Earlier this week, the City of Napoleon Finance and Budget Committee agreed to recommend to council to raise the city's minimum requirement to bid from $25,000 to $30,000.
Earlier this week, the City of Napoleon Finance and Budget Committee agreed to recommend to council to raise the city’s minimum requirement to bid from $25,000 to $30,000.
City Law Director Trevor Hayberger said the state has raised the minimum requirement to $50,000, which would mean contracts, services, materials and other purchases under that amount would not have go through a formal bidding process.
City Manager Jon Bisher noted there are both positives and negatives associated with raising the minimum, but did note costs increase over time.
“Obviously the cost of everything goes up at some point in time,” Bisher said. “The state must have thought that’s the right number. Am I in favor of it? Sure, operationally, it would make my life easier, but there would be reasons ... about why it might not be.”
City Finance Director Greg Heath did not object to raising the minimum, but suggested implementing a policy to ensure those purchases under the minimum limit are still competitive.
“Do I have a problem with it going to $50,000? No, I don’t, but there’s the issue of ... if it’s not forced formally, do you get less bidding? The answer in this city is absolutely yes,” Heath said, adding he currently sees many requisitions for $24,999.99 so the bidding process can be avoided. “Is the formal bid process more of a hassle? Yes, it is, but what is the purpose of the formal bid process? To get your best bid to save taxpayers’ money.”
Heath added these avoidances are often done with the intention of having projects done quicker, and theoretically, more efficiently.
“That’s my main concern, is addressing the competitiveness, I don’t care if it’s formal or not,” Heath said.
Bisher said several quotes should be gathered for those purchases under the minimum bid amount. However, he also noted relationships with suppliers are built over time and that relationship can help in certain situations.
“Part of doing business is just a relationship, whatever business you’re in,” Bisher said. “If it’s a pump you need and you have a relationship with a guy because you bought a lot of your pumps for you, he’ll find it for you.”
Heath said that may be true of emergency items, but not always for operational items.
Hayberger said the city can set its own procedures, short of formal bidding, to handle purchases less than the minimum amount.
Mayor Ron Behm suggested the $30,000 figure, adding he feels that would cover inflation since the $25,000 amount was implemented in 2003 but he was not comfortable doubling it to $50,000.
The other committee members agreed the increase to $50,000 seemed like a large jump. Committee member Jason Maassel motioned to leave the minimum at $25,000, but that motion died for the lack of a second. Behm them motioned to increase the minimum to $30,000, and that measure was approved. The committee declined to address a policy regarding purchases under the minimum limit.
The recommendation will be passed along to Napoleon City Council for consideration.
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