process, has generally met the Council's desired level of <br />23 review. That being said, it could be argued that the presence of the $5,000 limit has indirectly influenced <br />2,4 the type or amount of purchases being made; i.e. that the City Manager and Staff may have chosen to forgo <br />25 some purchases knowing that they were going to receive added scrutiny. However, given that an estimated <br />26 99% of all city expenditures fall outside of the $5,000-$20,000 threshold, it appears unlikely that the <br />27 imposed limit could have had any significant effect on purchasing decisions. <br />28 <br />Zaemj <br />