Amendments to Code of Ordinances - Purchasing Ordinance

City Council Agenda Item Report FROM:

Ryan Cummins, City Manager

MEETING DATE:

February 5, 2025

SUBJECT:

Amendments to Code of Ordinances - Purchasing Ordinance

DESCRIPTION: The City’s contracts and purchasing ordinance was last updated in 2009. Unless there is a qualifying exception, the current ordinance requires sealed, competitive bids for amounts over $10,000. The process to obtain sealed, competitive bids can be time intensive, costly, and cumbersome for both staff and bidders. While sealed competitive bids are an excellent tool, it is better for larger purchases. Based on inflation since 2009, and some of the challenges staff has encountered recently, the following amendments are proposed: • • • •

Increase the amount required for sealed, competitive bids to $20,000. Provide clarity that quotes may be obtained for contracts or purchases less than $20,000. Purchases below $500 may be made without obtaining quotes. Adding that purchases through MiDeal (state procurement program), with recent vendors offering at or near the same pricing, and other unique circumstances as determined by the Council would be exceptions to obtaining sealed bids or quotes. Adding the option for sale of personal property to be by auction. Adding provisions for emergency purchases.

It is of note that City staff have a fiduciary responsibility to the City. The amendments maintain that Council reserves the right to accept the quotes for amounts less than $20,000. Payables will still be presented to Council for approval and Council still establishes appropriations through the budget. BUDGET ACTION REQUIRED: N/A LEGAL REVIEW:

Legal reviewed and assisted in preparing the redline changes for consideration. SAMPLE MOTION: Motion to approve Ordinance No. _____ to amend the City Code of Ordinances to clarify the purchasing authority of the City of Saugatuck.

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CITY OF SAUGATUCK ALLEGAN COUNTY, MICHIGAN AMENDMENT TO THE CITY CODE OF ORDINANCES ORDINANCE NO._____ At a meeting of the City Council of the City of Saugatuck, Allegan County, Michigan, held at the City of Saugatuck Hall on ___________________, 2025 at _____ p.m., City Council Member ______________________moved to adopt the following ordinance, which motion was seconded by City Council Member _______________________________. An ordinance to amend the City of Saugatuck Code of Ordinances to clarify the purchasing authority of the City of Saugatuck. THE CITY OF SAUGATUCK, ALLEGAN COUNTY, ORDAINS: SECTION 1. AMENDMENT OF SECTION 32.16 OF THE CITY CODE. The City of Saugatuck Code of Ordinances, Section 32.16, shall be amended as follows: § 32.16 PURCHASES OR CONTRACTS UNDER $20,000. (A) Contracts or purchases of at least $500 but less than $20,000 may be made by the Purchasing Agent in the open market but shall, where practicable, be based on at least three competitive quotes. The Purchasing Agent may solicit quotes verbally, or in writing. Purchases below $500 may be made at the discretion of the Purchasing Agent. (B) If a contract or purchase is to be awarded, the Purchasing Agent shall select the vendor whose quote is in the best interest of the city. When determining whether a quote is in the best interest of the city, the quoted price and other relevant factors, including, without limitation, reputation and reference, shall be considered, but the quoted price shall not necessarily be the determining factor. If the Purchasing Agent finds any of the quotes to be satisfactory, the Purchasing Agent shall award and sign the contract to or make the purchase with the vendor whose quote is in the best interest of the city, unless the City Council has expressly reserved the right to accept the quote and award the contract or purchase. (C) If the City Council has expressly reserved the right to accept the quote, the quote or quotes received shall be examined, tabulated and reported to the City Council with the recommendation of the Purchasing Agent. When the quotes and accompanying documentation are submitted to the City Council, if the City Council shall find any of the quotes to be satisfactory, the City Council, subject to the rights reserved in the last sentence of this subsection, shall award the contract to the vendor whose quote is in the best interest of the city. The award may be by motion, resolution or ordinance. The City Council shall have the right to reject any or all quotes and to waive irregularities in purchasing and to accept quotes which do not conform in every respect to the purchasing requirements. SECTION 2. AMENDMENT OF SECTION 32.17 OF THE CITY CODE. The City of Saugatuck Code of Ordinances, Section 32.17, shall be amended as follows:

§ 32.17 PURCHASES OR CONTRACTS OVER $20,000. (A) Any expenditure for supplies, materials, equipment, construction project or contract obligating the city, where the amount of the city’s obligation is $20,000 or more, shall be approved by the City Council and shall be governed by the provisions of this section. (B) The expenditure shall be made the subject of written contract when directed by the City Council. A purchase order shall be a sufficient written contract in cases where the expenditure is in the usual and ordinary course of the city’s affairs. (C) The Purchasing Agent shall solicit bids from a reasonable number of the qualified prospective bidders as are known to him or her by sending each a copy of the notice requesting bids. Bids shall be solicited by newspaper advertisement when directed by the City Council. (D) Unless prescribed by the City Council, the City Manager shall prescribe the amount of any security to be deposited with any bid which deposit shall be in the form of cash, certified or cashier’s check or bond written by a surety company authorized to do business in the state. The amount of the security shall be expressed in terms of percentage of the bid submitted. Unless fixed by the City Council, the City Manager shall fix the amount of the performance bond and in the case of construction contracts, the amount of the labor and materials bond to be required of the successful bidders. (E) Bids shall be opened in public at the time and place designated in the notice requesting bids in the presence of the Purchasing Agent or their authorized representative and at least one other city official. The bids shall thereupon be carefully examined and tabulated and reported to the City Council with the recommendation of the Purchasing Agent. The recommendation of the Purchasing Agent may take into account such relevant factors as reputation and references. After tabulation, all bids may be inspected by the competing bidders. In lieu of the procedure for opening bids herein specified, the City Council may direct that bids be opened at a Council meeting. (F) When the bids are submitted to the City Council, if the City Council shall find any of the bids to be satisfactory, the City Council, subject to the rights reserved in section G, shall accept the bid that is in the best interest of the city. The award may be by motion, resolution or ordinance. (G) The City Council shall have the right to reject any or all bids and to waive irregularities in bidding and to accept bids which do not conform in every respect to the bidding requirements. (H) At the time the contract is executed by him or her, the winning bidder shall file a bond executed by a surety company authorized to do business in the state, to the city, conditioned to pay all laborers, mechanics, subcontractors and material laborers as well as all just debts, dues and demands incurred in the performance of the work and shall file a performance bond when one is required. (2) The wining bidder shall also file evidence of public liability insurance naming the city harmless from loss or damage caused to any person or property by reason of the contractor’s negligence. (I) All bids and deposits of certified or cashier’s checks may be retained until the contract is awarded and signed. If any successful bidder fails or refuses to enter into the contract awarded to him or her within 15 days (or such alternative period of time as specified in the bid solicitation

materials) after a notice of award has been issued by the city, or fails to file with the city all required bonds and evidence of insurance within the same time, the deposit accompanying his or her bid shall be forfeited to the city, and the City Council may, in its discretion, award the contract to the next lowest qualified bidder or the contract may be re-advertised. SECTION 3. AMENDMENT OF SECTION 32.18 OF THE CITY CODE. The City of Saugatuck Code of Ordinances, Section 32.18, shall be amended as follows: § 32.18 EXCEPTIONS TO COMPETITIVE BIDDING. Competitive bidding or multiple quotes shall not be required in the following cases: (A) Where the subject of the contract is not competitive in nature and no advantage to the city could result from requiring competitive bidding, and the City Council, upon recommendation of the City Manager, authorizes execution of a contract without competitive bidding; (B) In the employment of professional services; (C) Where the City Council shall determine that the public interest will be best served by purchase from or joint purchase with another unit of government; and (D) To take advantage of favorable unit prices in an existing contract with the city, the city may amend the existing contract by issuing a change order, for example, to expand the scope of work without competitive bidding, provided that a substantial majority of the additional work, as determined in the discretion of the Council, shall be performed at or near the same unit prices set forth in the existing contract; (E) To take advantage of favorable unit prices of or to renew or extend a contract from a contractor or vendor that the city contracted with within the last two years, provided that a substantial majority of the additional work, as determined in the discretion of the City Council, or units to be purchased are at or near the same prices as set forth in the last contract with the contractor or vendor; (F) Where the city elects to undertake the work itself; (G) Where the purchase is being made through MiDEAL or similar state or regional procurement program; and (H) Where the City Council determines that unique circumstances exist or that forgoing competitive bidding is in the best interest of the city. SECTION 4. AMENDMENT OF SECTION 32.19 OF THE CITY CODE. The City of Saugatuck Code of Ordinances, Section 32.19, shall be amended as follows: § 32.19 INSPECTION OF MATERIALS. The responsibility for the inspection and acceptance of all materials, supplies and equipment shall rest with the Purchasing Agent.

SECTION 5. AMENDMENT OF SECTION 32.20 OF THE CITY CODE. The City of Saugatuck Code of Ordinances, Section 32.20, shall be amended as follows: § 32.20 SALE OF PERSONAL PROPERTY. Any personalty of this city no longer required for public purposes may be sold without competitive bidding by auction or by motion or resolution of the City Council. If the value of the personalty is demonstrably less in value than $2,500, no competitive bids or resolution are required and the Purchasing Agent may proceed to sale. SECTION 6. ADDITION OF SECTION 32.21 OF THE CITY CODE. The City of Saugatuck Code of Ordinances, shall be amended to add Section 32.21 as follows: § 32.21 EMERGENCY PURCHASES In case of actual emergency, where the established purchasing procedure would substantially affect the public safety, health or welfare, direct purchases of materials, supplies, or services needed to relieve the emergency's effects may be made by the Purchasing Agent, subject to the City Treasurer confirming the sufficiency of funds for such purchase and Public Works Superintendent concurring as to the existence of the emergency, provided that no such purchase shall be made in excess of $50,000.00. All emergency purchases shall be reviewed and approved by the City Council at its next meeting. SECTION 7. SEVERABILITY: Should a court of competent jurisdiction find any provision, clause, or portion of this ordinance amendment to be invalid, the balance or remainder of this ordinance amendment shall remain valid and in full force and effect and shall be deemed “severable” from the portion, clause, or provision deemed to be invalid by the court. SECTION 8. REPEAL: All Ordinances or parts of Ordinances in conflict herewith are hereby repealed. SECTION 9. EFFECTIVE DATE: This Ordinance shall take effect immediately after publication. YEAS: ___________________________________________________________________ NAYS: ___________________________________________________________________ ABSENT/ABSTAIN: _______________________________________________________ ORDINANCE DECLARED ADOPTED. ____________________________________________ Holly Anderson City of Saugatuck, Mayor

CERTIFICATION I hereby certify that: 1.

The above is a true copy of an ordinance adopted by the City of Saugatuck at a duly scheduled and noticed meeting of the City Council held on __________, _____ 2025, pursuant to the required statutory procedures.

A summary of the above ordinance was duly published in the ______________________ newspaper, a newspaper that circulates within the City of Saugatuck, on ___________, 2025.

Within 1 week after such publication, I recorded the above ordinance in a book of ordinances kept by me for that purpose, including the date of passage of the ordinance, the names of the members of the City Council voting, and how each member voted.

I filed an attested copy of the above ordinance with the Allegan County Clerk on _____________, 2025.

ATTESTED: ___________________________________ Jamie Wolters City of Saugatuck, Clerk

PURCHASES, CONTRACTS AND SALES § 32.15 PURCHASING AGENT. The City Manager shall act as Purchasing Agent of the city, or, under his or her responsibility, delegate such duties to some officer or employee of the city and shall adopt any necessary rules respecting requisitions and purchase orders. § 32.16 PURCHASES OR CONTRACTS UNDER $10,000$20,000. (A) Contracts and Purchases purchases of supplies, materials or equipment, the cost of which is at least $500 but less than $10,000$20,000, may be made by the Purchasing Agent in the open market but those purchases shall, where practicable, be based on at least three competitive bidsquotes. The Purchasing Agent may solicit bids quotes verbally, or by telephone, or in writing. or may contact prospective bidders by written communication. Purchases below $500 may be made at the discretion of the Purchasing Agent. (B) If a contract or purchase is to be awarded, the Purchasing Agent shall select it shall be awarded to the bidder vendor whose bid quote is in the best interest of the city. When determining whether a bid quote is in the best interest of the city, the quoted price bid and other relevant factors, including, without limitation, reputation and reference, shall be considered, but the quoted price bid shall not necessarily be the determining factor. If the Purchasing Agent shall findfinds any of the bids quotes to be satisfactory, the Purchasing Agent, subject to the rights reserved in the last sentence of this subsection, shall award and sign the contract to or make the purchase with the vendor whose accept the bid quote which is in the best interest of the city, unless the City Council has expressly reserved the right to to have the City Council accept the quote and award the contract or purchaseaccept the bidquote. (C) If the City Council has expressly reserved the right to accept the bid quote, the bid quote or bidsquotes received shall be examined, tabulated and reported to the City Council with the recommendation of the Purchasing Agent. When the bids quotes and accompanying documentation are submitted to the City Council, if the City Council shall find any of the bids quotes to be satisfactory, the City Council, subject to the rights reserved in the last sentence of this subsection, shall accept the bid quote ofaward the contract to the lowest qualified vendorbidderthe vendor whose quote is in the best interest of the city. The award may be by motion, resolution or ordinance. The City Council shall have the right to reject any or all bids quotes and to waive irregularities in bidding purchasing and to accept bids quotes which do not conform in every respect to the bidding purchasing requirements. (Am. Ord. 090427-1, passed 4-27-2009) § 32.17 PURCHASES OR CONTRACTS OVER $10,000$20,000.

(A) Any expenditure for supplies, materials, equipment, construction project or contract obligating the city, where the amount of the city’s obligation is in excess of $10,000$20,000 or more, shall be approved by the City Council and shall be governed by the provisions of this section. (B) The expenditure shall be made the subject of written contract when directed by the City Council. A purchase order shall be a sufficient written contract in cases where the expenditure is in the usual and ordinary course of the city’s affairs. (C) The Purchasing Agent shall solicit bids from a reasonable number of the qualified prospective bidders as are known to him or her by sending each a copy of the notice requesting bids. Bids shall be solicited by newspaper advertisement when directed by the City Council. (D) Unless prescribed by the City Council, the City Manager shall prescribe the amount of any security to be deposited with any bid which deposit shall be in the form of cash, certified or cashier’s check or bond written by a surety company authorized to do business in the state. The amount of the security shall be expressed in terms of percentage of the bib bid submitted. Unless fixed by the City Council, the City Manager shall fix the amount of the performance bond and in the case of construction contracts, the amount of the labor and materials bond to be required of the successful bidders. (E) Bids shall be opened in public at the time and place designated in the notice requesting bids in the presence of the Purchasing Agent or their authorized representative and at least one other city official. The bids shall thereupon be carefully examined and tabulated and reported to the City Council with the recommendation of the Purchasing Agent at the next Council meeting. The recommendation of the Purchasing Agent may take into account such relevant factors as reputation and references. After tabulation, all bids may be inspected by the competing bidders. In lieu of the procedure for opening bids herein specified, the City Council may direct that bids be opened at a Council meeting. (F) When the bids are submitted to the City Council, if the City Council shall find any of the bids to be satisfactory, the City Council, subject to the rights reserved in the last sentence of this subsection in section G, shall accept the bid that is in the best interest of the cityof the low qualified bidder. The award may be by motion, resolution or ordinance. (G) The City Council shall have the right to reject any or all bids and to waive irregularities in bidding and to accept bids which do not conform in every respect to the bidding requirements. (GH) (1) AtAt the time the contract is executed by him or her, the contractor winning bidder shall file a bond executed by a surety company authorized to do business in the state, to the city, conditioned to pay all laborers, mechanics, subcontractors and material laborers as well as all just debts, dues and demands incurred in the performance of the work and shall file a performance bond when one is required. (2) The contractor wining bidder shall also file evidence of public liability insurance naming the city harmless from loss or damage caused to any person or property by reason of the contractor’s negligence. (HI) All bids and deposits of certified or cashier’s checks may be retained until the contract is awarded and signed. If any successful bidder fails or refuses to enter into the contract awarded to

him or her within 15 days (or such alternative period of time as specified in the bid solicitation materials) after a notice of award has been issued by the city, or fails to file with the city all required bonds and evidence of insurance within the same time, the deposit accompanying his or her bid shall be forfeited to the city, and the City Council may, in its discretion, award the contract to the next lowest qualified bidder or the contract may be re-advertised. (Am. Ord. 090427-1, passed 4-27-2009) Statutory reference: Bidders on public contracts, see M.C.L.A. §§ 123.501 et seq. § 32.18 EXCEPTIONS TO COMPETITIVE BIDDING. Competitive bidding or multiple quotes shall not be required in the following cases: (A) Where the subject of the contract is other than a public work or improvement and the product or material contracted for is not competitive in nature and no advantage to the city could result from requiring competitive bidding, and the City Council, upon written recommendation of the City Manager, authorizes execution of a contract without competitive bidding; (B) In the employment of professional services; (C) Where the City Council shall determine that the public interest will be best served by purchase from or joint purchase with another unit of government; and (D) To take advantage of favorable unit prices in an existing contract with the city, the city may amend the existing contract by issuing a change order, for example, to expand the scope of work without competitive bidding, provided that a substantial majority of the additional work, as determined in the discretion of the Council, shall be performed at or near the same the unit prices set forth in the existing contract; and (E) To take advantage of favorable unit prices of or to renew or extend a contract from a contractor or vendor that the city contracted with within the last two years, provided that a substantial majority of the additional work, as determined in the discretion of the City Council, or units to be purchased are at or near the same prices as set forth in the last contract with the contractor or vendor; (F) Where the city elects to undertake the work itself;. (FG) Where the purchase is being made through MiDEAL or similar state or regional procurement program; and (GH) Where the City Council determines that there are unique circumstances exist or that forgoing competitive bidding it is in the best interest of the city. (Am. Ord. 090427-1, passed 4-27-2009)

§ 32.19 INSPECTION OF MATERIALS. The responsibility for the inspection and acceptance of all materials, supplies and equipment shall rest with the City Manager Purchasing Agent. § 32.20 SALE OF PERSONAL PROPERTY. Any personalty of this city no longer required for public purposes may be sold without competitive bidding by auction or by motion or resolution of the City Council. If the value of the personalty is demonstrably less in value than $1,000$2,500, no competitive bids or resolution is are required and the City ManagerPurchasing Agent may proceed to sale. § 32.21 EMERGENCY PURCHASES In case of actual emergency, where the established purchasing procedure would substantiallyvitally affect the public safety, health orand welfare, direct purchases of materials, supplies, or services needed to relieve the emergency's effects may be made upon direction of the City Managerby the Purchasing Agent, subject to the with the concurrence of the City Treasurer confirming the sufficiency of funds for such purchase and Public Works Superintendent concurring as to the existence of the emergencyas to the existence of the emergency and the sufficiency of funds for such purchase, provided that no such purchase shall be made in excess of $50,000.00. All emergency purchases shall be reviewed in detail withand approved by the City Council at theirits next meeting seeking Council approval. Purchases in excess $50,000.00 shall require a meeting and approval of the City Council.