Arroyo Grande City Council
September 26, 2023

Purchasing Policies and Procedures Manual
Chapter 4 – Competitive Solicitation Procedures
16 all submitted quotes/proposals; and any subsequently approved contract and/or purchase order.

The records must be kept in accordance with the City’s records retention policy. j. Less than three quotes/proposals received. If the staff member conducting the solicitation is unable to obtain three price quotes or proposals, the purchase may move forward so long as the effort is documented in writing and submitted to the Department Head (or City Manager if required) as part of the request for contract approval.

Note: Nothing precludes the City Manager or a Department Head from requiring a more formal means of solicitation, such as that required by subsection 3 below (formal solicitation).

3. Formal solicitation required. Departmental purchases of goods and services with an estimated cost greater than $50,000 require a formal solicitation process to invite sealed bids or proposals that includes the following requirements:
a. Notice of solicitation. Prior to conducting a formal solicitation, a Notice Inviting Bids/Proposals must be prepared as prescribed by the Department Head that states the bidding method being used.
b. Public posting of notice of solicitation. The Notice Inviting Bids or Proposals must be posted in at least one publicly accessible location likely to reach the intended service provider, supplier, or vendor.

The first publication or posting of the solicitation shall be at least ten days before the due date for responses to the solicitation. The posting location may include the city’s website, an electronic bulletin board, a newspaper of general circulation in the city, or a trade journal, magazine, or other publication, whether in print or electronic. c. Solicitation document preparation and content. For formal solicitations, an Invitation for Bids (IFB) or Request for Proposals (RFP), or Request for Qualifications (RFQ) must be prepared using a templated prescribed by the Department Head. The solicitation document must:
i. Identify the bidding method being used.
ii. Describe the purchase and establish product specifications, functional requirements, and/or scope of services by specifying actual or estimated quantities for goods and/or desired quality of product or service performance. iii. Establish minimum threshold and/or experiential requirements that must be met to be considered for contract award.
iv. Enumerate other requirements such as any desired warranty, insurance, or bonds; the time, place and manner of delivery of the purchases; the desired terms of payment; and the form, method, and timing of the response to the solicitation.
v. Include the City’s standard contractual terms and conditions, and in the case of an RFP or RFQ, provide instructions to proposers to identify in writing any objections to the City’s requirements, terms and conditions. vi. Include protest procedures, if required.

Purchasing Policies and Procedures Manual
Chapter 4 – Competitive Solicitation Procedures
17 d. Public noticing period. The solicitation must be posted in at least one publicly accessible location likely to reach the intended service provider, supplier, or vendor.

The first publication or posting of the solicitation must be at least ten days before the due date for responses to the solicitation. The posting location may include the city’s website, an electronic bulletin board, a newspaper of general circulation in the city, or a trade journal, magazine, or other publication, whether in print or electronic.

A bidding period reasonable and sufficient to the dollar value, size or complexity of the procurement should be used.
e. Direct solicitation. Bids or proposals may also be directly solicited from individuals and businesses if such individuals or businesses are known to be capable of providing the item or service that is being solicited. However, such direct solicitations are in addition to the solicitation requirements specified above. f. Shared information (bid addenda). Any material information provided in response to an inquiry or inquiries by a prospective bidder/bidders must be provided to all known prospects (called “plan holders”) through the issuance of an addendum on a form prescribed by the Department Head, especially if product specifications, requirements, or scope of work is changed that could give a bidder a competitive advantage if the change is only known to that bidder.

Note: Only properly issued written addenda are binding on the City; verbal responses shall not be used to change any specifications, requirements, scope, or contractual terms and conditions of the solicitation.
g. Electronic submittals encouraged. Consistent with best practices for automating processes and paperwork reduction, the submittal of electronic bids is encouraged, and paper submittals are discouraged.
h. Evaluation period. Every solicitation requires a due date and time. To ensure fairness and process integrity, submitted bids can only be evaluated after the specified due date and time, not before (see also Section 4.5 Bid or Proposal Evaluation).
i. Contract award. Once a responsible vendor has been selected, a contract and/or purchase order is recommended for approval to the appropriate award authority. j. Records retention. The staff member initiating the purchase must keep a record of the solicitation document; any correspondence sent to prospective vendors that changes the scope or product specifications in response to an inquiry or inquiries; all submitted quotes/proposals; and any subsequently approved contract and/or purchase order.

The records must be kept in accordance with the City’s records retention policy.

4.5 Bid or Proposal Evaluation

1. Responsiveness and responsibility. Before any bidder or proposer can be considered for contract award, submitted bids or proposals must first be reviewed to determine bid/proposal responsiveness and bidder/proposer responsibility.

Purchasing Policies and Procedures Manual
Chapter 4 – Competitive Solicitation Procedures
18 a. Bid/proposal responsiveness. Responsiveness refers to bids or proposals submitted by contractors, vendors or consultants that meet the material requirements of the solicitation and comply with its instruction.

Bids or proposals found to be non-responsive should be removed from consideration by the Department Head or designee before evaluating responsive bids/proposals received.
b. Bidder/proposer responsibility. Bidder/proposer responsibility refers to contractors, vendors or consultants who have consistently demonstrated attributes of trustworthiness, quality, fitness, capacity, and experience to satisfactorily provide the goods and/or services contained in a solicitation.

2. Lowest bid method. The lowest bid method is typically used for the purchase of materials, supplies and equipment (goods), where the goods offered are identical or nearly identical.

This method may also be used for procuring general or technical services such as maintenance work, as deemed appropriate by the City Manager or a Department Head.

In situations where goods offered are not identical or nearly identical, the fitness and quality of the goods offered may be considered, in addition to price, with a contract awarded to the vendor that offers the best combination of price and fitness and quality of goods (similar to the best value evaluation method for services described below). The lowest bid method may be used for contracts for general services if determined by the City Manager or designee to be in the best interest of the City.

3. Best value method. Contracts for services (including professional services) are awarded on the basis of demonstrated competence and the professional qualifications necessary for the satisfactory performance of the services, offered at a fair and reasonable price, as determined by considering the following criteria:
a. Whether the price is fair, reasonable, and competitive; b. The quality of the services offered;
c. The demonstrated competence, ability, capacity, and skill of the person or business to provide the services promptly, within the time specified, within budget, and without delay or interference;
d. The credentials and licenses of the person or business, if required; e. The character, integrity, reputation, judgment, training, experience, and efficiency of the bidder or proposer;
f. The person’s or business’s knowledge of local conditions; g. The person’s or business’s previous history of working on related projects or issues for the city, where such previous experience will allow the services to be performed more efficiently and will require less time spent on preparation and background research;
h. The sufficiency of the bidder’s or proposer’s financial capacity and other resources; and
i. The ability of the bidder or proposer to provide such future service as may be needed.

Purchasing Policies and Procedures Manual
Chapter 4 – Competitive Solicitation Procedures
19 Helpful hint: When soliciting proposals for most services, a best practice is to evaluate submittals based on qualifications and competence first, before pricing is considered. To help ensure that pricing is not initially considered, solicitations should require that pricing is submitted with the proposal in a “separately sealed envelope” (or otherwise segregated from the main proposal if an electronic solicitation process is used).

4. Qualifications based selection. When professional service providers such as architects, engineers, land surveyors, or construction management firms are required, the solicitation must follow the Qualifications Based Selection (QBS) process required by state law (see Section 4525 et. seq. of the California Government Code or its federal counterpart for federal aid projects, the Brooks Act).

For these types of professional services procurements, consultants are selected based on demonstrated competence before pricing is considered, i.e., an evaluation process that typically includes interviews will be completed and a rank order determined.

At minimum, submitted pricing must be separately sealed and separately evaluated. For many projects that are funded by federal or state grants (such as transportation funding administered by the California Department of Transportation, or Caltrans), pricing cannot be submitted in response to an initial solicitation.

When a QBS process is required, staff must negotiate in good faith with the top-rated proposer. If a contract cannot be agreed upon in consideration of scope, reasonable cost and acceptable terms and conditions, then discussions can commence with the next highest rated proposer, and so on, until an acceptable agreement is reached.

5. Request for Qualifications. In situations where a department wishes to establish on-call contract(s) (typically for as-needed general or professional services), a Request for Qualifications (RFQ) process can be conducted. An RFQ is used to solicit statements of qualifications from qualified firms to provide a particular/specialty service on an as-needed basis. Examples include, but are not limited to, special inspections, environmental testing services, land surveying, or information technology services.

The statements of qualifications (SOQs) are evaluated based on demonstrated competence similar to the QBS process described above. Proposing firms should submit hourly rate sheets as well for comparison purposes. Once the evaluation process is complete, qualified firms can be placed on a “shortlist” for as-needed use.

The type of service needed, i.e., discrete project work or on-call services when the need arises, and the degree of consultant specialization, will dictate how contracts are awarded, as illustrated with the following examples.

Example 1:

A shortlist is established for land surveying and the shortlisted firms are fairly equal in experience and hourly rates, and the City only has the need for one surveying project with a defined scope of work, then brief proposals can be solicited from each firm and a selection made based on best overall value.

Example 2:

Purchasing Policies and Procedures Manual
Chapter 4 – Competitive Solicitation Procedures
20 A shortlist is established for different types of as-needed surveying work associated with a large capital project such as construction staking, topographical surveys, and boundary surveys, and each shortlisted firm presents an area of specialty. Rather than conducting a solicitation process, on-call contracts with not-to-exceed amounts can be awarded to each firm based on their area of specialty.

Example 3:

The City is interested in acquiring property for a park and will need to conduct (as yet undefined) environmental testing work as the site is prepared for development, with the process expected to take five to seven years. A multi-year services agreement can be established with one or more of the shortlisted firms. As the environmental testing needs are better defined, task orders based on discrete scopes of work can be negotiated with a firm or firms under the services agreement based on area of specialty, availability, etc.

6. Local preference. If two or more bidders or proposers are reasonably comparable based on a consideration of the criteria in subsection 3 in this section, a preference may be given to a bidder or proposer that has a primary place of business located within the City as a means to serve the public purposes of supporting local economic stability and of encouraging businesses to locate and remain in Arroyo Grande.

4.5.1 No Bids or Proposals Received
If no bids or proposals are received in response to a solicitation, staff may proceed with the procurement through direct negotiation with a vendor, or other reasonable means as determined by the City Manager or a Department Head, subject to applicable laws and City requirements.

4.5.2 Bid or Proposal Rejection
The City may reject any or all bids or proposals in response to a solicitation in its sole discretion. Bids or proposals are typically rejected if submitted pricing is above the available budget or if proposed goods and/or services do not meet the City’s requirements.

The authority to reject bids or proposals is consistent with the first, second, and third level dollar thresholds established for awarding contracts.

4.6 Exceptions to Competitive Solicitations
Certain purchases may be exempt from competitive solicitation if in the City’s best interests, subject to appropriate approvals and other requirements specified in this section. In recommending a bid exception, the purchase must satisfy one or more of the following criteria:

1. No competitive advantage. No price advantage would be gained from a competitive solicitation process, including but not limited to circumstances when goods or services are unique and are only available from one source (known as a "sole source" purchase).

Note: There may be instances where goods or services are unique but are available from more than one source. If it is determined that no price advantage would be gained from a competitive solicitation process and the value can be justified, then a procurement can proceed with one source (known as a “single source” purchase).

Purchasing Policies and Procedures Manual
Chapter 4 – Competitive Solicitation Procedures
21 2. State and Federal Multiple Award Schedules. When the purchase is based on a cooperative agreement, multiple award schedule, or other types of agreements entered into by the state of California or the federal government.

Information on these types of programs can be found at California Multiple Award Schedules (CMAS) and Federal General Services Administration (GSA) Multiple Award Schedule.

3. Cooperative purchasing programs. When a vendor or service-provider has been awarded a contract by another public agency and:
a. The agency used competitive solicitation procedures consistent with those required by Arroyo Grande;
b. The vendor or service-provider offers the same price(s) to the City that it offered to the other agency, unless better pricing can be obtained; c. The contract was awarded within a reasonable timeframe relative to the City’s purchase; and
d. The initial awarding public agency agrees to the purchase.

Note: This subsection may include the use of for profit regional or national purchasing cooperatives, provided that the city is a registered member of the cooperative and a membership fee is not required. Some leading cooperatives include:
 OMNIA Partners, Public Sector (formerly U.S. Communities)  Sourcewell (formerly National Joint Partners Alliance)  NASPO ValuePoint (formerly WSCA-NASPO, or the Western States Contracting Alliance-National Association of State Procurement Officials)

4. Emergency situations. An emergency is a situation such that the life, health or safety of employees or the general public is at risk, or when significant harm may occur to City property or operating systems and goods and/or services must be procured immediately to prevent loss or substantial disruption of city services or functions. Emergency situations are those that present imminent risk and require immediate action, as opposed to urgent situations that require swift action, i.e., there is no immediate danger, but the situation requires prompt attention to preclude an emergency event from occurring.

Purchasing decisions for goods and/or services necessary to respond to emergencies that require full or partial activation of the emergency operations organization must be considered in conjunction with provisions 4.a and 4.b in this subsection. a. The determination that an emergency situation exists is made by the City Council, City Manager or designee pursuant to Municipal Code Chapter 8.12, Emergency Services Organization, and/or
b. Where a disaster has been declared by the City Council, state or federal government, provided that competitive bidding is not required by a state or federal reimbursing agency and is otherwise consistent with state law (see also 5.4 Grantfunded Purchases).

5. Bid impracticality. A purchase may be exempt from a competitive solicitation when the contract award authority determines that bidding would be impractical, inefficient, or

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Chapter 4 – Competitive Solicitation Procedures
22 otherwise not in the best interest of the City, provided that the contract file contains sufficient documentation to justify bid impracticality.

Situations where it may be impractical to issue a solicitation typically include products or processes where the City has decided for best value purposes to standardize on certain equipment or systems and replacement parts and/or maintenance and repair services are only available from the manufacturer or one authorized source.

6. Other enumerated exceptions. When the purchase is for, or made in conjunction with, the following:
a. Insurance and bonds;
b. Procurements funded by grants, donations or gifts when the special conditions attached to the grants, donations or gifts require the procurement of particular goods and/or services;
c. Goods and/or services obtained from or through agreement with any governmental, public or quasi-public entity;
d. Works of art, entertainment or performance;
e. Surplus personal property owned by another governmental, public or quasi-public entity;
f. Membership dues, conventions, training, and travel arrangements; g. Advertisements in magazines, newspapers, or other media; and h. Goods procured for resale to the public.

7. No preclusion from competitive bidding. Notwithstanding the exception provisions listed above, nothing in this section shall preclude the solicitation of competitive bids or proposals, when in the best interest of the City or when required by law.

8. Documentation and approval required. A written justification form is required for purchases exempt from competitive bidding (see Attachment B: Competitive Bid/Proposal Exemption Request Form), as follows:
a. The requestor must identify the applicable bid exception. b. The justification must include an explanation as to why a competitive process cannot be used, including verification that a good faith search for competition was made. c. If different brands or models have been tested or previously used and determined to be unsuitable, the justification should provide descriptive information on brands/models used, dates of use and why they are not acceptable. d. The written justification must be approved by the City Manager or Department Head, as applicable, and attached as backup at the time contract approval is recommended to the appropriate award authority.

Note: The person responsible for conducting a procurement pursuant to this section must conduct negotiations, as appropriate, as to price, delivery and terms and may require the submission of cost or pricing data in connection with the award of a contract which does not require a competitive solicitation.

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23 4.7 Solicitation Procedures and Dollar Thresholds for Public Projects The City has adopted the California Uniform Public Construction Cost Accounting Act (Public Contract Code Section 22000 et seq., as may be amended) (the Act or CUPCCAA). All expenditures for public projects by the City must be made in accordance with the Act.

The competitive bidding requirements/thresholds are contained in §§22030 to 22045. The Act applies to routine, reoccurring and usual work for the preservation or protection of any publicly owned or publicly operated facility for its intended purpose.

CUPCCAA establishes three competitive bidding threshold ranges and requirements, summarized below, that are periodically adjusted (Public Contract Code §22032). A common requirement associated with each threshold is the establishment and maintenance of a qualified list of contractors according to categories/class of work. Detailed instructions are included in the California Uniform Construction Cost Accounting Commission’s policies and procedures manual that can be accessed from the Commission’s homepage.

Note: Contracts resulting from the informal and formal bidding requirements established below must be awarded to the lowest responsive and responsible bidder. If two or more bids are the same and the lowest, the contract may be awarded to either bidder.

The person or department initiating the purchase shall make a reasonable and good faith estimate of the anticipated cost of the purchase and then proceed with the appropriate solicitation procedure below. Purchases shall not be split or separated into smaller orders for the purpose of circumventing the required procedures.

1. No competitive bidding required. Public projects with an estimated cost of up to $60,000, including any amendment thereto, may be made in two ways:
a. City employees. Projects within this threshold may be completed by City employees (referred to as “force account”).
b. Direct negotiation. If the project will not be completed by City employees, then staff may directly negotiate a construction agreement with a contractor, in accordance with the best value method explained in this chapter.
c. Contract award. Contracts for public projects up to $60,000 can be awarded by the Department Head.

2. Informal bidding required. Public projects with an estimated cost that is greater than $60,000 and up to $200,000 may be procured using the informal bidding procedures required by this subsection, or by the formal bidding procedures required by subsection 3 in this section if required by the City Manager or Department Head.

The informal bidding process includes the following requirements and steps:
a. Notice inviting bids. Prepare a notice inviting informal bids that describes 1) what is needed in general terms, 2) how to obtain additional information, 3) the submission deadline, and 4) how to submit a bid.
b. Prepare an Informal Invitation for Bids (IIFB). The IIFB shall be prepared in accordance with requirements established by the Department Head. c. Public posting of notice. Post the notice inviting informal bids to applicable construction trade journals in accordance with Public Contract Code §§22034 and

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24 22036 no less than 10 calendar days before bids are due. The invitation may also be sent to additional contractors at the discretion of the department/section soliciting bids.

If a list of qualified contractors has been developed for the category of work to be performed, the notice must be sent to the list (see also subsection 4 below).

If a required product or service is proprietary in nature such that it can be obtained only from a certain contractor or contractors, the notice inviting informal bids may be sent exclusively to such contractor or contractors.
d. Bid responsiveness and evaluation. Evaluate submitted bids as soon as the bidding period is closed by first determining if the submitted bids are responsive to the solicitation.
e. Contract award. Contracts resulting from informal bids up to $200,000 are awarded by the City Manager to the lowest responsive and responsible bidder. f. Submitted bids exceed threshold. In accordance with Public Contract Code §22034(d), if all informal bids received exceed $200,000, the City Council may, by adoption of a resolution, award a contract up to $212,500 to the lowest responsible bidder who has submitted a responsive bid, if it determines that the City’s cost estimate was reasonable.

3. Formal bidding required. Public projects with an estimated cost greater than $200,000 must be awarded using a formal competitive bidding process that includes a) a public advertisement for the submission of sealed bid, b) the public opening of timely submitted bids, and c) the award of a contract to the lowest responsible bidder who has submitted a responsive bid.

The formal sealed bidding process includes the following requirements and steps:
a. Notice inviting bids. Prepare a notice inviting bids that states the due date and time by which bids must be received and the place where the sealed bid opening will be conducted.
b. Prepare an Invitation for Bids (IFB). Prepare an Invitation for Bids (IFB) that includes the construction contract, instructions to bidders, and policy and procedural requirements; City provisions governing how the work is to be performed; and approved technical specifications.
c. Public noticing. Publish the notice inviting bids in a local newspaper of general circulation at least 14 calendar days before the bid opening date; or, if there is no newspaper which is circulated within the city, publication shall be by posting the notice in at least three places within the city as have been designated by ordinance or regulation of the city as places for the posting of its notices. d. Electronic distribution of IFB. Electronically send the IFB to applicable construction trade journals at least 15 calendar days before the bid opening date. e. Public bid opening. Conduct a public bid open as soon as the bidding period closes in accordance with procedures required by the Department Head.

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25 f. Bid responsiveness and evaluation. Evaluate submitted bids as soon as the bidding period is closed by first determining if the submitted bids are responsive to the solicitation.
g. Contract award. Construction contracts resulting from formal bidding must be awarded by the City Council to the lowest responsive and responsible bidder.

4. Contractors list. The Public Works Director or designee shall develop and maintain a list of qualified contractors, identified according to categories of work, in accordance with the provisions of Public Contract Code Section 22034 and criteria promulgated from time to time by the Commission.

5. Preparation and adoption of plans. In accordance with Public Contract Code Section 22039, the City Council has delegated the authority to the Public Works Director or designee to prepare and adopt plans, specifications, and working details for all public projects with an estimated cost greater than $200,000 (the maximum dollar amount stated in Public Contract Code Section 22032(c), including any amendment thereto).

6. Bid rejection. In its discretion, the City may reject any or all bids, and may do any of the following:
a. Abandon the project.
b. Re-advertise the bid in the manner described in this chapter. c. By a four-fifths vote, the City Council may declare by resolution that the project can be performed more economically by City employees and may have the project done by force account without further complying with this chapter. Prior to rejecting all bids and declaring that the project can be more economically performed by City employees, the City shall furnish a written notice to an apparent low bidder, informing the bidder of the City's intention to reject the bid. Such written notice shall be mailed at least two business days prior to the hearing at which the city intends to reject the bid.

7. No bids received. If no bids are received through the formal or informal procedure, the project may be performed by City employees by force account or by a negotiated contract without further complying with this chapter.

8. Emergencies.
a. In cases of emergency when repair or replacements are necessary, the City Council may, by a four-fifths vote, proceed at once to replace or repair any public facility, take any action required by that emergency, including procure equipment, services, and supplies without giving notice for bids to award contracts pursuant to Public Contract Code section 22050(a)(1).
b. Before taking any action, the City Council shall make a finding that the emergency will not permit delay resulting from a competitive bid process, and the action is necessary to respond to the emergency. Such findings shall be based upon substantial evidence set forth in the minutes of its meeting pursuant to Public Contract Code section 22050(a)(2).
c. If the City Council has ordered any emergency action, it shall review the emergency action at its next regularly scheduled meeting. Until the action is terminated, the City

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26 Council shall determine the need to continue such action by a four-fifths vote at each meeting pursuant to Public Contract Code section 22050(c)(1). d. In case of an emergency, if notice for bids to award contracts will not be given, the City shall comply with all requirements of Public Contract Code section 22050.

9. Exemptions. The bidding procedures for public projects required by this chapter shall not apply when an exemption is provided by state or federal law.

10. Bid protests.
a. Effect of Failure to Protest. The procedures set forth in this section are mandatory and are the sole and exclusive remedy of a bidder, proposer or other vendor to dispute the award of a contract that the city solicits through a competitive process.

A protest that does not comply with these procedures may be summarily rejected and the person submitting the protest shall be deemed to have waived all rights to relief.
b. Protests of Solicitation Method. By submitting a bid, proposal or other application for a contract award, the bidder, proposer or other vendor shall be deemed to have waived all rights to challenge the city’s method for procuring the contract or any discrepancy in the solicitation process or documents. Bidders, proposers, or vendors may submit bids, proposals or other applications under protest. Protests under this section shall be submitted in writing to the official designated to receive the bid, proposal or other application and shall contain a full summary of the factual and legal basis for the protest.
c. Protests of Award. A bidder, proposer or other vendor applying for a city contract through a competitive process may submit a written protest of the award of the contract. The protest shall identify and explain the factual and legal grounds for the protest. Any grounds not raised in the written protest are deemed waived by the protesting bidder.
d. Waiver. Any person that: (1) did not directly submit a bid or proposal; (2) is not responsible or qualified to receive the contract; (3) failed to submit a responsive bid or proposal; (4) is not in line to receive the contract or is otherwise ineligible to receive the contract; (5) is otherwise not beneficially interested in the award; or (6) fails to submit a timely protest shall be deemed to have waived the right to protest the award of the contract. Any protest deemed waived will be subject to summary rejection without further consideration and the person will have no right to any relief. e. Timing of Protest of Award. Protests shall be submitted in writing to the official designated to receive the bid, proposal or other application within the following times:
i. If of another bidder, within five calendar days after the bid opening date. ii. If the city makes a recommendation to the city council to award a proposal or other application, then within five calendar days following the issuance of the recommendation and prior to the date of the award.

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27 iii. If in response to a notice of intent to reject a bid, proposal or other application, then within five calendar days following the issuance of the notice of intent.
f. City Response. If the protest is timely and complies with the above requirements, the city shall review the protest, any response from the challenged bidder, proposer or other vendor, and all other relevant information. The City will provide a written decision to the protestor in a reasonable amount of time. If the protest is in response to a recommendation of award to the City Council, then the protest will be considered concurrently with the award of the contract, and the approval authority’s action is final.
g. Conflicts. The protest procedures contained in this section shall not apply if a particular solicitation contains a different protest procedure. This section does not limit or eliminate a claimant’s obligations under the Government Claims Act, Government Code Section 900 et seq.

4.7.1 Important Considerations for Bidding Construction and Maintenance Work
The following bullets include helpful factors to consider when conducting solicitations for public projects and maintenance work.
 A project that requires engineered plans and technical specifications is always considered a public work.
 Operational maintenance required to preserve a public improvement is generally not considered a public work.
 Staff must consider and apply the definition of “public project” established in subsections 22002(c) and 22002(d) of the Public Contract Code to determine which bidding requirements may apply to a particular maintenance project.  A common requirement for construction and maintenance work is that the contractor comply with prevailing wage and other labor compliance requirements (see Section 5.5, Prevailing Wage and Contractor Registration Requirements.  CUPCCAA competitive bidding thresholds are considerably higher that the City’s bidding thresholds for maintenance work. However, the informal and formal solicitation procedures required by CUPCCAA for public projects can be applied informal and formal solicitations for maintenance work, as required by the City Manager of Department Head.

Purchasing Policies and Procedures Manual
Chapter 5 – Special Procurement Programs and Considerations 28 Chapter 5 – Special Procurement Programs and Considerations

5.1 Overview
This chapter provides information on key City and other governmental programs and requirements that must be considered before making purchases with public funds.

5.2 City-issued Credit Cards
Based on operational need, employees may be assigned a City-issued credit card for the purchase of commonly used goods and offsite/online services such as subscriptions, training, professional memberships. Offsite services such as minor equipment repair that is performed at a business and not on City property can also be procured with City-issued credit cards in some cases.

Onsite services of any kind that require contractors to perform work on City property cannot be purchased with a City-issued credit card due to the City’s insurance and indemnification requirements that cannot be met by credit card issuers.

Issued cards are based on per transaction and monthly limits, and subject to the terms of the Requirements and Procedures for Use of City Credit Cards Policy.

5.3 Environmentally Preferable Purchases
Consistent with relevant state law and Chapter 8.33 of the Municipal Code (Mandatory Organic Waste Disposal Reduction), the City has adopted a Recovered Organic Waste Product Procurement Policy.

The policy requires all City departments and divisions to incorporate environmental considerations including recycled-content and recovered organic waste product use into purchasing practices and procedures.

All vendors providing paper products, printing and writing paper, and organic waste products must comply with relevant state law and City requirements.

5.4 Grant-funded Purchases
When contemplating a purchase of goods and/or services that involves the expenditure of federal or state funds, the procurement must be conducted in accordance with mandatory applicable federal or state regulations. For federal grants, the procurement standards in the Code of Federal Regulations must be followed. The federal procurement standards, along with contract provisions that must be included in City contracts under federal awards, are located on the Shared Drive under Employee Resources – Administrative Policies. The procurement standards and required contract provisions can also be found here: 2 CFR 200.318 to 327 and Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.

Purchasing Policies and Procedures Manual
Chapter 5 – Special Procurement Programs and Considerations 29 In addition to the procurement standards, it is important to note that local entities that receive more than $750,000 in federal funding during a fiscal year must comply with Single Audit requirements.

It is imperative that the Administrative Services Director be notified regarding federal funding of any amount.

Helpful hint: Prior to making a purchase using federal funding, the department must compare the City’s procurement policies to the federal procurement standards and use the most restrictive of the two. For example, the City’s formal bid threshold is $50,000, but the federal formal bid threshold is $250,000. In this instance, the City’s threshold of $50,000 must be used.

5.5 Prevailing Wage and Contractor Registration Requirements The payment of prevailing wage applies to all public works projects over $1,000 (Labor Code sections 1720 and 1771), with limited exceptions covered below. Public works contractors, and their subcontractors, are required to register each year with the Department of Industrial Relations (DIR) to help ensure compliance with prevailing wage requirements.

As detailed in this section, specific actions must be taken by City staff to verify that contractors and their subcontractors are registered with the DIR, and that contractors are fulfilling their prevailing wage obligations. The DIR’s Public Works page contains detailed information regarding the payment of prevailing wages and Contractor Registration Program.

The City’s responsibilities regarding contractor registration and prevailing wage compliance can be found on the DIR’s Awarding Bodies webpage and are summarized as follows:
 A PWC-100 Form must be submitted to the DIR for maintenance contracts exceeding $15,000 and construction contracts exceeding $25,000.
 Submit the PWC-100 Form within 30 days of contract award, but in no event later than the first day in which a contractor has started work (Labor Code §1773.3).  Obtain prevailing wage rates from DIR.
 Notify potential contractors that they must register with DIR and that the project is subject to enforcement by DIR.
 Require proof of publics works contractor registration before accepting a bid or awarding a contract. To find actively registered contractor, use the Public Works Contractor Registration Search tool on the Awarding Bodies webpage.
 Post or require contractors to post jobsite notices on public works requirements.  Ensure that public works contractors pay prevailing wages and are in compliance with public works laws.

Purchasing Policies and Procedures Manual
Chapter 5 – Special Procurement Programs and Considerations 30  Report any suspected public works violations to the Labor Commissioner.

5.6 Other Contractor Requirements
Contractors conducting business on City property must be properly licensed, insured and otherwise comply with all lawful requirements. Applicable requirements must be met before any work can commence. Consult with a Department Head to determine what requirements may apply to the procurement.

1. Certificates and licenses. Depending on the nature of services provided, special certifications or licenses may be required, as determined by a Department Head or designee.

2. Insurance compliance. Contractors working on City property must comply with the insurance requirements established in Chapter 6, Procurement Risk Management.

3. Tax compliance. Contractors conducting business in the City are required to obtain a business license before they begin work.

4. Guarantees and warrantees. When working on City property or in rights-of-way, contractors must provide assurances that work will be completed according with specifications and contractual obligations. These requirements may be included in standard bidding documents and contract templates. The most common examples are bid, payment and/or performance bonds, as required.

5.7 Specification Development and Product Standardization

5.7.1 Specification Development
Specifications are used define good or services in a competitive solicitation document.

Specifications should include a precise description of the physical characteristics, quality, or desired outcomes of a product to be procured, which a supplier must be able to produce or deliver to be considered for contract award. To promote competition, specifications should use plain language, relevant to and understood by the bidding community. Preparing clear, biddable specifications is an essential part of the competitive bidding process.

There are essentially two types of specifications: design and performance. Good specifications typically contain elements of both.

1. Design specifications. Design specifications establish the characteristics that a product or service must possess, and may include manufacturing details such as engineered plan, drawings or blueprints.

2. Performance specifications. Performance specifications identify the desired outcome or output that a good or service must meet. Performance specifications may utilize functional descriptions of defined tasks or desired results. a. Functional descriptions or requirements. Performance specifications may utilize functional descriptions of defined tasks or desired results. Functional requirements are typically associated with RFPs and are used for solutions such as software systems.

Purchasing Policies and Procedures Manual
Chapter 5 – Special Procurement Programs and Considerations 31 b. Brand name specifications. In areas where the City has standardized a particular product such as fleet vehicles, staff may use one brand name manufacturer (see 5.7.2, Product Standardization).

Note: Use of brand name specifications can be restrictive, limit competition, and can result in increased cost and risk of protest. Their use must be carefully considered and approved by a Department Head or designee.

Helpful hint: As a best practice, when developing specifications where a brand name is being referenced but the desired product has not been standardized for City use, the brand name reference should be followed by “or City-approved equal.” The product offered can then be evaluated for conformance to the City’s requirements.

In many cases, specifications can be highly complex/technical, requiring subject matter expertise beyond that of City staff. The following steps should be considered when developing specifications.

1. Collaboration. Meeting with stakeholders of a procurement or others at the City with knowledge/experience writing specifications helps to clarify specific needs.

Stakeholder review of the draft specifications can also be helpful from a peer review perspective.

2. Market research. Conducting market research will help inform product design/performance criteria and create understanding of market and supply chain trends. Be sure to inform vendors who are contacted during this process that a competitive solicitation will be performed.

3. Contact/research other public agencies. Other public agencies may have conducted a similar procurement and can share valuable information/insight.

4. Retain professional assistance. In some instances, contractors or consultants must be engaged to create complex specifications. However, if an outside consultant or contractor prepares specifications, they are prohibited from submitting a competitive bid or proposal.

Additional information on preparing specifications can be found on NIGP: The Institute for Public Procurement’s global procurement best practices webpage.

5.7.2 Product Standardization
Product standardization is a process whereby a determination is made that a particular brand name product (supplies, materials or equipment) or service must be used throughout the City. Common examples of products local agencies may standardize are fleet vehicles and computer equipment; both can have service components.

Factors and techniques that may be use in determining to standardize on a single brand or trade name can include the following considerations:

Purchasing Policies and Procedures Manual
Chapter 5 – Special Procurement Programs and Considerations 32  Field testing to determine the product’s suitability,  To achieve interoperability with products currently in use such a computer hardware, software, systems or programs, and
 Demonstration of ongoing cost savings.

Approval required. Product standardization decisions must be approved by the City Manager or designee.

5.8 Surplus Personal Property Disposal
Surplus personal property is defined as equipment, furniture, materials, supplies, vehicles, etc., that no longer have a business purpose but are still usable and have salvage value, as determined by the appropriate approval authority noted below. Surplus personal property does not include real property.

1. Approval authority and disposition. The approval authority to dispose of surplus personal property having salvage value is consistent with the first, second and third level designations used to determine the appropriate contract award authority (See Section 3.6, Dollar Thresholds for Award Contracts).

Surplus property with salvage value must be disposed by public auction, by competitive sealed bids, or by exchange or trade-in for new goods. The sale or lease of surplus personal property to a governmental, public, or quasi-public agency may be without advertisement for or receipt of bids.

2. Property with no salvage value. Surplus personal property with no salvage value, as determined by the City Manager or designee, must be disposed of in a manner that salvages recyclable components, if practical.

3. Unclaimed, seized, or abandoned property. The City Manager or designee is authorized to sell or dispose of all goods in the possession of the Police Department which are unclaimed, seized and/or abandoned and may be legally disposed of by the City.

4. Records. Each department shall keep records which indicate surplus personal property disposed of, the method of disposal, and the amounts recovered from its disposal. Such records must be available for public inspection and kept for a period of time in compliance with state law and the City’s records retention schedule kept on file in the City Clerk’s Office.

5. Donations. Provided that advance written approval of the City Manager is obtained and appropriate indemnification from liability has determined by the City Attorney, surplus personal property may be donated in “as-is” condition to governmental, public or quasipublic agencies, charitable or non-profit organizations. Any such donation must be in further of a legitimate public purpose with appropriate findings pursuant to any applicable authority or limitation on the City.

6. Proceed of sale. Proceeds from the sale of surplus personal property must be deposited into the appropriate city fund.

Purchasing Policies and Procedures Manual
Chapter 6 – Procurement Risk Management
33 Chapter 6 – Procurement Risk Management

6.1 Overview
Every purchase made by staff carries an element of risk that must be mitigated through the use of contract terms and conditions that limit liability exposure, and through insurance requirements that contractors and consultants must meet in order to conduct business with the City.

6.2 Insurance Requirements
Many of the City’s purchases require contractors and consultants to carry specific insurance coverage levels and terms. This is especially true for services that require work on City property and in the rights-of-way. Most importantly, contractors and consultants must insure the City through their insurance providers.

Standard insurance coverage includes commercial general liability, auto, worker’s compensation, and professional liability. When procuring technology products and services, cyber liability coverage is required.

Prior to conducting a procurement, consult with Risk Management to determine if coverage is required, what types and levels of coverage are required, and whether standard coverage limits can be modified.

6.2.1 Evidence of Insurance Coverage
All contractors and consultants who must meet the City’s insurance requirements must provide a Certificate of Insurance that includes all of the following elements:
 Additional insured. Insurance certificates must indicate that “The City, its elected and appointed officials, officers, attorneys, agents, employees, and volunteers” are covered as additional insureds for any liability arising from activities performed on behalf of contractors.
 Additional insured endorsement. It is essential that insurance certificates include a policy endorsement that extends the contractor’s coverage to the City. The endorsement proves that the contractor’s insurance company has acknowledged that a contractual relationship exists with the City and has amended the policy to extend coverage to the agency.
 Coverage limits. Risk Management, in conjunction with the City Attorney, has established minimum coverage limits that all contractors must meet. The limits may be adjusted upward or downward depending on project scope and potential liability.

Standard coverage limits are $1,000,000 per occurrence and $2,000,000 in the aggregate.

Purchasing Policies and Procedures Manual
Chapter 6 – Procurement Risk Management
34  Minimum insurer requirements. The insurers providing coverage to contractors must be authorized to conduct business in California and have minimum ratings comparable to A.M. Best A-/VII.

6.4 Insurance Not Required
Due to the low risk of liability, insurance is typically not required in the following instances:
 Goods purchases. Most goods purchases do not require vendors to insure the City, unless there is a service component that requires onsite services such as installation or ongoing maintenance work.
 Off-site services. Services that are provided off-site generally do not require insurance coverage. Examples include off-site or online training, repair or other routine services performed at a place of business.
 Delivery services. Delivery service companies such as Federal Express and United Parcel Service whose function is to deliver goods purchased from manufacturers or distributors of manufacturer’s products do not typically require insurance.  Memberships. Organizations for which the City pays membership fees are not required to meet insurance requirements.

6.5 Limiting City Liability
The City’s contractual terms and conditions legally protect and limit the liability of the City in the event of a contractor default, product defects arising within or outside of warranty periods, design defects by consultants that can lead to accidents or injuries, etc. Key examples include:
 Termination provisions for convenience or due to lack of funding.  Provisions ensuring contractors comply with local, state and federal laws and are appropriately licensed, insured and bonded.
 Indemnification provisions that require contractors to defend the City from claims arising from acts or omissions by the contractor/consultant or those to whom they are legally liable such as subcontractors.

Purchasing Policies and Procedures Manual
Glossary of Purchasing Terms and Terminology
35 Glossary of Purchasing Terms and Terminology
Additional insured. An essential component of an insurance certificate to establish that the “City, its elected and appointed officials, officers, attorneys, agents, employees and volunteers” are insured for any liability arising from activities performed on behalf of contractors working on City property or providing professional services to the City.

Additional insured endorsement. An essential component of an insurance certificate that signifies the insurer has amended a contractor’s or consultant’s insurance policy to extend coverage to the City.

Agreement. A mutual, written understanding between two or more competent parties, whereby one party agrees to perform as defined in the agreement and the other party agrees to compensation for the performance rendered in accordance with the agreement conditions. Agreement and contract may be used synonymously.

Amendment. An agreed upon written modification to an existing contract.

Appropriation. Authorization by the City Council to spend funds for City operations and infrastructure, or other designated purposes.

Award. The acceptance of a bid or proposal; or the presentation of a purchase order by the award authority or designee to a successful bidder or proposer.

Award authority. The governing body or staff person authorized to approve the purchase of goods and services on behalf of the City; the staff person(s) authorized to approve or execute procurement contracts and otherwise legally bind the City.

Best value procurement. A procurement that is awarded based on factors in addition to price.

Best value procurements are mainly conducted through the competitive request for proposals (RFP) and request for qualifications (RFQ) processes.

Bid addendum. A document issued to all known participants (“plan holders”) in a competitive bid or proposal process that makes a change to the solicitation documents/project (i.e., changes to specifications), or process (like a bid due date extension).

Bid bond. A guarantee (cash, cashier’s check or bid bond) required to be submitted with bids or proposals that entitles the City to compensation if the low bidder fails to execute a contract.

Bid opening. The process by which sealed bids are publicly opened at an in-person or virtual location at the time and place specified in the invitation for bids (IFB) in the presence of at least one witness.

Blanket purchase order. A limited-term contract for goods and/or services based on unit pricing, typically for one-year renewable periods. Blanket purchase orders be established with estimated quantities, allowing end users flexibility to order products when needed, or for on-call services.

Purchasing Policies and Procedures Manual
Glossary of Purchasing Terms and Terminology
36 Competitive solicitation. The process of soliciting and obtaining formal and informal bids or proposals, including price quotations, from competing sources.

Conflict of interest. A conflict of interest in conjunction with a City purchase is a situation where an employee or a member of the employee’s family stands to benefit financially from the procurement.

Contract. See Agreement.

Cooperative purchasing. A variety of arrangements where two or more public entities purchase goods and/or services from the same supplier or multiple suppliers using a single competitive bid or proposal; the combining of the requirements of two or more public entities to leverage the benefits of volume purchases, including administrative savings and other demonstrable advantages.

Encumbrance. An accounting entry related to the issuance of Purchase Order that commits an appropriated dollar amount to be spent.

Formal sealed bid. A procurement method for goods and/or services anticipated to be greater than $50,000 where sealed invitation for bids (IFB) are submitted and publicly opened, with a contract awarded to the lowest responsive and responsible bidder.

Formal sealed proposal. A procurement method for goods and/or services anticipated to be greater than $50,000 where sealed requests for proposals (RFP) or similar response documents are submitted and reviewed by an evaluation committee based on established criteria outlined in the solicitation document, with a contract awarded to the responsive and responsible proposer whose solution provides the best overall value to the City.

General services. Work performed or services rendered by independent contractors (excluding public works construction contracts) that does not typically require a license, certification or other professional criteria to perform the work. This includes services such as equipment maintenance, janitorial, printing, landscaping, machinery and equipment rental, refuse disposal; and utility.

Goods. Supplies, materials and equipment to be furnished or used by any department of the City, including items purchased by the City and furnished to contractors for use in public works projects.

Informal bid or proposal. Competitive bids or proposals anticipated to be no more than $50,000 conducted under informal procurement procedures.

Insurance certificate. The document provided by a contractor/consultant’s insurer that incorporates key elements and City requirements to show proof of agency insurance coverage by the insurer.

Invitation for bids (IFB). The type of solicitation document typically used in a competitive (formal) sealed bidding process. Components include but may not be limited to a bid invitation, instructions to bidders, bid schedule(s), terms and conditions, and technical specifications.

Lowest responsive and responsible bidder. The bidder to be awarded a contract whose bid fully complies with all material bid requirements, and whose past performance and financial capacity is determined to be acceptable and has offered the lowest price.

Offeror. An offeror is an individual or entity that responds to a bid or proposal or other solicitation with an offer to provide the requested goods and/or services.

Payment bond. A type of surety instrument which guarantees that contractors (or subcontractors) will pay their subcontractors, material suppliers or laborers for work and materials provided.

Purchasing Policies and Procedures Manual
Glossary of Purchasing Terms and Terminology
37 Qualifications-based selection. A process established by state or federal law that requires the selection of a professional services provider such as an architect, engineer, land surveyor, or construction management firm to be made on the basis of demonstrated competence before pricing can be considered.

Performance bond. A type of surety instrument which guarantees that the principal contractor will fulfill their contractual obligations under a project.

Pre-bid/proposal conference. A designated meeting during a solicitation period for contractors to hear about the business opportunity and ask process/technical questions. The pre-bid/proposal conference may be mandatory depending on the nature of a project.

Prevailing wages. The wage rates, including fringe benefits, paid to a majority of workers in a geographic area for the same type of work on similar projects as established by the California Department of Industrial Relations.

Professional services. Services, generally of an intangible nature that typically require a license, certification, and/or other professional criteria to perform the work as defined by the laws of the State of California including, but not limited to, Architect, Engineer, Land Surveyor, Attorney, Public Accountant as well as information technology services such as installation and implementation of information technology projects, software licensing and maintenance, and Software as a Service (SaaS).

Public project. Infrastructure improvement work as defined in Public Contract Code section 22002, as it may be amended from time to time.

Purchase order. A legally binding contract issued by Finance to a vendor which includes the terms and conditions of a transaction and/or to encumber funds related to an agreement.

Purchase requisition. The document required to be submitted through the financial system to complete the procurement process. Purchase requisitions must be properly documented by the requesting department and approved by the appropriate authority.

Request for proposals (RFP). The solicitation document used to solicit proposals for goods and/or services from potential providers.

Request for qualifications (RFQ). The solicitation document used to solicit proposals when qualifications and experience are overriding considerations to price and are commonly used for architectural and engineering services or other highly specialized consultants.

Responsible bidder or proposer. A bidder or proposer who has demonstrated the attribute of trustworthiness, as well as quality, fitness, capacity, and experience to satisfactorily perform the work.

Responsive bidder or proposer. A bidder or proposer whose submitted bid/proposal is in compliance with the instructions and requirements established by the City and set forth in the City’s solicitation documents.

Services. Either general services or professional services.

Single source purchase. A situation where a good or services is available from more than one source, but a compelling justification can be made to source the purchase to one particular vendor based on cost, best value, bid impracticality, etc.

Purchasing Policies and Procedures Manual
Glossary of Purchasing Terms and Terminology
38 Sole source purchase. A situation where a good or service can only be obtained from one source due to its proprietary or specialized nature, or a situation where product/service compatibility is an overriding consideration to price.

Specifications. Any description of the physical or functional characteristics or of the nature of a supply or service. It may include a description of any requirement for inspecting, testing, or preparing a supply or service for delivery. There are two types of specifications: design and performance. Specifications developed for solution-based procurements may be referred to as “requirements,” and specifications associated with services may be referred to as a “scope of work” (however, a scope of work is often included in solicitation documents in addition to specifications or requirements).

Surplus personal property. Equipment, furniture, materials, supplies, vehicles, etc., that no longer have a business purpose but are usable or otherwise have salvage value. Surplus personal property does not include real property.

Purchasing Policies and Procedures Manual
Attachments
39 Attachments
Attachment A: Delegation of Contract Award Authority
Date
TO: Administrative Services Director
FROM: City Manager
CC: City Attorney
Public Works Director
City Clerk
SUBJECT: Delegation of Contract Award Authority
Effective immediately and continuing until further notice, I hereby delegate the following authorities to insert staff member(s) as defined in Chapter 3.08 of the Municipal Code:

Ordinance Citation Description of Delegated Authority

3.08.060 The authority to award and sign first level contracts for the purchase of goods and services up to $50,000 in any one transaction.

3.08.060 The authority to award and sign first level contracts for public works construction contracts up to $60,000 in any one transaction.

3.08.070 The authority to exempt goods and services purchases up to $50,000 from competitive solicitation procedures.

3.08.120 The authority to dispose of surplus personal property with an estimated value of up to $50,000.

This delegation is made with the following provisions:

1. All actions taken under the authority delegated above must be in full compliance with the requirements of the Municipal Code.

2. All actions taken under the authority delegated above must be fully documented; and such written documentation must be retained in the procurement records and available for public inspection.
__________________________________
City Manager

Purchasing Policies and Procedures Manual
Attachments
40 Attachment B: Competitive Bid/Proposal Exemption Request Form

COMPETITIVE BID/PROPOSAL EXEMPTION REQUEST
(Purchases Greater than $5,000)
Purchase Requisition No. ___________________
Please indicate your requested exemption(s) to the City’s competitive bidding requirements, and provide brief written explanation in the space below:
☐ Professional or specialized services
☐ Emergency procurement, as defined in municipal code section 3.08.070 ☐ Situations where solicitations of bids or proposals would for any reason be impractical, unavailing or impossible
☐ Procurements funded by grants, donations or gifts when the special conditions attached to the grants, donations or gifts require the procurement of particular goods and/or services ☐ Goods and/or services obtained from or through agreement with any governmental, public or quasi-public entity
☐ Works of art, entertainment or performance
☐ Goods procured for resale to the public
☐ Sole source for goods or services where the City’s requirements can only be met by a single patented, copyrighted, or proprietary article or process available from a single source. (Examples of acceptable sole source purchases are equipment for which there is no comparable competitive product, a component or replacement part for which there is no commercially available substitute and which can only be obtained from the manufacturer, or an item where compatibility with items in use by the City is the overriding consideration.) ☐ Other
Justification for requesting an exemption (must accompany your request):

Requestor: Department Director Approval:
___________________________ ______________________________ Date Requested: Date Approved:
___________________________ ______________________________

ATTACHMENT 4

ATTACHMENT 5
Notes:
1The information below each city references the year of the last update to the purchasing ordinance and population size, respectively. 2Level 1 may include sub-delegation to departmental managers. 3The last comprehensive update of Arroyo Grande’s purchasing policies and procedures was 2000. 4CUPCCAA refers to the California Uniform Public Construction Cost Accounting Act. 2023 bidding thresholds are: up to $60,000, no bids required; $60,001 to $200,000, informal bids; greater than $200,000, formal bids. 5Green text represents solicitation and contract award thresholds that are higher than Arroyo Grande’s current limits. 6The cities of Lompoc, Morro Bay, Paso Robles, San Luis Obispo, and Santa Maria authorize the city manager to develop, implement and update procedures for administering the purchasing ordinance. 7The department director responsible for the procurement may award CUPCCAA contracts up to the informal threshold limit if such authority is delegated. 8The city manager may award contracts for goods, services and public projects at the levels established for Council approval if such authority is delegated.

Local Agency1 Procurement Type Solicitation Threshold Requirements Contract Award Thresholds None Required Informal Formal Level 1 (Department Director)2Level 2 (City Manager) Level 3 (City Council) Arroyo Grande (existing)
(2000)3, 18,456
Goods, General Services Up to $1,500 $1,501 to $10,000 Greater than $10,000 Up to $5,000 Up to $10,000 Greater than $10,000 Professional Services Up to $1,500 $1,501 to $25,000 Greater than $25,000 Up to $5,000 Up to $25,000 Greater than $25,000 Public Projects4 CUPCCAA limit CUPCCAA limit CUPCCAA limit Not applicable CUPCCAA formal Not applicable9 Arroyo Grande (2023
proposed)
Goods, Services Up to $5,000 Up to $50,000 Greater than $50,000 Up to $50,000 Up to $100,000 Greater than $100,000 Public Projects CUPCCAA limit CUPCCAA limit CUPCCAA limit Up to $60,000 CUPCCAA Informal CUPCCAA formal Atascadero
(2022), 29,708
Goods, Services Up to $30,0005 $30,001 to $100,0005 Greater than $100,0005 Up to $30,0005 Up to $100,0005 Greater than $100,0005 Public Projects4 CUPCCAA limit CUPCCAA limit CUPCCAA limit Up to $30,000 CUPCCAA informal CUPCCAA formal Lompoc6
(2017), 43,834
Goods, Services CUPCCAA limit5 CUPCCAA limit5 CUPCCAA limit5 CUPCCAA informal if delegated5 CUPCCAA informal5 CUPCCAA formal5 Public Projects4 CUPCCAA limit CUPCCAA limit CUPCCAA limit CUPCCAA informal5,7 CUPCCAA informal CUPCCAA formal Morro Bay6
(2022), 10,779
Goods Up to $10,0005 $10,001 to $125,0005 Greater than $125,0005 Up to $25,0005 Up to $125,0005 Greater than $125,0005 Services Up to $40,0005 $40,001 to $125,0005 Greater than $125,0005 Up to $25,0005 Up to $125,0005 Greater than $125,0005 Public Projects4 CUPCCAA limit CUPCCAA limit CUPCCAA limit Up to $25,0005 CUPCCAA informal CUPCCAA formal Paso Robles6
(2022), 31,000
Goods Less than $10,0005 $10,000 to $100,0005 Greater than $100,0005 Up to $50,0005 Up to $100,0005 Greater than $100,0005 Services Less than $40,0005 $40,000 to $150,0005 Greater than $150,0005 Up to $50,0005 Up to $100,0005 Greater than $100,0005 Public Projects4 CUPCCAA limit CUPCCAA limit CUPCCAA limit Up to $50,0005 Up to $100,000 Greater than $100,000 Pismo Beach
(2022), 8,036
Goods, Services Up to $2,5005 Up to $50,0005 Greater than $50,0005 Up to $15,0005 Up to $50,0005 Greater than $50,0005 Public Projects4 Up to $50,000 $50,000 to $200,000 Greater than $200,000 Up to $15,0005 Up to $50,000 Greater than $50,000 San Luis Obispo6
(2022), 47,545
Goods Up to $9,9995 $10,000 to $74,9995 Greater than $74,9995 Up to $74,9995 Up to $199,9995,8 Greater than $199,9995 Services Up to $9,9995 Up to $39,9995 Greater than $39,9995 Up to $9,9995 Up to $149,9995,8 Greater than $149,9995 Public Projects4 Up to $14,999 Up to $59,999 Greater than $59,999 Up to $59,9995 Up to $199,9998 Greater than $199,999 Santa Maria6
(2018), 109,711
Goods, Services Up to $10,0005 $10,001 to $75,0005 Greater than $75,0005 Up to $75,0005 Up to $75,000 (Director)5 Greater than $75,0005 Public Projects4 CUPCCAA limit CUPCCAA limit CUPCCAA limit CUPCCAA informal5 CUPCCAA informal Not applicable9 Grover Beach10
(2023 proposed), 12,711
Goods, Services Up to $5,000 5 $5,001 to $50,0005 Greater than $50,0005 Up to $50,0005 Up to $100,0005 Greater than $100,0005 Public Projects CUPCCAA limit CUPCCAA limit CUPCCAA limit Up to $60,000 CUPCCAA Informal CUPCCAA formal

ATTACHMENT 5
9The cities of Arroyo Grande and Santa Maria request Council Approval of construction plans and specifications. Contracts are awarded by the city manager. 10The city of Grover Beach adopted an updated ordinance on August 28, 2023.

Item 12.a.

MEMORANDUM
TO: City Council
FROM: Shannon Sweeney, Acting Public Works Director/City Engineer SUBJECT: Consider Introduction of Tally Ho Road Speed Limit Reduction Ordinance
DATE: September 26, 2023
SUMMARY OF ACTION:

Recommend that City Council waive first reading and introduce for reading by title only an ordinance authorizing a speed limit reduction on Tally Ho Road between James Way and Highway 227 from 35 miles per hour (mph) to 30 mph (Attachment 1).

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

A significant number of staff hours have been spent to date, including:
 Evaluating current conditions
 Developing and implementing a restriping plan
 Conducting multiple speed surveys, and
 Meeting with and communicating with the neighborhood residents, most recently with a postcard survey intended to receive feedback on the potential reduction of the current 35 mph to 30 mph.

A small financial impact on staff and resources is anticipated to replace the existing 35 mph speed limit signs with 30 mph signs, and possibly an increase in education and enforcement for a short time following the speed limit adjustment, and periodically thereafter.

RECOMMENDATION:
1) Waive the first reading and introduce for reading by title only an ordinance authorizing a speed limit reduction on Tally Ho Road between James Way and Highway 227 from 35 mph to 30 mph’ and 2) Make findings that the speed limit adjustment is not a project subject to the California Environmental Quality Act (“CEQA”) because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.) Other than the replacement of existing street signs, there is no additional physical alteration or

Item 12.a.

City Council
Consider Introduction of Tally Ho Road Speed Limit Reduction Ordinance September 26, 2023

construction associated with this action, and this speed adjustment is not anticipated to alter traffic patterns other than to reduce speed.

BACKGROUND:

Following numerous residential complaints about speeding, a speed survey was conducted on Tally Ho Road east of James Way from February 8-15, 2021. That speed survey (Exhibit A of Attachment 1) indicated an 85th percentile of 41 mph, which is then rounded to the nearest 0 or 5, or in this case 40 mph. Posted speed limits are only enforceable 5 mph below the 85th percentile, or in this case 35 mph, the current posted speed limit.

Although the posted speed limit of 35 mph was the lowest postable enforceable speed allowable at that time, many residents continued to express safety concerns with the existing speed. City staff hosted two well-attended meetings in the Tally Ho neighborhood, one on September 2, 2021, and the other on May 25, 2022. In response to resident input and the residential and family character of this neighborhood, staff developed a street restriping plan (Attachment 2) and implemented this restriping plan in winter 2022. Following the street restriping, intended to calm traffic, reduce excessive speeding, and provide a bike lane, a new speed study was conducted from July 6-13, 2023. That speed survey (included in Exhibit A of Attachment 1) indicated an 85th percentile of 36 mph, which is then rounded to the nearest 0 or 5, or in this case 35 mph.

The new speed survey indicates that the restriping was successful in lowering vehicle speed. However, residents continue to have safety concerns with the current speed limit of 35 mph.

Public Works staff spoke with Commander Zak Ayala, who supervises the Arroyo Grande Police Department Traffic Division to confirm that the proposed Ordinance has their full support.

ANALYSIS OF ISSUES:

The 2006 California Manual on Uniform Traffic Control Devices (MUTCD) and Caltrans Policy Directive 09-04 recommend setting a speed limit at the nearest 5 mph increment to the 85th percentile speed of free-flowing traffic. According to the latest speed survey, this recommended speed is 35 mph.

The MUTCD and Caltrans Policy Directive 09-04 allow for speed limit reduction below the 85th percentile, if the conditions and justification for this lower speed limit are documented in an engineering and traffic study (E&TS) and approved by a registered Civil or Traffic Engineer.

Factors that may be considered when considering a speed limit reduction 5 mph below the 85th percentile speed include the following (a definition of each factor below):
 Road characteristics, shoulder condition, grade, alignment, and sight distance;

Item 12.a.

City Council
Consider Introduction of Tally Ho Road Speed Limit Reduction Ordinance September 26, 2023

 The pace speed;
 Roadside development and environment;
 Parking practices and pedestrian activity; and
 Reported crash experience for at least a 12-month period.

Road Characteristics
There are no road characteristics on this section of Tally Ho Road, such as shoulder condition, grade, alignment, or sight distance that justify a lower speed limit.

Pace Speed
Based on the speed survey conducted in July 2023, both eastbound and westbound pace speed (10 mph increment of speed containing the largest number of vehicles) in this area averages 27-36 mph. Average speed eastbound is 31.4 mph and westbound 31.6 mph.

Given that 30 mph is within the pace speed range, this lower speed limit is justified.

Roadside Development and Environment
California Vehicle Code (CVC) §515 defines a “residence district” adjacent to a highway as a section of highway that contains 16 or more separate dwelling houses within a quarter mile. This 0.37-mile section of road contains 42 residences, which is the equivalent of 28 homes per quarter mile, which would easily qualify this area as residential if this were a highway. The Vehicle Code does not provide a definition for residential districts for streets not defined as highways.

In the E&TS, the engineer may consider conditions unforeseen to the driver as justification for a lower speed limit. Forty-two residential properties front Tally Ho Road between James Way and Highway 227; however, six properties are flag lots, meaning that only thin drive approaches front the street and the residential structures on these lots are not visible to drivers on Tally Ho Road. Therefore, there are more residences on the street that are apparent to the driver, which contributes towards justifying a lower speed limit. An aerial image of the street is located in the E&TS in Exhibit A of Attachment 1.

Parking Practices and Pedestrian Activity
The restriping plan reduced parking only one side of the street so parking practices do not help justify a lower speed limit. However, the residential nature of this neighborhood and associated pedestrian traffic and children playing in the yards and on the sidewalks of the street, as well as the presence of a school bus stop, contribute to justifying a lower speed limit.

Collision History
Collision history must consider for at least a 12-month period. To date this year, there have been no reported collisions. There were two collisions in all of calendar year 2022, and no collisions in all of 2021. Anecdotally, many residents shared near miss accidents, excessive speeds, and pets being hit by vehicles due to speeding.

Item 12.a.

City Council
Consider Introduction of Tally Ho Road Speed Limit Reduction Ordinance September 26, 2023

Resident Input
Resident input has driven much of the work to date on this topic. Given that both 30 and 35 mph speed limits are enforceable, staff wished to verify that the interest in a reduced speed limit on this street was widespread and not just the interest of one or two homeowners. To obtain feedback, staff issued a postcard to all 42 residents on Tally Ho Road between James Way and Highway 227. The postcard said:

Dear resident
Some residents on Tally Ho Road between James Way and Highway 227 have requested a lower speed limit. Both 30 mph and 35 mph are supported by data. Before City staff recommend that the speed limit be reduced to 30 mph, we want to hear from you. Please call (805) 473 – 5485 or email [email protected] by September 8, 2023, and indicate your preference from the choices below.
⃝ Please recommend a speed limit of 30 mph
⃝ Please leave the speed limit of 35 mph
⃝ I have no preference.

Thank you for your input.

The City received eleven responses. Ten responses requested a speed limit of 30 mph.

Of those ten responses, eight indicated a preference for 25 mph. One response requested that the speed limit remain at 35 mph.

California Vehicle Code section 22352 sets the prima facie or expected and accepted speed limit of 25 mph in residential areas when a speed limit is not posted. However, posted speed limits can only be set at the 85th percentile of the speed survey data speeds (in this case the posted speed limit in the Tally Ho neighborhood 35 mph), or 5 mph below the 85th percentile when justified by an E&TS (in this case/recommendation, 30 mph).

The posting of other speed limits, not meeting the 85th percentile thresholds are not enforceable, meaning that the issuance of a speeding ticket will generally not be upheld.

An E&TS prepared by Shannon Sweeney, registered Civil Engineer C61453, is included as Exhibit A of Attachment 1. The Ordinance may be adopted after two readings, which would set the date of adoption for the October 10, 2023 City Council meeting.

ALTERNATIVES:

The following alternatives are provided for the Council’s consideration:

1. Introduce an Ordinance reducing Tally Ho speed limit from 35 mph to 30 mph - this is the lowest enforceable speed that can be posted;

Item 12.a.

City Council
Consider Introduction of Tally Ho Road Speed Limit Reduction Ordinance September 26, 2023

2. Do not introduce an Ordinance and do not reduce the posted speed limit of 35 mph, as 35 mph represents the 85th percentile and is within the pace speed window and therefore is enforceable;

3. Remove existing speed limit signs, which would revert the speed limit to the prima facie limit of 25 mph for residential areas per California Vehicle Code (CVC) 22352.

While this speed is enforceable, it cannot be posted, and staff is concerned that with no speed limit signs present, speeding will persist and potentially revert to speeds shown in the 2021 speed survey; or

4. Provide other direction to staff.

ADVANTAGES:

The recommended action fulfills the desire of numerous residents on this street for a lower speed limit. Continued resident dissatisfaction and staff time to address concerns are very likely to remain if the speed limit is not reduced. A 25 mph speed limit is enforceable, but only if not posted. Staff is concerned that lack of a posted speed limit sign will not accomplish the desired goal of reducing speed at this location.

DISADVANTAGES:

Since the recommended posted speed limit is within the pace speed of the area where the speed survey was conducted, no negative impacts are anticipated to the surrounding community. Drivers in the area do run a higher risk of receiving a speeding ticket because of the drop in speed limit. This likelihood can be reduced in part through an initial weeklong enforcement period when drivers who exceed the speed limit are provided a warning instead of a ticket.

ENVIRONMENTAL REVIEW:

No environmental review is required for this item. Speed limit adjustment is not a project subject to the California Environmental Quality Act (“CEQA”) because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.) Other than the replacement of existing street signs, there is no additional physical alteration or construction associated with this action, and this speed adjustment is not anticipated to alter traffic patterns other than to reduce speed.

PUBLIC NOTIFICATION AND COMMENTS:

The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2.

Attachments:

1. Proposed Ordinance

2. Tally Ho Restriping Plan

ATTACHMENT 1
ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE APPROVING THE REDUCTION IN SPEED

LIMIT ON TALLY HO ROAD BETWEEN JAMES WAY AND
HIGHWAY 227 FROM 35 MPH TO 30 MPH
WHEREAS, residents along Tally Ho Road between James Way and Highway 227 have expressed concerns regarding the current speed limit of 35 miles per hour (mph) at this location; and,
WHEREAS, a speed survey on February 8 – 15, 2021 indicated that 35 mph was the lowest enforceable postable speed at the time; and,
WHEREAS, City staff held field meetings on September 2, 2021 and again on May 25, 2022 to receive resident input; and
WHEREAS, in response to resident feedback, staff developed a striping plan and implemented this plan in winter 2022; and,
WHEREAS, the 2006 California Manual on Uniform Traffic Control Devices and Caltrans Policy Directive 09-04 allow for a speed limit reduction below the 85th percentile, if the conditions and justification for this lower speed limit are documented in an engineering and traffic study (E&TS) and approved by a registered Civil or Traffic Engineer.

WHEREAS, a new speed survey conducted July 6 – 13, 2023 indicated that a speed limit of 30 mph can be enforceable if such a speed is justified in an Engineering and Traffic Study (E&TS) developed by registered Civil Engineer; and WHEREAS, an E&TS has been developed by a registered Civil Engineer, and the engineer is recommending a speed limit of 30 mph (see Exhibit A, incorporated by reference).

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande does ordain as follows:
1, The above recitals are true and correct and incorporated herein.

2. The Council hereby approves the reduction in speed limit on Tally Ho Road between James Way and Highway 227 from 35 mph to 30 mph, and authorizes City staff to undertake any necessary changes to effectuate the reduction in the applicable speed limit, including changes to traffic signage in the designated area.

3. This ordinance is not a project subject to the California Environmental Quality Act (“CEQA”) because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State Page 529 of 575 ORDINANCE NO.

PAGE 2
CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.) Other than the replacement of existing street signs, there is no additional physical alteration or construction associated with this action, and this speed adjustment is not anticipated to alter traffic patterns other than to reduce speed.

4. If any section or provision of this Ordinance is for any reason held to be invalid or unconstitutional by any court of competent jurisdiction, or contravened by reason of any preemptive legislation, the remaining sections and/or provisions of this ordinance shall remain valid. The City Council hereby declares that it would have adopted this Ordinance, and each section or provision thereof, regardless of the fact that any one or more section(s) or provision(s) may be declared invalid or unconstitutional or contravened via legislation.

5. The Mayor shall sign and the City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same, or the summary thereof, to be published and posted pursuant to the provisions of law and this Ordinance shall take effect thirty (30) days after passage and after appropriate signs giving notice of the new speed limit are posted upon the street affected by the Ordinance.

On motion by Council Member __________, seconded by Council Member__________, and by the following roll call vote, to wit:

AYES:

NOES:

ABSENT:

The foregoing Ordinance was adopted this ____ day of _____, 2023.

ORDINANCE NO.

PAGE 3

CAREN RAY RUSSOM, MAYOR
ATTEST:

JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:

BILL ROBESON, INTERIM CITY MANAGER
APPROVED AS TO FORM:

ISAAC ROSEN, CITY ATTORNEY

ORDINANCE NO.

PAGE 4

EXHIBIT A
Engineering and Traffic Study (E&TS)

EXHIBIT A

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ATTACHMENT 2

Item 12.b.

MEMORANDUM
TO: City Council
FROM: Shannon Sweeney, Acting Public Works Director/City Engineer SUBJECT: Discussion of SLOCOG Supplemental Funding Efforts DATE: September 26, 2023
SUMMARY OF ACTION:

Summarize San Luis Obispo Council of Governments (SLOCOG) current efforts to secure supplemental funding for transportation needs and provide feedback to the City’s SLOCOG Board of Directors representative, Councilmember Guthrie.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

Approximately 3 hours of staff time was spent researching the issue and preparing this report.

RECOMMENDATION:

Receive an update, discuss, and provide feedback to Councilmember Guthrie for the SLOCOG Board of Directors.

BACKGROUND:
25 of 58 counties in California are considered self-help counties, meaning that they have a local transportation sales tax to deliver timely, cost-efficient transportation improvements to their communities. See Figure 1. The dollar values in the figure represent the annual revenue received by each county. In 2016, San Luis Obispo County placed Measure J on the November ballot which would have established such a local transportation sales tax. This measure received 66.3% voter support, just shy of the

66.7% required for passage.

Item 12.b.

City Council
Discussion of SLOCOG Supplemental Funding Efforts
September 26, 2023

Figure 1: Map of California Self-Help Counties
Had this measure passed, the sales tax measure would have generated approximately $25 million per year in 2016 and currently $35 million per year to address county transportation issues, including road maintenance. In addition, the County has not been eligible for an estimated $1 billion in competitive state grants by not having adequate matching funds to secure those grants.

SLOCOG is developing an Investment Plan, and one potential element of that plan is a local sales tax. SLOCOG is exploring the potential of including a sales tax measure on the November 2024 ballot. To this end, SLOCOG has developed a website

Item 12.b.

City Council
Discussion of SLOCOG Supplemental Funding Efforts
September 26, 2023

(www.localroadsfirst.com), an online survey tool, provides background information, and an identification logo. Meetings with key stakeholders, including several local advisory councils, have been held to raise awareness, identify benefits, and build trust. Four focus group meetings, with attendees that represent likely voters, are being held in September to further understand what is meaningful to the public and to identify if SLOCOG is correctly understanding and articulating the priorities of county residents.

ANALYSIS OF ISSUES:

San Luis Obispo County has a $3.1 billion available revenue stream and $5.4 billion of identified transportation needs, resulting in a funding shortfall of $2.3 billion over the next 23 years. Previous funding streams for transportation needs have heavily relied on gas tax. However, conservation, hybrids, and electric vehicles have resulted in a decline of gallons of fuel used and therefore revenues and allocation of funds.

Deferring maintenance on roads leads to considerably more cost in road maintenance.

Preventative maintenance of roads costs a fraction of the cost of rehabilitating roads that have already deteriorated. Timely maintenance saves a significant amount of funding and allows for more efficient use of funding dollars for keeping streets maintained. In addition, funds not needed to rehabilitate streets can be spent on other transportation needs such as sidewalk repairs, public transportation, and ADA improvements.

SLOCOG is seeking input from the community. All county residents are encouraged to visit www.localroadsfirst.com and take a survey to provide input on this important issue.

The SLOCOG Board of Directors will be meeting in October to discuss the potential sales tax measure. Council Member Guthrie is the City’s representative on the Board and has requested feedback from the Council before that meeting.

ALTERNATIVES:

The following alternatives are provided for the Council’s consideration:

1. Receive and update and provide feedback to Council Member Guthrie, or

2. Provide other direction to staff.

ADVANTAGES:

The City of Arroyo Grande has the potential to benefit from additional funding to address its road maintenance backlog. It is advantageous for city residents, staff, and elected officials to remain informed on SLOCOG’s efforts.

DISADVANTAGES:

There could be a negative perspective on City’s potential revenue generation measures since it is anticipated that several jurisdictions around the County and State may be placing similar measures on the November 2024 ballot.

Item 12.b.

City Council
Discussion of SLOCOG Supplemental Funding Efforts
September 26, 2023

ENVIRONMENTAL REVIEW:

No environmental review is required for this item.

PUBLIC NOTIFICATION AND COMMENTS:

The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2.