HomeMy WebLinkAbout2018-43 - Amending City Council Policy F-14, Authority to ContractRESOLUTION NO. 2018-43
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH, CALIFORNIA, AMENDING CITY
COUNCIL POLICY F-14, AUTHORITY TO CONTRACT
WHEREAS, the City of Newport Beach ("City") adopted City Council Policy F-14,
"Authority to Contract" on January 24, 1994, to establish guidelines and parameters for
the authority to enter into City contracts;
WHEREAS, the City has amended City Council Policy F-14 five times since its
adoption to allow for improvements and consolidation with other policies;
WHEREAS, all procurements involving the use of funds from federal awards,
either directly or received from a pass-through agency such as the State of California,
must comply with the procedures of Title 2 of the Code of Federal Regulations, 200.318
through 200.326, as prescribed by the Federal Office of Management and Budget
("OMB");
WHEREAS, City staff recommends adding Section IV(D) "Procurements and
Contracts Involving Federal or Pass -Through Funding" to City Council Policy F-14 to
ensure compliance with OMB requirements;
WHEREAS, the City's Finance Committee reviewed the proposed revisions to City
Council Policy F-14 to ensure they are consistent with the City's current planning goals
and objectives, and federal law; and
WHEREAS, the City Manager reviewed the recommended revisions suggested by
the Director of Finance/Treasurer and the City's Finance Committee and recommends
the City Council amend City Council Policy F-14 as attached hereto.
NOW, THEREFORE, the City Council of the City of Newport Beach does hereby
resolve as follows:
Section 1: City Council Policy F-14, "Authority to Contract," attached hereto as
Exhibit "A" and incorporated herein by reference is hereby approved and adopted. All
prior versions of City Council Policy F-14 are rescinded.
Section 2: This amendment will align the City's procurement policy with federal
law and be consistent with the City's current financial planning goals and objectives.
Section 3: The recitals provided above are true and correct and incorporated into
the operative part of this resolution.
Section 4: If any section, subsection, sentence, clause or phrase of this resolution
is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the
validity or constitutionality of the remaining portions of this resolution. The City Council
hereby declares that it would have passed this resolution, and each section, subsection,
sentence, clause or phrase hereof, irrespective of the fact that any one or more sections,
subsections, sentences, clauses or phrases be declared invalid or unconstitutional.
Resolution No. 2018-43
Page 2 of 2
Section 5: The City Council finds the adoption of this resolution is not subject to
the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the
activity will not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it
has no potential for resulting in physical change to the environment, directly or indirectly.
Section 6: This resolution and the amended City Council Policy F-14 shall take
effect immediately upon its adoption by the City Council, and the City Clerk shall certify
the vote adopting this resolution.
ADOPTED this 261i day of June, 2018.
ATTEST:
BrownLeilani 1.
City Clerk
APPROVED AS TO FORM:
CITY NEY'S OFFICE
JJ(;r)
Aaron C. Harp
City Attorney
Marshall "DufflorOuffield
Mayor
Attachment: Exhibit A—Amended City Council Policy F-14
F-14
AUTHORITY TO CONTRACT
I. PURPOSE AND LIMITATION
The purpose of this policy is to set out the City's policy establishing authority for City
contracts. This policy applies to all contracts, whether entered into through standard,
emergency, or other procedures, including, but not limited to, professional services,
purchase requisitions, acquisition of goods, supplies, equipment, and materials,
settlements, right of entry agreements, cost sharing agreements, joint defense
agreements, cooperative agreements, reimbursement agreements, grant agreements,
audit services, legal and investigative services, independent instructional and recreation
services, former employee services, on-call and emergency services, temporary labor
services, training services, public works projects, and public property maintenance,
installation, custodial, and repair services.
II. GENERAL AUTHORITY TO ENTER INTO CONTRACTS
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 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.
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A. Authority to Enter into Contracts
The authority to enter into original contracts is delegated as set out below.
1. The City Manager.
The City Manager is authorized to award and sign all contracts, without prior Council
approval, in an amount not in excess of $120,000 provided funding for the contract was
approved by the City Council as part of the annual Department budget, authorized
budget amendment, City Council action or is available in an applicant deposit account.
With the exception of grants and donations, which are covered in City Council Policies
F-3, F-25 and B-17, the City Manager is authorized to sign all contracts without prior
Council approval where the City is receiving or expending an amount not in excess of
$120,000. This authority shall not be delegated below the Assistant City Manager level.
2. Department Directors.
Contracts for Services
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, authorized budget amendment, City Council action, or are available
in an applicant deposit account. This authority may not be delegated below the
Department Director level.
Contracts or Purchase Requisitions for the Acquisition of Goods and Materials
Department Directors, including the City Clerk and the City Attorney, are authorized to
award and sign contracts or purchase requisitions for the acquisition of goods and
materials, with prior City Manager or Council approval, in an amount not in excess of
$75,000 provided that the funds were approved by the City Council as part of the annual
Department budget, authorized budget amendment, City Council action or are available
in a deposit account.
3. City Attorney.
The City Attorney is authorized to award and sign contracts for all services for outside
counsel, investigators, 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, investigators, and experts necessary to address other pending or potential legal
claims or legal issues so long as funds for outside counsel, investigators, 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.
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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 or material 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.
1. City Manager.
The City Manager may sign and award a contract amendment on a contract approved by
the Council if the total cost will not exceed 125% of the original contract amount, or
increase the original contract by more than $120,000, whichever amount is less.
Otherwise the City Manager may sign and award a contract amendment, including but
not limited to, amendments to extend the term of a contract, so long as the total contract
amount as amended does not exceed $120,000.
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.
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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.)
• 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
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F-14
• Legal Services not otherwise authorized in Section A(3) of this Policy
• Training and Temporary Labor Services
B. General Services Contracts
General Services Contracts are not strictly professional in nature, but arise where
operations, repair, installation, and maintenance services, or other services of a non-
professional nature, are provided to the City. Contracts that typically fall into this
category are for repair and maintenance of roadways, landscape maintenance, repair and
maintenance of City facilities, and other such non-professional services.
Some General Service Contracts may be considered "public works' under the Charter
and, if so, the work covered by the General Service Contract shall be awarded in
accordance with the laws governing the award of "public works' contracts. If not
considered a "public work" under the Charter, the City shall select general services
contractors though a Request for Proposal or a Request for Bid process, whichever serves
the City's greater benefit, based on each contract or procurement. Contracts through a
Request for Bid process shall be awarded based solely on pricing and minimum
qualifications to determine the most responsive and responsible bidder. Contracts
through a Request for Proposal process shall be awarded based on qualifications and
pricing in order to determine the best value to the City.
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
Council may direct that such contracts be signed by the Mayor, the City Manager or the
Public Works Director.
D. Procurements and Contracts Involving Federal or Pass -Through Funding
Procurements expending funds from federal grants or awards received directly by the
City or from a pass-through agency such as the State of California, must comply with the
provisions of Title 2 of the Code of Federal Regulations ("CFR") §200.318 through
§200.326. To ensure the City's adherence to the Federal guidelines related to these
procurements and contracts, the City Manager has adopted procurement procedures for
such projects in the Administrative Procedures Manual.
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E. 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.
F. On -Call or 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.
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 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 the initial term cannot
exceed three (3) years. The City Manager is authorized to extend the term of an on-call
agreement for up to six (6) months if work has been authorized or encumbered during
the initial term but not yet completed. 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.
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Whenever possible, the City shall enter 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.
G. Contracts with Former City Employees
When not more than five (5) years has passed since a person who is a former City
employee has left service with the City:
1. All professional services contracts with former City employees or
temporary employment contracts with retiring or former City employees
shall require approval of the City Council; and
2. City Council approval shall also be required for professional services
contracts with a corporation or other business entity owned or operated by
a former City employee or that employs a former City employee
V. GENERAL PROCEDURES
A. Contract Retention
The City Clerk shall retain all original executed 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 Contract Templates (or as otherwise approved by the City's Risk Management
Division).
C. Reporting
At least once annually, the City Manager shall report to the Council the summary of all
contracts entered into by the City Manager and Department Directors. The summary
shall include the vendor, the department responsible that will oversee the contract, the
purpose of the contract, and the contract amount.
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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 - May 9, 2006
Amended - January 25, 2011
Amended - May 12, 2015
Amended - February 23, 2016 (F-5 & F-20 were consolidated with F-14)
E:l
STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss.
CITY OF NEWPORT BEACH }
I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the
whole number of members of the City Council is seven, the foregoing resolution, being Resolution
No. 2018-43 was duly introduced before and adopted by the City Council of said City at a regular meeting
of said Council held on the 261h day of June, 2018; and the same was so passed and adopted by the
following vote, to wit:
AYES: Council Member Herdman, Council Member Kevin Muldoon, Council Member Diane
Dixon, Council Member Scott Peotter, Council Member Brad Avery, Mayor Pro Tem Will
O'Neill, Mayor Duffy Duffield
NAYS: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of
said City this 271h day of June, 2018.
Leilani I. BYown
City Clerk
Newport Beach, California