ITEM:		CONSENT CALENDAR
2.	CONSIDER ADOPTION OF REVISED PURCHASING POLICY
Meeting Date:			April 15, 2024	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Nishil Bali	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: The Finance and Administration Committee reviewed this item on April 8, 2024 and recommended approval.
CEQA Compliance: This action does not constitute a project as defined by the California Environmental Quality Act Guidelines Section 15378.

SUMMARY: The District’s current Purchasing Policy was adopted in January 1997 and needs to be revised holistically. The proposed policy clarifies applicable regulations, staff responsibilities, purchasing methods, solicitation mechanisms, and purchasing controls for the types of procurement that the District may engage in. The proposed policy will allow for a more cost-effective, compliant, and efficient purchasing function. Staff seeks Board approval for the proposed Purchasing Policy for the District.

RECOMMENDATION: The Finance and Administration Committee recommends that the Board adopt the proposed purchasing policy in Exhibit 2-B. As part of the proposed purchasing policy, Staff recommends approving Resolution No. 2024-04 in Exhibit 2-C to adopt the Uniform Public Construction Cost Accounting Act procedures in accordance with Public Contract Code Section 22003.

BACKGROUND: The District is committed to purchasing supplies, services, and equipment in a fair, open, and equitable manner and at the lowest possible cost and/or best value. The District’s current Purchasing Policy was adopted in January 1997 and warrants revisions in several areas. The goals of the revised purchasing policy are to:

a. Comply with current regulations and best practices to streamline the District’s purchasing function.

b. Provide a cost-effective purchasing function while maintaining a reputation for fairness and integrity.

c. Increase transparency and encourage competitive bids from responsible providers who are qualified, capable, and willing to meet the District’s requirements, and ensure open and fair competition for the District’s business.

d. Allow for the purchase of materials and services at the optimum time in the appropriate quality for the intended purpose.

e. Ensure the continuity of District operations.

The proposed policy includes the following key proposed changes:

a. Clarifies ethical and accountability guidelines for procurement of goods and services. These include requiring business justifications for purchases along with appropriate documentation and signoffs for goods/services purchased, prohibition of order splitting to avoid authorization limits, and establishing criteria for purchasing specifications, among other requirements.

b. Proposes new purchasing thresholds as inflation has eroded purchasing power since the policy’s last adoption in 1997. The limit for Petty cash purchases is proposed to be raised from $50 to $150 per request and the threshold for creating purchase orders is proposed to be raised from $150 to $500 per product/service, along with related criteria for informal and formal solicitations. All purchases are required to be budgeted as part of the proposed Division budget.

c. Provides new guidelines for credit card purchases including restricted uses.

d. Defines and allows the use of various types of contracts including Standing Supply, Master Services, Public works, Goods and General Services, and Cooperative Purchasing agreements.

e. Updates solicitation thresholds for public works and other types of contracts. The proposed policy incorporates the requirements of the California Uniform Construction Cost Accounting Act for Public Contracts. For all other contracts, purchasing limits are revised to fall in one of four tiers corresponding to approval thresholds for District staff, Managers, General Manager, and the Board. Unless exempt or noted otherwise, all contracts above $25,000 require Board approval.

f. Defines competitive solicitation mechanisms such as Requests for Proposals, Requests for Qualifications, and Invitation to Bid, as well as exempt purchases or those deemed as sole source, urgent, or related to an emergency.

g. Clarifies guidelines for disposal of surplus property and risk management.

The proposed changes are intended to align purchasing supplies and services with best practices, ensure continuity and uniformity in the district’s purchasing operations, and allow for a more cost-effective, compliant, transparent, and efficient purchasing function.

EXHIBITS

2-A Existing MPWMD Purchasing Policy – Adopted January 1997

2-B Proposed MPWMD Purchasing Policy – Adopted April 2024

2-C Resolution No. 2024-04 adopting Uniform Public Construction Cost Accounting Act

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