UPDATED: Councilman Vanderbilt Proposal To Reduce Council-Approval Spending Threshold Raises Questions

vanderbiltLast month, Councilman James Vanderbilt asked staff to bring back an agenda item “to empower council to approve all expenditures” of more than $50,000. Currently, the city manager can approve contracts for $100,000 or less; council approval is required for any expenditure of more than $100,000. All contracts valued at $20,000 or more are posted on the Transparency section of the city website.

$100,000 is a fairly typical signature threshold for a city of Anaheim’s size. The threshold has been adjusted three times in the last 13 years. In 2004, the city manager’s signature authority was increased to $100,000 from $25,000. In November 2010, it was increased to $250,000 based on an anticipated increase in the efficiency of the contracting process.

Almost a year later, Mayor Tom Tait moved to have that threshold restored to $100,000 – stating his belief the higher threshold was “excessive.” He noted that survey of like-size California cities such as Santa Monica, Irvine, Long Beach and Los Angeles had a $100,000 threshold.

Then-City Manager Tom Wood explained during that council meeting that only 12 of the 243 contracts processed that year fell within the $100,000 to $250,000 range.

Nonetheless, Mayor Tait’s motion carried 4-1, with only then-Councilmember Lorri Galloway voting in opposition.

How many items would such a change add to the council agenda each year? Anaheim Blog has reached out to the city to verify how many contracts processed during the past several years fell between $50,000 and $100,000 – the range targeted by Vanderbilt’s proposal.

Councilman Vanderbilt did not provide reasons for reducing the threshold when he asked to have it agendized last month. Anaheim Blog has reached out to Councilman Vanderbilt regarding his reasons for wanting to lower the expenditure approval threshold, and will update this article upon his reply.

Also unclear is whether Vanderbilt’s proposal would apply to council aides. While Mayor Tait’s council aide Mishal Montgomery is a salaried city employee, several councilmembers – including Kris Murray and Denise Barnes – contract out for their council aides. Since these budgets are more than $50,000, the question is whether a councilmember’s choice of council aide will be subject to a council veto if Vanderbilt’s proposal is adopted.

Until more information surfaces, it’s difficult to determine if this is an appropriate response to an existing or ongoing issue, or a solution in search of a problem – or something else.

UPDATED (January 3): Councilman Vanderbilt sent this response to Anaheim Blog inquiries about his proposal:

AB: Is there a specific reason for seeking to change the threshold? Have there been specific expenditures you believe should have required council approval but did not due to the spending threshold?

JV: “My interest in adjusting the spending authority relates, in part, to a $71,000 contract with a consulting firm that studied the economic viability of the performing arts center located at the site of The Grove of Anaheim. The contract was connected to a request made by a council member on Oct. 7. 2014 requesting staff to bring back an agreement for consideration to develop the center. I believe it would have been helpful to know that the need for the study was an integral part of the request for the agreement.”

AB: The council lowered the threshold from $250K to $100K in 2011 – and specifically noted that was more in line with similarly sized cities that also had a $100K threshold. Has there been an issue with city contracting that you think would be solved by lowering the council approval threshold to $50K?

JV: “You are correct that many cities maintain a $100,000 cap. But, not all. There seems to be a lot of variation throughout the state. Several cities that have a $50,000 or less threshold (Riverside, Fresno, Santa Ana, etc.) As with any proposal, a closer examination is needed to determine the pros and cons and I hope the council will deliberate them fully.”

AB: Several council members contract out for their council aides. Since each councilmembers’ council aide budget is now approximately $70K, would lowering the threshold to $50K subject those councilmembers’ choice of council aide contractor to council approval?

JV: “I didn’t consider the council aide contracts when making the request and I wasn’t planning to bring them up now or in the future.”

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