The Livingston Board of Aldermen will draft a new purchasing agreement for citywide use following discussions Monday night.
Mayor Lori Elder Burnett said new state law allows cities to adopt their own spending policies instead of using one set by the state. Burnett said as part of this change, cities will not have to go through the normal bid advertisement process if a purchase is less than a set amount. Burnett said the city has never had this policy in place.
“I’m suggesting adopting the bid threshold of $25,000 that we don’t have to advertise for,” Burnett said. “But we would, again, we would still get the estimates for that, it just would not be a delay in getting those bids back.”
The traditional bid process requires municipalities to advertise their projects in the newspaper before bids are placed, which can create a delay. The motion to adopt Burnett’s $25,000 threshold ultimately died by failure to receive a second, but the Aldermen essentially agreed to put a placeholder amount in the policy’s first draft.
The Livingston purchasing policy will be based on those from other local governments. It should be drafted and ready for discussion at the next meeting.
Attorney Andre Greppin spoke to clarify the Aldermen’s questions. Greppin said the old law requires competitive, sealed bids for non-emergency and non-proprietary purchases. The threshold was put in place to prevent municipalities from having to go through the process for small everyday purchases.
“The General Assembly allows every city in Tennessee to establish a minimum bid threshold of up to $25,000,” Greppin said. “It doesn’t have to be $25,000. It can be $10,000 or $5,000.”
Greppin said most cities have considered a $25,000 threshold, but Carthage recently set a threshold of $10,000.
Greppin said for any purchase that is 40 percent or more of the threshold is, the law still requires at least three quotes before a bid is awarded. With a $25,000 threshold, any purchase of $15,000 or less can essentially be made with only one quote.
Alderman Arno Proctor was initially hesitant about adopting a policy. Proctor said he is afraid someone could just make an unauthorized purchase.
“Every week in the paper, almost, is where some public official has absconded with some funds,” Proctor said. “Almost every week. And it concerns me. $10,000 is a lot of money to me.”
Proctor said he wanted to see a policy in writing before making a final decision, which was ultimately the decision made at the meeting.
Burnett said she still holds the final authority on any purchasing order, and the city would not approve any spending not in the budget. Burnett said the city will still do due diligence to receive three bids on items, even if they were already approved in the budget.
Greppin said department heads do not have city debit cards, and purchasing orders require two signatures to be approved. In other words, there are safeguards in place.
Greppin said the policy will help add written clarity about who is authorized to make purchases for the city. It would also ensure the city takes pricing into account when awarding bids.
In other business, the Livingston Board of Aldermen approved a new cyber security policy as required by state law. The policy will need to be reviewed and updated every two years.
