Sedona council debates overhaul of purchasing rules; staff to revise code and return on consent

Sedona City Council members spent a substantial portion of the meeting discussing proposed revisions to Sedona City Code Chapter 3.05, the city’s purchasing rules and procurement procedures.

The proposed ordinance would add a procurement officer role and formally recognize a procurement manual, raise several purchasing thresholds and clarify types of purchases and solicitations, including goods, services, professional services and construction professional services. Monique, a staff presenter, told the council the draft aligns city practice with state law and modern procurement practices and recommended returning a cleaned-up ordinance on a future consent agenda.

Why it matters: the changes would shift when purchase decisions come to council, how departments document selection of consultants or vendors, and how the city handles construction procurements and contract change orders.

Staff presentation and main proposals Monique, the staff presenter, said the code has had no major overhaul since 2007 and that the draft would codify current practices and add definitions and a procurement manual. She told council the city manager’s signature authority would increase from $100,000 to $150,000, department heads would remain at $50,000, and purchases below $25,000 would not require written quotes though departments would still need to document reasonable pricing and follow the procurement manual. Monique said, “we're proposing to increase city manager signature authority to $150,000.”

Procurement officer, procurement manual and thresholds Procurement officer Ian Cubrow described the manual as the “how-to” to implement the code’s pillars. Ian said the proposed thresholds would require three written price quotes for goods and services between $25,000 and $150,000 and a best-value analysis rather than automatic lowest-price selection: “this would be a best value analysis,” he said. The draft also imports Title 34 of the Arizona Revised Statutes for construction professional services, which the state sets at a $500,000 solicitation threshold.

Professional services and competition-impracticable exception The city attorney team proposed a definition of professional services as work requiring “advanced training and specialized knowledge” and said professional contracts under $150,000 could be directly selected while contracts above that amount would require formal solicitation. Councilors pressed for safeguards and clearer documentation when departments directly select consultants. Ian and Monique said the procurement manual would require a justification memo for any noncompetitive selection and other documentation.

Change orders, cumulative authority and a $150,000 cap Councilors gave particular attention to contract amendments and change orders. The draft retained a longstanding 10% cumulative change-order authority for the city manager; councilors worried that 10% of very large contracts could be substantial. After discussion, council members reached a working direction that staff should revise the draft so the city manager may approve individual change orders up to 10% of the original contract price but not to exceed $150,000 per individual amendment. That approach also removes the proposed cumulative-only phrasing in favor of a per-change-order cap. Councilor Brian (speaking from experience with recent large amendments) urged caution, and Councilor Kinsella asked for clearer internal controls and documentation: “Reasonable judgment is not defined in 1 of your definitions,” she said, arguing the manual should supply evaluative steps.

Cooperative purchasing, sole source, emergency purchases and bonds The draft formalizes cooperative purchasing (for contracts already competitively procured), clarifies sole-source/competition impracticable procedures and authorizes the procurement officer and city manager to make emergency purchases when an emergency is declared. Ian said cooperative contracts often produce favorable pricing and terms and recommended delegating cooperative-use approvals to staff rather than seeking council approval every time.

Council concerns and direction to staff Councilors repeatedly asked that the draft explicitly tie discretionary appeals and selection safeguards to the procurement manual. Councilor Fultz questioned allowing direct selection up to $150,000 for professional services and asked for documentation that a fair process occurred when staff choose consultants without a formal solicitation. Monique and Ian said the procurement manual will set those procedures and that staff will require written justifications. The council asked staff to: (1) add clearer references throughout the code to “pursuant to the procurement manual,” (2) adopt the 10% per-change-order with a $150,000-per-amendment cap and remove the cumulative-only wording, and (3) include specific procedural safeguards and justification documentation for competition-impracticable and direct-selection professional services decisions in the procurement manual.

Next steps and procedure Monique said staff will update the redline and clean copies to reflect the council direction and planned to return the ordinance as a consent item at a future meeting with a blue-line summary of edits. No final ordinance vote occurred tonight; councilors agreed to the staff direction and asked that the manual and the code language be clear about internal controls.

Council comment Councilor Fultz pressed for transparency in consultant selection, saying repeated awards to a single firm can create appearance issues. Annette, the city manager, and other staff said department head review, procurement oversight and city attorney review operate as current checks. Monique and Ian said they would document the procedures in the procurement manual and provide that guidance when the ordinance returns to the council.

What the draft would not do Monique said the draft does not strip any required city attorney review; all contracts would still receive legal review. The code changes are meant to clarify and codify authority and to make day-to-day procurement practice more consistent with current needs and state law.

Ending Staff will return a revised ordinance and a procurement-manual summary showing where the council-requested edits were made; the council agreed to consider the revised ordinance on a future consent agenda rather than as separate legislation requiring a separate ordinance vote.