HomeMy WebLinkAbout04 - Approval of Revised City Council Policy F-14Q SEW Pp�T
CITY OF
z NEWPORT BEACH
c�<,FORN'P City Council Staff Report
December 13, 2022
Agenda Item No. 4
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Michael Gomez, Deputy Finance Director — 949-644-3124,
mgomez@newportbeachca.gov
PREPARED BY: Sander Huang, Purchasing and Contracts Administrator,
shuang@newportbeachca.gov
PHONE: 949-644-3080
TITLE: Resolution No. 2022-93: Approval of Revised City Council Policy F-14
ABSTRACT:
The Finance Committee recently completed its review of Council Policy F-14 and
recommends changes to update and improve the language, elaborate or define current
policy statements, and ensure consistency between policies, as shown in the revised
redline policy included as Attachment B.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Adopt Resolution No. 2022-93, A Resolution of the City Council of the City of Newport
Beach, California, Adopting a Revised City Council Policies F-14 "Authority to
Contract. "
DISCUSSION:
The Finance Committee is charged with a variety of tasks including, but not limited to,
reviewing and monitoring events and issues that may affect the financial status of the City
of Newport Beach (City) and making recommendations to the City Council regarding
amendments to financial and budgetary policies. The Finance Department recently
conducted a review of Council Policy F-14 as a result of recommendations from a
procurement operational review completed by an internal auditor. Under the guidance of
the City Attorney's Office, language throughout Council Policy F-14 was updated, clarified
and improved. The proposed revisions were reviewed by the Finance Committee at its
November 10, 2022 meeting, and the Finance Committee recommends changes as
shown in the revised redline policy in Attachment B and described below.
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Resolution No. 2022-93: Approval of Revised City Council Policy F-14
December 13, 2022
Page 2
F-14 Authority to Contract
The purpose of this policy is to establish the requirements for contract procurement and
delegation authority to enter into and execute contracts. Contracts include all agreements,
purchase requisitions, and purchase orders. "Entering into a contract" or "executing a
contract" is the formal approval of the contract, and both apply regardless of whether the
City is expending funds or receiving funds. Changes to Council Policy F-14 include the
following:
1. Under the guidance of the City Attorney's Office, the first three sections were
simplified and minor changes to update language were applied throughout.
2. The definition of contracts is expanded to include expensing and receiving funds
and specific services previously mentioned are grouped under the general
classification of service.
3. In Background, language originating from Charter Section 421 was modified to
provide clarity.
4. In Authority to Amend Contracts, language was added to include the maximum
contract terms according to the policy. This relates specifically to instruction,
recreation and on -call contracts, which shall not exceed five years in duration.
5. Definitions and examples throughout Council Policy F-14 were moved to
Administrative Procedures.
6. In Special Requirements, language is added to provide clarity between on -call and
fixed/defined maintenance and repair service contracts; include the use of
cooperative agreements; and describe procedures for special services and non-
standard products.
FISCAL IMPACT:
There is no direct fiscal impact related to this item.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action 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.
4-2
Resolution No. 2022-93: Approval of Revised City Council Policy F-14
December 13, 2022
Page 3
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Resolution No. 2022-93, including City Council Policy F-14
Attachment B — City Council Policy F-14 (redlined)
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Attachment A
Resolution No. 2022-93, including City Council Policy F-14
RESOLUTION NO. 2022- 93
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, ADOPTING A
REVISED 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 Finance Director/Treasurer and the Finance Committee recently
completed their review of Council Policy F-14 and recommend changes to promote
efficiencies, update language, and ensure smooth administrative operations; and
WHEREAS, the City Manager has reviewed the recommended revisions, and
recommends the City Council adopt the revised Council Policy F-14 as set forth in Exhibit
A.
NOW THEREFORE, the City Council of the City of Newport Beach does hereby
resolve as follows:
Section 1: The City Council hereby approves the aforementioned
recommendations and adopts the revised Council Policy F-14 set forth in Exhibit A, which
is incorporated herein by this reference.
Section 2: All prior versions of Council Policy F-14 that conflict with the revisions
adopted by this resolution are hereby repealed.
Section 3: The recitals provided above are true and correct and incorporated
into the operative part of this resolution.
Section 4: 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, Division 6, Chapter 3,
because it has no potential for resulting in physical change to the environment, directly or
indirectly.
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Resolution No. 2022-
Page 2 of 2
Section 5: This resolution shall take effect immediately upon its adoption by the
City Council, and the City Clerk shall certify the vote adoption the resolution.
ADOPTED this 13th day of December, 2022.
Kevin Muldoon
Mayor
ATTEST:
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
•v. �- cr-
Aaron C. Harp
City Attorney
Attachment: Exhibit A — Council Policy F-14
CONTRACT PROCUREMENT AND AUTHORITY TO CONTRACT
Purpose
F-14
This policy sets forth requirements for contract procurement and City Council's
delegation of authority for entering into contracts. "Entering into a contract" or
"executing a contract" is synonymous with the awarding and signing of a contract and
means the formal approval of the contract terms and intent to be bound thereby.
"Contracts" includes all agreements, purchase orders, and purchase requisitions,
which is applicable regardless of whether the City is expending or receiving funds. The
types of contracts covered by this policy include, but are not limited to, settlements,
right of entry agreements, cost sharing agreements, joint defense agreements,
cooperative agreements, reimbursement agreements, grant agreements, professional
services agreements, former employee services agreements , independent instruction
and recreation contracts, public works contracts, and "as -needed" or "on -call" services
agreements.
Background
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 or employee designated by the
City Council; signed on behalf of the City by (i) the Mayor or by such other employees
designated by the City Council, (ii) the City Clerk, and (iii) the City Attorney (Charter
§ 421). The City Attorney shall approve the form of all contracts made by the City and
amendments thereto and all bonds given to the City, endorsing his or her approval
thereon in writing (Charter g 602(e)).
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 the Assistant City Manager, Department Directors, and to the
City Attorney as set out below. The City Manager has final authority to approve any
contract within the City Manager's approval limit.
All formalities required under the provisions of the Charter shall be applied to these
contracts.
The City Manager may make exceptions to the City's standard contract terms,
including but not limited to, insurance and indemnification requirements, based on
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operational considerations and weighing the particular risks involved. When deciding
whether to modify standard contract terms, the City Manager shall consult with the
City Attorney, Risk Manager, and Department Directors, as necessary. This authority
shall not be delegated below the Assistant City Manager level.
Contracts may not be written to circumvent any of the authority limits described herein.
The City Manager shall, in consultation with the City Attorney, adopt and enforce
administrative procedures that ensure: (1) all contracts are 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 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 execute all contracts without prior
Council approval, in an amount that shall not exceed $120,000. For
contracts involving expenditure of funds, the services and the funds must
have been approved by the City Council as part of the annual approved
budget. Execution of contracts for grants and donations shall be in
accordance with City Council Policies F-3, F-25 and B-17. This authority
shall not be delegated below the Assistant City Manager level.
2. Department Directors
Department Directors, including the City Attorney and City Clerk, are
authorized to execute contracts without prior City Manager or Council
approval in an amount not in excess of $75,000. For contracts involving
expenditure of funds, the services and funds must have been approved
by the City Council or City Manager as part of the annual approved
budget. This authority may not be delegated below the Assistant or
Deputy Director level. The City Manager has authority to approve
requests for budget increases without City Council approval at the level
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F-14
set forth in Policy F-3, Section E-1("Administration of the Annual Budget,
New Appropriations").
3. City Attorney
The City Attorney is authorized to execute 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.
4. Human Resources Director
The Human Resources Director shall have authority to enter into
contracts to resolve claims, litigation and other legal disputes where the
City is receiving or expending an amount not in excess of $75,000. This
authority may not be delegated below the Department Deputy Director
or Risk Manager level.
B. Authority to Amend Contracts
If circumstances arise that were 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, Department Directors, City Clerk and City
Attorney are authorized to amend contracts as set out below. For purposes of
this policy, "total contract amount" is defined as the total consideration paid
over the term of the agreement, including any previous amendments to the
contract. "Original contract amount" is defined as either the amount of
compensation agreed upon when the contract was first entered into or the
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F-14
amount of compensation most recently approved by the City Council by
amendment, whichever is greater.
1. City Manager
Contracts zvithin the City Manager's Contracting Authority
The City Manager may execute any 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 and the term
extension does not exceed the maximum allowable contract term.
Contracts approved by City Council
The City Manager may execute any contract amendment, including but
not limited to amendments to extend the term of a contract, so long as the
total contract amount does not exceed 125 percent of the original contract
amount or the original contract amount plus an additional $120,000,
whichever amount is less, and the term extension does not exceed the
maximum allowable contract term.
2. Department Directors
The Department Director, including the City Clerk and City Attorney,
who entered into the contract or whose department is designated as the
contract administrator, may execute any 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 $75,000 and the
term extension does not exceed the maximum allowable contract term.
3. Amendments in Cases of Possible Work Stoppage or Undesirable Delay
The City Manager is authorized to execute a contract amendment that
increases the total contract amount up to 150 percent of the original
contract amount in cases where a work stoppage or other undesirable
consequence will result if approval of the amendment is delayed until the
next City Council meeting. Within twenty-four (24) hours, the City
Manager shall notify the City Council Members of any such amendment.
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F-14
4. Amendments Necessary to Address Emergency Situations
In the event of emergency work requiring an amendment to an existing
contract, the emergency contracting policy outlined below may be
followed.
Special Requirements
Competitive proposals should be obtained for service contracts whenever possible
before resorting to negotiated awards.
A. Professional Services Contracts
Services of a professional nature shall be obtained through a qualifications -
based selection process based on 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.
B. Services Contracts (Non -Professional)
The City shall select services contractors though a Request for Proposal (RFP) or
a Request for Bid (RFB) process, whichever serves the City's best interest.
Contracts through the RFB process shall be awarded based solely on pricing and
minimum qualifications to determine the most responsive and responsible
bidder. Contracts through the RFP process shall be awarded based on both
qualifications and pricing to determine the best value to the City.
C. Maintenance and Repair Service Contracts
A service contract for maintenance or repair work that is fixed or of a definite
nature (not on -call) and over the formal bid dollar amount in Charter Section
1110 must be requisitioned as a formal public works contract. For contracts not
exceeding the formal bid dollar amount, the City may select services contractors
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though the RFP or RFB process, whichever serves the City's best interest based
on the service to be provided.
D. Public Works Contracts
Contracts for public works where the total expenditures for the project exceed
the formal bid dollar amount shall be awarded consistent with the provisions of
Charter Section 1110 and relevant provisions of the California Public Contract
Code.
E. 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")
Sections 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.
F. Independent Instruction and Recreation Contractors
Department Directors are authorized to execute contracts with independent
contractors for instructional, educational, cultural, or recreational purposes
("Instruction and Recreation contracts") 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.
Instruction and Recreation contracts shall not exceed five (5) years in duration
and shall include a termination clause granting the City the right, at its sole
discretion and with or without cause, to terminate the contract at any time by
giving seven (7) calendar days' prior written notice.
Should fees paid under an Instruction and Recreation contract exceed $75,000
during the term of the contract, the Department Director shall provide written
notice to the City Manager identifying the program and independent contractor.
The City Manager shall give written notice to the City Council should fees paid
exceed $120,000.
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F-14
G. On -Call Contracts for Services (Professional or Non -Professional)
The City Manager and Department Directors are authorized to enter into on -call
("as -needed") agreements for obtaining services, including but not limited to
professional services and maintenance and repair services, where the need for
services is contingent, does not have a set timeframe, or where the size of the job
does not warrant the expense of entering into individual agreements for each
service.
On -call services contracts shall not exceed five (5) years and shall include a
termination clause granting the City the right, at its sole discretion and with or
without cause, to terminate the contract at any time by giving prior written
notice of seven (7) calendar days. The City Manager is authorized to extend an
on -call services contract for up to six (6) months if work has been authorized or
encumbered during the initial term but not completed.
City Council approval is required for: (1) an on -call contract that exceeds
$120,000, and (2) on -call contracts to multiple contractors stemming from a
single procurement where the combined amount of the contracts exceeds
$120,000.
On -call contracts may not be used to perform maintenance or repair work in
contravention of Charter Section 1110. For example, a project, task, job, or work
order in an amount in excess of the formal bid dollar amount in Charter Section
1110 cannot be performed under an on -call maintenance or repair services
contract but must be requisitioned as a public works project.
H. Emergencies
Services contracts obtained for purposes of responding to an emergency (as
defined in Newport Beach Municipal Code Section 2.20.020) that exceed the
signing authority of the City Manager or Department Director as authorized in
this policy shall be brought to the City Council at its next regularly scheduled
meeting for review and authorization.
I. Contracts with Former Council Members and City Employees
City Council approval is required for the following when not more than five (5)
years have passed since a person who is a former Council Member or City
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F-14
employee has left service with the City:
1. All professional services contracts with former Council Member or City
employees;
2. All professional services contracts with a corporation or other business
entity owned or operated by a former Council Member or City employee
or that employs a former Council Member or City employee.
J. Exceptions to Competitive Procurement Requirements
Certain commodities and service types are unique or otherwise not amenable to
traditional procurement and bidding procedures. The City Manager shall
prescribe in the Administrative Procedures Manual alternative procedures and
methods for the procurement of such items, e.g. cooperative agreements and
piggyback agreements, and ensure that the pricing involved in the
procurements is competitive to the greatest extent possible.
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 database in order to maintain transparency
in contracting.
E. 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
Manager or Risk Manager).
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
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F-14
that will oversee the contract, the purpose of the contract, and the contract
amount.
Future Amendments to Policy
Any future changes in the provisions of this policy shall be made by resolution of the
City Council.
History
Adopted F-14 - 09-22-1969 (Purchase Authority for Goods & Materials)
Reaffirmed F-14 - 03-09-1970
Reaffirmed F-14 - 02-14-1972
Amended F-14 - 11-11-1974
Amended F-14 - 11-24-1975
Amended F-14-12-08-1975
Amended F-14 - 11-24-1986
Amended F-14 - 05-26-1987
Adopted F-14 - 01-24-1994 (new F-14) (Authority for Contracts)
Amended F-14 - 01-24-1994 (old F-14) (changed to F-5)
Amended F-5 - 02-26-1996
Amended J-1-11-10-1997 (Contracts with Former Employees)
Amended J-1 - 03-09-1998
Amended J-1 - 03-22-1999 (changed to F-20)
Amended F-5 - 03-14-2000
Amended F-20 - 04-08-2003
Amended F-14 - 04-13-2004
Amended F-5-11-22-2005
Amended F-14 - 05-09-2006
Amended F-14 & F-5 - 01-25-2011
Amended F-14 - 05-12-2015
Amended F-14 - 02-23-2016 (incorporating F-5 & F-20 and renaming "Authority to
Contract")
Amended F-14 - 06-26-2018
Amended F-14 - 02-12-2019
Amended F-14 - 12-13-2022
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Attachment B
City Council Policy F-14 (Redlined)
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F-14
CONTRACT PROCUREMENT AND AUTHORITY TO CONTRACT
Purpose ,,,,.a Lififitatieff
The purpose of this pehey is to set out the I
contracts, This policy sets forth requirements for contract procurement and City
Council's delegation of authority for entering into contracts. "Entering into a contract"
or "executing a contract" is synonymous with the awardingand nd signing of a contract
and means the formal approval of the contract terms and intent to be bound thereby.
"Contracts" includes all agreements, purchase orders, and purchase requisitions,
which is applicable regardless of whether the City is expending or receiving
fun ds.-rr - -- all rat=� --- entered - through a- o- --✓ ,
ether procedures, including, but meted to, rofessienal services, purchase
materials, The types of
contracts covered by this policy include, but are not limited to, settlements, right of
entry agreements, cost sharing agreements, joint defense agreements, cooperative
agreements, reimbursement agreements, grant agreements, professional services
agreements, audit see- ,iees legal and investigative services, independent iRStF,,,,t_ ra
and r ..tio s former employee services agreements, OR _all and er-gen y
sefiees, temporary label: ser-viees, independent instruction and
recreation contracts, public works pi:ejecAscontracts, and "as -needed" or "on -call"
services agreementspublie property maintenanee, ' ,
Back round
- - - -=--- - of the ha- =- govern the methods --- - --a-which the Citymaybe bound
by contracts. The r,i,.,, ter- 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 or employee designated by the City Council; assigned on behalf of the City
by Cihthe Mayor and City r''_or by such other OffiEei: ofieeri employees a&-,ha44
be -designated by the City Council, ii the City Clerk, and (iii) the City Attorney
(Charter § 421). The City Attorney shall approve the form of all contracts made by the
Ci and e -amendments thereto and all bonds given to the City, endorsing his or her
approval thereon in writing (Charter-§ 602(e)).
The City Manager- has final to
the City I
authority appEove any
limit to the
eontr-aet within
City's terms,
and make exeeptions
app-roval
star ar-E ntr- et
ineluding but limited to, insur-anee indemnifieation
based
not and
requirements, on
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F-14
11
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 the Assistant City Manager, Department Directors, and to the
City Attorney as set out below. The Ci , Manager has final authority to approve any
contract within the City Manager's approval limit.
All formalities required under the provisions of the Charter shall be applied to these
contracts.
The City Manager may make exceptions to the City's standard contract terms,
including but not limited to, insurance and indemnification requirements, based on
operational considerations and weighing the particular risks involved. When deciding
whether to modify standard contract terms, the City Manager shall consult with the
City Attorney, Risk Manager, and Department Directors, as necessary. This authority
shall not be delegated below the Assistant City Manager level.
Contracts may not be written to circumvent any of the authority limits described herein.
As stieh, the City Attorney shall review, approve and sign all sueh ---------- ---------_----
pfier to eontraet awafd and exeeotion and the City Clerk shall sign all sueh eentfaets
attesting to their- being entefed into by the City. Additiona4 The City Manager shall,
in consultation with the City Attorney, adopt and enforce administrative procedures
that —censure: 1 all contracts are: {Wentered 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)
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best accounting practices are followed; and (4) the contracting process of the City is
open and transparent, and provides accountability.
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 an s;g„ execute all contracts
goods, materials X .X xent-,-without prior Council approval, in an
amount not in excess of that shall not exceed $120,000J For contracts
involving expenditure of funds, provided the services and the funds
funding for- the coast, actmust have been was approved by the City Council
as part of the annual approved budget. With the exception of Execution of
contracts for grants and donations which are eover^a it shall be in
accordance with City Council Policies F-3, F-25 and B-17,-4he-424ty
$120,000: This authority shall not be delegated below the Assistant City
Manager level.
2. Department Directors,
Department Directors, including the City Attorney and City Clerk, are
authorized to execute contracts and agreements for
__S OF f)tfr-Ehase requisitions for- the acquisition of goods, materials
without prior City Manager or Council approval; in an
amount not in excess of $75,000g For contracts involving
expenditure of funds, the services and funds must have been were
approved by the City Council or City Manager as part of the annual
approved budget. This authority may not be delegated below the
Assistant or Deputy Director level. The City Manager has authority to
approve requests for budget increases without City Council approval at
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the level set forth in Policy F-3, Section E-1 ("Budget Adoption and
Administration').
3. City Attorney
The City Attorney is authorized to execute 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.
4. Human Resources Director,
The Human Resources Director shall have authority to enter into
contracts to resolve claims, litigation and other legal disputes where the
City is receiving or expending an amount not in excess of $75,000. This
authority may not be delegated below the Department Deputy Director
or Risk Manager level.
B. Authority to Amend Contracts
If circumstances arise that were snot 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, Department Directors, City Clerk and
City Attorney are authorized to amend contracts as set out below. For purposes
of this policy, "total contract amount" is 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 is defined as
either the amount of compensation agreed upon when the contract was first
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entered into or the amount of compensation most recently approved by the City
Council by amendment, whichever is greater.
1. City Manager
Contracts within the City Manager's Contracting Authority
The City Manager may sign and ai execute any 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
and the term extension does not exceed the maximum allowable contract
term.
Contracts approved by City Council
The City Manager may sign and award execute any contract amendment,
including but not limited to; amendments to extend the term of a contract,
so long as the total contract amount does not exceed 125 ep rcent4 of the
original contract amount or the original contract amount plus an
additional $120,000, whichever amount is less, and the term extension
does not exceed the maximum allowable contract term.
2. Department Directors,
Contracts within the Contracting Autherity of the Pepartment Piree
The Department Director, including the; City Clerk; or -and City Attorney,
who entered into the contract; or whose department is designated as the
contract administrator i the eont, aet, may execute any
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 $75,000 and the term extension does not exceed the
maximum allowable contract term.
3. Amendments in Cases of Possible Work Stoppage or Undesirable Delay
The Citv ManaLyer is authorized to execute a contract amendment that
increases the total contract amount up to 150 percent of the original
contract amount in eer-tain situations, a eentr-aet amendment may be
needed that will eause the total eeF&-aet ameuRt to exceed the City
Manager's amendment signature autheFity, and the timing is SUEh that in
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cases where a work stoppage or other undesirable consequence will
result if approval of the change -amendment is delayed until the next City
Council meeting. i these situations, the City Manager y approve an
_
amendment that increases the total contract amount up to 150% of the
original contract amount.Within twenty-four (24) hours, the City
Manager shall notify the City Council Members of any such amendment.
4. Amendments Necessary to Address Emergency Situations,
In the event of emergency work that requires- an amendment to
an existing contract, the emergency contracting policy outlined below may
be followed.
Special Requirements
it is that by natufe, sefViEe --r,-,,aets eannot always be --„a^a as a
result of a competitive bid rocess roweve ,— :ompetitive proposals should be
obtained for service contracts whenever possible before resorting to negotiated awards.
A. Professional Services Contracts
Professional
from in h they
---
sult -- - sefviees --offer
the
other- =- ser-viees are of --
f the
professional nature,
an�'�to
ethical codes some of professions
involved,
the the
do fall
as well
as natufe of serviees
pfovided, not Feadily wi
individually seleeted Services of a professional nature shall be obtained through
a qualifications -based selection process foF a speE fiE pfoJeEt or--�^ based on
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.
!E1
RV."zl
FMF_TIE�TE�i_T.fE!!�E
T
I
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F-14
B. Services Contracts (Non -Professional)
Charter
Section 1110,
-
are used - re services-
are ----=------- --------------------
-
by
the City. Examples
,,,, luc but .,
where such services
are needed
, of
steam cleaning,
Nvindow washing and
refuse collection,
The City shall select services contractors though a Request for Proposal (RFP) or
a Request for Bid RFB process, whichever serves the City's best interest.
Contracts through thea RFB 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 -the RFP Request for n,,,,,-.osa
process shall be awarded based on both qualifications and pricing to determine
the best value to the City.
C. Maintenance and Repair Service Contracts
A Sservice contracts for maintenance or repair work that is fixed or of a definite
nature (not on-call)and i-,over $420,000 the formal bid dollar amount in Charter
Section 1110 must are-Eensider-ed—aPubl; e-rk and thus need to -be
requisitioned as a formal pPublic wWorks cContract. For contracts not
7
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F-14
exceeding the formal bid dollar amount, the City may select services contractors
though the RFP or RFB process, whichever serves the City's best interest based
on the service to be provided.
D. Public Works Contracts
Contracts for pPublic wWorks where the total expenditures for the project
exceed $120, the formal bid dollar amount; shall be awarded consistent with
the provisions of Charter Section 1110 and Chapter- 15.75 of the Newpor-t Beae
Municipal Code and relevant provisions of the California Public Contract Code.
- - ---- --- - eontr-aets are used for- the EORStr-HetiOR -- -
buildings,
and
works,streets,drains,seivers,ufflifies,parks or playgrounds,
every purehase of supplies teals ehhpi:ojeet� asNvell—as—�"
projects for the maintena.— ir of such facilities intended to extend their
useful life.
E. 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")
§Sections 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.
F. Independent Instruction' and Recreation Contractors
Department Directors are authorized to execute contracts with
independent contractors for instructional, educational, cultural, or recreational
purposes ("Instruction and Recreation contracts"Lwhere 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.
Instruction and Recreation C-contracts with sueh independent eentr-aetor-s may
be u shall not exceed five (5) years in duration but must and shall include a
termination clause granting the City the right, at its sole discretion and with or
4-24
F-14
without cause, to terminate the contract at any time by giving seven (7) calendar
days' prior written notice to the Centr-aetor-
Should fees paid under an Instruction and Recreation contract
exceed $75,000 during the term of the contract, the Department Director shall
provide written notice to the City Manager identifying the program and
independent contractor. The City Manager shall give written notice to the City
Council should fees paid exceed $120,000.
G. On -Call Contracts for Services (Professional or Non -Professional)
The City Manager and Department Directors are authorized to enter into on -call
("as -needed" )-agreements for obtaining services, including but not limited to
professional services and maintenance and repair services, on an as needed
basis, inmeted to, professionalieesfepair--awl
m -- a = -- - = and emergeneies, that are needed from time to time where
the need for services is contingent, does not have a set timeframe, or where the
size of the job does not warrant the expense of entering into individual
agreements for each service.
On all agreements must be within the autheAty of the individual enteFing i agr-,,,,,, ent on ,,,half f the City and the initial ,-,,,,,,-, eannot On -call services
contracts shall not exceed five (5) years and shall include a termination clause
granting the CiteO tight, at its sole discretion and with or without cause, to
terminate the contract at any time by giving prior written notice of seven (7)
calendar days. The City Manager is authorized to extend the term of an on -call
agreement -services contract for up to six (6) months if work has been authorized
or encumbered during the initial term but not completed. On Call agreements
must inelude a termination clause granting the City the right, at its
disefetion and with or- without eause, to terminate the eontr-aet at any fifne by-
for- entering
the AdministFative PFE)Eedure Manual.
City Council approval is required for: (1) an on -call contract that exceeds
$120,000, and (2) on -call contracts to multiple contractors stemming from a
01
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F-14
single procurement where the combined amount of the contracts exceeds
$120,000.
On -call contracts may not be used to perform maintenance or repair work in
contravention of Charter Section 1110. For example, a project, task, job, or work
order in an amount in excess of the formal bid dollar amount in Charter Section
1110 cannot be performed under an on -call maintenance or repair services
contract but must be requisitioned as a public works project.
H. Emergenc'e y Contracts
Services contracts obtained for purposes of responding to an emergency (as
defined inTf— for "-- ---- -----------"y , -rdeF the pfe isle Newport
Beach Municipal Code Section 2.20.020) that , the City Emergency nr^^,,,a,,re
shall b fel t.,,,a if the ^ r+„a^+ amount exceeds the signing authority of the
City Manager or Department Director as authorized in this policy, then ai
^t-aet shall be brought to the City Council at its next regularly scheduled
meeting for review and oT--authorization, if the eontract constitutes a n„t,i;^
:W.P01,
..
I. Contracts with Former Council Members and City Employees
Whe City Council approval is required for the following when not more than
five (5) years l&s,have passed since a person who is a former Council Member
or City employee has left service with the City:
10
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All professional services contracts with former Council Member or City
employees ; afkd
2. All professional services
contracts with a corporation or other business entity owned or operated
by a former Council Member or City employee or that employs a former
Council Member or City employee.
J. Exceptions to
Competitive Procurement Requirements
r.
OM.TeR�S
RAIMF
IS
�A
NTP.I A-MINN
�111 1 11-1
■.
WURWATIM
Certain commodities and service types are unique or otherwise not sect
amenable to traditional procurement and bidding procedures. The City
Manager shall prescribe in the Administrative -Procedures Manual alternative
procedures and methods for the procurement of such items, e.g. cooperative
agreements and piggyback agreements, and to -ensure that the pricing involved
in these tr-ansaet=ons the procurements is competitive to the greatest extent
possible.
11
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F-14
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 database 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
Manager or Risk Manager).
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.
Future Amendments to Policy
Any future changes in the provisions of this policy shall be made by resolution of the
City Council.
History
Adopted F-14 - 09-22-1969 (Purchase Authority for Goods & Materials)
Reaffirmed F-14 - 03-09-1970
Reaffirmed F-14 - 02-14-1972
Amended F-14-11-11-1974
Amended F-14-11-24-1975
Amended F-14-12-08-1975
Amended F-14-11-24-1986
Amended F-14 - 05-26-1987
Adopted F-14 - 01-24-1994 (new F-14) (Authority for Contracts)
12
F-14
Amended F-14 - 01-24-1994 (old F-14) (changed to F-5)
Amended F-5 - 02-26-1996
Amended J-1 - 11-10-1997 (Contracts with Former Employees)
Amended J-1- 03-09-1998
Amended J-1- 03-22-1999 (changed to F-20)
Amended F-5 - 03-14-2000
Amended F-20 - 04-08-2003
Amended F-14 - 04-13-2004
Amended F-5-11-22-2005
Amended F-14 - 05-09-2006
Amended F-14 & F-5 - 01-25-2011
Amended F-14 - 05-12-2015
Amended F-14 - 02-23-2016 (incorporating F-5 & F-20 and renaming "Authority to
Contract")
Amended F-14 - 06-26-2018
Amended F-14 - 02-12-2019
Amended F-14-12-13-2022
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