Turlock City Council
November 18, 2025

Section 6 – Permanent Local Housing Allocation
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

30 6-C. Eligible Property

1. Property purchased with PLHA funds must be located in:

a. The City of Turlock city limits excluding County pockets.

2. Property type must be:

a. Single-family housing; or

b. Condominium unit; or

c. A town home unit.

3. Eligible property must have the following occupancy characteristics:

a. Currently occupied by the owner-seller of the property; or

b. If a rental property, sold only to existing tenant; or

c. If rental property, must be vacant for a minimum of 4 months prior to the applicant putting in an offer to purchase.

6-D. Affordability Period

1. PLHA funds do not currently have an affordability period.

6-E. Loan Terms

1. Security:

a. PLHA loans shall be secured by the property.

b. The lien securing repayment of the PLHA loan shall be subject only to liens, encumbrances, and other matters of record reviewed and approved by the City.

2. Deferment:

a. Principal and interest payments shall be deferred for 30 years.

3. Repayment:

a. The PLHA loan principal and interest shall be due and payable upon:

1.) Sale, transfer, rental, or lease of property.

2.) Borrower’s failure to occupy the property as Borrower’s principal place of residence (Borrower must certify occupancy annually).

Section 6 – Permanent Local Housing Allocation
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

31 3.) The PLHA maturity date:

i. If it is determined by the Housing Program Services Division staff that repayment of the loan at maturity will cause a hardship to the Borrower, the Loan Committee may elect to:

a. Approve a one-time additional deferral period of up to 30 years at 0% interest or:

b. Convert the debt (principal plus accrued interest) to a 15 -year amortized loan at 0% interest.

4.) The maturity date, or full repayment, of any debt secured by the property that is senior to the PLHA deed of trust.

5.) Upon default under the PLHA promissory note, deed of trust, deed of trust rider or the covenants, or other recorded documents of record pertaining to the property.

6.) Borrower’s cash out refinance of any superior mortgages.

7.) The Borrower may repay the loan balance at any time with no pre-payment penalty. Loan payments will be credited to principal first and then to interest.

4. Assumability:

a. PLHA loans are not assumable.

5. Transfer of Interest Exceptions:

a. PLHA loans do not have transfers of interest exceptions.

6. Loan Term:

a. The PLHA loan term shall be 30 years, at a 15 year, 0% interest to follow with a 15- year, 2% simple interest.

7. Prepayment Penalty:

a. A Borrower may prepay the PLHA loan, in part or whole, at any time without penalty.

8. Interest:

a. The loan shall be at zero (0%) percent simple interest for fifteen (15) years followed by two percent (2%) simple interest for the remaining 15 years and;

b. There are no payments due on the loan during the life of the ownership of the property by the Borrower and;

Section 6 – Permanent Local Housing Allocation
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

32 c. The total amount of the silent second loan plus any accrued interest becomes due and payable at the time of sale, refinance, transfer of ownership, rental, is no longer occupied by the primary borrower or thirty (30) years whichever comes first.

d. In instances where the City loan would be in first position, the loan will become a 30 year fully amortized loan at 3% simple interest.

9. Restrictions on Sale:

a. Subsequent buyers, unless assisted with a PLHA loan under this Program, do not need to meet the Eligible Household requirements set forth above.

b. Resale restrictions required by other secondary financing sources used in conjunction with a PLHA loan shall prevail.

6-F. Subordinate Financing

1. Fees and/or changes for subordinate loan financing shall be consistent with reasonable loan origination fees for first mortgage financing as determined by the City based on industry standards.

2. Balloon payments due before the maturity date of the PLHA loan are not permitted.

3. All subordinate financing shall defer principal and interest payments for the term of the PLHA loan.

6-G. Target Areas

No target areas defined.

6-H. Program Income

1. All repayments of PLHA loan principal and interest shall be received by the City and deposited into a separate account maintained by the City’s Finance Department.

2. The account shall be interest bearing into which all earned interest shall be deposited.

3. All funds deposited into the account shall be the property of the City.

4. A line item for reuse of PLHA funds will be inserted into the City’s fiscal year budget allocating and approving the use of funds for PLHA eligible activities.

5. All program income funds shall be expended in accordance with PLHA regula tions and the PLHA agreement between the City and HCD.

Section 6 – Permanent Local Housing Allocation
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

33 6-I. Matching

No matching requirements apply.

6-J. Maximum Loan Amount

1. The maximum loan amount for a PLHA first-time homebuyer is $100,000.

Section 7 – FTHB Mortgage Underwriting Requirements
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

34 7. First Time Homebuyer
Mortgage Underwriting Requirements (for all funding sources)

7-A. Overview

1. The primary mortgage lender (Lender) shall utilize its own underwriting standards in reviewing and approving a Borrower’s application for a first mortgage loan.

2. In addition, the City shall ensure that the Borrower meets the underwriting standards for a mortgage loan (s) issued by the City in conjunction with this Program. The City conducts underwriting upon receipt of accepted purchase agreement and lenders 1003 and 1008 submittal. Many of these secondary underwriting standards will parallel those associated with the first mortgage, but the City shall take all necessary steps to ensure compliance with the requirements of this Program.

3. The Borrower must complete and sign the appropriate FTHB Program certifications. If the Lender becomes aware of miss tatements whether negligently or willfully made, it must notify the City of Turlock immediately.

4. Secondary underwriting requirements must be met by a Borrower and verified by City in accordance with the following sections.

7-B. Verification of Previous Ownership Status

1. The Borrower may not have held an ownership interest in a residential property within the past three years. Allowable exceptions are:

a. If the FTHB mortgage assistance is financed solely with City funds:

1) A displaced homemaker, who, while a homemaker, owned a home with his or her spouse or resided in a home owned by the spouse. A displaced homemaker is an adult who has not, within the preceding two years, worked on a full-time basis as a member of the labor force for a consecutive twelve-month period and who has been unemployed or underemployed, experienced difficulty in obtaining or upgrading employment and worked primarily without remuneration to care for his or her home and family;

2) A single parent who, while married, owned a home with his or her spouse or resided in a home owned by the spouse. A single parent is an individual who is unmarried or legally separated from a spouse and has one or more minor children for whom the individual has custody or joint custody or is pregnant; or

3) An individual or individuals who owns or owned, as a principal place of residence during the three -year period before the purchase of a home with CalHome assistance, a dwelling unit whose structure is:

i. Not permanently affixed to a permanent foundation in accordance with state or local regulations; or

Section 7 – FTHB Mortgage Underwriting Requirements
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

35 ii. Not in compliance with state, local or model building codes and cannot be brought into compliance with such codes for less than the cost of constructing a permanent structure.

2. The Borrower must provide copies of their last three (3) years signed federal tax returns, verifying that the Borrower did not claim a homeowner deduction for mortgage interest or taxes on real property. Acceptable alternatives are as set forth below:

a. If the Applicant filed the 1040 Long Form for the prior three years and cannot produce an original copy of the signed tax returns, then the Applicant must request a copy of the returns from the IRS.

b. If the Borrower has filed the short form 1040A or 1040EZ for the prior three years and cannot produce the signed returns, the City will accept a letter from the IRS verifying the filing status of the Borrower. The letter should confirm that the Borrower filed the 1040A or 104OEZ for the years in question. The Borrower can request tax account information from the Local IRS office. This information will be provided on IRS Letter Form 1722 and will include: (1) name and social security number; (2) type of return f iled; (3) marital status; (4) tax shown on return; (5) adjusted gross income; (6) taxable income; (7) self- employment tax; and (8) number of exemptions. If the address on the tax returns filed is different than the Borrower’s current address, the Borrower should also provide a written statement (signed by all Borrowers) indicating that the previous returns had been filed at a different address.

The tax account information should be requested, in person, from the IRS office. The tax returns must have an original signature certifying that "this is a true and exact copy of the returns submitted to IRS”.

c. In the event the Borrower was not obligated to file federal income tax returns for any of the preceding three years, it will be necessary for the City to obtain from the Borrower a completed and signed Applicant Income Tax Certification which is required in place of (a) or (b) above. The Applicant Income Tax Certification must be accompanied with documented proof of the reason for not filing taxes.

d. When an application is submitted during the period between January 1 and April 15 and the Borrower has not yet filed his/her Federal income tax return for the preceding year with the IRS, the City may with respect to such year, rely on a certification of the Borrower that the Borrower is not entitled to claim deductions for taxes or interest on indebtedness with respect to property constituting his/her Principal Residence for the preceding calendar year. The certification is included within the Ap plicant Income Tax Certification.

7-C. Verification of Borrower Income

Income eligibility criteria vary according to the secondary financing source utilized. Funding is determined based on available funding and property conditions. The City must verify a Borrower’s income in accordance with the following:

1. CalHome, CDBG, and HOME, Borrowers must have an annual gross income equal to or less than 80% of the area median income as adjusted for household size. NSP and PLHA

Section 7 – FTHB Mortgage Underwriting Requirements
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

36 borrowers must have an annual gross income equal to or less than 120% of the area median income as adjusted for household size. See Exhibit “C” for income limits.

a. Income limits used to determine eligibility for CalHome funding must be those published by the State of California Department of Housing and Community Development available from the City.

b. Income limits used to determine eligibility for HOME, CDBG, and NSP funding must be those published by the U.S. Department of Housing and Urban Development and available from the City.

2. Household size is determined by counting all members of the household, regardless of age, who will be permanent residents in the home.

3. The City shall determine the Borrower’s annual gross income by obtaining source documentation verifying income and asset inclusions listed in Exhibit “A” of this Manual.

a. For self -employed borrowers, source documentation shall also include but not necessarily be limited to:

1) 3 years federal tax returns. (A minimum of the two most recent years must show income as self-employed)

2) A profit and loss statement prepared by an accountant or bookkeeper. The City reserves the right to request an audited Profit and Loss statement by a Certified Accountant/Bookkeeper.

4. Income from all adult household members 18 years of age or older shall be counted to determine household income eligibility. Income of borrowers will be used to determine loan eligibility.

5. The Borrower’s gross annual income must then be projected by the City over the upcoming 12-month period and judged to not exceed the applicable income limit. The City shall complete an Income Summary Worksheet.

a. If documentation is provided by the Borrower that his or her current circumstances may be about to change, this information must be used in the projection of gross annual income. For instance, if a Borrower has documented income of $10.00/hour, but a negotiated union contract will increase this amount to $15.00/hour 6 months hence, the anticipated additional income must be counted in the projection.

6. Assets

a. All income from assets must be included in the calculations determining the Borrower’s gross annual income.

b. When the cash value of all of a Borrower’s assets exceeds $5,000, annual gross income shall include the greater of:

1) The actual amount of income, if any, derived from all household assets; or

Section 7 – FTHB Mortgage Underwriting Requirements
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

37 2) The current HUD Passbook rate multiplied by the cash value of all such assets.

c. As with income, the value of a Borrower’s assets must be projected over the following 12-month period and judged to not exceed the applicable income limit.

7. Income of Co-Borrower

a. If a co-Borrower will be both on the title and the deed of trust, his or her gross annual income must be included in determining eligibility for the program.

b. The income of any other person expected to both live in the residence and be secondarily liable for the mortgage must be counted and verified as noted above.

c. Co-signers and co -mortgagors who do not intend to occupy the property are prohibited.

7-D. Credit

1. A credit report will be obtained at time of application by the City for every perso n, 18 years and older, applying for a loan through the FTHB program. For married couples, credit reports will be required of both spouses, to determine credit worthiness and household debt, even if one spouse will not be on title.

For purposes of qualifying Borrower for a City mortgage, credit worthiness criteria shall be:

a. No late payments within the 12 months prior to the date of applying.

b. No outstanding judgments or liens.

c. Outstanding collections may be paid out of closing not to be included as part of required down payment or from City funds.

d. Bankruptcy date of discharge must have been a minimum of two years prior to the date of applying with no additional collections.

e. Foreclosure must have been a minimum of three years from date of sale.

7-E. Purchase Price

1. The City will obtain a copy of the signed purchase contract for verification purposes that the FTHB Program’s purchase price limit has not been exceeded.

7-F. Maximum Sales/Price Value Limit

1. The maximum sales price/value limit for a home purchased with the assistance of a City loan under this Program shall be as follows as per funding source:
a. CDBG- up to 100% of the current median value of a single-family residence in Stanislaus County.

Section 7 – FTHB Mortgage Underwriting Requirements
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

38 b. HOME – up to 95% of the current median value of a single -family residence in Stanislaus County.

c. CalHome – up to 105% of the current median value of a single-family residence in Stanislaus County.

d. PLHA – no maximum.

2. The median sales price shall be as documented in the most recent data set accepted by the United States Department of Housing and Urban Development (HUD) for use in City’s mortgage assistance program. The City utilizes the HUD HOME homeownership Value Limits to determine the median sales price, unless an exception is granted to the City per CFR 92.254 (a)(2)(iii).

7-G. Maximum Loan Amount

1. The City will provide “Gap” financing up to $100,000 toward the purchase of affordable housing to be occupied by the applicant. This refers to filling the “gap” between the amount the homebuyer has and the amount needed to secure a primary loan.

GAP FINANCING SUBSIDY CALCULATION EXAMPLE
Purchase Price of Property $ 400,000
Less primary loan borrower can obtain $(325,000)
Less program required down payment $( 5,000)
Equals “Gap” needed to purchase property $ 70,000

Plus estimated closing costs $ 16,000
Total Subsidy/Loan $ 86,000

7-H. Loan Documentation

1. All City loans shall be evidenced by the following documents and provisions.

a. Promissory Note(s) payable to City in the principal amount of the loan and stating the terms and rate of interest.

b. Deed of Trust (s) securing the Note; this deed shall be recorded and shall secure City’s financial interest in the property.

c. Other appropriate security instrument naming City as beneficiary.

d. Request for copy of “Request for Notice of Default”.

7-I. Gift Funds

a. Gift funds to borrowers are permitted but will be limited to $5,000. These funds cannot be used toward the borrower’s required contribution.

Section 7 – FTHB Mortgage Underwriting Requirements
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

39 b. Letter for gift funds must be provided to City Housing staff prior to loan committee approval. Letter must state the name of donor, amount being gifted, and that the funds are a gift and not a loan.

Section 8 – Application and Delivery Process
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

40 8. APPLICATION and DELIVERY PROCESS (for all funding sources)

8-A. Overview

1. Eligible homebuyers apply for a first mortgage loan from a primary mortgage lender (Lender).

2. The City processes the FTHB Mortgage Application and associated documentation, and issues a FTHB pre-approval letter for the City mortgage loan.

3. The City funds the City’s FTHB mortgage loan concurrently with the first mortgage lender funding.

8-B. FTHB Mortgage Application Process

The FTHB processing procedures are designed to integrate with the Lender’s standard mortgage loan processing and underwriting procedures. Recognizing there are procedural variations among lenders, the procedures outlined here are meant to serve as guidelines with respect to the sequence of events. However, all the elements of the processing sequence outlined in this section must, regardless of sequence, be completed by the Lender, the City, the Borrower, and the Seller.

The Lender, Borrower and the City are responsible for performing the tasks related to the issuance of a FTHB Mortgage as identified below:

1. Eligibility/Pre-approval Phase

Borrower:  Applies to Lender for a first mortgage and a FTHB mortgage.

 Provides all necessary documentation and authorizations to City of processing application.

 Provide a copy of the certificate of completion for the homebuyer education workshop from the City of Turlock or a selected approved agency.

Lender:  Determines if Borrower is eligible for primary mortgage financing.

Lender determines acceptability of first loan in accordance with applicable loans, and private mortgage insurance standards and/or underwriting guidelines.

 Transmits the following to City:

 Appraisal.

 Preliminary Title report

 Mortgage Credit Analysis

Section 8 – Application and Delivery Process
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

41  Certified Lead Inspection, applicable only to properties built prior to 1978. See section 8-E page 43 for more details.

 Commitment letter from Primary Lender.

City:  Examines all documents for completeness and consistency. Issues a FTHB pre-approval letter, which is valid for a maximum of ninety days.

 Inspects subject property for compliance with Basic Housing Quality Standards. Inspections will be completed less than 90 days prior to the commitment of funds. Copy of the FTHB Inspection form is placed in Borrower’s file.

 The City of Turlock or a selected approved agency will offering First Time Homebuyer Education workshop to Borrower.

 Conducts environmental review;

 Verifies legality of unit(s) on subject property.

 Verifies compliance with maximum per unit subsidies.

 Confirms subject property location within specified areas by funding source (NSP and CalHome-funded only).

 Verifies property has successfully cleared any outstanding Housing Quality Standards issues; if applicable, verifies that responsible party (Borrower or Seller) has mitigated all deteriorated paint surfaces issues and obtains all Lead Based Paint (LBP) forms from responsible party.

 If being funded with HOME funds, verify property meets all property standards as identified in 24 CFR 92.251 and each major systems has a remaining useful life of a minimum of 5 years.

2. Pre-Closing Phase

Lender:  Cooperates with City to obtain any additional information required under the Program.

 Immediately notifies the City in writing of any cancellation of Lender’s first mortgage Pre-approval or commitment. The reason for cancellation must be clearly stated.

 Confirms with City that the FTHB Pre-approval is still active and has not expired.

Section 8 – Application and Delivery Process
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

42 City:  Confirms that the FTHB Pre-approval is still active and has not expired. If expired, an extension must be requested.

3. Closing Phase

Lender:  Approves the first mortgage loan in accordance with Lender’s regular procedures.

Title Co.:  Submits Lender’s Closing Certification to City.

 Submits copy of HUD-1 closing statement to City.

 Forwards required first loan documents and Lender’s escrow instructions to City.

Borrower:  Executes all first mortgage documents, FTHB mortgage documents, and all other related documents.

Borrower/Seller:  If applicable, and after determination of responsible party, submits documentation certifying resolution of any deteriorated or lead - based paint issues to City.

City:  Conducts final review of all FTHB submittals from Lender.

 Forwards FTHB mortgage promissory note, deed of trust and escrow instructions to escrow company.

 Reviews Lender’s first mortgage loan documents and escrow instructions for compatibility with FTHB Program requirements.

 Loan Committee reviews and approves Request for Release of FTHB Program Funds.

 Writes and transmits escrow instructions to escrow company.

 Issues check for FTHB mortgage funds made payable to escr ow company.

8-C. Application Handling Priority

All FTHB Applications will be processed by the City according to the date of receipt .

Processing is subject to change in the event of special funding and special requirements.

8-D. Property Standards

The property purchased with City funds under this program must:

1. Be eligible pursuant to the program if it is a single-family residence, a condominium unit, or a townhome located within the city limits of Turlock. Manufactured housing unit, must

Section 8 – Application and Delivery Process
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

43 at the time of purchase be on a permanent foundation, connected to permanent utility hook-ups, and be located on land that is to be owned by the purchaser.

2. Meet or exceed HUD's Housing Quality Standards (HQS) prior to close of escrow.

The City's Housing Rehabilitation Specialist/Inspector shall undertake a HQS inspection of the proposed unit to determine the property's eligibility for the FTHB Program. The Rehabilitation Specialist inspects the property for compliance with all locally adopted codes and ordinances noted above less exceptions. All homes must pass the HQS inspection conducted by the City. Responsibility for correcting any deficient items noted shall be the sole responsibility of the Borrower and/or seller. The only exception is when a CalHome Secondary Financing with Rehabilitation Program loan will occur.

For all loans funded with HOME funds, property must meet all property standards as identified in 24 CFR 92.251 and each major system must have a remaining useful life of a minimum of 5 years. The Housing Rehabilitation Specialist/Inspector will utilize a comprehensive checklist to ensure property meets all standards of the funding.

The HQS inspection should not be confused with a home inspection and may not be relied upon by the Borrower . The City does not provide a home inspection for the Applicant. The City recommends that the Applicant safeguard their investment by hiring a certified home inspector to provide an objective written report of the condition of the home's systems as they appear and operate at the time of the inspection.

3. Comply with all locally adopted standards at the time of purchase. Locally adopted standards include, but are not limited to: the 2007 editions of the Uniform Building Code (U.B.C.), Uniform Mechanical Code (U.M.C.), Uniform Plumbing Code (U.P.C.), the National Electrical Code (N.E.C.), the California Building Code (C.B.C.), and Title 8 of the Turlock Municipal Code, less exceptions.

4. Must meet the accessibility requirements of the Fair Housing Act and Section 504 of the Rehabilitation Act of 1973.

5. In the event that the home does not meet the requirements as described above and CalHome funds are used as secondary financing, the home may be eligible under the following conditions;
a. Funds must be used for both acquisition and rehabilitation. Funds may not be used for only rehabilitation
b. Combined Secondary Financing and Rehabilitation loan cannot exceed 105% CLTV.
c. Rehabilitation Specialist will provide list of repairs c. Work must start no later than 30 days after purchase. d. Work must be completed within six months after home purchase. e. Must be done by a California licensed contractor
f. Work is allowable to the extent that it replaces or repairs items necessary to make a property habitable and usable.

See Rehabili tation Policies and Procedures for det ailed information regarding the rehabilitation process.

8-E. Lead Based Paint (LBP)

Section 8 – Application and Delivery Process
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

44 All units assisted by the City must comply with part 35 of title 24 of the Code of Federal Regulations (24 CFR Part 35 )9 implementing Lead-Based Paint regulations which include the HUD final regulation known as the Lead Safe Housing Rule effective 9/15/00 and the HUD/Environmental Protection Agency (EPA) Lead -based paint disclosure rule issued in 1996. The purpose of the L ead Safe Housing Rule is to protect young children from lead - based paint hazards in housing that is receiving federal assistance. It applies only to housing that was built before 1978; in that year, lead -based paint was banned nationwide for consumer use.

The program is subject to the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821- 4846), the Residential Lead -Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851 - 4856), and implementing regulations at part 35, subparts A, B, J, K, M and R of this title.

All housing units built prior to 1978 and utiliz ing City funds under this Program are subject to the following requirements:

1. Notification

a. All Applicants for the FTHB Program are provided with a notification of the dangers of lead-based paint. This notification takes the form of an EPA-approved lead hazard information pamphlet entitled “Protect your Family from Lead in Your HOME” (EPA -747-K-94-001) or an equivalent pamphlet that has been approved by the EPA. The Lead-based paint notification shall be available in English, Spanish and other languages as offered through HUD and the EPA. The brochure can be down loaded from the HUD website at http://www.hud.gov/offices/lead/healthyhomes/lead.cfm.

2. Lead-based Paint exposure- Properties Constructed prior to 1978

a. A residential property built prior to 1978 may pres ent exposure to lead from lead- based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behav ioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women.

b. All housing units constructed prior to 1978 and utilizing City funds under this Program are subject to additional regulations to control lead -based paint hazards and must be inspected by a certified lead -based paint inspector, for def ective paint. If any defective paint is discovered during the inspection, the seller and buyer shall be notified, and the unit shall automatically be ineligible for assist ance, unless the defective paint is abated.

c. All remediation shall be completed in compliance with the practices recommended by the Occupational Safety and Health Administration (OSHA) , the Environmental Protection Agency (EPA) and in 24 CFR 35.1345 Occupant protection and worksite preparation.

9 The 24 CFR Part 35 regulation implements sections 1012 and 1013 of the Residential Lead-Based Paint Hazard Reduction Act of 1992, which is Title X of the Housing and Community Development Act of 1992. Sections 1012 and 1013 amend the Lead-Based Paint Poisoning Prevention Act of 1971.

Section 8 – Application and Delivery Process
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

45 After remediation, a certification by a certified lead-based paint inspector shall be provided to the City of Turlock, the seller, and the buyer that no defective paint remains in the unit. Such certification shall then make the unit eligible for assistance.

3. Consumer Information Resources

For information on lead hazards and prevention contact the National Lead Information Center (NLIC) Hotline at 1(800) 424 -LEAD [5323] or their website at http://www.epa.gov/oppt/lead/. NLIC provides the general public and professionals with information about lead hazards and their prevention.

8-F. Environmental Review

1. The environmental effects of activities carried out with State and Federal funds must be assessed in accordance with the provisions of the National Environmental Policy Act (NEPA).

2. The City shall conduct said environmental review in accordance with 24 CFR Part 58.

3. The environmental effects of activities carried out with City or State funds must be assessed in accordance with the provision of the California Environmental Quality Act (CEQA).

8-G. Homebuyer Education Requirement

Homebuyer Education Course is required by all homebuyers on title receiving a FTHB loan.

The course must be provided by the City of Turlock or a selected agency. A copy of the certificate of completion of the 8-hour homebuyer education course must be submitted to the City. See Exhibit “D” for Homebuyer Education Curriculum.

The topics must include:

1. Preparing for homeownership

2. Available financing and credit analysis

3. Loan closing and homebuyer responsibilities

4. Home maintenance and loan servicing

8-H Mortgage Assistance Limit

See Exhibit “B”

8-I. Transfer of FTHB Mortgage

The City’s FTHB loan is not transferable with the exception of CalHome funded loans. See CalHome section 2-F (page 9) for more information.

8-J. Transfer of FTHB Application to Substitute Lender

Section 8 – Application and Delivery Process
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

46 1. If a Borrower decides to change from one Lender to another after a FTHB Pre-approval has been issued, the City will honor the original expiration date as long as no information has changed and the new Lender will comply with all regulations and time frames as required by loan and program.

2. The FTHB Pre-approval will be re -issued to the Borrower with the same original expiration date. The expiration date will not be extended without a formal request.

8-K. Pre-approval Letter from City

Upon completion of a full application and documentation, the qualifying Borrower will receive a Pre-approval letter from the City. This letter will only be good for 90 days from date of issuance. Specific timeframes for contracts and closings will be noted in the letter.

8-L. Changing Properties During the FTHB Second Application Process

1. If a Borrower has a pending FTHB Application and changes the property he/she is purchasing, the Borrower must submit a new purchase contract and all information which the City has determined necessary for reconsideration.

8-M. Resubmittal of FTHB Second Application Returned or Rejected

If a FTHB Application has been returned or denied by the City, any resubmission, must include all information which the City has determined necessary for reconsideration.

8-N. Changes Prior To Closing

1. The Lender must immediately notify the City in writing of any change in the circumstances upon which the FTHB Pre-approval was issued. These changes may require re-certification of eligibility of the Borrower.

3. If changes to the circumstances upon which the FTHB Pre-approval was issued result in the Borrower or the Property no longer meeting the FTHB Program requirements, the FTHB Pre-approval will be revoked.

4. Eligibility of Borrower for a FTHB Second is based upon the Borrower’s current and projected income. The City will issue the FTHB Pre-approval based on facts verified as of the date the FTHB Pre-approval is issued. The income verified for commitment is valid as long as the loan closes within 90 days of the date of the FTHB Pre-approval and there are no additional sources of income that were not previously reported.

Any added source of Income received after the issuance of the FTHB Pre-approval but prior to closing must be verified by the City and the Borrower’s continued eligibility under the FTHB Program income limits must be confirmed and reported to the City.

7. Any changes in home ownership status, acquisition or rehabilitation cost and amount of mortgage loan after issuance of commitment and prior to closing must also be reported to the City.

a. If the Borrower acquires a present ownership interest in a principal residence prior to loan closing, the FTHB Pre-approval shall be revoked.

Section 8 – Application and Delivery Process
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

47 b. If the total acquisition cost of the residence purchased in connection with the FTHB Second increases so as to exceed the purchase price limitations set forth herein, the FTHB Pre-approval shall be revoked.

8-O. Conflict of Interest

No FTHB Program mortgage shall be issued to any person or the immediate family of any person who is in a decision-making position relative to the FTHB Program which includes but is not limited to the staff of the City.

Section 9 – FTHB Mortgage Loan Servicing by City
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

48 9. First Time Homebuyer
Mortgage Loan Servicing by City (for all funding sources)

9-A. Overview

These loan servicing policies and procedures are intended to preserve the City’s financial interest in properties purchased with funding through the First Time Homebuyer Program.

9-B. Payment of Property Taxes and Insurance

1. Borrower must maintain property insurance coverage naming the City as loss payee when in first position or additional insured if the loan is a second mortgage. If borrower fails to maintain the necessary insurance, the City will contact the Borrower reminding them of the insurance requirement. The Borrower will have 30 days to provide proof of insurance. If verification of insurance is not received, the City may call the loan due.

2. If the Borrower fails to maintain required hazard insurance (including flood insurance if the property is located within a 100-year floodplain) the City may take out a “forced place” insurance policy to cover the property. City shall obtain a judgment for any amounts expended by City under this section, and shall record a judgment lien against the property. The City of Turlock is currently not designated in a flood zone.

3. Property taxes must be kept current during the term of the loan. If the Borrower fails to maintain payment of property taxes , the City may pay the taxes current and add the balance of the tax payment plus any penalties to the balance of the loan. Wherever possible, the City encourages Borrower to have impound accounts set up with their first mortgagee wherein they pay their taxes and insurance as part of their monthly mortgage payment.

9-C. Owner-Occupancy

1. The Borrower shall be required to complete and submit an Annual Occupancy Certification yearly. Such report shall include the following:

a. Evidence of Borrower’s occupancy of the Property as Borrower’s principal place of residence;

b. Evidence of payment of property taxes and hazard insurance.

c. Other information reasonably required by the City.

9-D Required Noticing and Restrictions on Any Changes of Title or Occupancy:

1. In all cases where there is a change in title or occupancy or use, the Borrower must notify the City in writing of any change. City and borrower will work together to ensure the property is kept in compliance with the original First Time Homebuyer program terms and conditions such that it remains available as an affordable home for low-income families. These types of changes are typical when Borrowers do estate planning (adding

Section 9 – FTHB Mortgage Loan Servicing by City
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

49 a relative to title) or if a Borrower dies and pro perty is transferred to heirs or when the property is sold or transferred as part of a business transaction.

2. Change from ownership occurs at a sale, the loan is not assumable and the loan balance is immediately due and payable in full.

3. If a transfer of the property occurs through inheritance, property can only be transferred to the spouse (as owner -occupant) who must reside at the home as the primary residence. All such changes are subject to the review and approval of the City’s Loan Committee. Any other transfer is not permissible and loan will be due in full. In the event that the heir is not a spouse, the heir will not be provided the opportunity to assume the loan. If the heir intends to occupy the property and is low income, the City will work with the heir to qualify for a new primary loan to pay off the existing loan(s) and obtain a new down payment assistance loan. If the heir is a non -income eligible family, the balance of the loan is due and payable in full. If the heir intends to act as an owner-investor, the balance of the loan is due and payable in full. All such changes are subject to the review and approval of the City’s Loan Committee.

4. Change from owner -occupant to owner -investor occurs when an owner -occupant decides to move out and rent the assisted property, or if the property is sold to an investor. If the owner converts any assisted unit from owner occupied to rental, the loan is due in full.

5. Conversion to use other than residential use is not allowable where the full use of the property is changed from residential to commercial or other. In some cases, Borrowers may request that the City allow for a partial conversion where some of the residence is used for a business but the household still resides in the property. Partial conversions can be allowed if it is reviewed and approved by any and all agencies required by local statute. If the use of the property is converted to a fully non -residential use, the loan balance is due and payable.

9-E. Subordination

1. If the Borrower wishes to refinance any superior loans, the Borrower must submit a Request for Subordination to the City. Subordinations will be granted only under the following conditions:

a. “No cash-out” allowed. Cash out means there are no additional charges on the transaction above existing loan balance and escrow closing fees.

b. No third-party debt pay-offs or additional encumbrance on the property above traditional refinance transaction costs.

c. Should lower the families housing cost with a lower interest rate

d. Refinancing for a shorter term will be permitted as long as the increase in housing costs do not exceed allowable back and front-end ratios.

e. Total indebtedness secured by the property may not exceed the current market value of the property. In cases of economic crisis, the subordination request will be approved on a case-by-case basis.

Section 9 – FTHB Mortgage Loan Servicing by City
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

50 2. The City Loan Committee will review and approve or deny the Request for Subordination and, if approved, the escrow company will provide the proper subordination documentation, including a new Request for Notice of Default for the City, for execution and recordation by the Lender.

9-F. Demand/Pay-off

1. Upon receiving a Notice of Demand/Pay-off, City’s Housing Program Services Division shall calculate the amount of principal and interest due, and transmit the payoff amount to the requesting party.

2. Upon receipt of all due principal and interest, City shall reconvey the FTHB mortgage deed of trust.

9-G. Request for Notice of Default

1. The City may record a Request for Notice of Default for each lien senior to the City’s FTHB mortgage.

a. When the City’s loan is in second position behind an existing first mortgage, it may require the title company handling the home loan purchase , to prepare and record a "Request for Notice of Default" for each senior lien in front of City’s loan. This document notifies the City of any foreclosure action by a senior lien holder listed in the notice. The City will then have time to contact the Borrower and assist them in bringing the first loan current. The City can also monitor the foreclosure process and go through the necessary analysis to determine if the loan can be made whole or preserved.

9-H. Foreclosure by Senior Lien Holder

1. Upon any condition of loan default: 1) nonpayment; 2) lack of insurance or property tax payment; 3) change in title or use without approval; 4) default on senior loans, the Lender will send out a letter to the Borrower notifying them of the default situation. If the default situation continues then the Lender may start a formal process of foreclosure.

2. When a senior lien holder st arts a foreclosure process and the City is notified via a Request for Notice of Default, the City, who is the junior lien holder, may cancel the foreclosure proceedings by "reinstating" the senior lien holder. The reinstatement amount or payoff amount mus t be obtained by contacting the senior lien holder. This amount will include all delinquent payments, late charges and fees to date. City must confer with Borrower to determine if, upon paying the senior lien holder current, the Borrower can provide futu re payments. If this is the case then the City may cure the foreclosure and add the costs to the balance of the loan with a Notice of Additional Advance on the existing note. This action will be submitted to the loan committee for review and approval.

3. If the City determines, based on information on the reinstatement amount and status of borrower, that bringing the loan current will not preserve the loan, then staff must determine if it is cost effective to protect their position by paying off the senior lien holder in total and restructure the debt such that the unit is made affordable to the Borrower. If the City does not have sufficient funds to pay the senior lien holder in full, then they may

Section 9 – FTHB Mortgage Loan Servicing by City
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

51 choose to cure the senior lien holder and foreclose on the property themselves. As long as there is sufficient value in the property, the City can afford to pay for the foreclosure process and pay off the senior lien holder and retain some or all of their investment.

This action will be submitted to the loan committee for review and approval.

4. If the City decides to reinstate, the senior lien holder will accept the amount to reinstate the loan up until five (5) days prior to the set "foreclosure sale date." This "foreclosure sale date" usually occurs about four (4) to six (6) months from the date of recording of the "Notice of Default." If the City fails to reinstate the senior lien holder before five (5) days prior to the foreclosure sale date, the senior lien holder would then require a full pay off of the balance, plus costs, to cancel foreclosure. If the City determines the reinstatement and maintenance of the property not to be cost effective and allows the senior lien holder to complete foreclosure, the City's lien may be eliminated due to insufficient sales proceeds.

9-I. Recapture Provision

1. The Recapture provision applies only to HOME and NSP funds.

a. When a loan is refinanced or the property is sold or the Applicant is no longer the principal resident or upon discovery of willful misrepresentation or fraud in connection with the program the money from the FTHB Program loan is instantly repayable as stipulated through the deed restriction

b. The seller is entitled to a fair rate of return o n his investment, including any documented improvements to the property.

2. The affordability period for funds depends on the amount of the City HOME and NSP investment in the property subject to recapture and the nature of the activity. If the FTHB HOME and NSP assistance is over $40,000, then the affordability period is 15 years. Payments and payoffs that meet the affordability requirements are returned as Program Income to the city. Payments and payoffs that do not meet the affordability requirements are returned as Recaptured funds to the city.

3. The City imposes recapture requirements to recapture the entire amount of the City HOME and NSP investment from the homeowner, to ensure affordability. However, when the recapture requirement is triggered by a sale (voluntary or involuntary) of the housing unit, and there are no net proceeds or the net proceeds are insufficient to repay the City HOME and NSP investment due, the city can only recapture the net proceeds, if any. The net proceeds are the sales price minus superior loan repayment (other than City HOME and NSP funds) and any closing costs.

4. If the net proceeds are not sufficient to recapture the full City HOME and NSP investment plus enable the homeowner to recover the amount of the homeowner’s down payment and any capital improvement investment made by the owner since purchase, the City will share the net proceeds. The net proceeds are the sales price minus loan repayment (other than City HOME and NSP funds) and closing costs.

The net proceeds will be divided proportionally as set forth in the following mathematical formulas.

City HOME and NSP investment . X Net proceeds = City HOME and NSP amount to be recaptured

Section 9 – FTHB Mortgage Loan Servicing by City
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

52 (City HOME and NSP investment + homeowner investment)

Homeowner investment . X Net proceeds = amount to homeowner (City HOME and NSP investment + homeowner investment)

9-J. Foreclosure by City

1. When the City is in first position on a fully amortized loan as a senior lien holder and or the end of the deferment period, active collection efforts will begin on any loan that is 31 or more days in arrears. Attempts will be made to assist the homeowner in bringing and keeping the loan current. These attempts will be conveyed in an increasingly urgent manner until loan payments have reached 90 days in arrears, at which time the City may consider foreclosure. City’s staff will consider the following factors before initiating foreclosure:

a. Can the loan be cured and can the rates and terms be adjusted to allow for affordable payments such that foreclosure is not necessary?

b. Can the Borrower refinance with a private lender and pay off the City?

c. Can the Borrower sell the property and pay off the City?

d. Does the balance warrant foreclosure? (If the balance is under $5,000, the expense to foreclose may not be worth pursuing.)

e. Will the sales price of home "as is" cover the principal balance owing, necessary advances, (maintain fire insurance, maintain or bring current delinquent property taxes, monthly yard maintenance, periodic inspections of property to prevent vandalism, etc.) foreclosure, and marketing costs?

2. If the balance is substantial and all of the above factors have been considered, the City may opt to initiate foreclosure. The Borrower must receive, by certified mail, a thirty-day notification of foreclosure initiation. This notification must include the exact amount of funds to be remitted to the City to prevent foreclosure (such as, funds to bring a delinquent loan current or pay off a Deferred Payment Loan).

3. At the end of thirty days, the City will contact a reputable foreclosure service or local title company to prepare and record foreclosure documents and make all necessary notifications to the owner and junior lien holders. The service will advise the City of all required documentation to initia te foreclosure (Note and Deed of Trust usually) and funds required from the owner to cancel foreclosure proceedings. The service will keep the City informed of the progress of the foreclosure proceedings.

4. When the process is completed, and the property has "reverted to the beneficiary" at the foreclosure sale, the City could sell the home themselves under a homebuyer program, use it for an affordable rental property, use it for transitional housing facility or other eligible use.

5. Foreclosures are subject to the review and approval of the City Council.

Section 9 – FTHB Mortgage Loan Servicing by City
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

53 9-K. Use of Third-Party Agent

Portions or all of the FTHB Program loan servicing shall be performed by City or, at City’s option and shall be performed by a third party under contract with City.

9-L. Loan-to-Value Limits

1. The loan-to-value (LTV) ratio for a City loan, when combined with all other indebtedness to be secured by the property, shall not exceed 100% (down payment assistance only) or 105% (CalHome Secondary Financing with Rehabilitation Program assistance) of the sales price plus a maximum of up to 5% of the sales price to cover closing costs.

9-M. Borrower Contribution

1. Five Thousand dollars ($ 5,000) shall be required of an eligible Borrower to be used towards the purchase of the property in order to receive funds under this Program.

Funds cannot be borrowed, gifted or granted by seller or any other party. Proof of required down payment must be provided when application is taken. Funds can be used for the following:

a. Additional down payment

b. Closing Costs

c. Inspection costs

9-N. First Mortgage Underwriting Requirements

1. In addition to the first mortgage requirements of the primary lender, the following FTHB Program requirements shall also to apply to first mortgages issued in conjunction with a FTHB mortgage:

a. Borrower shall obtain the maximum first mortgage loan with a term and interest rate from a mortgage lender consistent with affordable housing costs as defined in herein.

b. First mortgage loans shall not include provisions for negative amortization, principal increases, adjustable-rate mortgages (ARM), balloon payments, deferred interest or temporary buy downs.

c. City staff will evaluate current housing and overall debt for the Borrower, including monthly expenses, assets or cash reserves and appropriateness of assistance.

d. Front End Ratio:

1) For purposes of qualifying Borrower for a first mortgage, and as defined herein means the ratio between monthly household income and monthly housing cost, including first mortgage principal, interest, taxes and insurance.

2) This ratio shall be a minimum of thirty-five percent (35%).

Section 9 – FTHB Mortgage Loan Servicing by City
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

54 e. Back End Ratio:

1) For purposes of qualifying Borrower for a first mortgage, and as defined herein means the ratio between monthly household income and monthly housing costs plus all payments on long-term installment debt.

2) This ratio shall not exceed forty-six percent (46%).

f. Credit Worthiness Criteria

1) For purposes of qualifying Borrower for a first mortgage, credit worthiness criteria shall be:

a. No late payments within the 12 months prior to applying.

b. No outstanding judgments or liens.

c. Outstanding collections may b e paid out of closing not to be included as part of required down payment or from City funds.

d. Bankruptcy date of discharge must have been a minimum of two years from date of application with no additional collections.

e. Foreclosure must have been a minimum of three years prior to the date of application.

9-O. Appraisal

1. Prior to close of escrow an appraisal must be obtained which meets the following requirements:

a. The appraisal shall be prepared by a state-licensed residential property appraiser;

b. The appraisal shall use the sales of comparable propert ies approach to determine value; and

c. Maximum appraised home values at time of purchase shall not exceed the purchase price/value limits set forth in Section 7-F above

d. In the event the property is being acquired using CalHome Secondary Financing with Rehabilitation Program funds the following requirements must be met:
a. Purchase price may not exceed the “as is” value established by the licensed appraiser.
b. Necessary rehabilitation work must be noted by the appraiser. c. Appraiser may use a single appraisal to show both values and sign off on the completed work or the appraiser may use two separate appraisals, with the second one issued after completion of the work.
d. The combined loan to after rehabilitation value cannot exceed 105% e. The after-rehabilitation value may not exceed the median sales price for limits.

Section 9 – FTHB Mortgage Loan Servicing by City
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

55 9-P. Cash-Out of Escrow

1. Borrowers may not receive cash out of escrow from any loan package containing City financing.

9-Q. Title Insurance

1. The Borrower shall provide City with an ALTA lenders title insurance policy in the amount of the City loan at Borrower’s expense.

9-R. Hazard Insurance

1. Borrower must provide and maintain fire and flood (if the property is located in a 100- year floodplain) insurance in an amount at least equal to the replacement value of the improvements.

2. City must be named as an additional loss payee on the policy.

Section 10 – Federal Regulatory Provisions
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

56 10. Federal Regulatory Provisions
(for all funding sources)

10-A. Conflict of Interest

In accordance with Federal and State regulations no person who is an employee, agent, consultant, officer, or elected official or appointed official of the City of Turlock who exercise or have exercised any functions or responsibilities with respect to CalHome, PLHA, CDBG, HOME, or NSP assisted activities under this Program, or who are in a position to participate in a decision making process or gain inside information with regard to such activities, may obtain a financial interest or benefit from this activity, or have a financial interest in any contract, subcontract, or agreement with respect to this activity, or with respect to the proceeds of the this activity, either for themselves or those with whom they have business or immediate family ties, during their tenure with the City or for one year thereafter.

10-B. Fair Housing and Non-Discrimination

Implementation of the First Time Home Buyers Program will be consistent with the City’s commitment to non-discrimination. No person shall be excluded from participation in, denied the benefit of, or be subject to discrimination under any program or activity funded in whole or in part with state and federal funds on the basis of religion or religious affiliation, age, race, color, creed, gender (sex), sexual orientation, marital status, familial status (children), physical or mental disability, veteran status, national origin, or ancestry, or other arbitrary cause.

The City shall comply will all Federal and State Laws and Regulations pertaining to fair housing and equal opportunity including but not limited to the following references.

-Title VI of the Civil Rights Act of 1964, As Amended (422 U.S.C. 2000d et seq.) The provisions for HUD programs may be found in 24 CFR Part 1. -Section 109 of the Housing and Community Development Act of 1974 -Age Discrimination Act of 1975, As Amended (42 U.S.C. 6101). Regulations found at 24 CFR Part 146.
-Section 504 of the Rehabilitation Act of 1973
-Americans with Disability Act (ADA) (42 U.S.C. 12131; 47 U.S.C. 155, 201, 218, and 225).
-Equal Employment Opportunity (Executive Order 11246, as amended) Implementing regulations may be found at 41 CFR Part 60.
-Equal Opportunity in Housing (Executive Order 11063, as amended by Executive Order 12259). Regulations may be found in 24 CFR Part 107.
-Title VIII of the Civil Rights Act of 1968, As Amended by the Fair Housing Amendments Act of 1988 (The Fair Housing Act).
-Fair Housing Act (42 U.S.C. 3601-3620) Fair Housing Act implementing regulations for HUD programs may be found in 24 CFR Part 100-115.
-The California Fair Employment and Housing Act.
-The California Unruh Civil Rights Act.

10-C. Relocation of Displaced Tenants

Section 10 – Federal Regulatory Provisions
City of Turlock FTHB Program Policies and Procedures Manual Updated: 7-8-2025

57 1. Eligible properties purchased with funds under this Program must be owner-occupied, sold to existing tenants or vacant for four (4) months or longer in order to avoid displacing tenant households. It is not anticipated that the implementation of this Program will result in the displacement of any person, household or family.

2. All assisted units must comply with the Code of Federal Regulations (49 CFR Part 24) "Uniform Relocation Assistance and Real Property Acquisition Policies Act (URA) of 1970, as amended" and Section 104(d). This means that any person "displaced" as a result of the property being acquired with Federal funds is eligible for relocation assistance. As all assisted units under the City's FTHB Program must be vacant, owner- occupied, or occupied by the tenant making the purchase. No one shall be displaced as a result of the FTHB Program therefore URA or Section 104(d) will not be invoked.

3. Relocation assistance under the URA is not available to existing tenants displaced as a result of a sale assisted with City funds.

Section 11 – Exhibits
City of Turlock FTHB Program Policies and Procedures Manual Updated: 9-11-2012

58 11. Exhibits

A. 24 CFR Part 5 Annual Income Inclusions and Exclusions B. Maximum Loan Amount
C. Income Limits
D. Homebuyer Education Curriculum

EXHIBIT “A”
24 CFR PART 5 ANNUAL INCOME INCLUSIONS AND EXCLUSIONS

Part 5 Inclusions
This table presents the Part 5 income inclusions as stated in the Code of Federal Regulations.

General Category Statement from 24 CFR 5.609 (b) - April 1, 2008

1. Income from wages,
salaries, tips, etc.

The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services.

2. Business Income
Net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness cannot be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight-line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family.

3. Interest & Dividend
Income
Interest, dividends, and other net income of any kind from real or personal property.

Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation is permitted only as authorized in number 2 (above). Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD.

4. Retirement & Insurance
Income
The full amount of periodic payments received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start of a periodic payment (except as provided in number 14 of Income Exclusions).

5. Unemployment &
Disability Income
Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (except as provided in number 3 of Income Exclusions).

6. Welfare Assistance
Welfare Assistance payments. If the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare assistance income to be included as income shall consist of:· (A) the amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities;
(B) the maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities. If the family welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under this paragraph is the amount resulting from one application of the percentage.

7. Alimony, Child Support,
& Gift Income
Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing in the dwelling.

8. Armed Forces Income All regular pay, special day and allowances of a member of the Armed Forces (except as provided in number 7 of Income Exclusions).

9. Section 8 Programs
For section 8 programs only and as provided in 24 CFR 5.612, any financial assistance, in excess of amounts received for tuition, that an individual receives under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.). from private sources, or from an institution of higher education (as defined under the Higher Education Act of 1965 (20 U.S.C. 1002)), shall be considered income to that individual, except that financial assistance described in this paragraph is not considered annual income for persons over the age of 23 with dependent children. For purposes of this paragraph, “financial assistance” does not include loan proceeds fro the purpose of determining income.

EXHIBIT “A”
Part 5 exclusions
This table presents the Part 5 income exclusions as stated in the Code of Federal Regulations.

General Category Statement from 24 CFR 5.609 (c) - April 1, 2008

1. Income of Children Income from employment of children (including foster children) under the age of 18 years.

2. Foster Care Payments Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone).

3. Inheritance and
Insurance Income
Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses (except as provided in number 5 of Income Inclusions).

4. Medical Expense
Reimbursements
Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member.

5. Income of Live-in Aides Income of a live-in aide (as defined in 24 CFR 5.403).

6. Student Financial Aid Subject to number 9 on income inclusions, the full amount of student financial assistance paid directly to the student or to the educational institution.

7. "Hostile Fire" Pay The special pay to a family member serving in the Armed Forces who is exposed to hostile fire.

8. Self-Sufficiency
Program Income
(A) Amounts received under training programs funded by HUD. (B) Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set side for use under a Plan to Attain Self-Sufficiency (PASS). (C) Amounts received by a participant in other publicly assisted programs that are specifically for, or in reimbursement of, out-of-pocket expenses incurred (special equipment, clothing, transportation, childcare, etc.) and that are made solely to allow participation in a specific program.
(D) Amounts received under a resident service stipend (as defined in 24 CFR

5.609(c)(8)(iv).
(E) Incremental earnings and benefits resulting to any family member from participation in qualifying state or local employment training programs (including training not affiliated with a local government) and training of a family member as resident management staff. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives, and are excluded only for the period during which the family member participates in the employment-training program.

9. Gifts Temporary, nonrecurring, or sporadic income (including gifts).

10. Reparation Payments Reparation payments paid by a foreign government pursuant to claims under the laws of that government by persons who were persecuted during the Nazi era.

11. Income from Full-time
Students
Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head of household or spouse).

12. Adoption Assistance
Payments Adoption assistance payments in excess of $480 per adopted child.

13. [Reserved]

14. Social Security & SSI
Income
Deferred periodic amounts from supplemental security income and social security benefits that are received in a lump sum amount or in prospective monthly amounts.

15. Property Tax Refunds Amounts received by the family in the form of refunds or rebates under state or local law for property taxes paid on the dwelling unit.

16. Home Care Assistance
Amounts paid by a state agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep this developmentally disabled family member at home; or

17. Other Federal
Exclusions
Amounts specifically excluded by any other federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions of 24 CFR 5.609(c) apply.

EXHIBIT “B”

Maximum Loan Amounts
City of Turlock First Time Home Buyers Program

Funding
Source Maximum Loan Amount Notes
CalHome
Acquisition- 40% of Sale Price
of home with a maximum limit of
$100,000.

CalHome loans shall not exceed the maximum loan amount
published in the corresponding Notice of Funding
Availability (NOFA), if not published in the NOFA, or when considered with other available financing and assistance, the minimum amount necessary to:

Ensure affordable monthly housing costs as defined by the first mortgage lender (the first lender shall make the largest first loan possible given the ability of the Borrower to repay in order to keep the CalHome loan amount at the minimum amount necessary).

CDBG

Maximum loan amount of
$100,000.

HOME Maximum loan amount of
$100,000.

The maximum amount of a HOME loan may not exceed the
per-unit limits established under section 221(d)(3) of the National Housing Act as annually adjusted for bedroom
size. These limits are available from the HUD Field Office. (Maximum per-unit subsidy amount and subsidy layering

92.250)

NSP

20% of Sale Price of home with
a maximum limit of $25,000. If
need exceeds $25,000,
additional funding sources may
be combined up to a maximum
of $100,000.

PLHA Maximum loan amount of
$100,000.

These Maximum Loan Amounts are subject to change with City Council’s approval or delegation to the Housing Program Services Division’s Loan Committee or Funding Regulation changes.

Updated: 2025

EXHIBIT “C”

CITY OF TURLOCK

Income Limits

PERCENTAGE OF MEDIAN INCOME

STANISLAUS COUNTY

Total household income cannot exceed the limits listed below, based on household size.

Limit below applies to:

CDBG, CalHome, HOME
Number in
Household

LOW/MODERATE
Not greater than 80%
1 $55,200
2 $63,050
3 $70,950
4 $78,800
5 $85,150
6 $91,450
7 $97,750
8 $104,050

HUD Effective June 2025
(Limits updated annually by HUD)

EXHIBIT “D”

HOMEBUYER EDUCATION CURRICULUM

The 8 hour Homebuyer Education Course is required by all homebuyers on title receiving a FTHB loan. The course must be provided by the HUD-approved agency. A copy of the certificate of completion of the homebuyer education course must be submitted to the City. The following is a sample of an 8 hour course but may vary from agency to agency.

Lesson: Are you Ready to Buy a Home?
Owning a home is not for everyone. Some people do not want the responsibility.

Some people do not want to change their spending habits in order to make monthly payments on a home.

Objectives:
-The advantages & disadvantages of owning a home.
-Setting goals
-How to budget & save
-How much you can afford to pay for a home
-The importance of good credit when you try to borrow money -How to find the right house in the right neighborhood. -How to make an offer
-The steps to getting a loan
-How you can maintain and protect your home after you move in

Lesson: Budgeting and Credit
If we set realistic goals, then budgeting, that plain old everyday chore, can bring us one step closer to our dreams.

Objectives:
-Knowing where your money goes
-Setting goals
-Budgeting to meet your goals
-Cutting costs and finding ways to save
-Planning, so that unexpected expenses are less of a threat -Understanding credit and protecting your credit rating -Fixing credit problems

Lesson: Shopping for a Home
Buying a home is a complicated process. The sale of property is controlled by federal, state, and local laws. The purchase requires a legal contract between buyer and seller. Long term financing through a bank or mortgage company is standard and there are at least five different kinds of insurance involved in the average home purchase

Lesson: Getting a Mortgage
Getting a mortgage is more complicated than applying for a credit card or buying a car. This section will help you understand the steps involved in getting a mortgage loan.

Objectives:
-How a lender decided whether or not to give you a mortgage loan -Calculating ho much you can borrow
-Who makes mortgage loans
-The different types of loans that are available
-Shopping for the bet loan
-The loan application

-The loan approval process
-What to expect at closing.

Lesson: Keeping Your Home and Managing Your Finance
A home is one of the biggest investments a person will ever make. This class is designed to help you take care of your home and take care of your finances so you can continue to enjoy home ownership for many years.

Objectives:
-Making your home safe and energy efficient
-Keeping your home in good repair
-Deciding when and how to remodel
-Getting involved in the life of your neighborhood
-Protecting your investment
-Budgeting for home ownership
-Keeping records and paying taxes
-Understanding refinancing
-What to do if you cannot make your payments

Upon completion of the program a “Certificate of Completion” for the First Time Home Buyer’s Program will be provided to the borrower. Certificate will vary from agency to agency. A copy of the Certification must be provided to the City.

City Council Staff Report
November 18, 2025

From: Nick Showalter, Information Technology Director
Prepared by: Luis Machado, Information Technology Manager Agendized by: Susan E. Borrego, Interim City Manager

1. ACTION RECOMMENDED:

Motion: Approving the renewal of Rubrik Data Backup and Recovery Solution software support with Savant Solutions for an amount not to exceed $61,908.55, which includes a base quote of $56,280.50 and a ten percent (10%) contingency ($5,628.05) to accommodate potential increases in cloud storage consumption.

This purchase is made through the NASPO Cooperative Contract 7-17-70-40-05 and funded through the ARPA Network Firewall/Cyber Solutions account.

2. NARRATIVE:

The City utilizes a data backup solution to ensure protection and rapid recovery of data across all City servers and cloud environments. The system is a part of the City’s cybersecurity and disaster recovery strategy, providing secure backups and fast data restoration capabilities.

Ongoing support for Rubrik through Savant Solutions ensures uninterrupted access to technical support, security patches, and software updates. Without this renewal, the City would face increased vulnerability to data loss, or extended service interruptions due to system failure or other threats to security or integrity of data.

The ten percent contingency allows the City to manage potential fluctuations in cloud archive and backup usage during the term of service, ensuring continuous protection without requiring an additional Council action.

This renewal is made under an existing NASPO cooperative purchasing agreement, which allows the City to procure the required services efficiently without conducting a separate competitive bid process under Turlock Municipal Code 2-7-08 (b) (5).

3. FISCAL IMPACT / BUDGET AMENDMENT:

The total cost for the renewal is $61,908.55, which includes:
• Base Quote: $56,280.50
• 10% Contingency: $5,628.05

Funds have been appropriated in Fund 119 American Rescue Plan Act out of the account 119-10-188.51015_001- Network Firewall/Cyber Solutions to cover this expenditure.

The Purchasing Division has determined that this item does not require a competitive

Agenda Staff Report
11/18/2025

procedure due to Turlock Municipal Code 2-7-08 (b) (5), which states bidding is not required when engaged in joint, cooperative, or leveraged purchasing plans that have been solicited and awarded on a competitive basis.

There is no additional appropriation required.

4. ENVIRONMENTAL DETERMINATION:

This action is not a project under the California Environmental Quality Act (CEQA) in accordance with Section 15378(b)(5) of the CEQA Guidelines. The renewal involves administrative activities that will not result in direct or indirect physical changes in the environment.

5. ATTACHMENTS:

1. Rubrik 1YR Renewal - LM-31125_1

City Council Staff Report
November 18, 2025

From: Isaac Moreno, Finance Director
Prepared by: Lisa Quiroga, Purchasing Manager
Agendized by: Susan E. Borrego, Interim City Manager

1. ACTION RECOMMENDED:

Motion: Adopt the Procurement Manual

Ordinance: Amend Turlock Municipal Code Title 2, Chapter 7, regarding purchasing system to standardize and update the procurement and contracting process

2. NARRATIVE:

The Purchasing Division is responsible for multiple citywide procurement processes, including making sure our procurement processes conform to State and Federal guidelines. In order to meet these requirements, a new Procurement Manual is required. A procurement manual is a guidebook for employees that outlines an organization's policies and procedures for acquiring goods and services. It standardizes the procurement process, ensuring consistency, compliance with regulations, and efficiency, while helping to mitigate risks like non-compliance or fraud. To complete this task, the Finance Department contracted with MGT to develop the new manual. The following list highlights some of the changes proposed in the new manual:

• Clarifies the Acting City Manager's signing authority • Incorporates State and Federal regulations
• Develops award protest procedures
• Clarifies local vendor preference guidelines
• Clarifies exemptions on bidding requirements
• Incorporates language to adapt to our pending e-procurement process

In order to make sure the City's Procurement Manual stays up-to-date on the city process and State plus Federal guidelines, the Finance Division has also incorporated language that gives the City Manager or designee authority to update the manual if needed.

3. FISCAL IMPACT / BUDGET AMENDMENT:

The Finance Department received a grant from CalRecycle to develop this new Procurement Manual. Therefore, there was no fiscal impact for this process.

4. ENVIRONMENTAL DETERMINATION:

This action is not subject to the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15378(b)(5) of the CEQA guidelines. This action consists of “organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment” and therefore is not considered a project.

Agenda Staff Report
11/18/2025

5. ATTACHMENTS:

1. Draft Ordinance

2. City of Turlock Purchasing Manual

BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK

IN THE MATTER OF AMENDING TURLOCK } ORDINANCE NO. -CS MUNICIPAL CODE TITLE 2, CHAPTER 7, }
REGARDING PURCHASING SYSTEM TO }
STANDARDIZE AND UPDATE THE }
PROCUREMENT AND CONTRACTING }
PROCESS }
}

WHEREAS, the Purchasing Division is responsible for multiple citywide procurement processes, including making sure our procurement processes conform to State and Federal guidelines; and

WHEREAS, in order to meet these requirements, a new Procurement Manual is required. A procurement manual is a guidebook for employees that outlines an organization's policies and procedures for acquiring goods and services; and

WHEREAS, it standardizes the procurement process, ensuring consistency, compliance with regulations, and efficiency, while helping to mitigate risks like non-compliance or fraud; and

WHEREAS, the City’s existing Municipal Code Title 2, Chapter 7 references outdated thresholds and procedures requiring an update; and

BE IT ORDAINED by the City Council of the City of Turlock as follows:

SECTION 1. AMENDMENT: Title 2, Chapter 7, is hereby amended to read as follows:

§ 2-7-01 Adopted: Purposes.

A purchasing system is hereby adopted for the following purposes:
(a) To establish efficient procedures for the purchase of supplies and equipment; (b) To secure for the City supplies and equipment at the lowest possible cost commensurate with the quality needed;
(c) To exercise positive financial control over purchases; (d) To clearly define the authority for the purchasing function; and (e) To assure the quality of purchases.
§ 2-7-02 Purchasing Officer: Position created.

There is hereby created the position of Purchasing Officer. § 2-7-03 Purchasing Officer: Appointment.

The Purchasing Officer shall be appointed by the City Manager.

Ordinance No. -CS

§ 2-7-04 Purchasing Officer: Powers and duties.

The duties of the Purchasing Officer may be combined with those of any other office or position. The Purchasing Officer shall have the following powers and duties:
(a) To purchase or contract for supplies and equipment required by any using agency in accordance with the purchasing procedures set forth in this chapter, such administrative regulations as the Purchasing Officer shall adopt, and such other rules and regulations as shall be prescribed by the Council;
(b) To negotiate and recommend the execution of contracts for the purchase of supplies, equipment, and services;
(c) To act to procure for the City the needed quality in supplies and equipment at the least expense to the City;
(d) To discourage uniform bidding and endeavor to obtain as full and open competition as possible on all purchases;
(e) To prepare and recommend to the Council rules governing the purchase of supplies, equipment, and services for the City;
(f) To prepare and recommend to the Council revisions and amendments to the purchasing rules;
(g) To keep informed of current developments in the field of purchasing, prices, market conditions, and new products;
(h) To prescribe and maintain such forms as are reasonably necessary to the operation of the provisions of this chapter and other rules and regulations; (i) To supervise the inspection of all supplies and equipment purchased to ensure conformance with specifications;
(j) To recommend to the City Manager the transfer of surplus or unused supplies and equipment between departments as needed and the sale of all supplies and equipment which cannot be used by any agency or which have become unsuitable for City use; and (k) To maintain a bidders’ list, vendors’ catalog file, and records needed for the efficient operation of the Purchasing Department Division.
§ 2-7-05 Requisitions.

Using agencies shall submit request for supplies and equipment to the Purchasing Officer by standard requisition forms.
§ 2-7-06 Purchase orders.

Purchases of supplies, equipment, and services over Two Thousand Five Hundred and no/100ths ($2,500.00) Dollars, or such amount as the City Council may designate by resolution, shall be made only by purchase orders.

Ordinance No. -CS

§ 2-7-07 Encumbrance of funds.

Except in cases of emergency, the Purchasing Officer shall not issue any purchase order for supplies or equipment unless there exists an unencumbered appropriation in the fund account against which such purchase is to be charged.
§ 2-7-08 Bidding requirements.
(a) A City agency may purchase supplies, materials, equipment, and services up to a value of Two Thousand Five HundredFive Thousand and no/100ths ($2,55,000.00) Dollars without soliciting quotes or bids.
(b) Bidding procedures are not required under the following circumstances regardless of the amount involved:
(1) When an emergency requires that an order be placed with the nearest available source of supply;
(2) When the supplies, materials, equipment, or services can be obtained from only one (1) vendor;
(3) For contracts involving the obtaining of professional or specialized skill, such as, but not limited to, services rendered by attorneys, engineers, accountants, and specialized consultants;
(4) Where calling for bids on a competitive basis in the opinion of the Purchasing Officer is undesirable, impossible, unavailing, or incongruous;
(5) When engaged in joint, cooperative, or leveraged purchasing plans that have been solicited and awarded on a competitive basis; or
(6) Information technology software;
(7) Utility services;
(8) Educational services, publications, and memberships; (9) Interim contracts of up to four (4) months so that a bidding process may be completed; or
(610) When the Council shall have adopted a resolution by at least four (4) affirmative votes determining that the best interests of the City require that the purchase be made without compliance with the formal bid procedure.
(c) Purchases of supplies, materials, equipment, and services of a value of more than Two Five Thousand Five Hundred and no/100ths ($2,55,000.00) Dollars to Twenty-Five Thousand and no/100ths ($25,000.00) Dollars, except as provided in subsection (b)(5) of this section, with the consent of the City Manager may be made utilizing the informal bid procedure as set forth below.
(d) Purchases of supplies, materials, equipment, and services of a value greater than Twenty- Five Thousand and no/100ths ($25,000.00) Dollars shall be made utilizing the formal bid procedure as set forth below.

Ordinance No. -CS

(e) The City Manager is authorized to enter into contracts for the purchase of supplies or equipment or contracts for professional, consultant, and maintenance services where the amount of the contract does not exceed One HundredSeventy-Five Thousand and no/100ths ($10075,000.00) Dollars, or such other amount as the City Council may designate by resolution. Where the amount of any such contract exceeds One HundredSeventy-Five Thousand and no/100ths ($10075,000.00) Dollars, or such other amount as the City Council may designate by resolution, the contract shall be approved by the City Council. (1) All contracts authorized by the City Manager pursuant to this section shall be subject to the current appropriation and allocation of funds by the City Council in the current fiscal year budget or a funding resolution specific to a specific contract(s). (2) The City Manager shall have the authority to approve in writing any amendment directing an addition, deletion, or revision in such contract, including contract price, plans, specifications, and the nature or quality of services, equipment, supplies or work, to the extent such amendment does not result in the contract price exceeding One HundredSeventy-Five Thousand and no/100ths ($10075,000.00) Dollars. (3) In an emergency endangering the lives, property, or welfare of the people of the City or the property of the City, the City Manager may authorize the expenditure of any unencumbered moneys, notwithstanding the fact that such moneys may not have been appropriated for such purpose, to the extent that other moneys have not been appropriated or are otherwise unavailable.
(f) In the event of the absence of a permanent City Manager, or vacancy in the position, the an Acting or Interim City Manager is authorized to enter into contracts for the purchase of supplies or equipment or contracts for professional, consultant, and maintenance services where the amount of the contract does not exceed TwentySeventy-Five Thousand and no/100ths ($2575,000.00) Dollars, or such other amount as the City Council may designate by resolution, provided there exists an unencumbered appropriation in the fund account against which such contract is to be charged. This section shall only apply to an Acting or Interim City Manager designated by the City Council. If not designated by the City Council, an Acting or Interim City Manager is authorized to enter into contracts under the provisions of this subsection that do not exceed Twenty-Five Thousand and no/100ths ($25,000.00) Dollars. (g) The City Engineer is authorized to enter into contracts for the purchase of supplies or equipment or contracts for professional, consultant, and maintenance services where the amount of the contract does not exceed Twenty-Five Thousand and no/100ths ($25,000.00) Dollars, or such other amount as the City Council may designate by resolution, provided there exists an unencumbered appropriation in the fund account against which such contract is to be charged.
§ 2-7-09 Purchases: Procedures.
(a) Informal bid procedure. The Purchasing Officer shall solicit informal bids by direct mail requests, telephone inquiry, comparing prices on file, or by other appropriate means. Insofar as it is practical, no less than three (3) vendors shall be solicited to submit quotations. Award shall be made to the vendor offering the lowest acceptable quotation. The Purchasing Officer shall keep a record of all open market purchases and sales and the informal bidding competition thereon, and such records shall be maintained as a public record.

Ordinance No. -CS

(b) Formal bid procedure. Purchases made hereunder shall be by written contract with the lowest responsible bidder pursuant to the procedures set forth in this section. (c) Formal bid procedure. Purchases made hereunder shall be by written contract with the lowest responsible bidder pursuant to the procedures set forth in this section. (1) Notices inviting bids. Notices inviting bids shall include a general description of the articles to be purchased and shall state where bid blanks and specifications may be secured and the time and place for opening bids.
(i) Published notices. Notices inviting bids shall be published at least ten fourteen (1014) days before the date of the opening of the bids. Notices shall be published at least once in a newspaper of general circulation, printed and published in the City. (ii) Bidders’ list. The Purchasing Officer shall also solicit sealed bids from all responsible prospective suppliers whose names are on the bidders’ list or who have requested their names to be added thereto.
(2) Bidder’s security. When deemed necessary by the Purchasing Officer, bidder’s security may be prescribed in the public notices inviting bids. Bidders shall be entitled to the return of the bid security; provided, however, a successful bidder shall forfeit his bid security upon his refusal or failure to execute the contract within ten (10) days after the notice of the award of the contract has been mailed unless the City is responsible for the delay. The Council may, on the refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible bidder. If the Council awards the contract to the next lowest bidder, the amount of the lowest bidder’s security shall be applied by the City to the difference between the low bid and second lowest bid, and the surplus, if any, shall be returned to the lowest bidder.
(3) Bid opening procedure. Sealed bids shall be submitted to the Purchasing Officer and shall be identified as bids on the envelopethrough the City’s e-procurement portal. Bids shall be opened in public at the time and place stated in the public notices. A tabulation of all bids received shall be open for public inspection during regular business hours for a period of not less than thirty (30) calendar days after the bid opening. (4) Rejection of bids. In its discretion, the Council City may reject any and all bids presented and re-advertise for bids and may waive any informalities or minor irregularities in a bid.
(5) Award of contracts. Contracts shall be awarded by the Council City to the lowest responsible bidder except as otherwise provided in this section. The City Council may, in its discretion, grant qualified local vendors a bidding preference of three five (35%) percent not to exceed a limit of Three Five Thousand and no/100ths ($35,000.00) Dollars.

For purposes of this section, a qualified local vendor is defined as any individual, partnership, or corporation which regularly maintains a place of business and an inventory of merchandise for sale within the corporate limits of the City and has obtained a business license issued by the City of Turlock. Additional qualifications on a Local Vendor determination may be found in the adopted Purchasing Manual, as it may be amended from time to time. In addition to price, in determining the lowest responsible bidder, consideration will be given to quality and performance of the commodity to be purchased

Ordinance No. -CS

or service provided by the seller. Criteria for determining low bids shall include, but not be limited to, the following:
(i) The ability, capacity, and skill of the bidder to perform the contract; (ii) Whether the bidder has the facilities to perform the contract promptly, or within the time specified, without delay or interference;
(iii) The character, integrity, reputation, judgment, experience, and efficiency of the bidder;
(iv) The bidder’s record of performance of previous contracts; (v) The previous and existing compliance by the bidder with laws and ordinances relating to the contract; and
(vi) The ability of the bidder to provide future maintenance, repair parts, and services for the use of the commodity purchased.
(6) Tie bids. If two (2) or more bids received are for the same total amount or unit price, quality and service being equal, and if the public interest will not permit the delay of readvertising for bids, the Council may accept the bid it chooses or accept the lowest bid made by negotiation with the tie bidders at the time of the bid opening. In the case of an absolute tie, an award will be made to the local vendor. In the case of a tie between local vendors, the award will be determined by lottery.
(7) Performance bonds. The Council shall have the authority to require a performance bond in such amount as it shall find reasonably necessary to protect the best interest of the City before entering into a contract. If the Council requires a performance bond, the form and amount of the bond shall be described in the notice inviting bids. § 2-7-10 Award Protest.
(a) Any actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation or award of a contract may protest to the City of Turlock Purchasing Officer.

Non-awarded bidders may file a written protest through email or certified mail no later than five (5) business days after the date of the Notice of Intended Award. Such protests must be received by the Purchasing Officer before 5:00 PM local time on the last day of the five (5) business day protest period. Protests may be submitted to the City of Turlock Purchasing Officer through email at [email protected] or at 156 S. Broadway Suite 270, Turlock, CA 95380. Protests filed with the Purchasing Officer shall:

(1) Include the name, address, business telephone number, and email address of the protestor;

(2) Identify the project under protest by name, solicitation number, and closing date;

(3) Contain a concise statement of the grounds for protest. Appeals should address only areas regarding bid contradictions, procurement errors, quotation rating discrepancies, legality of procurement context, conflict of interest in the rating process, and inappropriate or unfair competitive procurement grievances regarding the bid process. RFB, RFP, or

Ordinance No. -CS

RFQ processes and procedures, including evaluation criteria, shall not be proper grounds for protest. Concerns related to those issues must be raised and addressed, prior to the bid or proposal opening date to allow adjustments before the evaluation of bids or proposals; and

(4) Include all supporting documentation, if any. Documentation submitted after filing the protest will not be considered during the review of the protest or during any appeal;

(5) The procedure and time limits set forth in this Section are mandatory and are the bidder’s sole and exclusive remedy. Failure to comply with these procedures and time limits shall constitute a waiver of any right to further pursue a protest;

(6) The bidder’s filing of a protest shall not preclude the City from rejecting all bids or proposals and re-advertising a contract. Rejecting all bids or proposals shall render a protest moot and terminate all protest proceedings.

(b) In an effort to limit frivolous protests, protestors who file two (2) protests within twelve (12) calendar months, whose protests are not resolved in their favor, may be withheld from future bid or proposal.

§ 2-7-10 11 Approval of contract amendments by the City Manager. (a)(1) After the effective date of any contract approved by the City Council for the purchase of supplies or equipment or contracts for professional, consultant, and maintenance services, the City Manager, an Acting City Manager or an Interim City Manager shall have the authority to approve in writing any amendment directing an addition, deletion, or revision in such contract, including contract price, plans, specifications, and the nature or quality of services, equipment, supplies or work, subject to the following limitations:
(i) The cumulative dollar value of all such amendments relating to any one (1) contract shall not exceed ten (10%) percent of the contract price approved by the City Council. (ii) All amendments authorized by the City Manager, an Acting City Manager or the an Interim City Manager pursuant to this section must be accounted for as part of the City’s current appropriation and allocation of funds in the current fiscal year budget or accounted for as part of an approved project or contract. (2) Any amendment exceeding the limitations set forth in subsection (a)(1) of this section shall be submitted to the City Council for approval in the form of a contract amendment or supplemental agreement. Such amendment or supplemental agreement shall set forth the amended contract price which will constitute the new contract price for the purposes of the authority for City Manager-approved amendments in accordance with subsection (a)(1) of this section.
§ 2-7-11 Repealed.

§ 2-7-12 Quality and conformance inspections and tests.

The Purchasing Officer shall inspect delivered supplies and equipment to determine their conformance with the specifications set forth in the order or contract. The Purchasing Officer shall have the authority to require chemical and physical tests of samples submitted with bids

Ordinance No. -CS

and samples of deliveries, which tests shall be necessary to determine quality and conformance with specifications.
§ 2-7-13 Incorporation of anti-nepotism standards.
(a) Except as provided in subsection (b) of this section, in making purchases of equipment or supplies and in entering into agreements for the provision of services the Purchasing Officer, and any person or agency delegated authority under Section 2-7-04 to independently make such purchases or enter into such contracts, shall be subject to and governed by the anti- nepotism policy concerning the employment of relatives set forth in the City’s Personnel Rules and Regulations as established and amended from time to time by resolution of the City Council.
(b) Neither the provisions of subsection (a) of this section nor the Personnel Rules and Regulations incorporated into that subsection shall prevent, nor be construed as preventing, the Purchasing Officer or a delegatee of the Purchasing Officer from receiving and accepting donations of equipment, supplies, or volunteer services from or by any relative of a City employee.

SECTION 2. VALIDITY: If any section, subsection, sentence, clause, word, or phrase of this ordinance is held to be unconstitutional or otherwise invalid for any reason, such decision shall not affect the validity of the remainder of this ordinance. The Turlock City Council hereby declares that they would have passed this ordinance, and each section, subsection, sentence, clause, word, or phrase thereof, irrespective of the fact that one or more section, subsection, sentence, clause, word, or phrase be declared invalid or unconstitutional.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Turlock this 18th day of November, 2025, by the following vote:

AYES:

NOES:

NOT PARTICIPATING:

ABSENT:

Signed and approved this ___ day of _____________, 2025.

SIGNED:

__________________________

Ordinance No. -CS

Amy Bublak, Mayor

ATTEST:

_____________________________
Nichole Fiez, City Clerk,
City of Turlock, County of Stanislaus,
State of California

APPROVED AS TO FORM:

______________________________
George Petrulakis, City Attorney

CITY OF TURLOCK

PURCHASING MANUAL

i

SECTION 1 : INTRODUCTION .......................................................................................................................1

1.1. DEFINITION AND DUTIES OF THE PURCHASING DIVISION .........................................................2

1.2. LEGAL ASPECTS .....................................................................................................................................2

1.2.1 Municipal Code .................................................................................................................................2

1.2.2 Related State and Federal Laws and Regulations ......................................................................3

1.2.3 Code of Ethics and Conduct ...........................................................................................................3

1.2.4 Local Vendor Preference .................................................................................................................4

1.2.5 Environmentally Preferable Purchases and Practices ................................................................5

1.3. CONTRACTS OUTSIDE THE SCOPE OF THE PROCUREMENT MANUAL .....................9

1.3.1 Other Acquisitions ............................................................................................................................9

1.3.2 Revenue and No-Cost Contracts ...................................................................................................9 SECTION 2 : OVERVIEW AND CROSS-CUTTING REQUIREMENTS .....................................................10

2.1. DEFINITIONS AND THRESHOLDS .....................................................................................................10

2.1.1 Definitions ........................................................................................................................................10

2.1.2 Thresholds .......................................................................................................................................10

2.2. GENERAL ................................................................................................................................................12

2.3. DETERMINATION OF COMPETITIVE PROCUREMENT METHOD ..............................................12

2.3.1 Procurement Methods ....................................................................................................................12

2.3.2 Selection of Procurement Method ................................................................................................13

2.4. EXEMPTIONS TO COMPETITIVE PROCUREMENT REQUIREMENTS ......................................13

2.4.1 General ............................................................................................................................................13

2.4.2 Micro Purchases .............................................................................................................................13

2.4.3 Emergency Purchases ...................................................................................................................14

2.4.4 Sole Source .....................................................................................................................................14

2.4.5 Professional or Specialized Skills ................................................................................................15

2.4.6 No Advantage .................................................................................................................................16

2.4.7 Cooperative Purchasing ................................................................................................................16

2.4.8 Categorical Exemptions .................................................................................................................16

2.4.9 Council-approved Exemption ........................................................................................................16

2.5. RETURN PROCEDURES ......................................................................................................................17

2.5.1 Making a Return .............................................................................................................................17

2.5.2 Damaged Items ...............................................................................................................................17

2.6. VENDOR RELATIONS ...........................................................................................................................17

2.7. INFORMATION DISCLOSURE .............................................................................................................17

2.8. REQUEST FOR INFORMATION/REQUEST FOR INTEREST (RFI) ..............................................18

2.8.1 Process ............................................................................................................................................18

2.8.2 Evaluation ........................................................................................................................................18

2.8.3 Negotiations .....................................................................................................................................18

2.8.4 RFI Documents ...............................................................................................................................18

2.9. INSURANCE REQUIREMENTS ...........................................................................................................18

2.9.1 Insurance Provisions in Procurement Documents .....................................................................19

2.9.2 Insurance Provisions in Purchase Orders and Contracts .........................................................19

2.10. CONFLICT OF INTEREST ................................................................................................................20

2.11. WAIVER OF DEFECTS AND TECHNICALITIES ...........................................................................20

2.12. PROTESTS AND APPEALS .............................................................................................................20

2.12.1 General ............................................................................................................................................20

2.12.2 Protest Submittal ............................................................................................................................20

2.12.3 Protest of Non-responsive and Non-responsible Bidders .........................................................21

2.12.4 Protest Review ................................................................................................................................21

ii

SECTION 3 : REQUEST FOR BIDS PROCESS ..........................................................................................22

3.1. BIDDING PROCESS ...............................................................................................................................22

3.2. BIDDING REQUIREMENTS ..................................................................................................................22

3.2.1 Purchases Up to Five Thousand Dollars ($5,000.00) ...............................................................22

3.2.2 Informal Bid Process ......................................................................................................................22

3.2.3 Formal Bid Process ........................................................................................................................22

3.3. INFORMAL BIDDING PROCESS .........................................................................................................23

3.3.1 Obtaining Quotes .........................................................................................................................23

3.3.2 Time Element ..................................................................................................................................23

3.4. FORMAL BIDDING PROCESS .............................................................................................................23

3.4.1 Specification Writing .......................................................................................................................23

3.4.2 Procurement Package ...................................................................................................................24

3.4.3 Bid Documents ................................................................................................................................25

3.4.4 Bid Advertising ................................................................................................................................25

3.4.5 Delivery Time ...................................................................................................................................26

3.4.6 Pre-Bid Conference ........................................................................................................................26

3.4.7 Qualifications of Bidders ................................................................................................................26

3.4.8 Pricing Schedule .............................................................................................................................26

3.4.9 Bid Addenda ....................................................................................................................................27

3.4.10 Bid Opening .....................................................................................................................................27

3.4.11 Evaluation of Bids ...........................................................................................................................28

3.4.12 Award of Contract ...........................................................................................................................30

3.4.13 Contract Administration .................................................................................................................30 SECTION 4 : REQUEST FOR PROPOSALS ............................................................................................31

4.1. REQUEST FOR PROPOSALS (RFP) ..................................................................................................31

4.2. RFP PROCESS .......................................................................................................................................31

4.2.1 Development of Scope of Work and Scoring Criteria ................................................................31

4.2.2 Procurement Package ...................................................................................................................32

4.2.3 RFP Documents .............................................................................................................................33

4.2.4 Evaluation ........................................................................................................................................37

4.2.5 Contract Administration .................................................................................................................39 SECTION 5 : REQUEST FOR QUALIFICATIONS ......................................................................................40

5.1. REQUEST FOR QUALIFICATIONS (RFQ) .........................................................................................40

5.2. GENERAL ................................................................................................................................................40

5.2.1 Process Summary ..........................................................................................................................40

5.2.2 Development of Scope of Work and Scoring Criteria ................................................................40

5.2.3 Procurement Package ...................................................................................................................41

5.2.4 RFQ Documents .............................................................................................................................42

5.2.5 Evaluation ........................................................................................................................................45

5.2.6 Contract Administration .................................................................................................................47 SECTION 6 : PUBLIC WORKS CONTRACTS ............................................................................................48

6.1. APPLICABILITY ......................................................................................................................................48

6.1.1 Public Project Defined ....................................................................................................................48

6.1.2 Federal Funds .................................................................................................................................48

6.1.3 Federal Contract Law .....................................................................................................................48

6.1.4 Bidding Procedures – Public Works Projects .............................................................................49

6.1.5 Value Engineering ..........................................................................................................................49

6.1.6 Caltrans Local Assistance Projects ..............................................................................................49

6.1.7 Advertisement for Bids ...................................................................................................................50

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6.1.8 Bidder Qualifications ......................................................................................................................50

6.2. METHODS OF PROCUREMENT ......................................................................................................51

6.2.1 Micro-purchases ............................................................................................................................51

6.2.2 Small Purchases ...........................................................................................................................51

6.2.3 Existing Contracts: Purchasing Schedules and Piggybacking ...........................................51

6.2.4 Competitive Sealed Bidding ........................................................................................................52

6.2.5 Competitive Negotiation ..............................................................................................................53

6.2.6 Architectural and Engineering (A&E) and Other Professional Services ...........................53

6.2.7 Noncompetitive (Sole Source) Proposals ...............................................................................54

6.2.8 Options .............................................................................................................................................55

6.3. CONTRACT TYPES ...............................................................................................................................56

6.3.1 Time and Materials Contracts .....................................................................................................56

6.3.2 Cost Reimbursement Contracts ................................................................................................56

6.3.3 Cost Plus Percent Of Cost Contracts .......................................................................................56

6.3.4 Construction Contracts for Publicly Funded Buildings ..........................................................56

6.3.5 Design Build ...................................................................................................................................57

6.4. CONTRACT COST AND PRICE ANALYSIS ....................................................................................57

6.4.1 Requirement ...................................................................................................................................57

6.4.2 Independent Cost Estimate ........................................................................................................57

6.4.3 Cost Analysis ...................................................................................................................................57

6.4.4 Price Analysis .................................................................................................................................58

6.5. BONDING REQUIREMENTS .............................................................................................................58

6.5.1 Construction ....................................................................................................................................58

6.5.2 Non-Construction ............................................................................................................................58

6.6. PAYMENT PROVISIONS .......................................................................................................................58

6.6.1 Progress Payments ......................................................................................................................58

6.7. DELAY (LIQUIDATED) DAMAGES ......................................................................................................58

6.7.1 Risk Management .........................................................................................................................58

6.7.2 Calculation ......................................................................................................................................59

6.7.3 Measurement .................................................................................................................................59

6.7.4 Solicitation Requirements ............................................................................................................59

6.8. CONTRACT AWARD ANNOUNCEMENTS .....................................................................................59

6.9. PROTEST PROCEDURES ....................................................................................................................59

6.10. FTA-SPECIFIC REQUIREMENTS ...................................................................................................60

6.10.1 Contract Scope ...............................................................................................................................60

6.10.2 A&E Procurement ...........................................................................................................................60

6.10.3 Cost Analysis ...................................................................................................................................60

6.10.4 Piggy-Backing .................................................................................................................................60

6.10.5 Advance Payments .......................................................................................................................61

6.10.6 FTA Review of Protest .................................................................................................................61

6.10.7 FTA Contract Period .....................................................................................................................62

6.10.8 Recovery Credited to Project ......................................................................................................62

6.11. CONTRACT PERIOD .......................................................................................................................62

6.12. NOTICE TO PROCEED .....................................................................................................................62 SECTION 7 : FEDERAL REQUIREMENTS .................................................................................................63

7.1. APPLICABILITY ......................................................................................................................................63

7.2. PROCUREMENT VS. NONPROCUREMENT TRANSACTIONS ....................................................63

7.2.1 Contractor vs. Subrecipient Determination .................................................................................63

7.2.2 Subrecipients ...................................................................................................................................63

7.2.3 Contractors ......................................................................................................................................64

7.2.4 Use of Judgment .............................................................................................................................64

7.3. SUBRECIPIENT REQUIREMENTS .....................................................................................................64

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7.3.1 Agreements .....................................................................................................................................64

7.3.2 Suspension and Debarment .........................................................................................................65

7.3.3 Monitoring ........................................................................................................................................65

7.4. PROCUREMENT REQUIREMENTS ...................................................................................................65

7.4.1 General Standards .........................................................................................................................65

7.4.2 Full and Open Competition ...........................................................................................................66

7.4.3 Geographic Preferences ................................................................................................................66

7.4.4 Suspension and Debarment .........................................................................................................67

7.5. PUBLIC WORKS PROJECT REQUIREMENTS .................................................................................67

7.5.1 Build America, Buy America Act ...................................................................................................67

7.5.2 Cost Principles ...............................................................................................................................67

7.6. MINORITY, DISADVANTAGED, AND WOMEN-OWNED BUSINESS UTILIZATION ...................68

7.6.1 Policy ................................................................................................................................................68

7.6.2 Definitions ........................................................................................................................................68

7.6.3 Good Faith Effort ............................................................................................................................68

7.6.4 Minority Determination ...................................................................................................................69

7.6.5 General Requirements ...................................................................................................................69

7.7. DISADVANTAGED BUSINESS ENTERPRISES (DBE) ............................................................69

7.7.1 Policy Statement .............................................................................................................................69

7.7.2 Disadvantaged Business Enterprise Liaison Officer .................................................................69

7.7.3 Public Notification ...........................................................................................................................70

7.7.4 Establishment of Goal ....................................................................................................................70

7.7.5 Contract Procedure ........................................................................................................................71

7.7.6 DBE Notification ..............................................................................................................................71

7.7.7 Selection Criteria for Projects with DBE Goals ..........................................................................71

7.7.8 Counting DBE Participants ............................................................................................................72

7.7.9 Records and Reports .....................................................................................................................72

7.7.10 Complaints .......................................................................................................................................72

7.7.11 Summary of Significant Regulations ............................................................................................73 SECTION 8 : CONTRACTS ...........................................................................................................................76

8.1. APPLICABILITY ......................................................................................................................................76

8.1.1 Sound and Complete Agreement .................................................................................................76

8.2. GENERAL REQUIREMENTS ................................................................................................................76

8.2.1 Retroactive Contracts ....................................................................................................................76

8.2.2 Contract Periods .............................................................................................................................76

8.2.3 Compensation for Contracts .........................................................................................................76

8.3. CONTRACT PREPARATION AND PROCESSING ...........................................................................77

8.3.1 Negotiation .......................................................................................................................................77

8.3.2 Contract Drafting .............................................................................................................................77

8.3.3 Contract Processing .......................................................................................................................78 SECTION 9 : CONTRACT ADMINISTRATION ............................................................................................79

9.1. APPLICABILITY ......................................................................................................................................79

9.1.1 Contract Administration ................................................................................................................79

9.1.2 Contract Monitoring ........................................................................................................................79

9.1.3 Contract Administrator ...................................................................................................................79

9.1.4 Administrative Controls ..................................................................................................................79

9.1.5 Work Progress ................................................................................................................................80

9.1.6 Cost Controls ...................................................................................................................................80

9.1.7 Invoice Review and Approval .......................................................................................................80

9.1.8 Inspection of Plant and Audit of Records ....................................................................................81

9.1.9 Contract Administration Files - Procurement ..........................................................................81

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9.1.10 Contract Files – Post-Award .......................................................................................................82 SECTION 10 : SPECIAL PURCHASING PROCEDURES ........................................................................83

10.1. APPLICABILITY ..................................................................................................................................83

10.2. INFORMATION TECHNOLOGY .......................................................................................................83

10.2.1 Information Technology (IT) ..........................................................................................................83

10.3. MOTOR VEHICLES ............................................................................................................................83

10.3.1 Utilization of Contract .....................................................................................................................83

10.4. BLANKET PURCHASE ORDERS ....................................................................................................84

10.4.1 Use of Blanket Purchase Orders ..................................................................................................84

10.4.2 Requests for a Blanket Purchase Order .....................................................................................84

10.4.3 Vendor Selection ............................................................................................................................85

10.5. PETTY CASH ......................................................................................................................................85 SECTION 11 : SURPLUS CITY PROPERTY AND UNCLAIMED PROPERTY .......................................86

11.1. APPLICABILITY ..................................................................................................................................86

11.2. PROCEDURES ...................................................................................................................................86

11.2.1 Disposal Methods ...........................................................................................................................86

11.2.2 General Procedure .........................................................................................................................86

11.2.3 Trade-Ins ..........................................................................................................................................87

11.2.4 Information Technology .................................................................................................................87

11.2.5 Vehicle Disposal .............................................................................................................................87

City of Turlock Purchasing Manual (11/25) 1
SECTION 1 : INTRODUCTION

This manual is presented as an informational guide to City departments to detail the procedures that are to be followed for obtaining materials, equipment, and services through a decentralized purchasing system.

The purpose of a decentralized purchasing system is to obtain those materials, equipment, and services necessary for the daily operations of our City government, as well as long-range procurement, in a timely and cost-effective manner to ensure continued function and continuity of City services.

For such a system to work, City departments and Purchasing Division staff must work together to develop clear and concise specifications conducive to open, competitive purchasing that will ensure a standard of quality and reliability.

The information in this manual will help staff understand the laws and regulations that govern the procurement activity of the City, as well as assist in following the proper procedures necessary for completing the purchasing process in a timely manner.

The Purchasing Division staff looks forward to assisting you in meeting your procurement needs and hopes that you will use them as a resource to avert unnecessary delays in obtaining the goods and services required by your department.

Administrative and regulatory modifications to this Policy and Procedures Manual may be approved by the City Manager or designee.

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1.1. DEFINITION AND DUTIES OF THE PURCHASING DIVISION
The Purchasing Officer is responsible to the Finance Director for the administration of the Purchasing Division. The division is responsible for the purchasing of supplies, equipment, materials, and contractual services required by City departments, and for the administration of all rules and regulations established by the City Municipal Code, State, and federal laws and regulations that may apply to these areas of responsibility.

1.2. LEGAL ASPECTS

1.2.1 Municipal Code
A. In conformance with the provisions of Chapter 2, Section 7 of the Turlock Municipal Code (TMC), a decentralized purchasing system has been adopted for the following purposes:

1. To establish efficient procedures for the purchase of supplies and equipment;

2. To secure for the City supplies and equipment at the lowest possible cost commensurate with the quality needed;

3. To exercise positive financial control over purchases;

4. To clearly define the authority for the purchasing function; and

5. To ensure the quality of purchases.

B. The Purchasing Officer shall have the following powers and duties: (TMC §2-7-02 through 2-7-04, §2-7-12)

1. To purchase and contract for supplies and equipment required by any using agency in accordance with the purchasing procedures set forth in Chapter 2, Section 7, Turlock Municipal Code, such administrative regulations as the Purchasing Officer shall adopt, and such other rules and regulations as shall be prescribed by the Council;

2. To negotiate and recommend the execution of contracts for the purchase of supplies, equipment, and services;

3. To act to procure for the City the needed quality in supplies and equipment at the least expense to the City;

4. To discourage uniform bidding and endeavor to obtain as full and open competition as possible on all purchases;

5. To prepare and recommend to the Council rules governing the purchase of supplies, equipment, and services for the City;

6. To prepare and recommend to the Council revisions and amendments to the purchasing rules;

7. To keep informed of current developments in the field of purchasing, prices, market conditions, and new products;

8. To prescribe and maintain such forms as are reasonably necessary to the operation of the provisions of this chapter and other rules and regulations;

9. To recommend to the City Manager the transfer of surplus or unused supplies

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and equipment between departments as needed, and the sale of all supplies and equipment which cannot be used by any agency, or which have become unsuitable for City use;

10. To maintain a bidders' list, vendors' catalog file, and records needed for the efficient operation of the Purchasing Division.

1.2.2 Related State and Federal Laws and Regulations
A. In addition to the municipal code, Federal regulations and State Codes apply in specific procurement applications.

B. Significant Federal regulations that should be considered when procuring goods and services with Federal funds include but are not limited to:

1. Federal Wage Rate Determination (Davis-Bacon) Act

2. Build America Buy America Act

3. 2 CFR 200.313 Equipment

4. 2 CFR 200.318 through 200.327 Procurement Standards

5. 2 CFR 180.995 and 2 CFR 200.214 Suspension and Debarment

6. 2 CFR 200.331 Subrecipient and Contractor Determinations

7. 2 CFR 200.332 Requirements for Pass-through Entities

C. Key provisions of California law affecting the City include but not limited to:

1. California Government Code Section 54202 Establishment of purchasing policies and procedures

2. California Government Code, Title 1, Division 5, Chapter 10 Contracts with Private Architects, Engineering, Land Surveying, and Construction Project Management Firms

3. California Public Contract Code Division 2, Part 3 Contracting by Local Agencies

4. California Uniform Public Construction Cost Accounting Act, where applicable

5. California Government Code Section 53702 Compliance with Federal laws and regulations in contracts for public work

6. California Government Code, Title 1, Division 5, Chapter 3.2 Energy Conservation Contracts

7. California Government Code, Title 14, Division 7, Chapter 12, Article 12 Procurement of Recovered Organic Waste Products

1.2.3 Code of Ethics and Conduct
A. Ethical Concepts . When conducting City business with the business community, it is every employee’s responsibility to follow ethical practices and adhere to applicable laws, policies, and procedures.

B. Fair and Equal Treatment . City employees must discharge their duties under the City’s Municipal Code and this Manual in an impartial manner to foster the integrity of the City’s purchasing function and to assure fair and open competition for City business and the selection of competent, responsible vendors. All vendors shall be treated equally and fairly at all times by City personnel, with equal information given to each vendor who participates in a competitive situation.

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Staff should not aid or assist a potential vendor in securing a contract for goods or services by favoring one vendor over another, giving or withholding information from any vendor not given or withheld from all other vendors; willfully misleading any vendor in regards to the character of the materials or supplies of a quality inferior to that called for by the contract; or knowingly certifying to a greater amount of labor performed or material or supplies furnished than has been performed or received.

C. Conflict of Interest . The City Council, and all City employees, including elected officials, classified personnel, and unclassified personnel shall: (Council Resolution 2020-47)

1. Avoid any act of impropriety or the appearance of impropriety.

2. Not discriminate in the provision of services to the public, including the solicitation or acceptance of gifts in connection with services rendered in the performance of duties.

3. Not accept an economic advantage or discount not available to all City employees.

4. All City employees should notify the Purchasing Officer in writing of any Conflict or Impaired Judgement to document why the employee should remove themselves from any purchasing situation.

D. Solicitation or Acceptance of Gifts. City personnel are prohibited from accepting tips, special gifts of value, or other consideration because of services rendered in their official capacity as City employees. (Section 10.1.3, Personnel System Rules and Regulations)
E. Anti-nepotism . In making purchases of equipment or supplies and in entering into agreements for the provision of services the Purchasing Officer, and any person or agency delegated purchasing authority is subject to and governed by the anti- nepotism policy concerning the employment of relatives set forth in the City’s Personnel Rules and Regulations. (TMC §2-7-13)
F. Lobbying . Pursuant to California Government Code Section 87100, no public official shall make, participate in making, or in any way attempt to use their official position to influence a governmental decision in which they know or have reason to know they have a financial interest. A City elected official, any person appointed to the City Council, the City Manager, the Deputy or Assistant City Manager, the City Attorney, the City Clerk, any department director, any department deputy or assistant director, the City Engineer, and the City Chief Building Official shall not, for a period of 2 years after leaving that office or employment, act as agent or attorney for, or otherwise represent, for compensation, any other person, if the appearance or communication is made for the purpose of influencing administrative or legislative action, or influencing any action involving the sale or purchase of goods or property. (TMC §2-13-103)

1.2.4 Local Vendor Preference
A. Whenever the Purchasing Officer purchases services, supplies, materials, and/or equipment for the City through the competitive process, including quotes, bids, and proposals, a five (5%) percent, not to exceed a limit of $5,000 preference shall

City of Turlock Purchasing Manual (11/25) 5
be granted to local vendors for evaluation purposes. (TMC §2-7-09 (c)(5)) B. The Local Vendor Preference does not apply to bids conducted jointly with other public agencies, nor when prohibited by state or federal statutes or regulations that require an award to the lowest responsible bidder (such as in Public Works of Improvement projects), or otherwise exempted from local preferences. (2 CFR 200.319(c))
C. For the purposes of this section, a qualified Local Vendor is defined as any business that meets both the criteria below:

1. The vendor has a place of business within the corporate limits of the City for at least one (1) year prior to the transaction for which preference is claimed by the vendor. Post office boxes do not qualify as a verifiable business address.

2. The vendor has a current business license issued by the City.

D. The Purchasing Office will apply the following procedures and guidelines when implementing the Local Vendor Preference program.

1. To qualify for the Local Vendor Preference, local vendors must submit with each bid for which a preference is claimed documentary proof that the vendor meets the criteria established. The Purchasing Officer shall not be required to verify the accuracy of any such certification and shall have sole discretion to determine if a vendor meets the definition of a local vendor or local business.

2. When bid submissions are evaluated, a five percent (5%) bidding preference, not to exceed $5,000, shall be granted to the total dollar amount bid by qualified local vendors on competitive quotes and bids. The award shall be made at the full price of the quote, bid, or proposal. In the case of an absolute tie, an award will be made to the local vendor. In the case of a tie between local vendors, the award will be determined by lottery. (TMC §2-7-09(c)(5) and TMC §2-7-09(c)(6)).

1.2.5 Environmentally Preferable Purchases and Practices The City of Turlock encourages innovation and efficiency improvements. By adopting environmentally friendly purchasing practices in compliance with California State Law (SB 1383), the City can reduce its environmental impact, reduce costs and liabilities, and improve environmental quality. The primary goals are to minimize environmental impacts and promote the purchase of recycled and environmentally-preferred products that:

1. Conserve natural resources and materials;

2. Reduce the consumption of space in landfills; and

3. Increase employee awareness that many used items can serve an additional purpose.

City of Turlock Purchasing Manual (11/25) 6

1.2.5.1 General Policies
A. Whenever feasible, each department should make every reasonable effort to purchase and use recycled products or with recycled content, to the extent such use does not adversely affect health, safety, operational efficiency, or effectiveness, as determined by each department. Nothing in this policy shall be construed as requiring the purchase of products that do not perform adequately or are not available at a reasonable price.

B. Departments will review purchasing specifications and contract requirements, and where feasible, will revise such specifications and contact requirements to encourage the use of recycled products and other environmentally-preferred products. Departments shall consider the ability of a product and its packaging to be reused, reconditioned, or recycled.

Departments should purchase products which minimize waste and toxic by- products in their manufacturing , use recycling, and disposal processes.

1.2.5.2 Definitions
A. "Paper Products" include, but are not limited to, paper janitorial supplies, cartons, wrapping, packaging, file folders, hanging files, corrugated boxes, tissue, and toweling; or as otherwise defined in 14 CCR Section 18982(a) (51).

B. "Compost (SB 1383 Eligible)" means the product resulting from the controlled biological decomposition of organic solid wastes that are source separated from the municipal solid waste stream or which are separated at a centralized facility or as otherwise defined in 14 CCR Section 17896.2(a)(4).

C. "Mulch" means organic material that must meet or exceed the physical contamination, maximum metal concentration, and pathogen density standards for land application specified in 14 CCR Section 17852(a) (24.5) (A) 1 through 3 and must be produced at one of the following facilities:

a. A permitted or authorized compostable material handling operation or facility as defined in 14 CCR Section 17852(a)(12), that is permitted or authorized under 14 CCR Division 7, other than a chipping and grinding operation or facility as defined in 14 CCR Section 17852(a)(10); or b. A permitted or authorized transfer/processing facility or transfer/processing operation as defined in 14 CCR Section 17402(a) (30) and (31) or that is permitted and authorized under 14 CCR Division 7; or c. A permitted solid waste landfill as defined in Public Resources Code Section 40195.1 that is permitted under 27 CCR Division 2.

D. “Procurement of Recovered Organic Waste Products” shall mean purchase or acquisition of (e.g., free delivery or free distribution from a hauler or other entity via a written agreement or contract) Organic Waste Products and end use by the City. The City’s Annual Recovered Organic

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Waste Product Procurement Target can be fulfilled directly by the City or by Direct Service Providers through written contracts or agreements for Procurement of Recovered Organic Waste Products at the City’s behest.

E. “Recycled-Content Paper Products and Recycled-Content Printing and Writing Paper” means such products that consist of at least thirty percent (30%) recycled materials, by fiber weight, post-consumer fiber, or as much as one hundred percent (100%) post-consumer fiber by fiber weight, consistent with the requirements of Sections 22150 to 22154 and Sections 12200 and 12209 of the Public Contract Code, and as they may be amended from time to time.

F. "SB 1383" means Senate Bill 1383 approved by the Governor on September 19, 2016, which establishes methane emissions reduction targets in a statewide effort to reduce emissions of short-lived climate pollutants, as amended, supplemented, superseded, and replaced.

G. "SB 1383 Regulations" or "SB 1383 Regulatory" means or refers to the Short-Lived Climate Pollutants (SLCP): Organic Waste Reductions regulations developed by Cal Recycle and adopted in 2020 that created Chapter 12 of 14 CCR, Division 7 and amended portions of regulations of 14 CCR and 27 CCR.

1.2.5.3 Paper Products
Preference should be given to paper products that contain postconsumer recycled content and are recyclable. Specifically, Sections 22150-22154 Public Contract Code and 14 CCR 18993.3 and as they may be amended from time to time.

A. Printing and writing paper should consist of at least 30 percent postconsumer recycled content;
B. Other paper products should consist of at least 30 percent postconsumer recycled content, except for:

1. Toilet paper should consist of at least 45 percent postconsumer recycled content;

2. Paper towels should consist of at least 40 percent postconsumer recycled content;

3. Facial tissue should consist of at least 10 percent postconsumer recycled content;

4. Toilet seat covers should consist of at least 20 percent postconsumer recycled content;

5. General purpose paper wipes should consist of at least 40 percent postconsumer recycled content;
C. Products must be recyclable as defined by Federal Trade Commission (FTC) Green Guides (16 CFR 260.12); and
D. Vendors must certify postconsumer content and recyclability claims by completing the Recycled-Content and Recyclable Paper Certification Form.

City of Turlock Purchasing Manual (11/25) 8
E. User Departments must maintain a spreadsheet documenting the volume and type of paper purchased. The spreadsheet will cover a calendar year and be provided to the Regulatory Affairs Division by January 31. The spreadsheets will be compiled by the Regulatory Affairs Division and utilized to assist in the preparation of the Jurisdiction Electronic Annual Data Report, due annually on August 1 for the preceding calendar year.

1.2.5.4 IT Equipment
Preference should be given to electronic products that:

A. Have Bronze registration or higher under the Electronic Products Environmental Assessment Tool (EPEAT), or which meet similar energy efficiency standards; B. Are Energy Star-rated or meet similar energy efficiency standards.

1.2.5.5 Recover Organic Waste Products
The City, including its Direct Service Providers, will make every effort to meet its annual procurement target for Recovered Organic Waste Products as determined by the State. Periodically, the City’s Recordkeeping Designee shall distribute information to City Staff on the Procurement target and specific products that meet the SB 1383 procurement requirements. Divisions and departments responsible for landscaping maintenance shall:

A. Use SB 1383 Eligible Compost and SB 1383 Eligible Mulch produced from recovered Organic Waste, as defined in the Definitions section of this Policy, for landscaping maintenance as practicable, whenever available, and capable of meeting quality standards and criteria specified;
B. Ensure that SB 1383 Eligible Mulch producers certify that the mulch meets the definition contained in this policy through the following:

1. Copy of operation or facility permit or authorization.

2. Copy of laboratory results confirming the mulch meets or exceeds the physical contamination, maximum metal concentration, and pathogen density standards for land application specified in 14 CCR Section 17852(a) (24.5) (A) 1 through 3.

Failure to provide the applicable certification documents on an annual basis or at the request of the City will result in the mulch no longer being eligible as a recovered organic waste product under this procurement policy.

C. Keep records, including invoices or proof of Recovered Organic Waste Product procurement (either through purchase or acquisition), and submit records to the Regulatory Affairs Division, on a schedule to be determined by the Recordkeeping Designee. General Procurement Records shall include:

1. General description of how and where the product was used and applied, if applicable;

2. Source of product, including name, physical location, and contact information for each entity, operation, or facility from whom the Recovered Organic Waste Products were procured;

3. Type of product;

4. Quantity of each product; and

City of Turlock Purchasing Manual (11/25) 9

5. Invoice or other record demonstrating purchase or procurement.

D. For Compost and SB 1383 Eligible Mulch provided to residents through giveaway events or other types of distribution methods, keep records of the Compost and SB 1383 Eligible Mulch provided to residents. Records shall be maintained and submitted to the Regulatory Affairs Division.

E. When a Direct Service Provider for the City procures compost or mulch, enter into a written contract or agreement, or execute a purchase order between the City and Direct Service Provider with enforceable provisions that include:

1. Definitions and specifications for SB 1383 Eligible Mulch, Compost, Renewable Gas, and/or Electricity Procured from Biomass Conversion; and

2. An enforcement mechanism (e.g., termination, liquidated damages) in the event the Direct Service Provider is not compliant with the requirements.

1.2.5.6 Promotion
A. City business cards, letterhead stationery, envelopes, business forms, and other documents should use recycled products where feasible. Such items should be labeled "Printed on Recycled Paper" to promote the use of postconsumer content. In addition, City mailings and publications should be printed using non- toxic inks.

B. All City offices and Departments should promote the recycling of office waste paper by providing recycling bins for employees’ use.

1.3. CONTRACTS OUTSIDE THE SCOPE OF THE PROCUREMENT MANUAL

1.3.1 Other Acquisitions
This policy will not apply to transactions involving the purchase, sale, lease, or other transactions for real property; for joint development projects; for purchases from government-regulated entities such as public utilities which are granted market exclusivity by the regulating agency; for purchases of professional subscriptions, memberships, seminars, and expenses in connection with industry meetings and conferences; for travel and living expenses on City business; and other similar expenditures incidental to the routine conduct of the City's business.

1.3.2 Revenue and No-Cost Contracts
Contracts whose principal purpose is to generate revenue for the City or operate at no cost are not subject to this policy. However, where feasible, a competitive process suitable to the type and scope of the activity involved and the availability of competition should be conducted. Additionally, the responsible Division should ensure that appropriate insurance is obtained.

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SECTION 2 : OVERVIEW AND CROSS-CUTTING REQUIREMENTS

2.1. DEFINITIONS AND THRESHOLDS

2.1.1 Definitions
A. Professional services shall mean accounting, appraisal, architectural, auditing, engineering, environmental, information system services, land surveying, construction management, legal services, financial planning, medical or planning services or any service which is similarly professional, scientific, expert, or technical in nature.

B. Public Project means: (PCC Section 20161)

1. A project for the erection, improvement, painting, or repair of public buildings and works.

2. Work in or about streams, bays, waterfronts, embankments, or other work for protection against overflow.

3. Street or sewer work except maintenance or repair.

4. Furnishing supplies or materials for any such project, including maintenance or repair of streets or sewers.

All public projects with expenditures exceeding five thousand dollars ($5,000), shall be contracted for and let to the lowest responsible bidder. (PCC Section 20162) Additionally, all Public Works projects more than $1,000 are subject to state-mandated prevailing wage and reporting requirements, regardless of the procurement method used. (Labor Code §1771)
C. Purchases. Means the acquisition of supplies, nonprofessional services, materials, and/or equipment in furtherance of City needs and purposes.

2.1.2 Thresholds
A. Less than or equal to $5,000: “Micro” Purchases: The purchase of supplies, materials, equipment, and services up to a value of $5,000.00 (Five Thousand and no/100ths), multiple price quotes are not required. Purchases over $2,500.00 shall be made only by purchase order. (TMC §2-7-08(a), §2-7-06) B. $5,000.01 - $25,000: “Informal Bid” Purchases. For the purchase of supplies, materials, equipment, and services with a value exceeding $5,000 but equal to or below $25,000 (Twenty-Five Thousand and no/100ths), price quotes shall be solicited from a minimum of three (3) suppliers. (TMC §2-7-08(c)) The resulting order, if any, shall be placed with the supplier providing the lowest- priced, responsive, and responsible offer, which is defined as the bidder submitting the lowest-priced quote that materially conforms to all requirements of the purchase, and has demonstrated ability to perform the work. More complex purchases within the $5,000.01 - $25,000 range may be better handled through the

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written Request for Bid (RFB), Request for Proposal (RFP), or Request for Qualifications (RFQ) processes. (TMC §2-7-09(a))
C. $25,000.01 and above: Purchases of supplies, materials, equipment, and services of a value greater than Twenty-Five Thousand and no/100ths ($25,000.00) Dollars and up shall be made utilizing a formal bid procedure. Procurements at or above this threshold are made through the City’s e-procurement portal. (TMC §2-7-08(d)) D. Signing Authority Up to $25,000: The City Engineer is authorized to enter into contracts for the purchase of supplies or equipment or contracts for professional, consultant, and maintenance services where the amount of the contract does not exceed Twenty-Five Thousand and no/100ths ($25,000.00) Dollars, or such other amount as the City Council may designate by resolution, provided there exists an unencumbered appropriation in the fund account against which such contract is to be charged. (TMC §2-7-08(g))
E. Signing Authority Up to $75,000: The City Manager, and in the absence of a permanent City Manager or vacancy in the position, an Acting or the interim City Manager are authorized to enter into contracts for the purchase of supplies or equipment or contracts for professional, consultant, and maintenance services where the amount of the contract does not exceed Seventy-Five Thousand and no/100ths ($75,000.00) Dollars, or such other amount as the City Council may designate by resolution. This section shall only apply to an Acting or Interim City Manager designated by the City Council. If not designated by the City Council, an Acting or Interim City Manager is authorized to enter into contracts under the provisions of this subsection that do not exceed Twenty-Five Thousand and no/100ths ($25,000.00) Dollars. Where the amount of any such contract exceeds Seventy-Five Thousand and no/100ths ($75,000.00) Dollars, or such other amount as the City Council may designate by resolution, the contract shall be approved by the City Council. (TMC §2-7-08(e), §2-7-08 (f))
F. Signing Authority Above $75,000: Contracts for the purchase of supplies, materials, equipment, and services exceeding Seventy-Five Thousand and no/100ths ($75,000.00) Dollars shall be approved by the City Council. Amendments to contracts that result in a total contract price exceeding Seventy-Five Thousand and no/100ths ($75,000.00) Dollars shall also be approved by the City Council. (TMC §2- 7-08(e))
G. Approval of Contract Amendments by the City Manager: After the effective date of any contract approved by the City Council for the purchase of supplies or equipment or contracts for professional, consultant, and maintenance services, the City Manager, an Acting City Manager or an Interim City Manager shall have the authority to approve in writing any amendment directing an addition, deletion, or revision in such contract, including contract price, plans, specifications, and the nature or quality of services, equipment, supplies or work, subject to the following limitations:
i. The cumulative dollar value of all such amendments relating to any one (1)

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contract shall not exceed ten (10%) percent of the contract price approved by the City Council.
ii. All amendments authorized by the City Manager, an Acting City Manager or an Interim City Manager pursuant to this section must be accounted for as part of the City’s current appropriation and allocation of funds in the current fiscal year budget or accounted for as part of an approved project or contract.

Any amendment exceeding the limitations set forth in this section shall be submitted to the City Council for approval in the form of a contract amendment or supplemental agreement. Such amendment or supplemental agreement shall set forth the amended contract price which will constitute the new contract price for the purposes of the authority for City Manager-approved amendments in accordance of this section. (TMC §2-7-11)
It is never permissible to split a proposed contract, project, or purchase in order to evade contract dollar limitation or bidding requirements.

2.2. GENERAL
Departmental purchase requests should describe the requested goods or services sufficiently to facilitate the procurement process. The clearer such specifications are, the easier it is to determine the appropriate procurement method and obtain pricing proposals. Specifications and standards from previous successful procurements should be reused and updated whenever repeat purchases are made.

Public Works of Improvement (construction and maintenance) projects are subject to additional rules, such as prevailing wage requirements for projects above $1,000, reporting of maintenance work above $5,000, reporting of new construction projects above $25,000, the requirement for bidder’s security for all construction bids in the form of cash, cashier’s check, certified check, or a bidder’s bonds and requirement of performance bonds and payment bonds at or above $25,000. See Section 6 for procedures related to Public Works contracts. (State of California Civil Code §9550, PCC § 20170, 20171, 20483, and SB-854)

2.3. DETERMINATION OF COMPETITIVE PROCUREMENT METHOD

2.3.1 Procurement Methods

2.3.1.1 Request for Bids
The Request for Bid (RFB) process is used to obtain simple, common, or routine goods and services. Little discretion is required to perform the work. Examples of goods and services commonly procured through an RFB include pest control, equipment maintenance, and uniforms. The primary focus in the RFB process is price. RFB procedures are located in Section 3 of this manual.

2.3.1.2 Request for Proposals
The Request for Proposals (RFP) process is used to obtain complex services in which professional expertise is needed and may vary. These services may be provided using

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different methods or approaches. Examples of services procured through the RFP process include auditing, planning, and professional design. The focus of the RFP process is on both price and quality. RFP procedures are located in Section 4 of this manual.

2.3.1.3 Request for Qualifications
The Request for Qualifications (RFQ) focuses on vendor qualifications, capabilities, and experience, seeking the best, most qualified vendor to work on a project. The RFQ process is similar to the RFP process; however, price is not negotiated until after a potential vendor is selected. Examples of goods and services where an RFQ may be used include construction projects, architectural and engineering services, and consulting services such as IT or management consulting. Procedures related to the RFQ process are located in Section 5.

2.3.2 Selection of Procurement Method
The Requestor Department is responsible for selecting the most appropriate procurement method for needed goods and services. The Requestor Department should consider the types of goods or services needed and the focus of the procurement. The Table below illustrates the focus of each procurement method.

Solicitation Method Focus
Request for Bids (RFB) Price
Request for Proposals (RFP) Price and Quality
Request for Qualifications (RFQ) Quality

2.4. EXEMPTIONS TO COMPETITIVE PROCUREMENT REQUIREMENTS

2.4.1 General
Absent a statutory requirement, public entities are not bound to engage in competitive bidding (San Diego SAFE v. Superior Ct., (1988) 198 CA 3d. 1466, and Grayden v. Pasadena Redevelopment Agency (1980) 104 CA 3d 631). Purchases of equipment, materials, supplies, and services shall be awarded through competitive processes, except when the Purchasing Officer determines that at least one of the following conditions apply: (TMC §2-7-08(b))

a. Micro Purchase;
b. Emergency;
c. Sole-Source;
d. Professional or Specialized Skills;
e. Cooperative Purchasing;
f. Categorical Exemptions
g. Council-approved Exemptions

2.4.2 Micro Purchases

2.4.2.1 Competitive processes are not required when the total price for supplies, materials, equipment, and services is $5,000 or below.

2.4.2.2 Public Works of Improvement above $1,000 are subject to prevailing wage and

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reporting requirements, regardless of procurement method (Labor Code §1771).

Refer to Section 6 for further information.

2.4.2.3 Federally-funded purchases may be subject to Micro Purchase thresholds different from those of the City. In such cases, the more stringent policies shall be followed. Refer to Section 7 for further information.

2.4.3 Emergency Purchases

2.4.3.1 The City is not required to competitively purchase supplies, equipment, materials, or services when immediate action is required to avoid imminent danger to persons or property.

2.4.3.2 Emergency purchases shall be made by City personnel who have expertise related to the emergency situation. The City Manager may authorize the expenditure of any unencumbered moneys, notwithstanding the fact that such moneys may not have been appropriated for such purpose, to the extent that other moneys have not been appropriated or are otherwise unavailable. (TMC §2-7-08 (b)(1), TMC §2-7-08 (e)(3))

2.4.3.3 During a natural disaster or other such emergency, all related emergency procurements will be coordinated through the City’s designated Emergency Operations Center.

2.4.4 Sole Source

2.4.4.1 Competitive processes are not required when the procurement qualifies for sole- source exemption, as justified by the requisitioner and approved by the Purchasing Officer. A sole-source decision is not permitted merely upon the grounds that such an approach is the most convenient, or that the subject product demonstrates technical or administrative superiority or is preferred by staff. (TMC §2-7-08 (b)(2))

2.4.4.2 A sole-source procurement can be made from only one source of supply, or when no competitive advantage can be gained through competitive processes. Such situations may arise when the item or service requirements are so unusual or distinct that the possible sources are narrowed down to one. This may be the case, for example, with replacement parts for brand-name machinery, equipment, or vehicles.

The sole-source vendor must be the only known supplier with the capability of meeting the City’s specifications or other requirements.

2.4.4.3 Acceptable sole-source justifications include :

A. Negotiated or sole-source purchases that have been specifically preauthorized by the City Council.

B. After soliciting a number of sources, Purchasing determines that procurement of a basic item or service is available only from a single vendor.

C. Competition is precluded because of the existence of patent rights, copyrights, secret processes, control of the basic raw material(s) or similar circumstances, and no equivalent good or service is available.

D. The procurement is for parts or components for equipment, and no

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information or data is available to ensure that the parts or components obtained from another supplier will perform the same function in the equipment; or the parts or components could compromise the safety or reliability of the product, or would void or invalidate a manufacturer’s warranty or guarantee.

E. The procurement is for services from a provider with unique knowledge, skill, or ability not available from other sources.

F. A distributor or service provider has an exclusive franchise or operating agreement with the supplier of goods to be purchased or maintained and no other person or entity may provide, install, service or maintain the goods in the service area. This does not include the purchase of goods where the same or a similar good may be purchased and is not otherwise defined as a Single Source item.

G. The procurement is for goods and/or services where standardization is beneficial for reasons including maintenance, repair, training, and interoperability.

H. The procurement is for goods and/or services where continuity of providers will provide efficiency or critical knowledge, and other providers of the goods and/or services cannot provide similar efficiencies or critical knowledge.

I. When so directed by the Court, the funding source, as mandated by the state, or other relevant authority.

2.4.4.4 The requesting department shall initiate such procurement by completing a written requisition and justification for sole source, which shall be approved by the head of the requesting department or authorized designee, and then sent to Purchasing for approval. The requesting department head or designee will approve the sole-source status of the procurement only after confirmation that staff has verified that there is only one vendor or supplier of the items or services in question.

2.4.4.5 Prior to acting on the sole source procurement, the Purchasing Officer or authorized designee shall verify that the procurement meets the sole source definition set forth above, costs are allowable under the proposed funding source, and the requisition is complete with the proper approval of the requesting department or authorized designee.

2.4.5 Professional or Specialized Skills

2.4.5.1 The City is not required to competitively procure professional or specialized skills (TMC §2-7-08(b)(3)); however, it may be in the City’s best interest to procure them using the Request for Proposals (RFP) or Request for Qualifications (RFQ) processes as defined in Sections 4 and 5 of this manual.

2.4.5.2 Competitive price-based bidding (RFB) may be undertaken for services with standard, non-personal qualities that are easily quantifiable, and which lend themselves to price comparison.

2.4.6 No Advantage

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The City is not required to procure goods and services through a competitive process when competitive procurement is undesirable, impossible, unavailing, or incongruous. (TMC §2-7-08 (b)(4))

2.4.7 Cooperative Purchasing
Procurement may be made through existing cooperative purchasing agreements with other government agencies, schools, or public utilities, where the requirement for competitive procurement has already been met by the actions of the lead agency.

Non-competitive (“negotiated”) cooperative agreements are not acceptable for use in situations where competitive procurement is required. (TMC §2-7-08 (b)(5))

2.4.8 Categorical Exemptions

2.4.8.1 The following types of goods and services are categorically exempt from competitive procurement requirements:

A. Utility Services: The item or service to be procured is from a utility or a direct access provider and qualifies as a Single Source.

B. Educational Services: Procurement of educational services from a not-for- profit organization.

C. Publications and Subscription Services: Notices, advertisements, and publication services used to post notices required by law or necessary to support the City’s operations. Information sources governed by publisher agreement, subscriptions (on-line or print) to newspapers, journals, and other periodicals. Legal research services and publications used for legal research and analysis.

D. Information Technology Subscriptions: Annual subscription costs for information technology software.

E. Memberships: Memberships in groups or organizations for which competitive procurement is not feasible.

F. Interim Contracts: Interim contracts or extensions of existing contracts where the required goods or services, except professional services, are the subject of an ongoing procurement and where the results of that procurement have been protested, litigation has been initiated or is believed to be forthcoming, or where an unforeseen and intervening event has delayed the award or caused the procurement to be cancelled or a portion of the procurement to be redone; or where the goods or services are or were provided through a contract that has been or is expected to be terminated or suspended. Interim contracts and extensions must be approved by the City Attorney and shall not exceed four (4) months.

2.4.9 Council-approved Exemption
Procurement may be made through noncompetitive methods when the Council has adopted a resolution by at least four (4) affirmative votes determining that the best interests of the City require that the purchase be made without compliance with the formal bid procedure. (TMC §2-7-08 (b)(10))

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2.5. RETURN PROCEDURES

2.5.1 Making a Return

When a return is needed, the department is responsible for coordinating the return, including shipment and initial communication with the vendor. Returns may be necessary for the following reasons:

A. The wrong item received.

B. Item no longer needed.

C. Item received damaged.

D. Received a double shipment.

The item must be packaged and wrapped for shipment including the vendor's address and the Operating Department's return address with the following information:

A. Contact the vendor for a return merchandise authorization number (RMA#).

B. Reason for return.

C. Purchase Order Number.

D. Copy of freight bill and/or packing slip.

E. Copy of the purchase order indicating the item being returned.

2.5.2 Damaged Items
If items are received damaged, make a note on the freight bill and/or packing slip. Make sure to keep the item in the package/box received, if possible. Subsequently, follow the return procedures above. If items are received damaged directly from the vendor, refuse delivery of the damaged items and note the refusal on the vendor and City copies of the invoice and/or receiving report.

2.6. VENDOR RELATIONS
It is to the City's advantage to maintain and promote good relations with suppliers. The City's vendor relations reflect the public image of the City organization. Both the Purchasing Division and Operating Departments are responsible for promoting fairness, integrity, courtesy, and goodwill in their vendor relations.

The Purchasing Division will normally serve as an intermediary between Operating Departments and vendors, obtaining prices, catalogs, samples, and general information on commodities.

However, for planning purposes, it may be to the advantage of Operating Departments to make direct contact with vendors for purposes such as obtaining technical information and cost estimates.

2.7. INFORMATION DISCLOSURE
During open formal bids, not related to public works, all questions should go to Purchasing.

Purchasing will compile the questions into an addendum and ensure the addendum is posted to the City’s e-procurement portal. Price information should not be given to any vendor before the bid process is completed and award letters have been issued.

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2.8. REQUEST FOR INFORMATION/REQUEST FOR INTEREST (RFI) The Request for Information/Request for Interest (RFI) process is generally used in cases where the City is seeking information to better define the Scope of Services being developed for an upcoming competitive process, generally an RFP, or in cases where the City is seeking to identify potential vendors who might be interested in responding to such an RFP.

The Request for Information/Request for Interest (RFI) process is a separate procurement-related activity as compared to the Request for Information which is an integral part of the competitive procurement process (RFB, RFP, RFQ) where potential vendors request additional information on an open procurement and the City prepares a response through an addendum.

2.8.1 Process

2.8.1.1 The RFI process is not a procurement process governed by code, but rather an information-seeking activity. As such, there are no rules governing the solicitation process, though good judgment should be exercised in crafting the written solicitation and efforts should be made to advertise it appropriately to ensure a satisfactory response.

2.8.1.2 RFIs should only be conducted, when necessary, as they add to the time required to complete the subsequent RFP process. To avoid such delays, the RFI process should be skipped if sufficient Scope of Work information and a ready pool of potential contractors exist to facilitate conducting an RFP.

2.8.2 Evaluation
There are no formal evaluation or award processes, as an RFI seeks only to gather information.

2.8.3 Negotiations
In cases where only one vendor responds to the RFI, the City may document that insufficient marketplace competition exists to conduct a competitive process and may proceed with negotiating and awarding an agreement with the single vendor, subject to Purchasing Officer approval under the sole-source justification process defined in Section 2.4. However, departments shall not conduct RFIs to circumvent the competitive RFP process.

2.8.4 RFI Documents
RFI documents may consist of a simple open letter requesting responses be sent to a specified person or location by a specified time and date. Purchasing documents may be used as a template.

2.9. INSURANCE REQUIREMENTS
City policy requires all vendors providing services, materials, or construction to the City to indemnify and defend the City for claims arising from their performance of the contract and supply proof of insurance coverage to the City. The proof the City requires is usually in the form of certificates of

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coverage provided by the contractor’s broker or carrier. Proof of insurance is required whether the vendor is providing services under a purchase order or a contract.

2.9.1 Insurance Provisions in Procurement Documents

2.9.1.1 Bid documents shall include a form for the bidder's bond when a security requirement is imposed. When required, the bid document shall also include sample performance and payment bond forms.

2.9.1.2 RFP documents shall include a form outlining the City’s minimum insurance requirements for the resultant contract, if any. Consult with Risk Management for assistance in identifying the appropriate insurance requirements.

2.9.1.3 Public Works of Improvement (construction and maintenance) projects require bonding as follows:
a. Bid Bonds - Bidder's securities are applicable to all public projects and protect the City's interests in the event that a bidder refuses to honor its bid or fails to enter into a contract awarded by the City. Generally, 10% of the total bid, though the City may adjust this amount. May be a surety bond, cash, or certified or cashier's check. (PCC §20170, 20171, 20483) b. Performance Bonds – Performance sureties secure fulfillment of a contractor's obligations and are required for public projects with an estimated contract price of $25,000 or more. The life of the performance bond may be required to extend beyond the completion of the main work under the contract to cover any warranty period. The instrument must be a surety bond for 100% of the total contract price - no alternative payment methods are permitted. (PCC §20483)
c. Payment Bonds – The payment bond assures the contractor's full discharge of its obligations to its subcontractors, suppliers, and other labor used on the project and is required for public projects with an estimated contract price of $25,000 or more. In all Public Works of Improvement (construction and maintenance) contracts, and contracts for the procurement of services or products which involve subcontracting, a payment bond may be required. The instrument must be a surety bond for 100% of the total contract price – no alternative payment methods are permitted. (Civil Code §3247 and §3248). The City has some discretion with regards to acceptable bid bond alternatives, but not for performance and payment bonds. If a bidder is unable to secure both performance and payment bonds in cases where they are mandatory, then the City must move on to the next-lowest- priced responsible and responsive bidder.

2.9.2 Insurance Provisions in Purchase Orders and Contracts

2.9.2.1 All contracts will include insurance requirements based on the nature of the contract. Types of insurance required may include, but are not limited to, general liability, worker’s compensation and employer’s liability, professional liability, contractors, builder’s risk, cyber, contractor’s pollution, commercial automobile, and umbrella.

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2.9.2.2 Purchase orders will also include insurance requirements.

2.10. CONFLICT OF INTEREST
Provisions requiring the potential vendor(s) to attest that the vendor has no conflicts of interest with the City are included in the RFB/RFP/RFQ template documents, the standard contract templates, and the standard purchase order provisions.

2.11. WAIVER OF DEFECTS AND TECHNICALITIES
The City may waive defects and technicalities in bids or proposals when to do so is in the best interests of the City.

2.12. PROTESTS AND APPEALS

2.12.1 General
Potential bidders, proposers, and sub-proposers wishing to protest or appeal a decision made in connection with the solicitation or award of a contract may protest following the procedures below. Protests or appeals not submitted in accordance with such procedures will not be reviewed. The protest procedure described herein is not applicable to public projects for construction. In the case of these projects, refer to the project specifications for protest procedures (see Sections 6.9 and 6.10.6).

2.12.2 Protest Submittal
Any actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation or award of a contract may protest to the City of Turlock Purchasing Officer. Non-awarded bidders may file a written protest through email or certified mail no later than five (5) business days after the date of the Notice of Intended Award. Such protests must be received by the Purchasing Officer before 5:00 PM local time on the last day of the five (5) business day protest period. Protests may be submitted to the City of Turlock Purchasing Officer through email at [email protected] or at 156 S.

Broadway Suite 270, Turlock, CA 95380. Protests filed with the Purchasing Officer shall:
a. Include the name, address, business telephone number, and email address of the protestor;
b. Identify the project under protest by name, solicitation number, and closing date; c. Contain a concise statement of the grounds for protest. Appeals should address only areas regarding bid contradictions, procurement errors, quotation rating discrepancies, legality of procurement context, conflict of interest in the rating process, and inappropriate or unfair competitive procurement grievances regarding the bid process. RFB, RFP, or RFQ processes and procedures, including evaluation criteria, shall not be proper grounds for protest. Concerns related to those issues must be raised and addressed, prior to the bid or proposal opening date to allow adjustments before the evaluation of bids or proposals; and d. Include all supporting documentation, if any. Documentation submitted after filing the protest will not be considered during the review of the protest or during any appeal.
e. The procedure and time limits set forth in this Section are mandatory and are the

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bidder’s sole and exclusive remedy. Failure to comply with these procedures and time limits shall constitute a waiver of any right to further pursue a protest. f. The bidder’s filing of a protest shall not preclude the City from rejecting all bids or proposals and re-advertising a contract. Rejecting all bids or proposals shall render a protest moot and terminate all protest proceedings.

2.12.3 Protest of Non-responsive and Non-responsible Bidders If the Purchasing Officer determines that the apparent lowest bidder is either nonresponsive or non-responsible, the Purchasing Officer shall reject the bid. The Purchasing Officer shall notify the bidder in writing that the bid has been rejected and state the basis for the rejection. The bidder may protest the Purchasing Officer’s decision following the procedure established in 2.12.2.

2.12.4 Protest Review
a. Upon receipt of a protest, the Purchasing Officer shall review all submitted materials, create and retain a written record of the review, and respond in writing at least generally to each material issue raised in the protest no later than ten (10) business days after receipt of the protest.
b. If the solicitation is for goods or services that are expected to be funded, in whole or in part, with federal funds, the Purchasing Officer shall promptly notify the appropriate federal agency of the receipt of a third-party contract protest, in accordance with the Common Grant Rule (49 CFR Part 18). c. If the protest cannot be resolved by mutual agreement, or if the protesting bidder is not satisfied with the decision of the Purchasing Officer, the protesting bidder shall have the right to appeal to the City Manager, in writing, within five (5) business days after notification of the Purchasing Officer decision.
d. If the protesting bidder is not satisfied with the decision of the City Manager, except as otherwise provided below, the final level of appeal is with the City Council. The protesting bidder may appear at a City Council meeting to be heard by the Council. If the solicitation is for goods or services that are expected to funded, in whole or in part, with federal funds, the protesting bidder may have additional protest escalation options as outlined in the respective solicitation.

In general, the filing of a protest should cause the solicitation proceedings subject to protest to be halted until the appeal is resolved. In order to allow essential City functions to continue, the City may proceed with the solicitation or award of the contract, despite the protest, upon an adequate determination in writing by the City’s Purchasing Officer that such action is necessary. It is expected that such determination will occur only in those few circumstances where it is necessary to protect a substantial interest of the City of Turlock.

In an effort to limit frivolous protests, protestors who file two (2) protests within twelve (12) calendar months, whose protests are not resolved in their favor, may be withheld from future bids or proposals.

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SECTION 3 : REQUEST FOR BIDS PROCESS

3.1. BIDDING PROCESS
Bidding requirements are detailed in the Municipal Code Title 2, Chapter 7, Sections 2-7-08 and 2-7-

09. In addition to the legal bidding requirements, there are instances when sound fiscal and fair business practices dictate that the City would bid items that would normally be exempt from the bidding process. The procedures detailed below incorporate both the legal requirements of the City Municipal Code and the intent to obtain the best value at the lowest cost to the City.

Except as otherwise permitted in Section 2 of this policy, purchases of equipment, materials, supplies, and services shall be awarded through a competitive procurement process. The Request for Bids (RFB) process is appropriate for procuring services and goods where the scope of work is well-defined and the selection is price-driven. The process requires additional lead time when bonds are required, when delivery or performance will occur over time, or for costly or complex procurements.

3.2. BIDDING REQUIREMENTS

3.2.1 Purchases Up to Five Thousand Dollars ($5,000.00) Purchases up to $5,000.00 may be made without soliciting quotes or bids.

3.2.2 Informal Bid Process
The Informal Bid Process is applicable to purchases over Five Thousand Dollars ($5,000.00) up to Twenty-Five Thousand ($25,000.00).

3.2.2.1 A large percentage of the City budget is spent on commodities and services that fit into this category.

3.2.2.2 Informal bid procedures should be followed for these purchases.

3.2.3 Formal Bid Process
The Formal Bid Process is applicable to purchases greater than Twenty-Five Thousand Dollars ($25,000.00).

3.2.3.1 This category of procurement requires that formal written bids be solicited from prospective bidders and that sealed bids be directed to the Purchasing Officer.

3.2.3.2 Since the complexity of bid specifications will vary in this category, each bid package is susceptible to different time elements. In most cases, however, the bid opening is set no less than 14 days from the publication of the first public notice.

3.2.3.3 For purchases exceeding signing authority outlined in section 2.1.2 (d) and (e), after the bids have been opened, the results will be forwarded to the City Council for consideration of an award.

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3.3. INFORMAL BIDDING PROCESS

3.3.1 Obtaining Quotes
The requesting department should solicit a minimum of three (3) quotes. Quotes may be obtained through a vendor’s website, email, or phone. If a phone quote is taken, written notes should be prepared identifying the vendor, the name of the vendor representative who provided the quote, and the quoted price and terms. The quote documentation should be attached to the purchase order before the purchase order is submitted to Purchasing.

3.3.2 Time Element
Quotes must be obtained and a purchase order created prior to placing an order. If no quotes have been obtained, the time element will depend upon the vendor's response.

3.4. FORMAL BIDDING PROCESS
A Request for Bids shall include detailed specifications, general provisions, special provisions, and in some instances bond forms, legal statements, affidavits, or other documents. The bidder submits the required information in a sealed bid for public opening by Purchasing at a specified date, time, and place. The outcome of this bidding is summarized in a bid summary and is available to the requestor for review on e-procurement portal that can be found on the City’s website.

3.4.1 Specification Writing

3.4.1.1 It is the responsibility of the requesting department to develop comprehensive specifications that will describe the commodity or service requested so that detailed specifications can be prepared, and at the same time ensure that they are broad enough to allow competition. Care should be taken not to include specifications that have the effect of limiting the bid through specifications that have little or no bearing on the end function of the goods or services.

3.4.1.2 The requesting department should also include technical specifications. Technical specifications shall include detailed descriptions of both the qualitative and quantitative nature of the supplies, equipment, materials, routine services, or construction to be procured. They must also set forth the minimum essential characteristics and standards to which the products and services must conform to satisfy the City's needs. The use of blueprints, diagrams, charts, and maps is encouraged to clarify the requirements of the specification. Technical specifications shall not be drafted to unduly restrict competition. (2 CFR 200.319(d)(1)) Brand names may be used in technical specifications only when it is impractical or uneconomical to specify clear and adequate descriptions of the technical requirements for a particular type of needed product. Brand names may also be specified if a finding is made and described in the procurement documents that a particular brand or trade name is required: (PCC 3400(c)) A. In order that a field test or experiment may be made to determine the product’s suitability for future use.

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B. In order to match other product’s in use on a particular public improvement either completed or in the course of completion.

C. In order to obtain a necessary item that is only available from one source.

D. In order to respond to an emergency declared by the State or a local agency, but only if the declaration is approved by a four-fifths vote of the governing board of the local agency issuing the invitation for bid or request for proposals.

In all cases where brand names are used, bidders shall be afforded the opportunity to propose to the City a substitute alternate product of equal quality or value. The City's decision to approve or disapprove such an alternate product shall be final and binding on the bidder. Note that additional restrictions on using brand-name specifications may apply to federally-funded procurements. Refer to Section 7 for additional details.

3.4.1.3 The Purchasing office will review specifications for clarity and completeness. If in the opinion of the Purchasing Officer, the specifications are incomplete or restrict the bidding process, requests will be returned to the ordering department to include more detail or substantiate their requirements for restrictive specifications. The laws affecting government procurement require that the City maintain a competitive market commitment and that the purchasing records of the City are of public record.

3.4.2 Procurement Package
The requesting department shall develop the procurement package within the e- procurement portal along with any other documents necessary to implement the process.

These shall include but are not limited to:
a. Documentation, technical specifications, and scope of work which adequately describe the goods or services required.
b. Special terms and conditions that apply to the specific procurement. c. Estimated cost of the contract. The requesting department should ensure they have adequate funding to cover the resultant contract at the time of execution. d. A suggested project coordinator, when appropriate, whose duties will include acting as a liaison between the requesting department and Purchasing. e. A suggested contract administrator, shall endeavor to resolve any problems concerning adherence to terms and conditions of the contract. When appropriate, the contract administrator shall also fill the role as the project coordinator. f. Procurement Package Checklist, which includes a section to document approval by the head of the requesting department.

Purchasing will review the requesting department's documentation and confirm that the procurement is appropriate for the sealed bidding process. If the procurement method is not appropriate, Purchasing will work with the requesting department to identify the best method to procure the requested goods or services.

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3.4.3 Bid Documents

3.4.3.1 The requesting department shall prepare RFB documents under the supervision of the Purchasing Division. Purchasing shall establish a preliminary schedule of events with the department, based upon the anticipated date of advertisement, which designates the date upon which all changes, comments, and required approvals must be submitted to Purchasing. Such a schedule shall permit a sufficient time period for review of the contract documents by the individuals involved.

3.4.3.2 The RFB documents will be prepared utilizing the RFB fillable template. The document will contain:

A. Formal Bid Guidelines
B. Scope of Service
C. The process for Submitting Proposals
D. A description of the process for evaluating proposals and selecting the bid recommended for award.

E. A description of prohibited communications.

F. A section requiring the proposer to represent there are no conflicts of interest.

G. Standard terms and conditions
H. Draft agreement
I. Applicable Ordinances and Programs

3.4.4 Bid Advertising
The Purchasing Officer or authorized designee shall publicly advertise the Request for Bid ("Notice") to notify potential bidders of the title and nature of the contract and of the date, time, and place of the bid opening. Purchasing will publish the Notice in the local newspaper. The advertisement shall state the time and place for receiving and opening sealed bids and shall describe in general terms the work to be done. The Notice shall also inform bidders of applicable requirements under federal or state laws. The Notice shall indicate whether bonding (i.e., bidder's security) is required. Generally bonding is only required for Public Works contracts. The Notice shall also designate the method for obtaining copies of the Request for Bid. (PCC § 22032(b), PCC § 22034, PCC § 22037) a. RFBs will be open no less than 14-30 days. The Purchasing Officer will determine the number of days RFBs will be open based on the nature and complexity of the goods or services being procured.
b. City employees, and consultants or contractors under the supervision of City employees, shall refrain from discussing with prospective bidders any details of goods or services advertised for bid, unless so authorized by Purchasing. c. It is Purchasing's policy to not disclose a Bid List prior to bid opening. Bid List disclosure is not required if the public interest served by temporarily withholding said

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information clearly outweighs any conceivable public interest served by disclosure. (California Public Records Act, Government Code § 6255).

3.4.5 Delivery Time
Delivery time will be predicated upon the industry standards for the type of commodity ordered. In most instances, the City will require a specific delivery date, but in some cases, delivery time is an item that is included in the bid proposals that the prospective vendor must address.

3.4.6 Pre-Bid Conference
If a Pre-Bid Conference is scheduled, the Notice shall advise of the date, time, and location of the conference, if the conference is virtual, the Notice should include the link to the virtual meeting. For in-person conferences, an attendance sign-in sheet will be used as a permanent record of the Pre-Bid Conference and shall contain the names, contact information, and business affiliations of all bidders and other interested persons in attendance. For virtual conferences, a record of the participants attending will be generated from the meeting software and retained with the bid documentation.

3.4.7 Qualifications of Bidders
In contracts where the nature of the work is such that the qualifications of the bidders are essential criteria for evaluating the bidders' responsibility, the requesting department should identify such criteria in the Special Provisions.

Such provision shall clearly state that the City may reject any bid that does not meet the requirements stated in the qualification’s clause. Included in such clause shall be requirements that bidders demonstrate they are regularly engaged in the manufacture, construction, or provision of the work or product called for in the contract, and that they have the necessary resources, facilities, and personnel to perform under the contract.

Additionally, bidders must attest that they have previously and satisfactorily performed work comparable to that specified in the contract. Finally, bidders may be required to provide adequate references. The requesting department may prepare and include with the bid documents a form to be completed by bidders that covers the qualifications requirements.

3.4.8 Pricing Schedule
The bidder's completion of the Pricing Schedule (also known as a "Form of Bid") shall constitute the bidder's acceptance of all the terms and conditions contained in the bid documents and shall also indicate the bidder's prices. The requesting department and Purchasing shall develop the Pricing Schedule.

The Pricing Schedule shall seek separate cost quotations for all relevant aspects of the procurement, including, where applicable, unit price, extended price, sales or use taxes, and cost of installation and delivery. In all cases, the Pricing Schedule shall be structured to allow the City to make an objective comparison of all bids. Whenever possible, this will be accomplished by requesting a Total Bid Price.

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3.4.9 Bid Addenda
a. All bidder questions will be entered and answered in the e-procurement portal. All bidders shall be advised to prevent any one bidder from obtaining an unfair advantage.
b. Once the Notice has been published, any necessary changes, modifications, or adjustments to specifications, requirements, bid quantities, corrections, deadline extensions, or otherwise revise the bid documents shall be accomplished through the issuance of written Addenda, and authorized and published by Purchasing. No private modifications shall be made.
c. All technical Addenda shall be drafted by the requesting department and approved by Purchasing before publishing. Addenda shall identify the bid number and title, date of issuance, Addendum number, and specific reference to the provisions in the bid documents being amended and the substance of such amendment. d. Purchasing shall publicly issue Addenda so that it is available to all firms or persons through the e-procurement portal.

3.4.10 Bid Opening
a. Bids shall be submitted electronically through the e-procurement portal before the specified time and date.
b. The e-procurement software will date and time stamp sealed bids as they are received. Sealed bids shall remain unopened and stored securely until the public opening date and time specified in the Request for Bid or subsequent addenda. c. Any bids received after the specified date and time of bid opening will not be accepted by Purchasing.
d. Bids shall be opened publicly by the Purchasing Officer or designee along with another member of the Purchasing staff at, or immediately after, the date and time noticed for the bid opening.
e. No bidder or interested party will be excluded from the bid opening. f. A bid opening attendance record shall be prepared at the time of the opening, containing the names, contact information, and business affiliations of all bidders and other interested non-City persons in attendance.
g. Bid pricing shall be read aloud by the person opening the bids. Upon request, other non-confidential information contained in the bid forms shall also be read aloud or otherwise made available for inspection. Members of the public shall be permitted to witness the bid opening.
h. From and following the specified date and hours of the bid opening, no bidder shall be permitted to change their bid. If the opening of the bids is delayed beyond the time specified in the Notice, all bidders shall be so notified. i. Original bid documents shall be retained on file in the e-procurement software, until no longer required by the City's Records Retention Policy, or other applicable law.

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3.4.11 Evaluation of Bids

3.4.11.1 Criteria
Contract award, if any, shall be made to the lowest-priced responsive and responsible bidder which is defined as the bidder submitting the lowest-priced bid that materially conforms to all requirements of the request for bids, and has demonstrated ability to perform the work. The criteria for evaluating bids shall be lowest monetary bid, the responsiveness of the bid, and responsibility of the bidder. Purchasing shall be principally responsible for the evaluation of bids. In addition, the requesting department shall review the bids for compliance with Technical Specifications and Special Provisions.

3.4.11.2 Price/Cost Analysis
Where more than one bidder submits a proposal, Purchasing shall conduct a price analysis of the bids. In cases where only one bid is received or it is determined that there was a lack of adequate competition for the contract, Purchasing shall conduct a cost analysis, unless the reasonableness of the bid price can be established on the basis of a catalog or market price for a similar commercial product sold in substantial quantities to the general public, or on the basis of prices set by law or regulation. Purchasing shall examine the bids to determine which bid is the lowest in price, or highest in price when appropriate (for example, when leasing out City property). In doing so, staff shall observe the following rules:
a. Any formula for determining the basis for evaluating bids, as described in the contract documents, shall be utilized;
b. The unit price shall govern whenever both unit price(s) and extended price(s) or total(s) are given;
c. All bids showing item extensions and/or totals shall be reviewed for accuracy. Any errors in bidders' calculations shall be noted on a separate sheet of paper. No corrections or changes are to be made on or to the vendor's bid. Purchasing shall review the terms of payment for the effect of those terms upon the bid price. Therefore, where specified in the contract documents, terms such as discounts, transportation costs, sales taxes, and other costs shall be considered in determining which bid is the lowest (or highest) in price. Payment discounts may only be used to determine low bid if payment terms are twenty (20) days or more and prior experience of the City indicates that such discounts are generally taken.

3.4.11.3 Responsiveness
a. Purchasing shall determine whether the lowest or highest (if applicable) monetary bid is responsive to the contractual and technical requirements, and review the bid documents to ensure that the bidder has made no unauthorized deletions, amendments, or other changes. Purchasing shall verify that the required proposal forms and certificates have been completed and that all signatures are in order. Purchasing may determine whether the deficiency is a minor irregularity (e.g., omission of a signature

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on a form, or a bidder's security submitted in an improper amount), or whether the deficiency is more substantive in nature (e.g., taking exception to warranty provisions, or extending the delivery period). b. Purchasing may contact the bidder and discuss the aspects of any bid that appears non-responsive. With respect to deficiencies representing minor irregularities, the bidder may be given the opportunity to correct the deficiency so that the bid may be considered responsive. If the bidder does not correct the minor irregularity and make the bid responsive, or if the deficiency is substantive in nature, Purchasing shall determine which bidder is the next lowest or highest monetary bidder and shall follow the procedure above to determine the responsiveness of that bidder.

3.4.11.4 Responsible Bidder
The responsible party shall determine whether the lowest-priced responsive bidder is a "responsible" bidder, i.e., whether such firm or person has sufficient experience, qualifications, and financial stability to perform the contract. The criteria to be used in making such determination may include the bidder's experience and history of service to the City, if any; the bidder's responses on those proposal documents requiring a listing of experience, qualifications, and references, if required; and the expertise, dependability and financial stability of the bidder as revealed to the City from any other legal source. In making this determination, Purchasing may cite the minimum requirements or specifications set forth in the Special Provisions and Technical Specifications.

3.4.11.5 Rejection of Bids
A. The City Council or City Manager have the right to reject any and all bids when it is in the best interest of the City to do so. Any determination to reject the lowest-priced bid on the basis that the bidder is not responsible or that the bid is not responsive may only be made if there are sound documented reasons evidencing the inability of the bidder to perform the contract, and after notice and an opportunity to have a hearing has been provided to the bidder through the usual Protest process. (TMC §2-7-09(c)(4)) B. Following bid evaluation, Purchasing may recommend rejecting bids in cases where:

1. The bids received were too high, or the budgeted funds are insufficient to cover the amount of the contract, even if awarded to the lowest-priced responsible bidder;

2. None of the bids were responsive to the requirements of the contract documents;

3. None of the bidders were deemed sufficiently responsible to perform the contract in a satisfactory manner; or

4. Purchasing determines that awarding the contract would not be in the best interests of the City, based upon sound, documented business reasons.

C. The reason for rejecting the bids should be documented and maintained in

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the bid file, along with the City Council’s or City Manager’s approval.

3.4.11.6 Tied Bids
In any case where two identically priced responsive and responsible bids are also the lowest (or highest) priced, Purchasing shall determine contract award using the following protocol:

1. Qualified local vendor(s) shall have preference over out-of-City vendor(s). (TMC §2-7-09 (c)(5))

2. The City Council may accept the bid it chooses or accept the lowest bid made by negotiation with the tie bidders at the time of the bid opening. (TMC §2-7-09(c)(6))

3.4.12 Award of Contract

3.4.12.1 Purchasing may award a contract to the lowest-priced responsive and responsible bidder whose proposal materially meets the specifications and requirements outlined in the Request for Bid documents. In the case of revenue- generating bids, an award will be made to the highest-paying responsive and responsible bidder. Upon completion of bid evaluation and analysis, Purchasing shall notify all bidders in writing of the City’s intent to award a contract. The successful bidder must execute the Agreement and related documents, and provide proof of insurance, within the time specified.

3.4.12.2 If the City intends to award a contract to a bidder other than the apparent lowest priced bidder, Purchasing shall inform each bidder whose total bid was less than that bid of the successful bidder and the reasons for the decision.

3.4.13 Contract Administration

3.4.13.1 Upon contract award and execution, the department shall maintain a contract file. The requesting department head or designated Project Manager shall be responsible for monitoring and reviewing the project to determine whether contract terms and conditions are being met, and for approving invoices for payment.

3.4.13.2 The requesting department, shall endeavor to resolve any problems concerning adherence to terms and conditions of the contract. All financial matters shall be coordinated with the Finance Department.

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SECTION 4 : REQUEST FOR PROPOSALS

4.1. REQUEST FOR PROPOSALS (RFP)
Except as otherwise noted in Section 2 of this policy, purchases of equipment, materials, supplies, and services shall be awarded through a competitive procurement process. The Request for Proposals (RFP) process is best suited to procurements where non-price factors are more important than pricing. When procuring Architectural and Engineering (A&E) services, the Request for Qualifications (RFQ) process is used instead (refer to Section 5).

Under the RFP approach, the award of a contract is made on a “best value” basis by identifying the most cost-effective solution to the City’s needs, with both price and non-price factors considered. Evaluation criteria identified in the RFP solicitation documents are subsequently used by an evaluation committee for scoring received proposals. The award need not be made to the lowest-priced proposer; however, in such cases selection must be based on written documentation explaining why the lowest-priced proposer was not selected. Proposers shall be afforded the right to appeal the City’s selection pursuant to the protest and appeal provisions outlined in the RFP documents and Section 2 of this manual.

4.2. RFP PROCESS

4.2.1 Development of Scope of Work and Scoring Criteria

4.2.1.1 It is the responsibility of the requesting department to create a comprehensive scope of work that will describe the commodity or service requested so that detailed specifications can be prepared, and at the same time ensure that they are broad enough to allow competition. Care should be taken not to include specifications that have the effect of limiting qualified vendors through specifications that have little or no bearing on the end function of the goods or services.

A. The requesting department should include a clear description of the problem to be solved.

B. Identification of what the proposer should accomplish. This would include any desired approach to the problem; practical, policy, technological, and legal limitations; specific questions to be answered; description of the items to be delivered; format and number of copies of any required reports; and the nature of the City’s assistance and cooperation which will be available to the proposer.

C. A time schedule including dates for award of contract, commencement of performance, submission of progress reports, if any, and completion.

D. Payment schedule, including whether progress payments will be allowed.

4.2.1.2 The requesting department should also develop a scoring rubric that adequately addresses the proposer’s qualifications and capabilities to complete the tasks

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outlined in the scope of work. Specifically, the requesting department should:

A. Identify scoring evaluation factors. The factors may include technical capabilities, experience and qualifications, cost and pricing, approach and methodology, compliance with requirements, and references and past performance.

B. Assign a weight to each identified evaluation factor.

C. Identify scoring metrics for each factor. For example, scoring metrics for approach and methodology may relate to the project plan, timeline, and risk management strategies; while metrics for price may relate to the total cost, cost breakdown, and value for money.

D. Develop the scoring rubric that outlines how points will be allocated for each criterion. Verify that the rubric aligns with the weights assigned to each factor.

E. For procurements for professional architectural, engineering or related services that are expected to lead to construction, state law (California Government Code 4526) and federal law (40 USC Chapter 11 “Brooks Act”) require that selection be made solely on the basis of qualifications, which does not allow for the consideration of cost or price during the selection process. Examples of services described in 49 USC Section 5325(b) include: program management, construction management, feasibility studies, preliminary engineering, design, architectural, engineering, surveying, mapping or related services. Once the most- qualified proposer is identified for these services, the City will negotiate costs to obtain pricing that is fair and reasonable. See Section 5 for further information. (Government Code Section 4526)

4.2.2 Procurement Package
The requesting department shall develop the procurement package within the e- procurement portal along with any other documents necessary to implement the process. These shall include but are not limited to:

a. Documentation and scope of work/services which adequately describe the goods or services required.

b. Scoring rubric, including identification of the related evaluation factors and metrics.

c. Special terms and conditions that apply to the specific procurement.

d. A proposed schedule including advertising and contract commencement dates.

e. Estimated cost of the contract. The requesting department should ensure they have adequate funding to cover the resultant contract at the time of execution.

f. A suggested project coordinator, when appropriate, whose duties will include

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acting as a liaison between the requesting department and Purchasing.

g. A suggested contract administrator, shall endeavor to resolve any problems concerning adherence to terms and conditions of the contract. When appropriate, the contract administrator shall also fill the role as the project coordinator.

h. Procurement Package Checklist, which includes a section to document approval by the head of the requesting department.

Purchasing will review the requesting department’s documentation via the e- procurement portal and confirm that the procurement is appropriate for the RFP process before proceeding further. If the procurement method is not appropriate, Purchasing will work with the requesting department to identify the best method to procure the requested goods or services.

4.2.3 RFP Documents
The requesting department shall prepare the RFP template and related documents under the supervision of the Purchasing Officer. Purchasing shall establish a preliminary schedule of events with the department, based upon the anticipated date of advertisement, which designates the date upon which all changes, comments, and required approvals must be submitted. Such a schedule shall permit enough time for review of the contract documents by the individuals involved. Although the provisions and requirements in RFP documents may vary, the RFP documents shall, at a minimum, contain the following items:

4.2.3.1 RFP Template
The RFP documents will be prepared utilizing the RFP fillable template. The document will contain:

A. Proposal Formal Guidelines
B. Scope of Service
C. The process for Submitting Proposals
D. A description of the process for evaluating proposals and selecting the proposal recommended for award.

E. A description of prohibited communications.

F. A section requiring the proposer to represent there are no conflicts of interest.

G. Standard terms and conditions
H. Draft Agreement
I. Applicable ordinances and programs

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4.2.3.2 Notice Requesting Proposals
The notice requesting proposals (“Notice”) is a publicly advertised document that notifies potential proposers of the title and nature of the contract, the date for a Pre-Proposal Conference, if one is scheduled, and establishes the subsequent date and time by which proposals must be submitted to the City.

The Notice shall also inform Proposers of significant requirements under federal or state laws, if any. The Purchasing Officer or authorized designee shall publicly advertise the Notice, which shall refer to and incorporate by reference all RFP documents (i.e., the General Conditions and Instructions to Proposer, the Special Provisions, the Technical Specifications, and other certificates, forms, and documents), and shall designate the method for obtaining copies of such documents.

4.2.3.3 Pre-Proposal Conference
If a Pre-Proposal Conference is scheduled, the Notice shall advise of the date, time, and location of the conference. An attendance sign-in sheet will be used as a permanent record of the Pre-Proposal Conference and shall contain the names, contact information, and business affiliations of all Proposers and other interested persons in attendance.

4.2.3.4 Qualifications of Proposers
A. In contracts where the nature of the work is such that the qualifications of the Proposers are essential evaluation criteria, the requesting department shall include among the RFP documents a clause setting forth such required qualifications. Contracts for services shall contain such clauses. In addition, contracts for the provision of supplies, equipment, and materials, where a specially manufactured product or technical guidance and advice are called for, shall also contain a provision regarding the qualifications of Proposers. Such provisions shall clearly state that the City may reject any proposal that does not meet the requirements stated in the Qualifications clause. Included in such clause shall be requirements that Proposers demonstrate they are regularly engaged in the provision of the work or product called for in the contract, and that they have the necessary experience, training, resources, facilities, and personnel to perform such work.

B. Additionally, Proposers must attest that they have previously and satisfactorily performed work with characteristics comparable to those specified in the contract. Finally, Proposers may be required to furnish adequate references. The requesting department may, at its option, prepare and include with the RFP documents a form to be completed by Proposers that will cover the qualification requirements described herein.

4.2.3.5 Scope of Work / Services
A. The RFP shall include the scope of work and services being requested, applicable terms and conditions, the time in which the project must be completed,

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requirements concerning coordination with other entities, other information that may be useful in the preparation of the proposal, and evaluation criteria specifically tailored to the project. Such criteria shall include the consultant's proven experience and competence, bondability, insurability, understanding of the scope of work, financial ability, resources to perform the work, willingness to cooperate with City Purchasing and technical staff, and proposed method for assuring timely and acceptable performance and management of the work.

B. In the event that the City assigns weighted values to the evaluation criteria, such values shall be indicated in the RFP. In addition, résumés of the consultant's staff may be requested to allow the evaluation committee to determine the staff’s training, education, experience, and overall competence to perform the work.

C. Specifications must include detailed descriptions of the qualitative and quantitative nature of the supplies, equipment, materials, or services to be procured. They must also set forth the minimum essential characteristics and standards to which the products, services, or work must conform to satisfy the City's intended use. The use of blueprints, diagrams, charts, and maps is encouraged to clarify the specifications requirements.

D. Specifications shall not be drafted to unduly restrict competition. Brand names may be used in Technical Specifications only when it is impractical or uneconomical to specify clear and adequate descriptions of the technical requirements for a particular type of needed product. In all cases where brand names are used, Proposers shall be afforded the opportunity to propose to the City a substitute alternate product of equal quality or value. The City's decision to approve or disapprove such an alternate product shall be final and binding on the Proposer.

E. Note that additional restrictions may apply to federally funded procurements.

Refer to Section 7 for additional details.

4.2.3.6 Pricing Schedule
A. Whenever reasonable and appropriate, a firm not-to-exceed price quotation shall be requested in the RFP. In other cases, the RFP shall solicit a labor fee schedule for all categories of personnel to be utilized by the consultant in connection with the project, and a total proposed project budget.

B. The Proposer's completion of the Pricing Schedule shall constitute both the Proposer's prices and acceptance of all the terms and conditions contained in the RFP documents, unless exceptions are thereto so noted and approved by the City.

Purchasing shall develop the Pricing Schedule in coordination with the requesting department. The Pricing Schedule shall seek separate cost quotations for all relevant aspects of the procurement, including, where applicable, unit price, extended price, sales or use taxes, and cost of installation and delivery. In all cases, the Pricing Schedule shall be structured to allow the City to make an objective comparison of all RFPs.

C. Whenever possible, this will be accomplished by requesting a Total RFP Price.

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4.2.3.7 Advertisement
A. Purchasing will publish the Invitation to RFP electronically, and when required by the funding agency or by law, in at least one newspaper of general circulation.

The advertisement shall state the time and place for the receiving of proposals and shall describe in general terms the work to be done.

B. Generally, RFPs will be open 14-30 days. The Purchasing Officer will determine the number of days RFPs will be open based on the nature and complexity of the goods or services being procured. City employees, and consultants or contractors under the supervision of City employees, shall refrain from discussing details of the requested goods or services with prospective proposers, unless so authorized by Purchasing.

4.2.3.8 Addenda
A. All proposer questions will be entered and answered in the e-procurement portal.

All proposers shall be able to access the questions and answers through the e- procurement portal, to prevent any one proposer from obtaining an unfair advantage.

B. Any necessary changes, modifications, or adjustments to specifications, requirements, or RFP quantities shall be authorized and publicized by Purchasing.

No private modifications shall be made. Once the RFP has been published, all changes necessary to correct any errors in the RFP documents, to extend deadlines, or to otherwise revise the RFP documents, shall be accomplished through the issuance of a written Addendum, authorized and publicized by Purchasing. No private modifications shall be made.

C. All technical Addenda shall be drafted by the requesting department and shall be reviewed, approved, and published by Purchasing. Addenda shall identify the RFP number and title, date of issuance, Addendum number, and specific reference to the provisions in the RFP documents being amended and the substance of such amendment.

D. Purchasing shall publicly issue the addendum so that it is available to all firms or persons.

4.2.3.9 Proposal Submittals
A. Proposal submittals shall be submitted electronically through the e-procurement portal before the time and date specified in the RFP documents.

B. The e-procurement software will date and time stamp proposal submittals as they are received. The e-procurement software will prevent the submission of proposals after the time and date specified.

C. Proposals are not subject to public examination until the City has made an award announcement. Following the specified date and hours proposals are due, no Proposer shall be permitted to change their proposal, except to correct errors or provide additional information, at the discretion and request of Purchasing.

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Original RFP and proposal documents shall be retained on file in the e- procurement software, until no longer required by the City's Records Retention Policy, or by applicable law.

4.2.4 Evaluation
Proposals are not subject to public examination until the City has made an award announcement. At a minimum, Proposals shall be reviewed by the Purchasing Officer or authorized designee. The Project Coordinator and other City personnel with appropriate technical expertise shall also be included in the review process, as necessary.

4.2.4.1 Criteria
The award shall be made to the Proposer whose proposal is determined in writing to (a) best meet the criteria set forth in the RFP and (b) provide the best value to the City. The review shall adhere strictly to the evaluation criteria set out in the RFP and discussed at the Pre-Proposal Conference, if one is scheduled; no discriminatory waiver of criteria shall be allowed. The conclusions of the reviewers shall be summarized in a memorandum.

4.2.4.2 Selection Process
A. The City shall establish an Evaluation Committee (EC) composed of representatives from the City for the purpose of evaluating the proposals received in response to an RFP. The City may include as part of the Committee qualified representatives from other agencies or entities. Each EC member shall attest in writing that they do not have a conflict of interest in serving in that role for the specified solicitation.

B. Proposal documentation requirements shall be set forth in the RFP to provide guidance regarding the information considered by the EC. The EC shall be responsible for performing the evaluations of each proposal based on the stated criteria.

C. Each member of the EC shall rate the proposals separately unless the proposals are technical in nature, in which case a subject matter expert may be called upon to score that section. The scores of each member of the EC shall then be averaged to provide a total score for each of the proposers.

4.2.4.3 Initial Evaluation: Proposal Submission and Financials Purchasing shall conduct an initial pass/fail analysis of (a) each proposal submittal package for completeness (“responsiveness”), and the Finance Director shall review when applicable (b) the financial stability of each Proposer based upon the Financial Report submitted. Upon completion of this analysis, Purchasing will forward the Qualification Proposals of the passing proposers to the Evaluation Committee (EC).

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4.2.4.4 Evaluation
A. The EC will review and evaluate the Qualification Proposals based on the criteria identified in the RFP, and each proposer will be given a score.

Reference checks will be performed, and proposers may also be required to submit to interviews, provide presentations, allow facility surveys, and other items deemed necessary during the evaluation process. In no case shall the City’s discretionary use or disuse of these optional additional evaluation processes be grounds for protest of an award decision.

B. Should the City exercise the option to interview, only those proposers judged by the EC to be the most qualified to perform the work shall be requested to make a formal presentation to the City. Based on the oral presentation and the written proposal, the evaluators shall make a final ranking of potential proposers.

4.2.4.5 Calculation of Final Score
Upon completion of all phases of the evaluation process, the e-procurement software shall total the scores to rank the proposals and identify the winning proposer.

4.2.4.6 Negotiations
A. The Project Coordinator and those City personnel with technical expertise relating to the project, may negotiate with the highest-ranked proposer to establish a precise scope of work, work schedule and completion date, cost of services, and the method and manner of payment. A recommendation for award may be made upon the successful completion of negotiations as to the terms, conditions, and technical requirements of the proposed agreement.

The recommendation for award should be submitted to Purchasing so award letters may be generated and distributed.

B. If negotiations with the highest-ranked proposer prove unsuccessful, the City shall terminate negotiations with this firm and commence discussions with the next-highest-ranked proposer until a price determined to be fair and reasonable to both parties is obtained. Once negotiations have been terminated with a firm, the City may not go back to that firm for additional negotiations – even if the next lower ranked respondent is higher in price.

4.2.4.7 Award of Contract
A. Award of Contract shall be made on a “best value” basis to the qualified proposer whose proposal best meets the criteria set forth in the RFP and will be most advantageous to the City, with price and all other factors considered.

The City Council shall authorize the award of contracts exceeding $75,000. (TMC §2-7-08(e)).

B. Upon completion of RFP evaluation and analysis, Purchasing shall notify all

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proposers in writing of the City's intent to award a contract. The successful proposer must execute the agreement documents and submit the required Certificate of Insurance within the time specified in the RFP or agreement documents, or if no such time is specified therein, within the time specified in the notice of intent to award issued by Purchasing.

4.2.5 Contract Administration

4.2.5.1 Upon contract award and execution, the e-procurement software will maintain a contract file. The requesting department head or designated Project Manager shall be responsible for monitoring and reviewing the project to determine whether contract terms and conditions are being met, and for approving invoices for payment.

4.2.5.2 The requesting department, shall endeavor to resolve any problems concerning adherence to terms and conditions of the contract. All financial matters shall be coordinated with the Finance Department.

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SECTION 5 : REQUEST FOR QUALIFICATIONS

5.1. REQUEST FOR QUALIFICATIONS (RFQ)
The Request for Qualifications (RFQ) process may be used as an alternative to the RFP process for procuring services, with the chief distinction of the RFQ process being that the award of the contract is made by identifying the most qualified proposer first before entering into price negotiations.

5.2. GENERAL

5.2.1 Process Summary
The RFQ process is similar to the RFP process defined in Section 4 of this Purchasing Manual, except proposers are ranked solely on qualification, without regard to pricing.

Pricing may be requested in the initial solicitation if it is kept separately sealed from the information used to evaluate and rank the proposers. Once the most-qualified proposer is identified, the City may open the selected proposer’s pricing and begin contract negotiations.

Professional services of private architectural, landscape architectural, engineering, environmental, land surveying, or construction project management firms shall be on the basis of demonstrated competence and professional qualifications. Once the most- qualified proposer is identified for these services, the City will negotiate cost to obtain pricing that is fair and reasonable. If it is determined that the pricing is not fair and reasonable, then the City may begin negotiations with the next most qualified proposer. (Government Code Section 4526)

5.2.2 Development of Scope of Work and Scoring Criteria

5.2.2.1 It is the responsibility of the requesting department to provide create a comprehensive scope of work that will describe the commodity or service requested so that detailed specifications can be prepared, and at the same time ensure that they are broad enough to allow competition. Care should be taken not to include specifications that have the effect of limiting qualified vendors through specifications that have little or no bearing on the end function of the goods or services.

A. The requesting department should include a clear description of the problem to be solved.

B. Identification of what the proposer should accomplish. This would include any desired approach to the problem; practical, policy, technological, and legal limitations; specific questions to be answered; description of the items to be delivered; format and number of copies of any required reports; and the nature of the City’s assistance and cooperation which will be available to the proposer.

C. A time schedule including dates for award of contract, commencement of performance, submission of progress reports, if any, and completion.

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D. Payment schedule, including whether progress payments will be allowed.

5.2.2.2 The requesting department should also develop a scoring rubric that adequately addresses the proposer’s qualifications and capabilities to complete the tasks outlined in the scope of work. Specifically, the requesting department should:

A. Identify scoring evaluation factors. The factors may include technical capabilities, experience and qualifications, approach and methodology, compliance with requirements, and references and past performance.

B. Assign a weight to each identified evaluation factor.

C. Identify scoring metrics for each factor. For example, scoring metrics for approach and methodology may relate to the project plan, timeline, and risk management strategies.

D. Develop the scoring rubric that outlines how points will be allocated for each criterion. Verify that the rubric aligns with the weights assigned to each factor.

5.2.3 Procurement Package
The requesting department shall develop the procurement package within the e- procurement portal along with any other documents necessary to implement the process.

These shall include but are not limited to:
a. Documentation, scoring criteria, and scope of work/services which adequately describe the goods or services required.
b. Special terms and conditions that apply to the specific procurement, such as unique qualifications of the prospective vendor.
c. A proposed bidding schedule (including advertising and contract commencement dates).
d. Estimated cost of the contract. The requesting department should ensure they have adequate funding to cover the resultant contract at the time of execution. e. A suggested project coordinator, when appropriate, whose duties will include acting as a liaison between the requesting department and Purchasing. f. A suggested contract administrator, shall endeavor to resolve any problems concerning adherence to terms and conditions of the contract. When appropriate, the contract administrator shall also fill the role as the project coordinator. g. Procurement Package Checklist, which includes a section to document approval by the head of the requesting department.

Purchasing shall review the requesting department's documentation via the e- procurement portal and confirm that the procurement is appropriate for the sealed RFQ process. If the procurement method is not appropriate, Purchasing will work with the requesting department to identify the best method to procure the requested goods or services.

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5.2.4 RFQ Documents
The requesting department shall prepare RFQ documents under the supervision of the Purchasing Officer. Purchasing shall establish a preliminary schedule of events with the department, based upon the anticipated date of advertisement, which designates the date upon which all changes, comments, and required approvals must be submitted. Such a schedule shall permit a sufficient time period for review of the contract documents by the individuals involved.

5.2.4.1 Although the provisions and requirements in RFQ documents may vary, the RFQ documents shall, at a minimum, contain the following items:
a. Notice Requesting Statements of Qualifications/Proposals. The notice requesting proposals ("Notice") is a publicly advertised document that notifies potential proposers of the title and nature of the contract, the date for a Pre-Proposal Conference, if one is scheduled, and establishes the subsequent date and time by which proposals must be submitted to the City.
b. The Purchasing Officer or authorized designee shall publicly advertise the Notice, which shall refer to and incorporate by reference all RFQ documents (i.e., the General Conditions and Instructions to Proposer, the Special Provisions, the Technical Specifications, and other certificates, forms, and documents), and shall designate the method for obtaining copies of such documents. c. General Conditions and Instructions to Proposer. The General Conditions and Instructions to Proposer ("General Conditions") sets forth standard terms and conditions that govern the contractual relationship between the successful Proposer and the City.
d. Special Provisions. Special Provisions prescribe terms and conditions specifically tailored to the particular contract being sought.
e. Pre-Proposal Conference. If a Pre-Proposal Conference is scheduled, the Notice shall advise of the date, time, and location of the conference. An attendance sign- in sheet will be used as a permanent record of the Pre-Proposal Conference and shall contain the names, contact information, and business affiliations of all Proposers and other interested persons in attendance.
f. Qualifications of Proposers. Because the nature of professional services obtained through the RFQ process is such that the qualifications of the Proposers are essential evaluation criteria, Purchasing includes among the RFQ documents a clause setting forth such qualifications, and contracts for services also contain such clauses. In addition, contracts for the provision of supplies, equipment, and materials, where a specially-manufactured product or technical guidance and advice are called for, also contain provisions regarding Proposer qualifications.

Such provisions shall clearly state that the City may reject any proposal that does not meet the requirements stated in the qualification’s clause. Included in such clause will be requirements that Proposers demonstrate they are regularly

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engaged in the provision of the work or product called for in the contract, and that they have the necessary experience, training, licenses or certifications, resources, facilities, and personnel to perform such work. g. Proposers must attest that they have previously and satisfactorily performed work with characteristics comparable to those specified in the contract. h. Proposers may be required to furnish adequate references.

The requesting department may, at its option, prepare and include with the RFQ documents a form to be completed by Proposers that will cover the qualification requirements described herein.

5.2.4.2 Scope of Work / Services.

A. The RFQ includes the scope of work and services being requested, applicable terms and conditions, the time in which the project must be completed, requirements concerning coordination with other entities, other information that may be useful in preparation of the proposal, and evaluation criteria specifically tailored to the project. Such criteria must include the consultant's proven experience and competence, bondability, insurability, understanding of the scope of work, financial ability, resources to perform the work, willingness to cooperate with City Purchasing and technical staff, and proposed method for assuring timely and acceptable performance and management of the work. If the City assigns weighted values to the evaluation criteria, such values shall be indicated in the RFQ.

B. In addition, résumés of the consultant's staff may be requested to allow the evaluation committee to determine the staff’s training, education, experience, and overall competence to perform the work. Specifications must include detailed descriptions of the qualitative and quantitative nature of the services to be procured. They must also set forth the minimum essential characteristics and standards to which the work must conform to satisfy the City's intended use.

C. The use of blueprints, diagrams, charts, and maps is encouraged to clarify the specifications requirements. Specifications shall not be drafted to unduly restrict competition. Brand names may be used in Technical Specifications only when it is impractical or uneconomical to specify clear and adequate descriptions of the technical requirements for a particular type of needed product. In all cases where brand names are used, Proposers shall be afforded the opportunity to propose to the City a substitute alternate product of equal quality or value. The City's decision to approve or disapprove such alternative product shall be final and binding on the Proposer.

Note that additional restrictions may apply to federally funded procurements.

Refer to Section 7 for additional details.

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5.2.4.3 Pricing Schedule
A. Whenever reasonable and appropriate, pricing may be requested in the RFQ. If pricing is requested, the RFQ should specify that pricing should be provided in a separate file. In some cases, the RFQ may solicit a labor fee schedule for all categories of personnel to be utilized by the consultant in connection with the project, and a total proposed project budget. The Proposer's completion of the Pricing Schedule shall constitute both the Proposer's prices and acceptance of all the terms and conditions contained in the RFQ documents unless exceptions are thereto so noted and approved by the City.

B. Purchasing shall develop the Pricing Schedule in coordination with the requesting department. The Pricing Schedule may seek separate cost quotations for all relevant aspects of the procurement. In all cases, the Pricing Schedule shall be structured to establish a starting point for negotiations and to allow the City to make a reasonable project cost determination. In no case shall such pricing be used to objectively compare RFQ submittals.

5.2.4.4 Advertisement
A. Purchasing will publish the Invitation to RFQ electronically, and when required by the funding agency or by law, in at least one newspaper of general circulation.

The advertisement shall state the time and place for the receiving of proposals and shall describe in general terms the work to be done.

B. Generally, RFQs will be open 14-30 days. The Purchasing Officer will determine the number of days RFQs will be open based on the nature and complexity of the goods or services being procured. City employees, and consultants or contractors under the supervision of City employees, shall refrain from discussing details of the requested goods or services with prospective proposers, unless so authorized by Purchasing.

5.2.4.5 Addenda
A. All proposer questions will be entered and answered in the e-procurement portal.

All proposers shall be able to access the questions and answers through the e- procurement portal, to prevent any one proposer from obtaining an unfair advantage.

B. Any necessary changes, modifications, or adjustments to specifications, requirements, or quantities shall be authorized and publicized by Purchasing. No private modifications shall be made. Once the RFQ has been published, all changes necessary to correct any errors in the RFQ documents, to extend deadlines, or to otherwise revise the RFQ documents, shall be accomplished through the issuance of a written Addendum, authorized and publicized by Purchasing. No private modifications shall be made.

C. All technical Addenda shall be drafted by the requesting department and shall be reviewed and approved by Purchasing before publishing. Addenda shall identify the RFQ number and title, date of issuance, Addendum number, and specific

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reference to the provisions in the RFQ documents being amended and the substance of such amendment.

D. Purchasing shall publicly issue the addendum so that it is available to all firms or persons, except in the cases of RFQs that require mandatory attendance of Pre- Proposal/Site Inspection Conference(s), in which case only those vendors in attendance may be forwarded addenda.

5.2.4.6 Proposal Submittals
A. Proposal submittals shall be submitted electronically through the e-procurement portal before the time and date specified in the RFQ documents. Proposals may be submitted physically or electronically, at the discretion of the City.

B. The e-procurement software will date and time stamp proposal submittals as they are received. Any proposals received after the specified date and time proposals are due will not be accepted by the e-procurement software.

C. Proposals are not subject to public examination until the City has made an award announcement. Following the specified date and hours proposals are due, the e- procurement software will prevent Proposers from changing their proposal, except to correct errors or provide additional information, at the discretion and request of Purchasing. Original RFQ and proposal documents shall be retained on file in the e-procurement software until no longer required by the City's Record Retention Policy, or by applicable law.

5.2.5 Evaluation
Proposals are not subject to public examination until the City has made an award announcement. At a minimum, Proposals shall be reviewed by the Purchasing Officer or authorized designee. The Project Coordinator and other City personnel with appropriate technical expertise shall also be included in the review process, as necessary.

5.2.5.1 Criteria
The award shall be made to the Proposer whose proposal is determined in writing to best meet the criteria set forth in the RFQ. The review shall adhere strictly to the evaluation criteria set out in the RFQ and discussed at the Pre- Proposal Conference (if applicable); no discriminatory waiver of criteria shall be allowed. The conclusions of the reviewers shall be summarized on the scoring matrix and/or in a memorandum.

5.2.5.2 Selection Process
A. The City shall establish an Evaluation Committee (EC) composed of representatives from the City for the purpose of evaluating the proposals received in response to an RFQ. The City may include as part of the Committee qualified representatives from other agencies or entities. Each EC member shall attest in writing or electronically that they do not have a conflict of interest in

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serving in that role for the specified solicitation.

B. Proposal documentation requirements shall be set forth in the RFQ to provide guidance regarding the information considered by the EC. The EC shall be responsible for performing the evaluations of each proposal based on the stated criteria.

C. Each member of the EC shall rate the proposals separately unless the proposals are technical in nature, in which case a subject matter expert may be called upon to score that section. The scores of each member of the EC shall then be averaged to provide a total score for each of the proposers.

5.2.5.3 Initial Evaluation: Proposal Submission and Financials Purchasing shall conduct an initial pass/fail analysis of (a) each proposal submittal package for completeness (“responsiveness”), and the Finance Director shall review when applicable (b) the financial stability of each Proposer based upon the Financial Report submitted. Upon completion of this analysis, Purchasing will forward the Qualification Proposals of the passing proposers to the Evaluation Committee (EC).

5.2.5.4 Evaluation of Qualifications
A. The EC will review and evaluate the Qualification Proposals based on the criteria identified in the RFQ, and each proposer will be given a score.

Reference checks will be performed, and proposers may also be required to submit to interviews, provide presentations, allow facility surveys, and other items deemed necessary during the evaluation process. In no case shall the City’s discretionary use or disuse of these optional additional evaluation processes be grounds for protest of an award decision.

B. Should the City exercise the option to interview, only those proposers judged by the EC to be the most qualified to perform the work shall be requested to make a formal presentation to the City. Based on the oral presentation and the written proposal, the evaluators shall make a final ranking of potential proposers.

5.2.5.5 Evaluation of Pricing
A. Price proposals will remain locked within the e-procurement portal until the EC has completed the evaluation of the Qualification Proposals.

B. Proposer qualifications are of the utmost importance in service contracts; however, where two or more persons or firms appear equally qualified to perform the desired services, the one proposing the lowest total price shall be ranked first. In the event that the City receives only one proposal in response to an RFQ or the responses reveal a lack of adequate competition, the department may conduct a cost analysis to determine whether the compensation proposals are fair and reasonable.

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5.2.5.6 Calculation of Final Score
Upon completion of all phases of the evaluation process, the e-procurement software shall total the scores to rank the proposals and identify the winning proposer.

5.2.5.7 Negotiations
A. The Project Coordinator, and those City personnel with technical expertise relating to the project, may negotiate with the highest-ranked proposer to establish a precise scope of work, work schedule and completion date, cost of services, and the method and manner of payment. A recommendation for award may be made upon the successful completion of negotiations as to the terms, conditions, and technical requirements of the proposed agreement.

The recommendation for award should be submitted to Purchasing so award letters may be generated and distributed.

B. If negotiations with the highest-ranked proposer prove unsuccessful, the City shall terminate negotiations with this firm and commence discussions with the next-highest-ranked proposer until a price determined to be fair and reasonable to both parties is obtained. Once negotiations have been terminated with a firm, the City may not go back to that firm for additional negotiations – even if the next lower ranked respondent is higher in price.

5.2.5.8 Award of Contract
A. Award of Contract shall be made on a “best value” basis to the qualified proposer whose proposal best meets the criteria set forth in the RFQ and will be most advantageous to the City, with price and all other factors considered.

The City Council shall authorize the award of contracts exceeding $75,000. (TMC §2-7-08(e)).

B. Upon completion of RFQ evaluation and analysis, Purchasing shall notify all proposers in writing of the City's intent to award a contract. The successful proposer must execute the agreement documents and submit the required Certificate of Insurance within the time specified in the RFQ or agreement documents, or if no such time is specified therein, within the time specified in the notice of intent to award issued by Purchasing.

5.2.6 Contract Administration

5.2.6.1 Upon contract award and execution, the e-procurement software will maintain a contract file. The requesting department head or designated Project Manager shall be responsible for monitoring and reviewing the project to determine whether contract terms and conditions are being met, and for approving invoices for payment.

5.2.6.2 The requesting department, shall endeavor to resolve any problems concerning adherence to terms and conditions of the contract. All financial matters shall be coordinated with the Finance Department.

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SECTION 6 : PUBLIC WORKS CONTRACTS

6.1. APPLICABILITY
This Section is designed to supplement the procedures outlined in Sections 2 through 5 for Public Works Contracts. The procurement of public projects should follow all established procedures and the unique procedures outlined below. In addition, if the project is federally funded, the requirements outlined in Section 7 should also be followed.

6.1.1 Public Project Defined
Public Project shall mean any of the following: (PCC §20161, TMC §2-9-01(b))

• A project for the construction, reconstruction, erection, alteration, renovation, improvement, demolition, painting, repainting, or repair work involving any publicly owned, leased, or operated facility,
• Work in or about streams, bays, waterfronts, embankments, or other work for protection against overflow,
• Street or sewer work except maintenance or repair,
• Furnishing supplies or materials for any such project, including maintenance or repair of streets or sewers.

All public projects with expenditures exceeding five thousand dollars ($5,000), shall be contracted for and let to the lowest responsible bidder. (PCC Section 20162) Additionally, all Public Works projects more than $1,000 are subject to state-mandated prevailing wage and reporting requirements, regardless of the procurement method used (Labor Code §1771). The City shall comply with state Department of Industrial Relations regulations, and to advise contractors of mandatory bonding requirements for projects above $25,000 (Civil Code §95500; Labor Code §1720; PCC §20170, 20171, 20483, and SB-854)

6.1.2 Federal Funds
The City's procurement actions are primarily governed by the State of California Government Code, Public Contract Code, Federal Transit Administration (FTA) Circular 4220.1F, and Federal Highway Administration (FHWA) regulations as they appear in the Caltrans Local Assistance Procedures Manual (LAPM). In all procurements utilizing any amount of Federal funds, Federal requirements will generally supersede State law. Where no Federal funds are involved, procurement actions will be governed by applicable State law. References to statutes or regulations herein shall be deemed to refer to any subsequent revisions or amendments that may be enacted from time to time.

6.1.3 Federal Contract Law
If no applicable State or Federal law or regulation exists regarding a particular aspect of procurement, then Federal contract law principles defined in the Federal Acquisition Regulations may be applied.

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6.1.4 Bidding Procedures – Public Works Projects
The Engineering Division maintains a Standard Specifications and Drawings document that outlines proposal, award, scope of work, control of work and materials, legal relations, and other standards related to a public works construction project. The standards may be supplemented by Special Provisions and/or Technical Specifications for specific projects as necessary to define the scope of work.

6.1.5 Value Engineering
The City of Turlock may use value engineering clauses for construction and other capital projects of sufficient size to offer reasonable opportunity for increased efficiency. Value engineering is a systematic and creative analysis to ensure that the project is designed and constructed to perform its essential functions in the most cost- effective manner. The process may include consideration of life-cycle costing, and intangible or indirect benefits such as sustainability. (2 CFR 200.318(g))

6.1.6 Caltrans Local Assistance Projects
The California Department of Transportation (Caltrans) Local Assistance Program provides funding to the city for the purpose of improving its transportation infrastructure or providing transportation services. The funding comes from various Federal and State programs designed to assist the transportation needs of local agencies. Local Assistance Programs include programs such as the Congestion Mitigation and Air Quality Improvement Program (CMAQ) and Local Highway Safety Improvement Program (HSIP).

Local Assistance Programs will be administered in accordance with the Local Assistance Program Guidelines and Local Assistance Program Manuals (LAPMs).

6.1.6.1 Pursuant to the Local Assistance Procedures Manual, Chapter 10, Section 10.1.3, contracts below $1 million are not subject to the Caltrans Financial Document Review, but Local Public Agencies are required to establish that all costs are in compliance with the Federal cost principles, 48 CFR Chapter 1, Part 31, and other applicable requirements are met.

6.1.6.2 For identified projects below $1 million, prior to contract execution, the City will obtain documentation including the Exhibit 10-H1 Cost Proposal and the Exhibit 10-K Consultant Annual Certification of Indirect Costs and Financial Management System form for each consultant.

6.1.6.3 Once all documentation is received, the City will complete an ICAP/ICRP Review Checklist for each consultant working on the project.

A. If there are any items where the consultant does not appear to meet the requirements, the City will communicate with the consultant to attempt to resolve the discrepancy.

B. If there are any items that remain unresolved, the City will determine whether:
• The rate should be recalculated, making adjustments for any items that were not documented or do not appear reliable.

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• Do not proceed with the contract in the event the issues are significant and assurance over the accuracy of the rate cannot be obtained and an adjustment cannot be calculated.

6.1.6.4 Pursuant to LAPM Section 10.1.3, an indirect cost rate (ICR) is valid for the one- year applicable accounting period and consultants must update their ICR annually. However, once an ICR has been established for a contract, the ICR may be extended beyond the one-year applicable period through the duration of the specific contract, provided all concerned parties agree. The contract must clearly specify the ICR period if it is beyond the one-year applicable period.

6.1.7 Advertisement for Bids
Notices inviting informal bids will be sent to all qualified contractors for the category of work being bid and/or all construction trade journals specified in PCC §22036. Public Works of Improvement projects above $220,000 shall be advertised in one local newspaper of general circulation and the City’s website. (PCC §20161, 20162, 20170, 20482, 22036)

For federal and state-aid projects, the bid solicitation shall notify bidders of requirements associated with the participation of Local and Small Business Enterprise (LSBE) or Disadvantaged Business Enterprises (DBE), where applicable.

6.1.8 Bidder Qualifications
The City Engineering Division shall review the bids and determine whether the low bid proposal is responsive to the bid solicitation and whether the low bidder is responsible.

The City Engineering Division will recommend an award of an agreement by the City Council to the lowest bidder determined to be both responsive and responsible.

In contracts where the nature of the work is such that the qualifications of the bidders are essential criteria for evaluating the bidders' responsibility, the Engineering Division shall identify such criteria in the Special Provisions. Contracts for services and Public Works of Improvement (construction and maintenance) shall contain such clauses. In addition, contracts for the provision of supplies, equipment, and materials, where a specially manufactured product or technical guidance and advice are called for, shall also contain a provision regarding the qualifications of bidders.

Such provision shall clearly state that the City may reject any bid that does not meet the requirements stated in the qualification’s clause. Included in such clause shall be requirements that bidders demonstrate they are regularly engaged in the manufacture, construction, or provision of the work or product called for in the contract, and that they have the necessary resources, facilities, and personnel to perform under the contract.

Additionally, bidders must attest that they have previously and satisfactorily performed work comparable to that specified in the contract. Finally, bidders may be required to provide adequate references. The Engineering Division may prepare and include with the bid documents a form to be completed by bidders that covers the qualifications requirements.

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6.2. METHODS OF PROCUREMENT

6.2.1 Micro-purchases
Micro-purchases are those purchases up to but not exceeding $2,500. Purchases below that threshold may be made without obtaining competitive quotations but shall provide for competition whenever practicable. Award may be made if it is determined that the price is fair and reasonable, and that there are no significant differences in quality or price among available vendors. Typically, this would involve items sold "off- the-shelf' to the general public or a specific market. Documentation for a non- competitive micro-purchase need only include a notation that the price is fair and reasonable and the reason for the determination. The determination of price reasonableness may be recorded on preprinted forms or a checklist on the receipt. (2 CFR 200.320(a))

6.2.1.1 Micro-purchases are exempt from Buy America requirements. There should be equitable distribution among qualified suppliers, and requirements may not be split to avoid a competitive solicitation process.

The City of Turlock will maintain a log of micro-purchases to ensure that there is an equitable distribution of purchases among qualified suppliers.

The Davis Bacon Act (40 U.S.C. §3141 et seq.) applies to construction micro- purchases in excess of $2,000.

6.2.2 Small Purchases
Small purchases are relatively simple and informal solicitations for services, supplies, or other property that cost more than $5,000 but do not exceed $25,000. In no case shall small purchase procedures be used for procurements above the Federal simplified acquisition threshold as defined in 41 U.S.C. §403(11), currently $250,000.

If small purchase procedures are used, price or rate quotations shall be solicited from an "adequate number of qualified sources." The number of sources will depend upon the availability of qualified sources, but the objective should ordinarily be to obtain quotes from at least three vendors. If items are purchased from GSA that have been competitively bid or state contracts, then no other solicitations are required. Both the solicitation and quotes should be written, in either electronic or hard copy form.

6.2.3 Existing Contracts: Purchasing Schedules and Piggybacking

6.2.3.1 State Purchasing Schedules. To foster greater economy and efficiency, intergovernmental agreements, contracts, and schedules of the U.S. General Services Administration ("GSA") and states may be used as permitted and appropriate. When GSA or state contracts are used to acquire goods or services with federal funds, all federal requirements apply. This will require the City of Turlock to incorporate federal terms and conditions (contract clauses and required vendor "certifications," such as Buy America, etc.), in the first purchase order issued by the City of Turlock under the GSA or state contract.

This will be necessary since GSA or the state may not have incorporated required federal terms, including Buy America, when the contracts were awarded. The City of Turlock will therefore require a Buy America certification

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in all cases, and if the product being acquired is not Buy America compliant, the City of Turlock will obtain a waiver from the applicable federal agency before proceeding with the procurement.

6.2.4 Competitive Sealed Bidding

6.2.4.1 Projects in excess of Two Hundred Twenty Thousand and no/100ths ($220,000) are publicly solicited through a formal Request for Bids (RFB) with a fixed-price contract (lump sum or unit price) being awarded to the lowest-priced responsive bid from a responsible bidder. Public projects less than $220,000 may be procured using an informal bidding process where qualified contractors are invited to bid. (TMC §2-9- 04)

6.2.4.2 Competitive sealed bidding is the preferred method of solicitation, and justification for any other method of procurement must be documented as part of the procurement record.

6.2.4.3 All bids will be publicly opened at the time and place prescribed in the RFB. Bidders shall be afforded a suitable opportunity to examine all bids received after they are opened.

6.2.4.4 A fixed-price contract award will be made in writing to the responsible bidder submitting the lowest responsive bid at the price stated in the bid. A fixed-price contract type does not preclude consideration of the use of price-varying provisions such as escalation or incentives/disincentives if suitable for the circumstances. The price reasonableness analysis shall consider whether bids are materially unbalanced.

6.2.4.5 When specified in bidding documents, factors such as discounts, transportation costs, and life cycle costs may be considered in determining the low bid if specified in the solicitation. Payment discounts shall be requested or considered only when prior experience indicates that the City is able to avail itself of such discounts.

6.2.4.6 If the RFB includes pricing for any options or alternatives, the solicitation must define whether or not they will be considered in determining the low bid, and, in the event of multiple options, the basis for and order in which they will be accepted. In order to exercise contract options after award, and also consider them as part of the original competitive process, the options must have been considered during the award of the basic contract.

6.2.4.7 In the event that a single responsive bid is received from a responsible bidder, the City may negotiate with the bidder to ensure that a fair and reasonable price is obtained. If the responsive bid from the lowest responsible bidder exceeds available funds, the City may negotiate with the apparent low bidder to obtain a contract price within available funds. The City may not, as part of a negotiation process, modify or alter the scope and specification defined in the RFB in a manner that might have attracted additional bidders if incorporated in the solicitation.

6.2.4.8 If the informal bidding process was used and all bids received exceed $220,000, the City Council may, by adoption of a resolution by a four-fifths vote, award the contract, at Two Hundred Thirty-Five Thousand dollars ($235,000) or less, to the lowest responsible bidder, if it determines the cost estimate was reasonable. (TMC §2-9-04 (h))

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6.2.5 Competitive Negotiation

6.2.5.1 For design/build contracts, the competitive negotiation procurement process is conducted through a formal Request for Proposals (RFP). This method of procurement is generally used when conditions are not appropriate for the use of sealed bids. This method may be used for the acquisition of supplies or services only if the City determines in advance and in writing that competitive sealed bidding is not practicable or fiscally advantageous, pursuant to California Public Contract Code 22160.

6.2.5.2 Either a fixed price or cost-reimbursement contract may be awarded.

6.2.6 Architectural and Engineering (A&E) and Other Professional Services

6.2.6.1 The City will use qualification-based competitive proposal procedures based on the Brooks Act, Chapter 11 of Title 40 of the United States Code, and 49 U.S.C. §5325(b), when contracting for A&E services.

6.2.6.2 The Brooks Act requires that:

A. An offeror’s technical qualifications be evaluated; B. Price be excluded as an evaluation factor;
C. A pricing proposal be requested from, and negotiations be conducted only with the most qualified offeror; and
D. Failing agreement on price, the proposal must be rejected and negotiations conducted with the next most qualified offeror, until a contract award can be made to the most qualified offeror whose price is fair and reasonable; if the pool of qualified offerors is exhausted without an agreement, the solicitation must be canceled.

6.2.6.3 The Brooks Act "qualifications-based" procurement method can only be used for the procurement of A&E services which are defined to include program management, construction management, feasibility studies, preliminary engineering, design, architectural, engineering, surveying, mapping, and related services, where any amount of Federal funds is utilized. This method of procurement cannot be used to obtain other types of services even though a firm that provides A&E services is also a potential source to perform other types of services. It is also recognized that California law does not require contracts for professional services such as private architectural, landscape, engineering, environmental, legal, land surveying or construction management be competitively bid and the Federal policy to restrict qualifications-based selection procedures to A&E contracts may be considered inconsistent. However, the City hereby determines that acceptance of Federal funds and compliance with the Federal standard is in the public interest even though the Federal limitation of the use of qualification-based procurement procedures is inconsistent with the

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California law.

6.2.6.4 When no Federal funds are involved in funding a procurement for professional services including accountants, lawyers, architects, engineers, environmental, land surveying or construction management, the City will comply with the applicable provisions of the California Government Code and Public Contract Code and select the contractor based on professional qualifications, excluding price.

6.2.7 Noncompetitive (Sole Source) Proposals

6.2.7.1 Noncompetitive (Sole Source) procurements are accomplished through acceptance of a proposal from only one source. A contract amendment or change order that is not within the scope of the original contract is considered a sole source procurement that must comply with this subparagraph.

6.2.7.2 Procurement by noncompetitive proposals may be used when only one source is practicably available and the award of a contract is infeasible under small purchase procedures, sealed bids, or competitive proposals and at least one of the following circumstances applies:

1. The item is available only from one responsible source because:
(a) It involves a unique or innovative concept or capability not available from another source. A unique or innovative concept means a new, novel, or changed concept, approach, or method that is the product of original thinking, the details of which are kept confidential or are patented or copyrighted, and is available to the City only from one source and has not in the past been available to the City from another source.
(b) Patents or Restricted Data Rights. Patent or data rights restrictions preclude competition.
(c) Substantial Duplication Costs. In the case of a follow-on contract for the continued development or production of highly specialized equipment and major components thereof, when it is likely that an award to another contractor would result in substantial duplication of costs that are not expected to be recovered through competition. (d) Unacceptable Delay. In the case of a follow-on contract for the continued development or production of highly specialized equipment or major component thereof, an award to another contractor would result in unacceptable delays in fulfilling the City's needs.

2. The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;

3. The federal agency authorizes noncompetitive negotiations (e.g., in the original grant application and approval process);

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4. Other circumstances described in Part 6.3 of the Federal Acquisition Regulations exist;

5. After solicitation of a number of sources, competition is determined inadequate, and an evaluation of the specifications determines they are not unduly restrictive of competition; or

6. The item is an associated capital maintenance item as defined in 49 U.S.C. §5307(a) (1) that is procured directly from the original manufacturer or supplier of the item to be replaced, and no other sole source justification applies. The City must first certify to the FTA in writing that the manufacturer or supplier of the capital maintenance item is the only source for the item and that the price is no higher than the price paid by like customers.

A. Receipt of a single responsive and responsible bid or proposal is not, by itself, conclusive evidence that competition was inadequate; the City Manager, or designee, must determine if there was a perception of competition which would affect the bid or proposal. Under these circumstances, award is not considered a sole source. The City Manager, or designee, however, must investigate the reason why no other bids or proposals were received; verify that the specification was not unduly restrictive, and that the solicitation cannot be modified in a manner that would result in greater competition; and document the file accordingly.

B. A cost analysis is required for each sole source acquisition.

C. The contract file must include a sole source determination signed by the City Manager explaining the reasons for the award on a non- competitive basis.

6.2.8 Options

6.2.8.1 An option is a unilateral right in a contract by which, for a specified time, the buyer may elect to purchase additional equipment, supplies, or services called for by the contract, or may elect to extend the term of the contract.

The use of options must be limited to quantities of goods or services that are reasonably anticipated to be required by the City during the term of the contract; options may not be included solely with the intent of assigning them to another entity in the future; however, contracts may include a provision allowing assignment to other agencies in the event of a change in the City's anticipated requirements, in accordance with federal regulations and guidance.

6.2.8.2 The option quantities or periods must be defined in the solicitation; contained in the offer upon which a contract is awarded; and evaluated as part of the initial award process; i.e., the options must be evaluated in combination with bid prices for the base quantity to determine the low bidder. When an option has not been evaluated to determine the low bidder for award of the contract, exercise of the option will be considered a

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sole source procurement and must be justified as such.

6.2.8.3 The exercise of an option must be in accordance with the terms and conditions of the option as stated in the initial contract, and an option may not be exercised unless it is determined that the option price is better than prices available in the market or that the option is the more advantageous offer at the time the option is exercised, cost and other factors considered.

6.2.8.4 If sequential options (e.g., a series of one-year extensions) exist, the failure to timely and properly exercise any option will void all subsequent options.

6.2.8.5 The City of Turlock may exercise options in contracts of other public agencies ("piggybacking") in accordance with federal regulations and guidance.

6.3. CONTRACT TYPES

6.3.1 Time and Materials Contracts
Time and Materials ("T&M") contracts are to be used only after a documented determination that no other type of contract is suitable. Such contracts will specify a ceiling price (a limitation of funding) that the contractor shall not exceed except at its own risk. T&M contracts are subject to a high degree of oversight in order to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls. (2 CFR 200.318(j))

6.3.2 Cost Reimbursement Contracts
Prior to the use of a cost-type contract, the City Manager, or designee, shall make a determination that the contractor's accounting system is adequate to properly segregate and bill costs, and also adequate to allocate indirect costs in accordance with generally accepted accounting principles. In no event shall fixed indirect cost rates, that are not subject to audit and adjustment, be used in a cost-type contract, as such agreements constitute an unlawful cost-plus-percent-of-cost method of compensation. Provisional indirect billing rates may be used but must be subject to later audit and adjustment.

6.3.3 Cost Plus Percent of Cost Contracts
Contracts that are structured with payment provisions based on the incurrence and payment of actual costs, such as direct labor, with a fixed mark-up on the actual costs incurred for (a) profit, (b) indirect costs, (c) or both, are prohibited by Federal statute and shall not be used.

6.3.4 Construction Contracts for Publicly Funded Buildings All construction projects for public works contracts costing more than $4,000 are required to be performed by contract and cannot be separated into smaller work orders for the purposes of evading the provisions of the Public Contract Code.

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6.3.5 Design Build
Design-build refers to a procurement for design and construction simultaneously with a contract award to a single contractor, joint venture, etc., that will be responsible for both the project's design and construction. Design-build contracts may be used for the construction of a building or buildings and improvements directly related to the construction of a building or buildings and park and recreational facilities. Design- build contracts may not be used for the construction of other infrastructure, including, streets and highways, public rail transit, or water resources facilities and infrastructure. Design-build contracts may be used for public works projects in excess of one million dollars. (PCC Sections 22160-22169)

6.4. CONTRACT COST AND PRICE ANALYSIS

6.4.1 Requirement
A cost or price analysis must be performed for every procurement action, including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation. (2 CFR 200.324)

6.4.2 Independent Cost Estimate
Any cost or price analysis must be based on an independent cost estimate, which should be developed before a solicitation is issued, but in no event after the receipt of bids or proposals. For contract modifications, the independent estimate must be prepared without knowledge of the contractor's proposed pricing.

6.4.3 Cost Analysis

6.4.3.1 A cost analysis must be performed when the offeror is required to submit the elements (i.e., labor hours, overhead, materials, etc.) of the estimated cost.

6.4.3.2 A cost analysis will be necessary when adequate price competition is lacking, including sole source procurements (which include contract modifications and change orders), unless price reasonableness can be established on the basis of a catalog or market price of a commercial product sold in substantial quantities to the general public or on the basis of prices set by law or regulation.

6.4.3.3 Profit is to be negotiated as a separate element of the price for each contract in which there is no price competition and, in all cases, where cost analysis is performed. To establish a fair and reasonable profit, consideration will be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor's investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work.