Woodward, Okla. — Woodward City Commissioners voted Monday night to raise the limit for how much city officials can spend without having to seek prior approval from the commission itself.

City Attorney Aaron Sims said the previous limit of $5,000 had been in effect for at least 14 years or more.

However, City Finance Officer Doug Haines said state statutes allow for up to $50,000 to be spent without having to use competitive bidding procedures. (Oklahoma Statutes Title 60 Section 176(H) and Title 61 Sections 101 and following)

Based on those statutes, Haines said the amendment was made to increase the spending limit to $50,000.

He said this increase will help to "streamline" city operations and provide "more flexibility," as well as helping to save time and money.

Essentially, he said by increasing the limit, the city will be able to pay off purchases under $50,000 whenever those payments come due rather than waiting for commission approval once a month.

Previously commissioners have been approving a claims list that included all the encumbered purchases over $5,000 during their first meeting each month, meaning payments were only made once a month, Haines said.

These claims approvals were handled under the commission's consent docket and were "a formality because the money for those purchases had already been obligated," he said.

However, with the commission only approving these claims once a month, Haines said that many payments were often overdue by the time purchases were officially approved, sometimes by as much as 60 days.  This meant the city was often having to pay late fees in addition to the original purchase price, he said.

But with the spending limit increase, Haines said the city should not only be able to pay for purchases on time, but may also have the opportunity to "take advantage of early discounts" in some instances.

The finance officer also pointed out that the spending limit only applies to budgeted purchases, which means that commissioners technically already approved the purchases when they approved the overall city budget.

Non-budgeted items, no matter their cost, will still be brought to the city commission for approval prior to purchase, Haines said.

"If it's something that falls outside the budget guidelines, then it will come back to the commission," he said.



OTHER CODE AMENDMENTS

In addition to increasing how much can be spent without prior approval by the commission, a code amendment was also approved that will increase how much can be spent without seeking competitive quotes.  Previously, Woodward code outlined that competitive quotes had to be obtained for purchases with an estimated cost over $10,000.

With the amendment that was approved Monday, that amount was increased to $25,000, meaning that quotes only have to be collected for purchases valued between $25,000 and $50,000.  Purchases over $50,000 will be formally bid as set out by state law.

Woodward's ordinances were also changed in order to increase the authority of the city manager to approve purchases up to the $50,000 limit as long as the other purchasing procedures are followed.

That includes following a new section of code that was enacted Monday, which outlines the responsibility of the city manager to establish a system of checks and balances.

According to the new code this new internal control system "should include the following control procedures: (1) Proper authorization of transactions and activities; (2) Adequate segregation of duties; (3) Adequate documents and records; (4) Adequate safeguards over access to and use of assets and records; and (5) Independent checks on performance."

While there isn't any further explanation of what these control procedures should entail, City Manager Alan Riffel said it is more than what had previously been outlined in code.

But Haines added that while there may not have been a previous ordinance outlining a system of checks and balances, it doesn't mean those procedures haven't been in use.

"A lot of those mechanisms are already in place," he said.  "For several years we've used a 3-tier approval process by which purchases are approved by the city manager, myself and the accounting supervisor."



CHANGES BASED ON OTHER CITIES' CODES

Haines and City Manager Alan Riffel said the changes in the city code were based on a survey of similar codes from other cities across the state.  In particular they noted Enid, Edmond and Bartlesville, saying that  each of those city's codes were available for review online.  (Edmond and Bartlesville have their code of ordinances available through municode.com, while Enid has its code available through sterlingcodifiers.com.)

Based on an examination of the codes for those cities, The News did not find any requirement for city commission approval of purchases for non-bid items in those other communities.

Enid and Edmond code both assign the duties of purchasing supplies and contractual services to a purchasing agent (assigned by the city manager), while Bartlesville assigns those duties directly to the city manager.  In each, the city council is only brought in to approve purchases that have gone through the competitive bidding process.

The changes approved for Woodward code on Monday will bring local ordinances more in line with those other communities in that respect, with the commission only acting on bid items when it comes to budgeted purchases.

However, the spending limits for each community still varies somewhat.

Both Enid and Bartlesville code requires competitive bids for any expenditures over $25,000.  While Edmond only seeks bids for expenses over $50,000 as outlined by state statute.

However, Enid code outlines that quotes must be sought for open market purchases under $25,000.  Bartlesville doesn't require quotes for expenses under $2,500, but at least 3 verbal quotes must be obtained for purchases between $2,500 and $10,000, and 3 written quotes for purchases between $10,000 and $25,000.

Edmond requires that written quotes be obtained for purchases between $15,000 and $50,000.  But Edmond does not require quotes for expenditures under $15,000.