Charter amendment to update purchase procedures

By Lisa Brody

The city of Birmingham is seeking voter approval on November 8 for a charter amendment to update procedures on handling of purchases and contracts.

The proposed charter amendment would raise the ceiling amount for contracts that are required to go through the request for proposal (RFP) process, competitive bidding, and go before the city commission for approval. The current $6,000 threshold was last approved in 1987, and it requires that any contract for materials, tools, apparatus, equipment, goods and services in excess of $6,000 must have a RFP, be placed on the Michigan Inter-governmental Trade Network (MITN), competitive bidding, and commission review and approval. While that level may have been practical in the mid-1980s, it no longer is, and city leaders are asking residents to raise that level to $75,000 before they need to go through the process, similar to other communities.

According to an explanation of the request on the city's website, “The city attorney’s office conducted a survey of approximately 25 different communities throughout the state of Michigan to determine the threshold for approval of its legislative body. The $6,000 threshold determined more than 35 years ago is far different from $6,000 today. The proposed higher threshold is more relevant in today’s economy while also taking into account the infrequency of changes to the threshold amount. When looking at the total value of spending on purchase orders over the past 10 years, those that are below $75,000 make a up a very small percentage of the total purchase order value. Raising the threshold would greatly reduce the number of contracts that the city commission has to approve at its meetings, but still provide the city commission with substantial oversight over the total value of contracts being approved.”

If approved by voters, the purchasing guidelines will be updated to state the dollar limit for purchases requiring no bids or quotes, purchases where quotes must be obtained, purchases that may still need commission approval, and purchasing limits that will require additional approvals from the city manager, city attorney and the finance director. The city commission would review these guidelines and limits, and approve what they deem appropriate for the community.