HomeMy WebLinkAboutAtt C - Section 1110City of Newport Beach
City Council Minutes Attachment C
July 27, 2010
Council Member Webb felt that public uses should be considered for the site.
Willie Boyd asked Council to consider the construction of a hotel and parking structure
on the site.
Doug Dryer received confirmation that public input would be allowed during
the committee meetings.
Motion by Council Member Webb, seconded by Council Member Gardner to a)
adopt Resolution No. 2010-96 relating to the City Council Ad Hoc Committee on the Re -
Use of the City Hall Site; b) appoint Mayor Curry, Mayor Pro Tem Henn, and Council
Member Rosansky to the Committee; and c) waive provision of Council Policy F-14 to
allow the hiring of Tim Collins as Project Manager for this effort.
The motion carried by the following roll call vote:
Ayes: Council Member Selich, Council Member Rosansky, Mayor Pro Tem Henn, Mayor
Curry, Council Member Webb, Council Member Gardner, Council Member Daigle
S24. GENERAL MUNICIPAL ELECTION - NOVEMBER 2, 2010: ADOPTION OF
RESOLUTION CALLING THE ELECTION FOR THE PURPOSE OF
SUBMITTING A .QUESTION FOR PROPOSED CHARTER AMENDMENTS AND
ORDINANCE REPEALS [391100-20101.
City Attorney Hunt discussed details of the opposition by Construction Industry Force
Account Council (CIFAC) and clarified the proposed language change.
After discussion, it was agreed that the dollar amount threshold would be $120,000.
Motion by Council Member Selich, seconded by Mayor Pro Tem Henn to adopt
Resolution No. 2010-97 calling the election for the purpose of submitting a question for
proposed Charter amendments and ordinance repeals.
The motion carried by the following roll call vote:
Ayes: Council Member Selich, Council Member Rosansky, Mayor Pro Tem Henn, Mayor
Curry, Council Member Webb, Council Member Gardner, Council Member Daigle
XVIII. MOTION FOR RECONSIDERATION - None
XIX. ADJOURNMENT -Adjourned at 9:10 p.m. in memory of Gregory Vance Gushaw.
The agenda for the Regular Meeting was posted on July 21, 2010 at 4:55 p.m. and the
supplemental agenda for the Regular Meeting was posted on July 23, 2010 at 2:45
p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach
Administration Building. / n IL– — n
Volume 59 - Page 54.8
43
Attachment B
CITY OF NEWPORT BEACH
CHARTER UPDATE COMMISSION STAFF REPORT
Agenda Item No. 2
February 16, 2010
FROM: Public Works Department
Stephen G. Badum, Public Works Director
949-644-3311, SBadum@newportbeachca.gov
SUBJECT: CHARTER SECTION 1110 — PUBLIC WORKS CONTRACTS
RECOMMENDATION:
Recommend to the City Council that Charter Section 1110 1) be amended to increase
the contract cost limits requiring formal bidding to $125,000 (Alternative 1); and 2)
include a provision granting City Council the power to regulate all aspects of public
works projects, including the bidding, award and performance of public works contracts,
through ordinance or resolution.
DISCUSSION:
A "white paper" with relevant background information and suggested alternatives for the
Commission's consideration is appended as Attachment "A." Charter Section 1110 is
appended as Attachment "B." Public Contracts Code Section 22032 is appended as
Attachment "C." A summary providing an overview of charter cities who establish
contract award authority by resolution or ordinance is appended as Attachment "D."
Pre ed by:
"Angelaiu,
Management Assistant
Submitted by:
Bien G. Badum,
is Works Director
Attachments: Section 1110 White Paper
Charter Section 1110
Public Contracts Code Section 22032
Charter Cities Summary
EXHIBIT A
45
CONTRACTING AUTHORITY FOR PUBLIC WORKS PROJECTS
Statement of Issue:
Should Charter Section 1110 be amended to increase the threshold requirement of
formal bidding for public works projects over $30,000?
Relevant Background:
Charter Section 1110 currently provides that all public works projects over $30,000 are
required to undergo formal bidding procedures and to be let by Council. The formai
bidding process requires compliance with a number of set procedures, including written
proposals and specific notice requirements. The contract is then awarded to the lowest
responsible bidder. Please refer to Attachment B.
Over the years, the threshold requirement of formal bidding for public works contracts
has been raised to account for inflation and rising construction costs. In 1974, Section
1110 was amended to increase the dollar limit from $5,000 to $12,000. In 1986, the
dollar limit was raised to $30,000. As the last adjustment was made over twenty years
ago, this $30,000 limit contrasts sharply with existing state law and standards adopted
by other charter cities.
California Public Contracts Code Section 22032 provides that public works projects of
$30,000 or less may be performed by negotiated contracts. Public work contracts of
$125,000 or less may be awarded through informal bidding procedures. Public projects
exceeding $125,000 shall be awarded through formal bidding procedures. Please refer
to Attachment C.
A brief review of the public works projects awarded by the City within the past two years
revealed the following'
Fiscal Year 2008: 32 Public Works Projects Awarded
$30,000 or less
$50,000 or less $125,000 or less
Over $125,000
1 project
2 projects 7 projects
22 projects
Fiscal Year 2009: 20 Public Works Projects Awarded
$30,000 or less
$50,000 or less
$125,000 or less
Over $125,000
0 projects
0 projects
6 projects
14 projects
The City has only had one public works project under $30,000 and two projects under
$50,000. Most public works projects were priced between $50,000 and $125,000, or
higher.
Alternatives:
The Commission has the following alternatives identified by staff:
Alternative 1:
Recommend a change to increase the threshold requirement for formal bidding of public
works contracts from $30,000 to $125,000, consistent with the guidelines provided by
state law in Public Contracts Code Section 22032 and standards adopted by other
charter cities. Recommend the inclusion of a provision granting City Council the
authority to adopt ordinances and resolutions as needed, to regulate all aspects of
public works contracts.
By using California Public Contracts Code Section 22032 as a guide, any contracts for
projects valued under $125,000 would be let by City staff on an informal basis. Informal
bidding would still avail these smaller projects the benefits of competitive bidding but the
process would be more timely and cost effective.
While this represents a significant jump in dollar value, it should be noted that the
$30,000 figure was last adjusted over twenty years ago. Consequently, a recalibration
of this figure is long overdue. Furthermore, Charter Section 1110 applies only to
budgeted capital projects which would have already been approved by City Council
during the budget process.
As a mechanism to ensure that the formal bidding threshold limit continues to stay
relevant to current market conditions, Charter Section 1110 could also be amended to
include a provision with the following language:
"The City Council shall have the power to establish standards, procedures, rules or
regulations relating to all aspects of the bidding, award and performance of any public
works contracts, including, but not limited to, compensation paid for performance of
such work."
This provision would grant City Council authority to establish resolutions or ordinances
as needed to oversee the administration of public works contracts. For example, if
market climate necessitates a need to readjust the threshold limit on public works
contracts, Council can establish a new threshold limit based on the Consumer Price
Index or construction indices via a simple resolution.
This approach has already been utilized by a number of cities throughout the state.
Please refer to Attachment D for a sampling of charter cities that have adopted this
approach.
Reducing the administrative burden of formal bidding for lower cost projects will achieve
savings in staff time and City resources. Adoption of this amendment allows the City to
use the same authority that other cities and counties employ to enter into cost-effective
and efficient public works contracts. The benefits of competitive procurement would
remain unchanged.
47
Alternative 2:
Recommend no change to Charter Section 1110. All public works projects over
$30,000 will continue to be subject to formal bidding procedures.
EXHIBIT 6
MO
SECTION 1110. CONTRACTS ON PUBLIC WORKS.
Every project for the construction or improvement of public buildings, works, streets,
drains, sewers, utilities, parks or playgrounds, and every purchase of supplies or
materials for any such project, when the total expenditures required for the project
exceed Thirty Thousand Dollars ($30,000), or such lesser amount as may be
established by ordinance, shall be let by the City Council by contract to the lowest
responsible bidder after notice by publication in the official newspaper by one or more
insertions, the first of which shall be at least ten days before the time for opening bids.
Projects for the maintenance or repair of such facilities are excepted from the
requirements of this paragraph if the City Council determines that such work can be
performed more economically by a City department than by contracting for the doing of
such work.
All bids shall be accompanied by either a certified or cashier's check, or a bidder's
bond executed by a corporate surety authorized to engage in such business in
California, made payable to the City. Such security shall be in an amount not less than
that specified in the notice inviting bids or in the specifications referred to therein, or if
no amount be so specified then in an amount not less than ten percent (10%) of the
aggregate amount of the bid. If the successful bidder neglects or refuses to enter into
the contract, within the time specified in the notice inviting bids or in the specifications
referred to therein, the amount of his or her bidder's security shall be declared forfeited
to the City and shall be collected and paid into its general fund, and all bonds so
forfeited shall be prosecuted and the amount thereof collected and paid into such fund.
The City Council may reject any and all bids presented and may readvertise in its
discretion.
The City Council, without advertising for bids, or after rejecting bids, or if no bids were
received, may declare and determine that, in its opinion, based on estimates approved
by the City Manager, the work in question may be performed better and more
economically by the City with its own employees or the supplies or materials may be
purchased more economically on the open market, and after the adoption of a
resolution to this effect by at least five affirmative votes of the Council may proceed to
have said work done or said supplies or materials purchased in the manner stated,
without further observance of the provisions of this Section. Such contracts likewise
may be let without advertising for bids, if such work or supplies or materials shall be
deemed by the City Council to be of urgent necessity for the preservation of life, health
or property, and shall be authorized by resolution passed by at least five affirmative
votes of the Council and containing a declaration of the facts constituting such urgency.
(As amended by amendments effective April 28, 1966, June 6, 1974, and November 4,
1986)
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EXHIBIT C
51
CALIFORNIA CODES
PUBLIC CONTRACT CODE
SECTION 22032
22032. (a) Public projects of thirty thousand dollars ($30,000) or
less may be performed by the employees of a public agency by force
account, by negotiated contract, or by purchase order.
(b) Public projects of one hundred twenty-five thousand dollars
($125,000) or less may be let to contract by informal procedures as
set forth in this article.
(c) Public projects of more than one hundred twenty-five thousand
dollars ($125,000) shall, except as otherwise provided in this
article, be let to contract by formal bidding procedure.
52
EXHIBIT D
53
CONTRACTS ON PUBLIC WORKS
$ LIMIT SET BY CHARTER
City
County
$ Limit
Newport Beach
Orange
$30,000
Placentia
Orange
$25,000
Huntington Beach
Orange
$25,000
$ LIMIT SET BY ORDINANCE OR RESOLUTION
City County Charter Language Ordinance Limit
Rancho Mirage Riverside City shall have the power to Use of PCC§22032 Guidelines.
establish standards, procedures, $125,000 or less, City Manager
rules or regulations to regulate all approval.
aspects of the bidding, award and
Carlsbad
San Diego
performance of any public works
contracts, including, but not limited
to, the compensation rates to be
paid for the performance of such
work.
The City Council shali have ehe
power to establish standards,
procedures, rules or regulations
relating to all aspects of the award
and performance of contracts,
including contracts for the
construction of public
improvements, including, but not
limited to, compensation paid for
performance of such work.
Use of PCC§22032 Guitl&ines.
$125,000 or less, City Manager
approval. City Manager may
delegate awarding authority by
memorandum or by
administrative order.
Page 1 of 3 54
Anaheim
Pomona
Redwood City
Irvine
Orange Every contract involving an
expenditure in excess of an amount
as specified in
Division 2, Part 3, Chapter 1, Article
4 of the Public Contracts
Code of California shall be let to
the lowest responsible bidder after
notice by publication in the
official newspaper by two or more
insertions, the first of which
shall be at least ten days before the
time for opening bids.
Los Angeles city shall not be bound by any
contracts unless made in writing
and authorized by the Council. The
Council shall adopt all necessary
requirements to implement this
San Mateo Ail contracts entered into by the
city shall be signed by the city
manager and any other officer or
officers of the city as the council
may by ordinance provide.
Use of PCC§22032 Guidelines.
$125,000 or less, City Manager
approval.
$125,000 or less, City Manager
approval.
$100,000 or less, City Manager
approval.
Orange Except as otherwise provided by
Via Resolution. Up to $100,000,
law, the Purchasing Agent will
Dept. Director approval.
contract for the purchase of all
$100,000 - $1mil, City Manager
supplies, equipment, and services in
approval. $1mil +City Council
a manner that is consistent with
approval.
sound professional practices and
which allows for open competition;
provided that the Purchasing Agent
will only purchase items that have
been specifically identified as not
requiring further approval,
including but not limited to City
Council or City Manager approval,
without first obtaining such
approval.
Page 2 of 3
'M
San Mateo
San Mateo The City Manager or an officer
authorized by City Manager shall
purchase or contract for... public
works required by the city'rn the
manner prescribed by ordinance
San Marcos San Diego
Buena Park
Santa Ana
La Quinta
Orange
Orange
Riverside
The City shall have the powerto
establish standards, procedures,
rules or regulations to regulate all
aspects of the bidding, award and
performance of any public works
contract, including, but not limited
to, the compensation rates to be
paid for the performance of such
work.
Charter not posted.
The City Council shall adopt by
ordinance rules and procedures for
competitive bidding for all public
works contracts, which rules and
procedures shall establish limits for
public works contracts approved by
the City Manager.
The City shall have the power to
establish standards, procedures,
rules or regulations to regulate all
aspects of the bidding, award and
performance of any public works
contract, including, but not limited
to, the compensation rates to be
paid for the performance of such
work.
Less than $100,000 City
Manager may award or
delegate authority to dept head
at designated dollar levels. *PW
Director has awarding authority
for contracts up to $4 million
for projects funded with
Federal Economic Stimulus Pian
funds.
$100,000 or less, City Manager
approval.
Award of public projects of a
value less than established by
city council resolution. Per/TC
with PW director. Under
$30,000 City Manager approval,
$25,000 or less, City Manager
approval
The city council may, by
resolution, prescribe specific
procedures and rules governing
the solicitation of bids and
award of contracts for public
works projects. (Ord. 315 § 4
(part), 1998)
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