Capital purchases ordinance discussed
By Robert Cloud
City Administrator Aaron Jenson proposed amending the ordinance on how the city of Waupaca makes capital purchases of more than $25,000.
“Since 2020, there has been a number of times in which staff has requested City Council approval of capital purchases over $25,000 without going through a sealed bid process,” Jenson said in a Dec. 5 memo.
“Each request has come forward due to extenuating circumstances. Most were a result in supply chain and production delays that have created major delays in equipment orders,” he added.
After learning that orders for new equipment had been delayed for more than a year, staff has asked council to approve moving forward on the purchases with three written quotes in place of a sealed bid process.
Currently, city ordinance requires a sealed bid process for any capital purchase over $25,000, Jenson said.
State law requires cities and villages to competitively bid “public construction” projects in which the estimated costs exceeds $25,000, Jenson said.
“Public construction” does not include equipment purchases, such as vehicles, tractors or machinery.
Police Chief Brian Hoelzel asked how the proposed ordinance change would impact the purchase of squad cars, which are often purchased through a state cooperative purchasing agency.
Jenson said the proposed ordinance allows staff to use cooperative purchasing agencies or other government purchasing programs in place of three written quotes.
“What happens if you only get one quote?” Ald. Dave Peterson asked.
Jenson replied that there have been prior occasions when the city had only received a single quote after requesting bids for new equipment.
Council approval on capital purchases of more than $25,000 will still be required under the proposed ordinance changes.
Review by city attorney recommended
Ald. Henry Veleker asked if city staff had asked the city attorney to review the proposed changes in the ordinance.
“We are opening ourselves up to some disputes from vendors and other providers of our services if we don’t do something a little more formal,” Veleker said.
He suggested a “template document” indicating general contract conditions that would be included in a bid package.
“We’ve had people dispute the street-sweeping truck one year and we had a sealed-bid process,” Veleker said. “I think that (sealed bid) protected us in the award we made.”
Veleker suggested that the amount requiring sealed bids could be raised from $25,000 to $50,000.
“We’ve had a number of scenarios in which we had to ask council to give an exception to the ordinance,” Jenson said. “In some of the research, we found that many communities were in line with state statutes.”
Among the scenarios that Jenson noted were times when an order for new equipment was delayed. Used equipment was available, but the opportunity could be lost if the city went through the time-consuming sealed bid process.
Noting that the revised ordinance was on a first reading, Mayor Brian Smith suggested that staff have the city attorney review the changes and make revisions to address the council’s concerns.
“If we have another reading here, it’s not going to kill us,” Smith said.