KC Council approves compromise to trim city manager's spending authority

City Manager Troy Schulte
City Manager Troy Schulte File photo

The Kansas City Council voted unanimously Thursday to trim city staff's power to sign contracts without council authorization, an issue that triggered tensions between City Manager Troy Schulte and some council members.

In its final form, the ordinance is a more moderate version of the one introduced in November by its sponsor, Councilman Quinton Lucas. Schulte considered the provisions of the earlier ordinance so sweeping he briefly threatened to resign. He also backed a 6-5 council vote in February to send the bill back to committee.

Schulte and department directors can't spend money before it is appropriated by the council. But they still enjoy considerable latitude in signing contracts below certain threshold amounts. Lucas and other councilmembers contend that while Schulte has done nothing improper, the regulations limit their ability to scrutinize spending.

The approved ordinance, the product of negotiations between Lucas and Schulte, bars officials from signing construction contracts worth more than $1 million, down slightly from the current $1.3 million. Lucas' original version called for a $500,000 cap.

Staff can still approve non-construction contracts or other goods and services up to $400,000. Lucas' proposal included a reduction to $160,000.

The major change is in the area of consulting or other personal services contracts. The Lucas ordinance requires all agreements of more than $50,000 to receive council sign-off. The original limit was $400,000.

The $50,000 cap would not have triggered council scrutiny of a $40,000 expenditure Schulte approved to help fund a study of potential downtown sites for a new baseball stadium. Most council members said they knew nothing about the study until reading a story in The Star last October.

Lucas said before Thursday's meeting that the ordinance still delivers on its original intent, to provide more transparency for taxpayers in how their money is spent.

He called the $50,000 cap "an outstanding deal for taxpayers."

The ordinance does provide other checks on staff signing authority. It requires Schulte to produce a quarterly report of what Lucas callled "off book contracts," meaning those less than $50,000.

The new measure also tightens rules under which Schulte and department heads can waive requirements for competitive bidding and hiring of women and minorities.

The ordinance also eliminates the automatic $100,000 increase in contract dollar thresholds every four years. The next one is due in 2019.

Schulte and his staff still enjoy considerable signing authority relative to other municipalities.

An examination by The Star in December found that Phoenix, Ariz., was one of numerous cities with a council-manager form of government where elected officials can scrutinize spending more closely. Localities with lower thresholds for council review include Long Beach, Calif., ($200,000) Sacramento, Calif., ($100,000) and Mesa, Ariz., ($25,000).

Managerial spending caps for non-construction contracts at City Hall have risen by more than 1,000 percent since the year 2000, when the limit was $35,000. The ceiling on construction deals has ballooned more than 3,500 percent.