LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session March 29, 1999 TO: Honorable Frank Madla, Chair, Senate Committee on Intergovernmental Relations FROM: John Keel, Director, Legislative Budget Board IN RE: SB 507 by Duncan (Relating to purchases by municipalities through a competitive procedure.), As Introduced ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** Local Government Impact Current law requires municipalities to comply with competitive bidding procedures on expenditures of more than $15,000. The bill would lower the threshold to $5,000 and would allow municipalities with populations under 100,000 to use sealed proposals for the purchase of insurance. In some cities, the bill could result in increased costs, since additional purchases would be subject to competitive bidding procedures. Such costs would be attributed to the need for additional staff and additional operating expenses and supplies. Advertising costs would likely increase as well. Four municipalities provided estimates of increased costs that could result from the bill. The City of Cedar Park projects a $2,000 annual increase in advertising costs. The City of Galveston anticipates a $5,000 annual increase in advertising costs. The City of Brownsville anticipates staff and advertising costs increasing $110,000 annually. The City of Schulenburg expects no significant fiscal impact, because the city already uses $5,000 as the competitive bidding threshold. The provision to allow sealed proposals to be used by cities under 100,000 for the purchase of insurance is not expected to result in significant fiscal implications to municipalities. Source Agencies: LBB Staff: JK, TL