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ITEM: RESOLUTION NO. R2021-40 (APPROVING AN INCREASE TO THE VILLAGE'S PURCHASING THRESHOLDS FOR FORMAL SOLICITATIONS AND COUNCIL APPROVAL)
A RESOLUTION OF WELLINGTON'S COUNCIL APPROVING AN INCREASE TO THE VILLAGE'S PURCHASING THRESHOLDS FOR FORMAL SOLICITATIONS AND COUNCIL APPROVAL FROM $25,000 TO $65,000; AND PROVIDING AN EFFECTIVE DATE.
REQUEST: Approval of Resolution No. R2021-40 increasing the Village Purchasing Thresholds for Formal Solicitations and Council approval from $25,000 to $65,000.
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EXPLANATION: In 2004, the Village Council adopted the Purchasing Manual, which included Purchasing thresholds for formal bids and Council approval at $25,000. The Purchasing Manual was revised and adopted in 2014, and Purchasing thresholds for formal solicitations and Council approval remained the same at $25,000.
Due to significant spikes in the cost of commodities, services, and construction, staff recommends increasing the Purchasing threshold for formal solicitations and Council approval from $25,000 to $65,000.
According to Associated General Contractors of America (AGC) "The construction industry is in the midst of a period of exceptionally steep and fast-rising costs for a variety of materials, compounded by major supply chain disruptions". Between April 2020 and February 2021, the Producer Price Index (PPI) has demonstrated significant increases for commodities as summarized below:
Commodity
% Increase April 2020 - Feb 2021
Polyvinyl Chloride (PVC)
270%
Diesel Fuel
114%
Lumber and Plywood
62%
Copper and Brass
37%
Steel Mill Products
20%
A major concern regarding increases in the cost of labor and material is the Village's ability to award grants for home repairs through the Community Development Block Grant (CDBG) and the Great Neighborhood Grants program. The cost of home rehabilitations that would typically fall below the $25,000 threshold limit, now far exceed that amount. By increasing the threshold limit to $65,000, home rehabil...
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