Loading...
HomeMy WebLinkAboutItem 09o - Amazon Business PO Increase STAFF REPORT ADMINISTRATIVE SERVICES DEPARTMENT DATE: October 6, 2026 TO: Honorable Mayor and City Council FROM: Henry Chen, Administrative Services Director By: Monica Li, Buyer SUBJECT: CHANGE ORDER TO INCREASE THE PURCHASE ORDER WITH AMAZON BUSINESS TO $250,000 AND APPROVE A NEW PURCHASE ORDER IN THE AMOUNT OF $250,000 ANNUALLY, WITH THE OPTION TO RENEW FOR THREE (3) ADDITIONAL YEARS CEQA: Not a Project Recommendation: Approve SUMMARY On November 19, 2024, the City Council approved a purchase order with Amazon Business, with the option for renewal through Fiscal Year 2026-27. Fiscal Year 2025– 26 represented the first full fiscal year in which the purchase order was utilized for the procurement of office supplies and equipment. During the fiscal year, favorable pricing, product availability, and reliable delivery services resulted in expenditures exceeding the amount originally anticipated and approved. To accommodate the increased purchasing activity, a change order is requested to increase the Fiscal Year 2025-26 purchase order to $250,000. In addition, a new purchase order is being requested to accommodate increased purchasing needs, ensure continuity of service, and streamline administrative processing. Continuing the established purchasing arrangement will allow the City to maintain efficient and timely access to necessary office supplies and equipment, while reducing the administrative burden associated with processing individual purchases. It is recommended that the City Council approve a change order to increase the Fiscal Year 2025-2026 purchase order to $250,000, and approve a new purchase order with Change Order and Purchase Order for Amazon Business Account October 6, 2026 Page 2 of 5 Amazon Business for $250,000, with the option to renew for an additional three (3) years at the discretion of the City Manager, without requiring any further approvals from the City Council, provided that the pricing structure remain within standard inflationary limits. BACKGROUND Procurement Cards (“P-Cards”) are issued to certain employees that make purchases on behalf of their respective departments and are generally used to facilitate small- dollar purchases, including the purchase of office supplies, electronics, and other miscellaneous goods through Amazon consumer accounts. As annual expenditures with Amazon increased, a more formalized purchasing process was identified to improve transaction efficiency, strengthen procurement controls, and better manage Citywide purchasing activity. Accordingly, the City established an Amazon Business account through the OMNIA cooperative purchasing contract. Through the Amazon Business account, Arcadia has access to negotiated pricing and shipping terms, rebates on eligible purchases, and a more efficient and centralized purchasing process for City departments. DISCUSSION The first purchase order for Amazon Business was created based upon the City’s historical Amazon purchases. For open purchase orders, such as the one established with Amazon Business, purchases are made as needed and not according to a predetermined schedule. Spending is monitored by the Purchasing Office to ensure that the City remains within the authorized purchase order amount. In April 2026, the remaining balance on the Amazon Business purchase order was approximately $30,000, which was expected to be sufficient to cover purchases for the remainder of the fiscal year. At the time of review, outstanding purchases that had not yet been billed, as well as invoices that had not yet been entered into the City’s financial system, were not reflected in the remaining balance. These outstanding amounts totaled approximately $24,000. In addition, expenditures increased during the final months of the fiscal year as departments utilized their available budget to complete purchases prior to year-end. As a result, expenses during the final months of the fiscal year were substantially higher than the average Change Order and Purchase Order for Amazon Business Account October 6, 2026 Page 3 of 5 monthly spending throughout the year. Total Fiscal Year 2025–26 expenditures were approximately $250,000, which exceeded the original purchase order authorization by approximately $60,000. Accordingly, an increase to the existing purchase order is being requested to establish a total authorized amount of $250,000 for Fiscal Year 2025–26. Although expenditures exceeded the original purchase order amount, all purchases remained within the overall budgeted amounts approved for office supplies and equipment. The additional expenditures did not result in an increase to the City’s authorized budget and were accommodated within existing appropriations. Purchases through Amazon Business primarily supported routine departmental needs for office supplies and equipment and, in many instances, replaced purchases that otherwise would have been made through other vendors. To prevent expenditures from exceeding the authorized purchase order amount in the future, an additional level of review will be implemented by the Purchasing Office, and the City’s Amazon Business account will no longer allow purchases beyond the authorized purchase order amount. As such, City departments will only be permitted to make purchases through Amazon Business until the purchase order amount of $250,000 is reached. Although the City Council previously authorized additional renewals through Fiscal Year 2026–27, the original purchase order amount was established based on historical expenditure levels. Based on the level of utilization experienced during Fiscal Year 2025–26, and the continued demand from City departments, annual expenditures of approximately $250,000 are anticipated in future fiscal years. Accordingly, a new annual purchase order in the amount of $250,000 is recommended to more accurately reflect current and anticipated expenditures. Given the anticipated utilization beyond Fiscal Year 2026–27, there is also an opportunity to proactively establish a new purchasing arrangement that will accommodate the City’s anticipated needs through Fiscal Year 2029–30. Staff has identified a new OMNIA Partners cooperative contract that may be utilized for annual purchases with Amazon Business through Fiscal Year 2029–30. The California Government Code authorizes public agencies to participate in cooperative purchasing agreements such as those established by OMNIA Partners, while remaining within the City’s adopted rules and procedures for purchasing. By Change Order and Purchase Order for Amazon Business Account October 6, 2026 Page 4 of 5 utilizing a cooperative purchasing program like OMNIA Partners, the City can streamline the procurement process and purchase equipment, supplies, and services at the best price possible. OMNIA Partners awarded a master contract agreement to Amazon Business for an online marketplace, expiring May 4, 2030. A copy of the agreement has been reviewed by the Administrative Services Department, and it has been determined to meet the City’s procurement requirements. Accordingly, staff is requesting approval to increase to the current purchase order amount to $250,000 for Fiscal Year 2025–26, and authorize a new purchase order with Amazon Business in the amount of $250,000 annually, with the option to renew for up to three additional fiscal years through Fiscal Year 2029–30. ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), as it can be seen with certainty that it will have no impact on the environment. FISCAL IMPACT Sufficient funds for the procurement of office supplies and equipment are included within the respective department operating budgets. The proposed increase to the Fiscal Year 2025–26 purchase order will not require an increase to the City’s adopted budget, as the expenditures were accommodated within existing appropriations. Funding for future purchases with Amazon Business will be requested as part of the City's annual budget development process. RECOMMENDATION It is recommended that the City Council determine this action is not a project under the California Environmental Quality Act (“CEQA”); and approve a change order to increase the purchase order with Amazon Business to $250,000 for Fiscal Year 2025– 26, and approve a new purchase order with Amazon Business in the amount of $250,000 annually, with the option to renew for three (3) additional years through Fiscal Year 2029–30, at the discretion of the City Manager and without requiring any Change Order and Purchase Order for Amazon Business Account October 6, 2026 Page 5 of 5 further approvals from the City Council, provided that the pricing structure remain within standard inflationary limits.