HomeMy Public PortalAbout8ATem le AGENDA
ery MEMORANDUMITEM8.A.
Staff Report
TO: THE HONORABLE CITY COUNCIL DATE: SEPTEMBER 7, 2010
FROM: JOSE E. PULIDO, CITY MANAGER 10 -
BY: MONICA MOLINA, FINANCIAL SERVICES MANAGER'
SUBJECT: SECOND READING AND ADOPTION OF ORDINANCE NO. 10-937
AMENDING TEMPLE CITY MUNICIPAL CODE RELATING TO THE
CITY'S SYSTEM FOR PURCHASING GOODS, SERVICES AND
EQUIPMENT.
SUMMARY
On August 17, 2010, the City Council conducted a public hearing to consider amending
Temple City Municipal Code relating to the City's system for purchasing goods, services
and equipment. The City Council approved the draft amended Ordinance and is
recommended for second reading.
BACKGROUND
1. On June 15, 2010, the City Attorney reviewed and revised the Temple City
Municipal Code relating to the City's system for purchasing goods, services and
equipment. The City Attorney reviewed the City's existing code; current State
requirements; codes of other charter cities; and codes with which their office is
familiar. In crafting an amended code, little as possible changes were made in
regards to the way Temple City handles purchasing on a day-to-day basis but
changes were made to give the City more flexibility on smaller dollar item
purchases while making sure that the City follows applicable laws. The amended
Ordinance would do two things:
a) change the City's design -build contracting process to bring it into
conformity with State law and the City Charter; and
b) change the City's public bidding requirements to bring them into
conformity with the City Charter.
2. On June 22, 2010, Staff discussed the new Draft Purchasing Ordinance with the
City Attorney and set the threshold for requiring bidding on purchases of
equipment, supplies and services at $25,000 (currently $5,000)*. Purchases over
$25,000 would require the City to follow the formal bidding process (Exhibit A).
The amended purchasing ordinance includes the additional recommended
changes:
a) elimination of the current exemption from prevailing wage (required
because of the charter);
City Council
September 7, 2010
Page 2
b) power to use cooperative purchasing agreements to allow more
flexibility where some other entity has already gone through a formal
bidding process;
c) requirement for informal quotes for items under the threshold;
d) change in current design/build authority to simply comply with
design/build in the Public Contracts Code**; and
e) local vendor preference. (This is permissive, not mandatory, and will
allow the City to give preferences when it wants to without ever
requiring to do so).
3. On August 17, 2010, the City Council held a public hearing and Ordinance No.
10-937 was introduced for first reading. The draft Ordinance was approved by
the City Council and a second reading is required.
*The increase of the threshold was changed to an amount that is similar to what other
cities are doing and will give Staff flexibility while still making sure that large purchases
are approved by the City Council.
**The bidding threshold for public projects is set by the Public Contracts Code and does
not apply to the purchasing ordinance.
RECOMMENDATION
Waive further reading and adopt Ordinance No. 10-937 by title only.
FISCAL IMPACT
No fiscal impact.
ATTACHMENTS
Ordinance No. 10-937
S:\WordlAgenda Items \FY 10-1 1 City\Purchasing Ordinance 2nd Reading 9-7-2O10.docx
ORDINANCE NO. 10-937
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF TEMPLE CITY, CALIFORNIA, AMENDING CHAPTER 5
[PURCHASING SYSTEM] OF TITLE 2 [ADMINISTRATION]
OF THE TEMPLE CITY MUNICIPAL CODE RELATING TO
THE CITY'S SYSTEM FOR PURCHASING GOODS,
SERVICES, AND EQUIPMENT.
WHEREAS, paragraph C of Section 607 of the City Charter requires the City
Council to provide, by ordinance, for the acquisition of equipment, materials or supplies;
and,
WHEREAS, the City Council has provided for such acquisition through Chapter 5
[Purchasing System] of Title 2 [Administration] of the Municipal Code; and,
WHEREAS, the City has identified two areas of Chapter 5 that must be brought
into conformity with the City Charter and with State law; and,
WHEREAS, in the course of amending the purchasing system to address the two
areas of inconsistency the City undertook a thorough review of the entire Purchasing
System and has identified additional Sections of the System that can be improved to
create cost savings and efficiencies for the City; and,
WHEREAS, the City Council wishes to adopt these improvements to streamline
the acquisition procedures where such streamlining would be beneficial to the City while
at the same time maintaining control over large purchases.
THE CITY COUNCIL OF THE CITY OF TEMPLE CITY HEREBY ORDAINS AS
FOLLOWS:
SECTION 1: Chapter 5 [Purchasing System] of Title 2 [Administration] of the
Municipal Code of the City of Temple City is hereby amended to read in its entirety as
follows:
2500: Adoption of Purchasing System
In order to establish efficient procedures for the purchase of supplies, services
and equipment, to secure for the city supplies, services and equipment at the
lowest possible cost commensurate with quality needed, to exercise positive
financial control over purchases, to clearly define authority for the purchasing
function and to assure the quality of purchases, a purchasing system is hereby
adopted. All purchases or services or supplies for "public projects" as defined in
Section 20161 of the Public Contract Code (or any successor to that Section)
- 1 -
LA #4837-8141-8246 vl
shall be made in accordance with the Public Contract Code and with sections
2515 and 2517, as applicable, of this Chapter. All other purchases of supplies,
services and equipment shall be made in accordance with this Chapter.
2501: Centralized Purchasing Department
There is hereby created a centralized purchasing department in which is vested
authority for the purchase of supplies, services and equipment.
2502: Purchasing Officer
There is hereby created the office of purchasing officer, who shall be appointed
by the city manager. The purchasing officer shall be the head and have general
supervision of the purchasing department. The purchasing officer shall have
authority to:
A. Purchase or contract for supplies, service and equipment required by any
using department in accordance with purchasing procedures prescribed by
this chapter, such administrative regulations as the purchasing officer shall
adopt for the internal management and operation of the purchasing
department and such other rules and regulations as shall be prescribed by
the city council;
B. Negotiate and recommend execution of contracts for the purchase of
supplies, services and equipment;
C. Act to procure for the city the needed quality in supplies, services and
equipment at least expense to the city;
D. Discourage uniform bidding and endeavor to obtain as full and open
competition as possible on all purchases;
E. Prepare and recommend to the city council rules governing the purchase of
supplies, services and equipment for the city;
F. Prepare and recommend to the city council revisions and amendments to the
purchasing rules;
G. Keep informed of current developments in the field of purchasing, prices,
market conditions and new products;
H. Prescribe and maintain such forms as reasonably necessary to the operation
of this chapter and other rules and regulations;
I. Supervise the inspection of all supplies, services and equipment purchased to
insure conformance with specifications;
J. Recommend the transfer of surplus or unused supplies and equipment
between departments as needed and the sale of all supplies and equipment
LA #4837-8141.8246 u1
which cannot be used by any agency or which have become unsuitable city
use; and
K. Maintain a bidder's list, vendor's catalog file and records needed for the
efficient operation of the purchasing department.
2503: Estimates Of Requirements
All departments using the purchasing department shall file detailed estimates of
their requirements in supplies, service and equipment in such manner, at such
time, and for such future periods as the purchasing officer shall prescribe.
2504: Encumbrance of Funds
Except in cases of emergency, the purchasing officer shall not issue any
purchase order for supplies, services or equipment unless there exists an
unencumbered appropriation in the fund account against which said purchase is
to be charged.
2505: Requisitions
Using departments shall submit requests for supplies, services and equipment to
the purchasing officer by standard requisition forms.
2506: Purchase Orders
Purchases of supplies, services and equipment shall be made only by purchase
order or, where appropriate, by formal written contract.
2507: Exemptions from Centralized Purchasing
The purchasing officer, with approval of the city council, may authorize in writing
any department to purchase or contract for specified supplies, services and
equipment independently of the purchasing department; but shall require that
such purchases or contracts be made in conformity with the procedures
established by this chapter and shall further require periodic reports from the
agency on the purchases and contracts made under such written authorization.
2508: Cooperative Purchasing Agreements
(a) Without complying with the requirements of sections 2510 and 2511, the
purchasing officer may participate in a cooperative purchasing agreement for the
procurement of any supplies or equipment with any federal, state, county or local
government agency when that agency has made their purchases in a
competitive manner. The purchasing officer may participate in a cooperative
purchasing agreement when the city can obtain supplies or equipment at a
purchase price lower than that which the city can obtain through its normal
purchasing procedures. In those instances where it is determined that
purchasing through the federal, state, county or local government agencies will
LA #4837.8141-82.1G vl
result in savings to the city, the purchasing officer is authorized to make such
purchases.
(b) The purchasing officer may also buy directly from a vendor at a price
established by competitive bidding by another federal, state, county or local
government agency in substantial compliance with sections 2510 and 2511 even
if the city has not joined with that public agency in a cooperative purchase
agreement.
2509: Open Market Procedure
Purchases of supplies, equipment, or services and sales of personal property of
an estimated value in an amount more than five thousand dollars ($5,000) but
less than twenty five thousand dollars ($25,000.00) may be made by the
purchasing officer in the open market without observing the procedure
prescribed in section 2511 of this chapter. Purchase orders shall, whenever
possible, be based on at least three informal quotes.
2510: Bidding
Purchases of supplies, services, or equipment and the sale of personal property
of an estimated value in excess of twenty five thousand dollars ($25,000.00)
shall be by bid procedures pursuant to sections 2510 and 2511 of this chapter.
Bidding shall be dispensed with only when an emergency requires that an order
be placed with the nearest available source of supply, when the city council by a
four -fifths (415) majority determines after opening of bids that rejection of all bids
and purchase on the open market will best serve the city, or when the commodity
can be obtained from only one vendor.
2511: Formal Contract Procedure
Except as otherwise provided herein, purchases and contracts for supplies,
services, equipment and the sale of personal property of estimated value greater
than twenty five thousand dollars ($25,000.00) shall be by purchase order or
written contract with the lowest (or for purposes of Section 2516 of this Chapter,
highest) responsible bidder, as the case may be, pursuant to the procedure
prescribed; herein:
A. Notice Inviting Bids: Notices inviting bids shall include a general description of
the articles to be purchased or sold, shall state where bid blanks and
specifications may be secured and the time and place for opening bids.
1. Published Notice: Notice inviting bids shall be published at least ten (10)
days before the date of opening of the bids. Notice shall be published at least
once in a newspaper of general circulation, printed and published in the city,
or if there is none, it shall be posted in at least three (3) public places in the
city that have been designated by ordinance as the places for posting
notices.
LA #1837-8141-8246 v 1
2. Bidder's List: The purchasing officer shall also solicit sealed bids from all
responsible prospective suppliers whose names are on the bidder's list or
who have requested their names to be added thereto.
3. Bulletin Board: The purchasing officer shall also advertise pending
purchases or sales by a notice posted on a public bulletin board in the city
hall;
B. Bidder's Security: When deemed necessary by the purchasing officer, bidder's
security may be prescribed in the public notices inviting bids. Bidders shall be
entitled to return of bid security; provided that a successful bidder shall forfeit
his bid security upon refusal or failure to execute the contract within ten (10)
days after the notice of award of contract has been mailed, unless the city is
responsible for the delay. The city council may, on refusal or failure of the
successful bidder to execute the contract, award it to the next lowest
responsible bidder. If the city council awards the contract to the next lowest
bidder, the amount of the lowest bidder's security shall be applied by the city
to the difference between the low bid and the second lowest bid, and the
surplus, if any, shall be returned to the lowest bidder;
C. Bid Opening Procedure: Sealed bids shall be submitted to the purchasing
officer and shall be identified as bids on the envelope. Bids shall be opened
in public at the time and place stated in the public notices. A tabulation of all
bids received shall be opened for public inspection during regular business
hours for a period of not less than thirty (30) calendar days after the bid
opening;
D. Rejection Of Bids: In its discretion, the city council may reject any and all bids
presented and readvertise for bids;
E. Award Of Contracts: Contracts shall be awarded by the city council to the
lowest responsible bidder who meets the quality requirements. The decision
of the city council shall be final. For purchases of supplies and equipment,
determination of the "lowest responsible bidder" may include the adjustment
of the bid price of a qualifying local vendor (as defined in subsection
2517(B)(1) below) according to the local vendor preference procedures
described in subsection 2517(B)(3) below. For purposes of this section, a
responsible bidder means a bidder who has demonstrated the quality, fitness,
capacity, and experience to satisfactorily perform the particular requirements
of the city.]
F. Tie Bids: If two (2) or more bids received are for the same total amount or unit
price, quality and service being equal and if the public interest will not permit
the delay of readvertising for bids, the city council may accept the one it
chooses or accept the lowest bid made by negotiation with the tie bidders at
the time of the bid opening;
I.A#•1837-8141-824G vl
G. Performance Bonds: The city council shall have authority to require a
performance bond before entering into a contract in such amount as it shall
find reasonably necessary to protect the best interests of the city. If the city
council requires a performance bond, the form and amount of the bond shall
be described in the notice inviting bids.
2512: Inspection and Testing
The purchasing officer shall inspect supplies and equipment delivered and
contractual services performed, to determine their conformance with the
specifications set forth in the order or contract. The purchasing officer shall have
authority to require chemical and physical tests of sample submitted with bids
and samples of deliveries which are necessary to determine their quality and
conformance with specifications.
2513: Professional services.
The city manager shall sign all professional service contracts on behalf of the
city. Professional services contracts will be prepared in accordance with the city's
standard Consultants Services Agreement. The process for securing
professional services will be through negotiation or through request for proposal
subject to the contract value limitations of sections 2509 and 2010 of this
chapter.
2514: Emergency Purchases
During times of emergency, as concurred in by the city council or the city
manager, mayor and city attorney, purchases necessary to meet such
emergency may be made without compliance with this chapter.
2515: Design/Build Contracts
Whenever the city seeks to construct any public work, other than transportation
facilities, with design and construction costs in excess of one million dollars
($1,000,000.00), the city council may proceed to contract therefor as a design/build
project in compliance with California Public Contracts Code Section 20175.2, as
amended, or any later enacted statute regulating designlbuild contracts.
2516: Surplus Supplies and Equipment
All using agencies shall submit to the purchasing officer at such times and in
such form as he shall prescribe, reports showing all supplies and equipment
which are no longer used or which have become obsolete or worn out. The
purchasing officer shall have authority to sell all supplies and equipment which
cannot be used by any agency or which have become unsuitable for city use, or
to exchange the same for, or trade in the same on, new supplies and equipment.
Such sales shall be made pursuant to sections 2509, 2510 and 2511 of this
chapter, as applicable.
LA #4837.8141.8246 vl
2517. Local vendor preference program.
A. The city has established a local vendor preference program to be applied in
the procurement of supplies and equipment under Section 2511 of this
chapter.
B. The adjustment to bids provided for under the local vendor preference
program shall be implemented according to the following:
1. Qualification for local vendor preference. In the procurement of supplies
and equipment for the city's requirements, preference shall be given to
those vendors who (i) qualify as a local vendor ("qualifying local vendor")
under this subdivision and (ii) submit a written statement in their bid
package requesting to be considered a qualifying local vendor. In order to
qualify as a local vendor, the bidder must certify the following information
as part of the bid package:
a. It has fixed facilities with employees located within the city limits;
b. It has a business street address (post office box or residential a
address shall not suffice to establish a local presence);
c. All sales tax returns for the goods purchased must be reported to the
state through a business within the geographic boundaries of the city;
and
d. It has a city business license.
2. False certifications. False certifications shall be immediate grounds for
rejection of any bid or if the bid is awarded, grounds for voiding the bid,
terminating any agreement, and seeking damages thereto. Failure to
certify the above information shall result in the bid being considered by the
city without any adjustment for a local vendor as described in subsection
2511(H)(c) below.
3. Application of local vendor preference. The bid of a qualifying local
vendor shall be adjusted according to the following procedures:
a. In the tabulation of bids to determine the lowest responsible bidder,
the bid of each qualifying local vendor shall be reduced by five
percent.
b. The reduced bid price of the qualifying local vendor will then be
compared to the other bids received by the city to determine the lowest
responsible bidder under section 2511. Notwithstanding this reduction
for purposes of determining the lowest responsible bidder, the contract
amount with the lowest responsible bidder shall be at the bid price.
LA #4837-a141-8246 v1
SECTION 2: The City Council hereby declares that, should any provision, section,
subsection, paragraph, sentence, clause, phrase, or word of this Ordinance or any part
thereof, be rendered or declared invalid or unconstitutional by any final court action in a
court of competent jurisdiction or by reason of any preemptive legislation, such decision
or action shall not affect the validity of the remaining section or portions of the Ordinance
or part thereof. The City Council hereby declares that it would have independently
adopted the remaining provisions, sections, subsections, paragraphs, sentences,
clauses, phrases, or words of this Ordinance irrespective of the fact that any one or more
provisions, sections, subsections, paragraphs, sentences, clauses, phrases, or words
may be declared invalid or unconstitutional.
SECTION 3: The City Clerk shall certify to the passage and adoption of this
Ordinance and to its approval by the Mayor and shall cause the same to be published
according to law.
PASSED, APPROVED, AND ADOPTED this 7th day of September 2010.
MAYOR
ATTEST: APPROVED AS TO FORM:
City Clerk City Attorney
I, Mary Flandrick, City Clerk of the City of Temple City, hereby certify that the
foregoing Ordinance No. 10-937 was introduced at the regular meeting of the City Council
of the City of Temple City held on the 17th day of August 2010, and was duly passed,
approved and adopted by said Council at the regular meeting held on September 7, 2010
by the following vote:
AYES:
NOES:
ABSENT:
City Clerk
I. #9837-81.11.8246 vl