Grover Beach City Council
August 28, 2023

Agenda Item No. 12

CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: August 28, 2023 FROM: Matthew Bronson, City Manager
PREPARED BY: Kristin Eriksson, Deputy City Manager
SUBJECT: Second Reading and Adoption of an Ordinance to Repeal Chapter 8 (Performance of Public Projects; Purchasing of Supplies and Equipment; Contracting for Services) and Adding a New Section 2800 of Chapter 8 (Purchasing Policy) of Article II (Administration) of the Grover Beach Municipal Code

RECOMMENDATION
Conduct a public hearing for the second reading and adoption of an Ordinance to repeal Chapter 8 (Performance of Public Projects; Purchasing of Supplies and Equipment; Contracting for Services) and Adding a New Section 2800 of Chapter 8 (Purchasing Policy) of Article II (Administration) of the Grover Beach Municipal Code.

BACKGROUND:

On July 7, 1997, the City Council adopted Ordinances 97-11, repealing existing purchasing ordinances and adopting a new Chapter 8 (Performance of Public Projects; Purchasing of Supplies and Equipment; Contracting for Services) of Article II (Administration) of the Grover Beach Municipal Code, which established the rules and regulations for purchasing within the City. (See Attachment 1 –Ordinance 97-11). That same year, the City developed a Purchasing Procedures Manual to detail procedures and internal controls to be followed by City departments.

Since that time, no changes have been made to the City’s purchasing procedures including the approval thresholds and the existing code is out of date and inconsistent with State codes.

In 2022, staff began the process of developing an updated Purchasing Policy seeking input from multiple departments, including Administrative Services and Public Works along with the City Attorney. Staff also looked at purchasing policies of other agencies and researched current State codes. After considering these sources of information, staff developed an updated Purchasing Policy to replace the outdated code sections and be incorporated by reference upon approval of this Ordinance by the City Council. (See Attachment 2 – New Ordinance and Attachment 3 – Purchasing Policy).

The new Policy better defines purchasing authority within the City and provides updated purchasing approval thresholds to improve the efficiency and timing of purchasing actions and provide purchasing procedures to guide staff. The Policy also defines rules and procedures for the use of City credit cards, business tax certificate requirements, contract management and disposal of surplus property. Additionally, the policy authorizes the City Manager to approve future administrative changes to the Policy, including changes to processes and procedures, but not including changes to purchasing authority or approval thresholds, which will still require City Council approval.

Staff Report: Second Reading and Adoption of Purchasing Ordinance Page 2 August 28, 2023
The Policy’s updated purchasing approval thresholds are depicted in the charts below. Acronyms referenced in the charts include RFB (Request for Bids), RFP (Request for Proposals), and PO (Purchase Order).

Purchases of Supplies, Materials, Equipment and General Services:

Purchase Amount Bid Process Approval Authority
$5,000 or less None Required Department Head or designee approves invoice
$5,001-$50,000 Informal Quotes
Process
Department Head approves invoice or PO
$50,001-$100,000 RFB Process City Manager approves
More than $100,000 RFB Process City Council approves contract Purchases for Public Projects:

Purchase Amount Bid Process Approval
$5,000 or less None Required Department Head or designee approves invoice
$5,001-$50,000 RFB/ RFP Process Department Head or designee approves invoice
$50,001-$100,000 RFB/RFP Process City Manager approves PO $100,001-$200,000 RFB/RFP Process City Council approves contract More than $200,000 RFB/RFP Process City Council approves project concept prior to bidding process and resulting contract
Purchases for Certain Professional Services (such as engineering and architectural services):

Purchase Amount Bid Process Approval
$5,000 or less None Required Department Head or designee approves invoice
$5,001-$50,000 Informal Quotes
Process*
Department Head approves PO
$50,001-$100,000 Informal Quotes
Process*
City Manager approves PO
More than $100,000 RFB/RFP Process City Council approves contract On-Call Consultant Services (previously approved firms for design and geotechnical services):

Purchase Amount Bid Process Approval
$5,000 or less None Required Department Head or designee approves invoice
$5,001-$50,000 Proposals from Oncall ConsultantsDepartment Head approves PO $50,001-$400,000 Proposals from Oncall ConsultantsCity Manager approves PO More than $400,000 Proposals from Oncall ConsultantsCity Council approves * Approval threshold previously approved by Council related to infrastructure projects Staff Report: Second Reading and Adoption of Purchasing Ordinance Page 3 August 28, 2023
Under the policy, a purchase approver listed above may also amend a contract or approve a change order in an amount not to exceed 20% of the original contract amount without approval from the higher purchasing authority. This action is dependent upon the original contract being within the approver’s authority and that the amendment does not materially change the scope of services.

FISCAL IMPACT
There is no fiscal impact related to approval of the purchasing policy.

ALTERNATIVES
The Council has the following alternatives to consider:
1) Conduct a public hearing for the second reading and adoption of an Ordinance to repeal Chapter 8 (Performance of Public Projects; Purchasing of Supplies and Equipment; Contracting for Services) and Adding a New Section 2800 of Chapter 8 (Purchasing Policy) of Article II (Administration) of the Grover Beach Municipal Code; or 2) Provide alternative direction to staff.

PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.

Attachments

1. Original Ordinance 97-11

2. New Ordinance

3. Purchasing Policy
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ORDINANCE NO. 97-11

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH REPEALING ARTICLE II, CHAPTER 8, AND ENACTING STANDARDS FOR THE

PERFORMANCE OF PUBLIC PROJECTS,

THE PURCHASE OF SUPPLIES AND EQUIPMENT AND CONTRACTING FOR SERVICES THE CITY COUNCIL OF THE City of Grover Beach DOES ORDAIN AS FOLLOWS:

Part I. Chapter 8 of Article II of the Grover Beach Municipal Code is repealed.

Part 2. Chapter 8 of Article of the Grover Beach Municipal Code is enacted to read as follows:

CHAPTER 8 - PERFORMANCE OF PUBLIC PROJECTS;
PURCHASE OF SUPPLIES AND EQUIPMENT; CONTRACTING FOR SERVICES PART 1- GENERALLY
Sec. 2800.2. (A) This article provides procedures for the performance of public projects, the purchase of supplies and equipment, and contracting for services.
(B) As used in this article, "Purchasing Agent" means the City Manager or employee designated as purchasing agent by the City Manager.
(C) The provisions of this article shall not apply to the extent that they conflict with any applicable State or federal laws or regulations or the terms and conditions of any grant, contract, gift or bequest otherwise consistent with law.

PART 2 - PUBLIC PROJECTS
Sec. 280 I. Uniform Public Construction Cost Accounting Act. The City has elected to become subject to the Uniform Public Construction Cost Accounting Act (Public Contract Code section 22000 et seq.) in the performance of public projects. The procedures contained in this division are intended to implement and be consistent with such Act.

Sec. 2802. Definitions. (A) "Public project" means any of the following:
(I) Construction, reconstruction, erection, alteration, restoration, improvement, demolition and repair work involving any facility owned, leased or operated by the City. (2) Painting or repainting any facility owned, leased or operated by the City. (3) The construction, erection, improvement or repair of dams, reservoirs, powerplants and electrical transmission lines of 230,000 volts and higher that are part of a utility system owned by the City.
(B) "Public project" does not include maintenance work. "Maintenance work" means any of the following:
(1) Routine, recurring and usual work for the preservation or protection for its intended purposes of any facility owned or operated by the City.

Attachment 1
) )
(2) Minor repainting.
(3) Resurfacing at less than one inch deep of streets and highways. (4) Landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants and servicing of irrigation and sprinkler systems. (5) Work performed to keep, operate and maintain water, power or waste disposal systems owned by the City, including, but not limited to, dams, reservoirs, powerplants and electrical transmission lines of230,000 volts and higher.
(C) "Facility" means any of the following:
(1) Any plant, building, structure, ground facility, real property, street, highway or other public work improvement.
(2) Any utility system owned by the City, subject to the limitation found in subdivision (a) (3) of this section.

CD) "Force account" means work performed on public projects using internal resources, including, but not limited to' labor, equipment, materials, supplies and subcontracts of the City.

Sec. 2803. Contracting Procedures: Dollar Amount Limitations. (A) Public projects of $25,000 or less may be performed by force account, by negotiated contract, or by purchase order. The director of the department in charge of the project is authorized to determine how and by whom the project shall be performed and to execute any contract or purchase order for the project and to execute any change order thereto if that change order, together with the amount of the original contract or purchase order and any previous change orders thereto, does not exceed $25,000. Any change orders exceeding such total amount shall be submitted for approval by the City Council. All contracts, purchase orders and change orders shall be in a form approved by the City Attorney. (B) Public projects from $25,000.01 to $75,000 shall be contracted for pursuant to the informal bidding procedures contained in section 2805.
(C) Public projects of more than $75,000 shall be contracted for pursuant to the formal bidding procedures contained in section 2805.
(D) It shall be unlawful to split or separate any project into smaller work orders or projects for the purpose of evading the provisions of this division requiring work to be done by contract after competitive bidding.

Sec. 2804.Lists of Contractors and Trade Journals. (A) The purchasing agent shall develop and maintain a list of contractors, identified according to categories of work, in accordance with criteria determined by the California Uniform Construction Cost Accounting Commission. (B) The purchasing agent shall maintain a list of the construction trade journals, as determined for San Luis Obispo County by the California Uniform Construction Cost Accounting Commission, that are to receive mailed notice of all informal and formal construction contracts being bid for work within San Luis Obispo County.

Sec. 2805.Informal Bidding Procedures. (A) When a public project from $25,000.01 to $75,000 is to be contracted for, the purchasing agent shall mail a notice inviting informal bids to all contractors on the list for the category of work being bid, to all construction trade journals on the list, and to such other contractors and trade journals as may be requested by the department in charge of the project. However, if a product of service essential to the project is proprietary and can be obtained only from a certain contractor or contractors, the notice inviting informal bids may be sent only to such contractor or contractors.
(B) . All mailing of notices inviting informal bids shall be completed not less than 10 calendar days before bids are due.
) )
(C) The notice inviting informal bids shall describe the project in general terms and how to obtain more detailed information about the project, and shall state the time and place for the submittal of bids.
(D) The purchasing agent and the director of the department in charge of the project are each authorized to award and execute contracts for public projects of $75,000 or less or to reject all bids and to execute any change order to such a contract if that change order, together with the amount of the original contract and any previous change orders thereto, does not exceed $75,000. Any change orders exceeding such total amount shall be submitted for approval by the City Council. (E) If all bids received are in excess of $75,000, the City Council may, by adoption of a resolution by a four-fifths vote, award the contract at $80,000 or less to the lowest responsible bidder, if the City Council determines that the City's cost estimate was reasonable. (F) If no bids are received, the project may be performed by force account or by negotiated contract.
(G) All contracts and change orders shall be in a form approved by the City Attorney.

Sec. 2806. Formal Bidding Procedures. (A) The City Council shall approve plans, specifications and working details for all public projects of more than $75,000. (B) When a public project of more than $75,000 is to be contracted for, the purchasing agent shall prepare a notice inviting formal bids, which shall distinctly describe the project and state the time and place for receiving and opening sealed bids.
(C) At least 14 calendar days before the date of opening the bids, the purchasing agent shall publish the notice in a newspaper of general circulation, printed and published in the City. At least 30 calendar days before the date of opening the bids, the purchasing agent shall mail the notice to all construction trade journals on the list referred to in subsection (b) of section 2804. The purchasing agent may also give such other notice as the purchasing agent or the director of the department in charge of the project deems proper.
(D) The purchasing agent may reject any bids received. If, after the first invitation of bids, all bids are rejected, the purchasing agent may, after reevaluating the cost estimates for the project:
(1) Abandon the project;
(2) Readvertise for bids; or
(3) Request that the City Council adopt a resolution by a four-fifths vote, declaring that the project can be performed more economically by City employees. If such a resolution is adopted, the purchasing agent may have the project done by force account.
(E) The purchasing agent shall award any contract to the lowest responsible bidder and is authorized to execute such contract.
(F) If no bids are received, the project may be performed by negotiated contract or by City employees by force account.
(G) The director ofthe department in charge of the project is authorized to execute any change order to a contract awarded pursuant to subsections (e) or (f) of this section, provided the change order does not exceed the total amount of the original contract and any previous change orders thereto. Any change order exceeding such total amount shall be submitted for approval by the City Manager. (H) All contracts and change orders shall be in a form approved by the City Attorney.

Sec. 2807. Same-Bid Bonds. All sealed bids submitted pursuant to section 2806 must be accompanied by a bid security in an amount equal to at least 10 percent of the amount bid. A bid shall not be considered. unless one of the forms of bid security specified in Government Code section 20170 is enclosed with the bid. If the successful bidder fails to execute the contract, the amount of the bidder's security shall be forfeited to the City, except as provided in Government Code sections 20173 and 20174. ) )
Sec. 2808. Performance and Payment Bonds. The purchasing agent or departmental director awarding a contract pursuant to section 2805, and the purchasing agent awarding a contract pursuant to section 2806, may require a faithful performance bond and shall require a payment bond in an amount equal to at least one-half of the amount of the contract. Such bonds shall be issued by an admitted surety insurer and be in the form of a bond, not a deposit in lieu of a bond.

Sec. 2809. Emergencies; Procedure. (A) In cases of great emergency, including, but not limited to, states of emergency defined in section 8558 of the Government Code, when repair or replacements are necessary to permit the continued conduct of the operation or services of the City or to avoid danger to life or property, any public facility may be repaired or replaced, pursuant to the procedure set out in subsection (b), without adopting plans, specifications, strain sheets or working details, or giving notice for bids to let contracts. The work may be done by day labor under the direction of the City Council, by contract, or by a combination of the two.
(B) By majority vote, the City Council may declare an emergency and authorize the repair or replacement ofa public facility, as described in subsection (a). If the City Council is not in session, the City Manager may take such actions, subject to confirmation by the City Council, by a four-fifths vote, at its next meeting.

PART 3 - PURCHASE OF SUPPLIES AND EOUIPMENT
Sec. 2810. Authority to Purchase. Supplies and equipment may be purchased for the City by the purchasing agent and by such other City officers and employees.

Sec. 2811. Purchase Orders and Contracts. Purchases of supplies and equipment shall be made only by purchase order or by contract in a form approved by the City Attorney. The purchasing agent or the City officer or employee making the purchase is authorized to execute the purchase order or contract on behalf ofthe City.

Sec. 2812. Bids Required. Except when the commodity can be obtained from only one source, bids shall be obtained for all purchases of supplies or equipment of $1 ,000 or more, in accordance with such procedures as the City Council may adopt by resolution.

Sec. 2813. Emergencies. If the City Council or the City Manager declares that the public interest and necessity demand the immediate expenditure of public money to safeguard life, health or property, the City Council or the purchasing agent may expend any sum required to purchase supplies and equipment in the emergency without complying with section 2805.

PART 4 - CONTRACTING FOR TRADE SERVICES AND PROFESSIONAL SERVICES Sec. 2814. Definitions. (A) "Trade services" are services other than professional services. (B) "Professional services" are services and advice rendered by a specially trained and experienced person, firm or corporation in financial, economic, accounting, architectural, landscape architectural, engineering, environmental, land surveying, construction project management, legal or administrative matters.

Sec. 2815. Purchase of Trade Services. Trade services may be purchased for the City by the purchasing agent or by other City officers and employees in accordance with procedures adopted by resolution of the City Council.
) )
Sec. 2816. Purchase of Professional Services. Professional services may be purchased for the City by the purchasing agent or by other City officers and employees in accordance with procedures adopted by resolution of the City Council. However, procedures for contracting for certain professional services are provided in division 5 of this article.

Sec. 2817. Purchase Orders or Contracts Required. (A) Every purchase of trade services shall be by purchase order or by contract in a form approved by the City Attorney. (B) Every purchase of professional services shall be by contract in a form approved by the City Attorney.
(C) The purchasing agent or the City officer or employee making the purchase of trade services or professional services is authorized to execute the purchase order or contract on behalf ofthe City.

PART 5 - CONTRACTING FOR CERTAIN PROFESSIONAL SERVICES
Sec. 2818. Purpose. The purpose of this part is to ensure that certain professional services are engaged on the basis of demonstrated competence and qualifications for the types of services to be performed and at fair and reasonable prices to the City and to ensure maximum participation by small business firms.

Sec. 2819. Definitions. (A) As used in this part, "services" means architectural, landscape architectural, engineering, environmental, land surveying and construction project management services rendered by private persons or firms, as such services are defined by section 4525 of the Government Code. (B) As used in this part, "small business firms" means those businesses so defined by the California State Director of General Services pursuantto section 14837 of the Government Code.

Sec. 2820. Applicability. This part shall not apply when the person or body selecting the services determines that the services needed are more of a technical nature and involve little professional judgment and that requiring bids would be in the public interest.

Sec. 2821. Basis for Selection. Persons and firms shall be selected to render services to the City on the basis of demonstrated competence and on the professional qualifications necessary for the satisfactory performance of the services required.

Sec. 2822. Actiyities Prohibited. (A) In contracting for services, no person shall engage in practices that might result in unlawful activity including, but not limited to, rebates, kickbacks or other unlawful consideration.
(B) If a City employee has a relationship with a person or business entity seeking a contract for services, and such relationship would subject the employee to the prohibition of section 87100 of the Government Code, such employee shall not participate in the process of selecting the contractor for those services. Section 87100 of the Government Code provides that no public official at any level of state or local government shall make, participate in making or in any way attempt to use his official position to influence a governmental decision in which he knows or has reason to know he has a financial interest.

Sec, 2823. Procedure. (A) Requests for proposals for services may, but need not, state the amount that has been budgeted for the services. However, requests for proposals for services shall prohibit proposers from providing information as to the cost at which they would provide services. (B) Requests for proposals for services shall require proposers to provide information as to their professional experience and qualifications. In addition, requests for proposals for construction project management services shall require proposers to provide evidence that the person or firm and its personnel carrying out onsite responsibilities have expertise and experience in construction project ) )
design review and evaluation, construction mobilization and supervision, bid evaluation, project scheduling, cost-benefit analysis, claims review and negotiation, and general management and administration of a construction project.
(C) City staff shaH make reasonable efforts to make small business firms located in San Luis Obispo County aware of requests for proposals issued by the City for services provided by such firms. (D) City staff shaH determine the best qualified proposers and rank them accordingly. Rankings shall be based on responses to the request for proposals and on any interviews with the proposers that City staff may conduct. Interviews need not be conducted if City staff has sufficient information from the responses to the request for proposals to determine rankings. (E) City staff shaH negotiate for a contract with the first ranked person or firm at a compensation that City staff determines is fair and reasonable to the City. If City staff is unable to negotiate a satisfactory contract with the first ranked person or firm, City staff shaH notity such person or firm in writing that negotiations are terminated and shall begin negotiate with the second ranked person or firm, and so on in order of the rankings. If City staffis unable to negotiate a satisfactory contract with the second and third ranked person or firm, City staff may enter into negotiations with additional persons or firms in the order that they are ranked, pursuant to the same procedure, until a satisfactory agreement is reached, or may notity all remaining proposers that no additional negotiations will be entered into. In such case, City staff may issue a new request for proposals or perform the services with City employees.

Sec. 2824. No Obligation to Contract. Every contract for services must be awarded pursuant to this part.

However, nothing in this part shall require City staff to enter into any contract for services with any person or firm.

PART 6 - ADDITIONAL PROCEDURES
Sec. 2825. Purchasing Manual. The purchasing agent shall develop and maintain a purchasing manual that provides detailed procedures for compliance with City ordinances and resolutions and State and federal laws applicable to purchasing and contracting.

Within fifteen days after passage, the City Clerk shall cause this ordinance to be published one time in a newspaper of general circulation, published and circulated in the City. Ordinance No.97-l1 was first read on July 7, 1997 and finally adopted on July 21, 1997, to become effective thirty days thereafter.

On motion by Council Member Arnoldsen, second by Council Member Santos and on the following roll- . call vote, to wit:

AYES:

NOES:

ABSENT:

Arnoldsen, Santos, Gates, Keith, Mayor Reed
None
None
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APPROVED AS TO FORM:
~~ ES F. RUPP, CITY ARNEY
ORDINANCE NO. 23______

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH, CALIFORNIA, REPEALING OF CHAPTER 8 (PERFORMANCE OF PUBLIC PROJECTS; PURCHASING OF SUPPLIES AND EQUIPMENT; CONTRACTING

FOR SERVICES), OF ARTICLE II (ADMINISTRATION) AND ADDING A NEW SECTION 2800 OF CHAPTER 8 (PURCHASING POLICY) OF ARTICLE II (ADMINISTRATION) OF THE GROVER BEACH MUNICIPAL CODE
WHEREAS, the City of Grover Beach (“City”) is a General Law city organized pursuant to Article XI of the California Constitution; and
WHEREAS, this Chapter may be referred to as the “Purchasing Policy” and is adopted pursuant to the authority identified in this ordinance, including Government Code Sections 37103, 37350 et seq., 53060, and 54201 et seq., as well as the police power set forth in Article XI, Section 7 of the California Constitution; and
WHEREAS, This Ordinance applies to contracts for the procurement of goods, services, construction, and professional services entered into by the City and it shall apply to every expenditure of public funds by the City for public purchasing irrespective of its source, except as otherwise provided by State law, State regulation, City ordinance or administrative policy, and WHEREAS, it shall not be applied to purchases by elected officials not statutorily required to purchase in compliance with City policies or for whom purchases are not made by the City; and WHEREAS, when the procurement involves the expenditure of State or Federal assistance or contract funds, the procurement shall be conducted in accordance with any applicable mandatory State and/or Federal law. This ordinance does not apply to the procurement of legal services; and
WHEREAS, the Purchasing Policy, is not a project within the meaning of the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., “CEQA”) and CEQA Guidelines (Title 14 California Code of Regulations §§ 15000, et seq.) Section 15378 because the approval of the Purchasing Policy will not result in a direct or indirect physical change in the environment and does not involve an irrevocable commitment of resources by the City.

NOW THEREFORE, BE IT HEREBY ORDAINED BY THE CITY COUNCIL OF THE CITY OF GROVER BEACH AS FOLLOWS:

PART 1. Chapter 8 (Performance of Public Projects; Purchasing of Supplies and Equipment; Contracting for Services), of Article II (Administration) is hereby repealed in total.

PART 2. A new Section 2800 of Chapter 8 (Purchasing Policy) of Article II (Administration) is hereby added as follows:

Attachment 2
Ordinance No. 23-__ Page 2
Chapter 8 – Purchasing Policy
Sec. 2800. The Purchasing Policy shall represent the procedures for the procurement of goods, services, construction, and professional services entered into by the City and it shall apply to every expenditure of public funds by the City for public purchasing irrespective of its source, except as otherwise provided by State law, State regulation, City ordinance or administrative policy. The Purchasing Policy Dated July 24, , 2023, and entitled “City of Grover Beach Purchasing Policy, Version no. 1” is hereby incorporated by reference as if set out in full and adopted by the Council establishing the purchasing procedures for the City which shall be implemented consistent with the provisions within the Purchasing Policy.

PART 3. Severability. If any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held invalid by a court of competent jurisdiction, such a decision shall not affect the validity of the remaining portions of this Ordinance. The City Council declares that it would have passed this Ordinance and each section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses, or phrases, be declared invalid.

PART 4. All ordinances and parts of ordinances in conflict with those sections amended or added herein are hereby repealed.

PART 5. Effective Date. This Ordinance shall not become effective and in full force and effect until 12:01 a.m. on the thirty-first day after its final passage. However, within fifteen (15) days after adoption by the City Council, the Ordinance shall be published once, together with the names of the Council Members voting thereon, in a newspaper of general circulation within the City.

INTRODUCED at a regular meeting of the City Council held on July 24, 2023 and PASSED, APPROVED, and ADOPTED by the City Council on August _____, 2023, on the following roll call vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:
___________________________________

KAREN BRIGHT, MAYOR
Attest:
______________________________

WENDI SIMS, CITY CLERK
Approved as to Form:
_____________________________
DAVID P. HALE, CITY ATTORNEY
** D R A F T **
City of Grover Beach
Purchasing Policy, Version No. 1
As Approved by City Council Resolution 2022-XX
Date:

July 24, 2023
Attachment 3

TABLE OF CONTENTS

CONTENTS
SECTION 1 – OVERVIEW......................................................................................................... 2

1.1 Introduction.................................................................................................................. 2

1.2 Purchasing System...................................................................................................... 2

1.3 Types of Purchases ..................................................................................................... 2 SECTION 2 – PURCHASING AUTHORITIES/RESPONSIBLITIES ........................................... 3

2.1 General Authority......................................................................................................... 3

2.2 Grant Funding.............................................................................................................. 4 SECTION 3 – PURCHASING PROCESS .................................................................................. 5

3.1 Permitted Purchasing Methods .................................................................................... 5

3.2 Purchase Requisitions/Purchase Orders...................................................................... 5

3.2.1. Blanket Purchase Orders/Standard Goods Contracts..........................................................5 SECTION 4 – PURCHASING BIDDING AND APPROVAL THRESHOLDS ............................... 6

4.1 Supplies, Materials, Equipment and General Services................................................. 6

4.2 Public Projects ............................................................................................................. 7

4.2 Purchases of Certain Professional Services................................................................. 8

4.3 On-Call Consultant Services ........................................................................................ 9

4.4 Contract Amendments and Change Orders ................................................................. 9 SECTION 5 – BIDDING PROCEDURES ................................................................................... 9

5.1 Request for Bids (RFB)................................................................................................ 9

5.2 Request for Proposals (RFP)....................................................................................... 9

5.3 Request for Qualifications (RFQ) ................................................................................10

5.4 Informal Quotes ..........................................................................................................10

5.5 Bidding Criteria ...........................................................................................................10 SECTION 6 – NO-BID PURCHASING ......................................................................................11

6.1 Low-Cost Purchasing..................................................................................................11

6.2 Sole Source Purchasing .............................................................................................11

6.3 Emergency Purchasing...............................................................................................11

6.4 Cooperative Agreement Purchasing ...........................................................................12

6.5 Routine Expenditures for Utilities, Payroll and Other Services ....................................12 SECTION 7 – CREDIT CARD CHARGES ................................................................................12

7.1 Credit Card Issuance ..................................................................................................12 1 SECTION 8 – BUSINESS TAX CERTIFICATE REQUIREMENT ..............................................14

8.1 Requirement ...............................................................................................................14

8.2 Exceptions ..................................................................................................................14 SECTION 9 – PAYMENT OF INVOICES ..................................................................................15

9.1 Receipt of Goods and Services...................................................................................15

9.2 Invoice Process ..........................................................................................................15 SECTION 10 – CONTRACT MANAGEMENT ...........................................................................15

10.1 Responsibilities...........................................................................................................15

10.2 City Attorney Approval ................................................................................................15

10.3 Execution....................................................................................................................16

10.4 Control of Contract......................................................................................................16 SECTION 11 – DISPOSAL OF SURPLUS PROPERTY ...........................................................16

11.1 General.......................................................................................................................16

11.2 Value Exceeding $5,000................................................................................................16

11.3 Value of $5,000 or Less ..............................................................................................16

11.4 Donations to Other Agencies .........................................................................................17 SECTION 12 – DEFINITIONS...................................................................................................17

11.1 Capital Asset...............................................................................................................17

11.2 Force Account.............................................................................................................17

11.3 Job Order Contract .....................................................................................................17

11.4 Public Project..............................................................................................................17

11.5 Sole Source Purchase ................................................................................................17

11.6 Surplus Property .........................................................................................................18

ATTACHMENTS
A Emergency Purchasing and Disaster Policy .............................................................. 18 B Credit Card Agreement..............................................................................................22 2 SECTION 1 – OVERVIEW

1.1 Introduction
The purpose of this chapter is to guide City of Grover Beach employees in purchasing goods and services on behalf of the City by establishing responsibilities and authorization levels, outlining statutory requirements, and setting forth the policies and procedures that govern purchasing activities.

These guidelines are not intended to address every issue, exception or contingency that may arise in purchasing activities. Accordingly, the basic standard that should always prevail is to exercise good judgment in the use and stewardship of City resources. Any questions about purchasing activities or proper purchasing process should be referred to the Administrative Services Department.

Definitions for certain terms in this policy are included in Section 11 of this policy.

1.2 Purchasing System
Chapter 8 of Article II of the City of Grover Beach Municipal Code (GBMC), which incorporates these Policies (this Purchasing Policy) and the policies and procedures set forth in this chapter shall govern the City’s purchasing system, in addition to applicable sections of the Public Contracting Code to the extent the act preempts local regulations governing public works contracts (see California Public Contract Code Sections 20100, et. seq.). This system has been developed to achieve the following objectives:
• Secure goods and services at the lowest cost possible commensurate with quality requirements and the City’s needs;
• Establish authority, responsibility and accountability for purchasing activities conducted on behalf of the City;
• Ensure appropriate levels of competition and provide equal opportunities for all qualified vendors;
• Standardize procedures where appropriate to achieve consistency in purchasing practices in adherence to City policies and goals;
• Coordinate citywide purchasing for commonly used items.

1.3 Types of Purchases
The type of purchase and the estimated cost of the purchase determine the formality of the process by which the purchase shall be made. The City has identified three basic types of purchases:
• Purchases of Supplies, Materials, Equipment and General Services. Purchases or contracts for supplies and equipment, as well as operating and maintenance services.
• Purchases for Public Projects. Purchases for public projects, as defined by Public Contracting Code Section 20161 (generally, contracts for construction, reconstruction, erection, alteration, renovation, improvement, demolition and repair work, including painting of any facility owned, leased or operated by the City and street or sewer work).
3 • Purchases for Certain Professional Services. Professional work provided to the City by specially trained and experienced individuals or firms regarding engineering, planning, architectural, landscape architectural, environmental, land surveying and construction project management.
• Purchases for Services from On-Call Contractors. Purchases of consultant services, made from a list of contractors deemed most qualified via a competitive Request for Statement of Qualifications process and approved by Council. On-call lists must be approved by Council at least every three years.

SECTION 2 – PURCHASING AUTHORITIES/RESPONSIBLITIES

2.1 General Authority
The Table below demonstrates the City’s purchasing authorities and responsibilities:

City Council • Adopt purchasing ordinance
• Adopt resolution to approve
purchasing policy
• Approve changes to the
purchasing policy involving
purchasing thresholds or
authorities
• Approve purchases as required
under Section 4 of this policy
• Delegate authority to City
Manager/staff for purchases within
certain cost thresholds and
approved budget
City Manager • Ensure implementation of
purchasing policies
• Approve administrative changes to
the policy, including changes to
processes and procedures, but
not including changes to
purchasing thresholds or authority.
• Serve as or designate “Purchasing
Agent”
• Award contracts as specified in
Section 4 of this policy
Administrative Services Director (or
designee)
• Develop and implement
purchasing policies and
procedures
4 • Review purchases and contract
awards for compliance with
purchasing policy
• Assist departments in
development of solicitations
• Create, manage and maintain
Blanket Purchase Orders
City Engineer • Approve specifications for public
projects
Public Works Director • Approve Job Order Contract task orders for public projects
Department Heads • Review and approve departmental
purchases and contracts as
specified in Sections 4 and 10
• Approve invoices or payment
requests for departmental
purchases
• Delegate purchasing authority to
department employees as
appropriate
IT Manager • Review all purchases of citywide
or departmental technology
systems, applications, software or
hardware for recommendation on
purchase
Authorized Employees • Purchase, receive and pay for
items in accordance with City
guidelines
• Review (and approve if delegated
by the Department Head) invoices
or payment requests for
departmental purchases

2.2 Grant Funding
Federal, State or other grant programs may require additional conditions that are more stringent than the City’s procedures. It is the responsibility of the department accepting the grant to ensure all grant provisions are complied with. Departments should adhere to Part 200 – Uniform Administrative Requirements for Federal Grants, including the 5 Section 200.318 general procurement standards, which can be found here:
https://www.ecfr.gov/current/title-2/part-200.

SECTION 3 – PURCHASING PROCESS

3.1 Permitted Purchasing Methods
Departments may use three methods to purchase goods and services: Purchase Order/Contract, City Credit Card and Emergency Purchases. The table below summarizes the dollar thresholds and requirements for each method. Note that work may be performed by Force Account, or with internal resources, if the Department Head determines internal resources have the needed ability/expertise and the total cost is less than $25,000.

Purchase Type Dollar Threshold Requirements
Contract/Purchase
Requisition/ Purchase
Order**
Within approved
budget
Must obtain all approvals as required by
Section 4
Credit Card Up to $5,000* Not permitted for purchases for services or Capital assets. Only employees
authorized by Department Heads may
make credit card purchases.

Emergency Purchase Within Budget* for
a General
Emergency
For a Proclaimed
Emergency or
Disaster, refer to
Attachment B
Only permitted if there is an immediate
and serious need that cannot be met
through normal purchasing procedures
that would seriously threaten the
functioning of City government, the
preservation of property or the health
and safety of any person consistent with
approved emergency declaration. All
emergency purchases must be reported
to the Administrative Services
Department as soon as is practicable.
* Limit/amount may be raised with City Manager approval ** Purchase Requisitions and Purchase Orders are not required, pending a new financial system

3.2 Purchase Requisitions/Purchase Orders

3.2.1. Blanket Purchase Orders/Standard Goods Contracts. The Administrative Services Department shall develop contracts and/or Blanket Purchase Orders with vendors for frequently purchased goods. The Administrative Services 6 Department shall maintain a list of citywide contracts and Blanket Purchase Orders for these purchases. City staff must use the City accounts or contracts when making related purchases, unless otherwise authorized by the Administrative Services Department and approved by the City Attorney. [THE REMAINDER OF THIS SECTION IS INTENTIONALLY LEFT BLANK PENDING IMPLEMENTATION OF FINANCIAL SYSTEM]
SECTION 4 – PURCHASING BIDDING AND APPROVAL THRESHOLDS
The required bidding process and level or approvals for any purchase is determined by the type of purchase (see Section 1.3 of this policy) and the cost of the purchase. Most purchases that do not fall within an exception listed in Section 6 of this policy require an informal or formal bidding process (See Section 5 of this policy which defines each bidding process). Note that the buyer for any purchase cannot serve as the approver of that purchase.

4.1 Supplies, Materials, Equipment and General Services The table below summarizes the bidding and approval requirements for purchases of supplies, materials, equipment and general services. Note that all purchases of technology systems, applications, software or hardware must be reviewed by the IT Manager.

Purchase Amount Bid Process Approval PO/Contract
Requirement
$5,000 or less None Required Department Head or
designee approves
invoice
No PO or contract
required
$5,001-$50,000 Informal Quotes
Process*
Department Head
approves invoice or
PO
PO or contract
required
$50,001-$100,000 RFB Process City Manager
approves
PO or contract
required
More than $100,000 RFB Process City Council
approves contract
Contract required;
Contracts must be
reported to the City
Council in quarterly
reports
* Generally, staff should seek at least three quotes. A “no-bid” response may be considered a quote for this purpose. 7 4.2 Public Projects
The table below summarizes the bidding and approval requirements for Public Project purchases. Staff should also consult the Public Contracting Code Guidance provided by the Public Works Department.

Purchase Amount Bid Process Approval PO/Contract
Requirement
$5,000 or less None Required Department Head or
designee approves
invoice
No PO or contract
required
$5,001-$50,000 RFB RFP Process Department Head or
designee approves
invoice
PO or contract
required
$50,001-$100,000 RFB/RFP Process City Manager
approves PO
Contract or PO
required
$100,001-$200,000 RFB/RFP Process City Council
approves contract
Contract required
More than $200,000 RFB/RFP Process City Council
approves project
concept prior to
bidding process and
resulting contract
Contract required
8 4.2 Purchases of Certain Professional Services
For purchases of certain professional services, as defined in Section 1.3 of this policy, persons or firms must be selected on the basis of demonstrated competency and professional qualifications necessary for the performance of the services required and proposers must provide information about the cost of services under separate cover. The table below summarizes the bidding and approval requirements for each type of service under this section.

Purchase
Amount
Bid Process Approval PO/Contract
Requirement
$5,000 or less None Required Department Head or
designee approves
invoice
No PO or contract
required
$5,001-$50,000 Informal Quotes
Process*
Department Head
approves PO
PO or contract
required
$50,001-$100,000 Informal Quotes
Process*
City Manager
approves PO
Contract required
More than $100,000 RFB/RFP Process City Council
approves contract
Contract required
* Generally, staff should seek at least three quotes. A “no-bid” response may be considered a quote for this purpose. 9 4.3 On-Call Consultant Services
The table below summarizes the bidding and approval requirements for purchases of on-call consultant services, as defined in Section 1.3 of this policy.

Purchase Amount Bid Process Approval PO/Contract
Requirement
$5,000 or less None Required Department Head or
designee approves
invoice
No PO or contract
required
$5,001-$50,000 Proposals from Oncall Consultants
Department Head
approves PO
Contract required
$50,001-$400,000 Proposals from Oncall Consultants
City Manager
approves PO
Contract required
More than $400,000 Proposals from Oncall Consultants
City Council
approves
Contract required

4.4 Contract Amendments and Change Orders
A purchase approver may amend a contract or approve a change order in an amount not to exceed 20% of the original contract amount without approval from the higher purchasing authority, provided that the original contract was within the approver’s authority, as noted in this Section 4, and the amendment or change order does not materially change the scope of services.

SECTION 5 – BIDDING PROCEDURES
For purchases that require a bidding process as shown in Section 4 of this policy that do not fall within the exceptions listed in Section 6 of this policy, staff must engage in one of the following competitive bidding processes describe below.

5.1 Request for Bids (RFB)
An RFB is a request to vendors to submit an offer or quote for specific, defined goods, products or construction. An RFB should be used when seeking a fixed price for goods with known specifications (e.g. Dell XPS 13 laptops). RFBs are used for Construction of Public Projects and when setting up a Job Order Contract (defined in Section 11 of this Policy). RFBs must be posted on the City’s designated solicitation site along with other desired noticing.

5.2 Request for Proposals (RFP)
An RFP is a request to vendors to submit a proposal for goods or services for which the exact specifications or methodology of providing the desired goods or services is not 10 defined. An RFP is generally used for more complex goods or services purchases. RFPs allow for consideration of factors other than price, including the qualifications of the vendor and the vendor’s ability to perform. RFPs must be posted on the City’s designated solicitation site along with other desired noticing.

5.3 Request for Qualifications (RFQ)
An RFQ is a request for a statement of qualifications for a certain class of vendors or consultants. RFQs are used to develop On-call or Master Agreements. RFQs must be posted on the City’s designated solicitation site along with other desired noticing.

5.4 Informal Quotes
When formal bidding is not required by the City’s purchasing policy, staff may seek informal quotes by verbal or written request. An informal or quick quote is a simple request for pricing on simple, low-cost goods or services. Staff should request quotes from at least three vendors, if available. If quotes are sought by verbal or written request, staff must create a quote summary to record the quotations received..

5.5 Bidding Criteria
The table below summarizes the requirements and process for each type of solicitation listed in Sections 5.1 – 5.4 of this policy.

RFB RFP RFQ Informal Quote
Goal Lowest Price Lowest
Responsible
Bidder
Most Qualified Lowest Price
Public Opening
Requirements
Open publicly
and read aloud
Open publicly
and pricing read
aloud
No public
opening.

Qualification
statements
made publicly
available
No public
opening
Evaluation
Process
Select lowest
responsive bid.

No scoring
Responsible
proposals
evaluated and
scored based on
qualifications.

Qualifications
evaluated and
scored (can
have pass/fail
responses). No
cost evaluation.

Select lowest
responsive
quote. No
scoring
Award Basis Lowest
responsive bid
Highest scored
proposal
Highest scored
submittal
Lowest
responsive
quote
11 SECTION 6 – NO-BID PURCHASING

6.1 Low-Cost Purchasing
As noted in the tables in Section 4 of this manual, no bidding process (formal or informal) is required for purchases of less than $5,000.

6.2 Sole Source Purchasing
Generally, it is the policy of the City to solicit quotations or bids for purchases of commodities or services for more than $5,000 and to select vendors on a competitive basis. However, certain acquisitions in which the products or services may only be obtained from a single source may be purchased without engaging in bidding procedures.

Sole Source purchases must be justified in sufficient detail to explain the basis for suspending the usual competitive procurement process and approved by the Administrative Services Department before such a purchase is made.

Some examples of legitimate sole source purchases include the following:
• Purchases in which only one known source exists or there is no reasonable alternative source for the goods or services as determined by documented research • Purchases in which only one source meets the City’s business needs (e.g., compatibility with existing systems, unique features or services that meet the desired goals of the City, etc.).
• Purchases of proprietary items which only the manufacturer, owner, or designated re-seller is permitted to sell (this includes purchases in which purchasing from a nondesignated seller would result in nullification of manufacturer warranties) • Upgrades to existing systems where purchasing a different solution or product would result in significant additional costs (e.g., data conversion, re-training of staff, new system implementation costs)
• Purchases of services from a contractor with specific and unique knowledge of existing City systems, procedures or historical data that is critical to the project or City goals where use of another contractor would result in significant costs or project delays due to lack of such knowledge.

6.3 Emergency Purchasing
Generally, it is the policy of the City to solicit quotations or bids for purchases of commodities or services for more than $5,000 and to select vendors on a competitive basis. However, purchases that are required to safeguard and immediate life, health or property interest may be made without a bidding process.

Section 6.3.1 – A purchase qualifies as an Emergency Purchase if all of the following are true:
• The City’s need cannot be met under the time constraints of the normal purchasing process and;
12 • The lack of equipment, goods or services would seriously threaten the functioning of City government, the preservation of property or the health and safety of any person.

Section 6.3.2 – City staff must not use the emergency purchase process to circumvent general purchasing policy or vendor licensing requirements. City staff should seek quotes and determine reasonableness of pricing when making an emergency purchase whenever possible.

Section 6.3.3 – Local Emergency Purchasing. If a local emergency is declared by the City Council, City staff must adhere to the Emergency and Disaster Purchasing Policy (see Attachment B).

6.4 Cooperative Agreement Purchasing
Section 6.4.1 – City staff may use established cooperative agreements involving other public agencies for purchases without a competitive bidding process, if those cooperative agreements were competitively bid. City staff is responsible for researching cooperative agreements to ensure the bidding process complies with City competitive bidding rules.

Section 6.4.2 – City staff should research the pricing for the goods or services being sought and compare the pricing set forth in the cooperative agreement is reasonable. If the pricing set forth in a cooperative agreement is not reasonable, City staff should initiate a competitive bidding process rather than leveraging the cooperative agreement.

6.5 Routine Expenditures for Utilities, Payroll and Other Services Routine expenditures that benefit several departments, such as telephone, utilities, debt service payments, and payroll benefit costs, shall be paid by the Administrative Services Department without the use of a Purchase Order Request. Computer spreadsheets, reports, or other coding information will be sufficient to use as backup documentation.

These procedures may be waived in the event of an emergency if it is in the public interest.

SECTION 7 – CREDIT CARD CHARGES

7.1 Credit Card Issuance
The Administrative Services Department will issue credit cards only to permanent employees who are approved by their Department Head.
13 7.1.1 Limits. Generally, City-issued credit cards shall have a credit limit of $5,000. However, the City Manager may approve an increase of this limit if written justification is provided by the Department Head.

7.1.2 City Business. City credit cards are for official City business only. No personal purchases may be charged to the card. Intentional charging of personal expenses on City credit cards is a misuse of City funds, and a serious breach of the City’s ethics policy. Doing so, even if the intent is to reimburse the City later, will result in disciplinary action, up to and including termination and legal action.

Minor incidental expense as a component part of a larger billing, such as personal calls on a hotel bill, may be allowed if reimbursed at the time the credit card billing is submitted for payment.

7.1.3 Travel Expenses. Credit cards may be used in paying for travel expenses.

However, the City’s Travel Guidelines still apply to all such credit card payments, including the use of Travel Authorizations and per diem amounts.

7.1.4 Gratuities. Generally, purchases with City credit cards may include reasonable gratuities for services for which such gratuities are standard but should not exceed 20 percent of the total cost.

7.1.5 Comply with Rules. City credit cards may not be used to circumvent other purchasing rules in this manual. Additionally, City credit cards may not be used for the following:
• Cash advances, wire transfers, money orders, etc.
• Purchases of items for which the City has contracts (water meters, bulk fuel, etc.) unless it is an emergency situation, and approved by the Approving Official.
• Political or religious organizations.
• Court costs, fines, bail, or bonds.
• Rentals, except for small pieces of equipment to be used for less than a weekin duration or vehicle rentals related to travel.
• Temporary employees.
• Alcoholic beverages and tobacco products.
14 7.1.6 Cardholder Responsibility. Each cardholder is responsible for the security and safe keeping of the credit card and must sign the City’s Credit Card Agreement (See Attachment C – Credit Card Agreement). Cardholders should obtain itemized receipts for every transaction. Cardholders who fail to provide itemized receipts for purchases may be held personally responsible for charges.

If an item is billed incorrectly, the cardholder is responsible for contacting the vendor within 10 days of the transaction. The employee should notify Accounts Payable and should provide all documentation relating to the charge in a timely manner. Accounts payable will contact the bank and will pursue the matter until resolved.

7.1.7 Department Head Responsibility. Department Heads must authorize issuance of credit cards and develop and implement departmental procedures to be sure credit card purchases are approved and forwarded to Administrative Services in accordance with this manual, and in a timely manner. Department Heads must retrieve credit cards from the cardholder if the cardholder fails to adhere to the policies in this manual or separates from City service. When necessary, Department Heads must enforce disciplinary action associated with the misuse of credit cards.

7.1.8 Disciplinary Action. The Director of Administrative Services or authorized designee will notify Department Heads regarding misuse of City credit cards.

Department Heads will be responsible for all disciplinary action surrounding misuse of cards, or abuse of this policy. This will include cancellation of card privileges, and other action as deemed appropriate.

SECTION 8 – BUSINESS TAX CERTIFICATE REQUIREMENT

8.1 Requirement
The City requires most entities doing business within or transacting with the City to obtain a Business Tax Certificate, pursuant to GBMC Section 10202. Therefore, for most purchases, City staff must notify the vendor of the requirement and/or ensure that the vendor has a Business Tax Certificate before making the purchase. Whenever possible, City staff should direct purchases to vendors who already have a valid business license. Staff should contact the Administrative Services Department for a current listing of businesses who have valid Business Tax Certificates.

8.2 Exceptions
• Some businesses are exempt from obtaining a Business Tax Certificate (see GBMC Section 10215). For those businesses that are exempt, staff need not require proof of a Business Tax Certificate to make a purchase. 15 SECTION 9 – PAYMENT OF INVOICES

9.1 Receipt of Goods and Services
Items must generally be shipped to a City address or worksite. If the product will be shipped to an alternate location, this should be cleared through the Administrative Services Department inadvance.

9.2 Invoice Process
Once an invoice is received, staff should verify the goods or services were received in good working order or pursuant to the scope and terms of the contract, when applicable.

Upon verification, the Department should enter all necessary information in the Accounts Payable System provide the following information to the Administrative Services Department:
• That they are authorizing payment (i.e., use stamp)
• The amount that they are authorizing for payment
• The account number(s) that is to be charged
• Include vendor’s W-9 form if not already on file (should be checked with the Administrative Services Department)
• Attach a copy of the contract, if applicable
• Attach invoice/receipt/backup
SECTION 10 – CONTRACT MANAGEMENT
Purchases that require contracts, as noted in Section 4 of this policy, and any contract entered into on behalf of the City must adhere to this Section 10.

10.1 Responsibilities
Contract management is the primary responsibility of the department in charge of the project or services. Prior to requesting bids or proposals, the Department Director shall work with the City Attorney to ensure the contract is in proper legal form and shall ensure the contract is properly executed upon award. The Department Director shall also ensure that payment to contractors or vendors are in accordance with the payment terms and/or schedule within the contract.

10.2 City Attorney Approval

10.2.1 Unless otherwise exempted in this Policy, contracts must be reviewed and approved as to legal effect and form by the City Attorney prior to execution or submittal to the City Clerk for inclusion in the City Council Agenda. .

10.2.3 Templates. If staff uses a City Attorney-approved contract template for the purchase of goods or equipment and no changes are made, additional City Attorney approval and/or signature is not required.
16 10.3 Execution
Whenever possible, contracts that require approval of the City Council should be signed by the contractor prior to being brought before the Council and a copy of the contract shall be included in the Council agenda package submitted to the City Clerk before it is included into the Council agenda package. Contracts should be signed via electronic signature whenever legally permitted. Contracts that are signed by a corporation or any other legal entity other than an individual, should be verified by written delegation of the legal entity the party signing the agreement has authority to do so. The City Attorney can assist with the type and nature of written authority necessary for a binding agreement.

10.4 Control of Contract
The Director of the contracting department shall maintain a copy of each contract and shall provide a copy to the Administrative Services Department. Contracts should be maintained for at least three years from the date of final payment under the contract.

SECTION 11 – DISPOSAL OF SURPLUS PROPERTY
All departments shall notify the Administrative Services Department of existing materials, supplies or equipment that are no longer used or have become obsolete. Departments may sell or dispose of such property under the following Sections.

11.1 General
If disposing of any City property, staff should determine the property’s value and reason for disposal (ie: property is past useful life, property is obsolete or being replaced by updated equipment). Disposal of capital assets must be reported to the Administrative Services Department.

11.2 Value Exceeding $5,000

11.2.1. If the value of the equipment or goods exceeds $5,000, the City must publish a notice in a newspaper of general circulation and shall sell the property using one of the following methods:
(A) A notice inviting formal bids shall be published in a newspaper of general circulation and sale shall be made to the highest bidder. (B) The department may use a third party vendor to auction the items on behalf of the City.

11.2.2. The department may dispose of property with a value exceeding $5,000 only if it is determined to be unusable or if an attempted sale is not successful.

Disposal of such property must be approved by the City Manager.

11.3 Value of $5,000 or Less
If the value of the equipment or goods is $5,000 or less, the surplus property shall be offered to other departments, if feasible. If no other City department claims the property, it must be included in a list prepared by the Administrative Services Department and be 17 sold by informal bids to the highest bidder. If no bids are received or if the property has no resale value, the City Manager may approve the destruction of the property.

11.4 Donations to Other Agencies
If property may properly be donated to another governmental agency, staff shall make arrangements with that agency and notify the Administrative Services Department of property being donated and estimated value. Donations should be made on an “as-is” basis, without any express or implied representations or warranties under applicable law.

11.5 Disposal
Departments shall dispose of property at the City’s Corporation Yard. 11 – DEFINITIONS
For definitions of bidding processes, see Section 5 of this policy.

11.1 Capital Asset
Any asset, tangible or intangible, used in operations that has a service life of more than one year with a cost exceeding $25,000 for infrastructure and $5,000 for all other capital assets.

11.2 Force Account
Use of City assets, equipment or labor of City staff, rather than a contractor.

11.3 Job Order Contract
A competitively bid, fixed price, multi-year construction contract based on established or published unit prices via a unit price book (UPB) or a price list with a multiplier (termed coefficient) applied to the unit prices.

11.4 Public Project
A public project is “construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds . . . For purposes of this paragraph, “construction” includes work performed during the design, site assessment, feasibility study and other preconstruction phases of construction, including, but not limited to, inspection and land surveying work regardless of whether any further construction work is conducted, and work performed during the postconstruction phases, including but not limited to, all cleanup work at the jobsite. For purposes of this paragraph, “installation” includes, but is not limited to, the assembly and disassembly of freestanding and affixed modular office systems.” (See CA Labor Code Section 1720, CA Public Contract Code Section 20161).

11.5 Sole Source Purchase
A sole source purchase is when the City enters into a contract with a contractor without going through the typical competitive process as required by law because it deems that the contractor is the only source available that can meet the City’s 18 requirements or the purchase complies with the requirements of Section 6.2 of this Policy.

11.6 Surplus Property
Surplus property is tangible property (any property that can be physically relocated) that is no longer of use to any City department because it is obsolete, uneconomical to repair, or valued only for its base contents. Surplus Property may include anything from office supplies and furniture to vehicles and heavy equipment. Surplus property for purposes of this Policy shall not include real property as defined by State law.

EXHIBIT A

EMERGENCY AND DISASTER PURCHASING POLICY
Policy Statement
The City of Grover Beach (City) is a full-service City, providing police, public works, parks and recreation and community development services. As such, it is the City’s responsibility to establish policies for prudent financial oversight and accountability.

The City Council sets legislative financial management policies, as recommended by staff. During declared states of emergency, the City may be required to invoke emergency purchasing practices to maintain core public services. These emergency practices are only authorized when the City Manager, acting in the capacity of the Director of Emergency Services, or the City Council of the City of Grover Beach declares a local state of emergency.

Purpose
When the City of Grover Beach has declared a local state of emergency, any official or employee who is required to purchase materials, supplies or services on behalf of the City for their department shall use purchasing practices set forth in this document until such time as the local state of emergency has been lifted.

This Policy modifies the City’s normal purchasing practices to assure that, in exigent circumstances caused by a proclaimed disaster or emergency, the City is able to acquire the goods and services required to address an immediate threat to health, safety or improved property while still maintaining an effective purchasing process and complying with applicable local and state purchasing laws. Where the City is included in a major disaster or emergency declared by the President of the United States, this Policy also assures that City procurements comply with federal regulations applicable to FEMA disaster grant reimbursement.

Definitions
For purposes of this Policy, (a) a proclaimed disaster or emergency exists if (i) the Governor has declared a state of emergency for an area which includes the geographic territory of the City; or (ii) the Chief Executive Officer of the City has declared an emergency in the City; (b) “Exigent Circumstances” are situations in which (i) a disaster or emergency has been proclaimed, and (ii) the public exigency for goods and services required to address an immediate threat to health, safety, or improved property will not permit competitive solicitation.

Emergency and Disaster Purchasing Policy
Disaster purchasing has a number of facets, first emergency spending limits are expanded and authorized by council without the need to obtain their prior approval. There can be individual limits and aggregate limits which give emergency managers the necessary authority to act quickly under exigent circumstances.

The concept of emergency purchases regards purchases made under “crisis” conditions, where there is an immediate threat to health, safety or improved property. When this condition (an immediate threat to health, safety or improved property) exists, the city has wider latitude to do what is necessary to save lives and prevent further damage to improved property. Given this, and operating under the understanding that when an emergency is in place, the City will be in need of supplies, goods and services as quickly as possible, local vendors within the City and County will be contacted first to obtain the quickest possible acquisition to preserve immediate health and safety for the Grover Beach community. This is consistent with the policy directives outlined below.

Section 1 - Delegations of Purchasing Authority in Exigent Circumstances. (a) if the City Manager determines that goods and services must be procured before the City Council is able to assemble and approve purchases, the City Manager has authority, subject to the limitations set forth in sub-paragraphs (a)(i) and (a)(ii), to approve the immediate rental or purchase of any equipment, supplies, services or other items necessary to respond to an immediate threat to health, safety or improved property.
(i) Limits of Single Purchase Authority. The City Manager shall have the authority to make individual purchases up to $250,000 on his or her signature alone. The City Manager shall have the authority to make purchases in excess of $250,000 up to a maximum of $500,000 when countersigned by the Mayor or in the Mayor’s absence countersigned by another council member.
(ii) Limits of Aggregate Purchase Authority. The City Manager shall have the authority to make aggregate purchases up to $500,000 on his or her signature alone. The City Manager shall have the authority to make purchases in excess of $500,000 up to a maximum of $1,500,000 when countersigned by the Mayor or in the Mayor’s absence countersigned by another council member.
(b) Sub-delegation to EOC Coordinator. The EOC Coordinator shall be a designee of the City Manager at any time that the City Manager is not available to approve purchases as allowed in this section. (c) Administrative Procedures: Reporting Requirements.
(i) As soon as possible after purchases are made under this section 1, the City Manager, EOC Coordinator, or department head shall submit to the Purchasing Officer (Administrative Services Director) a requisition and a notation that the commodity has been ordered on an emergency basis from the vendor designated.
(ii) The Purchasing Officer will inform the City Manager and the City Council of any individual purchase under this section with a contract amount greater than $125,000, and also whenever the aggregate of purchases under this section is greater than $200,000 dollars. (iii) The Purchasing Officer will obtain the City Manager's (or EOC Coordinator as the City Manager’s designee) approval prior to any purchase by a department head if the amount is $150,000 dollars or more.
(iv) The Purchasing Officer shall have the authority to approve all disaster related purchases under $150,000 thousand dollars.

(v) The Purchasing Officer will expedite the verification of funds available and complete the preparation of the purchase order.

Section 2 - Procurement Procedures in Exigent Circumstances.

Upon receipt of requisitions under Section 1 above, the Purchasing Officer shall prepare purchase orders for the emergency equipment, supplies, services or other items in accordance with the requirements of this section.
(a) Exempt Purchases. Purchases below $200,000 shall not be required to be formally bid. Purchases greater than $200,000 may be made following the procedures specified in this section. The signature(s) of the City Manager, Purchasing Officer and/or Department Head are still required as provided in Section 1.
(b) Justification of “Sole Source” or “No-bid” Contracts. Where exigent circumstances require immediate procurement from the nearest available source:
(i) the Procurement Officer shall complete a Sole Source Justification Form; (ii) procurement should be limited to that portion of the work that must be performed immediately, allowing subsequent procurement by competitive proposals of the remainder of the work;
(iii) “Sole source” or “no-bid” acquisitions shall be necessary for one of the following reasons:
placement of emergency protective measures; procurement of a scarce commodities, goods, or services; or acquisition or rental of emergency equipment , emergency consulting services, emergency road clearance or other emergency requirements. (c) Provision for Alternate Bid Solicitation Procedures. The City's normal requirements for sealed bids shall not apply to acquisitions under Section 1. However, the Procurement Officer shall conduct telephonic or other electronic bid solicitation from potential vendors or suppliers, in lieu of written and/or sealed bids, in an effort to obtain multiple competitive proposals when and if time allows in light of the exigent circumstances.
(d) Locations of Postings for Requests for Proposals or Solicitation of Bids. The Procurement Officer may waive normal requirements for public posting of requests for proposals or solicitation of bids.

Notices soliciting bids or requests for proposals shall be posted at the Emergency Operations Center or Alternate Emergency Operations Center, if the Primary Emergency Operations Center is not being used.
(e) Length of Time for Posting Requests for Proposals or Solicitation of Bids. The Procurement Officer may shorten the normal bid period to expedite the award of contracts for emergency equipment, goods, or services. The Procurement Officer should seek to assure that the shortened bid period allows multiple suppliers to submit bids.
(f) Number of Bids Required. Solicited bids that are non-responsive shall count towards the minimum numbers of bids required when there is a declared emergency or disaster in the City.

Section 3 - Notification and Ratification
(a) Posting of Contract Awards. Under this section, all contracts awarded that exceed $750,000 shall be presented to the City Council for ratification and shall be publicly posted within sixty (60) days of the award.
(b) Authority to Cancel Emergency Procurements. As a provision of this policy, the City has the absolute authority to rescind a contract for non-performance within 24 hours when a contractor or vendor, once awarded a contract, is unable to perform under the terms of the contract and the resulting delay or non-performance presents an immediate threat to life, safety or improved property. (c) Notification Requirement for Emergency Purchases. For any purchase in excess of $150,000, the City Manager shall report all such purchases to the City Council within thirty (30) days. (d) Requirement for Separate Invoicing. All purchases or rentals made during proclaimed emergency or disaster conditions shall require separate invoicing from routine (non-disaster related) purchases.

All invoices shall state the goods, services or equipment provided and shall specify where the goods or services were delivered and be coded to the designated disaster project code. (e) Auditing of Invoices for Debris Clearance Prior to Payment. All invoices for debris clearance and removal shall be audited by the City prior to payment to the vendor. Vendors shall be notified of this requirement prior to the awarding of any contract for debris clearance and/or removal. Audits shall be in accordance with procedures for debris removal monitoring specified in FEMA’s Publication 325, Debris Management Guide.
(f) Limitations of Disaster Purchasing Policy. For the purposes of this section, an emergency or disaster shall be deemed to exist when a condition exists that presents an immediate threat to health, safety or improved property and a local emergency or disaster has been proclaimed. Any purchases that do not meet the standard of being necessary for responding to an immediate threat to health, safety or improved property shall follow the City's regular purchasing provisions.

EXHIBIT B

CITY OF GROVER BEACH

CREDIT CARD HOLDER USE AGREEMENT
22 Employee: Department:

The above-named employee (Cardholder) of the City of Grover Beach has been issued a City credit card. The Cardholder has been provided with a copy of the City's purchasing policy, and hereby agrees to comply with all terms and conditions set forth therein, including but not limited to:

1. Official Use Only. City credit cards are for official City use only. Charging personal expenses on City cards is a misuse of City funds and a serious breach of the City’s ethics policy. Doing so—even if the intent is to reimburse the City later—will result in disciplinary action, up to and including termination. Minor incidental expenses as a component part of a larger billing—such as personal telephone calls or video rentals on a hotel bill—may be allowed if reimbursed at the time the credit card billing is submitted for payment.

2. Timely, Accurate and Supported Payments. Credit card payments will be processed on a timely basis, and adequate supporting documentation (such as vendor order forms, receipts, invoices and credit card receipts) will be retained for all charges and attached to payment vouchers.

3. Disputed Charges. The vendor and issuing bank will be notified immediately of any disputed charges.

4. Lost or Stolen Cards. The issuing bank and the Administrative Services Department will be notified immediately of a lost or stolen card. Failure to do so could make the Cardholder responsible for any fraudulent use of the card.

5. Surrender Upon Request or Separation. The credit card will be immediately surrendered upon retirement, termination or upon request of the department head. Use of the credit card for any purpose after its surrender is prohibited.

6. Credit Card Limit. The credit limit of this card is $ .

7. Other Restrictions. .

Cardholder Signature Date
DISTRIBUTION: Original - Cardholder Personnel File Copies - Administrative Services Department, Department Head, Cardholder

RETURN OF CITY CREDIT CARD UPON SEPARATION FROM CITY EMPLOYMENT I HEREBY SURRENDER the credit card issued to me by the City of Grover Beach to the Human Resource Department. I declare that all outstanding charges on the credit card are for official City business and will be paid through established procedures.

Cardholder Date Department Head Date