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HomeMy WebLinkAbout20 - Council Policies F-5 & F-14CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 20 (January 25, 2011) TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: David R. Hunt, City Attorney Ext..3131, dhunt(a)-newportbeachca.gov Dana Smith, Assistant City Manager Ext. 3002, dsmith(Wriewportbeachca.gov SUBJECT: PROPOSED AMENDMENTS TO COUNCIL CONTRACTING POLICY F -14 AND PURCHASING POLICY F -5 61.4111', Provide an amended draft of the City Council's contracting policy (F -14) and purchasing policy (F -5) that will result in clearer policy directives and gain operational efficiencies for the City. RECOMMENDATION: Staff recommends that Council adopt the amended Council Policies F -14 and F -5 appended to the staff report as Attachment 1 through the passage of the corresponding resolution appended to the staff report as Attachment 2. DISCUSSION: Background Charter Section 421 vests the authority to enter into contracts on behalf of the City with the City Council with the exception of entering into contracts with regular employees of the City.' It also authorizes the City Council to delegate contacting authority to the City Administration through adoption of ordinances and resolutions that provide council guidance. These two very important policies have not been updated in a number of years. The redrafting of council policies F -14 and F -5 establishes updated and explicit policy directives to the City Manager, updates contracting types and authority levels for executive staff, and removes implementing language not appropriate for a policy document. Discussion The authority to enter into agreements with regular employees of the City is vested solely by the City Manager pursuant to Charter Section 421. Updating Council Contracting Policy F -14 And Purchasing Policy F -5 Council Meeting January 25, 2011 Contracting and purchasing are critical to the functions of the City. The current F -14 policy defines the delegated authority of City staff to enter into and amend contracts and describes the types of authorized contracts. Council Policy F -14 goes beyond the normal bounds of a policy document by including detailed administrative contracting procedures. The inclusion of specific administrative details such as proscribed bid processes, procedures for approval of contracts, retention practices, and detailing processes for the selection of consultants is impractical. Policies by their very nature are adopted and approved by legislative bodies, in this case the Council, and procedures are created and approved by the administration responsible for carrying out the function. This amended draft of policy F -14 proposes removing the administrative procedures and focuses on clear policy directives. The City Manager has directed staff to insert the administrative procedures removed from policies F -14 into the City's Administrative Procedures Manual. The City Council's current Purchasing Policy F -5 already separates policy from the City Manager's administrative procedures. The updated F -5 policy attached simply clarifies the delegated spending authority of the City Manager and Department Directors. Summary of Recommended Changes Proposed changes to Policy F -14 are detailed below. These changes address unique contracting needs, contract authority and delegation levels, policy guidance for accountability and transparency, and maintenance of a competitive contracting environment. 1. Independent Instructional and Recreation Contractors It is recommended that a section be added to Policy F -14 to address the unique contractual relationship the City has with independent contractors who provide instructional and recreational services. The Recreation and Senior Services Departments use these types of contractors in their programs. The contractors are paid either a percentage of the amount their classes bring in or sometimes on a "piece work" basis, for examples umpires are paid by the game. This type of contractual relationship was not specified in the old policy language as there is no "contract amount" that can be identified at the outset of the agreement. The new policy expressly authorizes these types of contracts and establishes reporting protocols should the amounts paid on a percentage basis exceed Director and City Manager authority. 2 "On -Call' Agreements "On- call" agreements have also been clarified and limited in the recommended Policy. The policy has been written so that staff may enter into "on- call" agreements for services that are recurring in nature and do not warrant entering into individual contracts for the provision of the services for each individual project. That authority, however, is limited to the authority delegated to the department director and the City Manager and limited to a Updating Council Contracting Policy F -14 And Purchasing Policy F -5 Council Meeting January 25, 2011 time span of two years. Thus, at the outset of an on -call agreement and at least every two years thereafter, staff must review the contract and enter into a process that assures the City that it is receiving a fair, reasonable and competitive price for the contracted performance. This approach simplifies the entering into agreements that are necessary for providing repetitive and emergency services for the City. For example, Utilities may use on -call agreements for repetitive electrical and other maintenance and repair services and can address emergency services such as repair of pipelines in the event of failure. 3. Contract Authority delegation levels The current contract spending. authority granted to the City Manager ($50,000) and department directors ($30,000) has not been updated in many years. The executive staff manages many lines of business that make up the $240 million dollar city corporation. The relatively low contracting authority level hinders efficient conduct of routine business activity. A review of surrounding cities showed that Newport Beach was at the lower end of the contracting spending authority and the trend for medium size cities is to set contracting limits between $75,000 and $125,000. To modernize our policies and practices and to be consistent with the updated Charter, staff recommends increasing the contracting authority of the City Manager to $120,000 and $75,000 for Department Directors. 4. Amended Contract Amounts There are problems with managing contract amendments under current Policy F -14. The definition of the term "original contract amount' was not clearly understood.. The revised F -14 policy defines 'original contract amount' as the initial compensation agreed to under the contract or the latest amount approved by the City Council, whichever is greater. The proposed Policy clarifies staffs authority to amend a contract. A contract executed by the City Manager or a Department Director may be amended up to their specified limit. For example, the City Manager may amend a $79,000 contract he executed up to his authorized limit of $120,000. And, the City Manager may amend contracts signed by Department Directors whose limits are $75,000 up to a maximum of $120,000 (again, his limit under the amended policy). The City Manager, under the new policy, may also amend contracts that were originally approved by City Council up to 125% of the "original contract amount" provided the amended amount does not exceed his contract spending authority of $120,000. 5. Accountability and Transparency The proposed policy is clear that the Office of the City Attorney, consistent with Charter obligations, must sign and approve as to form all contracts entered into within the City. The Office of the City Attorney and will continue to oversee the compliance of contracts to Council policies. 3 Updating Council Contracting Policy F -14 And Purchasing Policy F -5 Council Meeting January 25, 2011 Additionally, Administrative Services requires all contracts and purchases to be consistent with the City's contracting and purchasing policies before it will issue funds on an obligation. The department requires that accounting best practices are followed and documents the financial responsibility of the purchaser. The City Clerk will continue to be the office of record for all City contracts as outlined in the City Charter. Copies of all original contracts are routed to the City Clerk. The Clerk maintains the originals and posts copies into the City's public electronic data base. This ensures transparency for all contracts entered into by the City. 6. Unique contracting arrangements Confusion existed as to the application of F -14 for contracts entered into, and on behalf of, applicants and developers. The updated policy clarifies that all contracts, including those entered into, and on behalf of applicants and developers, must adhere to Council's F -14 Policy. 7. Contract Authority for the City Attorney Under the existing Policy, the City Attorney does not have a defined spending limit. This policy amendment clarifies that the City Attorney shall keep the City Council informed regarding any litigation expense that exceeds $120,000 on not less than a quarterly basis and shall seek budget updates, if needed, within a timely basis. Non - litigation spending authority for the City Attorney shall be $75,000. Recommendation of Finance Committee Staff brought many of the recommended changes to F -14 to the Finance Committee in July of 2010. The Finance Committee supported raising the contract authority levels and the separation of administrative procedures from the Council policy. The Committee further stressed that accountability and transparency were important attributes to be maintained in both the policy and the administrative procedures. The Committee reaffirmed the City's need to seek competitive pricing in its contracting procedures. ENVIRONMENTAL REVIEW: This is not a project under CEQA. PUBLIC NOTICE: This agenda item has been noticed according to the Ralph M. Brown Act (72 hours in advance of the public meeting at which the City Council considers the item). It was posted at City Hall and on the City's website. FUNDING AVAILABILITY: This recommended action does not require funding. L� Updating Council Contracting Policy F -14 And Purchasing Policy F -5 Council Meeting January 25, 2011 CONCLUSION: Based upon the above discussion, staff recommends the adoption of the attached Resolution amending contracting and purchasing policies F -14 and F -5 of the City Council. Prepared & Submitted by: OFFICE OF THE CITY ATTORNEY David R. Hunt, City Attorney DRH:rh Submitted by: Dana Smith, AssistanY City Manager Attachment 1: Proposed Council Policies F -14 & F -5 Attachment 2: Proposed Resolution 5 F -14 AUTHORITY TO CONTRACT FOR SERVICES 1 I. PURPOSE AND LIMITATION T-G set forth the City's The purpose of this policy is to set out the City's policy establishing authority for committing City funds for Service Contracts. This policy applies to all contracts for services, whether entered into through standard or emergency procedures, including but not limited to professional services, audit services, public works project services, public property maintenance and repair services, and maintenance, custodial and repair services for all City facilities. II. LIMITAT-IANGENERAL AUTHORITY TO ENTER INTO CONTRACTS FOR SERVICES Provisions of the Charter govern the methods through which the City may be bound by contracts. Under the Charter, all contracting authority, with the exception of services rendered by a person in the employ of the City at a regular salary, rest with the City Council. The Charter states that the City shall not be bound by any contract or amendment thereto, unless the same shall be made in writing, approved by the City Manager to bind the City, with or without a written contract, for the acquisition of equipment, materials, supplies, labor, services or other items included within the budget approved by the City Council, and may impose a monetary limit upon such authority, Gentmets fGF seMees are distinct from contracts for prorurernent of specific maternal ifemo If the only purpose of a contract is for the City to obtain goods, .tech. OF maintename of goods, mateFials and equipment shall also be formed under the ■T[S� 21101li- G ■ ■ ■ ■ ■ ■ ■ ■ ■ ■T[S� 21101li- G ■ F -14 The Citv Council herebv delegates its authoritv to contract for services to the Cit Manager and through him or her to Department Directors, and to the City Attorney as set out below. All formalities required under the provisions of the Charter shall be applied to these contracts. As such, the City Attorney shall review, approve and sign all such contract documents prior to contract award and execution and the City Clerk shall accountability. A. Authority to Enter Contracts The authority to enter into original contracts is delegated as set out below. 1. The -City Manager. 4 The City. Manager is authorized to sign and award and sign contracts for services without- prior Council approval, in an amount not emeed in excess of $69120,000 provided that the services and funds are available-mere approved by the C- ity Council as part of the annual Department budget or are available in an applicant deposit account. This authority shall not be delegated below the Assistant City Manager level. 2 m RR 1. The -City Manager. 4 The City. Manager is authorized to sign and award and sign contracts for services without- prior Council approval, in an amount not emeed in excess of $69120,000 provided that the services and funds are available-mere approved by the C- ity Council as part of the annual Department budget or are available in an applicant deposit account. This authority shall not be delegated below the Assistant City Manager level. 2 m F -14 rrOM _ . . ..... 2. Department Directors. 2- Department Directors are authorized to award and sign Witten contracts for services without prior City Manaaer or Council approval in an amount that de not in excess ofexeeed $3975,000 without furtheF Council review, as Iong-as- provided that the services and funds were approved by the City Council as part of the annual Department budget or are available in an applicant deposit account. This authority may not be delegated below the Department Director level. The City Glad( shall sign all s eh 3. City Attorney. The City Attorney is authorized to award and sign contracts for all services for outside counsel and experts related directly to and necessary for prosecution and defense of pending litigation as- defined in the Brown Act, and for services for outside counsel and experts necessary to address other pending or potential legal claims or legal issues so long as funds for outside counsel, experts and related legal services were approved by the City Council as part of the approved annual budget- presess. The City Attorney shall keep Council informed reaardina any such expense that exceeds $120.000 on not less than a quarterly basis and shall seek budget updates, if needed, within a timely fashion. B. Authority to Amend Contracts If circumstances arise that were are not reasonably foreseeable by the parties at the time of contracting-,-and which make extra work necessary for the proper completion of the service originally contracted for, a contract amendment and corresponding increase in total contract amount may be necessary. Under those circumstances, the City KM F -14 Manager and Department Directors are authorized to amend a contract as set out below. For purposes of this policy, "total contract amount" shall be defined as the total consideration paid over the term of the agreement, including any previous amendments to the contract. "Original contract amount" shall be defined as either the amount of compensation agreed upon when the contract was first entered into or the amount of compensation last approved to by the City Council, whichever is greater. 1. City Manager. For all contracts entered into within the City Manager's authority, the Citv Council, Tthe City Manager may sign and award thea contract amendment if the total cost of services will not exceed 125% of the original contract amount, or Of the increase the....__origina0ta1 contract by more than $120,000, whichever amount does - not xeeed $50,000, whiGhever is greaterlesser. 4- 2. Department Directors. The Department Director overseeina the contract may sian the contract amendment if that amendment will not cause the total contact amount to exceed - 2-. if the original GentFaGt did not exceed $30,000 and Fnay sign the GentraGt ameRdFnent if that amendment will not eause the total GentFa ° $75.000. 3. Amendments in Cases of Possible Work Stoppaae or Undesirable Delay. a- In certain situations, the City Manager and the Department Director in charge of the contract may determine that an amendment is needed that will cause the total contract amount to exceed the City Manager's amendment signing authority, and that the timing is such that awork stoppage or other undesirable consequence will - result -if -- approval of the change is delayed until the next City Council meeting. _In those situations, the City Manager may approve an amendment that increases the total contract amount up to 150% of the original contract. _However, the City Manager will notify all City Council Members individually if this situation develops, and if any individual Council Member objects to the increase, a special meeting of the City Council will be called to address the issue. 4. Amendments Necessary to Address Emergency Situations 3- In event of emergency work that requires an amendment to an existing contract, the emergency contracting policy outlined below shah -may be followed. IV. TYPES OF SERVICES CONTRACTS AND HOW TO AWARD THEM ■I F -14 i'ddina It is recognized that by their nature, service contracts cannot always be awarded as a result of a competitive bid process. However, competitive "proposals should be obtained whenever possible before resorting to negotiated awards. A. Professional Services Consultant Selection Professional consultant services differ from other services in that they are of a professional nature, and due to the ethical codes of some of the professions involved, as well as the nature of the services provided, do not readily fall within the competitive bidding process. _Professional consultants should be individually selected through a qualifications -based selection process for a specific project or service on the basis of and with the objective of selecting the most _qualified consultant at a fair -and reasonable and verifiably appropriate cost. The procedures for achieving this goal shall be adopted and applied by the City Manager in the Administrative Procedures Manual. fGIIOWing Procedures shall be used in the selection of professienal Gensulting seWices. This policy shall include, but not be limited to, services in the following fields: • Engineering (civil, mechanical, electrical, structural, traffic, geotechnical, etc.) • Building plan review and grading plan review and /or inspection services • Architecture • Landscape Architecture _ • Construction Project Management Firms • Environmental • Planning • Economic Analysis • Property Appraisals • Land Surveying Financial Services 5 i� F -14 • Data Processing Services • Legal Services not.otherwise authorized in Section A(3) of this Policy B. General Services Agreements General Services Agreements are not strictly professional in nature, but arise where operations, repair and maintenance services, or other services of a non - professional nature, are provided to the City. Agreements that typically fall into this category are for repair and maintenance of roadways, landscape maintenance, repair and maintenance of City faculties, and other such non - professional services. The City shall select general services contractors though a request for proposal process awarding such contracts. C. Capital Improvement Program Contracts for public works shall be awarded consistent with the provisions of Charter Section 1110 and Chapter 15.75 of the Newport Beach Municipal Code as updated and amended from time to time. Under the terms of City Charter Section 1110, contracts for D. Independent Instructional and Recreation Contractors Where contractors are paid for services from fees collected for the services provided, Department Directors are authorized to award and sign contracts with independent such independent contractors may be up to two (2) years in duration. Should fees paid to any contractor exceed $75.000 during the term of the contract. the Department Director shall provide written notice to the City Manager identifying the program, independent contractor and anticipated total fees to be paid. The City Manager shall give written notice to the City Council should fees paid exceed $120000. E. On -Call and Emergency Contracts for Services Under limited circumstances the use of formal contracting procedures to procure services is not an effective or an efficient use of City resources. The following 0 F -14 contracting procedures are authorized for entering into on -call agreements for services as needed and for procuring services in times of emergency. 1. On -Call Agreements. The City Manager and Department Directors are authorized to enter into on -call agreements for obtaining services on an as needed basis, including, but not limited to, professional services and repair and maintenance services, that are needed from time to time where the size of the iob does not warrant the expense of entering into individual agreements for each service. On -call agreements must be within the authority of the call agreements shall be consistent with the award procedures for the type of contract being awarded as set out above. Procedures for entering into on -call agreements shall be prescribed by the City Manager in the Administrative Procedure Manual. 7 d- - - :u .'J -L1J 2. E—.Emergencv Contracts for Services. F -14 If a contract for services is necessary under the provisions of Newport Beach Municipal Code Section 2.20.020, ^•^^� he City Emergency Procedures shall be followed. If a contract for services is entered into in times of urgent Aecessafy- necessity under the authority of Newport Beach City Charter Section 1110, and the contract amount exceeds the signing authority of the relevant Department Director or City Manager as authorized in this Policy, then that contract shall be brought to the City Council at its next regularly scheduled meeting for review. Whenever possible, the City shall enter into Emergency On -Call Agreements with contractors or consultants who can be relied upon to assist the City in advance of any actual emergency. Emergency On -Call Agreements shall be submitted to Council for approval after being reviewed and approved by the G49L � Office of the City Attorney._ After the Emergency On -Call Agreement is approved, services provided on an emergency basis under an Emergency On -Call Agreement may be retained by oral commitment of the City Manager (or, in the case of an emergency described by Municipal Code Section 2.20.020, the Director or Assistant Director of Emergency 11 4d F -14 Services), to be memorialized in a Letter Agreement between the parties as soon as possible thereafter. When a written contract has been entered into in order to address an emergency, copy of the written contract shall be provided to the City Clerk as soon as possible. V. GENERAL PROCEDURES A. Contract Retention The City Clerk shall retain the-all original executed service contracts in accordance with the City's current adopted Records Retention Schedule. Contracts shall be posted into �Ra T tl,. nre:Rl.,r.Z,rJr_r.ZSmTr.�a:L,�c rS.PTV Mw. - ... _ . : - .. - ;. .. XB_Insurance All contracts shall be accompanied by proof of the appropriate level of insurance at the time of execution. The insurance level required shall be in accordance with the City's published Schedule of Insurance of +Kr.� „s_. Polley), or as otherwise approved by the City's Risk Manager. F -14 FUTURE AMENDMENTS TO POLICY Any future changes in the provisions of this Policy shall be made by resolution of the City Council Adopted - January 24,1994 Amended - April 13, 2004 Amended by Resolution No. 2006 -35 - May 9, 2006 Amended by Resolution No. 2011- - January 25, 2025 12 F -14 AUTHORITY TO CONTRACT FOR SERVICES I. PURPOSE AND LIMITATION The purpose of this policy is to set out the City's policy establishing authority for committing City funds for Service Contracts. This policy applies to all contracts for services, whether entered into through standard or emergency procedures, including but not limited to professional services, audit services, public works project services, public property maintenance and repair services, and maintenance, custodial and repair services for all City facilities. II. GENERAL AUTHORITY TO ENTER INTO CONTRACTS FOR SERVICES Provisions of the Charter govern the methods through which the City may be bound by contracts. Under the Charter, all contracting authority, with the exception of services rendered by a person in the employ of the City at a regular salary, rest with the City Council. The Charter states that the City shall not be bound by any contract or amendment thereto, unless the same shall be made in writing, approved by the City Council and signed on behalf of the City by the Mayor and City Clerk or by such other officer or officers as shall be designated by the City Council (Charter § 421). The City Attorney shall approve the form of all contracts made by or amendment thereto and all bonds given to the City, endorsing his or her approval thereon in writing (Charter § 602(e)). The City Council may, however, by ordinance or resolution authorize the City Manager to bind the City, with or without a written contract, for the acquisition of equipment, materials, supplies, labor, services or other items included within the budget approved by the City Council, and may impose a monetary limit upon such authority. III. DELEGATION OF AUTHORITY TO ENTER INTO AND AMEND CONTRACTS The City Council hereby delegates its authority to contract for services to the City Manager and through him or her to Department Directors, and to the City Attorney as set out below. All formalities required under the provisions of the Charter shall be applied to these contracts. As such, the City Attorney shall review, approve and sign all such contract documents prior to contract award and execution and the City Clerk shall sign all such contracts attesting to their being entered into by the City. Additionally, the City Manager shall adopt and enforce administrative procedures that assure all contracts are: (1) entered into at a reasonable, fair and competitive price to the City; (2) all necessary formalities are followed and the requirements of federal, state, and local laws, including Council policies, are met; (3) best accounting practices are followed; and (4) the contracting process of the City is open and transparent, and provides accountability. A. Authority to Enter Contracts The authority to enter into original contracts is delegated as set out below. I I[17 F -14 City Manager. The City Manager is authorized to award and sign contracts for services without prior Council approval in an amount not in excess of $120,000 provided that the services and funds were approved by the City Council as part of the annual Department budget or are available in an applicant deposit account. This authority shall not be delegated below the Assistant City Manager level. 2. Department Directors. Department Directors are authorized to award and sign contracts for services without prior City Manager or Council approval in an amount not in excess of $75,000 provided that the services and funds were approved by the City Council as part of the annual Department budget or are available in an applicant deposit account. This authority may not be delegated below the Department Director level. 3. City Attorney. The City Attorney is authorized to award and sign contracts for all services for outside counsel and experts related directly to and necessary for prosecution and defense of pending litigation as defined in the Brown Act, and for services for outside counsel and experts necessary to address other pending or potential legal claims or legal issues so long as funds for outside counsel, experts and related legal services were approved by the City Council as part of the approved annual budget. The City Attorney shall keep Council informed regarding any such expense that exceeds $120,000 on not less than a quarterly basis and shall seek budget updates, if needed, within a timely fashion. B. Authority to Amend Contracts If circumstances arise that were are not reasonably foreseeable by the parties at the time of contracting which make extra work necessary for the proper completion of the service originally contracted for, a contract amendment and corresponding increase in total contract amount may be necessary. Under those circumstances, the City Manager and Department Directors are authorized to amend a contract as set out below. For purposes of this policy, "total contract amount" shall be. defined as the total consideration paid over the term of the agreement, including any previous amendments to the contract. "Original contract amount" shall be defined as either the amount of compensation agreed upon when the contract was first entered into or the amount of compensation last approved to by the City Council, whichever is greater. City Manager. For all contracts entered into within the City Manager's authority, the City Manager may sign and award a contract amendment so long as the total contract amount as amended does not exceed $120,000. For contracts entered into by the City Council, the City Manager may sign and award a contract amendment if the total cost of services will not exceed 125% of the original contract amount, or increase the original contract by more than $120,000, whichever amount is lesser. — _ — - -- _ 2 a F -14 2. Department Directors. The Department Director overseeing the contract may sign the contract amendment if that amendment will not cause the total contract amount to exceed $75,000. 3. Amendments in Cases of Possible Work Stoppage or Undesirable Delay. In certain situations, the City Manager and the Department Director in charge of the contract may determine that an amendment is needed that will cause the total contract amount to exceed the City Manager's amendment signing authority, and that the timing is such that a work stoppage or other undesirable consequence will result if approval of the change is delayed until the next City Council meeting. In those situations, the City Manager may approve an amendment that increases the total contract amount up to 150% of the original contract. However, the City Manager will notify all City Council Members individually if this situation develops, and if any individual Council Member objects to the increase, a special meeting of the City Council will be called to address the issue. 4. Amendments Necessary to Address Emergency Situations In event of emergency work that requires an amendment to an existing contract, the emergency contracting policy outlined below may be followed. IV. TYPES OF SERVICES CONTRACTS AND HOW TO AWARD THEM It is recognized that by their nature, service contracts cannot always be awarded as a result of a competitive bid process. However, competitive proposals should be obtained whenever possible before resorting to negotiated awards. A. Professional Services Consultant Selection Professional consultant services differ from other services in that they are of a professional nature, and due to the ethical codes of some of the professions involved, as well as the nature of the services provided, do not readily fall within the competitive bidding process. Professional consultants should be individually selected through a qualifications -based selection process for a specific project or service on the basis of demonstrated competence and qualifications for the types of services to be performed and with the objective of selecting the most qualified consultant at a fair, reasonable and verifiably appropriate cost. The procedures for achieving this goal shall be adopted and applied by the City Manager in the Administrative Procedures Manual. This policy shall include, but not be limited to, services in the following fields: • Engineering (civil, mechanical, electrical, structural, traffic, geotechnical, etc.) Vo F -14 • Building plan review and grading plan review and /or inspection services • Architecture • Landscape Architecture • Construction Project Management Firms • Environmental • Planning • Economic Analysis • Property Appraisals • Land Surveying • Financial Services • Data Processing Services • Legal Services not otherwise authorized in Section A(3) of this Policy B. General Services Agreements General Services Agreements are not strictly professional in nature, but arise where operations, repair and maintenance services, or other services of a non - professional nature, are provided to the City. Agreements that typically fall into this category are for repair and maintenance of roadways, landscape maintenance, repair and maintenance of City faculties, and other such non - professional services. The City shall select general services contractors though a request for proposal process that is implemented in order to determine the most qualified proposer and obtain the most competitive price. Both qualifications and pricing shall be considered when awarding such contracts. C. Capital Improvement Program Contracts for public works shall be awarded consistent with the provisions of Charter Section 1110 and Chapter 15.75 of the Newport Beach Municipal Code as updated and amended from time to time. Under the terms of City Charter Section 1110, contracts for public works that exceed $120,000 in total expenditures must be awarded by the City Council through the conducting of a formal bidding process. At its option, the City °7r i F -14 Council may direct that such contracts be signed by the Mayor, the City Manager or the Public Works Director. D. Independent Instructional and Recreation Contractors Where contractors are paid for services from fees collected for the services provided, Department Directors are authorized to award and sign contracts with independent contractors for instructional, educational, cultural, or recreational purposes where the fees paid by the City are based upon either a percentage of fees collected by City for a program or on a flat rate basis for tasks performed by the contractor. Contracts with such independent contractors may be up to two (2) years in duration. Should fees paid to any contractor exceed $75,000 during the term of the contract, the Department Director shall provide written notice to the City Manager identifying the program, independent contractor and anticipated total fees to be paid. The City Manager shall give written notice to the City Council should fees paid exceed $120,000. E. On -Call and Emergency Contracts for Services Under limited circumstances the use of formal contracting procedures to procure services is not an effective or an efficient use of City resources. The following contracting procedures are authorized for entering into on -call agreements for services as needed and for procuring services in times of emergency. On -Call Agreements. The City Manager and Department Directors are authorized to enter into on -call agreements for obtaining services on an as needed basis, including, but not limited to, professional services and repair and maintenance services, that are needed from time to time where the size of the job does not warrant the expense of entering into individual agreements for each service. On -call agreements must be within the authority of the individual entering into the agreement on behalf of the City and they cannot extend longer than two (2) years. Funds shall be encumbered on a per project basis as opposed to a contract basis. Selection of consultants and contractors for award of on- call agreements shall be consistent with the award procedures for the type of contract being awarded as set out above. Procedures for entering into on -call agreements shall be prescribed by the City Manager in the Administrative Procedure Manual. 2. Emergency Contracts for Services. If a contract for services is necessary under the provisions of Newport Beach Municipal Code Section 2.20.020, the City Emergency Procedures shall be followed. If a contract for services is entered into in times of urgent necessity under the authority of Newport Beach City Charter Section 1110, and the contract amount exceeds the signing authority of the relevant Department Director or City Manager as authorized in this Policy, then that contract shall be brought to the City Council at its next regularly scheduled meeting for review. Z F -14 Whenever possible, the City shall enter into Emergency On -Call Agreements with contractors or consultants who can be relied upon to assist the City in advance of any actual emergency. Emergency On -Call Agreements shall be submitted to Council for approval after being reviewed and approved by the Office of the City Attorney. After the Emergency On -Call Agreement is approved, services provided on an emergency basis under an Emergency On -Call Agreement may be retained by oral commitment of the City Manager (or, in the case of an emergency described by Municipal Code Section 2.20.020, the Director or Assistant Director of Emergency Services), to be memorialized in a Letter Agreement between the parties as soon as possible thereafter. When a written contract has been entered into in order to address an emergency, a copy of the written contract shall be provided to the City Clerk as soon as possible. V. GENERALPROCEDURES A. Contract Retention The City Clerk shall retain all original executed service contracts in accordance with the City's current adopted Records Retention Schedule. Contracts shall be posted into the City's electronic document data base in order to maintain transparency in contracting. B. Insurance All contracts shall be accompanied by proof of the appropriate level of insurance at the time of execution. The insurance level required shall be in accordance with the City's published Schedule of Insurance (or as otherwise approved by the City's Risk Manager. F -14 FUTURE AMENDMENTS TO POLICY Any future changes in the provisions of this Policy shall be made by resolution of the City. Council. Adopted - January 24,1994 Amended - April 13, 2004 Amended by Resolution No. 2006 -35 - May 9, 2006 Amended by Resolution No. 2011 -_ - January 25, 2025 6 L �? F -5 PURCHASING AUTHORITY FOR GOODS AND S ERVIGES MATERIALS PURPOSE Tehe purpose of this policy is set out the City's policy establishing authority for II. DELEGATION OF AUTHORITY TO ENTER INTO CONTRACTS OR PURCHASE REQUSITIONS FOR THE ACQUISITION OF GOODS AND MATERIALS The City Council hereby delegates its authority to contract for the acquisition of the Charter shall be applied to these contracts. Additionally, the City Manager shall 1 �r f f F -5 formalities are followed and the requirements of federal, state, and locals laws, including Council policies, are met: (3) best accounting practices are followed: and (4) the purchasing process of the City is open and transparent and provides accountability ( "Purchasing Procedures "). A. Authority to Enter Contracts or Purchase Requisitions acquisition of goods and materials is designated below. F -5 1. City Manager 2. Department Directors — u4��ua� a�c4, cyy�r J — Februa"ry 26, 2996 — Mach 14, 2000 (Purchasing Procedures Only) ik ,, ember 22, 2005 (Purchasing Procedures Only) 2 as F -5 PURCHASING AUTHORITY FOR GOODS AND MATERIALS PURPOSE The purpose of this policy is set out the City's policy establishing authority for purchasing goods, supplies, materials or equipment. POLICY Contracts or purchase requsitions for the procurement of specific, matenat` ite s are distinct from contracts for services. If the predominant purposeaof xontract;rs or the City to obtain goods, supplies, materials or equipment, this Policy antl,,j P'u`rchasing Procedures, as adopted and enforced by the City Man ger's,.Office, shall1f�e'adhered to. Contracts entered for the purpose of obtaining related see ice, installation, repair or maintenance of goods, supplies, materials or equipment shall'al o 66, entered into in a manner consistent with the Purchasing Procedure •,? f1'n I. GENERAL AUTHORITY TO ENTER INTO CO)TRACTS OR PURCHASE REQUISITIONS FOR THE ACQUISITION OF GOOS AND MATERIALS Provisions of the Charter govern the thods i ".,u "which the City may be bound by contracts. Under the Charter,R,all con tr,�``tin g authority, with the exception of services rendered by a person in the.,e ploy o ity amt a regular salary, rests with the City Council. II. DELEGATION "OF AUTHORITY TO ENTER INTO CONTRACTS OR PURCHASE REQ ONS FOR THE ACQUISITION OF GOODS AND MATERIALS.: The City rq he y delegates its authority to contract for the acquisition of equipment,O „matWials, r supplies to the City Manager and through his or her Departm�e t �3%reor�et out below. All formalities required under the provisions of the harter;�hallbe applied to these contracts. Additionally, the City Manager shall adop nd enta,ce purchasing procedures that ensure all purchases are: (1) entered into at reaso = able, fair and competitive price to the City; (2) ensure all necessary formalitiesaeIlowed and the requirements of federal, state, and locals laws, including Council policies, are met; (3) best accounting practices are followed; and (4) the purchasing process of the City is open and transparent, and provides accountability ( "Purchasing Procedures "). A. Auth ority to Enter Contracts or Purchase Requisitions The authority to enter into original contracts and purchase requisitions for the acquisition of goods and materials is designated below. a� F -5 1. City Manager The City Manager is authorized to award and sign contracts or purchase requisitions for the acquisition of goods and materials without prior Council approval in an amount not in excess of $120,000, provided that funds are available within the approved City budget. This authority shall not be delegated below the Assistant City Manager level. 2. Department Directors Department Directors are authorized to award and sign requisitions for the acquisition of goods and materials with prior approval in an amount not in excess of $75,000 provided that I by the City Council are available within the annual Departmer this authority shall be outlined in the Purchasing Procedures. III. FUTURE AMENDMENTS TO POLICY Any future changes in the provisions of this City Council. F -5 Adopted — January 24, 2994 Corrected — February 26, 299 Amended — March 14, 2000 (_ Amended — November 22ja Amended — January 2580`11 a � IE�gE 1 �4, v m Policy shall be r 6 4. a�Y 16j Only) Tres Only) contracts,a r purchase dF ty Manager, or Council PIN "d unds weVr pproved bua'ggt. Deletion of by resolution of the 2 Resolution No. 2011- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AMENDING COUNCIL POLICY'S F -14 AND F -5 (AUTHORITY TO CONTRACT AND PURCHASE, PURCHASING AUTHORITY FOR GOODS AND MATERIALS) WHEREAS, Section 421 of the City Charter provides that by ordinance or resolution the City Council may authorize the City Manager to bind the City, with or without a written contract, for the acquisition of equipment, materials, supplies, labor, services or other items included within the budget approved by the City Council, and may impose a monetary limit upon such authority. WHEREAS, Section 421 of the City Charter provides that the City Council may designate and direct other officers of the City to bind the City through written contracts. WHEREAS, Section 1106 of the City Charter provides that under the control and direction of the City Manager there shall be established a centralized purchasing system for all City departments and agencies. NOW, THEREFORE, the City Council of the City of Newport Beach hereby resolves as follows: Section 1: Council Policy F -14, Authority to Contract and Purchase, attached hereto is hereby approved and adopted. Section 2: Council Policy F -5, Purchasing Authority for Goods and Materials, attached hereto is hereby approved and adopted. Section 3: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 25th Day of January, 2011. Mayor ATTEST: City Clerk �Z COUNCIL POLICY F -5 & Fl 4 January 25, 2011 Contracting &Purchasing Goals E To obtain the highest possible value in exchange for public funds; E To provide for the fair and equitable treatment of all suppliers and contractors; and E To safeguard the quality and integrity of the purchasing process. *Pertains to Purchase of Goods and Materials *Hasn't been updated since November 22, 2005 Council Policy F -5 Required adherence to the Purchasing Procedures and the Procedures for Processing Payables. [Was silent on purchasing dollar limits.] Defines levels of authority: City Council > $1 20K City Manager > $75K Dept Directors up to $75K Administrative Policies Will identify threshold levels for informal bidding, bidding by departments, and formal bidding by Administrative Services' Purchasing staff. (See attached chart.) Up to $5,000 $5,001 - $10,000 $10,001 - $25,000 $25,001 - $75,000 >$75,001 No competitive Informal Quotes Formal Written Quotes Formal R.F.Q., R.F.P or Formal R.F.Q., R.F.P or quotes required Bid Bid • No quotes 0 Minimum of three Minimum of three • Minimum three Minimum three required price estimates or quotes on quotes. quotes. • Depts should quotes vendor's . R.F.Q. has opening • R.F.Q. has ensure best 0 May be verbal or letterhead or date & time by opening date & pricing by written quote form. requesting division. time by requesting obtaining Submit notes or ' Faxed, e- mailed No negotiation or division. No quotes written estimates or Internet quotes discussion. negotiation or with purchase are acceptable 0 R.F.P. has closing discussion. paperwork and are to be date & time and • R.F.P. has closing attached to the allows for date & time and requisition. negotiation. allows for • Attach approved a Formal legal negotiation. insurance and advertising Formal legal single or sole advertising source letter if • Opening & recording p 9 applicable. by City Clerk • Opening & • Attach approved recording by City insurance and Clerk contract signed by • Award by City the Department Manager if over Director, City $75,000, or by Attorney, and City City Council if Clerk are part of the over $120,000 official contract file (pending Charter (pending Charter Update vote) Update vote) . Staff report, approved insurance and signed contract are part of the official contract file *Pertains to Contracting for Services *Hasn't been updated since May 9, 2006 Council Policy F -14 Defined the delegated authority of City staff. Described contract types. Included detailed administrative procedures. Defines levels of authority: +.i City Council > $1 20K o City Manager < $120K o Dept Directors up to $75K Includes discussion of unique contractual relationship with instructors & recreation contractors. Clarifies on -call agreements. Defines original contract amount which will improve process of amending contracts. Council Policy F -14: Authority to Amend Defines levels of authority based on "original contract amount" ❑ Does not account for phased projects r City Council: Total cost not exceed 125% of original contract o City Manager: Total cost not exceed 125% of original contract L Dept Directors: Original contract <_ $30k then increase up to 125% of original contract Defines levels of authority based on "total contract amount," accounting for phased projects City Council > $1 20k increase City Manager: Total contract as amended cannot exceed $1 20k; or Original Contract awarded by Council, authorized to increase up tot 25% or $1 20k, whichever is less Dept Directors total contract amount <_ $75K Administrative Policies The administrative policies related to F -14 will include: Difference between Request for Proposal (RFP), Request for Qualifications (RFQ), and the bidding process. Requirements in each process for department & for Administrative Services. Links to contract templates prepared by City Attorney. Qualification Based Selection standards. Evaluation process for RFPs. Insurance requirements /verification. Links to Charter limits for public works contracts and makes spending limits consistent with recently approved Charter limits for public works contracts.