Last year, state law changed to allow cities the option of increasing their competitive bidding thresholds up to $25,000.00. The City of Brentwood adopted this raised threshold by Ordinance 2022-10, which provided that a formal publicly advertised bid process is used for expenditures over $25,000. For purchases between $10,000 and $25,000, three quotes must be obtained, but they may be obtained informally by obtaining pricing from catalogs, electronic databases, email quotes, etc. These increased thresholds have greatly reduced the workload for staff in preparing formal requests for bids and agenda items for purchases of certain goods.
However, many purchases of goods and services require contracts. Our Municipal Code (Sec. 2-69) currently provides that the City Manager may execute contracts on behalf of the City for "routine matters and matters having insubstantial long-term consequences," which is defined as "a contract for which expenditures during the fiscal year will be less than $10,000.00." This dollar amount was adopted in 2006 based on a provision in our statutory charter that - until very recently - allowed boards of commissioners to delegate the authority to city managers to enter into binding contracts up to $10,000.00.
Over the past several months, City staff worked with Senator Jack Johnson, Representative Gino Bulso, and our lobbyist team at Windrow Phillips Group to pursue a legislative change of the City Manager-Commission state law charter (specifically, Tenn. Code Ann. 6-19-104) to bring the delegated contracting authority in line with the increased bidding thresholds available to cities. The legislation proposed to amend state law to allow boards of commissioners the option to delegate the contracting authority to the city manager of "routine matters and matters having insubstantial long-term consequences" to mean those for which fiscal year expenditures will be less than $25,000.00. This legislation passed unanimously in the Tennessee Senate and House of Representatives and has now been signed by the Governor.
Pursuant to this charter change, staff recommends an amendment to the Municipal Code (Sec. 2-69) to increase the limit of the City Manager's contracting authority by updating the Code as follows:
Sec. 2-69. - Authority to enter into contracts.
Pursuant to T.C.A. § 6-19-104(f) and § 6-21-108, the city manager shall have the authority to enter into binding contracts on behalf of the city, without specific board approval, in routine matters and matters having insubstantial long-term consequences. As used in this section, "routine matters and matters having insubstantial long-term consequences" means any contract for which expenditures during the fiscal year will be less than $10,000.00 $25,000.00. The authority granted to the city manager under this section shall extend to:
(1) Contracts involving purchases or leases of goods or services, including utility services.
(2) Contracts providing for maintenance of equipment or other items owned or leased by the city.
(3) Agreements authorizing work to be done on state right-of-way by the city.
(4) Agreements to carry out work previously authorized by the board of commissioners.
(5) Other agreements similar in nature to those enumerated herein, provided that no such agreement shall have the effect of obligating the city to an expenditure of $10,000.00 $25,000.00 or more in any fiscal year.
It is staff's opinion that this change is logical considering ever-increasing prices for goods and services, and it will allow for greater efficiency with the ability to handle more purchases at an administrative level. It will also be beneficial for staff for the bidding threshold and city manager's contracting authority to be consistent.
Please contact the City Attorney if you have any questions. |