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CITY OF SAN LEANDRO STAFF REPORT DATE: July 9. 2001 TO: John Jermanis, City Manager APPROVED AND FORWARDED TO CITY COUNCIL coot- 601 . John anis C)7_16-01 City W ager �13(0812318 FROM: Michael White, Acting Finance Director�V4 Id BY: Darryl Sweet, Purchasing Supervisor WJK� SUBJECT: An Ordinance Amending Title I, Chapter 6 of the San Leandro Municipal Code Relating to Purchasing, Personal Services and Surplus Sales SUMMARY AND RECOMMENDATION Staff recommends that the City Council adopt the ordinance amending the San Leandro Municipal Code (Municipal Code) relating to the purchase of goods, materials, supplies and certain services effective October 3, 2001. The ordinance will increase the dollar limits that determine how the City conducts its purchasing activities and increase the dollar limit where the City can apply the local preference provision of the ordinance to price quotations submitted by businesses located in San Leandro. BACKGROUND The Municipal Code currently establishes how the City conducts its purchasing activities based upon a three -tiered, dollar -value based system. For purchases that are less than $1,000, staff is not required to solicit price quotations from more than one vendor. For purchases between $1,000 and $14,999, staff solicits competitive price quotations from vendors using an informal bid process. During the informal bid process, staff contacts a reasonable number of qualified vendors, solicits competitive price quotations and awards the purchase to the lowest bidder. For purchases of $15,000 and greater, staff conducts a formal sealed -bid process. During the formal sealed -bid process, staff advertises the purchase in the local newspapers and applicable trade publications, and solicits sealed bids from qualified vendors. Staff then opens the sealed bids on the date and time specified in the advertisement and awards the purchase to the lowest qualified bidder who meets the purchase specifications. This section of the Municipal Code also provides, for comparison purposes only, a 5% reduction in the price quotations submitted by businesses located in San Leandro if the purchase is less than $5,000 (the local preference provision). Staff recently compared the City's purchasing parameters to those in comparable California cities and discovered that the City's dollar limits were significantly lower. This is because the City has not adjusted them to reflect the impact of price inflation since they were adopted in the late 39.'1