San Luis Obispo City Council
May 17, 2022

6 Enterprise Fund Update
Utilities: Water and Sewer Funds
The tables below include third quarter actuals for FY 2021-22 compared to the projection. The “Total Expenditures & Obligations” column includes both costs that have already been incurred and costs that are obligated on purchase orders.

Revenue: Revenues are on track for both funds but appear to be trending low in the Sewer Fund because a majority of a $3.5 million state grant that has not yet been received. Due to utility billing timing, the figures above include revenue through the March 15th billing period. Revenues have increased compared to last fiscal year mainly because of a rate increase of 3.5% which went into effect July 1, 2021.

Additionally, there has been an increase in commercial usage associated with the reopening following the pandemic closures, an increase in irrigation driven by the current drought, and a return of Cal Poly students to campus and the community.

The COVID-19 pandemic and resulting California State water shut-off moratorium has resulted in an increase in the past due water accounts. The City received $263,000 under the CA Water and Wastewater Arrearage Payment Program to provide financial relief for water bill payments to those customers impacted by COVID-19. The program is supported by federal funding allocated by the state legislature to cover past due payments from residential and commercial customers accrued between March 4, 2020 and June 15, 2021.

Beginning in April 2022, Utility Department staff began working with residents, business owners, and community members to “catch up” on past due accounts with the option of payment plans for outstanding account balances. In additional to payment options for outstanding balances, staff highlighted the Customer Assistance Program (CAP) which provides discounted water and sewer rates to Water/Sewer Fund Revenue Q3 Actuals % Received Total Budget Q3 Actuals % Received Variance from prior year
Water Fund $ 15,694,211 74% $ 24,452,759 $ 17,188,341 70% 10% Sewer Fund $ 11,858,132 73% $ 22,500,887 $ 13,849,276 62% 17% Total $ 27,552,343 73% $ 46,953,646 $ 31,037,617 66% 13% 2020-21 2021-22 Expense Type by Fund Initial Budget
Budget
Adjustments Total Budget
Total
Expenditures &
Obligations
% Consumed
Water Fund
Staffing $ 4,730,739 $ (6,369) $ 4,724,370 $ 3,198,348 68% Contract Services $ 765,881 $ - $ 765,881 $ 481,883 63% Other Operating Expenses $ 12,138,663 $ (13,631) $ 12,125,031 $ 10,592,832 87% Utilities $ 679,072 $ - $ 679,072 $ 391,747 58%
Water Fund Total $ 18,314,354 $ (20,000) $ 18,294,354 $ 14,664,809 80% Sewer Fund
Staffing $ 4,816,352 $ 112,039 $ 4,928,392 $ 3,244,928 66% Contract Services $ 1,081,706 $ - $ 1,081,706 $ 719,466 67% Other Operating Expenses $ 1,921,632 $ 3,961 $ 1,925,593 $ 1,584,137 82% Utilities $ 793,027 $ - $ 793,027 $ 404,041 51%
Sewer Fund Total $ 8,612,717 $ 116,000 $ 8,728,717 $ 5,952,572 68% 2

7 income-eligible customers. Shutoffs for non-payment began in early April with volumes equivalent to prepandemic levels and only 54 accounts out of 15,958 subject to discontinued service.

Expenditures: There are no significant variances to point out at this time. It is normal and expected that contract services and other operating expenses track above 75% because annual purchase orders are set up at the beginning of the year and the funds are considered “Obligated” from that point forward. Staffing should track at a consistent level and the actuals seen above are due to staffing vacancies and subsequent savings during staffing transitions. Throughout the fiscal year, Utilities staff experienced major cost increases in the areas of chemicals and electricity rates, largely due to supply chain issues. The true impact of expenditures will be fully realized at the close of year end.

Parking Fund
The tables below include third quarter actuals for FY 2021-22 compared to budget projection. The “Total Expenditures & Obligations” column includes both costs that have already been incurred and costs that are obligated on purchase orders.

Revenue: With the implementation of revenue enhancement strategies focused on Parking structures, metered parking, and enforcement, the parking fund is positioned to meet or exceed its revenue projections this fiscal year. Through the first half of the year structure revenues were significantly impacted by lower-than-expected downtown activity, staff vacancies and equipment issues. This revenue stream has picked up over the last quarter. Overall revenue is about 80% higher than it was last year.

Expenditures: The Parking fund is realizing significant savings due to staff vacancies; however, this is partially offset by the need for additional contract services to maintain the workload. Overall, the fund will likely end the year with some expenditure savings which will help replenish the fund balance that was depleted during the pandemic.

Transit Fund
The tables below include third quarter actuals for FY 21-22 compared to the projection. The “Total Expenditures & Obligations” column includes both costs that have already been incurred and costs that are obligated on purchase orders.

Parking Fund Revenue Q3 Actuals % Received Total Budget Q3 Actuals % Received Variance
from prior
year
Parking Fund $ 2,236,603 97% $ 4,551,136 $ 3,999,725 88% 78.8% Total $ 2,236,603 97% $ 4,551,136 $ 3,999,725 88% 79%
2020-21 2021-22
Expenditure Type Initial Budget
Budget
Adjustments Total Budget
Total
Expenditures &
Obligations
% Consumed
Staffing $ 1,666,213 $ 45,000 $ 1,711,213 $ 887,755 52% Contract Services $ 606,806 $ 145,000 $ 751,806 $ 654,139 87% Other Operating Expenses $ 365,917 $ - $ 365,917 $ 301,259 82% Utilities $ 211,301 $ - $ 211,301 $ 123,848 59%
Parking Fund Total $ 2,850,237 $ 190,000 $ 3,040,237 $ 1,967,001 65%

8 Revenue: Most of the Transit Fund revenue is from State and Federal grants that are received at the end of the year. Revenue is on track to meet the projections by the end of the year. Coronavirus Aid, Relief, and Economic Security (CARES) Act funding covered Transit’s operating costs in Fiscal Year 2021-22. This freed up formula based federal 5307 dollars that the City received to be used on capital outlay, specifically the purchase of two electric buses. The Transit Program also received American Rescue Plan Act (ARPA) funding that is being used to construct the electric vehicle infrastructure needed to support the City’s acquisition of two zero emission buses.

Expenditures: There are no significant variances to point out at this time. For the first half of the year the Transit Program realized significant savings as it was temporarily operating at reduced service levels based on current ridership demand. The department also had a vacant Transit Manager, backfilled with an interim position, for several months which explains the savings in staffing. It is normal and expected that contract services and other operating expenses track above 75% because annual purchase orders are set up at the beginning of the year and the funds are considered “Obligated” from that point forward. In the case of the Transit fund, the majority of the Contract Services budget is for the annual transportation services contract with First Transit, Inc. Staffing should track at a consistent level and the actuals seen above are consistent with where the City should be.

Transit Fund Revenue Q3 Actuals % Received Total Budget Q3 Actuals % Received Variance
from prior
year
Transit Fund $ 1,793,868 37% $ 7,555,049 $ 1,838,208 24.3% 2.5% Total $ 1,793,868 37% $ 7,555,049 $ 1,838,208 24.3% 2.5% 2020-21 2021-22
Expenditure Type Initial Budget
Budget
Adjustments Total Budget
Total
Expenditures &
Obligations
% Consumed
Staffing $ 358,181 $ - $ 358,181 $ 210,503 59%
Contract Services $ 904,871 $ - $ 904,871 $ 254,392 28% Other Operating Expenses $ 3,407,654 $ - $ 3,407,654 $ 3,380,680 99% Transit Fund Total $ 4,670,706 $ - $ 4,670,706 $ 3,845,574 82%

9 Major City Goal Update
Table 3a: Major City Goal Tasks with Completion Dates in FY 2021-22 Q3 Strategy Task Department
Original
Completion
Date
Updated
Completion
Date

1.1 - For all members of the
community
a. Establish a process for the City to recognize and
promote Minority-owned businesses. ADM (ED/DEI) FY22 Q3 FY23 Q2

1.1 - For all members of the
community
b. Implement protocols within the City’s Office of
Economic Development to reach out to existing
and new Minority-owned/operated businesses to
learn of their experiences operating in SLO, and to
identify ways the City can be of support.

ADM (ED/DEI) FY22 Q3 FY23 Q2

2.1 - Establish Office of DEI a. Design DEI Administration, Function, and Operations of the Office Admin-DEI FY22 Q3 Completed

2.1 - Establish Office of DEI b. Develop DEI Base Operating Budget Admin-DEI FY22 Q3 Completed

2.1 - Establish Office of DEI d. Develop positions; Hire Staff Admin-DEI FY22 Q3 Completed

2.1 - Establish Office of DEI
h. Hire Interns - Cal Poly, Cuesta, community
candidates - .25 FTE - 2 positions Y1 @ midyear /
2 - Y2, full year
Admin-DEI FY22 Q3 FY23 Q1

2.4 - Inclusive & Equitable
Workplace
a. Develop and Adopt Diversity Statement for the
Organization
Admin-DEI FY22 Q3 FY 23 Q1

3.6 - City Homelessness Team
Coordination
b. Develop a Strategic Plan to guide a sustained
effort of engagement by regional partners, nonprofit partners, and community members to identify and implement coordinated solutions to
chronic homelessness.

CDD FY22 Q3 FY23 Q1

3.10 - Mobile Crisis Unit
(MCU) Pilot Program
Implmentation
a. Pair a crisis worker with an Emergency Medical
Technician (EMT) to provide non-emergency
response and care to unhoused community
members.

FD/CDD FY22 Q3 FY22 Q4

4.4 - Alternative and
Sustainable Transportation
a. Establish consistent mode split tracking and
reporting method, consistent with performance
monitoring recommendations as called for in the
Active Transportation Plan and CAP Connected
Communities task 1.1.

PW FY22 Q3 FY23 Q2

4.4 - Alternative and
Sustainable Transportation
i. Complete construction of the Orcutt Road/Tank
Farm Road Roundabout, reducing congestion and
auto emissions and improving access and safety
for bicycles, pedestrians and drivers.

PW FY22 Q3 FY23 Q1
3

10 CIP Update – Completed and Ongoing
ID# Spec# Fund Project
Current Construction
Status
Approximate
Project Budget
Expended
1 91425 Water
Terrace Hill Pipeline and Pressure
Reducing Valve Rehabilitation
Completed Q1 FY22 $ 775,000
2 91647 General Fire Station 1 HVAC Replacement Completed Q1 FY22 $ 170,000 3 1000066 Water
Bee Bee/Cuesta/Loomis Waterline
Replacement
Completed Q1 FY22 $ 1,275,000
4 1000198 General Silt Removal 2021 Completed Q2 FY22 $ 110,000 5 91385 General Sinsheimer Irrigation and Stadium
Drainage
Completed Q2 FY22 $ 425,000
6 91609 General Broad Street/Woodbridge Pedestrian
Hybrid Beacon
Completed Q2 FY22 $ 450,000
7 1000196 General Mission Plaza Railing Upgrades Completed Q2 FY22 $ 80,000 8 1000021 General Meadow Park Pathway Maintenance Completed Q2 FY22 $ 400,000 9 91392 General Laguna Lake 2021 Maintenance Dredging
Project
Completed Q2 FY22 $ 605,000
10 90742 General Meinecke Strom Drain Repair Completed Q2 FY22 $ 30,000 11 1000111 General Swim Center Therapy Pool Boiler
Replacement
Completed Q2 FY22 $ 60,000
12 1000163 Parking Downtown Parking Meter Pole Removal Completed Q3 FY22 $ 150,000 13 1000090 Water/Sewer Jeffrey Sewer and Water Replacement Completed Q3 FY22 $ 1,875,000 14 1000167 General 2021 Downtown Pavement Improvement Completed Q3 FY22 $ 3,980,000 15 1000060 General Energy Efficient Lighting Retrofits - City Hall and Fire Station 1
Completed Q3 FY22 $ 15,000
16 1000190 General Emerson Fitness Park Equipment
Replacement
Completed Q3 FY22 $ 300,000
17 1000180 Parking Downtown Crack Sealing Completed Q3 FY22 $ 43,900 18 1000184 Parking Monterey and Broad Improvements Construction Ongoing $ 67,000 19 91385-16 General Sinsheimer Court Entrance Hardscape Construction Ongoing $ 163,000 20 1000034 Water Reservoir 1 Cover Replacement Construction Ongoing $ 700,000 21 91375 General Railroad Safety Trail Taft to Pepper Construction Ongoing $ 3,980,000 22 1000034 General French Park Parking Lot Construction Ongoing $ 97,000 23 91611 General Tank Farm Road and Orcutt Roundabout Construction Ongoing $ 3,510,000 24 91562 General Parks and Recreation Office
Rehabilitation
Construction Ongoing $ 605,000
25 91506A Water
Groundwater Contamination
Characterization Project
Construction Ongoing $ 825,000
26 91118A Sewer Calle Joaquin Lift Station Replacement Construction Ongoing $ 8,534,000 27 91219 Sewer Wastewater Resource Recovery Facility
Upgrade
Construction Ongoing $ 123,331,000
Completed & Ongoing Construction Capital Projects (July 2021 - March 2022) Completed in Q3
4

11 Fund Balances
The fund balance is the fund balance at the beginning of the fiscal year plus the difference between revenues and expenditures. The beginning fund balance represents the residual funds brought forward from the previous year (ending balance). In the case of the enterprise funds, the “Working Capital” is a shown below. Working Capital is equal to the fund’s current assets minus current liabilities. The total balance includes reserved or restricted amounts.

Fund Balance/Working Capital by Fund
101 - General Fund $ 42,576,722
601 - Water Fund $ 32,342,869
602 - Sewer Fund $ 33,856,317
611 - Parking Fund $ 13,169,906
621 - Transit Fund $ 2,713,366
Outlook and Conclusion
Based on the third quarter data, the City’s financial picture is well on its way back to full recovery from COVID-19, but new challenges include record-high inflation, rising interest rates, supply chain issues, and the war in Ukraine. Uncertainty is the only certainty in economic forecasting right now which will be considered for the 2022-23 Budget Supplement.

While inflation causes revenue trends to look favorable, it is also important to consider the impact on the City’s own expenditures. The cost of services, construction, utilities, and supplies are all rising. Not to mention, the City is experiencing the same labor market challenges that the nation is facing. In order to ensure its competitive standing as an employer, the City embarked on a compensation study that found that the City’s base salaries are about 8.55% below the median. Updated long-term forecasts provided at mid-year show a balanced budget but as assumptions change and the future becomes clearer, the longterm outlook is bound to change as well. The City will need to remain nimble and cautious as it moves forward.

CalPERs Update
In July 2021, CalPERs reported a 21.3% net return on investments for the 12-month period that ended June 30, 2021. Under the Funding Risk Mitigation Policy, approved by the CalPERS Board of Administration in 2015, the double-digit return triggered a reduction in the discount rate used to calculate employer and Public Employees’ Pension Reform Act (PEPRA) members contributions. The discount rate, or assumed rate of return, will drop from 7% to 6.8% on ongoing basis. The lowering of the discount rate will increase both employee and employer normal cost and also influence the unfunded liability. However, the doubledigit gains should offset the impact of the lower discount rate on the unfunded liability. 6 5

R ______
RESOLUTION NO. _____ (2022 SERIES)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, APPROVING AN AMENDMENT TO THE 2021- 22 BUDGET ALLOCATION
WHEREAS, in accordance with the San Luis Obispo City Charter Section 802, the City Manager submitted the 2021-23 Financial Plan to Council for its review and consideration on June 1, 2021; and
WHEREAS, on June 1, 2021, the Council approved and appropriated the 2021-22 budget allocation including operating expenditures, debt service, and capital improvement plan budget (R-11251); and
WHEREAS, the City received $6,900 in 2016 for trailhead improvements at Terrace Hill that was paid by a developer; and
WHEREAS, the revenue was deposited into the Open Space Protection Fund and currently resides in the fund balance; and
WHEREAS, the City will now be utilizing the funding to build new fences at Terrace Hill and needs to appropriate the expenditure budget from fund balance; and WHEREAS, the City created an Insurance Fund which aggregates insurancerelated expenses including insurance premiums and payment of claims for workers’ compensation and excess liability and related costs; and WHEREAS, the 2021-23 Financial Plan provides for the Insurance Fund to manage the fluctuations in the insurance programs with a reserve for the Liability Excess Insurance Program maintained at approximately 75% funded confidence level based on the prior five-year average claims experience; and
WHEREAS, the funds within the reserve for the Liability Excess Insurance Program are insufficient to cover anticipated claims and related expenses for the rest of the 2021-22 fiscal year; and
WHEREAS, the Insurance Fund balance is sufficient to cover these costs so that current transactions can take place in a timely manner.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows:

Resolution No. _____ (2022 Series) Page 2
R ______
SECTION 1. The 2021-22 budget is hereby amended to appropriate $6,900 of the City’s Open Space Protection Fund balance into operating budget.

SECTION 2. The 2021-22 budget is hereby amended to appropriate $150,000 of the City’s Insurance Fund balance to cover anticipated claims and related expenses for the remainder of FY 2021-22.

Upon motion of _______________, seconded by _____________, and on the following roll call vote:

AYES:

NOES:

ABSENT:

The foregoing resolution was adopted this _____ day of _____________________ 2022. ___________________________
Mayor Erica A. Stewart
ATTEST:
________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________
Teresa Purrington
City Clerk

City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: May 17, 2022
TO: Mayor and Council
FROM: Brigitte Elke, Finance Director
VIA: Derek Johnson, City Manager
SUBJECT: Item 6b – Update to Financial Management Manual Section 202 – Purchasing Policy
Staff received the following request clarifications, regarding sections to the update and this memorandum serves to clarify questions that have come up for item 6b – Update to Financial Management Manual Purchasing Policy.

Staff would like to also clarify that extensive edits were made to the 2018 Purchasing Policy (Resolution 10888), and staff provided Council with a summary of the changes and a redlined version (Exhibit F) of the changes for review. Unfortunately, staff did not provide the final redline version which is now linked below.

Redline Changes - Purchasing Policy 2018 v. 2022 Update.docx Due to the large number of administrative changes made, staff provided a summary of the changes to assist Council in reviewing each modified section. (Agenda report p. 1181) Clarification to Change to Approval Thresholds
The recommendation is to reduce the applicable purchase types from five (5) to three (3) to increase process and system efficiencies while maintaining fiduciary control. Furthermore, the approval thresholds are recommended as follows:

Item 6b – Staff Agenda Correspondence Page 2
APPROVAL THRESHOLDS ‘Professional Services”

Item 6b – Staff Agenda Correspondence Page 3
Local Preference
Based on the information provided in the Council Agenda Report that highlights best practices recommended by professional organizations such as Government Finance Officers Association, International City and County Managers Association, the Council of State Governments, and the National Institute of Government Procurement, staff does not recommend Council adopt a local preference policy beyond what is currently in Municipal Code 3.24.060E Sections Added
The City Manager directed staff to review the City’s contract templates and applicable insurance requirements. This review resulted in the addition of section 255 and 274 to the purchasing policy to provide a comprehensive purchasing guide.

Staff is not asking for Council action on the sections but provided the summary information for this significant addition to the policy that further implements best practices and fiduciary control.

Item 6b
Department: Finance
For Agenda of: 5/17/2022
Placement: Business
Estimated Time: 60 minutes
FROM: Brigitte Elke, Finance Director
Prepared By: Daniel Clancy, Financial Analyst
SUBJECT: UPDATE TO FINANCIAL MANAGEMENT MANUAL SECTION 200 -

PURCHASING POLICY

RECOMMENDATION

1. Approve a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Updating the City’s Financial Management Manual Section 200 Purchasing Policy” including applicable purchasing and competitive bid approval thresholds; and

2. Consider changes to the local preference language for inclusion in the purchasing policy.

DISCUSSION
Background
The City of San Luis Obispo adopts a two-year Financial Plan and appropriates annual budgets to fund the services, programs, and projects the community expects from its municipal government. To provide an open and public procurement process while maintaining flexibility for the organization to execute its work programs, the City has adopted an extensive purchasing policy to guide its procurement approach and required approvals.

This policy had last been reviewed by the Council when the City implemented its Enterprise Resource Planning (ERP) system with Oracle in 2018. This system introduced a purchasing module and provided the opportunity to update the policy accordingly.

Resolution No. 10888 (2018 Series) (Attachment A) established six purchase types and five approval authority threshold levels. It mandated that the Finance Department maintain purchasing policies and procedures that are as efficient and effective as possible and remove any unnecessary administrative burden. Since that time, the City has improved the ERP system and its purchasing processes and proposes further refinements to enable proficient and efficient procurement.

Recommended Policy Updates
Utilizing the system and applying the purchasing types and thresholds adopted in 2018, the City learned that the process is ineffective in providing efficient program and service delivery, with too many purchase types creating an onerous approval process in the Oracle ERP system. The policy update is the result of a collaborative effort over the past four years amongst Finance staff, Department Heads, Fiscal Officers, City Attorney, Business Analysts, the City Engineer, and Deputy Directors in Public Works and Utilities.

Item 6b
The recommended approval thresholds are based on extensive research by Finance staff on current best practices in municipal procurement, including California and National Institute of Government Procurement award-winning agencies. The research supports the recommended thresholds to allow for broader approval authority and administrative flexibility.

If adopted, the updated approval thresholds will result in staff time efficiencies by reducing the number of administrative tasks associated with them and provide improved turnaround times in service, program, and project delivery (Attachment C – Benchmark research & purchase data).

Local Purchasing Preference
The City's Municipal Code under Section 3.24.060E currently allows for local preference to piggybacking on cooperative contracts and is mainly applied to fleet purchases. It states that bidding procedures are not required "when the purchase will be made cooperatively…or from a local dealer within the city limits who can provide the same [good or service] identified in the cooperative contract at or below the cooperative cost within the same terms and conditions."
On September 21, 2021, the Council held a study session to review strategies in support of local contractors, vendors, and labor on public projects. This was one of the work program components under the City’s 2021-23 Major City Goal for Economic Recovery, Resiliency, and Fiscal Sustainability. The session was designed to gauge the Council’s interest in the review for a stronger preference for local vendors. Council directed staff to study such a preference for inclusion in the City’s purchasing policies. The preference would only apply to goods and services as capital projects are covered under the State’s public contract code.

Staff research revealed that the most common local preference policy across California government entities, such as the City of Santa Cruz, and County of Monterey apply a legally binding percentage preference to local businesses, typically between 1 – 5%, with 5% being the most common. This means that when a local business submits a quote that is up to 5% above a non-local business, the City would have the authority to consider it the lowest bid at the quoted price point.

To further review the practicality of such an approach, Finance held two internal staff meetings and has drafted a white paper of findings. The paper and the town-hall presentation are included here for reference. (Attachment D – Local Preference Position Paper and Local Preference Presentation)
The argument supporting local preference is financial; the City can direct its funds to local businesses and show through policy actions its commitment to its business community.

In addition, local purchasing can increase the City's tax collections, secure employment, and reduce the carbon footprint.

Item 6b
The argument against local preference is that it leads to potentially higher costs to procure goods and services. Additionally, similar policies in other jurisdictions in response could place the City's businesses at a potential disadvantage in other jurisdictions, theoretically leading to loss of business opportunity for local businesses. Administrative cost to implement a preference increase as staff must consider factors to meet laws and regulations and each additional requirement adds to the risk of error in bid evaluation, calculation, and award. It's difficult to quantify if the potentially higher prices paid would be recycled back to the community and achieve an overall positive economic impact. It is for these reasons that government finance organizations have taken positions against local preference policies, including the Government Finance Officers Association, the National Institute of Government Procurement, the Council of State Governments, and the International City and County Managers Association.

To better understand the City’s current local purchasing behavious, staff analyzed purchase data in the City’s Oracle ERP system between October 1, 2018 to April 1, 2022. It shows that the City’s current operating expenditures are 53% local (within the City’s borders as defined by Municipal Code 3.24.060E).

As such, staff recommends not to amend the current Municipal Code language for additional local preference consideration. However, if Council chose to adopt a local preference policy, staff would recommend aligning the City with the most common policy across California jurisdictions and consider a 5% preference. (Attachment E – Draft Ordinance and Local Preference Policy). Staff will then return to Council with a version of Attachment E to implement the ordinance with the desired local preference.

Item 6b
Sustainable Purchasing
Finance recommends in lieu of a focus solely on local preference, the City create a comprehensive Sustainable Purchasing Policy that will amend the City’s Environmentally Preferrable Purchasing Municipal Code Section 3.24.075, to incorporate Environmental, Social, & Governance (ESG) principles. ESG is a holistic philosophy that accounts for an organizations environmental performance, but also measures social performance such as how an organization treats employees, and customers, with consideration of diversity and equity and how the organization is governed.

On August 18, 2020, Council amended the City’s investment policy to include ESG investing; Finance recommends adding ESG criteria not just for the City’s investments, but also the City’s purchases of goods and services. The policy will concurrently include metrics on sustainable purchasing to report on and proper management of ESG principles and create meaningful measurements of success.

To that end, Finance staff is working with the Office of Sustainability and Natural Resources to draft a Sustainable Purchasing Policy and will return to Council with an appropriate recommendation by the end of calendar year 2022. The Purchasing Policy update contemplated with this report contains the Municipal Code language as currently written in section 3.24.075.

Additional Sections
To present a comprehensive picture of all applicable considerations when purchasing and contracting on behalf of the City, staff added several new sections to the policy.

They are either administrative in nature or pertain to new State legislation that trigger purchasing considerations.

New: Section 277 - California SB 1383 Cal-Recycle Regulations for Paper Products SB 1383 establishes statewide targets to reduce the amount of organic waste disposed of in landfills (50% reduction by 2020 and 75% by 2025). In addition, SB 1383 mandates that the City purchase at least 30% recycled-content paper if “fitness and quality are equal”. The City's Municipal Code 3.24.075 allows for a ten (10%) price preference for recycled content products; so the City is not mandated to purchase 30% (or higher) recycled content paper products if they cost over 10% more than non-recycled products.

The purchasing division is working to establish preferred recycled paper product lists and is working with the City’s printing contractors to use recycled content paper when cost is feasible. Purchasing staff have led multiple trainings for staff around the SB1383 requirments, which has led to a significant increase in recycled-content paper products purchases since the start of the year.

Item 6b
New: Section 255 – Contract Terms and Conditions
The City uses standard templates when entering into contract with vendors and consultants. They are approved by the City Attorney as to form. When reviewing the current templates, it became apparent that they do not address the various considerations that need to be given depending on the nature of the contractual obligation and the product/service it contracts for. For completeness, staff created a new section within the manual to outline the standardized and thematic templates now in use to address the following considerations:

Cost efficiencies: standardization lowers transaction costs by reducing time spent drafting;
Faster negotiation: standardization results in more certainty around contract terms;
Mitigate risk: standardization locks in must-have terms and reduces one-on-one negotiation;
Increase Staff Productivity: Reducing time drafting and negotiating contracts results in efficiencies and time savings;
Mitigate Insurance Risk: Standardization of contracts also standardizes the City's insurance coverage for each standardized contract type New: Section 274 - Insurance – Contractual Risk Transfer Management As mentioned above, the review of the contract terms and conditions also prompted a review of the City’s current insurance requirements for certain contract types. The review revealed that the City does not currently apply requirements according to the contracted product or service and uses instead a “one size fits all” approach. The review of the policy triggered a different approach to better protect the City as all procurement and contracting contains an element of risk exposure. Section 274 therefore introduces policies and procedures to standardize assessment of City procurement for potential risk and assigns the appropriate insurance coverage. This work led to an expansion of the City’s standardized insurance coverage templates from five (5) to twenty-six (26) different coverage templates.

Administrative Changes
The review of the policy also offered staff an opportunity for several administrative changes and corrections throughout the document. To facilitate the review of those changes, staff drafted an abridged summary of changes to the policy that includes a full redline document. Both documents are attached to this report under (Attachment F – Summary of Changes including redline version)
Policy Context
The proposed updates comply with Municipal Code Section 3.24.040: “The City administrative officer shall approve and implement a manual of purchasing policies and procedures and shall make such a manual available to the Council for inspection.” (Ord. 1618 § 1 (Exh. A (part)), 2015: Ord. 954 § 2 (part), 1983: prior code § 2950.4)

Item 6b
Public Engagement
Public Comment on the item can be provided to the City Council through written correspondence prior to the meeting and through public testimony at the meeting.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action in this report because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378.

Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal
Fees
Total $0 $0 $0 $0
All procurement and purchases are considered annually with the City’s budget appropriation. As such, the update to the policy does not trigger an additional fiscal impact, but provides efficiencies and the fiduciary oversight of how the City procures goods, services, and public projects.

ALTERNATIVES

1. Council could decide not to approve the updates. This action is not recommended since the updates ensure efficient program and service delivery while maintaining fiscally prudent oversight and approval thresholds.

2. Council could decide to approve selective parts to the update. This is not recommended since the review of all components were carefully researched and evaluated to provide the City with an updated purchasing policy in consideration of best practices, Major City Goals, and organizational effectiveness.

ATTACHMENTS
A - Resolution 10888 (2018 Series) Policy Update
B - Draft Resolution approving an update to Policy Update C - Benchmark Thresholds
D - Local Preference Memorandum and Presentation
E - Local Preference Draft Ordinance Example
F - Summary of Changes and redline version of policy

Financial Management Manual
Purchasing Policy Update – October 2018
Resolution No. 10888 ( 2018 Series)
EXHIBIT A Page 3

201-1
Section 201

OVERVIEW
The purpose of this chapter is to guide staff members 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 the course of 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 City’s Purchasing Division.

PURCHASING SYSTEM OBJECTIVES
Along with three other key policy documents— the City Charter, purchasing ordinance (Chapter

3.24 of the Municipal Code) and purchasing resolution—the policies and procedures set forth in this chapter form the City's purchasing system. This system has been developed in order 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 an equal opportunity for all qualified vendors to do business with the City.

Ensure compliance with purchasing policies and procedures.

Standardize procedures where appropriate to ensure that organization- wide policies and goals are achieved.

Implement simple yet effective internal control procedures that appropriately support planning, maximize productive use of public funds and protect City assets from unauthorized use.

Coordinate organization-wide purchasing activities for commonly used items.

INTRODUCTION
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Introduction

PURCHASING AUTHORITY
The City's purchasing ordinance delegates purchasing authority to the City Manager as well as any other representatives designated by her or him:

Developing and prescribing such administrative policies, forms and files as may be reasonably necessary for the internal management and operation of City purchasing policies and procedures.

Purchasing or contracting for supplies, equipment, services and construction projects as required by the operating departments in accordance with City purchasing policies and procedures.

Negotiating and recommending execution of contracts.

Ensuring appropriate levels of competitive bidding for all purchases.

Ensuring compliance with purchasing policies and procedures.

PURCHASING FUNCTION
The City’s purchasing functions is centralized within the Finance Department, Purchasing Division, that coordinates purchasing processes and monitors compliance with the policies contained in this manual. The Purchasing Division is managed by the City’s Purchasing Analyst under direction of Finance Director.

The Purchasing Division shall be independent from other departments and the independent exercise of procurement authority is an important piece of the City’s overall system of internal controls.

To provide effective purchasing services throughout the City, the Purchasing Analyst shall be tasked with:

Be aware of the needs of City departments and acquainted with sources and availability of supplies, equipment, and certain services which will best fulfill these needs. This requires an ongoing dialog with City departments in which their needs are discussed and during which Purchasing indicates information required and lead-times necessary to complete procurement transactions.

Arrange interviews between suppliers and representatives of the various City divisions to discuss specific needs.

Coordinate bidding processes in compliance with these Policies.

Purchase all items at pricing and terms most advantageous to satisfy the normal needs of the City for a reasonable length of time.

Process purchasing requests as expeditiously as possible, in a manner consistent with these Policies.

General responsibilities for setting and implementing purchasing system policies and procedures 201-2
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are summarized in Exhibit 201- A.

PURCHASING SYSTEM OVERVIEW
Regardless of the type of item or service being acquired, virtually every purchase transaction goes through seven distinct stages in varying degrees:

Assessing and determining resource needs.

Developing specifications.

Soliciting and evaluating quotations, bids or proposals.

Selecting the best proposal.

Awarding the contract or purchase order and authorizing work to proceed.

Receiving and inspecting goods or services to ensure they conform with specifications.

Paying the vendor when contract terms have been met.

The type of purchase as well as its estimated cost determine the formality with which each stage is completed and documented. For this purpose, the City has identified five basic types of purchases:

General Goods Purchases. Contracts and purchases for supplies and equipment, including basic IT equipment.

General Services Purchases. Contracts and purchases for operating and maintenance services, including basic IT maintenance services.

IT Systems Purchases. Contracts and purchases of large-scale IT systems.

Public Projects. Construction, reconstruction, erection, alteration, renovation, improvement, demolition, painting, repainting, and repair work involving any publicly owned, leased, or operated facility (Public Contract Code 22002c).

Consultant Services. Professional work provided to the City by specially trained and experienced individuals or firms regarding economic, financial, engineering, planning, architectural, environmental, legal or administrative matters.

Procedural categories, purchasing authority levels and features for each of these purchase types are summarized in Exhibit 202-A.
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Purchasing System Responsibilities Exhibit 201-A
Approve City Charter
Adopt purchasing ordinance.

Adopt resolution setting purchasing guidelines.

Approve Requests for Bids (IFBs) and Requests for
Proposals ( RFPs) documents for purchases specified in
Section 202.

Delegate authority to award contracts if they are within budget to the City Manager.

Award contracts if they exceed the approved budget from the RFB/RFP.

Implement purchasing policies.

Delegate purchasing authority.

Approve RFB’s/RFP’s for purchases specified in Section
202.

Award contracts as specified in Section 202.

Develop and implement purchasing guidelines.

Monitor and evaluate system performance.

Set payment schedule.

Approve Purchase Requests as specified in Section 202.

Develop and implement city-wide purchasing
procedures
Review and approve purchase orders and contracts for
proper authority and terms.

Route contracts for signature and maintain complete
database for all goods and services contracts.

Assist departments in development of solicitations ( RFB, RFP, RFQ, Quick Quote, etc.).

Create and manage master agreements and Blanket
Purchase Orders for centralized and aggregate
purchasing ( e.g. office supplies; off-site copying,
scanning and document destruction).

Approve RFB Specifications for public projects.

Approve Job Order Contract (JOC) task orders for public projects as specified in Section 202.

Voters
City Council
Purchasing Authority
City Manager/Designee)
Finance Director/Budget
Manager
Purchasing Analyst
City Engineer
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Develop and implement departmental purchasing
procedures.

Delegate departmental purchasing authority.

Approve departmental Purchase Requests and award
departmental contracts as specified in Section 202.

Purchase, receive and pay for goods and services in
accordance with City and departmental guidelines.

Approve invoices or payment requests for departmental
purchases.

Notify potential vendors/ contractors of City Business
License requirement
Maintain required purchasing records.

Manage departmental inventories.

Department Heads
Authorized Employees
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Section 202

PERMITTED PURCHASING METHODS
There are three methods for departments to use to acquire goods and services:
1) Purchase Requisition/ Purchase Order
2) City Credit Card (Purchasing or P-Card)
3) Emergency Purchases
For small or recurring purchases, the City encourages authorized employees the use of the City PCard (See Section 275). Exceptions to this rule may be set forth by Accounting Procedures Section of the Financial Manual allowing the City Finance Department and/ or Fiscal Officers payment with credit card for specific purchases. For all other purchases, departments must use the requisition process defined below:

Purchase Type Dollar Threshold Requirements
Purchase Requisition $ 0 – Unlimited Must obtain all approvals required in this Section
below
P-Card $ 0 – $5,000* Not Permitted for large
purchases, purchases for
services, Capital Items
Emergency Purchase NA ONLY if there is an
immediate and serious
need for equipment,
supplies, or services that
cannot be met through
normal purchasing
procedures and where the
lack of such equipment,
supplies or services would
seriously threaten the
functioning of City
government, the
preservation of property,
or the health or safety of
any person;
Limit can be raised with Department Head approval.

PURCHASE REQUISITIONS AND PURCHASE ORDERS
Purchase Requisitions
All Purchase Requisitions, with the exception of purchases with a P-Card or Emergency Purchases, must be done through a Purchase Requisition. A Purchase Requisition is an internal document

PURCHASING PROCESSPURCHASING PROCESS
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electronic form) created in the City’ s financial system that:

Initiates an order by one or more departments;
Identifies the equipment, materials, supplies, goods or services required Identifies the specific funds ( account codes) that will be used to pay for the order If known, identifies recommended or potential vendors, or leaves vendor selection up to Purchasing
Is approved by appropriate City representatives to grant budget authority to make the purchase
Upon approval, allocates or pre-encumbers funds to support the purchase.

All purchase requisitions will be entered into the financial system by the purchase requestor. The requestor will be responsible for entering and validating the accuracy of the following:
1) Item/ services description
2) Quantity
3) Price, or if price is not known, budgeted or estimated amount* 4) Commodity Code
5) Account code
6) Vendor (if known)
7) List all other required information
8) Attached Supporting Documents (attach all applicable):
a. Quotes/ Proposals
b. Quote Summaries/Comparisons
c. Agreement ( Standard Agreement, On-Call Agreement, Cooperative Agreement)
d. JOC Task Order
e. RFP/ RFB package
f. Sole Source Approvals
g. Council Action Report for Council approval
Purchase Requisition Process
Departments must submit requisitions in the ERP system. Purchase Request approval levels are determined by which tier a specific purchase falls into, which is determined by the purchase type and value. See Exhibit 202-A for purchase tier thresholds. 202-2
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Purchase Requisition Approvals & Solicitation Requirements Tier Solicitation
Required
Level 1
Approver
Level 2
Approver
Level 3
Approver
Level 4
Approver
Purchasing
Involvement
1 None Fiscal Officer None None None None
2 Informal Quotes* Fiscal Officer Department
Head
None None Assist with Quotes
when requested
3 Formal Bidding* Fiscal Officer Department
Head
None None Assist with
RFP/RFB package
when requested
4 Formal Bidding* Fiscal Officer Department
Head
Budget
Manager
City Manager Assist with
RFP/RFB package
when requested
5 Formal Bidding* Fiscal
Officer**
None None None Assist with
RFP/RFB package
when requested
Note: Quotes and bidding processes are not required for purchases made pursuant to Sections X of this Manual.

All other approvals will be applied in the external Council Agenda Report process.

Purchase Orders
A purchase order is a document used to encumber funds and formalize a purchase transaction with a vendor. It sets forth the vendor’ s obligations as well as the City’s responsibilities and requirements.

Purchase Orders allow the City to clearly and explicitly communicate their intentions to vendors.

Purchase orders may include:
1) Price
2) Description of the requested item(s) or services
3) Delivery terms and transportation mode
4) Terms and conditions, and all other agreements pertinent to the purchase and its execution by the vendor
5) Attached Supporting Documents
a. Incorporated Agreements (City Agreements, Cooperative Agreements) b. Incorporated Quotes/Proposals
c. Council Action Report ( if Council approval is required for award of a contract/purchase order)
A vendor’ s acceptance of a Purchase Order constitutes a contract. Purchase Orders shall be issued by the Purchasing Division after all required procedures for selection are met.

There are three types of Purchase Orders:
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1) Regular Purchase Order - a nonrecurring order, written to a specific vendor for a definite quantity of identified item( s). It is the most appropriate method used for purchase of supplies and services.
2) Blanket Purchase Order – a Purchase order which authorizes repetitive purchases of goods and services from a specific vendor up to a maximum, not-to-exceed dollar amount. It is valid from date of issuance until the end of a fiscal year or specific date (unless funds are depleted sooner). 3) Contract Purchase Order – a Purchase order with an underlying Agreement that is set up for encumbrance purposes only. This is used when all work descriptions, costs and terms are incorporated in a City Agreement and the Contract PO is not distributed to the contractor. 202-4
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Purchase Order Process
Upon approval of a PR and after any competitive bidding is completed, the Purchasing Division will create a Purchase Order. Purchase Order approval levels are determined by which tier a specific purchase falls into, which is determined by the purchase type and value. See Exhibit 202-A for purchase tier thresholds.

Purchase Order Approvals
Tier Level 1 Approver Level 2 Approver Level 3 Approver Purchasing Involvement 1 Purchasing Assistant None None Create PO and issue
2 Purchasing Assistant Purchasing Analyst None Assist with obtaining quotes when requested; Review quote
summary; Create PO and issue
3 Purchasing Assistant
City Attorney (for
contract review only)
Purchasing Analyst None Coordinate RFP/RFB process;
Coordinate contract routing
and execution; Create PO and
issue
4 Purchasing Assistant
City Attorney (for
contract review only)
City Manager Purchasing Analyst Coordinate RFP/RFB process; Coordinate contract routing
and execution; Create PO and
issue
5 Purchasing Assistant
City Attorney (for
contract review only)
City Manager* Purchasing Analyst Coordinate RFP/RFB process; Coordinate contract routing
and execution; Create PO and
issue
City Manager approval is only required if the contract/PO award was delegated by Council. If a Council Action Report approving the contract/ PO is attached, City Manager approval is not required

PURCHASE CARD/ CITY CREDIT CARD PURCHASES
Credit Card purchases are discussed in Section 275 of this manual.

EMERGENCY PURCHASES
Emergency Purchases are discussed in Section 220 of this manual. 202-5
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Purchasing Thresholds Exhibit 202-A

Purchasing Thresholds Exhibit 202-A

Section 203
For purchases exceeding the City’s thresholds listed in Exhibit 202-A which do not fall within the exceptions listed in Section 220 of this Manual, City staff must engage in competitive bidding in some form, as required by the Municipal Code. Departments should work with the Purchasing Division for competitive bidding processes.

TYPES OF SOLICITATIONS
Requests for Bids ( RFB)
An RFB is a request to vendors to submit an offer or quote for specific, defined goods or products.

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 Project and when setting up a Job Order Contract (discussed in Section 250 of this Manual). RFBs must be posted on the City’s designated solicitation site.

Requests 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 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.

Requests 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.

Informal Quotes/ Quick Quotes
When formal bidding is not required by the City’ s purchasing policy ( see Section 202 of this Manual), staff may seek informal quotes either by posting a Quick Quote request on the City’s online solicitation program or by seeking quotes by verbal or written request. An informal or quick quote is a simple request for pricing on simple, low-cost goods or services. If quotes are sought by verbal or written request, staff must create a quote summary to record the quotations received.

BIDDING PROCESS
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BIDDING CRITERIA
RFB RFPs RFQ Quick Quotes
Formal Solicitation Yes Yes Yes No
Goal Lowest Price Lowest Responsible
Bidder
Most Qualified Bidder Lowest Price
Public Opening
Requirements
Opened publicly and
read aloud
Opened publicly and
pricing read aloud
Not opened publicly
List of vendors who
submit Qualifications
made publicly
available
Not opened publicly
Response Evaluated By Department with
Purchasing assistance
Department project
team
Formal Evaluation
Committee with
numerous
participants
Department with
Purchasing
assistance
Specific Evaluation
Process
Determine whether
Bid is responsive,
then select lowest
responsive Bid. No
scoring of
specification
response is involved.

Responses reviewed
to determine
responsibility of
proposals.

Responsible
proposals are
reviewed for factors
listed in Section

3.24.210 of the
Municipal Code
Statement of
qualifications
evaluated and a score
assigned. Some
specification
responses can be
pass/ fail only with no
associated score.

Determine whether
Quote is responsive,
then select lowest
responsive Quote.

No scoring of
specification
response is involved.

Cost Evaluation Process Costs for responsive
bids are compared to
each other to identify
lowest cost
Cost for responsible
bids are compared to
each other to identify
lowest cost
If applicable, costs of
labor or services are
scored
Costs for responsive
quotes are
compared to each
other to identify
lowest cost
Negotiation Allowed
after Selection
No, unless all bidders
are asked for a Best
and Final Offer
BAFO)
Yes Yes No, unless all
bidders are asked
for a Best and Final
Offer BAFO)
Award Basis Lowest responsible
bidder wins
Lowest responsible
proposal wins
Evaluation Committee
Recommendation
Lowest responsive
quote wins
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BIDDING PROCESSES
RFB Process
The following process shall be employed when releasing an RFB:

RFB Package
The City’ s template “ RFB Package” must be used to create the RFB document provided to prospective vendors (See Section 250 of this Manual). When posting the RFB, the following should also be included:
1) A precise description of the desired goods;
2) The time and place of public opening of sealed Bids; 3) The location and deadline for submission of Bids;
4) The deadline for submission of questions (if applicable).

RFB Submission and Opening
All RFB submissions (bids) must be sealed (whether in a sealed, unopened envelope for paper bids or with electronic encryption for electronic bids) and must be opened publicly at a designated location, date and time.

Bids or proposals which are received after the date and time specified or in a different format than that requested in the solicitation may not be considered.

RFB Evaluation/Bid Tabulation
Departments, in cooperation with Purchasing, must determine if the submitted bids are responsive i.e.: did the bid provide quotes for the specified goods, as requested). Then, the lowest responsive bid must be selected for award.
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RFB Award
Bidders should be notified when a bid has been selected for award and that award has been approved see procedure for approval of contracts/Purchase Orders in Section 202 of this Manual). If the City is unable to agree to contract terms with the selected vendor after a good faith effort, the award may be given to the next lowest, responsive bid.

Non-Construction RFP Process
The following process shall be employed when releasing an RFP:

Non-Construction RFP Package
The City’s template “ Regular RFP Package” must be used to create the RFP document provided to prospective vendors (See Section X of this Manual). When posting the RFP, the following should also be included:
1) A general description of the desired goods or services to be purchased; 2) The desired qualifications of proposers;
3) The information or documentation required for submission of proposals; 4) The date, time and location of public opening of sealed Proposals; 5) The location and deadline for submission of Proposals; 6) The deadline for submission of questions (if applicable); 7) The date, time and location of the pre-bid conference (if applicable).

Non-Construction RFP Submission and Opening
All RFP submissions (proposals) must be sealed (whether in a sealed, unopened envelope for paper bids or with electronic encryption for electronic bids) and must be opened publicly at a designated location, date and time.

Proposals which are received after the date and time specified or in a different format than that 203-4
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requested in the solicitation may not be considered.

Non-Construction RFP Evaluation/Bid Tabulation
The department in cooperation with Purchasing will first determine whether proposals are responsive to the RFP. Then, a designated evaluation team ( subject matter experts, department stakeholders) will review responsive proposals using the criteria listed in Section 3.24.210 of the Municipal Code. The lowest responsible proposal will then be recommended for award.

For professional services related to project management, construction management, design, engineering, surveying, mapping, landscape architecture, or architectural related services are to be evaluated based on demonstrated competence and qualifications for the type of professional services desired. As such, price shall not be used as a criterion in the evaluation and ranking/selection of the most highly qualified firm.

Non- Construction RFP Award
Proposers should be notified when a proposal has been selected for award and that award has been approved (see procedure for approval of contracts/Purchase Orders in Section 202 of this Manual). If the City is unable to agree to contract terms with the selected vendor after a good faith effort, the award may be given to the next highest scored, responsive bid.

Construction/Public Project RFB
The following process should be employed when releasing an RFP related to construction or public projects:

Public Project RFB Package
The City’s template “Public Project RFB Package” must be used to create the RFB document provided to prospective bidders ( See Section X of this Manual). When posting the RFB, the following should also be included:

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1) A general description of the desired work, goods, or services to be purchased; 2) The desired qualifications of proposers, including licensing requirements; 3) The information or documentation required for submission of proposals, including bid bonds requirements;
4) Information regarding applicable prevailing wage laws; 5) The date, time and location of public opening of sealed Proposals; 6) The location and deadline for submission of Proposals; 7) The deadline for submission of questions ( if applicable); 8) The date, time and location of the pre-bid conference (if applicable).

Public Project RFB Submission and Opening
All RFB submissions (bids) must be sealed (whether in a sealed, unopened envelope for paper bids or with electronic encryption for electronic bids) and must be opened publicly at a designated location, date and time.

Bidders which are received after the date and time specified or in a different format than that requested in the solicitation may not be considered.

Public Project RFB Evaluation/ Bid Tabulation
The department will first determine whether proposals are responsive to the RFB. All responsive bids will be tabulate and bid pricing compared. The lowest cost responsive bid will then be recommended for award.

Public Project RFB Award
Bidders should be notified when a bid is recommended for award and that award has been approved see procedure for approval of contracts/ Purchase Orders in Section 202 of this Manual).

RFQ Process
The following process shall be employed when releasing an RFQ for On-Call or Master Agreements:
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RFQ Package
The City’ s template “ RFQ Package” must be used to create the RFQ document provided to prospective vendors ( See Section 250 of this Manual). When posting the RFQ, the following should also be included:
1) A general description of the type of services to be included in the On-Call Contract or Master Agreement;
2) The desired qualifications of proposers;
3) The information or documentation required for submission of qualifications; 4) The date, time and location of public opening of sealed Qualifications; 5) The location and deadline for submission of Qualifications; 6) The deadline for submission of questions ( if applicable).

RFQ Submission and Opening
RFQ submissions (qualifications) do not need to be before opening. City Staff shall make the list of vendors who submit Qualifications in response to an RFQ available to the public upon request.

Qualifications which are received after the date and time specified or in a different format than that requested in the solicitation may not be considered.

RFQ Evaluation
The department will score the Qualifications submitted in response to the RFQ. The vendor(s) deemed most qualified will then be recommended for award.

RFP Award
Vendors who submit Qualifications should be notified when an award has been approved ( see procedure for approval of contracts/Purchase Orders in Section 202 of this Manual). Resulting OnCall Contracts and Master Agreements must be re-bid every 5 years.

Quick Quote ( Informal Quote) Process
Tier 2 purchases may be made utilizing an informal quotation process. Staff should seek at least three quotes either in writing, by phone or utilizing the City’s electronic solicitation system. Staff must then select the lowest responsive quote.
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204-1
Section 204

LOW COST PURCHASING
Tier 1 purchases do not require a competitive bidding process ( see Section X for amount thresholds for Tier 1 purchases). However, City staff should seek cost comparisons whenever practical.

SOLE SOURCE PURCHASING
General Rules
Generally, it is the policy of the City to solicit quotations or bids for purchases of commodities or services for specified dollar amounts and to select vendors on a competitive basis. However, pursuant to San Luis Obispo Municipal Code Chapter 3.24.060 ( C), certain acquisitions in which the products or services may only be obtained from a single source may be purchased without engaging in bidding procedures.

A “sole source” purchase may be entered into without a competitive process because only one known source for the desired goods or services exists, only a single provider can fulfill the requirements to meet the City’s needs, or the purchase constitutes an upgrade to an existing system adopted by the City. In such circumstances, competition is not feasible and, therefore, the competitive process is waived.

Some examples of legitimate sole source purchases include the following:

Purchases in which only one known source exists for the goods or services as determined by documented research
Purchases in which there is no reasonable alternative source that meets the City’ s needs Purchases in which only one source meets the City’s business needs (e.g., compatibility with existing systems, unique features that serve the desired goals of the City, etc.).

Purchases of proprietary items which only the manufacturer, owner, or designated re-seller is permitted sell ( this includes purchases in which purchasing from a non- designated 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.

Some examples of non-legitimate sole source purchases include the following:

Purchases of proprietary goods or services that may be sold by more than one source ( i.e., multiple resellers may sell one proprietary piece of software) Brand name preferences
o Exception: If a specific line of products was previously chosen through a proper process and has been adopted citywide ( e.g.: Dell computer products) Preferred vendors (i.e., vendors with whom the purchaser has a prior relationship)

NO-BID PURCHASING
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204-2
Procedure
Sole Source purchases must be justified in sufficient detail to explain the basis for suspending the usual competitive procurement process and approved by the approving authority before such a purchase is made. The City’s Sole Source Justification form (located in the Purchasing SharePoint page) must be submitted to and approved by the Purchasing Analyst prior to any sole source purchase.

Approved Sole Source Justifications should be attached to Purchase Orders when submitted for a sole source purchase.

Once approved, a sole source is effective for one-year (so, multiple purchases may be made under one sole source approval if a department makes multiple purchases of the same products or services throughout the year). The Purchasing Analyst shall maintain copies of approved sole sources.

EMERGENCY PURCHASING
General Rules
Generally, it is the policy of the City to solicit quotations or bids for purchases of commodities or services for specified dollar amounts and to select vendors on a competitive basis. However, pursuant to San Luis Obispo Municipal Code Chapter 3.24.060 (B), purchases that address an immediate and serious need for equipment, supplies or services may be purchased without engaging in bidding procedures, if:
1) The City’s need for the equipment, goods or services cannot be met through the time constraints of the normal purchasing procedures; and
2) The lack of the equipment, goods or services would seriously threaten the functioning of City government, the preservation of property, or the health or safety of any person.

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. Contracts for frequent as-needed emergency services should be established with competitive bidding procedures.

Procedure
Emergency purchases must be justified in sufficient detail to explain the basis for suspending the usual competitive procurement process. Whenever possible, City staff in need of an emergency purchase should receive prior approval from the Purchasing Division by submitting the City’s Emergency Purchase Justification Form (located in the Purchasing SharePoint page).

If prior approval is not feasible, City staff should submit the Emergency Purchase Justification Form to the Purchasing Analyst as soon as possible and at least within 24 hours after the purchase has been made.

Unless a City credit card is used for the purchase, City staff must enter a Purchasing Requisition for the emergency purchase as soon as possible and should attach the Emergency Purchase Justification Form to the requisition.

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204-3

COOPERATIVE AGREEMENT PURCHASING
City staff may use established cooperative agreements for purchases without a competitive bidding process, if those cooperative agreements were competitively bid. City staff is responsible for researching cooperative agreements to insure the bidding process complies with City competitive bidding rules.

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. Ifthe pricing set forth in a cooperative agreement is not reasonable, City staff should initiate a competitive bidding process rather than leveraging the cooperative agreement.

Local Dealers
If a local dealer within City limits can provide the same brand, model and configuration of any item in a cooperative purchase agreement at or below the cooperative agreement vendor’ s cost with the same terms and conditions, City staff may use the local dealer without initiating a separate competitive bidding process.

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215-1
Section 215

BUSINESS LICENSES
The City requires most entities doing business within or transacting with the City to obtain a business license, pursuant to Chapter 5.01 of the Municipal Code. Therefore, for most purchases, City staff must notify the vendor of the requirement and/or ensure that the vendor has a business license before making the purchase. No purchases may be made from any vendor that does not have a valid business license, unless specifically exempted from that requirement, as specified below.

Businesses that have a place of business within City limits must have a business license. City staff may not transact with such businesses who have failed to maintain a business license.

Whenever possible, City staff should direct purchases to vendors who already have a valid business license. A current listing of businesses who have valid business licenses is located in the Purchasing SharePoint page.

EXCEPTIONS
The following types of vendors are exempt from the business license requirement:

Business that are owned and operated solely by minors under the age of 18; Charitable, religious and nonprofit organizations;
Any business for which requiring a business license would violated Federal or State laws or contractual agreements;
Out-of-state businesses ( exempted by the Finance Director, pursuant to the adjustment powers set forth in Section 5.01.501);
Businesses which are not located in the City and for which the only transaction or business with the City is an online purchase initiated by the City (exempted by the Finance Director, pursuant to the adjustment powers set forth in Section 5.01.501).

POSSIBLE EXEMPTIONS (CASE-BY-CASE DETERMINATION)
Businesses who do not have a place of business within the City and do limited, low-cost ( less than 5,000) and/ or one-time transactions with the City may not be subject to the business license requirement. This is determined on a case- by-case basis by the Purchasing Analyst, as the Finance Director’ s designee, after a determination of whether the busin ess has a sufficient nexus with the City.

City staff should contact Purchasing prior to making a purchase if there is any uncertainty as to whether a business license is required.

BUSINESS LICENSE REQUIREMENT
Resolution No. 10888 ( 2018 Series)
EXHIBIT A Page 27

Section 295
In accordance with the policy framework set forth in Chapter 3.24 of the municipal code, City purchases and contracts ( including those for rentals and leases, but excluding those for real property) will be made pursuant to these guidelines. Applicable competitive bidding categories, authorization limits or contract award procedures will be based on unit cost, total purchase cost for consolidated bid items or fiscal year aggregates in the case of blanket purchase orders or similar ongoing purchasing arrangements. Staging of purchases in order to avoid these competitive bidding procedures or authorization limits is prohibited.

Purchases and contracts for supplies, equipment, operating or maintenance services will be made pursuant to the following guidelines ( see Tier Structure in Section 202 of this Manual and Approval Dollar Thresholds in Exhibit 202-A of this Manual):

A. Over-the-Counter. Purchase Requisition with cumulative costs which fall into the Tier 1 approval structure may be authorized by the Fiscal Officer. Purchase Orders for these purchases may be authorized by the Purchasing Assistant. Although no specific solicitation requirements are established for this level of purchase, competitive bidding should be used whenever practical and City staff should ensure that pricing is reasonable.

B. Open Market. Purchase Requisitions with cumulative costs which fall into the Tier 2 approval structure must be approved by the Fiscal Officer and Department Head. Purchase Orders for these purchases must be approved by the Purchasing Assistant and Purchasing Analyst.

C. Formal Bids or Proposals. Purchases which fall into the Tier 3, Tier 4 or Tier 5 approval structure will be made pursuant to the formal bidding requirements established in Chapter 3.24 Article III) of the municipal code. Authority to approve specifications, invite bids or request proposals and award contracts will be as follows:

1. Purchase Requisitions with cumulative costs which fall within the Tier 3 approval structure must be approved by the Fiscal Officer and Department Head. Purchase Orders for these purchases must be approved by the Purchasing Assistant and Purchasing Analyst.

2. Purchase Requisitions with cumulative costs which fall within the Tier 4 approval structure must be approved by the Fiscal Officer, the Department Head, the Budget Manager and the City Manager. Purchase Orders for these purchases must be approved by the Purchasing Assistant, the Purchasing Analyst and the City Manager. The City Attorney will also review specified Purchase Orders by request of the Purchasing Analyst when contract review is required.

3. Purchases with cumulative costs which fall within the Tier 5 approval structure must have prior approval of the City Council attached (the Council Agenda Report process will be used to obtain Council approval). Purchase Requisitions for these purchases must be approved by the Fiscal Officer. Purchase Orders for these purchases must be approved by the Purchasing Assistant and the Purchasing Analyst. Purchase Orders for which the award was delegated to the City Manager by Council will additionally be approved by the City Manager. The City Attorney will also review specified Purchase Orders by request of the Purchasing Analyst when contract review is required.

PURCHASING GUIDELINES
295-1
Resolution No. 10888 ( 2018 Series)
EXHIBIT A Page 28

PUBLIC PROJECTS
Contracts for public projects are governed by the Public Contract Code including the Uniform Public Construction Cost Accounting Act ( Section 22000), which allows alternative bidding procedures and job order contracting (Council Ord. 1435, 2003).

Job Order Contracts. Under the Job Order Contact provisions of Chapter 3.24.145 of the municipal code for maintenance-related construction projects, individual Task Orders may be approved as follows:

1. Purchase Requisitions for Job Order Contract Task Orders under $45,000 must be approved by the City Engineer. Purchase Orders for these Task Orders must be approved by the Purchasing Assistant and Purchasing Analyst.

2. Purchase Requisitions for Job Order Contract Task Orders between $45,000 and $174,999 must be approved by the City Engineer and the Budget Manager. Purchase Orders for these Task Orders must be approved by the Purchasing Assistant.

3. Purchase Requisitions for Job Order Contract Task Orders with a cost of $175,000 or more must be approved by the City Engineer, the Budget Manager and the City Manager if the purchase is within the annual limit. Purchase Orders for these Task Orders must be approved by the Purchasing Assistant and Purchasing Analyst.

4. If the Task Order cost is $175,00 or more and in excess of the annual limit must have prior approval of the City Council attached ( the Council Agenda Report process will be used to obtain Council approval). Purchase Requisitions for these purchases must be approved by the City Engineer. Purchase Orders for these purchases must be approved by the Purchasing Assistant and the Purchasing Analyst.

Adopted by the Council on September 4, 2007, Resolution No. 9926, and amended by Council on May 1, 2018, Resolution No. X. 295-2
Resolution No. 10888 ( 2018 Series)
EXHIBIT A Page 29

R ______
RESOLUTION NO. _____ (2022 SERIES)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, UPDATING THE CITY’S FINANCIAL
MANAGEMENT MANUAL – SECTION 200 PURCHASING POLICY
WHEREAS, in the course of conducting City operations it is necessary to purchase a broad range of goods and services; and
WHEREAS, in addition to the requirements of the City's Charter, the Council has adopted policies and procedures as set forth in Chapter 3.24 of the Municipal Code that require the Council to specify by resolution the dollar amount of purchases and contracts requiring the use of either open market or formal bidding procedures, and the level of authority required to authorize solicitations, award contracts, and approve Job Order Contract Task Orders; and
WHEREAS, on December 16, 2014, the City Council amended the Productivity section of the City budget policies to include, "Maintaining City purchasing policies and procedures that are as efficient and effective as possible;" and WHEREAS, the Council adopted Resolution No. 16021 (2015 Series) which set forth existing purchasing thresholds and authority levels; and WHEREAS, in May 2018, in preparation for the implementation of the new Enterprise Resource Planning (ERP) system that implemented a new purchasing module, the City Council adopted Resolution 10888 (2018 Series) that amended the purchasing policy as currently in use; and
WHEREAS, Council desires to update existing guidelines to reflect current conditions and implement improved procedures, including implementing updated approval authority thresholds, and updating guidance on policies and procedures for California SB 1383 regulations, standardizing contract templates, and insurance risk management; and
WHEREAS, the updated Purchasing policy will further streamline purchasing processes to effectively use the Oracle system, while maintaining appropriate fiduciary checks and balances.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows:

SECTION 1. The City's Financial Manual purchasing guidelines are hereby amended as set forth in Exhibit A to this resolution..

Recolution No. _______ (2022 Series) Page 2
R ______
SECTION 2. Resolution Number 10888 (2018 Series) is hereby amended and superseded to the extent inconsistent herewith.

Upon motion of Council Member ___________, seconded by Council Member ___________, and on the following roll call vote:

AYES:

NOES:

ABSENT:

The foregoing resolution was adopted this _____ day of _______________ 2022. ___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. __________________________
Teresa Purrington
City Clerk

Update to Section 200
Financial Management Manual
Purchasing Policy

1 Section 201

INTRODUCTION
Per requirement, in Chapter 3.24.040 of the Municipal Code, this chapter shall guide staff in purchasing goods and services on behalf of the City and provide sufficient detail to enable City departments to:
 Be fully aware of, and comply with purchasing policies and procedures, and  Effectively and efficiently participate in the City’s purchasing program.

These guidelines do not address every issue, exception, or contingency that may arise in purchasing activities. Accordingly, the primary standard that should always prevail is to exercise sound judgment in the use and stewardship of City resources. Questions about the City’s purchasing system and policies should contact the City’s Purchasing Division.

PURCHASING SYSTEM PURPOSE
The City's purchasing ordinance, Chapter 3.24 of the Municipal Code, the City Charter, and the policies and procedures outlined in this m a n u a l form the City's purchasing c o n t r o l system.

The purpose of the purchasing control system adopted in (Municipal Code 3.24.020) is:
 To purchase goods, professional services, and public works projects at the lowest cost commensurate with quality requirements;
 To ensure effective financial control over expenditures;  To clearly define authority and accountability for the purchasing function;  To minimize the written documentation, administrative actions, and expense of processing purchase transactions;
 To assure the quality of purchases made on behalf of the City; and  To facilitate accurate forecasting and planning of department needs and expenditures. (Ord. 1618 § 1 (Exh. A (part)), 2015: Ord. 954 § 2 (part), 1983: prior code § 2950.2)

AUTHORITY
The City Manager, or their designated representative(s), shall be the purchasing authority whose functions include the following powers and duties (Municipal Code 3.24.030)  To develop and prescribe, for the departments, such administrative policies, forms, and files as may be reasonably necessary for the internal management and operation of these purchasing procedures;
 To purchase or contract for those items listed in Section 3.24.010 required by departments following these purchasing procedures;
 To ensure fair and open competition for purchases;
 To develop and maintain department awareness of purchasing and pricing principles;  To consolidate department orders for like items, ensuring discount pricing whenever possible;

Introduction
2  To inspect supplies and equipment delivered, as well as contractual services performed, to determine their conformance with the specifications in orders and contracts; and, in this connection, to have the authority to require chemical, physical, or other tests of samples submitted with quotations or bids, or of delivery samplings, which may be necessary to determine quality and conformance with specifications;
 To establish procedures for and assign duties to personnel engaged in receiving, storing, and issuing purchased supplies, thereby ensuring that supply levels are consistent with usage requirements;
 Subject to Charter Section 906, to sell or exchange surplus supplies and equipment; provided that the same cannot reasonably be used by any department. (Ord. 1618 § 1 (Exh. A (part)), 2015: Ord. 954 § 2 (part), 1983: prior code § 2950.3)

PURCHASING DIVISION
The City operates as a de-centralized procurement organization with policy compliance auditing conducted by the Finance Department – Purchasing Division. Purchasing is independent of other departments as the independent exercise of procurement authority is an important piece of the City’s overall system of internal controls. The purchasing division's primary objectives include:
 Supporting the City’s strategic goals and purchasing control system adopted in (Municipal Code 3.24.020);
 Develop and adopt clear written policies and procedures that appropriately balance the culture of the City, the experience and knowledge of the staff, and compliance with regulations and best practices;
 Develop template documents for request for bids, proposals, qualifications (RFB, RFP, RFQ), purchase orders, contracts, and insurance;
 Work jointly with the City’s Risk Management Department to assess contractual risk and coordinate with City Departments to ensure adequate insurance coverages on contracts  Report on citywide purchasing metrics;
 Ensure fair and open levels of competition for all purchases;  Ensure compliance with administrative, state, and federal regulations and policies;  Audit citywide purchases and contracts to ensure compliance with City policies;  Develop policy and procedures to operate efficiently in the City’s finance Oracle ERP system;
 Provide training to staff delegated with responsibility for procurement and contracting.  Analyze purchasing of items to ensure pricing and terms are most advantageous to the City and consolidate purchases for like items from multiple suppliers when feasible ((Municipal Code

3.24.030).

Introduction
3 Exhibit 201A Purchasing Control System Responsibilities Voters  Approve City Charter
City Council  Adopt purchasing ordinance
 Adopt resolutionssetting purchasing guidelines
 Approve Requests for Bids (RFBs) and Requests for Proposals (RFPs) documents for purchases specified in Section 202
 Delegate authority to award contracts if they are within budget to the City Manager
Purchasing Authority /
City Manager
Designee
 Implement purchasing policies
 Delegate purchasing authority
 Approve RFP’s for purchases specified in section 202
 Award contracts specified in section 202
Finance Director /
Budget Manager
 Develop and implement purchasing guidelines
 Monitor and evaluate system performance
 Set payment schedules
 Approve purchase requests in section 202
City Attorney  Review City contracts to ensure compliance with the City’s policies, rules, and laws
Financial Analyst
Purchasing
 Develop and adopt clear written policies and procedures that appropriately balance the culture of the City, the experience and knowledge of the staff, and compliance with regulations and best practices.
 Develop templates for requests for bids, proposals, qualifications (RFB, RFP, RFQ), purchase orders, contracts, and insurance coverages.  Provide training to staff delegated with responsibility for procurement and contracting.
 Review and approve purchase requisitions, purchase orders, and contracts for proper authority and terms
 Coordinate and assist departments in the development of competitive bid solicitations (RFB / RFP / RFQ)
 Route contracts and maintain a complete database for all City contracts  Audit city departments for compliance with the city’s purchasing policies  Coordinate with the risk management administer to the city’s contractual risk transfer program for the city’s contracts.

Risk Management  Review and evaluate risk and insurance requirements for all City contracts
 Coordinate with the purchasing division on the city’s supplier risk management policy and program for the city’s contracts.

Introduction
4 City Engineer  Develop and implement procurement policies and procedures for the city’s Public Works Capital Improvement Planning (CIP) Division  Approve RFB specifications for public projects
 Approve Job Order Contracts (JOC) task orders for public projects as specified in Section 202
Department Heads  Develop and implement department purchasing procedures  Delegate departmental purchasing authority
 Approve departmental purchase requests and award departmental contracts as specified in section 202
 Department Heads should make expectations clear to managers that they will be held accountable for following proper procurement practices set forth in the City’s policies
Authorized Employees  Requisition goods and services in compliance with City purchasing policies
 Receive (approve) invoices or payment requests for departmental purchases
 Notify suppliers of business license requirements (when required)

202-1
Section 202

PURCHASING TYPES AND APPROVAL AUTHORITY THRESHOLDS
Under the policy framework outlined in Chapter 3.24 of the Municipal Code, City purchases and contracts (including those for rentals and leases, but excluding those for real property) will be made according to these guidelines.

Approval authority applies thresholds to a single transaction purchase total and/or a cumulative series of purchases over the fiscal year.

Staging purchases to avoid these competitive bidding procedures or authorization limits is prohibited.

The City has three types of purchases:
 Goods. Contracts and purchases for supplies and equipment.  Professional Services. Professional work is provided to the City by trained and experienced individuals or firms.
 Public Projects and Job Order Contracts. Construction, reconstruction, erection, alteration, renovation, improvement, demolition, painting, repainting, and repair work involving any publicly owned, leased, or operated facility governed by (Public Contract Code 22002c).

The type of purchase and its cost determine the approval authority levels.

Exhibit 202A and 203A summarize the authority levels and the approval process flows within the City’s Oracle ERP system.

Purchasing Types and Approval Authority Thresholds
202-2
Exhibit 202-A
General Goods
Tier Amount Approval Authority and workflow in Oracle ERP System 1 $0 - $10,000  No Bidding Process Required
 Requisition approved by Fiscal Officer*
 Purchase order approved by Finance - Purchasing
Division
2 $10,001 -
$74,999
 Three written or electronic quotes
 If only one quote? A sole source memo is required for the purchase
 Requisition approved by Fiscal Officer and Department Head*
 Purchase order approved by Finance - Purchasing
Division
3 $75,000 -
$199,999
 Formal bidding process (RFP – RFB)
 City Manager Report
 Requisition approved by Fiscal Officer and Department Head
 Purchase order approved by Finance - Purchasing
Division
4 $200,000 or
more
 Council approval through Council Agenda Report
 Formal bidding process (RFP – RFB)
 Requisition approved by Fiscal Officer
 Purchase Order approved by Finance - Purchasing
Division

Purchasing Types and Approval Authority Thresholds
202-3
Exhibit 202-A
Professional Services
Tier Amount Approval Authority and workflow in Oracle ERP System 1 Under $10,000  No Bidding Process Required
 Requisition approved by Fiscal Officer*
 Purchase order approved by Purchasing Division
2 $10,000 -
$39,999
 Three written or electronic proposals / quotes
 If only one quote? A sole source memo is required for the purchase
 Requisition approved by Fiscal Officer and Department Head*
 Purchase order approved by Purchasing Analyst
3 $40,000 -
$69,999
 Formal bidding process (RFP – RFB)
 Requisition approved by Fiscal Officer and Department Head*
 Purchase order approved by Purchasing Analyst
4 $70,000 -
$150,000
 Formal bidding process (RFP – RFB)
 City Manager approval through City Manager Report
 Requisition approved by Fiscal Officer *
 Purchase order approved by Purchasing Analyst
5 $150,000 or
more
 Council approval through Council Agenda Report
 Formal bidding process (RFP – RFB)
 Requisition approved by Fiscal Officer
 Purchase Order approved by Purchasing Analyst

203-1
Section 203

PUBLIC WORKS PROJECTS, CONSTRUCTION CONTRACTS, AND

JOB ORDER CONTRACTS
The City awards construction contracts following the Uniform Public Construction Cost Account Act.

Construction projects and bid procedures are managed by the City’s Public Works Department with Finance and City Attorney oversight.

The City’s Public Works Department CIP Design Manual Guide governs policies and procedures for entering into Construction Contracts, Construction Change Orders, and Job Order Contracts.

See the CIP Manual at:

CIP Manual
Exhibit 203-A
Construction Public Projects
Tier Amount Approval Authority and workflow in Oracle ERP System 1 Under $15,000  No bidding process required
 Requisition approved by Fiscal Officer
 Purchase order approved by Purchasing Division
2 $15,001 -
$59,999
 Three quotes (if possible)
 If only one quote? A sole source memo is required for the purchase
 Requisition approved by Fiscal Officer*
 Purchase order approved by Purchasing Analyst
3 $60,000 -
$199,999
 Formal bidding process (RFP – RFB)
 City Manager approval through City Manager Report
 Requisition approved by Fiscal Officer *
 Purchase order approved by Purchasing Analyst
4 $200,000 or
more
 Council approval through Council Agenda Report
 Formal bidding process (RFP – RFB)
 Requisition approved by Fiscal Officer
 Purchase Order approved by Purchasing Analyst

Public Works Projects, Construction Contracts, and Job Order Contracts 203-2
*The purchase thresholds identified in the above section do not apply to purchase orders for on-call consultants if the on-call consultants are selected from an RFP/RFQ. The reason is Council authorized the Finance Director to execute contracts up to the project budget (i.e., budget per the Financial Plan) Exhibit 203-A

JOB ORDER CONTRACTS
Tier Amount Approval Authority and workflow in Oracle ERP System 1 Under $60,000  Requisition approved by City Engineer  Purchase order approved by Purchasing Analyst
2 $60,001 -
$200,000
 Requisition approved by Fiscal Officer & Department
Head
 Purchase order approved by Purchasing Analyst
3 $200,000 or
more within annual
limit
 City Manager approval through City Manager Report
 Requisition approved by Fiscal Officer *
 Purchase order approved by Purchasing Analyst
4 $175,000 or
more outside annual
limit
 Council approval through Council Agenda Report
 Requisition approved by City Engineer
 Purchase Order approved by Purchasing Analyst

CONSTRUCTION CONTRACT CHANGE ORDERS
When the City awards a construction contract, the need for contract change orders (CCO) is not unusual. A CCO is required whenever the scope of work changes from the original contract or an unknown condition requires a change in the scope of work.

Usually, a contingency amount is established when the project is authorized for advertisement or award to accommodate limited CCO’s. The purpose of this policy is to establish limits of authority for approving construction project CCO.

GOALS
 Ensure appropriate authority and accountability in the approval of change orders.  Minimize the time needed to approve a CCO to avoid project delays.  Establish a system at the organizational level at which the approval is commensurate with the size of CCO and the project.
 Eliminate the potential for approval of a CCO when contingency funds are insufficient.

POLICIES

Public Works Projects, Construction Contracts, and Job Order Contracts 203-3
Conditions for Approval of CCO's by Staff
 Sufficient contingency funds are budgeted and available for the Public Works Director or City Manager (approved designees) to approve a CCO.
 The nature of work in the CCO is not significantly different from that in the contract.  Authorization limits are based on an individual CCO amount, not the aggregate amount of all CCO.
 Authorization limits apply to CCO for increases in contract amounts only.  Work will not be broken up into multiple CCOs to circumvent this policy.  All CCO must be in writing and approved by the appropriate contract parties consistent with the authorized limits established in this policy.

CONSTRUCTION CHANGE ORDERS
 A copy of each approved CCO will be transmitted to the Finance Department with monthly progress payments.
 The Purchasing Authority may approve CCO over $199,999 under the following circumstances (all three factors must be present):
 Immediate approval of the CCO is necessary to avoid delay.  The CCO is an integral and mandatory component of the project.  The costs associated with the delay of the project would be excessive. The Project Manager is responsible for carrying out this policy.
 The Purchasing Authority is also authorized to approve CCO over $199,999 related to Job Order Contract Task Orders.

AUTHORIZATION LIMITS
Public Works Director/ Designee
 Not to exceed $60,000
Purchasing Authority (City Manager/Designee)
 Not to exceed $200,000
City Council*
 Greater than contract or $200,000
__________________________________________________________________________ ______
* See circumstances above where the Purchasing Authority may approve CCO’s in excess of $200,000.

Originally Approved by the Council on August 3, 1993; Revised by the Council on April 15, 2003, and June 2, 2015

206-1
Section 204

PURCHASING METHODS
There are two purchase methods for departments to acquire goods and services:
1) Purchase Order via invoice account
2) Credit Card
The City’s preferred method for securing the majority of its purchases is by purchase order.

For a guide to purchase order types, see the City’s Purchasing SharePoint document “what type of purchase order do I need?” See What type of PO do I need? For credit card purchases, please refer to (See Section 275).

SUMMARY GUIDE TO PURCHASE TYPES:

Purchase Type Dollar
Threshold
Requirements
Purchase Order $100– Unlimited Must obtain approvals required in section 202; Exhibit 202-A
Credit Card $5,000 Manager
Card
$2,500 Single
Limit
$2,000
Employee Card
$900 Single
Limit
See Section 275 for credit card policy

PURCHASE REQUISITIONS
Purchase Requisitions
Purchase requisitions (PR) are a request to purchase goods and services. PR’s are entered into the City’s Oracle ERP system. PR’s accomplish the following:
 Initiates a purchase order request;
 Identifies the equipment, materials, supplies, goods, or services required;  Identifies the specific funds (account codes) that will be used to pay for the order;  Is approved by appropriate City staff in Exhibit 202A to make the purchase;  Upon approval, pre-encumbers funds to support the purchase.

279-2
All PR’s are entered into the Oracle ERP system by the requestor. The requestor is responsible for entering and validating the accuracy of the following:
 Item/services description
 Quantity or Amount
 If requesting Fiscal Year Open PO, a budgeted or estimated amount*  NIGP Expense Type Category *see NIGP code description document for more detail*  Charge Account
 Supplier
 Supporting Documents (attach all applicable):
 Quotes/Proposals
 Quote Summaries
 Agreement (Standard Agreement, On-Call Agreement, Cooperative Agreement)  JOC Task Order
 Sole Source Approvals
 Council Action Report or City Manager Report

PURCHASE ORDERS
A purchase order (PO) formalizes a purchase transaction with a supplier. It sets the supplier’s obligations and the City’s responsibilities and requirements. POs should be issued after all required policies and procedures are met.

A supplier’s acceptance of a PO constitutes a contract. POs allow the City to communicate its intentions to suppliers, and their terms and conditions protect the City from risk.

When staff purchase goods and services outside of a PO, the City and its taxpayers face undue risk.

POs include:
 Quantity or Amount
 Description of the requested item(s) or services
 Delivery terms and transportation mode
 Standard terms and conditions,
 All supporting documentation submitted by the requisitioner  Quotes/Proposals
 Quote Summaries/Comparisons
 Agreement (Standard Agreement, On-Call Agreement, Cooperative Agreement)  JOC Task Order
 Sole Source Approvals
 Council Action Report or City Manager Report

279-3

PURCHASE ORDER TYPES
The City utilizes three main purchase order types.
1) Standard Purchase Order
A PO for a definitive quantity, amount, and delivery schedule.  It is most appropriate for one-off purchases of goods and services when you know the amount, quantity, and delivery date.
2) Open Fiscal Year PO
A PO that allows for multiple purchases in a fiscal year (more than 12 times per fiscal year)  Ideal for ongoing goods and services purchases for approved suppliers  PO is an estimated budget amount, not a guarantee the City will purchase the total amount
 Staff must close open POs at the end of each fiscal year and choose whether or not to re-open in the next Fiscal Year
3) Contract Purchase Order – tied to a City Contract
A PO tied to a formal contract.
 Upon execution of a contract for a fixed dollar amount – an open PO can be issued for that fixed amount
 Fixed price contract POs can carry over multiple fiscal years until the end of the contract term

NON-PURCHASE ORDER EXCEPTIONS
Below is a list of categories that do not require a PO
 Bank fees

279-4
 Filing fees: used for filing city and county permits
 Training
 Postage
 Travel Reimbursements and Advances
 Tax payments; property taxes
 Instructor and artist services related to programs offered through Parks & Recreation community programs
 Personal Protective Equipment (Boot Allowance) reimbursement  Dues, fees, and memberships in trade or professional organizations  Fees for trade or career fairs,
 Fees for job-related seminars and training
 Subscriptions, periodicals, newspapers, books and library materials, electronic subscriptions, media maps, or similar publications in printed or electronic form  Water, sewer, telecommunications, electrical, or other utility services  Revenue refund or reimbursement payments
 Payments related to fringe benefits (dental, vision, life insurance, employee assistance, CalPERS)

NO BID PURCHASING
Municipal Code Chapter 3.24.060A sets forth guidelines for when bidding procedures are not required. All Tier 1 purchases fall within this category. (see Exhibit 202A; 203A) for thresholds).

However, staff should seek cost comparisons whenever practical.

EMERGENCY PURCHASING
Municipal Code Section 3.24.060 B defines an emergency purchase as a purchase to address a situation that is an immediate and serious need for goods or services that cannot be met through normal purchasing procedures and where the lack of such goods or services would seriously threaten the functioning of city government, the preservation of property, public peace, or the health or safety of any person.

City staff must not use the emergency purchase process to circumvent the general purchasing policy or supplier licensing requirements. City staff should seek quotes and determine the reasonableness of pricing when making an emergency purchase whenever possible. Contracts for frequent as-needed emergency services should be established with competitive bidding procedures.

Emergency purchases must be justified in sufficient detail to explain the basis for suspending the usual competitive procurement process. Whenever possible, City staff in need of an emergency purchase should receive prior approval from the Purchasing Division by submitting the City’s Emergency Purchase Justification Form (located on the Purchasing SharePoint page).

Emergency PO template
If prior approval is not feasible, City staff should submit the Emergency Purchase Justification Form to the Purchasing Analyst as soon as possible and at least within 24 hours after the purchase

279-5
has been made.

Unless a City credit card is used for the purchase, City staff must enter a Purchasing Requisition for the emergency purchase as soon as possible and should attach the justification backup to the requisition.

SOLE SOURCE PURCHASING
Municipal Code Section 3.24.060 dictates that certain acquisitions can be purchased from a single “sole-source” without engaging in bidding procedures. Staff must justify their sole-source purchases through one of the following criteria as set forth below in Municipal Code 3.24.060:

A. When the amount to be expended is less than the bid requirement amount which shall be specified by resolution of the council;
B. When an emergency purchase is made to address a situation that creates an immediate and serious need for equipment, supplies, or services that cannot be met through normal purchasing procedures and where the lack of such equipment, supplies or services would seriously threaten the functioning of city government, the preservation of property, or the health or safety of any person; C. When the item(s) to be purchased can be obtained from only one vendor or supplier; D. When supplies or equipment have been uniformly adopted in the city or otherwise standardized;
E. When the purchase will be made cooperatively with one, or more, other units of government, or from a local dealer within the city limits that can provide the same brand, model and configuration of item(s) identified in cooperative purchase agreement(s) at or below the cooperative purchasing net cost within the same terms and conditions; F. When reasonably necessary for the preservation or protection of public peace, health, safety or welfare of persons or property; or
G. When, given the indeterminate nature of the city’s need, a request for proposal will result in a more favorable and efficient comparison of supplies, equipment and/or services. (Ord. 1618 § 1 (Exh. A (part)), 2015: Ord. 1608 § 1, 2014; Ord. 954 § 2 (part), 1983: prior code § 2950.6) Examples of non-legitimate sole source purchases include:
 Purchases of proprietary goods or services that may be sold by more than one source (i.e., multiple resellers may sell one proprietary piece of software)  Brand name preferences: exception: If a specific line of products was previously chosen through a proper process and has been adopted citywide (e.g., Dell computer products)  The purchase will solely save staff time. Staff time must be accompanied by one of the justification reasons set forth in Municipal Code 3.24.060.

Staff must draft a “Sole-Source” memorandum to justify the purchase using the template

279-6
located on the purchasing SharePoint page at Sole-source template. Sole Source memos should provide enough detail so that a person from the public, who has no information on the purchase can understand the basis for the purchase. Sole Source memos are public records, and answers to the questions must be accurate.

The Purchasing Analyst must approve the sole-source before the purchase. Approved Sole Source Justifications should be attached to requisitions when submitted for a purchase order. An approved sole source is effective for the term of the contract or purchase order.

COOPERATIVE AGREEMENT PURCHASING
Section 3.24.060 (E) - City staff may use established cooperative agreements for purchases without a competitive bidding process. Cooperative agreements take advantage of already negotiated competitively bid RFP contracts. City staff, in coordination with the Purchasing Division, are responsible for researching cooperative agreements to ensure the bidding process complies with City competitive bidding rules.

If a local dealer, as defined in Municipal Code 3.24.060 (E) as being a supplier within City limits, can provide the same brand, model, and configuration of any item in a cooperative purchase agreement at or below the cooperative agreement supplier’s cost with the same terms and conditions, City staff may use the local dealer without initiating a separate competitive bidding process.

COPROCURE
Staff are encouraged to research active Cooperative Agreements at CoProcure at https://www.coprocure.us/

SMART PROCURE
Staff are encouraged to research the pricing of products at Smart Procure – a site that aggregates millions of contracts and purchase orders across the USA at https://smartprocure.us/ If the pricing in a cooperative agreement is not reasonable, City staff should initiate a competitive bidding process rather than leveraging the cooperative agreement.

207-1
Section 207

SOFTWARE AND INFORMATION TECHNOLOGY CONTRACTS
The City’s Information Technology Policies and Procedures Manual governs software and hardware related purchases.

Refer to the Policy at:

IT Policy

GUIDELINES
 Direct purchases are prohibited; Staff must follow the procedures in the City’s IT policy.
 All software, software as service, and software-related contracts must be approved by the IT steering committee before a purchase is made.  Staff must attach backup to all requisitions, including the approved steering committee form documenting that the purchase was approved by IT.  All hardware and software purchases without the form attached will be rejected by Finance.

COOPERATIVE PURCHASING AND PIGGYBACKING
 The City will use cooperative purchasing through the State of California and other Cooperative Purchasing Contracts in buying desktop and laptop workstations and mobile data computers (MDC’s).
 The City has used a number of Cooperative purchasing strategies over the years in attempting to ensure quality, reliable computer workstations, laptops, and MDC’s at a reasonable cost.
 Staff should always research whether a Cooperative contract is available to piggyback on, such as through the State’s California Multiple Award Schedule (CMAS) program, Western States Contracting Alliance (WSCA), OMNIA Partners, Sourcewell, or similar cooperative purchasing programs accomplish the following goals
Cooperative purchasing policy was approved by the Council on December 5, 1995 Revised by the City Manager on January 20, 2010, to expand to laptops and mobile data computers

210-1
SECTION 210

ETHICAL CONDUCT
The purpose of this policy is to set forth the ethical standards of professional behavior expected of all officials and employees conducting purchasing activities on behalf of the City.

STANDARDS OF CONDUCT
Every employee or official engaging in purchasing activities on behalf of the City is required to adhere to the following standards of conduct:

Consider, first, the interests of the City in all transactions and your fiduciary obligation to be a responsible steward of the citizen's taxpayer funds.
 Carry out the established policies of the City.
 Purchase without prejudice, seeking to obtain the maximum value for each expenditure of public funds.
 Subscribe to and work for honesty and truth in buying and selling and to denounce all forms and manifestations of commercial bribery.
 Cooperate with all organizations and individuals engaged in activities designed to enhance the development of purchasing practices.
 Respect obligations to others, and require the same respect from others for their obligations.

PROHIBITED PRACTICES
The following practices are prohibited in performing purchasing activities on behalf of the City:
 Having a financial or personal beneficial interest (directly or indirectly) in any contract or purchase order for supplies, equipment, services, or projects furnished to the City.  Accepting or receiving (directly or indirectly) from any person, firm, or corporation to whom any contract or purchase order may be awarded (by rebate, gift, or otherwise) any money or anything of value, or any promise, obligation, or contract for future reward or compensation.

Inexpensive advertising items bearing the name of the firm—such as pens, pencils, paperweights, or calendars—are not considered articles of value or gifts under this policy.  Using information available to officials and employees solely because of their City position, for personal profit, gain, or advantage.
 Directly or indirectly furnishing services or information not available to all prospective bidders to any person or firm bidding on, or who may reasonably be expected to bid on, a contract with the City.
 Providing confidential information to persons to whom issuance of such information has not been authorized.
 Using a position or status in the City to solicit (directly or indirectly) business of any kind, or to purchase products at special discounts or upon special concessions for personal private use from any person or firm who sells or solicits sales to the City.  Serving the interests of any organization (either as an officer, employee, member of

Ethical Conduct
279-2
the board of directors, or in any capacity for consideration) which transacts or attempts to transact business with the City for profit when such employee holds a City position of review or control— even though remote—over such business transactions.

RESPONSIBILITY
 Employees. Each employee is responsible for following these practices. Violation of this policy may result in disciplinary action, termination of employment, or criminal prosecution.  Department Heads. Department heads are responsible for ensuring that all employees of their department who conduct purchasing activities possess a thorough understanding of these standards of ethical conduct and prohibited practices.

215-1
Section 215

BUSINESS LICENSE AND TAX REQUIREMENT

BUSINESS LICENSES & TAX CERTIFICATE
The City requires entities that execute contracts with and do business within or transacting with the City to obtain a business license and tax certificate, according to Chapter 5.01 of the Municipal Code.

Businesses that have a place of business within City limits must have a business license. City staff may not transact with such businesses that have failed to maintain a business license.

Consultants and services suppliers who execute contracts with the City for ongoing services, whether or not they travel into the City to perform the services, must have a Business License.

Services providers who have a business address outside of City limits and travel into City limits and perform services within the City must have a business license.

Whenever possible, City staff should direct purchases to suppliers who have a valid business license.

A current listing of businesses that have valid business licenses is located with the City’s Revenue Division.

No purchases may be made from any supplier that does not have a valid business license unless specifically exempted from that requirement, as specified below.

EXCEPTIONS
The following types of suppliers are exempt from the business license requirement:(exempted by the Finance Director, according to the adjustment powers outlined in Section 5.01.501)  A business owned and operated solely by minors under the age of 18;  Charitable, religious, and nonprofit organizations;
 Any business for which requiring a business license would violate Federal or State laws or contractual agreements;
 Out-of-state businesses (exempted by the Finance Director, pursuant to the adjustment powers set forth in Section 5.01.501;
 Businesses which are not located in the City and for which the only transaction or business with the City is an online purchase initiated by the City (exempted by the Finance Director, pursuant to the adjustment powers set forth in Section 5.01.501.

POSSIBLE EXEMPTIONS (CASE-BY-CASE DETERMINATION)

Competitive Bididng Criteria and Standard Bid Documents 279-2
Businesses who do not have a place of business within the City and do limited, low-cost (less than $5,000) and/or one-time transactions with the City may not be subject to the business license requirement. This is determined on a case-by-case basis by the Purchasing Analyst, as the Finance Director’s designee, after a determination of whether the business has a sufficient nexus with the City.

City staff should contact Purchasing prior to making a purchase if there is any uncertainty as to whether a business license is required.

21 5-1

255-1
SECTION 250

COMPETITIVE BIDDING CRITERIA AND STANDARD BID

DOCUMENTS

BIDDING TYPES AND AWARD CRITERIA
RFB RFPs RFQ Quotes
Goal Lowest
responsive bid
submitted by
responsible bidder
Most
qualified bidder
that provides
the best
proposal
Most qualified
bidder
Lowest amount
of most qualified bidder
Public
Opening
Requirements
Opened
publicly and read
aloud in public or
bidders are in
attendance
Opene
d publicly and
pricing read
aloud if public
or bidders are
in attendance
Not opened
publicly - List of suppliers
who submit qualifications
made publicly available
Not opened
publicly
Response
Evaluated By
Department
project team
Depart
ment project
team
Department
project team
Department
with purchasing
assistance
Specific
Evaluation Process
Determine
whether bid is
responsive, then select
lowest responsive bid
submitted by
responsible bidder.

No scoring of
specification response
is involved.

Respo
nses reviewed
to determine
most qualified
bidder
Responsible
proposals are
reviewed for
factors listed in
Section

3.24.210 of the
Municipal
Code
Statement of
qualifications evaluated
and a score assigned.

Some specification
responses can be pass/fail
only with no associated
score.

Determine
whether quote is
responsive, then select
lowest, most qualified
responsive quote. No
scoring of specification
response is involved.

Cost
Evaluation Process
Costs for
responsive bids are
compared to each
other to identify
lowest cost
Cost
for responsible
bids are
compared to
each other to
identify most
qualified lowest
cost bidder
If applicable,
costs of labor or services
are scored
Costs for
responsive quotes are
compared to each other
to identify lowest, most
qualified cost
Negotiatio
n Allowed after
Selection
No, unless all
bidders are asked for a
best and final Offer
(BAFO)
Yes Yes No, unless all
bidders are asked for a
best and final Offer

Competitive Bididng Criteria and Standard Bid Documents 279-2
Award
Basis
Lowest
responsible bidder
wins
Lowes
t most qualified
responsible
proposal wins
Evaluation
Committee
Recommendation
Lowest most
qualified responsive
quote wins

BID DOCUMENT TEMPLATES
Bid templates are located on the City’s contract template SharePoint site at: Contracts Templates SharePoint. The templates contain the City’s standard terms and conditions, which are not negotiable unless approved by the City Attorney. Staff should use the standard templates to reduce the amount of time required for preparation and administrative review The City advertises competitive bids via BidSync www.bidsync.com. The preferable method for bid submission is in electronic format (paperless).

Public Works CIP bids are submitted according to the procedures in the CIP Design Manual. (Bid documents for construction projects are excluded from the Purchasing SharePoint site since Public Works centrally manages all construction projects, and they are responsible for maintaining standard bid documents for construction projects.)
A procedure guide for drafting RFP’s can be found at RFP drafting procedure

255-1
Section 255
City Contracts

INTRODUCTION
The City enters into numerous types of contractual agreements with suppliers of goods and services.

This procedure document is written for City employees who are tasked with drafting contracts with suppliers to provide goods and services for their departments. The purpose of this procedure document is to provide high-level clarity on roles and responsibilities in the contract drafting and routing process and to equip the staff member tasked with entering a contract with guidance on internal procedures for completing such a task. Additional detail on the City’s purchasing procedures is set forth in Section 200 of the City's Financial Management Manual.

What is a contract, and what does it do?
A contract is a legal instrument that protects the City’s interests by clearly establishing the roles and responsibilities of the parties to the contract and establishing the terms and conditions under which a service is to be performed, or goods are to be provided.

Contract Templates
The City has standard templates for the following types of contracts:

1. Professional Services Agreement

2. Design Professional Services Agreement

3. Amendments to Template Agreement

4. Contract Instructor Agreement

5. Community Partnership Agreement

6. Special Events Agreement

7. Tree Maintenance Agreement

8. Developer Impact Fee Reimbursement Agreement

9. Standard Supplier Contract
If staff has questions about the appropriate template to use, please review the Contract Template Matrix, and if questions remain, contact the Purchasing Analyst.

The City’s practice is to require suppliers to agree to its terms and conditions as set forth in the City’s various template agreements.

This expectation and practice should be emphasized in the bid documents and consistently signaled to interested suppliers throughout the negotiation process. There may be instances where the City’s standard contract templates or specific provisions of a template are not appropriate to use for a particular engagement, in which case staff should contact the Purchasing Division first, and if not successful in negotiating after, contact the City Attorney’s Office.

Contracts, Contract Amendments, Contract Management, Signature Authority 279-2

KEY ROLES IN CONTRACT DRAFTING AND ROUTING PROCESS

1. Initiating Staff Member (ISM): The ISM is any City staff member who has been tasked with procuring goods or services for their respective department. The ISM is responsible for ensuring their contract complies with the City’s Charter, Municipal Code, and Purchasing Policy, and should work closely with the Purchasing Analyst to accomplish this and complete all Steps of the contract’s procedure (which begins on the following page) (the “Procedure”). The ISM should also reach out to the City Attorney’s Office with questions about contract terms, and the Risk Manager with questions about insurance coverage requirements as soon as those questions arise (and well before the contract is ready to route for signatures).

2. Purchasing Analyst: The Purchasing Analyst is a position in the Finance Department.

The Purchasing Analyst is the primary point of contact should an ISM have questions about procurement methods or contract drafting procedures and will work closely with the ISM through all Steps of the Procedure.

3. Risk Manager: Risk Manager is a position in the Human Resources Department. The Risk Manager is the person most knowledgeable as to why the City’s insurance requirements are set at certain levels and when they can be reduced or should be increased. If the ISM believes the City’s standard insurance templates are not appropriate for a particular purchase or needs assistance making that determination, the Risk Manager should be looped in early in the drafting process, but after the ISM has complied with Steps 1 and 2 of the Procedure.

4. City Attorney’s Office (CAO): Requests for attorney assistance should be initiated through the CAO intake form, located on the CAO’s SharePoint home page. Use of the form allows workload to be distributed to the attorney best suited to answer an ISM’s questions within the shortest timeframe. The CAO should be contacted if there are questions about the applicability of a template to a specific purchase or if a bidder is requesting changes to the City’s contract terms. If this type of assistance is needed it should be requested early in the drafting process.  Note: When the contract routes for signature (Step 7), the City Attorney will approve “as to form” only. This is not the appropriate step to ask for substantive legal advice because it is required that the ISM, with the assistance of the Purchasing Analyst, will have already worked through all Steps of the Procedure to ensure all necessary authorizations have been obtained and procurement methods followed as required by City rules and regulations. The CAO will rely on the ISM’s compliance with the Procedure when approving “as to form.”

5. Approval Authority: The Approval Authority is the person authorized to execute the final contract documents. The Approval Authority will vary based on the contract type and its dollar amount. Determination of the appropriate Approval Authority is Step 1 of the Procedure and contract signatories (Approval Authority and CAO) are relying on the ISM and Purchasing Analyst to have completed all Steps of the Procedure prior to routing for signatures.

Contracts, Contract Amendments, Contract Management, Signature Authority 279-3

CONTRACT DRAFTING & ROUTING PROCEDURE
The ISM responsible for drafting and routing a contract should follow the steps in the order outlined below. The procedure set forth below applies to most City purchases of goods and services; it does not apply to contracts for the use of City facilities or property, special events,1developer reimbursement agreements, or Public Works construction contracts. 2 Step 1 (Identify Tier of Approval Authority): Determine the threshold approval authority required for the contract pursuant to Section 202A of the City's Financial Management Manual.

Note: If City Council approval is required, the ISM will need to coordinate placing the item on a meeting agenda and drafting a staff report seeking authorization to issue bid documents and/or execute the contract, and if City Manager approval is required, the ISM will need to draft and route a City Manager Report requesting authorization for the same.

Step 2 (Identifying Procurement Method): Determine the appropriate method for soliciting and procuring the necessary goods and services pursuant to Section 203 of the City's Financial Management Manual and Chapter 3.24 of the Municipal Code. Contact the Purchasing Analyst for assistance as needed to determine the appropriate procurement method. If applicable, prepare the appropriate bid document using the RFP/RFQ/RFB template provided on the City’s Contract SharePoint site.
 Caveat for IT Services:
o Purchases for IT Services are often made pursuant to a Cooperative Agreement pursuant to Section 3.24.060(E) of the Municipal Code. Contact the Purchasing Analyst for assistance researching existing Cooperative Agreements.
o Staff must follow the City’s Information Technology Policy and Procedures for all hardware and software purchases.
o Notify the City’s IT Manager and IT Analyst of the planned purchase and fill out the IT Steering Committee Project Proposal Form. If approved by IT, review the City’s IT Service Agreement template to determine if it’s appropriate for the purchase (see Step 3).

Step 3 (Identifying Contract Template): Identify and prepare the appropriate contract template for the engagement. This template will be an exhibit to the bid document. If no bid document is required under Step 2, contract will simply be routed to the Supplier under Step 5, along with the insurance requirements required in Step 4. Contract templates can be found on the City’s Contract SharePoint page. Contact the Purchasing Analyst for assistance determining the appropriate contract template.

1 The procedure for executing facilities use and special events agreements are specifically excluded from this Procedure as those contracts are managed by Parks & Recreation. Please contact the Recreation Manager (Facilities) for questions about the procedure for executing those agreements. 2 The procedure for construction contracts is specifically excluded from this document as those projects are managed by Public Works, and they are responsible for maintaining standard bid documents. Please refer to CIP Design and Construction Guide for procedures related to Public Works Construction contracts: CIP Design and Construction Guide.docx

Contracts, Contract Amendments, Contract Management, Signature Authority 279-4
Step 4 (Identifying Insurance Coverage Requirements): Identify the appropriate insurance coverage template that will be an exhibit to the contract. The standard insurance templates are located on the City’s Contract SharePoint page in the same folder as the correspondence insurance template (e.g., the standard Professional Services Insurance Template is in the Professional Services contract folder). The ISM should evaluate the risk of the engagement, understanding that there may be instances where the City’s standard insurance coverage templates are not appropriate to use for a particular engagement.3 Determining appropriate insurance coverage is dependent on a variety of details and the ISM should always reach out to the Risk Manager with any questions or concerns.

Necessary coordination with the Risk Manager regarding insurance coverage requirements and/or refinements to language should occur well in advance of proceeding to Step 5.

Step 5 (Obtaining Approval Authority Authorization): Once the ISM has prepared the draft bid document under Step 2, if applicable, and the draft contract under Steps 3 and 4, the package should be routed to the Approval Authority for review and approval.  Caveat for contracts requiring RFP/RFQ: Typically, if Council approval is required for a purchase that will be procured by an RFP or RFQ, staff will request Council approval through a Council Agenda Report to issue the bid documents and also to delegate authority to execute the contract with the selected bidder to the City Manager if the bid is within a certain dollar amount, so staff does not have to return to Council for approval of the award once the bidder has been selected.

Similarly, if City Manager approval is required for a purchase that will be procured by an RFP or RFQ, staff will request City Manager approval through a City Manager Report to issue the bid documents and to delegate authority to execute the contract with the selected bidder to the appropriate Department Head.
 Caveat for contracts not requiring RFP/RFQ: If bid documents are not required under Step 2 and the ISM is presenting the contract to the Approval Authority for authority to execute, the ISM must obtain the signature of the Supplier on the agreement prior to presenting it to the Approval Authority.

Step 6 (Posting of Bid Package—if applicable): If the procurement method determined by Step 2 requires issuance of RFP or RFQ send the approved bid package to the Purchasing Analyst.

This package should contain the RFP or RFQ document, the contract template selected under Step 3, and the insurance coverage requirements identified under Step 4. The Purchasing Analyst will complete a final review and post the documents to BidSync, the City’s electronic bid platform.

Step 7 (Selecting the Bidder—if applicable): If the procurement method determined by Step 2 results in issuance of an RFP or RFQ, Purchasing Division staff will open the bids and post the bid responses in a shared folder for the project review team. Project review team will review and recommend to the originating department to award the contract to the “lowest responsible bidder.”4  Note: As the City’s RFP/RFQ template states, if a bidder wishes to request changes to the City’s standard contract terms and conditions, this should be done within the proposal/submission of qualifications. This allows such requests to be considered when determining whether to award the

3 Additional non-standard insurance templates that may better suit the ISM’s needs are located on the Contract SharePoint page: Insurance Templates
4 Section 3.24.210 of the Municipal Code identifies the criteria the review team may consider when selecting the “lowest responsible bidder.”

Contracts, Contract Amendments, Contract Management, Signature Authority 279-5
contract or not, with any proposed changes being reviewed with the CAO prior to award of the contract.

Step 8 (Routing of Contract for Signature): Once Steps 1-7 have been satisfied, ISM should forward the contract to the Purchasing Analyst or their department-designated staff for routing to all parties via DocuSign (the City’s electronic signature software platform). ■ Note: The Clerk’s Office will route contracts requiring Council approval, specifically those requiring the Mayor’s signature, through DocuSign. See step 5 for additional detail regarding when the Mayor’s signature may be required, or when contract execution can be delegated to the City Manager, in which case the contract can be routed through the Purchasing Division.

257-1
Section 256

CONTRACT MANAGEMENT
Following the award of a contract, management actions must be taken to ensure full compliance with the terms and conditions contained within the contract document, including price.

Payment, monitoring of progress, inspection and acceptance, quality assurance, monitoring and surveillance, modifications, negotiations, contract closeout, and other activities encompass contract management.

Project Managers are responsible for the day-to-day management of their contracts and should be aware of the contract terms and scope of work and be aware of renewal dates.

For each contract executed with a supplier, it is the responsibility of the project manager assigned to oversee the project to ensure that the contract performs to the requirements, standards, and deliverables established in the contract.

The contract manager performs periodic inspections and reviews of the contractor’s performance and provides feedback to the contractor to maintain a regular crossflow of information and feedback. As much as possible, contract managers should document such communication in writing, whether it be of a positive or negative nature, as this information is critical to resolving disputes and as a reference for future Supplier performance reviews.

Contract managers assigned to oversee Supplier performance must attend contracts administration training provided by the Purchasing Department. Staff members who do not attend this training should not be appointed as contract managers.

The contract manager’s responsibilities include, but are not limited to:
 After execution of the agreement, keep a file a copy of the executed agreement.  Submitting a requisition for a purchase order to encumber the funds.  The Supplier must not begin any performance until an executed contract is approved.  On construction projects, the purchase order may serve as the Notice to Proceed.  Notifying the contractor when to begin work.
 Monitoring contract compliance.
 Reviewing progress reports, status reports, and compliance with time schedules.  Approving the final goods or services by accepting the deliverables in writing.  Providing copies of any contract administration documentation or communication to the Purchasing Department.
 Monitoring expenditures, ensuring funding availability, and proper fiscal encumbrances through purchase orders when the contract extends over multiple years.  Verifying the accuracy of invoices and approving those invoices for payment.  Requesting amendments, addendums, change orders, and/or contract renewals in a timely manner.
 Verifying all work is completed and accepted by the department prior to the contract expiration date.

Contract Management
279-2
 Performing contract closeout activities:
 Notifying the Finance Department when funds can be dis-encumbered.  Reporting any contract disputes immediately to the Purchasing Department.  Keeping an accurate, auditable, documented trail of contract administration.

Contract managers are not authorized to:
 Instruct the contractor to start work before the contract is fully executed.  Change the scope of the agreement without doing so through the formal process set forth in this policy
 Direct the contractor to perform work that is not described in and funded by the contract.
 Extend the time period of the contract without the execution of an approved amendment.
 Allow the contractor to incur any additional costs over the limit set by the contract.  Sign a contract as the department’s authorized signatory unless authorized in writing.  Sign any contractor’s contract form.

257-1
Section 257

CONTRACT AMENDMENTS
After contract award—whether by purchase order or formal contract—amendments may be needed to reflect changes in the scope of goods or services to be provided. The following summarizes what is required to authorize and document contract changes.

The City’s contract amendment templates are on the Contracts Policy and Procedures SharePoint site.

Amendments should be numbered.

AUTHORIZING AGREEMENT CHANGES
Construction Contracts
Authorization levels for approving construction contract change orders are outlined in Section 203 of this manual.

Goods
General Policy. Staff has the authority to amend agreements to the cumulative amended contract amount (original amount of the contract plus the amount of any amendments) that they are otherwise authorized to award contracts. (See exhibit A) In those cases where a higher purchasing authority awarded the original contract, staff have the authority to amend those contracts by a cumulative amendment amount (amount of only the amendment itself) that they are otherwise authorized to award contracts. (See exhibit B) Budget Constraints. In all cases, however, staff authorization to increase contract amounts is subject to existing budget availability.

Staging of Contract Costs and Amendments. Using the amendment process to avoid competitive bidding or higher authorization levels at the contract award stage is prohibited.

The following provides general guidelines for authorization levels in approving changes to purchase orders and agreements.

Contract Amendments
279-2
Exhibit A – Amendments originally approved by a lower authority

Contract Amendments
279-3
Exhibit B - Amendments originally approved by a higher authority __________________________________________________________________________ ______
Revised September 2, 2003, to reflect changes in the City’s Purchasing Guidelines approved by the Council on April 15, 2003, and again on June 2, 2015

275-1
Section 274

RISK MANAGEMENT & INSURANCE
Purchasing and Risk Management may require insurance coverage from the supplier selected for the award to protect the interests of the City. The insurance coverage shall be in the form and amounts as required by the solicitation.

All City procurements should be assessed for potential risk. If the risk is low, then generally, staff can proceed with the procurement. If risk assessment is medium to high – staff should consult with Purchasing, Risk Management, and the City Attorney’s office to determine appropriate insurance coverage.

Factors to Determine Risks for Statements of Work and Terms and Conditions  Provide a description of what service and information the good or service will provide
 Is there a high level of complexity in the services procured?  Will the contract terms be non-standard? High dollar? Environmental concerns?  Is the procurement mission-critical, highly visible, or potentially controversial?  Is the procurement funded by grants with expiration dates?  What security, access, confidentiality, or customer information is necessary to perform the work?
 What City systems are impacted, or will it require an interface to implement or use this software?
 Will the supplier require access to the City’s network during the performance of the work?
 Will the contractor be on-site on City property during the performance of the contract?
 Will chemicals or hazardous materials be purchased – will they require pollution and professional liability coverage
Contract awards may be contingent upon the submission of required insurance coverage and performance and payment bonds. If the Supplier selected for the award fails to fulfill these requirements, default actions can be initiated.

For contracts up to Tier 3, the City Manager or designee may render the Supplier in default, re-award the contract to the next lowest-priced responsive and responsible supplier, and subject the defaulted Supplier to re-procurement charges, or forfeiture of the bid, or offer bond, or security in an amount equal to the damages sustained by the City because of the default.

For contracts greater than Tier 4, the City may re-award to a new Supplier who participated in the solicitation but was not awarded any portion of the contract. The City Manager will obtain approval from the City Council.

City Issued Credit Cards
279-2
If the City Manager determines that the Supplier should not be suspended or debarred, the City Manager shall have the right to require certain corrective actions by the Supplier by a prescribed date and time.

The decision of the City Manager in these proceedings shall be final and not open to appeal by the Supplier or the Supplier’s legal representative.

The City shall reject any offer to do business from a Supplier who is suspended or debarred under these procedures for the entire term of the suspension or debarment.

City Issued Credit Cards
279-3
Section 275

CITY-ISSUED CREDIT CARDS

POLICY OVERVIEW
To provide secure payment options for employees who travel or at times have to make emergency purchases, the City issues credit cards registered to individuals under the City umbrella.

In this context, it is important to understand the fiduciary responsibility of utilizing a City credit card and the required audit control over purchases. This policy outlines the use, accounting, and reporting obligations that come with this fiduciary responsibility and the ramification of violating these obligations.

Employees assigned a City credit card will be bound to the criteria outlined in this policy, and individual user agreements will be signed to ensure that a contract between the City and the credit card holder exists for reference.

This policy establishes the City's allowable uses, the fiduciary responsibility, the procedures, and reporting obligations when using City credit cards in making emergency purchases or paying for travel and training-related expenses. Refer to the City's Municipal Code for the definition of an emergency purchase @ Municipal Code
This policy cannot cover every scenario, exception, or contingency that may arise in using City credit cards. Accordingly, the primary standard that should always prevail is to use common sense and good judgment in the use and stewardship of City financial resources.

POLICIES AND PROCEDURES AT-A-GLANCE
A summary document of primary cardholder responsibilities has been made available for easy reference. See policies & procedures At-A-Glance @ At a Glance A procedure handbook for how to request a card; due dates for reconciliations; How to Oracle guides for expense report submission; and compliance auditing can be found @ Credit Card Procedure Handbook
The Oracle' how-to' guide for submitting expense reports can be found @ Expense Report - How to Submit Guide

1.0 GENERAL GUIDELINES
Charges can originate in-store, online, or by phone. The primary responsibility for ensuring the appropriate use of credit cards lies with each employee holding a card. Acceptance of a City credit card indicates an employee's agreement to follow all policies and procedures, laws, and regulations.

1.1 EMERGENCY OPERATIONS CENTER - EMERGENCIES

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Emergency Operations Center (EOC) - In cases of declared emergencies, the City Manager or their designee may authorize an increase in credit card limits and individual transaction limits as well as authorize cards to be temporarily re-assigned to designated staff. The Procurement Cardholder whose Procurement Card was temporarily reassigned shall include a cover memorandum explaining the date and reasons for activation of the EOC with the monthly statement of account and affirm that the Procurement Card was temporarily reassigned in accordance with this policy. All receipts must be submitted in accordance with the rest of this policy.

2.0 TRAINING
Cardholders are strongly encouraged to attend training on their role and responsibilities outlined in this policy. Cards are issued to cardholders who certify they have read, understand, and will comply with this policy. Failure to follow this policy may result in termination of card privileges and disciplinary action.

Given the ramifications tied to incorrect administration of credit cardholder responsibilities, the Finance Department will hold annual training opportunities to ensure that roles and responsibilities are clearly understood and cardholders have all the tools necessary to complete their administrative obligations correctly. The material is available online and can be accessed at any time.

The training module is located on the Purchasing SharePoint site at Training.

Once the training is completed, you are required to sign the user agreement; once signed, Finance will activate the credit card. This same process is followed for department cards.

3.0 TYPES OF CITY CREDIT CARDS
Standard Credit Card – a card issued to individual City employees similar to a consumer credit card but is paid in full at the end of each month. The card can be used for acquiring goods and services in emergency situations or when encountering unexpected circumstances in the field. The card does not replace the purchasing guidelines set in section 202 of the City's Purchasing Policy and should not be used to circumvent planning and requisitioning. The card can be used for training, travel, and meeting-related expenses, as explained in the Travel & Meeting Policy of the Financial Management Manual - Section 350.

Department Card – A multi-user card issued to a division. A department card is issued to a specific employee recognized as the Card Coordinator or Reconciler. A Department card will have the name of the specific department or workgroup that it is assigned to.

4.0 LIMITS AND INCREASE REQUESTS
Department Heads and managers have two options for spending limits for employees:

Department / Division Cards:

Option 1 - Monthly limit of $5,000 with a single purchase limit of $2,500/$5000 Individual Cards

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Option 1 – Monthly limit of $5000 with a single purchase limit of $2500 Option 2 - Monthly limit of $2,000 with a single purchase limit of $900 Managers and Supervisors are more appropriate for option 1.

Employees under a manager's responsibility are more appropriate for option 2.

Purchase limits can be increased but must be approved by Finance. Cardholders should send an email requesting the increase to their Department Head, the Program Administrator, and Financial Analyst - Purchasing and include the following:
 Amount requested for the single purchase or monthly limit and business reason for the increase
 Supplier name for whom the single purchase is requested If a single purchase or monthly limit exceeds the amounts outlined, you must obtain approval from the Fiscal Officer/Department Head before making the purchase or using the purchase order process.

5.0 COMPETITIVE BIDDING THRESHOLDS
City employees shall not piecemeal credit card purchases to circumvent the allotted maximum credit card limit. If the cost of an emergency purchase exceeds the limit, staff can request a temporary limit increase as outlined in this policy.

6.0 TRAVEL EXPENSES
The City credit card must be used in paying for travel expenses to avoid personal reimbursements. Please reference the City's travel and meeting policy for all applicable rules and regulations. Please note food purchases while traveling cannot be paid via the City's credit card as they are reimbursed/advanced per diem.

7.0 PERSONAL USE OF CITY CREDIT CARDS STRICTLY PROHIBITED Employees shall not use City credit cards for personal expenses even if the intent is to reimburse the City later. Nor can personal credit cards be used for City business. Charging personal expenses on City credit cards is a misuse of City funds and a breach of the City's ethics policy. The same holds true for the use of a personal credit card for City businesses in order to reap the benefits in the form of travel miles or other incentives.

Note: it is strictly prohibited to register City Cards to any personal accounts such as Uber, Instacart, or Amazon. Purchases on Amazon can only be approved through the City's Amazon account.

A violation, as outlined above, will lead to suspension of the credit card upon the second violation. The first violation will lead to a violation notices, the second violation will lead to a oneyear suspension of card privileges. Should subsequent violations occur, card privileges will be terminated.

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8.0 NEGLECT OR VIOLATION OF THE MONTHLY FIDUCIARY OBLIGATION The monthly credit card statements are distributed on or around the first day of the month. It is the credit card holder's responsibility to submit the reconciling expense report, including all itemized receipts, through the Oracle system no later than the 10th day of the month.

The following will lead to the suspension of credit card privileges:
 Itemized receipt is missing
 Expense report is submitted past the 10th of the month  Expense report is submitted incorrectly despite multiple training opportunities  The expense report submitted does not match the bank statement Violations, as outlined above, will lead to suspension of the credit card as follows:
 The second violation will lead to a six-month suspension;  The third violation will lead to a one-year suspension of card privileges. Should a subsequent violations occur, the card would be terminated.

Please note: if you are not able to submit your expense report due to extenuating circumstances (such as a personal/family emergency), it is your responsibility to delegate the submittal of the report or inform Finance of the delay in the submittal.

9.0 PROJECT ACCOUNTS
At no time shall credit cards be used for project-related expenditures. Using a credit card to circumvent payments of project-related expenditures that are subject to requisitioning will lead to immediate termination of the credit card privileges.

10.0 FRAUD
Employees are responsible for ensuring that City-issued credit cards are protected from fraudulent use or loss and for ensuring that all purchases are made in accordance with the City's policies. Failure to follow policies and procedures regarding the use of credit cards is no different from failure to follow policies and procedures in any other aspect of an employee's job.

It is the cardholders' responsibility to immediately alert the bank should any suspicious activity occur on the card statement.

11.0 LOST OR STOLEN CARDS
Cardholders are responsible for ensuring that the issuing bank and the Department of Finance are notified immediately if the card is lost or stolen. The cardholder has been set up to directly contact the issuing bank (using the bank's customer service number) to report a lost or stolen card. Failure to do so may result in holding the cardholder responsible for any fraudulent use of the card.

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12.0 DISPUTED CHARGES
Cardholders are responsible for ensuring that the Supplier and issuing bank are notified immediately of any charges that are disputed. The City pays the statement in full, including any disputed amounts, to avoid finance charges and late fees; when resolved, the amount will be credited to the account on the next monthly statement. Any charge that has not been validated and accepted in Oracle Expense Management within a month is deemed a disputed charge, and it is the responsibility of the cardholder and the applicable department to have the dispute resolved before the next billing cycle.

13.0 CREDIT CARD FEES
Any processing fee or charge from the issuing bank is the responsibility of the cardholders' department operating budget like any other charge on the monthly expense statement.

14.0 SURRENDER OF CARD UPON REQUEST OR TERMINATION
Cardholders will immediately surrender their credit card upon request of their department head. Departments are responsible for retrieving the credit card when an employee separates from the City and returning the card to the Finance Department for cancellation and destruction. The use of the credit card for any purpose after its surrender is prohibited.

15.0 MISUSE OF CARDS
Misuse of City funds is a serious breach of the City’s ethics policy. Doing so – even if the intent is to reimburse the City later – can result in disciplinary actions, up to and including termination. The Finance Department will notify Department Heads and Human Resources for appropriate follow-up.

RESTRICTED CATEGORIES
The City's credit card policy allows for the blocking of 'Merchant Category Classification' (MCC Codes). The code identifies the Supplier's primary product or service. Examples of blocked MCC codes include liquor stores, cocktail lounges, nightclubs, spas, and massage parlors, and gambling casinos.

The Finance Director has the authority to designate any MCC code as restricted.

ROLES AND RESPONSIBILITIES DEFINITIONS
Credit Card Holder – Employee given responsibility for a City credit card to use for purchasing required in their job-function

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Credit Card Reconciler or Group Reconciler – Cardholder or employee designated to perform the transaction reconciliation process in Oracle for an individual account or a group in a division. If an employee is reconciling more than one account, they are known as a 'Group Reconciler' Credit Card Approver – The manager responsible for the approval of charges to an individual card within the system approval process. This process includes not only pertain to approving the monthly expense report but each induvial charge itself. An employee acting as a reconciler for charges cannot be the approver of those charges. A charge must be approved by someone other than the Credit Card Reconciler, most likely the cardholder's supervisor.

Department Credit Card Coordinator/Reconciler – The individual responsible for a Department Card is called the Department Card Coordinator. The employee is responsible for securing the card and tracking the use/users of the card. The Card Coordinator is responsible for reconciling the transactions in Oracle. The coordinator and reconciler may be two different people.

Internal Credit Card Compliance Auditor – The employee responsible for monitoring credit card transactions and policy compliance. For the City of San Luis Obispo, this is performed by the Program Administrator ( Financial Analyst – Purchasing) with oversight from the Finance Director.

Outside Accounting Auditor – External Accounting Auditors or Auditing Firm employed by the City of San Luis Obispo to complete the annual audit of the City Accounting functions.

Department Head - Department Heads determine the type of card the employee will carry and are responsible for ensuring that their staff is aware of their responsibilities and for implementing review and payment procedures within their department.

Financial Analyst - Purchasing - Manager of the Purchasing Division and responsible for internal audit of credit card transactions, compliance to policy, and training Program Administrator – The designated City employee who serves as the point of contact between the City and the bank. This position has authority over the program in Policy and Procedures with the Financial Analyst – Purchasing and is generally the first stop for any issues pertaining to the credit card program.

Finance Director - The Finance Director is responsible for administering the review of credit card statements to ensure that the proper documentation and purchase approvals have been provided.

278-1
SECTION 276

SUSTAINABLE PURCHASING
Municipal Code 3.24.075
It is the intent of the City Council that the City of San Luis Obispo takes a leadership role not only in recycling its waste products but also in the purchase of recycled products for use in the delivery of City services. It is the purpose of this section to provide direction to the City Administrative Officer in the procurement and use of recycled products.

For the purpose of this section, “recycled materials” are defined as any materials (e.g., glass, paper, plastic, etc.) that are separated by type, reprocessed by industrial methods, and used as raw materials for the manufacture of new products.

It is the policy of the City of San Luis Obispo to purchase and use recycled products whenever possible to the extent that such use does not negatively impact health, safety, or operational efficiency.

It is the policy of the City of San Luis Obispo to encourage the purchase of products that can be recycled or reused.

The City will purchase and use recycled paper for masthead stationery, envelopes, and printing purposes. In addition, recycled paper shall be purchased and used in all copy machines which will accept it. City staff will encourage the copier industry to develop high-speed copiers which will accept recycled paper.

City departments shall examine their purchasing specifications and, where feasible, purchase equipment, supplies, and services that result in less harm to the natural environment. This involves the purchase of equipment, supplies, and services in a manner that uses less harmful materials, employs recycled or recovered materials (where appropriate and available), and utilizes techniques intended to result in less impact on the environment than other available methods.

It is the policy of the City of San Luis Obispo that City funds shall not be used to purchase single-use plastic bottled beverages of less than twenty-one ounces or single-use plastic drink containers or single-use plastic beverage containers, as provided in Chapter 8.07.

A ten percent preference, not to exceed one thousand dollars per contract, may be given to recycled products.

The fitness and quality of the recycled product must be at least equal to unrecycled products as determined by the City.

The preference percentage shall be based on the lowest bid or amount quoted by the supplier or suppliers offering nonrecycled products.

Amount preferences may be offered in excess of the ten percent ceiling established in this section, if it can be shown that purchase of a recycled product or material will result in greater long-term savings to the City. Award of a bid in excess of the ceiling, however, requires the approval of the city administrative officer or city council as established in the City’s purchasing manual. (Ord. 1644 § 2, 2018: Ord. 1618 § 1 (Exh. A (part)), 2015: Ord. 1178 § 1, 1990)
Ord. No. 1178 added § 3.24.080, which the editor has renumbered § 3.24.075 since the chapter already contained a § 3.24.080.

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Section 277
Recycled Content Paper Procurement Requirements – SB 1383 This policy provides guidelines for the City to follow in its effort to meet or exceed Senate Bill 1383 regulatory requirements related to recycled content paper purchasing. This policy also supports the City’s sustainability policy (Section 277), and the City’s commitment to achieving carbon neutrality.

REQUIREMENTS FOR DEPARTMENTS
Option 1. Comparable or more favorable pricing: If fitness and quality of Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper are equal to that of non-recycled items, all City departments and divisions shall purchase Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper that consists of at least thirty percent (30%), by fiber weight, post-consumer fiber, whenever available at the same or a lesser total cost than non-recycled items, consistent with the requirements of the Public Contract Code, Sections 22150 through 22154 and Sections 12200 and 12209, as amended.

Option 2. If fitness and quality of Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper are equal to that of non-recycled items, all City departments and divisions shall purchase Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper that consists of at least thirty percent (30%), by fiber weight, post-consumer fiber, whenever the total cost is the same or a lesser total cost than non-recycled items or whenever the total cost is no more than 10 percent (10%) of the total cost for the non-recycled items, consistent with the requirements of the Public Contract Code, Sections 22150 through 22154 and Sections 12200 and 12209, as amended.

BAll Paper Products and Printing and Writing Paper shall be eligible to be labeled with an unqualified recyclable label as defined in Title 16 Code of Federal Regulations Section 260.12 (2013).

Provide records to the Purchasing Division of all Paper Products and Printing and Writing Paper purchases on a schedule to be determined by Recordkeeping Designee. (both recycled-content and non-recycled content, if any is purchased) made by a division or department, or employee of the City. Records shall include a copy of the invoice or other documentation of purchase, written certifications as required in Section 2.2.A.3-4 for recycled-content purchases, Supplier name, purchaser name, quantity purchased, date purchased, and recycled content (including products that contain none), and if non-Recycled-Content Paper Products and/or non-Recycled-Content Printing and Writing Paper are provided, including a description of why Recycled-Content Paper Products and/or Recycled-Content Printing and Writing Paper were not provided.

REQUIREMENTS FOR SUPPLIERS
A. All Suppliers that provide Paper Products (including janitorial Paper Products) and Printing and Writing Paper to the City shall:

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1. Provide Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper that consists of at least thirty percent (30%), by fiber weight, post-consumer fiber, if fitness and quality are equal to that of the non-recycled item and available at an equal or lesser price or available at no more than 10% of the total cost for non-recycled paper products.

2. Only provide Paper Products and Printing and Writing Papers that meet the Federal Trade Commission Recyclability standard as defined in Title 16 Code of Federal Regulations Section 260.12 (2013).

3. Certify in writing, under penalty of perjury, the minimum percentage of postconsumer material in the Paper Products and Printing and Writing Paper offered or sold to the City. This certification requirement may be waived if the percentage of postconsumer material in the Paper Products, Printing, and Writing Paper, or both can be verified by a product label, catalog, invoice, or a manufacturer or Supplier internet website.

4. Certify in writing, under penalty of perjury, that the Paper Products and Printing and Writing Paper offered or sold to the City is eligible to be labeled with an unqualified recyclable label as defined in Title 16 Code of Federal Regulations Section 260.12 (2013).

5. Provide records to the Recordkeeping Designee of all Paper Products and Printing and Writing Paper purchased from the Supplier within thirty (30) days of the purchase (both recycledcontent and non-recycled content, if any is purchased) made by a division or department or employee of the Jurisdiction. Records shall include a copy of the invoice or other documentation of purchase, written certifications as required in Section 2.2.A.3-4 for recycled-content purchases, purchaser name, quantity purchased, date purchased, and recycled content (including products that contain none), and if non-Recycled-Content Paper Products and/or non- Recycled-Content Printing and Writing Paper are provided, include a description of why Recycled-Content Paper Products and/or Recycled-Content Printing and Writing Paper were not provided.

B. All Suppliers providing printing services to the City via a printing contract or written agreement shall use Printing and Writing Paper that consists of at least thirty percent (30%), by fiber weight, post-consumer fiber, or as amended by Public Contract Code Section 12209.

Recordkeeping Responsibilities
A. The Finance Department will be the responsible department and will select an employee to act as the Recordkeeping Designee that will be responsible for obtaining records pertaining to Procurement of Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper, as well as reporting such records to the Reporting Designee.

B. The Recordkeeping Designee will do the following to track Procurement of RecycledContent Paper Products and Recycled-Content Printing and Writing Paper:

1. Collect and collate copies of invoices or receipts (paper or electronic) or other proof of purchase that describe the procurement of Printing and Writing Paper and Paper Products, including the volume and type of all paper purchases; and copies of certifications and other required verifications from all departments and/or divisions procuring Paper Products and Printing and Writing Paper (whether or not they contain recycled content) and/or from the Suppliers providing Printing and Writing Paper and Paper Products. These records must be kept as part of the City’s documentation of its compliance with 14 CCR Section 18993.3.

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3. Collect, collate, and maintain documentation submitted by the City departments and divisions, Direct Service Providers, and/or Suppliers, including the information reported to the Recordkeeping Designee in accordance with Section3.A.5.

4. Compile an annual report on the City’s direct procurement and Supplier/other procurement on behalf of the City of Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper, consistent with the recordkeeping requirements and 14 CCR Section 18993.4 for Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper procurement. This report shall be made available to the City’sresponsible entity for compiling the annual report to be submitted to CalRecycle (which will include a description of compliance on many other SB 1383 regulatory requirements) pursuant to 14 CCR Division 7, Chapter 12, Article 13.

This Policy shall go into January 1, 2022.

Authority cited: Public Resources Code Sections 40502, 43020, 43021, and 42652.5, and Health and Safety Code Section 39730.6. Reference: Public Resources Code Section 42652.5; Health and Safety Code Section 39 39730.6; and Public Contracts Code Sections 22150, 22151, 22152, 22153, and 22154.

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SECTION 279 –
NIGP – NATIONAL INSTITUTE OF GOVERNMENT PROCUREMENT

COMMODITY CODE CLASSIFICATION SYSTEM
The NIGP Commodity/Services Code classifies products and services in public procurement. The codes are the standard taxonomy for classifying commodities and services for 1000’s government entities across the USA and the world.

The codes are used to track data within strategic sourcing and spending to detail where the money is spent and what kinds of items are purchased most. The City uses these codes to track purchasing activity and expense report purchases for budgeting and management reporting, for tracking purchases, and for classifying suppliers by the types of products they provide.

The codes allow the City to look at suppliers' spending across all departments and also compare spending across peer governments. Is Utilities paying the same amount as Public Works? Is a peer government getting a better rate for a category than SLO? The codes are classified by digit categories; the longer the digits, the more detailed the classification.

The City uses the NIGP 5 Digit code structure to classify spending.

Structure Sample Code Description
3 Digit (Class) Code 918 Consulting Services
5 Digit (Class-Item) 918-43 Consulting Services –
Environmental
There are over 98,000 codes and subcodes to choose from. The City does not use all 98,000 codes.

To increase operational efficiencies and simplify the process for staff choosing amongst the 1000’s NIGP codes, the City has developed a smaller standardized list.

The City’s most common NIGP codes are in the below link:
 SLO NIGP Code Master List

279-1
Section 280
PROCURE TO PAY PROCESS (P2P)
The procure-to-pay (P2P) process begins with the requisition of goods or services by a requesting department and ends with payment to the supplier.

Between these two points, common practices and procedures must be followed.

Delivery of goods/services to the City does not constitute acceptance for payment.

Final acceptance for payment shall be given only after delivery and inspection by department requesters that the good/service meets the purchase order conditions.

Final acceptance for payment is verified by departments ‘receiving’ the invoice in Oracle, ensuring the PO# is on the invoice, and sending the validated final received invoice to Finance for payment.

The following activities and department responsibilities form the P2P process.

Department Responsibility
Requesting
Department
Determine need
Prepare requisition inOracle
Attach to the requisition detailed specifications, quotes, sole-source, CMR, contract, etc.

Budget Budget approval will auto-approve in Oracle
Purchasing Review purchase requests for appropriate backup documentation, scope, quote, contracts, authority, etc. Ensure policy requirements are met by requesters
Review purchase terms and conditions
Supplier Ship supplies to departments or performs service Submit the invoice to the requester who will receive the invoice in Oracle and send to accounts payable for payment Requesting
Department
Accept and inspect supplies or service for compliance
Resolve non-compliant purchases
Receive purchase in Oracle
Send invoice to Accounts Payable for payment

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Finance
Department
Enter invoice for payment into Oracle
Match PO, receiving, and invoice for payment
Responsibilities
Finance Department – It shall be the responsibility of the Finance Department to develop and implement procedures for the following:
 Notifying departments of improper invoicing. (within 10 days of receipt of the invoice in AP);
 Providing prompt payment of invoices within 30 days of receipt by the Finance department;
 Entering invoices, credit memos, etc. required for payment into the Oracle accounts payable system;
 Providing payment processing procedures to be followed by all City departments.

Requesting Departments – It shall be the responsibility of the departments to develop and implement procedures for thefollowing:
 Entering requisition information with appropriate charge account, amount, and descriptions of what is being purchased into the Oracle system;  Ensuring that all purchases, except for non-PO exceptions, have purchase order numbers;
 Entering receiving information into Oracle;
 Identifying and resolving receiving issues;
 Working with Finance to resolve payment disputes and issues.

General - The following applies to all external procurement of goods or services for the City:

1. All
invoices must be received by the requester in Oracle then sent to Accounts Payable.

2. Accounts Payable will pay after delivery and receiving of the goods/services by the departments and matching the supplier’s invoice with the purchase order (3-waymatch)

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3. If an invoice issent directly to the department – the department shall verify if the invoice is tied to a purchase order. If so, invoice can be sent to Accounts Payable for payment.

4. If the invoice does not have a purchase order number and does not meet an exception, the requester must submit the invoice for a purchase order number, even if after the fact purchase.

5. The invoice shall contain:
 Name of the supplier
 Date of invoice
 Invoice number
 The authorizing City purchase order number
 The correct quantity, amount, and total cost
 Manufacturer name and item number of the goods
 Address to which payment should be made

6. Invoices sent to Accounts Payable must have the purchase order number and receipt number stamped on the invoice.

It is the responsibility of the Finance Department (AP) to conduct the 3-way match.

PUBLIC CONTRACT CODE – SB1383
PUBLIC CONTRACT CODE – PCC DIVISION 2. GENERAL PROVISIONS [1100 - 22355]; ( Division 2 enacted by Stats. 1981, Ch. 306. ) PART 3. CONTRACTING BY LOCAL AGENCIES [20100 - 22178]; ( Part 3 added by Stats. 1982, Ch. 465, Sec. 11.); CHAPTER 3.5.

Recycled Product Procurement Mandates Pertaining to Local Governments [22150 - 22154]; ( Chapter 3.5 added by Stats. 2005, Ch. 590, Sec. 39.)
22150.

(a) If fitness and quality are equal, each local public entity shall purchase recycled products, as defined in Section 12200, instead of nonrecycled products whenever recycled products are available at the same or a lesser total cost than nonrecycled items. (b) A local public entity may give preference to suppliers of recycled products. (c) A local public entity may define the amount of this preference. (Added by Stats. 2005, Ch. 590, Sec. 39. Effective January 1, 2006.) 22151.

In bids in which the local government has reserved the right to make multiple awards, the recycled product preference cost shall be applied, to the extent possible, so as to maximize the dollar participation of firms offering recycled products in the contract award. (Added by Stats. 2005, Ch. 590, Sec. 39. Effective January 1, 2006.) 22152.

(a) All local public entities shall require all business, as defined in Section 12200, to certify in writing the minimum, if not exact, percentage of postconsumer materials in the products, materials, goods, or supplies, offered or sold. All contract provisions impeding the consideration of recycled products shall be deleted in favor of performance standards. (b) With respect to printer or duplication cartridges that comply with the requirements of subdivision (e) of Section 12156, the certification required by this subdivision shall specify that the cartridges so comply.
(Added by Stats. 2005, Ch. 590, Sec. 39. Effective January 1, 2006.) 22153.

All printing contracts made by any local public entity shall provide that the paper used shall meet the recycled content requirements of Section 12209. (Added by Stats. 2005, Ch. 590, Sec. 39. Effective January 1, 2006.) 22154.

(a) All businesses shall certify in writing to the contracting officer, or his or her representative, the minimum, if not exact, percentage of postconsumer material in the products, materials, goods, or supplies being offered or sold to any local public entity.

Public Contract Code – SB1383
(b) With respect to printer or duplication cartridges that comply with the requirements of subdivision (e) of Section 12156, the certification required by this section shall specify that the cartridges so comply.
(c) A local public entity may waive the certification requirement if the percentage of postconsumer material in the products, materials, goods, or supplies can be verified in a written advertisement, including, but not limited to, a product label, a catalog, or a manufacturer or Supplier Internet Web site.
(Amended by Stats. 2007, Ch. 130, Sec. 198. Effective January 1, 2008.) PUBLIC RESOURCES CODE – PRC; DIVISION 30. WASTE MANAGEMENT [40000 - 49620]; ( Division 30 added by Stats. 1989, Ch. 1096, Sec. 2.); PART 3. STATE PROGRAMS [42000 - 42999]; ( Part 3 added by Stats. 1989, Ch. 1096, Sec. 2.);CHAPTER 13.1. Short-Lived Climate Pollutants [42652 - 42654]; ( Chapter 13.1 added by Stats. 2016, Ch. 395, Sec. 6. ) 42652.5.
(a) The department, in consultation with the State Air Resources Board, shall adopt regulations to achieve the organic waste reduction goals for 2020 and 2025 established in Section 39730.6 of the Health and Safety Code. The regulations shall comply with all of the following:
(1) May require local jurisdictions to impose requirements on generators or other relevant entities within their jurisdiction and may authorize local jurisdictions to impose penalties on generators for noncompliance.
(2) Shall include requirements intended to meet the goal that not less than 20 percent of edible food that is currently disposed of is recovered for human consumption by 2025. (3) Shall not establish a numeric organic waste disposal limit for individual landfills. (4) May include different levels of requirements for local jurisdictions and phased timelines based upon their progress in meeting the organic waste reduction goals for 2020 and 2025 established in Section 39730.6 of the Health and Safety Code. The department shall base its determination of progress on relevant factors, including, but not limited to, reviews conducted pursuant to Section 41825, the amount of organic waste disposed compared to the 2014 level, per capita disposal rates, the review required by Section 42653, and other relevant information provided by a jurisdiction.
(5) May include penalties to be imposed by the department for noncompliance. If penalties are included, they shall not exceed the amount authorized pursuant to Section 41850. (6) Shall take effect on or after January 1, 2022, except the imposition of penalties pursuant to paragraph (1) shall not take effect until two years after the effective date of the regulations. (b) A local jurisdiction may charge and collect fees to recover the local jurisdiction’s costs incurred in complying with the regulations adopted pursuant to this section. (Added by Stats. 2016, Ch. 395, Sec. 6. (SB 1383) Effective January 1, 2017.) PUBLIC RESOURCES CODE – PRC; DIVISION 30. WASTE MANAGEMENT [40000 - 49620]; ( Division 30 added by Stats. 1989, Ch. 1096, Sec. 2.)PART 1. INTEGRATED WASTE MANAGEMENT [40000 - 40511]; ( Part 1 added by Stats. 1989, Ch. 1096, Sec. 2. ) CHAPTER 3. Department of Resources Recycling and Recovery [40400 - 40511]; ( Heading of Chapter 3 amended by Stats. 2009, Ch. 21, Sec. 7.);ARTICLE 3. Powers and Duties [40501 - 40511];( Article 3 added by Stats. 1989, Ch. 1095, Sec. 22. )

Public Contract Code – SB1383
40501.

The Department of Resources Recycling and Recovery may hold any hearings and conduct any investigations in any part of the state necessary to carry out its powers and duties. (Amended by Stats. 2009, Ch. 21, Sec. 15. (SB 63) Effective January 1, 2010.) 40502.

(a) The board shall adopt rules and regulations, as necessary, to carry out this division in conformity with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. The board shall make available to any person, upon request, copies of proposed regulations.
(b) (1) The board shall adopt regulations regarding city, county, and regional agency source reduction and recycling elements and nondisposal facility elements, required to be submitted to the board pursuant to Section 41791.5, which shall be deemed to be emergency regulations and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of public peace, health and safety, or general welfare. These emergency regulations shall not alter the deadlines for the submission of countywide and regional agency integrated waste management plans specified in Section 41791.
(2) Prior to adopting the emergency regulations required pursuant to paragraph (1), the board shall do all of the following:
(A) Make available to any person, upon request, a copy of the proposed regulations at least 30 days prior to adoption.
(B) Hold at least two public hearings in different parts of the state in order to receive public comment on the regulations.
(C) Publish notice in the California Regulatory Notice Register of the proposed adoption of the emergency regulations, the identity of a contact person at the board from whom copies of the proposed regulations may be obtained, and the dates, times, and locations of the public hearings that are required pursuant to subparagraph (B).
(c) Any emergency regulations adopted by the board pursuant to paragraph (1) of subdivision (b) shall be filed with the Office of Administrative Law at the earliest feasible date, but not later than December 31, 1993. Notwithstanding subdivision (e) of Section 11346.1 of the Government Code, any emergency regulations adopted pursuant to paragraph (1) of subdivision (b) shall remain in effect for not more than three years from the date of adoption. (Amended by Stats. 1993, Ch. 1169, Sec. 3. Effective October 11, 1993.) PUBLIC RESOURCES CODE – PRC; DIVISION 30. WASTE MANAGEMENT [40000 - 49620]; ( Division 30 added by Stats. 1989, Ch. 1096, Sec. 2.); PART 4. SOLID WASTE FACILITIES [43000 - 44820]; ( Part 4 added by Stats. 1989, Ch. 1095, Sec. 22.); CHAPTER 1.

Solid Waste Facility Standards [43000 - 43050];( Chapter 1 added by Stats. 1989, Ch. 1095, Sec.

22.); ARTICLE 2. Handling and Disposal Standards [43020 - 43035]; ( Article 2 added by Stats. 1989, Ch. 1095, Sec. 22. )

43020.

The board shall adopt and revise regulations which set forth minimum standards for solid

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waste handling, transfer, composting, transformation, and disposal, in accordance with this division, and Section 117590 of, and Chapter 6.5 (commencing with Section 25100) of Division 20 of, the Health and Safety Code. The board shall not include any requirements that are already under the authority of the State Air Resources Board for the prevention of air pollution or of the state water board for the prevention of water pollution. (Amended by Stats. 1996, Ch. 1023, Sec. 405. Effective September 29, 1996.) 43021.

Regulations shall include standards for the design, operation, maintenance, and ultimate reuse of solid waste facilities, but shall not include aspects of solid waste handling or disposal which are solely of local concern or which are within the jurisdiction of the State Air Resources Board, air pollution control districts and air quality management districts, or the state water board or regional water boards.

HEALTH AND SAFETY CODE – HSC; DIVISION 26. AIR RESOURCES [39000 - 44474]; (Division 26 repealed and added by Stats. 1975, Ch. 957.); PART 2. STATE AIR RESOURCES BOARD [39500 - 39961]; ( Part 2 added by Stats. 1975, Ch. 957.); CHAPTER 4.2.

Global Warming [39730 - 39734]; ( Chapter 4.2 added by Stats. 2014, Ch. 523, Sec. 1. ) 39730.6
(a) Consistent with Section 39730.5, methane emissions reduction goals shall include the following targets to reduce the landfill disposal of organics:
(1) A 50-percent reduction in the level of the statewide disposal of organic waste from the 2014 level by 2020.
(2) A 75-percent reduction in the level of the statewide disposal of organic waste from the 2014 level by 2025.
(b) Except as provided in this section and Section 42652.5 of the Public Resources Code, the state board shall not adopt, prior to January 1, 2025, requirements to control methane emissions associated with the disposal of organic waste in landfills other than through landfill methane emissions control regulations.
(Added by Stats. 2016, Ch. 395, Sec. 3. (SB 1383) Effective January 1, 2017.) PUBLIC CONTRACT CODE – PCC; DIVISION 2. GENERAL PROVISIONS [1100 - 22355]; ( Division 2 enacted by Stats. 1981, Ch. 306.; PART 2. CONTRACTING BY STATE AGENCIES [10100 - 19150]; ( Heading of Part 2 added by Stats. 1982, Ch. 1120, Sec. 6.); CHAPTER 4. State Agency Buy Recycled Campaign [12153 - 12217]; ( Heading of Chapter 4 amended by Stats. 2005, Ch. 590, Sec. 7. ); ARTICLE 4. Recycled Materials, Goods, and Supplies [12200 - 12217]; ( Article 4 added by Stats. 1989, Ch. 1094, Sec. 10. ) 12200.

For the purpose of this article, the following definitions shall apply:
(a) “Board” means the California Integrated Waste Management Board, as defined pursuant to Section 40110 of the Public Resources Code. (b) “Business” includes bidders, contractors, and other interested parties that provide services to, or sell products to, the state.

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(c) “Department” means the Department of General Services. (d) “Director” means the Director of General Services.
(e) “Postconsumer material” means a finished material that would have been disposed of as a solid waste, having completed its life cycle as a consumer item, and does not include manufacturing wastes.
(f) “Product categories” include paper products, printing, and writing papers, compost, cocompost, or mulch, glass, oil, plastic, paint, tires, tire-derived products, antifreeze, and metal. (g) “Purchase” means any contractual agreement that state agencies use to obtain goods or materials.
(h) “Recycled products” mean goods or materials that meet the requirements identified in Section 12209, including any good or material that has been reused or refurbished without substantial alteration of its original form.
(i) “Reportable purchase” means the purchase of any goods or materials, with recycled content or not, that may be reported or categorized or classified within one of the product categories identified in Section 12207.
(j) “Reportable recycled product purchase” means the purchase of any goods or materials that meet the requirements identified in Section 12209, that may be reported or categorized or classified within one of the product categories identified in Section 12207, including any good or material that has been reused or refurbished without substantial alteration of its original form. (k) “SABRC” means the State Agency Buy Recycled Campaign. (l) “Secondary material” means fragments of finished products or finished products of a manufacturing process, that has converted a resource into a commodity of real economic value, but does not include excess virgin resources of the manufacturing process, such as fibers recovered from wastewater, trimmings of paper machine rolls, mill broke, plastic, or metal trimmings, or shavings, or other residue from a manufacturing process. Secondary material does not include postconsumer material, so that the secondary material plus the postconsumer material plus the virgin material adds up to 100 percent of the product.
(m) “State agency” means each entity identified in Section 11000 of the Government Code, and includes the California State University.
(Amended by Stats. 2005, Ch. 590, Sec. 25. Effective January 1, 2006.) 12201.

(a) The Legislature finds and declares that it is the policy of the state to conserve and protect its resources. The Legislature further finds and declares that the use of recycled products produced as the result of the superior waste management efforts by the state and local governmental entities will help conserve resources.
(b) It is the intent of the Legislature that the state pursue all feasible measures to improve markets for recycled products including, but not limited to, bid evaluation preferences for purchases made by the state.
(c) If fitness and quality are equal, each state agency shall purchase recycled products instead of nonrecycled products whenever recycled products are available at the same or a lesser total cost than nonrecycled products.
(Added by Stats. 2005, Ch. 590, Sec. 26. Effective January 1, 2006.) 12203.

Each state agency shall ensure each of the following:
(a) (1) Before January 1, 2020, at least 50 percent of reportable purchases are recycled

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products.
(2) On and after January 1, 2020, at least 75 percent of reportable purchases are recycled products, except for paint, antifreeze, and tires.
(3) On and after January 1, 2020, at least 50 percent of reportable purchases of paint, antifreeze, and tires are recycled products.
(b) The requirements specified in this article apply to all reportable purchases of state agencies for product categories listed in this article. (c) The reportable purchases of state agencies shall meet each requirement for, and be applied to the total dollar amount of, each specified product category as defined in this article. The purchase of a recycled product from one category may not be applied toward the requirements for, or the total dollar amount of, any other category listed in this article. (d) Each state agency shall require the businesses with whom it contracts to use, to the maximum extent economically feasible in the performance of the contract work, recycled products. (Amended by Stats. 2014, Ch. 617, Sec. 1. (AB 2675) Effective January 1, 2015.) 12205.

(a) (1) All state agencies shall require all businesses to certify in writing the minimum percentage, if not the exact percentage, of postconsumer material in the products, materials, goods, or supplies offered or sold to the state regardless of whether the product meets the requirements of Section 12209. The certification shall be furnished under penalty of perjury. The certification shall be provided regardless of content, even if the product contains no recycled material. (2) With respect to printer or duplication cartridges that comply with the requirements of subdivision (e) of Section 12156, the certification required by this subdivision shall specify that the cartridges so comply.
(3) A state agency may waive the certification requirement if the percentage of postconsumer material in the products, materials, goods, or supplies can be verified in a written advertisement, including, but not limited to, a product label, a catalog, or a manufacturer or Supplier Internet Web site.
(b) (1) All businesses shall certify in writing to the contracting officer or his or her representative the minimum percentage, if not the exact percentage, of postconsumer material in the products, materials, goods, or supplies being offered or sold to the state regardless of whether the product meets the requirements of Section 12209. The certification shall be furnished under penalty of perjury. The certification shall be provided regardless of content, even if the product contains no recycled material.
(2) With respect to printer or duplication cartridges that comply with the requirements of subdivision (e) of Section 12156, the certification required by this subdivision shall specify that the cartridges so comply.
(3) A state agency may waive the certification requirement if the percentage of postconsumer material in the products, materials, goods, or supplies can be verified in a written advertisement, including, but not limited to, a product label, a catalog, or a manufacturer or Supplier Internet Web site.
(Repealed and added by Stats. 2005, Ch. 590, Sec. 29. Effective January 1, 2006.) 12207.

This article applies to the purchase of goods and materials from the following product categories:
(a) Paper products, including, but not limited to, paper janitorial supplies, cartons,

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wrapping, packaging, file folders, and hanging files, building insulation and panels, corrugated boxes, tissue, and toweling.
(b) Printing and writing papers including, but not limited to, copy, xerographic, watermark, cotton fiber, offset, forms, computer printout paper, white wove envelopes, manila envelopes, book paper, note pads, writing tablets, newsprint, and other uncoated writing papers, posters, index cards, calendars, brochures, reports, magazines, and publications. (c) Mulch, compost, and cocompost products including soil amendments, erosion controls, soil toppings, ground covers, weed suppressants, and organic materials used for water conservation.
(1) “Compost” means a product that meets the following requirements:
(A) It results from the controlled biological decomposition of organic materials, including, but not limited to, yard trimmings and wood byproducts that are separated from the municipal solid waste stream at the source of generation or at a centralized facility, or other source of organic materials.
(B) It is produced by a public or private supplier that is in compliance with the board’s composting operations regulatory requirements.
(2) “Cocompost” means a product that meets the following requirements:
(A) It results from the controlled biological decomposition of a blend of organic materials, including, but not limited to, yard trimmings and wood byproducts that are separated from the municipal solid waste stream at the source of generation or at a centralized facility, and also including, but not limited to, biosolids or other comparable substitutes such as livestock, horse, or other animal manure, food residues, or fish processing byproducts. (B) It is produced by a public or private supplier that is in compliance with the board’s composting operations regulatory requirements.
(3) “Mulch” means a product that meets the following requirements:
(A) It results from the mechanical breakdown (chipping and grinding) of materials, including, but not limited to, yard trimmings and wood byproducts that are separated from the municipal solid waste stream at the source of generation or at a centralized facility. (B) It is produced by a public or private supplier that is in compliance with the board’s composting operations regulatory requirements.
(d) Glass products including, but not limited to, windows, test tubes, beakers, laboratory or hospital supplies, fiberglass (insulation), reflective beads, tiles, construction blocks, desktop accessories, flat glass sheets, loose-grain abrasives, deburring media, liquid filter media, and containers.
(e) Lubricating oils including, but not limited to, any oil intended for use in a crankcase, transmission, engine, power steering, gearbox, differential chainsaw, transformer dielectric fluid, cutting, hydraulic, industrial, or automobile, bus, truck, vessel, plane, train, heavy equipment, or machinery powered by an internal combustion engine.
(f) (1) Plastic products including, but not limited to, printer or duplication cartridges, diskette, carpet, office products, plastic lumber, buckets, wastebaskets, containers, benches, tables, fencing, clothing, mats, packaging, signs, posts, binders, sheet, buckets, building products, garden hose, and trays.
(2) For purposes of this subdivision, “printer or duplication cartridges” has the same meaning as described in paragraph (2) of subdivision (f) of Section 12209. (g) Paint, including, but not limited to, water-based paint, graffiti abatement, interior and exterior, and maintenance.
(h) Antifreeze, including recycled antifreeze, and antifreeze containing a bittering agent or

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made from polypropylene or other similar nontoxic substance. (i) Tires including, but not limited to, truck and bus tires, and those used on fleet vehicles and passenger cars.
(j) Tire-derived products including, but not limited to, flooring, mats, wheelchair ramps, playground cover, parking bumpers, bullet traps, hoses, bumpers, truck bedliners, pads, walkways, tree ties, road surfacing, wheel chocks, rollers, traffic control products, mudflaps, and posts. (k) Metal including, but not limited to, staplers, paper clips, steel furniture, desks, pedestals, scissors, jacks, rebar, pipe, plumbing fixtures, chairs, ladders, file cabinets, shelving, containers, lockers, sheet metal, girders, building and construction products, bridges, braces, nails, and screws.
(Added by Stats. 2005, Ch. 590, Sec. 30. Effective January 1, 2006.) 12209.

For purposes of this article, the following minimum content requirements apply:
(a) Recycled paper products shall consist of at least 30 percent, by fiber weight, postconsumer fiber.
(b) (1) Recycled printing and writing paper shall consist of at least 30 percent, by fiber weight, postconsumer fiber.
(2) Printed newspapers that meet the requirements of Chapter 15 (commencing with Section 42750) of Part 3 of Division 30 of the Public Resources Code shall be considered in compliance with the requirements of this section.
(c) For recycled compost, cocompost, and mulch, at least 80 percent of the product shall consist of materials, including, but not limited to, the materials listed in subdivision (c) of Section 12207, that would otherwise be normally disposed of in landfills. (d) For recycled glass, the total weight shall consist of at least 10 percent postconsumer material.
(e) Rerefined lubricating oil shall have a base oil content consisting of at least 70 percent rerefined oil.
(f) (1) For recycled plastic products, other than printer or duplication cartridges, the total weight shall consist of at least 10 percent postconsumer material. (2) Recycled printer or duplication cartridges shall comply with either the requirements set forth in subdivision (e) of Section 12156 or the general requirement for recycled plastic products set forth in paragraph (1).
(g) Recycled paint shall have a recycled content consisting of at least 50 percent postconsumer paint. Preconsumer or secondary paint does not qualify as “recycled paint” pursuant to this subdivision. If paint containing 50 percent postconsumer content is unavailable, or is restricted by a local air quality management district, a state agency may substitute paint with at least 10 percent postconsumer content.
(h) Recycled antifreeze fluid shall have a recycled content of at least 70 percent postconsumer materials.
(i) Retreaded tires must use an existing casing that has undergone an approved or accepted recapping or retreading process, in accordance with Chapter 7 (commencing with Section 42400) of Part 3 of Division 30 of the Public Resources Code.
(j) For tire-derived products, the total content shall consist of at least 50 percent recycled used tires.
(k) For recycled metal products, the total weight shall consist of at least 10 percent postconsumer material.

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(l) For reused or refurbished products, there is no minimum content requirement. (Added by Stats. 2005, Ch. 590, Sec. 31. Effective January 1, 2006.) 12211.

(a) A state agency shall report annually to the board its progress in meeting the recycled product purchasing requirements using the SABRC report format provided by the Department of Resources Recycling and Recovery.
(b) On or before October 31 of each year, the department shall provide to the Department of Resources Recycling and Recovery the following information:
(1) A list, by category, of individual reportable recycled products, materials, goods, and supplies that were available for purchase by state agencies from a statewide-use contract, agreement, or schedule during the previous fiscal year. (2) A list, by category, of all reportable products, materials, goods, and supplies that were available for purchase by state agencies from a statewide-use contract, agreement, or schedule, including contract, agreement, or schedule tracking numbers, during the previous fiscal year. (Amended by Stats. 2014, Ch. 617, Sec. 2. (AB 2675) Effective January 1, 2015.) 12215.

Each state agency may, at the discretion of the individual agency director or his or her designee, print a statement on recycled products selected by the agency director. This statement shall be determined by the department, in consultation with the board, and shall be similar to the following: “Contains at least ____ percent postconsumer material.” (Added by Stats. 2005, Ch. 590, Sec. 35. Effective January 1, 2006.) 12217.

(a) If at any time a requirement has not been met, the department, in consultation with the board, shall review purchasing policies and shall make recommendations for immediate revisions to ensure that the recycled product purchasing requirements are met. (b) In determining purchasing specifications, with the exception of any specifications that have been established to preserve the public health and safety, all state purchasing specifications shall be established in a manner that results in the maximum state purchase of recycled products. (c) If a recycled product, as defined in subdivision (h) of Section 12200, costs more than the same product made with virgin material, the state agency shall, if feasible, purchase fewer of those more costly products or apply the cost savings, if any, gained from buying other recycled products towards the purchase of those more costly products to meet the solid waste diversion goals of Section 41780.
(d) Each state agency shall establish purchasing practices that ensure the purchase of goods and materials that may be recycled or reused. Each state agency shall continue activities for the collection, separation, and recycling of recyclable materials and may appoint a recycling coordinator to assist in implementing this section.
(e) To assist the state in meeting the requirements of this article, each state agency, and the department, in consultation with the board, may also establish recycled product-only bids, cooperative purchasing arrangements, or other mechanisms to meet the requirements for recycled products and to encourage the maximum state purchase of recycled products. (f) The department, in consultation with the board, shall review and revise the purchasing specifications used by state agencies in order to eliminate restrictive specifications and discrimination against the purchase of recycled products and to ensure that they are drafted in a

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manner that results in the maximum state purchase of recycled products. All contract provisions impeding the consideration of recycled products shall be deleted in favor of performance standards. (g) Any state agency that is required to submit an SABRC report to the board, pursuant to Section 12211, is subject to a review conducted by the board or its designee. (Added by Stats. 2005, Ch. 590, Sec. 36. Effective January 1, 2006.) PUBLIC CONTRACT CODE – PCC DIVISION 2. GENERAL PROVISIONS [1100 - 22355]; ( Division 2 enacted by Stats. 1981, Ch. 306); PART 2. CONTRACTING BY STATE AGENCIES [10100 - 19150]; ( Heading of Part 2 added by Stats. 1982, Ch. 1120, Sec. 6.); CHAPTER 4. State Agency Buy Recycled Campaign [12153 - 12217]; ( Heading of Chapter 4 amended by Stats. 2005, Ch. 590, Sec. 7.); ARTICLE 1. General Provisions [12153 - 12156]; ( Article 1 added by Stats. 1989, Ch. 1094, Sec. 10. )
12156.
(a) Except as provided in subdivision (b), no state agency shall purchase any printer or duplication cartridge for which the manufacturer, wholesaler, distributor, retailer, or remanufacturer places restrictions on the recycling or remanufacturing of that cartridge by any other person. For purposes of this section, these restrictions include, but are not limited to, all of the following:
(1) Reducing the price of the cartridge in exchange for any agreement not to remanufacture the cartridge.
(2) A licensing agreement on the cartridge that forbids remanufacturing. (3) Any contract that forbids the remanufacturing or recycling of the cartridge. (b) Notwithstanding subdivision (a), a manufacturer, wholesaler, distributor, retailer, or remanufacturer who establishes a recycling or remanufacturing program that is available to its customers may enter into signed agreements with those customers consenting to the return of the used cartridge to the manufacturer, wholesaler, distributor, retailer, or remanufacturer, only for either of the following purposes:
(1) Recycling and remanufacturing, for purposes of making the remanufactured cartridge available for purchase.
(2) Recycling.
(c) Each state agency shall print a statement on the cover of its printer or duplicator cartridge bid packages, or in some other noticeable place in the bid packet, notifying all bidders that it is unlawful to prohibit a printer or duplication cartridge that is sold to the state from being recycled or remanufactured, except as specified in subdivision (b). (d) This section does not authorize any violation of the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code) or the Unfair Practices Act (Chapter 4 (commencing with Section 17000) of Part 2 of Division 7 of the Business and Professions Code).
(e) As used in this section, the following terms mean:
(1) “Printer or duplication cartridge” means a cartridge, including, but not limited to, a toner or ink cartridge, used in printer or duplication equipment for business or personal use. (2) “Recycled” means a printer or duplication cartridge that would otherwise become solid waste, but which has undergone a process of collecting, sorting, cleansing, treating, or reconstituting, and which has been returned for the manufacture of new products or the remanufacture of used cartridges.
(3) “Remanufactured” means a printer or duplication cartridge that has served its intended

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end use, but, rather than being discarded or disposed of, has instead been restored, renovated, repaired, or recharged, without substantial alteration of its form. (Added by Stats. 1999, Ch. 910, Sec. 1. Effective January 1, 2000.)

Approval Thresholds – Benchmark Research
Santa Cruz (pop. 65,000)
Under $10,000 Small purchase
$10,000 - $99,999 Informal Bid - Quotes
$100,000 or more Formal Bid (RFP)
Santa Barbara (pop. 91,000) 6 purchasing staff
Under $7,500 One quote
$7,501 - $75,000 Three quotes Informal
$75,001 and above RFP (Goods and Professional Services) $75,001 and above RFP (Maintenance)
Paso Robles (pop. 31,000)
Under $5,000 One quote – No purchase order required
$5,000 – 10,000 Three quotes – Purchase order required before purchase $10,000 and above RFP
Up to $20,000 City Manager Approval
$20,000 and above Council Approval
Monterey, CA (pop. 28,000)
Goods, Professional Services, and Consultant Professional Services Under $12,000 One quote
$12,000 – 75,000 Three quotes
$75,000 and above Formal Bid (RFP)
Legal Professional Services
Under $100,000 City Attorney Approval
Over $100,000 Council Approval

County of Alameda
Goods and Services
Under $100,000 Informal request / quotes
$100,000 and above Formal Bids
County of SLO
Goods
Less than $5000 No PO; or purchasing approval. Department places order pay using AP invoice $5000 - $25,000 At least 2 quotes
$25,000 or greater Formal Bid Required
Services
Less than $5000 No PO; or purchasing required. Department places order pay using AP invoice $5000 - $25000 At least 2 quotes; Purchase Order Required $25,000 - $100,000 At least 3 quotes; Purchase Order Required $100,000 or greater Formal Bid Required

National Inst. Of Government Procurement (Award winning Agencies – procurement policies) St. Petersburg FL (pop. 261,000) (Centralized) Procurement Director - 26 staff Under $5,000 Best quote
$5,000-$9,999 Three telephone quotes
$10,000-$99,999 Five written quotes
$100,000 or more Council
Portland, OR (pop. 645,000) Centralized – Chief Procurement Officer and 42 staff Under $5,000 Small purchase – 3 quotes recommended – not required – purchases subject to audit
Non-Construction
$5,000 – $50,000 – 3 quotes required
$50,000 - $500,000 – RFP Required
$500,000 or more – Council
Port St. Lucie, FL (pop. 179,000) Centralized – Procurement Director - 7 buyers Under $5,000 One verbal quote (Fiscal Officer Approval) $5,000 - $50,000 Three quotes (Dept Head Approval)
$50,000 - $74,999 Three quotes (City Manager Approval)
$75,000 and over Formal Bid – (City Council)
Longmont, CO (pop. 94,000)
Under $5,000 One quotes – PO or Credit Card – Processed directly by departments $5,000 – 50,000 Three quotes
$50,000 over RFP
Mesa, AZ (pop. 499,000)
Under $5,000 One quote
$5,000 – 25,000 Goods and Non-Professional Professional Services – 3 quotes (Dept Head Approval)
$5,000 – 50,000 Consultant Professional Services – 3 quotes (Dept Head Approval) Over $25,000 Goods and Non-Professional Professional Services – RFP - Council Approval Over $50,000 Consultant Professional Services – RFP - Council Approval

2020‐21 Purchase Order Data
Row Labels PO Amount  Goods
General Goods 14,559,185.47
New Flyer of America, Inc. 909,259.00 Total PO's 512 14,559,185.47 Proterra, Inc. 835,000.00
JB Dewar Inc 695,498.82 Reduced RFP 29 1,487,671.55
Commline, Inc. 649,999.99 Increase in CMR's 1 67,452.14 DELL MARKETING L P 525,853.99 Increase in CAR's 6 1,026,438.92 Cal Poly‐University Cashier 520,000.00
Badger Meter, Inc 479,449.03 # CMR (old) 17
IPS Group Inc 466,209.31 # CMR (new) 12
JCI Jones Chemical, Inc 436,000.00 # CAR (old) 17
CAL POLY CORPORATION ‐ CAL POLY ARTS 323,351.00 # CAR (new) 23 Motorola Solutions Inc. 319,717.89
Cal Poly Performing Arts Center 318,351.00
Springbrook Software LLC 291,768.00
Ascent Environmental 287,500.00
Cdce Inc 279,333.39 Services
Quinn Company 266,440.40
WatchGuard Video 231,684.21 Total PO's 225 7,947,388.56 SHI International Corp 194,532.89
Olin Corporation Chlor Alkali 189,000.00 Reduced RFP 26 2,272,512.02 CDW Government Inc 184,190.39 Reduced CMR's 3 157,026.93 Swca Enviromental Consultants 155,078.25 CAR's 0
National Auto Fleet Group 153,474.01
Tyler Technologies 150,163.38 #CMR (old) 14
Zoll Medical Corporation 149,139.93 #CMR (new) 11
Citig, Inc. 148,335.78 #CAR (old) 9
Hanson Aggregates Inc 131,451.47 #CAR (new) 9
Statewide Traffic Safety & Signs Inc 124,674.53
GHD, Inc. 111,144.00
Pacific Polymers, Inc. 103,768.56
REACH 100,000.00
POLYDYNE INC 92,875.00
Traffic Management Products, Inc. 88,238.63
Hub Parking Technology USA Inc. 84,669.05
Bauer Compressors Inc 76,469.62
THATCHER COMPANY OF CALIFORNIA INC 67,452.14
ECS Imaging, Inc 64,193.26
Hach Company 62,974.16
Simpson Gumpertz & Heger, Inc. 62,000.00
Mustangs Sports Properties 62,000.00
Sierra Display, Inc. 58,563.73
Gilmore Liquid Air 57,500.00
SOFTWARE SOLUTIONS TEAM 57,059.75
Ferguson Enterprises LLC #1350 56,042.98
PERRY FORD LINCOLN MERCURY JEEP 52,856.00
Poor Richard's Press 52,699.35
Thermo Scientific Portable Analytical Instrument 52,420.38 Staples Business Advantage 52,346.31
Ditch Witch West 51,920.66
Smith & Sons Restoration and Construction 50,000.00
Columbia Cascade Company 49,258.02
Sybertech Waste Reduction, Ltd. 48,969.86
Burt Industrial Supply 48,851.55
Badger Branding 48,756.34
Charles P. Crowley Company, Inc. 48,569.79
Boone Printing and Graphics, Inc. dba Central Co 47,578.95 Perry's Electric Motors 47,319.77
Aviate Enterprises, Inc. 47,016.87
Famcon Pipe & Supply, Inc. 45,791.45
Dell Computer Corp 45,663.23
Brenntag Pacific, Inc. 45,500.00
Davey Resource Group, Inc. 44,571.00
Carquest Of Arroyo Grande 43,616.12
LN Curtis & Sons 43,471.07
Calportland Construction 40,160.95
Napa Auto Parts 37,155.97
Miwall Corporation 36,674.17
Bound Tree Medical LLC 36,356.73
ATT&T California, ATT&T Wholesale, AT&T DataC 36,021.88 STERLING WATER TECHNOLOGIES 36,000.00
Pureflow 34,465.00
Cal Poly Corporation 33,900.00
VWR International Inc 33,215.34
CHEMTRADE CHEMICALS US LLC 32,000.00

Furniture Installation Team, Inc 31,359.57
Contractor's Glass Company 30,562.00
SM Tire 30,077.66
Security Lines US 30,057.06
California Water Technologies, LLC 30,000.00
Ewing Irrigation Products, Inc. 29,970.26
Municipal Maintenance Equip Inc 28,000.00
D&H Water Systems Inc 27,472.36
PC Mechanical Inc 27,193.42
Smardan Hatcher Co #106430 26,700.00
Contractor's Maintenance Services 26,659.11
California Hotel & Lodging Association 26,565.60
Avtec Inc 26,562.37
CED 26,512.53
PACIFIC PETROLEUM 26,428.23
NexTech Systems, Inc. 26,342.60
Miner's Ace Hardware 26,340.70
Lincoln Aquatics 25,750.00
Shore Microsystems 25,600.00
Koehler Plumbing, Inc. 25,360.00
A1 Surveillance Systems LLC 24,461.59
San Luis Powerhouse Inc 23,845.00
eSCRIBE Software, Ltd 23,770.00
Arms Unlimited, Inc. 23,738.00
Aggson's Glass 23,678.61
Town and Country Fencing 23,237.00
ICONIX Waterworks 22,981.95
Haaker Equipment Co 21,861.44
Fence Factory Santa Maria 20,882.00
Pacific Overhead Door Service 20,786.87
Aquafix, Inc. 20,638.33
GE Digital LLC. 20,534.24
Applications Software Technology LLC 20,400.00
SLO Noor Foundation 20,000.00
Coast Riders Powersports 20,000.00
Core‐Rosion Products 19,780.00
T Ketcham Fence/Tyler Ketcham 19,700.00
Imagetrend Inc 19,669.09
Southland Printing Company, Inc. 18,869.50
San Luis Obispo Repertory Theatre 18,800.00
Associated Traffic Safety, Inc. 18,745.00
The Tire Store 18,465.75
MID‐State Containers 18,064.27
Economic & Planning Systems Inc 18,000.00
Traffic Logix Corporation 17,609.87
Advanced Infrastructure Tech 17,449.70
Drive Customs 16,985.59
Cal‐State Auto Parts Inc 16,318.40
League Of California Cities ‐ Channel Counties Div 16,197.00 Dell EMC 16,102.87
Noble SAW Inc 15,704.37
Coastal Reprographics Inc 15,044.60
South Coast Emergency Vehicle Services 14,840.20
Desert Sun Marketing Company, Inc. 14,815.63
Idexx Distribution Inc 14,722.05
Kelly‐Moore Paint Company 14,653.78
Grainger 14,461.54
Columbia Cascade Co 14,418.63
Stainless Steve 14,188.00
Anixter, Inc. 14,135.61
The Sign Place 14,065.97
SLO City/County Library 14,000.00
Asphalt Zipper Inc 13,880.69
Safety‐Kleen Systems, Inc 13,855.88
Shoreline Awning & Patio, Inc. 13,810.00
Peloton Interactive, Inc. 13,626.87
Casa 13,485.00
Berchtold Equipment Company 13,053.50
Kiefer Aquatics, The Lifeguard Store, All America 12,976.85 Southwest Lift & Equipment 12,663.61
Absolute Auto Tech Inc 12,643.80
SAN LUIS OBISPO MUSEUM OF AR
T 12,500.00
Gala Pride and Diversity Center 12,500.00
Central Coast Truck Center SLO 12,212.10
Farm Supply Company 11,947.24
Harrington Industrial Plastics 11,657.29
Applied Concepts Inc 11,536.32

Royal Industrial Solutions 11,000.00
Bill Gaines Audio, Inc. 10,992.63
J Carroll Corporation 10,933.19
Tri County Office Furniture 10,890.01
LPS Tactical & Personal Security 10,866.57
First Spear Of California LLC 10,818.20
Battery Systems 10,800.82
The Webstaurant Store, Inc. 10,600.00
Wastequip, LLC 10,509.00
DDL Traffic, Inc 10,374.17
Fastenal Company 10,364.05
S & L Safety Products 10,004.17
Kadence Corporation 10,003.46
SAN LUIS OBISPO COUNTY ARTS COUNCIL 10,000.00
San Luis Obispo Children's Museum 10,000.00
SLO International Film Festival 10,000.00
Diversity Coalition San Luis Obispo County 10,000.00
American General Media ‐ California Inc 9,760.00
Central Sanitary Supply 9,704.29
BC Construction & Electric 9,702.00
Eaton Corporation 9,295.16
Hazmat Resource 9,257.45
McMaster‐Carr 9,202.12
All Safe Industries, Inc. 9,064.21
DIG‐SMART, LLC 9,000.00
Linson Signs 8,987.18
Rain For Rent 8,945.40
Oilfield Enviro & Compliance Inc 8,914.20
LogMeIn USA, Inc. 8,730.00
Hayward Lumber Company 8,621.01
Central Coast Landscape Products 8,552.83
Core & Main LP 8,500.00
ProForce Law Enforcement 8,473.82
MAR‐Co Equipment Company 8,420.47
Rademaker Design 8,413.34
Takken's Inc 8,350.93
Quality Tinting & Signs 8,106.00
S&S Worldwide 8,021.27
Truckvault Inc 7,998.89
Manley Bros. of Indiana, Inc. 7,975.82
Eagle Energy Inc 7,897.76
SANS Institute 7,836.50
Westside Auto Supply 7,715.66
CI Technologies Inc 7,628.00
Office Depot, Inc 7,617.54
Nacto 7,500.00
Cal Coast Machinery Inc 7,500.00
SLO Life Magazine 7,499.00
South Coast Automation Systems Inc 7,308.00
Cuesta Polygraph ‐ John E. Odum 7,305.57
JTB Supply Company Inc 7,148.36
Peak Racks, Inc. 7,134.44
Creative Fence Co 6,815.00
Templeton Uniforms 6,650.61
Soils Solutions LLC 6,647.75
Central Coast Traffic Safety, Inc. 6,490.00
Integra Chemical Company 6,485.80
Allstar Industrial 6,448.29
Harrell's LLC 6,382.25
GT Molecular LLC 6,195.00
Srixon/Cleveland Golf/XXIO 6,108.20
Sequoia Rain Wolfe 6,100.00
Street Smart Solutions, LLC 6,095.50
ERA 6,073.12
Smartcover Systems 6,060.00
GIBBS TRUCK CENTERS 6,032.50
Range Servant America, Inc. 5,956.93
Culligan Water 5,950.72
Noble Power Equipment 5,792.49
APPLIED TECHNOLOGY GROUP INC 5,729.82
Odin Systems Inc 5,689.20
Flow N Control Inc 5,671.96
Adamson Police Products 5,602.22
Mullahey Ford 5,529.02
MK Battery 5,465.52
LC Action Police Supply 5,444.72
Lawson Products Inc 5,222.20

Dan's Landscaping Company, Inc. 5,080.00
Nutrien Solutions, Inc. 5,062.20
Intrepid Networks, LLC 5,040.00
Alameda Electrical Distributors 5,036.23
Thycotic Software LLC 5,025.18
History Center Of San Luis Obispo 5,000.00
Headstrong Fit, LLC 5,000.00
A2LA Workplace Training 5,000.00
CompTIA Member Services LLC 4,900.00
Critical Incident Videos, LLC 4,900.00
Sunshine Supply Co., Inc. 4,855.41
Emergency Repair Door Service, Inc. 4,748.10
Altec Industries, Inc. 4,657.80
Jam Services 4,617.12
Winema Industrial & Safety Supply 4,568.74
Peterson U‐Cart 4,544.47
Thales Consulting Inc 4,500.00
Golden Bell Products, Inc. 4,307.00
Pioneer Athletics 4,290.24
Code R Decals And Graphics 4,285.00
American Water Works Association 4,269.00
Harvey's Honey Huts 4,247.96
PolyJohn Enterprises Corp. 4,107.61
Pump Check 4,045.00
PCS Mobile 4,040.63
Mark's Tire Service 3,851.17
Solutions II Inc 3,700.00
FLO SYSTEMS INC 3,647.43
Axon Enterprise Inc 3,615.11
Dependable Fire Protection 3,604.75
Sun Badge Company 3,573.87
United Rentals Northwest Inc 3,533.20
PTC Inc. 3,515.00
Forest Nurseries, Inc 3,500.00
America's Tire 3,490.54
Thermo Eberline LLC 3,400.00
Hydro Solutions, Inc. 3,362.90
Stover Seed Company 3,342.94
Floor Connection Inc 3,300.00
Doghouse Promotions 3,214.40
One Cool Earth 3,200.00
Airgas USA LLC 3,109.73
Allen Instruments & Supplies, LLC 3,108.00
Men & Mice, Inc. 3,100.00
MISCOwater 3,087.60
Rick Scott 3,053.15
KRONOS INC 3,028.33
Volvik USA Inc 3,001.02
SLO Coast Wine Collective 3,000.00
Knorr Systems Inc 3,000.00
Jason Terry Mitchell 3,000.00
Let's Ride Motorsports, Inc. 2,912.69
Nightforce Optics 2,865.50
USA Blue Book 2,850.42
Christian's Solid Wood, Inc. 2,688.77
Eco‐T Tire & Retreading, LLC 2,687.23
Huber Technology Inc 2,615.19
Ernest Packaging Solutions 2,612.73
Basile Inman 2,600.00
Rutter Armey, Inc. 2,500.18
Tolar Mfg Co Inc 2,500.00
San Luis Obispo Symphony 2,500.00
Wilshire Health & Community Services 2,500.00
SLO Classical Academy 2,500.00
Spokes 2,500.00
San Luis Obispo Master Chorale 2,500.00
Caliper Corporation 2,500.00
Court Appointed Special Advocates 2,500.00
Golding Concrete Sawing 2,500.00
BIKE SLO COUNTY 2,500.00
Eckerd Connects 2,500.00
Central Coast State Parks Association 2,500.00
FOUNDATION FOR THE PERFORMING ARTS 2,500.00
Front Porch SLO 2,500.00
Civic Ballet 2,500.00
JEWISH COMMUNITY CENTER OF SLO 2,500.00
Center for Family Strengthening 2,500.00

California Electric Supply 2,459.71
Left Coast T‐Shirt Company 2,452.00
Independent Electric Supply Inc 2,441.90
NorCal Turf Tech and Reels 2,438.19
Central Coast Tourism Council 2,350.00
Wittek Golf 2,338.02
Kelly Donohue 2,325.00
Safeplay by Design, Inc. 2,300.00
Gordon Sand Company 2,280.00
Bentley Systems Inc. 2,259.00
Rogue Fitness 2,253.25
Infrastructure Technologies LLC 2,250.00
Vineyard Mechanical 2,190.00
MSM Sales and Distribution Inc. 2,186.07
Teledyne Instruments, Inc. 2,159.15
Judd and Judd Ltd 2,150.00
National Pen Company Inc 2,148.14
Coast Window Fashions 2,140.33
U.S. Bank 2,117.50
Arrivalist Co. 2,100.00
3 Ink Screenprinting, Inc 2,090.24
Allied 100, LLC 2,056.84
Infor (US) Inc 2,050.41
CENTRAL COAST PROPANE 2,031.92
Trench Drain Systems 2,002.08
Range Master 1,997.02
Michael Wolf 1,990.00
WAY SINE LLC 1,976.52
ReadyRefresh by Nestle 1,956.84
Waterline Tile Design 1,950.00
New Pig Corporation 1,928.66
Carrot‐Top Industries 1,913.62
Industrial Scientific Corporation 1,906.60
Ultrex Business Products 1,898.71
Smith Manufacturing 1,860.01
PTS 1,800.00
Rainscape 1,800.00
Fence Factory Atascadero 1,758.22
All Cal Equipment Services Inc. 1,750.00
Bell's Plumbing Repair Inc 1,750.00
Joan K. Reilly 1,740.00
Scott O'Brien Fire & Safety Co., Inc. 1,625.54
MBS Land Surveys 1,595.00
SAF‐T‐FLO Water Services, Inc. 1,576.47
EMERGENCY VEHICLE SPECIALISTS INC 1,555.91
Santa Maria Tool Inc 1,539.63
Midwest Contract Operations, Inc. 1,525.00
HD Supply Facilities Maintenance, Ltd. 1,500.00
Choice Label, Inc. 1,473.93
Whenever Communications LLC 1,470.88
Central Coast Spring 1,459.60
Roar Berg‐Johansen 1,451.39
AM Conservation Group Inc 1,436.02
Tileco Distributors, Inc. 1,432.21
Card Integrators Corporation 1,415.00
Bridgestone Golf, Inc. 1,394.03
Draeger Inc. 1,392.66
MarBorg Industries 1,390.28
Industrial Radiator Service Inc 1,375.51
California Rural Water Association 1,367.00
Wagner's Import Service Center 1,360.00
Turf Star Western 1,326.32
Continuing Education Of The Bar‐Regents of Uni
v 1,320.36
Evantec Corporation DBA, Evantec Scientific 1,301.45
USA Softball of Central California 1,300.00
Sherwin‐Williams Company 1,284.70
Swank Motion Pictures Inc 1,280.00
Valin Corporation 1,262.71
Rockart Industries, LLC 1,259.38
JTS, Inc. 1,250.00
Taylor Technologies Inc 1,200.00
April Flowers 1,157.88
Robert Daniels Deep Tine Service 1,150.00
Nixon Egli Equipment, Co. Inc. 1,108.32
Central Coast Plastics 1,086.12
Watereuse Association 1,070.00
O'Reilly Auto Parts 1,061.39

Snap‐On Industrial 1,059.07
davesimmons.io 1,050.00
Satcom Global FZE 1,026.00
Stratus Streaming 1,000.00
Wayne Cooper Ag Services LLC 1,000.00
Transit Information Products 1,000.00
American Muffler & Trailer Hitch 1,000.00
efurnitureMax, LLC 999.90
Cole Chrysler Dodge 993.20
H2O Engineering Inc 992.00
Eschat 969.84
Trimble, Inc. 960.00
DOJ Office of Justice Programs 957.00
Ruffoni Services, Inc. 954.36
Advanced Test Equipment Corporation 945.60
La Quinta by Wyndham ‐ San Luis Obispo Downto 945.08
OCV Control Valves, LLC 933.20
Uncharted 924.00
Farmload Distributors Inc 921.84
Air‐Rite Refrigeration,Heating 900.00
Coast Electronics 892.39
Political Data, Inc. 880.86
Transoft Solutions 880.00
Rob Derrick 870.00
PRW Steel Supply, Inc 823.94
Central Coast Bearing 818.00
Haztech Systems Inc 813.28
Alfano Motorcars Inc 804.54
Amrep Manufacturing, LLC 791.46
Eutek Systems, Inc. 778.18
GT Golf Holdings Inc 778.00
Ponton Industries 771.71
Traffic Safety Store 738.44
Dooley Enterprises Inc 727.36
Extensis 710.00
Fisher Scientific Co LLC 709.22
Recognition Works 700.35
EAM Solutions 700.00
Critical Reach 700.00
Edwards & Cromwell., Inc. 680.00
Great West Equipment Inc 669.92
National Auto Glass 669.87
UGSI Chemical Feed, Inc. 666.40
CSG Systems Inc 650.44
Seton 643.32
WATTCO 642.27
Air Vol Block Inc 615.01
Tremco Police Products 611.70
Texas Refinery Corp 608.59
R & R Products Inc 603.84
TWR Lighting, Inc. 600.00
Kitzman Water 600.00
Mid‐State Instruments 581.85
Big Brand Tire & Service 571.30
CALED 570.00
MID Coast Fire Protection Inc 568.40
Lehr Auto 559.61
Musco Sports Lighting, LLC 548.42
Precise Weighing Systems 540.00
B&B Steel & Supply of Santa Maria 538.75
PSI Water Technologies, Inc. 530.92
Target Specialty Products 516.93
Ennis‐Flint, Inc. 509.22
Aramsco, Inc. 507.44
Landers Roofing 500.00
International Town And Gown Assoc 500.00
Genfare 500.00
Nafco 495.52
DAO Associates 473.22
TSSI Holdings, Inc. 472.00
Igoe & Company, Inc. 455.00
Paso Robles Truck Center 452.77
Central Coast Coffee Roasting Company, Inc. 448.15
SLO TOW 443.75
Robert H Wager Company, Inc. 432.84
Compliance Signs, LLC 432.00
Martin's Auto Service Inc 426.00

Multiquip Inc 421.71
Negranti Construction 407.50
Miracle Playsystems, Inc. 406.13
Placer Title Company 400.00
Helping Hand Health Education, LLC 396.00
Lifeloc Technologies Inc. 395.64
American Flag And Gift Inc 391.19
Port San Luis Boatyard 391.12
The Fitting Image 370.00
Trophy Hunters 369.58
Ascap 367.00
Christopher J. Adamczyk 366.35
Wearcheck Lubrication Services LLC 360.00
American Leak Detection 350.00
All Green Electronics Recycling, LLC 350.00
B & B Steel & Supply Of Santa Maria 342.61
MFASCO Health & Safety Company 322.96
Keylock Security Specialists, Inc. 320.00
Hoffman Family Plumbing 300.00
Spikes Golf Supplies Inc 292.80
Indian Springs Mfg Co Inc 285.00
Mccarthy Steel Inc 283.70
Merco Marine, Inc 279.56
Cummins Sales & Service 273.45
Miracle Embroidery 270.82
Grignard Company LLC 253.92
IDN‐Wilco Inc 252.71
Coastline Equipment 245.89
Apollo Safety, Inc. 240.00
Bestway Laundry Solutions 219.00
Landscape Structures Inc 216.55
Recwest Outdoor Products Inc 216.55
Paso Robles Safe & Lock, Inc 215.00
Douglass Truck Bodies Inc 202.25
Trevor Monroe 200.00
Channel Counties Division 200.00
BridgePay Network Solutions 190.40
CS‐Amsco 190.00
Central Coast Fence Inc 190.00
Robert W. Moon 166.67
Sunbelt Rentals Inc 163.76
San Luis Auto Glass 152.31
SLO Firefighters Association Local 3523 150.00
SLOFIST 150.00
College Of The Sequoias 145.00
Gibbs International 136.39
Delta Liquid Energy 130.00
Cristando House Inc 125.00
Speedy Enterprise Inc 115.78
Toyota San Luis Obispo 101.79
Cal‐Line Equipment Inc 98.37
Procare Janitorial Supply 48.88
Mcdaniel Reporting & Video Conf Inc 0.00
Asap Reprographics 0.00
Envision Solar International, Inc. 0.00
Services 7,947,388.56
First Transit Inc 2,820,950.00
ALEXANDER'S CONTRACT SERVICES INC 310,000.00
TENNIS LANDSCAPE 299,697.00
All Ways Clean, Inc 290,347.83
DLT Solutions, LLC 270,958.81
SP Maintenance Services Inc 223,401.23
BUNYON BROTHERS TREE CARE INC 176,190.00
United Staffing Associates 171,135.66
KD JANNI LANDSCAPING INC 161,055.00
Karson Butler Events 148,258.83
Downtown SLO 139,866.00
Electricraft 129,979.74
Infosend, Inc. 123,870.35
Questica, Inc 119,885.29
2 Mexicans LLC 113,750.00
Passport Labs, Inc. 109,619.71
REPUBLIC ELEVATOR COMPANY 108,092.12
Verizon Wireless 107,979.84
Mission Linen Service 83,843.02
Weston Solutions, Inc. 69,028.00
Ray Morgan Company 55,358.93

Azteca Systems Inc 51,000.00
Govconnection, Inc 50,668.00
EXCEL CLEANING INC 48,096.46
Cold Canyon Landfill Inc 47,502.50
BRANDAN'S STEAM CLEANING & JANITORI 47,050.00
Granicus LLC 46,571.58
Mccain Inc 44,937.86
Central Coast Earthscapes, Inc dba Earthscapes 42,500.00 Visit SLO Cal 40,000.00
Allweather Landscape Maintenance, Inc. 38,550.25
AdastraGov, Inc. 38,000.00
Whitlock & Weinberger Transportation, Inc. 37,960.00
MEDSTOP URGENT CARE 37,575.38
Info‐Tech Research Group, Inc. 34,458.44
2G Energy Inc 34,311.56
Alpha Fire & Security Corp 33,298.74
Packet Fusion Inc 31,993.43
CAN/AM TECHNOLOGIES, INC 31,740.00
CARTEGRAPH SYSTEMS, INC 31,130.00
D. Garcia Jr. Excavating Inc. 30,870.00
Community Action Partnership 30,633.41
US Digital Designs Inc 29,943.00
DocuSign 29,140.66
Smith Mechanical Electrical Plumbing 28,775.00
Stanley Convergent Security Solutions Inc 25,861.93
NTT America Solutions, Inc. 23,308.56
Accela 22,600.00
New Times 22,517.00
PG&E 22,500.00
Weldon, Williams, & Lick, Inc. 22,114.96
Pathpoint 20,800.00
Aqua Metrology Systems Limited 19,950.00
GARDA CL WEST 19,686.84
GovernmentJobs.com, Inc., DBA NEOGOV 18,478.50
CIO Solutions LP 17,776.64
KCBX 16,920.00
Host Compliance LLC 16,333.00
SoCalGas 15,017.07
ASSETWORKS 14,730.20
Promotional Concepts 13,848.14
Relx Inc 13,835.99
Five Cities Security Inc 13,800.00
Sancon Technologies, Inc. 12,630.00
EMTS, Inc. 12,500.00
Thomson Reuters ‐ West 12,064.40
CrowdRiff 12,000.00
MAC Painting 11,650.00
Suez WTS Analytical Instruments Inc 11,542.08
Jensen Audiovisual Inc 11,060.55
Gold Coast Environmental 10,970.50
Vital Records Control 10,542.73
Fluid Resource Management 10,276.69
Corrpro Companies Inc 10,235.00
Zero Waste USA Inc 10,143.54
Literacy For Life 10,000.00
Dimes Media 9,720.00
Brezden Pest Control Inc 9,670.00
Advantage Technical Services 9,379.00
Underground Service Alert 9,350.03
Coastal Rolloff 9,260.76
Cuesta Polygraph ‐ John E. Odum 8,950.00
Advantage Answering Plus 8,739.29
Nice InContact, Inc. 8,679.00
Thinkst Applied Research (PTY) Ltd 8,150.00
In Time Services, Inc. 8,064.00
Pulsepoint Foundation 8,000.00
Thoma Electric Inc 7,901.25
Costera Landscape 7,780.00
GREENVALE TREE COMPANY 7,525.00
San Luis Garbage Company 7,520.00
Environmental Water Solutions Inc 7,499.40
California ‐ West, Inc. 7,499.00
Wells Fargo Financial Leasing 7,460.00
Layfield USA Corporation 7,400.00
Environmental Laboratory Accreditation Progra
m 7,373.00
Health and Human Resource Center, Inc. 7,344.00
Periscope Intermediate Corporation 7,210.00

The Bank Of New York Mellon 7,166.94
CPC Systems Inc 6,970.00
Pacific Builders 6,905.76
MC Etter Painting 6,900.00
Klir, Inc. 6,600.00
Spectre Security, Inc. 6,500.00
Zoom Video Communications, Inc. 6,496.55
KIRK CONSTRUCTION 6,460.00
Opengov Inc 6,240.00
Air Exchange Inc 6,156.17
Quadient Leasing 6,045.06
Netfile Inc 6,000.00
Quaglino Roofing 5,950.00
Achievement House, Inc. 5,850.00
Bluebeam 5,828.00
Clean Harbors Environmental Services, Inc. 5,735.76
Brinks Incorporated 5,623.32
Bobs Crane Service 5,250.00
Browder Painting Co. Inc. 5,203.80
Sally A. Lamas 5,168.80
Zee Medical Service Co #34 5,143.10
Responder Training Enterizes, LLP 5,120.49
Underwriters Laboratories Inc 5,048.00
Databrook LLC 5,000.00
KSBY‐TV 5,000.00
Shower the People 5,000.00
Pars 4,800.00
Action Rooter 4,700.00
Target Solutions Learning 4,545.00
Fedex Office 4,515.60
WIP 4,398.17
SHANNON ELLINGTON CLEANING 4,305.00
Aster Bio, Inc. 4,300.00
Airx Testing Services, Inc. 4,295.00
Abalone Coast 4,235.00
Code Publishing Inc 4,000.00
Alpha Electrical Service 3,753.35
Allan Hancock JCCD 3,641.50
Stericycle Inc 3,631.63
Serological Research Institute 3,500.00
Johnson Aviation, Inc 3,388.00
Enplug, Inc. 3,240.00
Servicemaster Clean Anytime 3,100.00
Gemini Group LLC 3,084.00
Alpine Technical Services, LLC 3,078.00
The Tribune 3,000.00
Addiction Medicine Consultants, Inc. 3,000.00
A & M Roofing 3,000.00
Cole Pro Media, LLC 3,000.00
Green Halo Systems 2,916.00
United Refrigeration Inc 2,750.00
Committee for Children 2,713.32
Vortex Industries Inc 2,704.27
STR Inc 2,700.00
WIN‐911 Software 2,640.00
Sterling Communications Inc. 2,604.26
Asbury Environmental Services dba World Enviro 2,541.03 Restorative Partners, Inc. 2,500.00
Special Services Group, LLC 2,400.00
Balance Engineering 2,400.00
Marcy Jaffe 2,350.00
Digital West 2,170.46
Mia Pelayo Franco 2,100.00
AET Orkin Pest Control 2,000.00
Coastal Janitorial 2,000.00
Russ Bassett Corp. 1,999.89
Enterprise Security, Inc. 1,800.00
Comprehensive Drug Testing, Inc 1,800.00
Power Plumbing Inc 1,726.00
Knecht's Plumbing & Heating Inc 1,718.65
KNB Advertising Specialties 1,689.39
QED Enviromental Systems Inc 1,546.50
Johnson Aviation 1,540.00
Mustang Media Group 1,500.00
A Superior Crane LLC 1,500.00
Arbor First 1,475.00
MESA ENERGY SYSTEMS, INC. 1,459.00

Transunion Risk And Alternative 1,400.00
AM PAC Repair 1,382.30
Metromedia Inc 1,320.00
Municipal Emergency Services Inc 1,299.08
Deep Blue Integration Inc 1,268.00
Quiky Car Wash LP 1,250.00
Dutch Window Cleaning Artist 1,180.50
Johnboys Towing 1,170.00
Mission Communications LLC 1,126.80
Water Fixers 1,060.19
Total Plumbing 989.00
Servpro Of San Luis Obispo 963.55
West Coast Safety Consultants 876.00
Gardensoft 795.07
HP Communications 787.92
Iron Mountain 750.00
All Green Electronics Recycling, LLC 749.00
Central Coast R&R Lock 745.29
Teamsideline.Com 699.00
ATSI 698.13
Burlingame Engineers, Inc. 678.83
Coastal View Window Cleaning 656.10
Redwood Toxicology Laboratory 650.00
Bockelman Illustration 561.40
Erin Clausen Photography 560.30
The Tribune ‐ Renewals 554.69
California Municipal Statistics Inc 500.00
Ian Gaffney Landscape 500.00
Drain Doctors Plumbing 470.00
UNITED PARCEL SERVICE 450.00
Mccall's Meter Sales & Services 450.00
Terri Recchia Bledsoe 450.00
Laurie Suzanne Estes 450.00
Julia Jackson Clark 428.40
O'Connor Pest Control 405.00
Mr. Rooter Plumbing Of Central Coast 392.76
Language Network, Inc. 391.25
Alluviam LLC 375.00
Pauls Dry Cleaners Inc 350.00
Robert Horch 350.00
Lenhardt Engineering Inc 344.18
Coulton's Appliance Service 339.00
Creative Services of New England 326.95
Califitness 276.00
United States Postal Service 245.00
Ball Bee Co. 195.00
Michelle Miller Massage 150.00
Sunset North Car Wash 99.42
Jack's Helping Hand 22.00
Macks Canvas & Awning 0.00
Grand Total 22,506,574.03

1 Local Preference in Public Procurement
What is San Luis Obispo's current policy for local vendors? SLO Municipal Code - Bidding procedures— not required when.

3.24.060E. When the purchase is made cooperatively with one, or more, other units of government or from a local dealer within the city limits that can provide the same brand, model, and configuration of item(s) identified in the cooperative purchase agreement(s) at or below the cooperative purchasing net cost within the same terms and conditions.

Does the City Council need to pass a local preference ordinance? Yes.

What is a local preference?
Local preference happens when Cities establish a legally binding preference that gives a direct financial advantage to local companies to benefit the local economy. The Government Finance Review (June 2012) reviewed local preference policy outcomes in both cities and counties and found that preference given to local businesses ranges from 1-5%, with 5% being the most common. Another type of local preference is limiting the eligible bidders to the local area so that non-local firms can't even compete.

Considerations
A local preference is an indirect cost increase. Local preferences have the potential to dismantle the competitive process by reducing the incentive for local businesses to provide the best value for the dollar.

Companies may decide not to bid when they know they don't have the same chance to compete and reduce the incentive for local businesses to provide the best value for the goods/services they offer.

However, a study, Local Preference in Municipal Audit Markets, conducted by Vanderbilt University concluded that local preference laws could serve their purpose - it always increases the likelihood that local firms win.

Overall, studies have shown that a local preference results in jurisdictions paying more money for the goods and services subject to the preference.

Therefore, the decision to consider a local preference becomes a judgment call as to whether the extra cost is worth it.

Who is local?
In terms of geography, the City defines local businesses as entities having a physical presence within SLO's borders. But is a PO BOX local? Should a local preference reach beyond the city limits to the County? Is a business headquartered in the City, but most of its business is

2 conducted elsewhere local? Or vice-versa: is a business located in a neighboring town but doing substantial business locally and employing locals, local? Ownership and management are also complicated; for example, is the local branch of a national company a local business, like Amazon?
Multiplier Effect
The economic benefit of keeping local dollars in the local economy is known as the 'multiplier effect.' The concept was developed by John Maynard Keynes and is used to measure the economic impact of laws, trade, etc. It's a measure of how a government's spending ripples through the economy. At the local level, the multiplier effect represents three rounds of spending, 1. The source of the funds or the budget, 2. The public expenditure, 3. How do the recipients spend the money within the local area? As local tax dollars are spent in SLO, theoretically, more jobs are maintained and created, and income is generated for residents.

The multiplier effect is difficult to quantify and varies depending on the item purchased. For example, some businesses (primarily service businesses) must pay out most of their receipts to their employees; these dollars are recycled when the employees spend them locally. Other businesses, however, are capital intensive, with relatively few employees and most of the receipts going into the cost of sales, distribution, or production of goods and products; those expenditures may or may not involve other local suppliers or manufacturers. For example, when SLO purchases a car from a local dealer, a small portion of the cost goes to the dealer's employees and local profits, but most of the funds go to the manufacturer, generally not a local firm. However, the City does realize significant gross tax receipts from local vehicle sales.

Although dollars are always recycled, and the multiplier effect is a genuine economic factor, the true measure of the multiplier effect is very difficult to measure. Ideally, the goal of a preference program would be to create a structure that guarantees enough of an actual economic advantage to the jurisdiction to financially offset the direct cost of the preference in higher bid prices or reduced competition.

Sustainability
Purchasing local has the potential to reduce shipping distances of goods in particular, which aligns with the City's Climate Action Goals of Carbon Neutrality. What is the price the City is willing to pay for this? If you found a good, for example, a pipe sold in SLO that was 5, 10, 15% more expensive than the same product from a supplier in Bakersfield, should the City buy it from the local dealer? Retaliation
Other governmental jurisdictions do not like to see their local businesses at a financial disadvantage in competing with vendors in other localities. This reaction has led to the development of reciprocal preferences. These laws (which might be better called negative preferences) require retribution against companies located in areas that have a local preference when these companies try to do business elsewhere. The financial preference that a firm receives in its home jurisdiction becomes a

3 financial penalty if it tries to compete for governmental business in a jurisdiction with a reciprocal preference.

Administrative Costs
Preferences and reciprocal preferences add to the administrative cost of procurement. Staff must consider factors to meet basic purchasing laws and regulations, and each additional requirement adds to the time required to review and adds to the risk of the possibility of human error in bid evaluation, calculation, and award. Therefore, it raises the ultimate costs to citizens of the jurisdiction.

Have national and state organizations taken a position on local preferences? Several professional organizations that deal with government purchasing and procurement have examined the pros and cons of local preferences and have taken the position that local preferences are not cost-effective. These organizations include:
x NIGP – National Institute of Government Procurement
x The International City and County Managers Association x The Government Finance Officers Association (GFOA)
x The Council of State Governments

Local Preference
What is a local preference?
• Cities establish a legally binding preference that gives a direct financial advantage to local companies and workforce to benefit the local economy.

City of San Luis Obispo
• A supplier ‘within City limits’• Municipal Code 3.24.060E. • When the purchase will be made [from a cooperative agreement] with one, or more, other units of government or from a local dealer within the city limits that can provide the same brand, model, and configuration of item(s) identified in the cooperative purchase agreement(s) at or below the cooperative purchasing net cost within the same terms and conditions.

3 Types of Local Preference Policies
• Hiring Preferences – Contractors must hire a certain % of local workers • Purchasing Preferences – Contractors must purchase local supplies and materials
• Contract Award Preferences – Give local bidders an advantage in the award of contracts

4 Types of Contract Award Preferences

1. % price decrease to local bidders – advantage to local firms even if their bid is higher price.2. SLO’s Current Policy • Gives local bidders the opportunity to match the lowest bid

3. Reciprocal Preference: Applies a price increase to non-local bidders only if the non-local bidder’s City applies a local-preference policy

4. Tie Bid: Local bidder will win bid if non-local bid is equal in price and quality

% Price Decrease to Local Bidders
• Non-local XYZ bids ---- $100,000 • Local bids ----------------$105,000• Policy would reduce local bid by 5% - but still pay $105,000 • Award to local bidder – if local bidder is ‘lowest most responsible bidder’ • Still have to evaluate bids for all other factors

Bid Matching
• Gives local bidders the opportunity to match the lower price• Current City Policy • Lowest most responsible non-local bid = $100,000 • Local bidder is within 5% of the non-local bid• Policy would require the City to give the local bidder to opportunity to match the price

Reciprocal Preference
• City would increase non-local bidders price 5% • If that bidder’s jurisdiction also had a local preference polic y
• City of Santa Cruz has a 5% preference policy• Santa Cruz firm bids $100,000 for consultant project• SLO would add 5% to price

Tie Bid Preference
• If local and non-local bid are equal in quality and price• Local bidder will win the award

Pros
Support local business• Financial – direct more funds to local businesses• Political – showing local business actionable policy• Tax base – increased sales and property tax (businesses relocate) • Reduce the City’s carbon footprintIncrease employmentInstitute for Local Self-Reliance – many studies support local preferences • https://ilsr.org/rule/local-purchasing-preferences/

Cons
• Indirect tax increase• Retaliation of other jurisdictions – can lead to less jobs – SLO business at disadvantage in other markets • Increased staff administrative costs –Adds layers to procurement process; increased risk of errors • Negligible carbon impacts – Products sold in SLO are not manufactured in SLO – shipped to SLO. • Difficult to quantify benefit – is a 5% preference recycled back to the local economy? National Finance Organizations – Against local preference policies • National Institute of Government Procurement• Government Finance Officers Association• International City and County Managers Association• The Council of State Governments

Local
54%
Non-Local
46%
Local v. Non Local
LocalNon-Local
Local$54,328,663
Non-Local$46,704,64

PURCHASE ORDERS - OPERATING SPEND
2018-2022

2020 Transactions Amount %
SLO 1557 157,984.21 26%Non-Local 2344 461,397.68 74%Total 3901 619,381.892021 Transactions Amount %SLO 2321 269,653.67 24%Non-Local 4344 842,262.15 76%Total 6665 1,111,915.822022 Transactions Amount %SLO 501 54,449.71 19%Non-Local 945 225,719.05 81%Total 1446 280,168.76 CREDIT CARD SPENDING – 2020-2022 LOCAL v. NON-LOCAL

Local
53%
Non-Local
47%
PURCHASE ORDERS + CREDIT CARDS OPERATING SPEND
LOCAL v. NON-LOCAL (2018-22)
$103,044,776
LocalNon-Local
Non-Local$48,234,025
Local$54,810,750

LOCAL PREFERENCE – TIER 2-5
*TIER 2 – STAFF COSTS – TOO COSTLY FOR DIVISION STAFF TO IMPLEMENT

If adopted
• Requires passing an Ordinance – Limited to non-public works goods and services only • Finance recommends a 3-5% contract award preference (Tier 3-5 only) • Local Business as defined as ‘within City limits’ • Valid Business License• Not delinquent in any City payments• No active code enforcement or planning actions• Applies only to non-public works goods and professional services

Exemptions
• Purchases under the limits (Tier 1-2)• Sole-source purchases• Construction projects• Emergency purchases • Cooperative agreement purchases• Purchases funded by outside agencies that prohibit the use of preferences (grant funding)
• Purchases made by credit cards

Should Council Amend Current Local Policy? (Purchasing) Recommendation • Do not adopt policy• Costs outweigh benefits for staff to administer• Retaliation against SLO business in other jurisdictions • Alternative programs and funding to support local business (TBID; Economic Development Programs, etc.) • Municipal Code 3.24.060E. • When the purchase requires a formal competitive bid will be made [from a cooperative agreement] with one, or more, other units of government or from a local dealer within the city limits that can provide the same brand, model, and configuration of item(s) identified in the cooperative purchase agreement(s) at or below the cooperative purchasing net cost wi a thin the same terms and conditions.

ORDINANCE NO. _____ (2022 SERIES)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS

OBISPO, CALIFORNIA, TO ADOPT A LOCAL PURCHASING

PREFERENCE FOR NON-PUBLIC PROJECTS GOODS AND SERVICES

PURCHASES
WHEREAS, Local businesses contribute significantly to the economic health of our city and to the quality of life of our citizens and visitors. The city encourages the growth of local businesses by means of increasing the participation of these businesses in the city’s purchase of goods and services; and
WHEREAS, the city manager, or his/her designee, shall be responsible for enforcement of this chapter; and
WHEREAS, a five percent (5%) evaluation preference will be applied to any competitive process for goods, supplies, equipment, materials, services, or professional services from a business designated as a local business; and WHEREAS, when a nonlocal business has submitted the lowest responsive responsible bid, and when one or more local businesses, as defined by this chapter, have also bid, the local business’ total bid amount will be reduced by the preference percentage of five percent for bid comparison purposes. If the net amount is lower than the lowest bid, the contract will be awarded to the local business for the full amount of its bid. When a request for proposals is used, the preference will reduce only the price component of the evaluation criteria; and
WHEREAS, A business shall comply with all of the following to be designated a local business:

1. The provisions of this chapter shall apply to:
(a) The business shall have an office with at least one employee within the city of San Luis Obispo.
(b) The business shall not be delinquent with any payments to the city. (c) The business shall hold a valid city of San Luis Obispo business license and tax certificates.

2. The provisions of this chapter shall not apply to:
(a) Purchases under the informal bid limit
(b) Sole source purchases.
(c) Construction projects.
(d) Urgent purchases necessary to protect public health, welfare or safety.
(e) Purchases made under a cooperative agreement.

(f) Purchases made by credit card, petty cash, or on claims. (g) Purchases funded by outside agencies that prohibit the use of preferences.
(h) Professional services requests for proposals where price is not considered in the selection of which service provider to engage in negotiations.

In addition, the city council shall have the authority to waive application of the local business preference at its discretion.

NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo as follows:

SECTION 1. A local purchasing preference for non-public projects, goods, and service purchases with an allowable, up-to five percent (5%) evaluation preference as provided herein.

SECTION 2. A summary of this ordinance, together with the names of Council members voting for and against, shall be published at least five (5) days prior to its final passage, in The New Times, a newspaper published and circulated in this City. This ordinance shall go into effect at the expiration of thirty (30) days after its final passage.

INTRODUCED on the ____ day of ____, 202X, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the ____ day of ____, 202X, on the following vote:

AYES:

NOES:

ABSENT:
__________________________
Mayor Erica A. Stewart
ATTEST:
_______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________
Teresa Purrington
City Clerk

Summary of Policy Changes
Purchasing Policy Update
As of April 2022
Section Summary of Change
Introduction 2018 policy references small, selected sections of purchasing Muni Code.
2021 update fully incorporates language to fully explain the Municipal Code language in the policy
Purchasing Division
Summary
Updated to more accurately reflect the City’s organizational structure as a de-centralized purchasing organization; rather than centralized – as described in the 2018 update.

Exhibit 201A Added City Attorney in the roles and responsibilities Added Risk Management in the roles and responsibilities Updated job roles and responsibilities
Updated the City Engineer role to accurately reflect their position in the purchasing and procurement of Public Projects
202 – Purchase Types 2018 policy had five purchase types 2021 update will simplify and reduce the number of purchase types for goods, professional services, public projects, and JOC 202 A
Thresholds
Update to the approval authority thresholds
*See accompanying memo in support*
202 A
Non-Purchase Order
Threshold
The update provides a non-purchase order allowance of up to $100 203 The update creates a CIP and Public Project purchases subsection Reference the CIP design manual – maintained by the Public Works Department that governs policies and procedures for CIP and Public Projects
203 Update thresholds to align with UPCCC thresholds (increase) 203 Update thresholds for Construction Contract Change Orders 204 Update the City’s main purchase methods to align with the updated thresholds
204 Update to purchase order types

Section Summary of Change
- Defines purchase order types
- Defines criteria for open Fiscal Year purchase orders Update to this section reflects how the City operates in the Oracle ERP system taking into account staff costs in requisitioning / receiving/payment
204 Defines non-purchase order allowance and non-purchase order exceptions
204 Update to further define Emergency Purchasing with reference to the City’s Municipal Code
Emergency purchase justification forms must be submitted with the purchase
204 Sole Source Purchasing reference to the Municipal Code language The updated thresholds will tighten the scrutiny for sole-sourcing due to the increase in the no-bid thresholds and expanding the threequote price range before an RFP is required. 207 IT Procurement
Reference the City’s Information Technology Policy and
Procedures.

Establish procedures for purchasing IT-related goods and services and contract templates
At the end of the project will develop contract templates for each of the IT categories the City purchases. (hardware, software, consulting, SaaS, IaaS, PaaS, and others).

Developed a checklist from identifying the need and assessing the risk to making the purchase or signing a contract
255 Establish contract process and procedures
256 Establishes Contract Management Best Practices and Future Training Opportunities
Defines authorities to change and/or modify contracts
257 Update to language to clearly define Contract Amendment policy and procedures.

Section Summary of Change
274 Introduce ‘Risk Management’ policy and procedures to the City’s contractsto ensure the City’s contractual transfer risk procedures and policies are followed by staff procuring goods and services. Every purchase will be evaluated for the risk it presents to the City. 275 Credit Card Policy (updated in Spring 2022)
New purchase thresholds, mandatory training for end-users, and ramifications for violation of policy rules.
276 Sustainable purchasing policy – integrated current Municipal Code Language. It will be further developed in collaboration with the Office of Sustainability and will be returned to Council for consideration.
277 SB 1383 – update to introduce the State of CA, SB 1383 mandate for recycled content paper products, 30% post-consumer recycled paper requirement when feasible, and the reporting requirements to the State
278 NIGP code – classification of purchase orders through the National Institute of Government Procurement commodity code for analysis of cumulative spending on different procurement types.
279 Procure to Pay Process – explains the entirety of a procurement cycle – from the sourcing of a product, policies, and procedures for staff to follow, and describes what is expected of each division and department in the process.

Formatted Table

Update to Section 200
Financial Management ManualFinancial
Management Manual
Purchasing Policy and Procedures Update –
October 20182019 2022
Formatted: Indent: Left: 0.09", Space Before: 0 pt, Line spacing: Exactly 39 pt

INTRODUCTIONSection 201 ..........................................................................................................2 INTRODUCTION ..........................................................................................................................2 OVERVIEW ......................................................................................................................................2 PURCHASING SYSTEM OBJECTIVES .........................................................................................2 PURCHASING AUTHORITY..........................................................................................................3 PURCHASING FUNCTION .............................................................................................................3 PURCHASING SYSTEM OVERVIEW ...........................................................................................4 Section 202........................................................................................................................................7 PURCHASING PROCESS PURCHASING PROCESS.................................................................7 PERMITTED PURCHASING METHODS ......................................................................................7 PURCHASE REQUISITIONS AND PURCHASE ORDERS..........................................................8 PURCHASE CARD/CITY CREDIT CARD PURCHASES ..........................................................11 EMERGENCY PURCHASES ........................................................................................................11 Section 203......................................................................................................................................15 BIDDING PROCESS ..................................................................................................................15 TYPES OF SOLICITATIONS ........................................................................................................15 BIDDING CRITERIA .....................................................................................................................16 BIDDING PROCESSES..................................................................................................................17 Section 204........................................................................................................................................1 NO-BID PURCHASING ................................................................................................................1 LOW COST PURCHASING.............................................................................................................1 SOLE SOURCE PURCHASING.......................................................................................................1 EMERGENCY PURCHASING........................................................................................................2 COOPERATIVE AGREEMENT PURCHASING............................................................................3 Section 215 ....................................................................................................................................561 BUSINESS LICENSE REQUIREMENT ....................................................................................561 BUSINESS LICENSES.................................................................................................................561 EXCEPTIONS ...............................................................................................................................561 POSSIBLE EXEMPTIONS (CASE-BY-CASE DETERMINATION) ........................................561 Section 225....................................................................................................................................562 CONSTRUCTION CONTRACT CHANGE ORDERS................................................................562 OVERVIEW ..................................................................................................................................562 GOALS ..........................................................................................................................................562 Section 255....................................................................................................................................564 Amendments to Agreements .................................................................................................564 DOCUMENTING WORKSCOPE CHANGES ............................................................................564 AMENDMENT TO AGREEMENT NO.......................................................................................568 Section 295 ........................................................................................................................................1 PURCHASING GUIDELINES .......................................................................................................1 PUBLIC PROJECTS .........................................................................................................................2 HYPERLINK "bookmark://_Toc528329925"PUBLIC 561 Formatted: TOC 3

Section 201
Per requirement in Chapter 3.24.040 of the Municipal Code this chapter shall guide staff members 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 and provide sufficient detail to enable City departments to:
• Be fully aware of, and comply with purchasing policies and procedures, and • Effectively and efficiently participate in the City’s purchasing program.

These guidelines do not are not intended to address every issue, exception, or contingency that may arise in the course of purchasing activities. Accordingly, the basic standard that should always prevail is to exercise good judgment in the use and stewardship of City resources. Questions Any questions about the City’s purchasing system and policies activities or proper purchasing process should contact the be referred to the City’s Purchasing Division.

PURCHASING SYSTEM PURPOSE SYSTEM OBJECTIVES
The City's purchasing ordinance, Chapter 3.24 of the Municipal Code, the delegates purchasing authority to the City Manager as well as any other representatives designated by her or him:

Along with three other key policy documents— the City Charter, and purchasing ordinance (Chapter

3.24 of the Municipal Code) and purchasing resolution—the policies and procedures set forthoutlined in this m a n u a l chapter form the City's purchasing c o n t r o l system.

The purpose of the purchasing control system adopted in (Municipal Code 3.24.020) is:

This system has been developed in order to achieve the following objectives:
• To purchase supplies, services, equipment, and public works projects at the lowest cost commensurate with quality requirements;
• To ensure effective financial control over expenditures; • To clearly define authority and accountability for the purchasing function; • To minimize the written documentation, administrative actions and expense of processing purchase transactions;
• To assure the quality of purchases made on behalf of the City; and • To facilitate accurate forecasting and planning of department needs and expenditures. (Ord. 1618 § 1 (Exh. A (part)), 2015: Ord. 954 § 2 (part), 1983: prior code § 2950.2)

AUTHORITY
The City Manager, or his/her designated representative(s), shall be the purchasing authority whose functions include the following powers and duties (Municipal Code 3.24.030) • To develop and prescribe, for the departments, such administrative policies, forms and files as may be reasonably necessary for the internal management and operation of these Formatted: List Paragraph, Bulleted + Level: 1 +
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Commented [CD1]: The 5/1/2018 policy copied in only
selected sections of the Muni Code in the Authority section.

I’ve pasted all of the section language in for accuracy and completeness
Formatted: Normal, No bullets or numbering
Commented [CD2]: These bullet points were all in the last policy adopted. Too wordy and too many objectives in my opinion
The 3 policy documents:

Formatted: Font: Bold
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purchasing procedures;
• To purchase or contract for those items listed in Section 3.24.010 and required by departments in accordance with these purchasing procedures;
• To ensure full and open competition as possible on all purchases; To procure the needed quality in supplies, services, equipment and public works projects not controlled by the Charter, at minimum expense;
Secure goods and services at the lowest cost possible commensurate with quality requirements and the City’s needs.
• To develop and maintain department awareness of purchasing and pricing principles, marketing conditions and new products;
• To consolidate department orders for like items, ensuring discount pricing whenever possible; • To inspect supplies and equipment delivered, as well as contractual services performed, to determine their conformance with the specifications set forth in the orders and contracts; and, in this connection, to have the authority to require chemical, physical or other tests of samples submitted with quotations or bids, or of delivery samplings, which may be necessary to determine quality and conformance with specifications;
• To establish procedures for, and assign duties to, personnel engaged in receiving, storing and issuing purchased supplies, thereby ensuring that supply levels are consistent with usage requirements;
• Subject to Charter Section 906, to sell or exchange surplus supplies and equipment; provided, that the same cannot reasonably be used by any department. (Ord. 1618 § 1 (Exh. A (part)), 2015: Ord. 954 § 2 (part), 1983: prior code § 2950.3)
■ Establish authority, responsibility and accountability for purchasing activities conducted on behalf of the City.
■ Ensure appropriate levels of competition and provide an equal opportunity for all qualified suppliers to do business with the City.
■ Ensure compliance with purchasing policies and procedures. ■ Standardize procedures where appropriate to ensure that organization-wide policies and goals are achieved.
■ Implement simple yet effective internal control procedures that appropriately support planning, maximize productive use of public funds and protect City assets from unauthorized use.
■ Coordinate organization-wide purchasing activities for commonly used items.

Commented [HM3]: Might want to consider loosening
this up a little. All purchases don’t have open competion like emergency projects and small dollar purchases (like a cup of coffee)
Commented [CD4R3]: @Horn, Matt This is verbatim
language from the muni code – which I don’t think we can change without passing a new ordinance
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Commented [HM5]: This seems odd to have in the muni
code and purchasing policy.

Commented [CD6R5]: @Horn, Matt This is verbatim
language from the muni code – which I don’t think we can change without passing a new ordinance
Commented [HM7]: I don’t think that we are formally
doing this. If we are not doing this, we should remove and include in some future update when necessary storage and inventory space and procedures have been developed.

Commented [CD8R7]: @Horn, Matt This is verbatim
language from the muni code – which I don’t think we can change without passing a new ordinance
How do we start to develop?
The City has multiple Assest management software systems in place – how are they being used to manage assets,
inventory, and work orders?
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Commented [CD9]: Procuedure – Delete
Procedure should be department specific – each department has different management structures – procedures should be removed from the ‘Policy’
Commented [CD10]: Procedure and internal strategy -
Delete

Introduction

PURCHASING AUTHORITY
The City's purchasing ordinance delegates purchasing authority to the City Manager as well as any other representatives designated by her or him:
• Developing and prescribing such administrative policies, forms and files as may be reasonably necessary for the internal management and operation of City purchasing policies and procedures.
• Purchasing or contracting for supplies, equipment, services and construction projects as required by the operating departments in accordance with City purchasing policies and procedures.
■ Negotiating and recommending execution of contracts.
• Ensuring appropriate levels of competitive bidding for all purchases. ■ Ensuring compliance with purchasing policies and procedures.

PURCHASING DIVISION FUNCTION
The City’s purchasing division oversees City-wide purchasing under the direction of the Finance Director. The City operates in a de-centralized procurement model with centralized oversight and auditing conducted by the purchasing division. Purchasing functions is centralized within the Finance Department, Purchasing Division, that coordinates purchasing processes and monitors compliance with the policies contained in this manualshall be independent of other departments as the independent exercise of procurement authority is an important piece of the City’s overall system of internal controls. . The pPurchasing dDivision primary objectives include: is managed by the City’s Purchasing Analyst under direction of the Finance Director. • Support the City’s strategic goals and purchasing control system adopted in (Municipal Code

3.24.020);
• Be aware of the needs of City departments and acquainted with suppliers that best fulfill those needs to support operations;
• Report on citywide purchasing performance metrics;
• Audit the purchase of goods, services, consulting services, and public works projects to ensure department purchases comply with City policy;
• Assist departments in developing procedures to operate efficiently in the City’s Oracle ERP system;
• Analyze purchasing of items to ensure pricing and terms are most advantageous to the City and to consolidate purchases for like items from multiple suppliers ((Municipal Code

3.24.030);
• Encourage efficiency in financial operations around the ‘procure to pay process’ Commented [CD11]: Procedure - Delete
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Commented [CD12]: Procedural – Each City Dept has
different staff that negotiate contracts, source suppliers, etc.

City staff are the SME on many of their projects –
purchasing staff can ensure compliance with City policies; ensure contract templates are used; negotiate on standard terms; but subject matter experts should be the lead
negotiators on work scope; etc.

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Commented [CD13]:

The word ‘centralized’ is mis-leading. The City’s
organizational model is de-centralized.

The purchasing division oversees and audits purchasing for compliance to policy, recommends cooperative agreements and alternative suppliers when pricing is not competitive.

Purchasing does not carry out out the physical act of the purchase – tracking, receiving, etc. The ERP motion project was explained in multiple roadshows that purchasing was moving to a ‘centralized’ system and led to mis-perceptions amongst the departments. We don’t have a centralized
system in place, and it may not be the best organizational model for the City.

A discussion with the leadership and fiscal officers would help. What model is best for SLO?
The white paper link below lays out pros/cons of the 3
primary organizational models most public entities follow – currently SLO is between #2 & 3

1. Fully centralized

2. Hybrid

3. Fully Decentralized.
https://slocitycloud.sharepoint.com/sites/SLOHub/Finance/S hared%20Documents/Purchasing/Policy%20and%20Procedu
res/Centralized%20v.%20Decentralized.pdf
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The Purchasing Division shall be independent from other departments as and the independent exercise of procurement authority is an important piece of the City’s overall system of internal controls.

To provide effective purchasing services throughout the City, the Purchasing Analyst shall be tasked with:
■ Be aware of the needs of City departments and acquainted with sources and availability of supplies, equipment, and certain services which will best fulfill these needs.

This requires an ongoing dialog with City departments in which their needs are discussed and during which Purchasing indicates information required and lead-times necessary to complete procurement transactions.
■ Arrange interviews between suppliers and representatives of the various City divisions to discuss specific needs.
■ Coordinate bidding processes in compliance with these Policies. ■ Purchase all items at pricing and terms most advantageous to satisfy the normal needs of the City for a reasonable length of time.
■ Process purchasing requests as expeditiously as possible, in a manner consistent with these Policies.

General responsibilities for setting and implementing purchasing system policies and procedures are summarized in Exhibit 201-A.Exhibit 201A Purchasing Control System Responsibilities Voters • Approve City Charter
City Council • Adopt purchasing ordinance
• Adopt resolutions setting purchasing guidelines
• Approve Requests for Bids (RFBs) and Requests for Proposals (RFPs) documents for purchases specified in Section 202
• Delegate authority to award contracts if they are within budget to the City Manager
• Award contracts if they exceed the approved budget from the RFB/RFP Purchasing Authority /
City Manager
Designee
• Implement purchasing policies
• Delegate purchasing authority
• Approve RFB’s / RFP’s for purchases specified in section 202 • Award contracts specified in section 202
Finance Director /
Budget Manager
• Develop and implement purchasing guidelines
• Monitor and evaluate system performance
• Set payment schedules
• Approve purchase requests in section 202
201-2
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Commented [CD14]: Remove – City staff in divisions are
the subject matter experts – in a centralized purchasing system – the subject matter expert would sit in the larger ‘procurement’ office and arrange interviews – SLO is not staffed in this way.

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Commented [HM15]: Council can delegate authority as
they deem appropriate right? I would think they can
delegate to any staff member no matter what the cost.

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City Attorney • Review City contracts to ensure compliance with the City’s policies, rules, and laws
Financial Analyst
Purchasing
• Develop and implement city-wide purchasing policies and procedures • Review and approve purchase requsitionsrequisitions, purchase orders, and contracts for proper authority and terms
• Coordinate and assist departments in the development of competitive bid solicitation on the City’s electronic bidding platform (RFB / RFP / RFQ) • Route contracts and maintain a complete database for all City contracts • Audit city deparmentsdepartments for compliance with the City’s purchasing policies
• Coordinate with the risk management to develop risk templates and risk assessment toolkits to enable departments to make good decisions when addressing risk and insurance requirements in contracts Risk Management • Review and evaluate risk and insurance requirements for all City contracts • Coordinate with the purchasing division to develop risk templates and risk assessment toolkits to enable departments to make good decisions when addressing risk and insurance requirements in contracts City Engineer • Approve RFB specifications for public projects • Approve Job Order Contracts (JOC) task orders for public projects as specified in Section 202
Department Heads • Develop and implement department purchasing procedures • Delegate departmental purchasing authority
• Approve departmental purchase requests and award departmental contracts as specified in section 202
Authorized Employees • Requisition goods and services in compliance with city purchasing policies • Receive (approve) invoices or payment requests for departmental purchases • Notify suppliers of business license requirements (when required) Formatted Table
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Commented [HM16]: Does it seem odd the the finance
director is developing guidelines and analyst is developing policies? Seems like this should be reversed.

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Commented [BJC17]: Should copies of the procedures be
provided to Purchasing for records and reference?
Commented [CD18R17]: Good idea. I know Public
Works has a CIP design manual which covers their
purchasing procedures. I’m not sure of other departments having written procedures – the policy / procedure to follow is the exhibit 202A
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PURCHASING SYSTEM OVERVIEW
Regardless of the type of item or service being acquired, virtually every purchase transaction goes through seven distinct stages in varying degrees:Purchasing )purchases
■ Assessing and determining resource needs.
■ Developing specifications.
■ Soliciting and evaluating quotations, bids or proposals. ■ Selecting the best proposal.
■ Awarding the contract or purchase order and authorizing work to proceed. ■ Receiving and inspecting goods or services to ensure they conform with specifications. ■ Paying the supplier when contract terms have been met.

The type of purchase as well as its estimated cost determine the formality with which each stage is completed and documented. For this purpose, the City has identified five basic types of purchases:
■ General Goods Purchases. Contracts and purchases for supplies and equipment, including basic IT equipment.
■ General Services Purchases. Contracts and purchases for operating and maintenance services, including basic IT maintenance services.
■ IT Systems Purchases. Contracts and purchases of large-scale IT systems. ■ Public Projects. Construction, reconstruction, erection, alteration, renovation, improvement, demolition, painting, repainting, and repair work involving any publicly owned, leased, or operated facility (Public Contract Code 22002c). ■ Consultant Services. Professional work provided to the City by specially trained and experienced individuals or firms regarding economic, financial, engineering, planning, architectural, environmental, legal or administrative matters.

Procedural categories, purchasing authority levels and features for each of these purchase types are summarized in Exhibit 202-A.

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Commented [BJC19]: Maybe a quick comment about
contract administration. This is important for service
contracts.

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Commented [CD20]: Consider removing the 7 stages of a
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Commented [CD21]: Remove category – IT systems is an
initial ‘Goods’ purchase usually followed by a contract of ‘Services’ purchases
Commented [CD22]: Add JOC?
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Purchasing System Responsibilities Exhibit 201-A
■ Approve City Charter
■ Adopt purchasing ordinance.
■ Adopt resolution setting purchasing guidelines.
■ Approve Requests for Bids (IFBs) and Requests for Proposals (RFPs) documents for purchases specified in Section 202. ■ Delegate authority to award contracts if they are within budget to the City Manager.
■ Award contracts if they exceed the approved budget from the RFB/RFP.
■ Implement purchasing policies.
■ Delegate purchasing authority.
■ Approve RFB’s/RFP’s for purchases specified in Section 202. ■ Award contracts as specified in Section 202.
■ Develop and implement purchasing guidelines.
■ Monitor and evaluate system performance.
■ Set payment schedule.
■ Approve Purchase Requests as specified in Section 202. ■ Develop and implement city-wide purchasing procedures ■ Review and approve purchase orders and contracts for proper authority and terms.
■ Route contracts for signature and maintain complete database for all goods and services contracts.
■ Assist departments in development of solicitations (RFB, RFP, RFQ, Quick Quote, etc.).
■ Create and manage master agreements and Blanket Purchase Orders for centralized and aggregate purchasing (e.g. office supplies; off-site copying, scanning and document
destruction).program
■ Approve RFB Specifications for public projects.
■ Approve Job Order Contract (JOC) task orders for public projects as specified in Section 202.
■ Develop and implement departmental purchasing procedures.

Voters
City Council
Purchasing Authority
(City Manager/Designee)
Finance Director/Budget
Manager
Purchasing Financial
Analyst
City Engineer
3- 01
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Commented [CD23]: The City Attorney should be within
this flow?
Commented [CD24]: The City as it currently is structured is a “hybrid” purchasing model more decentralized then
centralized.

The ERP motion project assumed centralized purchasing – for every single type of purchase regardless of specialization - the system flows in a decentralized manner.

We can work centralize certain commodity types (office
supplies, furniture, janitorial services, linen, janitorial products, safety supplies, etc.

We can drive departments to consolidate suppliers – ie we don’t need 6 different rubber gloves suppliers – but we should also keep decentralized for the more complex
purchases which is what is being practiced currently.

The issue is how do we make it flow most efficiently inside Oracle and the larger financial system.

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