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Purchasing Policy Ordinance would limit contract approval by city manager to $5,000

By Bill ShortFlag City Logo

The Millington Board of Mayor and Aldermen has unanimously passed an ordinance on first reading that would limit the city manager’s contract approval authority to $5,000.

Board members took the action during their March 5 meeting on a motion offered by Alderman Bethany Huffman and seconded by Alderman Mike Caruthers.

The ordinance is scheduled for second reading at the board’s April 1 meeting. It states that the City Charter authorizes the board to establish general purchasing policies and dollar limits on requirements for obtaining quotes or bids. The Charter also authorizes the city manager, or an employee designated by him, to act as the city’s purchasing agent. The ordinance would amend the Municipal Code to establish Chapter 5 of Title 1. In accordance with the Charter and the board’s actions, Section 5-112 of the Code would give the city manager authority to enter into contracts on behalf of the city, subject to budgetary limitations, up to $5,000 without the board’s prior approval. During discussion shortly before the vote, Huffman said she believes giving the city manager this authority would be “helpful in running the day-to-day operations” of Millington. But she wanted to ensure that the board would have the “proper internal controls.”

“My understanding is that it can’t be without the budget,” she noted. “The mayor still signs the contracts, and we still have two signatures on the checks.”

But Huffman also said she wanted confirmation from the individuals who are “doing this every day” that it is actually how this is going to work. City Finance Director John Trusty said the proposed ordinance is designed to establish a “formal set of guidelines” for the city’s purchasing. He acknowledged that, for many years before he accepted his current position, Millington had a “very informal” set of guidelines.

Trusty recalled that one of his early experiences was testifying before a state grand jury and looking at some of the Millington finances in connection with the investigation of the former mayor. Inquiring about what the policies were, the grand jury asked whether they were adopted by the board and were “in writing.”

“Most of those answers were ‘no,’” he said. “But they were very pleased that we were at least moving toward documentation. And there was nothing they found in the grand jury investigation that suggested any of the city’s finances were involved.”

Trusty also noted that Millington has implemented a system whereby bids are formally advertised, they follow the same format and are all coordinated through City Hall. In the past, he acknowledged, the city’s various departments did that independently.

“We’re trying to, both in appearance and in fact, make sure that everything we’re doing is above board and fair to all people who are sending quotes or bids to the city,” he noted.

Trusty said the concept is that if specific, written controls are in place that are being followed, and a year-end audit verifies that, then a higher-dollar limit is “specifically appropriate.” He recalled recommending that the previous board not include any dollar limits in the new Charter, but to give itself the “prerogative” to set those within the confines of state law.

“Under the general state law,” he said, “I believe municipalities have the authority to raise it to $20,000. I would not recommend it at that level at this point.”

In response to a question by Huffman, Trusty said Millington’s outside auditors and the Tennessee Comptroller’s Office had not yet reviewed the city’s policy.

“I can have the outside auditors look at it before we have the third reading of this ordinance,” he noted. “I don’t know that the Comptroller’s Office will express an opinion on it.”

Caruthers, who was a member of the previous board, said it did not have a lot of special called meetings that required it to approve contracts amounting to more than $5,000.

“The only thing that we as aldermen have any control over is the budget and expenditures for the city,” he said. “And I think it’s irresponsible for us to relinquish that control.”

Noting that she does not want to prevent the city’s employees from repairing equipment, Huffman asked City Manager Thomas Christie to keep a record of how many times the board has an “issue” with this.

“Those things are very expensive,” she acknowledged. “And I don’t want to hurt the services to the residents because of the limit we have here.”

Because the board members might have to address this issue again in the future, Huffman said she wanted to make sure they have “some tracking” of that.

“You’ll have tracking,” Christie responded, “because it’ll have to come before the board.”

But Huffman said that, if the board was about to “handcuff” someone from doing his work, it would probably need a special called meeting for that particular purpose, rather than waiting a month for its next regular meeting.



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March 2013
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