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HomeMy WebLinkAboutFIN 2017-05-02 Item 2A - Ordinance - TMC Section 3.32.040 "Unbdgeted Equipment or Fixed Asset Items"City of Tukwila Allan Ekberg, Mayor TO: Allan Ekberg Finance Committee FROM: Peggy McCarthy, Finance Director BY: Craig Zellerhoff, Fiscal Coordinator DATE: April 26, 2017 SUBJECT: Update Tukwila Municipal Code by removing section 3.32.040 "Unbudgeted Equipment or Fixed Assets" ISSUE At the April 24, 2017 Committee of the Whole, the City Council referred the discussion of TMC 3.32.040 back to the Finance Committee for further discussion. BACKGROUND Staff is seeking Committee direction on how to appropriately streamline purchasing practices. Options that could be considered include: -- 1. removing section 3.32.040 "Unbudgeted Equipment or Fixed Assets" from the Tukwila Municipal Code (TMC) and repealing Ordinance No. 2245, (original staff proposal) 2. taking the action described in 1 above and reporting quarterly fixed asset purchases in the quarterly financial report, 3. taking the action described in 2 above and codifying the fixed asset reporting requirement. 4. leaving section 3.32.040, "Unbudgeted Equipment or Fixed Assets" in the Tukwila Municipal Code but increasing the cost threshold to $10,000 from $5,000, 5. taking the action described in 4 above except increasing the cost threshold to an amount other than $10,000, or 6. revising the interpretation of "unbudgeted" such that if an amount has been appropriated in the budget for capital or fixed asset items and sufficient appropriation exists to cover the proposed fixed asset purchase, the purchase then is deemed "budgeted" rather than "unbudgeted ". Council controls over procurement. Fixed Assets -- In November 1997, City Council adopted Ordinance No. 1817 establishing Chapter 3.32, Budget Provisions, which included section 3.32.040 "Unbudgeted Equipment or Fixed Assets". TMC 3.32.040 requires the approval of the Mayor and three affirmative votes of the respective Council Committee to approve the purchase of unbudgeted capital equipment or fixed assets, including components or services of items related to capital equipment or fixed assets. Fixed asset items were defined as costing at least $1,000 and having a useful life of at least two years. Ordinance No. 2010, adopted in December 2002, changed the minimum limit for capital equipment from $1,000 to $5,000. Other Goods and Services -- TMC section 3.32.030 "Bids" requires Council approval of all purchases $40 thousand and above. Interpretation of the term "unbudgeted". The term "unbudgeted" as it is used in Chapter 3.32.040 has been interpreted to mean any item that is not specifically identified and listed in the budget. It has been the City's practice to list in the budget only the anticipated vehicle purchases INFORMATIONAL MEMO Page 2 and not other anticipated fixed asset purchases. For example, the Parks and Recreation Department budgets for replacement of gym equipment but does not specifically list the items. The City has been considering purchases in this category "unbudgeted" which is a very conservative interpretation. DISCUSSION It is the City's responsibility to utilize taxpayers' dollars in the most effective and efficient way possible while adhering to applicable laws and regulations. Council has established a $40,000 mayoral approval limit for the procurement of goods and services. The process of obtaining Council approval for the purchase of the unbudgeted fixed assets, purchases between $5,000 and $40,000 that have not been specifically identified and listed in the budget, takes Council and staff time and the value of the policy has been questioned at times by certain Councilmembers. In an effort to streamline practices, it is recommended that one of the suggested actions be taken. RECOMMENDATION For discussion only. ATTACHMENTS Ordinance to repeal Ordinance No. 2245. Z:\Council Agenda IternsTinancOnfo Memo - TMC-Remove 3.32.040 4.25.17.docx AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, REPEALING ORDINANCE NO. 2245 §1 (PART), AS CODIFIED AT TUKWILA MUNICIPAL CODE SECTION 3.32.040, "UNBUDGETED EQUIPMENT OR FIXED ASSET ITEMS "; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the process for unbudgeted equipment or fixed asset items was originally adopted in 2002, and the City routinely reviews processes and procedures to validate their effectiveness; and WHEREAS, it is the City's standard operating procedure to ensure spending does not exceed the approved final budget, and eliminating this section of the code will streamline processes for greater efficiency; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1. Repealer. Ordinance No. 2245 §1 (part), as codified at Tukwila Municipal Code (TMC) Section 3.32.040, "Unbudgeted Equipment or Fixed Asset Items," is hereby repealed, thereby eliminating TMC Section 3.32.040. Section 2. Corrections by City Clerk or Code Reviser. Upon approval of the City Attorney, the City Clerk and the code reviser are authorized to make necessary corrections to this ordinance, including the correction of clerical errors; references to other local, state or federal laws, codes, rules, or regulations; or ordinance numbering and section/subsection numbering. Section 3. Severability. If any section, subsection, paragraph, sentence, clause or phrase of this ordinance or its application to any person or situation should be held to be invalid or unconstitutional for any reason by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this ordinance or its application to any other person or situation. W: Word Processing\Ordinances\Repeal ordinances relating to TMC 332.040 4-12-17 CZ:bjs Page 1 of 2 Section 4. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City, and shall take effect and be in full force five days after passage and publication as provided by law. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 12017. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk Rachel B. Turpin, City Attorney Allan Ekberg, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: W: Word Processing\Ordinances\Repeal ordinances relating to TIVIC 3.32.040 4-12-17 CZ:bjs El Page 2 of 2