HomeMy Public PortalAbout06) 7D Authority to Waive Certain Insurance RequirementsAGENDA
ITEM 7.0.
ADMINISTRATIVE SERVICES DEPARTMENT
MEMORANDUM
DATE: January 16 , 2018
TO: The Honorab le City Council
FROM : Bryan Cook, City Manager
By : Tracey L. Hause , Administrative Services Di rector
SUBJECT: AUTHORITY TO WAIVE CERTAIN INSURANCE REQUIREMENTS
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to wa ive certain
insurance requirements for informal contracts in the amount of less than $25 ,000 on a
case by case basis , after consultation w ith the City Attorney 's Office and Ca li forn ia Joint
Powers Insurance Authority (JPIA).
BACKGROUND:
On September 7 , 2010 , the City Council adopted Ordinance No . 10-937 , ad opt i ng a
Purchasing System (Attachment "A ").
ANALYSIS:
When entering into contracts for services and supplies , the City, upon recommendation from
the City Attorney's Office and the JPIA, ensures the appropriate insurance cove rage and
related endorsements are in place to mitigate any potential liab ility to the City.
The current Purchasing System adopted by the City Council requ ires the City Council to
take action awarding all formal contracts of greater value than $25 ,000 . With that approval ,
the City Council is approving all required insurances and respective endorsements in that
contract as recommended by staff. For contracts under $25 ,000 (informal contracts), the
City Manager currently has the authority to execute on behalf of the City. Staff is
recommending that the City Manager have the discretion to waive certain insura nce
requirements if the coverage recommended by the City Attorney's Office and /or JPIA is not
City Counci l
January 16 , 2018
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applicable or reasonable for the specific situation. All informal contracts are carefully
reviewed and consideration is given to the type of services that are contracted , i n order to
be as reasonable and efficient as possible in requiring insurances as part of the contracting
process .
The City Manager will consult with both the City Attorney's Office and JPIA when considering
waiving existing insurance requirements . In addition , the C ity Manager will report back to
the City Council on which waivers have been made.
CITY STRATEGIC GOALS:
Approval to authorize the City Manager to waive certain insurance requirements for
informal contracts in the amount of less than $25 ,000 on a case by case basis w ill further
City's Strategic Goal to promote Good Governance.
FISCAL IMPACT:
There is no fiscal impact on this action .
ATTACHMENTS:
A. City of Temple City's Municipal Code-Purchasing System
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Chapter 5
PURCHASING SYSTEM
2-5-0: ADOPTION OF PURCHASING SYSTEM:
ATTACHMENT A
In order to establish efficient procedures for the purchase of supp lies , services and eq uipment , to
secure for the c ity suppl ies , services and equipment at the lowest poss ible cost commensurate with
quality needed , to exercise positi ve financial control over purchases , to clearly de fin e au thority for the
purchasing function and to assu re th e quality of purchases , a purchasi ng system is hereby adopted.
All purchases or services or suppl ies fo r "public projects" as defined in section 20 161 of t he Public
Contract Code (or any successor to that section) shall be made in accordance with the Publ ic Contract
Code and with sections 2-5-15 and 2-5-17 , as applicable , of this chapter. All other purchases of
supplies , services and equipment shall be made in accordance with this c hapter. (Ord . 1 0-937 )
2-5-1: CENTRALIZED PURCHASING DEPARTMENT:
There is hereby created a centralized purchasing department in which is vested authority fo r the
purchase of supplies , services and equ i pment. (Ord. 1 0-937)
2-5-2: PURCHASING OFFICER:
There is hereby created the office of purchasing officer, who shall be appointed by the c ity manager.
The purchasing officer shall be the head and have general supervision of the purchasing department.
The purchasing officer shall have au thority to:
A. Purchase or con tract for suppl ies , service and equ ipment requ ired by any using department in
accordance w it h purchasing procedures prescribed by th is chapter, such admin istrative regulatio ns
as the purchasing officer shall adopt for the internal management and operation of the purchas ing
department and such other rules and regulations as shall be prescribed by the c ity council ;
B . Negotiate and recommend execution of contracts for t he purchase of supplies , services and
equipment;
C. Act to procure for the city the needed quality in supp lies , services and equipment at l east expense
to the city;
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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 c ity council revisions and amendments to the purchas ing rules;
G. Keep informed of curre nt 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 th is chapter and
other rules and regulations;
I. Supervise the inspection of all suppl ies, services and equipment purchased to ensure 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 which cannot be used by any department 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. (Ord . 1 0-937)
2-5-3: ESTIMATES OF REQUIREMENTS:
All departments using the purchasing department shall file detailed estimates of the ir requ irements in
supplies, service and equipment in such manner, at such time, and for such future periods as the
purchasing officer shall prescribe. (Ord. 1 0-937)
2-5-4: ENCUMBRANCE OF FUNDS:
Except in cases of emergency, the purchasing officer shall not issue any purchase order for supplies ,
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services or equipment unless there exist s an un encumbered appropriation in the fund account against
which said purchase is to be charged. (Ord. 1 0-937)
2-5-5: REQUISITIONS:
Using departments shall submit requests for supplies , services and equ ipment to the purchasing
officer by standard requis ition forms . (O rd. 1 0-937)
2-5-6: PURCHASE ORDERS:
Purchases of supplies , services and equipment shall be made only by purchase order or, where
appropriate, by form al written co ntract. (Ord. 1 0-937)
2-5-7: EXEMPTIONS FROM CENTRALIZED PURCHASING:
The purchasing officer, with approval of the city cou ncil, 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 w ith the
procedures established by this chapter and shall further requ ire periodic reports from the department
on the purchases and con tra cts made under such written authorization . (Ord. 1 0-937 )
2-5-8: COOPERATIVE PURCHASING AGREEMENTS:
A. Without complying with the re q uirements of sections 2-5-10 an d 2-5-11 of this chapter, the
purchasing officer may participate in a coop erative 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 purc hases in a co mpetit ive manner. The purchasing officer may participate
in a cooperative purchasing agreement when the city can obta in supplies or equ ipment at a
purchase price lower than that whic h the city can obtain through its normal purchasing procedures .
In those instances where it is determined that purchasing through the fede ra l, state , county or local
government agencies will result in savings to the city, the purchasing officer is authorized to make
such purchases .
B. T he purchasing officer ma y also buy directly from a vendor at a price establ is hed by competitive
bidding by another federal , state , cou nty or local government agency in substantial compliance
with sections 2-5-10 and 2-5-11 of th is c hapte r even if the city has not joined with that public
agency in a cooperative purchase agree ment. (Ord . 1 0-937)
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2-5-9: 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 ,000.00) 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 2-5-11 of this chapter. Purchase orders shall, whenever possible , be
based on at least three (3) informal quotes. (Ord. 1 0-937)
2-5-10: BIDDING:
Purchases of supplies, services, or equipment and the sale of personal property of an esti mated value
in excess of twenty five thousand dollars ($25,000.00) shall be by bid procedures pursuant to this
section and section 2-5-11 of this chapter. Bidding shall be dispensed w ith 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 (4 /5 ) 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.
(O rd . 1 0-937)
2-5-11: FORMAL CONTRACT PROCEDURE :
Except as otherwise provided here in , 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 (o r for purposes of section
2-5-16 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 (1 0) days before the date of
opening of the bids . Notice shall be published at least once in a newspaper of general
circulation , printed and publ ished in the city, or if there is none, it shall be posted i n at least thre e
(3) public places in the city that have been designated by ordinance as the places for posting
notices.
2 . Bidder's List: The purchasing officer shall also solicit sealed b ids 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 sa les by a
notice posted on a public bulletin board in the city hall ;
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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 (1 0) days after the notice of award of contract has been mailed , unless the city
is responsible for the delay. The city counc il may, on refusa l or fa ilure 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 app lied 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 b idder;
C. B id Opening Procedure: Seal ed bids shall be submitted to the purchasing officer and shall be
identified as bids on the envelope. Bids shall be opened in public at t he time and place stated in
the public notices. A tabulation of all bids re ceived shall be opened for public inspection during
regular business hours for a period of not less than th irty (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 counc il shall be final. For purchases
of supplies and equipme nt, determination of the "lowest respons ible bidder" may i nclude the
adjustment of the bid price of a qualifying local vendor (as defined in subsection 2-5-17 B 1 of this
chapter) according to the local vendor preference procedures described in subsection 2-5-17 B3 of
th is chapter. 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 amoun t 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 acce pt the lowest bid made by negotiat ion with the
tie bidders at the time of the bid opening;
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 . (Ord. 10-937)
2-5-12: INSPECTION AND TESTING:
The purchasing officer shall inspect supp lies and equipment delivered and con tra ctual services
performed, to determine their conformance with the specifications set forth in the order or contract.
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The purchasing officer shall have authority to require chemical and physical tests of sample submitted
with bids and samples of deliveries wh ich are necessary to determine their quality and conforma nce
with specifications. ( Ord. 1 0-937 )
2-5-13: 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 negot iation or through
request for proposal subject to the contract value limitations of sections 2-5-9 and 2-5-10 of this
chapter. (Ord. 1 0-937)
2-5-14: 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 comp li ance with this
chapter. (Ord . 1 0-937)
2-5-15: 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 Contract Code
section 20175 .2 , as amended , or any later enacted statute regulating des ign /build contra cts. (Ord. 10-
937)
2-5-16: SURPLUS SUPPLIES AND EQUIPMENT:
All using departments shall submit to the purchasing officer at such ti mes and in such form as he sha ll
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 department 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 2-5-9, 2-5-1 0 and 2-5-11 of this chapter, as applicable . (Ord . 1 0-937)
2-5-17: LOCAL VENDOR PREFERENCE PROGRAM:
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A. The city has established a local vendor preference program to be applied in the procurement of
supplies and equipment under section 2-5-11 of this chapter.
B. The adjustment to bids provided for under the local vendor preferen ce program shall be
implemented according to the followi ng:
1. Qualification For Local Vendor Preference: In the procurement of supplies and equ i pment for the
city's requirements, preference shal l be given to those vendors who: a) qualify as a local vendor
("qualifying local vendor") under this subsection and b) submit a written statement in their bid
package requesting to be considered a qualifying local vendor. In order to qua lify as a local
vendor, the bidder must certify the following information as part of t he bid package:
a. It has fixed facilities with employees located w ithin the city limits ;
b. It has a business street address (post office box or resident i al address shall not suffice to
establish a local presence);
c . All sales ta x 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 c ity business license.
2. False Certifications: Fals e certifications shall be immediate grounds for rejection of any b id or if
the bid is awarded , grounds for vo iding 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 v endor as descri bed in subsection 83 of th is
section.
3. Application Of Local Vendor Preference: The bid of a qualifying local vendor shal l be adjusted
according to the following procedures:
a . In the tabulation of bids to determine the lowest respons ible b idder, the bid of eac h qual ifying
local vendor shall be reduced by five percent (5 %).
b. The reduced bid price of the qualifyi ng local vendor will then be compared to the other bids
received by the city to determine the lowest responsible bidder under section 2-5-11 of this
chapter. Notwithstanding this reduction for purposes of determining the lowest respons ible
bidder, the contract amount with the lowest responsible bidder shall be at the bid price. (Ord .
10-937)
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