ABSTAIN: Councilmembers _

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1 CITY OF SOUTH LAKE TAHOE 4 ORDINANCE NO. _ AN ORDINANCE OF THE CITY OF SOUTH LAKE TAHOE CITY COUNCIL AMENDING CITY CODE CHAPTER 22 PURCHASING, IN ITS ENTIRETY The City Council of the City of South Lake Tahoe does hereby ordain as follows: Section 1. Enactment. Chapter 22 of the South Lake Tahoe City Code is hereby amended in its entirety as designated in Exhibit "A" attached hereto and incorporated herein by reference. Section 2. Conflicting Ordinances Repealed. All other ordinances or parts of ordinances in conflict herewith are hereby repealed. Section 3. Summary Publication. Pursuant to Government Code 36933(c)(1), a summary of said ordinance was published at least five (5) days prior to its final adoption as required by law, and a certified copy of the full text of the proposed ordinance was posted in the Office of the City Clerk. Within fifteen (15) days after adoption, a summary of said ordinance with the names of those City Councilmembers voting for and against shall be published as required by law, and a certified copy of the full text of the ordinance shall be posted in the Office of the City Clerk. Section 4. after its adoption. Effective Date. This ordinance shall take effect thirty (30) days FIRST READING: August SECOND READING: August 19, 2008 PASSED AND ADOPTED by the City Council of the City of South Lake Tahoe at a regular meeting held on August 19, 2008, by the following vote: AYES: NOES: ABSENT: Councilmembers Councilmembers Councilmembers ABSTAIN: Councilmembers _ ATTEST: Mike Weber, Mayor Susan Alessi, City Clerk (City Seal)

2 CHAPTER 22 - PURCHASING Sections: Article I. In General 22-1 Purpose of this chapter Application of this chapter Purchasing system adopted Duties and authority of purchasing manager Centralized purchasing office Purchases to be made only against unencumbered funds Procurement methods Submittal of requisitions Change orders Unauthorized purchases, orders and commitments Splitting purchases prohibited Determination of irresponsible bidder Pre-bid conferences or site inspections Local bidder preference Procurement records-public inspection Environmentally preferable products Sole source purchases Emergency purchases Authority of city manager to sign non-public contracts Purchases through cooperative purchasing agreements and piggyback opportunities Acceptance of gifts, etc. by city employees and elected officials prohibited Ethics Disposal of surplus supplies and equipment. Article II. Materials, Supplies and Equipment Formal bids and contracts Informal bids and contracts Nominal value purchases Exception to bidding procedures Cancellation of solicitations; Rejection of bids Inspection and testing Submittal of bids Withdrawal or correction of formal bid Consideration of bids and basis of awards. Article III. Materials, Supplies, and Equipment Formal bids and contracts for public works projects. Article IV. Professional Services/Consultants Contracts for Professional Services. * For state law as to purchasing of supplies and equipment by cities, see Gov. C to

3 Article I. In General 22-1 Purpose of this chapter. The purpose of this chapter is to maximize the purchasing value of public funds in procurement, to create efficient procedures for the acquisition of materials, supplies, equipment and services, to clearly define the authority for the purchasing function, to provide safeguards for maintaining a procurement system of quality and integrity Application of this chapter. Except as otherwise provided in this chapter, this chapter applies to contracts for the procurement of materials, supplies, equipment and services, entered into by the city. When the procurement involves the expenditure of state or federal assistance or contract funds, the procurement shall be conducted in accordance with mandatory applicable state and/or federal laws. All applicable statutes, regulations, rules and guidelines are to be followed when using state or federal funds. Nothing in this chapter shall prevent the city from complying with the terms and conditions of any grant, gift or bequest that is otherwise consistent with law Purchasing system adopted. This purchasing system is adopted to establish efficient procedures for public bidding, contracting for public works projects, the purchase of materials, supplies and equipment, and contracting for services for the city at the lowest possible cost commensurate with quality needed, to exercise positive cost control over purchases, to clearly define authority for the purchasing function and to assure the quality of purchases, a purchasing system is hereby adopted Duties and authority of purchasing manager. The city manager shall designate a purchasing manager who shall have the responsibility for administering the city's purchasing of materials, supplies, equipment and services in accordance with this chapter and other applicable laws. Said position title may be changed from time to time, pursuant to a duly enacted resolution or such other administrative policies relating to personnel matters which may be authorized by the city council. For purposes of this chapter, any reference to the purchasing manager shall be deemed to refer to that position title or any successor position title thereto. The purchasing manager shall be the head of and have general supervision of the purchasing office. The purchasing manager shall have the authority to direct or perform all duties related to the internal management and operation of the 4

4 purchasing office. These may include, but are not limited to, the purchase or contract of leases, negotiation and execution of purchasing supplies and equipment, open competition through the bid process, monitoring of specification conformance, and the transfer and disposition of surplus property. The purchasing manager shall at all times have authority to take such reasonable actions as may be necessary or desirable to enforce the provisions of this chapter. The purchasing manager shall also have the authority to adopt administrative policies and procedures relating to the execution of duties and to establish reasonable rules and regulations concerning purchasing activities that further implement the intent of this ordinance, provided all such rules and regulations are not in conflict with this chapter and are concurrently approved by the city manager Centralized purchasing office. There is hereby created a centralized purchasing office in which is vested authority for the purchase of materials, supplies, equipment and services Purchases to be made only against unencumbered funds. Except in cases of emergency or in cases where specific authority has been first obtained from the city manager, the purchasing manager shall not issue any purchase order for goods, services, supplies or equipment unless there exists an unencumbered appropriation in the fund account against which such purchase is to be charged Procurement method. Purchase of materials, supplies, equipment or services shall be made by purchase order, procurement card, payment request or other appropriate method, depending on the nature of the acquisition or service. Except as otherwise provided in this chapter, no purchase order shall be issued unless prior approval of the purchasing manager or his/her designed representative has been obtained. All purchase orders shall be signed by the purchasing manager or designated representative Submittal of requisitions. Department heads or their designees shall submit requests for materials, supplies, equipment and services to the purchasing manager by electronic requisition forms or by other means as may be established by the purchasing rules and regulations. 5

5 22-9 Change orders. A change order is a written modification or addendum to an executed contract. The city manager has the authority to execute contract change orders for up to a total of ten percent (10%) of the contract value, but not exceeding $25,000 for goods, professional services and other types of services or agreements. All change orders over $25,000 are to be brought before the city council, but work may begin on the changes prior to council review. If the change can wait without additional costs to the city, the change order should be brought to the city council for approval prior to any work being done. Additionally, any changes above available funding sources shall require council approval Unauthorized purchases, orders and commitments. It is unlawful for any officer or employee of the city to obligate the city in any way for purchases by methods other than those prescribed in this chapter. Any purchases, order commitments or obligations to pay made contrary to the provisions of this chapter, or related administrative policies adopted pursuant to this chapter, shall be null and void and may be cause for disiplinary action against the employee that was unauthorized to commit city funds Splitting purchases prohibited. No acquisition of materials, supplies, equipment or contractual services from a single vendor or provider shall be accomplished by the issuance of several purchase orders for portions thereof Determination of irresponsible bidder. A bidder may be found to be irresponsible, and his/her bid may be rejected upon determination that any or all of the following circumstances exist: A. That a bid submitted by a bidder did not strictly conform to the required bid specifications; provided, that the purchasing manager, city manager, or city council shall have the authority to waive nonsubstantial deviations from such specifications. B. That a bidder has demonstrated, through documented past performance in the industry or through prior dealings with the city, that he/she is unable to satisfactorily meet the responsibilities required of a successful low bidder. C. That a bidder's product has been demonstrated, through documented past performance in the industry or through prior use by the city, to be incapable of satisfactorily meeting the accepted demands to be placed upon such product. 6

6 I Determination of irresponsibility of a bidder shall be made by the city council in any formal bid process requiring city council award of contract. In any informal bid process where it appears irresponsibility of the bidder may be present, the purchasing manager shall, in consultation with the city attorney, review the bidder's qualifications and the reason or reasons for which they believe the bidder should be deemed irresponsible. In any case where the bidder is so deemed irresponsible, the bidder shall be disqualified from consideration on the subject bid, and the purchasing manager may, on the next available city council agenda, request that the council make a formal determination as to the bidder's irresponsibility. In the event the city council finds a bidder to be irresponsible, the bidder shall be excluded from future city bidding procedures until such time as the bidder has obtained consent from the city council to resume his/her active status to bid. Requests for reinstatement for active bidder status may be made no sooner than one year following the determination that a bidder has been irresponsible. All such requests shall be made directly to the city council, and shall be granted only upon a determination by the city council that the bidder's status should be reinstated for future bids Pre-bid conferences or site inspections. When deemed necessary for an adequate understanding of requirements, the purchasing manager or his/her designated representative, is authorized to require prospective bidders or proposers to attend a pre-bid conference or site inspection prior to the time and date set for receipt of bid or proposals. A written addendum shall follow the meeting to address changes, if any, to the bid document. Bidder's or proposers not in attendance may be considered non-responsive Local business preference. A. Findings. 1. The City of South Lake Tahoe's businesses are a significant sector of the local economy and form the backbone of our neighborhoods. Local businesses contribute hundreds of thousands of dollars to South Lake Tahoe's economy each year. Through payroll taxes alone, small local businesses make a significant investment in the economic health of our city and the quality of life of its citizens and visitors. 2. Because South Lake Tahoe's businesses experience higher costs than large businesses or businesses located outside the city, they suffer disadvantage in any competition with those businesses. Staff finds that small local businesses are at a competitive disadvantage in competing for work on public contracts. Because 7

7 of their size, most local businesses are at an even greater competitive disadvantage in competing for work on public contracts. 3. Local businesses which seek to enter into contracts with the city of South Lake Tahoe are at a competitive disadvantage with businesses from other areas because of the higher (administrative) costs of doing business in the city of South Lake Tahoe (e.g., higher taxes, higher rents, higher wages and benefits for labor, higher insurance rates, etc.) 4. The public has an interest in fostering a strong and vibrant network of local businesses in South Lake Tahoe. The public interest is best served by encouraging businesses to locate and remain in South Lake Tahoe through the provision of a minimal good faith preference to local businesses in the awarding of city contracts. In part, South Lake Tahoe can accomplish this goal by ensuring that small local businesses can compete for public contracts on a level playing field. 5. Staff finds that the disadvantages suffered by small local businesses in competing as prime contractors on public contracts can be reduced by discounting their bids and ratings by five percent. Granting a five percent discount does not unduly burden businesses not eligible for such discounts, and is similar to the corrective adjustments given to local businesses in other jurisdictions. B. Purpose - Assistance to Local Businesses. The city shall assist local businesses to increase their ability to compete effectively for the award of city contracts, including contracts for vehicles, goods, certain services, supplies, equipment, and public works contracts. The city shall provide the bid discounts, and contracting opportunities set forth in this section, information and training, and other assistance to local businesses in order to accomplish the goal of contracting with more local businesses. C. Amount of Discount. Unless otherwise provided in this section, contract awarding departments shall apply a five percent discount to any bid from a business designated as a local business. Contract awarding departments shall apply these discounts to each stage of the selection process, including qualifications, proposals and bid awards. D. Local Business Designation - Criteria for Local Business Designation. Through appropriately promulgated procedures, if any, the finance director or his/her designee shall designate as a local business any business that meets all of the following criteria: 1. The business is financially and operationally independent from any other business. 2. The business is a for-profit enterprise. 8

8 3. The business performs a commercially useful function. 4. The business maintains its principal place of business in a fixed office within the geographic boundaries of the city that provides all of the services for which local business designation is sought, other than work required to be performed at a job site; provided, however, that suppliers are not required to maintain their principal place of business in South Lake Tahoe, but are required to maintain a fixed office in South Lake Tahoe that meets all of the requirements of this section other than the principal place of business requirement. An office is a fixed and established place of business, including a qualified home office, where business is conducted on a regular basis of the type for which designation is sought. A residence qualifies as an office only if none of the persons who own or control the business also maintain an office outside the residence in the same or related field, and the persons who own or control the business claimed a business deduction on the prior year's income tax return, or for businesses started after the last tax return, would qualify for a deduction on the next tax return. None of the following constitutes an office: a post office box, a temporary location, a movable property, a location that was established to oversee a project such as a construction project office, or work space provided in exchange for services, as opposed to monetary rent. To establish a principal place of business in South Lake Tahoe, a business must demonstrate that the majority of its principals are based in the South Lake Tahoe office, and that it pays South Lake Tahoe payroll taxes on at least 51 percent of its total payroll. Suppliers must maintain a warehouse in the city that is continuously stocked with inventory consistent with their certification. Truckers must park their registered vehicles and trailers within the city. 5. The business possesses a current South Lake Tahoe business and professions tax certificate. 6. The business has been located and doing business in South Lake Tahoe for at least six months preceding the application for certification. 7. The business owner has licenses or other relevant trade or professional certifications, or, where licensing is not required, relevant training and experience that are appropriate for the type of business for which the business seeks certification. 8. The business is owned and controlled as defined herein by individuals who reside in the United States or its territories. 9

9 E. Small Local Business Designation - Criteria for Designation. Through appropriately promulgated procedures, if any, the Finance Director or his/her designee shall designate as a small local business any business that meets all of the following criteria: 1. Items 1-8 in Section (D). 2. Which has not exceeded a gross annual revenue of four million dollars ($4,000,000) for the past three (3) consecutive years. F. Local & Small Local Business Designations - Period of Designation. The city manager or his/her designee may designate a local or small local business for a period not to exceed three years; provided, that businesses must at all times throughout the designation period meet the criteria in subsections (D) or (E) of this section. The city manager or his/her designee may require designated businesses annually to submit documentation for the purpose of verifying continuing eligibility for any designation hereunder. G. Exceptions. 1. Notwithstanding any other provision of this section, a discount shall not be applied where to do so would result in a contract being awarded to a business without the capacity to perform it. The city manager, finance director, or either of their designees may adopt rules and regulations setting standards for determining that a local business has sufficient skill, experience, and financial capacity to perform the contract. 2. Notwithstanding any other provision of this section, a discount shall not be applied when prohibited by state or federal statutes or regulations to be awarded to the "lowest responsible bidder." (Ord ; Ord ; Ord ) Procurement records-public inspection. a). Records Maintenance. The purchasing manager shall maintain records for each procurement which include, at a minimum, the procurement request from the end user; the bid or proposal documents for the procurement, if any; any and all bids or proposals received; the basis on which contract award is made; and a copy of any and all contracts awarded. Such records shall be maintained for a period of time in compliance with state law. The city's records retention schedule shall be available for public inspection during normal city business hours and shall be subject to any fees or charges as may be established by city council. b). Public Inspection. Informal and formal competitive bids not involving competitive negotiation shall be available for public inspection following the date and time set for receipt of bids. Informal and formal competitive proposals and 10

10 agendized formal competitive bids involving competitive negotiation shall be available for public inspection following contract award or rejection Environmentally preferable products. The city desires to purchase environmentally preferable products that minimize environmental impacts, reduce waste by increasing product efficiency, and contain recycled content whenever economically feasible. The city prefers to purchase U.S. EPA Energy Star certified products. Responses to solicitations should identify any products that have earned the Energy Star certification Sole source purchases. Where applicable and not otherwise provided by state or federal law, purchasing from a sole source shall be permitted after written justification from the requesting department explaining why a sole source has been specified, and a factual finding by the purchasing manager and city manager that it is in the best interest of the city to purchase without competitive purchasing. These purchases or services are considered distinct and unique to such a degree that bidding of such services would not be in the best interest of the city. Staff recommendations for amounts specified in the formal bid section of this chapter shall be subject to approval by the city council Emergency purchases. If an emergency occurs at a time other than during regular business hours, the city manager may authorized the purchasing manager and/or city department heads to purchase directly, any materials, supplies, equipment or contractual services where immediate procurement is essential to prevent delays in the work of the using department, which may vitally affect the life, health or convenience of citizens. The head of such using department shall submit, on the next business day, to the purchasing manager, a record of the emergency purchase together with a report of the circumstances of the emergency. All emergency purchases which would otherwise require council approval, shall be submitted to the city council at the next regular council meeting for ratification Authority of the city manager to sign non-public works contracts. Pursuant to Section of the Government Code, the city council authorizes the city manager, or his/her designee, to sign non-public works contracts for amounts up to the sum of twenty-five thousand dollars ($25,000). The limit set forth above shall be automatically increased by five-thousand dollars ($5,000) on 11

11 October 1,2008 and by the same amount each fifth year thereafter as set forth in section below. The city manager, or his/her designee, may sign contracts for all expenditures not involving a "public project" (as defined in section of Article 4 of the Public Contract Code), when an emergency requires that the commodity be obtained from the nearest available source Purchases through cooperative purchasing agreements and piggyback opportunities. For the purpose of this chapter, "cooperative purchasing" means a form of intergovernmental cooperative purchasing in which one government agency or jurisdiction performs the solicitation and award process for one or more agencies or jurisdictions, but separate contracts or purchase orders are executed between each participating agency and the vendor; The agency contracting for the prices bears no contractual responsibility to the vendor. The purchasing manager may purchase supplies and equipment without complying with the quotation or bidding requirements of this chapter, if such purchases are based on an agreement or cooperative purchasing program (including, but not limited to, the state or the county) pursuant to authority granted by any statute or ordinance, pursuant to contractual arrangement between the city and said governmental entity, or pursuant to a written determination by the purchasing manager that the governmental agency conducted a competitive bidding process. The city is authorized and empowered to enter into contracts with other governmental entities providing purchases are made on behalf of the city. In all such cases, the supplies and equipment purchased must be the same and offered at the same price as the supplies and equipment subject to the agreement or program, except that up to 10 percent variation is allowed for customizing the order or for desirable options Acceptance of gifts, etc. by city employees & elected officials prohibited. No officer, employee or elected official of the City may accept, directly or indirectly, any gift, rebate, money, or anything else of value whatsoever from any person or entity if the gift, rebate, money, or item of value is intended as a reward or inducement for conducting business, placing orders with, or otherwise using the employee's position to favor the contributor. Promotional items of nominal value, such as calendars or pens, shall not constitute a gift if received as a nonpersonal item by the officer or employee, and the item is distributed to customers or potential customers routinely by the contributor. 12

12 22-22 Ethics. a). Statement of Policy. City employees and elected officials shall discharge their duties impartially so as to assure fair competitive access to city procurement opportunities by responsible contractors. Moreover, they shall conduct themselves in such a manner as to foster public confidence in the integrity of city procurement activities. b). Conflict of Interest. No city employee or elected official shall participate directly or indirectly in a city procurement when the employee knows that: 1). The employee or any member of the employee's or elected official's immediate family has a financial interest pertaining to the procurement; or 2). The employee or any member of the employee's or elected official's immediate family is negotiating or has an employment arrangement which is contingent upon or will be affected by the procurement. c). Withdrawal from Participation. Upon discovery of an actual or potential conflict of interest, an employee shall promptly withdraw from further participation in the procurement. d). Gratuities. No person shall offer, give or agree to give any city employee or elected official any gratuity or offer of employment in connection with a procurement by the city. No city employee shall solicit, demand, accept or agree to accept from any other person a gratuity or an offer of employment in connection with a procurement by the city. e). Prohibited procedures. Any practices which might result in unlawful activity are prohibited, including, but not limited to kickbacks or other unlawful consideration. City employees and elected officials are specifically prohibited from participating in the selection process when those employees or elected officials have a relationship with a person or business entity seeking a contract pursuant to this chapter. The above guidelines are in conformance and compliance with AS 1234 adopted by the State legislature in 2007 to set ethics laws to guide local officials in their service to their communities Disposal of surplus materials, supplies and equipment. All using departments shall submit to the purchasing manager, at such times and in such forms as he/she shall prescribe, reports showing all supplies and equipment which are no longer used or which have become obsolete and worn out. 13

13 The purchasing manager shall have authority to exchange for, or trade-in on, new supplies and equipment, all supplies and equipment unsuitable for City use. The purchasing manager shall also have authority to dispose of surplus supplies and equipment by auction or by sale or otherwise after receiving bids or proposals which, in his/her judgment, provide the maximum return to the city. The purchasing manager shall have the authority to dispose of surplus supplies or equipment by donation to local schools or non-profit organizations, or if surplus has no value, by disposal at refuse company, when the estimated market value of such surplus is less than five-thousand dollars ($5,000). The five thousand dollar ($5,000) limit set forth above shall be automatically increased by one-thousand dollars ($1,000) on October 1,2008 and by the same amount each fifth year thereafter. In the event any single item of property exceeds five-thousand dollars ($5,000) in current market value, the city council may empower the purchasing manager to dispose of it (in accordance with the same terms and conditions, and subject to the same discretion and limitations as if it were under five-thousand dollars ($5,000) in value. Alternatively, the city council may elect to sell, rent, donate, or destroy the same in accordance with whatever provision and/or terms and conditions the city council may, in its discretion, elect. Article II. Materials, Supplies and Equipment Formal bids and contracts. For the purpose of the sections within this article: "Bid" or "Sealed Bid" means an offer submitted via the city's approved secure online purchasing system, in sealed envelopes, or otherwise secured to prevent the contents from being known prior to the submission deadline. This procedure is appropriate for higher-value purchases when exact specifications can be determined and the only significant variable is price. "Quote" means an offer that is not required to be sealed or secured. Such offers may be made by phone, fax, , postal mail, secure internet purchasing system or other suitable means. This procedure is appropriate for lower-value purchases and for obtaining budget estimates. "Proposal" means an offer at a set price and terms or an offer to enter into a negotiated contract. This process is appropriate when the specification is for an end result rather than a specific product or process. Proposals are to be structured to present suggested processes, services or solutions that best serve the needs and interests of the city. 14

14 "Competitive Solicitation" means any process, including an invitation to bid, quote or proposal, whether used alone or in combination, which provides all interested vendors a fair and equal opportunity to compete for the city's business. (See Section Local Business Preference). Inflationary Factor - In the event that tllis section is amended to establish different monetary bid thresholds, then all sections shall be deemed amended to substitute such different figures for the monetary limits herein set forth for formal and informal bid procedures on behalf of the city, Except as otherwise provided in this chapter, the purchase of materials, supplies, equipment and services (other than professional services) valued at twenty-five thousand dollars ($25,000) or more shall be by written contract with the lowest responsible bidder whose bid has been solicited, received and approved pursuant to the procedure contained within this Chapter. The twenty-five thousand dollar ($25,000) limit set forth above shall be automatically increased by five-thousand dollars ($5,000) on October 1,2008 and by the same amount each fifth year thereafter. A. Bidder's List. The purchasing manager shall notify all qualified prospective bidders registered on-line with the city or any other source that will ensure open competition, not fewer than ten (10) calendar days prior to the date set for submission of quotes, bids or proposals. B. Bidder's Security. When deemed necessary by the purchasing manager and in the best interest of the City any bidder may be required to submit a bid security, including, but not limited to performance bonds, bidder's bonds, and labor and materials bonds. The purchasing manager shall prescribe the form and amount in the notice inviting bids. Bidders shall be entitled to return of bid security; provided, that a successful bidder shall forfeit his/her bid security upon his/her refusal or failure to execute the contract within 10 days after the notice of award of contract has been mailed, unless in the latter the city is solely responsible for the delay in executing the contract. 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 such subsequent award of bid is made by the city council, the lowest responsible bidder's security may be applied by the city to the contract price differential between the lowest responsible bid and the second lowest responsible bid and the surplus, if any, may be returned to the lowest responsible bidder. If the city council rejects all bids presented and readvertises, the amount of the lowest responsible bidder's security may be used to offset the cost of receiving new bids. C. Bid Opening Procedures. Sealed written bids or proposals shall be submitted to the purchasing manager 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 open for public inspection during regular 15

15 business hours for a period of not less than 30 calendar days after the bid opening. D. Rejection of Bids. At its discretion, the city council may: 1. Reject all bids; or 2. Reject all bids and readvertise for bids pursuant to the procedure prescribed in this article; or 3. Direct the purchase of such equipment, supplies, material, or securement of services on the open market by direct negotiations. E. Award of Bid. Except as otherwise provided in this chapter, the city council shall award the contract to the lowest responsible bidder whose bid complies with the specifications and is deemed best value and in the best interest of the city. In determining responsibility, the City Council shall consider the known reliability, resources, experience, integrity, and the reputation for workmanship of the various bidders. The city council may waive any informalities or minor irregularities in bids received. The decision shall be at the sole discretion of the city council and shall be final and binding. F. Tie Bids. If two or more bids received are for the same total amount or unit price(s), quality and service being equal, and if the public interest will not permit the delay of readvertising for bids, the city council may. at its discretion, accept the one it chooses or accept the lowest bid made by and after negotiation with the tie bidders at the time of consideration by the city council of such tie bids. G. Emergency authority of purchasing manager. "Emergency" means a situation where immediate action is required to preserve the public peace, health and safety and/or to avoid severe degradation of a city facility. In an emergency as defined above, and precluding action by the city council, the purchasing manager may purchase materials, supplies, equipment or services, even though the total amount thereof may exceed twenty-five thousand dollars ($25,000), without competitive bids upon notice. At the next succeeding city council meeting, the purchasing manager shall submit to the city council a staff report stating the circumstances of such emergency, a description of the supplies or service purchased, and the prices thereof for ratification Informal bids and contracts. Except as otherwise provided in this chapter, purchase of materials, supplies, equipment and services of an estimated value of five-thousand dollars ($5,000) or 16

16 more, and less than twenty-five thousand dollars ($25,000) as such amounts may be amended as set forth in section above, and all leases of supplies and equipment terminable by the city, may be made by the city informally without observing the procedures prescribed in Section in the open market, pursuant to the following procedures. All such purchases shall be coordinated with authorized city staff and subsequent bids awarded by the purchasing manager, A. Minimum Number of Quotes. Authorized city staff shall, whenever possible, solicit at least three quotes and shall award a contract based on best value. B. Notice Inviting Bids. Authorized city staff shall solicit at least three (3) quotes, whenever possible, from prospective suppliers by phone, fax, , postal mail, secure internet purchasing system or other suitable means C. Rejection of Quotes. Authorized city staff may: 1. Reject all quotes; or 2. Reject all quotes and re-obtain quotes pursuant to the procedure prescribed in this article. 3. Direct the purchase of such equipment, supplies, material, or securement of services on the open market by direct negotiations. Upon rejection of a quote authorized staff shall notify the purchasing manager of such rejection and the reasons therefore. D. Award of Contracts. Except as otherwise provided in this chapter, the purchasing manager shall award the contract to the lowest responsible bidder meeting all specifications. E. Tie Quotes. If two or more quotes received are for the same total amount or unit prices, quality and services being equal, and if the public interest will not permit the delay of obtaining new quotes, the purchasing manager may negotiate with the tie bidders for the award of contract Nominal value purchases. The purchase of materials, supplies, equipment and services estimated in value to be less than five-thousand dollars ($5,000) may be made without formal bids or quotes, subject, however, to fair, just and equitable terms and conditions of the purchase. A duly executed purchase requisition shall be submitted to the purchasing manager and a subsequent purchase order shall be obtained in accordance with SLTCC The five-thousand dollar ($5,000) limit set forth above shall be automatically increased by one-thousand dollars ($1,000) on \7

17 October 1, 2008 and by the same amount each fifth year thereafter as set forth in section above Exception to bidding procedures. The bidding requirements set forth in SLTCC 22-24, 22-25, and may be dispensed with in any of the following instances and not withstanding any provision of this chapter to the contrary, providing there exists an unencumbered appropriation in the department against which the expense is to be charged (approved budgeted item): A. An emergency requires that a purchase be made from the nearest available source of supply and is ratified by city council; or B. The amount of the purchase of goods and services is of nominal value as set forth in SLTCC 22-26; or C. The commodity to be purchased can only be obtained from one vendor or the professional service to be rendered are considered distinct and unique to such a degree that bidding of such services would not be in the best interest of the city (a single source or sole source) and is awarded by the city council if value of the purchase or service is twenty-five thousand dollars ($25,000) or more, or D. The purchase of goods or services is made through a purchasing contract negotiated by another governmental agency utilizing acceptable bidding procedures (Piggybacking) following all laws, rules and regulations and is awarded by the city council if value of the purchase is twenty-five thousand dollars ($25,000) or more. Such purchases are subject to fair, just and equitable contract conditions; or E. The purchase of used material or equipment and is awarded by the city council if value of the purchase is twenty-five thousand dollars ($25,000) or more; or F. The purchase of materials, supplies and equipment are from another governmental entity, and is awarded by the city council if value of the purchase is twenty-five thousand dollars ($25,000) or more Cancellation of solicitations; Rejection of bids. a). Cancellation of Solicitations/Rejection of Bids. The purchasing manager may cancel competitive bid or proposal solicitations before the date and time set for receipt of bids or proposals, and the city council may reject, in whole or in part, bids or proposals received in response to formal competitive bid or proposal solicitations upon a written determination that such action is in the city's best interest for reasons including, but not limited to any of the following: 18

18 1). The city no longer requires the goods and/or services, as determined by the end user; 2). The city no longer can reasonably expect to fund the procurement, as determined by the director of finance, city manager, or city council; 3). Proposed amendments to the solicitation would be of such magnitude that a new solicitation is desirable. c). Records. The fact that a solicitation was cancelled or bid or proposal rejected shall be made part of the procurement records Inspection and testing. The city 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 city shall have authority to require chemical and physical tests or samples submitted with bids and samples of deliveries which are necessary to determine their quality and conformance with specifications Submittal of bids. Bids shall be submitted to the city via the city's approved secure online purchasing system, or on paper, submitted in a sealed envelope. Bids submitted on paper shall be delivered to the purchasing manager and shall be identified as bids on the envelope containing the same. A tabulation of all bids received shall be open for public inspection during regular business hours or on the city of South Lake Tahoe's official website for a period of not less than thirty calendar days after the bid opening Withdrawal or correction of formal bids. Prior to bid opening date and time, bids submitted may be withdrawn by written request received by the city before the hour set for opening. After such hour the bid may not be withdrawn. After bid opening date and time, any bidder who seeks to withdraw or modify a bid because of inadvertent computational error shall notify the purchasing manager no later than three (3) working days following the bid opening. The bidder shall provide worksheets and other such information as may be appropriate or required by the purchasing manager to substantiate the claim of inadvertent error. Failure to do so may bar such relief and allow recourse from the bid surety, if applicable. The burden shall be upon the bidder to prove such error. 19

19 , I Consideration of bids and basis of award. To the extent not inconsistent with state law the following guidelines are to be followed for awards made under this chapter. Purchases shall be awarded on the basis of best value of the bid or bids most advantageous and in the best interest of the city. The determination of best value shall be pursuant to the findings and recommendations presented by the purchasing manager at the time of award. In determining whether a bid is the best value to the city, in addition to price, the purchasing manager, the city manager or city council may consider the following: 1) The ability, capacity and skill of the bidder to perform the contract or provide the service required; 2) Whether the bidder can perform the contract or provide the service promptly or within the time specified, without delay or interference; 3) The character, integrity, reputation, judgment, experience, and efficiency of the bidder; 4) The quality of performance of previous contracts or services; 5) The previous and existing compliance by the bidder with the laws and ordinances; 6) The sufficiency of the financial resources and the ability of the bidder to perform the contract or provide the service; 7) The quality, availability and adaptability of the supplies or contractual services to the particular use required; 8) The ability of the bidder to provide future maintenance and service for the use of the subject of the contract; 9) The number and scope of conditions attached to the bid. 10) Whether the bidder has a fixed place of business within the City and a City business license pursuant to section Award criteria of contracts, agreements, instruments and conveyances not otherwise covered by this chapter may be prescribed by city council resolution. 20

20 Article II/. Public Works Contracts Public Projects. The procedure for bidding and awarding construction contracts on public projects shall be in accordance with the Public Contract Code Section and following. Notice inviting bids shall be published in accordance with Section of said Public Contract Code. Bidder's security shall accompany the bid presented in accordance with sections through of said Public Contract Code. The city council shall have authority to require a performance bond or labor and materials bond before entering into a public project contract under the provisions of this chapter. Any bond required for a public project contract, as defined in the Public Contract Code, shall be in an amount the city council finds reasonably necessary to protect the best interests of the city. If the city council requires a bond pursuant to this section, the form and amount of the bond(s) shall be described in the notice inviting bids. All contracts for public projects for more than the dollar amount established by Section of the Public Contract Code shall be awarded by the city council in accordance with applicable law. Single or sole source procedures are not applicable to public projects except as permitted by state law. Upon approval by the city council, each contract shall be accompanied by a purchase order for encumberance and project tracking purposes. Article IV. Contracts for Professional Services/Consultants Contracts for Professional Service Professional services are defined as those provided by an independent contractor and may be considered distinct and unique to such a degree that bidding of such services would not be in the best interest of the city or firm engaged in a profession based on a generally recognized special knowledge or skill, including, but not limited to, the professions of material testing services, construction inspection services, architectural, engineering, testing, land surveying, appraising, environmental, planning, financial services, legal services, medical services, development processing, governmental operations, special studies, construction project management, consulting services and other services related thereto, and whose services are considered distinct and unique to such a degree that bidding of such services would not be in the best interest of the city. 21

21 Upon approval by the city manager and/or city council, each contract will be accompanied by a purchase order for encumberance and project tracking purposes. Examples of non-professional services would be services offered by individuals without such generally recognized specialized knowledge whose primary product would be manual labor. Formal Contracts a). Award of contracts for services of a professional nature valued at twenty-five 'thousand dollars ($25,000) or more shall be subject to city council approval pursuant to the procedure prescribed herein. The twenty-five thousand dollars ($25,000) limit set forth above shall be automatically increased by five-thousand dollars ($5,000) on October 1,2008 and by the same amount each fifth year thereafter. 1). Request for Proposal. When selecting providers of professional services, requests for proposals shall be used when in the best interest of the city. Requests for proposals shall specify the deadline and place for submission, the nature of the services required, and the selection criteria to be used for awarding the contract. 2). Award of Contract. Except as otherwise provided herein, the city council shall award a contract based on firm qualifications, experience and responsiveness, in addition to any other criteria set forth in the requests for proposals. 3). Rejection of Proposals. The city council may reject any and all proposals submitted and may, in its discretion, re-advertise for other proposals or authorize negotiations in the open market. b). Informal Proposal Contracts for professional services up to twenty-five thousand dollars ($25,000), may be made by the city manager informally without observing the procedures prescribed in Section The limit set forth above shall be automatically increased by five-thousand dollars ($5,000) on October 1,2008 and by the same amount each fifth year thereafter. Such contracts shall, when practical, be based on at least three informal proposals, and shall be awarded based on firm qualifications, experience and responsiveness, in addition to other appropriate criteria. Contracting Manager The city manager or designee shall serve as the contracting manager for purposes of this section. 22

22 Selection Procedures For each proposed professional contract: The contracting manager shall establish the professional competence and qualifications necessary to be possessed by a firm in order to be awarded the proposed professional services contract. Professional competence and qualification may be determined in accordance with, but not limited to, the following factors: The firm's experience and expertise in the field; The quality of the firm's work; The firm's ability to meet project deadlines; and The 'firm's past performance on similar projects. If it is in the best interest of the city, the contracting manager may publish a notice that the city is proposing to award a contract to obtain specified, professional services or, in the alternative, may directly solicit proposals from appropriate firms. Request for proposals shall require the following information (when applicable): The scope of work; Plans and specifications; A time schedule for the project; An estimate or range for total cost; Proof of insurance and/or other surety; Proof of City business license or ability to obtain such license; A list of employees who will be assigned to the project and their qualifications; and Other special conditions related to the contract. C. The contracting manager may discuss with one or more firms the alternative methods for providing the required services and may conduct further negotiations with one or more of the most qualified firms to fully clarify each firm's offer to provide the services. 23

23 Award of Contract The authorized department head shall submit the proposal(s) of the most qualified firm or firms together with a recommendation to the city manager, or designee, for review and awarding of the professional services contract. 24

24 LEGAL PUBLICATION SUMMARY OF PROPOSED ORDINANCE OF THE CITY OF SOUTH LAKE TAHOE CITY COUNCIL AMENDING CITY CODE CHAPTER 22 - PURCHASING IN ITS ENTIRETY NOTICE IS HEREBY GIVEN that on August 5, 2008, the City of South Lake Tahoe City Council waived first reading, Read by Title Only and referred to second reading and adoption at the August 19, 2008 City Council meeting. The following is a summary of the proposed ordinance, as follows: PURPOSE OF AMENDMENT This ordinance amends the City Code Chapter 22 in its entirety - Purchasing. Chapter 22 - The Purchasing Chapter of the City Code required updating to reflect changes in business practices. The proposed changes can be characterized as reorganizations, clarifications, and modernizations. The key modifications are (a) Article I, Section "Local Bidders Preference" has been expanded to also include a small local business preference to take into consideration local contractors doing business with the City, (b) Article I, Section 22 16, The city desires to purchase environmentally preferable products that minimize environmental impacts, reduce waste and contain recycled content whenever economically feasible. (c) Article II, Section 22-24, In an effort to keep our bid and contract processes efficient and strearnlined, it is being proposed that bid limits keep up with the cost of living by providing regular interval increases, (d) Article III, Section 22-23, contains the Public Works Contract information which is out of date and needs to be brought current with information that is in accordance with the California Public Contract Code, Section and following, and (e) a new article IV, Section has been added to the Code to address the area of Professional Service and Consultant Agreements. In summary, these proposed revisions are intended to bring our Municipal Code current with modern business practices, to correct errors and ambiguities, and to consolidate all of the key elements of the Purchasing Code into a single document. A copy of said proposed ordinance in its entirety is available for review in the City Clerk's Office located at 1901 Airport Rd, South Lake Tahoe, California or via the August 5, 2008 City Council agenda packet (Agenda Item New Business a) available on City's website at SUSAN ALESSI, CITY CLERK CITY OF SOUTH LAKE TAHOE 1901 AIRPORT ROAD SOUTH LAKE TAHOE, CA (530) ================================================================= NOTE TO TAHOE DAILY TRIBUNE ONLY: PLEASE PUBLISH ONE TIME ON WEDNESDAY, AUGUST 13,2008. THANK YOU.