Rolling Hills Municipal Code Ch. 3.04 Purchasing System

To establish efficient procedures for the purchase of supplies, services, and equipment; to secure for the City supplies, services, and equipment at the lowest cost commensurate with the quality needed and with due consideration to usability; to exercise positive financial control over purchases; to clearly define authority for the purchasing functions; to assure the quality of purchases; and to buy without favor or prejudice, a purchasing system is adopted and shall control the procedures for all purchases except as otherwise provided by law.

(Ord. 303 § 1(part), 2007).

As used in this chapter, the following words and terms shall be defined as follows unless the context indicates that a different meaning is intended:

"City" shall mean the City of Rolling Hills.

"Contract" shall mean an agreement, in writing, between two or more persons with the requisite authority, which creates an obligation to do a particular thing.

"Disaster," "Proclaimed Disaster" or "Emergency" shall mean a state of emergency for an area which includes the geographic territory of the City declared by the Governor, County, Mayor or the City Manager.

"Encumbrance" shall mean a contingent liability and reservation of a budget appropriation incurred as a result of the issuance of a purchase order and/or contract.

"Exigent circumstances" shall mean situations in which (i) a disaster or emergency has been proclaimed, and (ii) the public exigency for goods and services required to address an immediate threat to health, safety, or improved property will not permit competitive solicitation.

"Personal property" shall mean any tangible property not including land or real estate. This includes but is not limited to vehicles, equipment, supplies, furniture and fixtures.

"Purchases" shall mean procurement of supplies, services, equipment and personal property and shall include leases or rentals of such items.

"Professional services" shall mean the services of architects, attorneys, auditors, consultants, engineers, physicians, or other individuals or organizations possessing a high degree of professional, unique, specialized, technical skill or expertise.

"Public works project" as defined in California Public Contract Code Section 20161 is "(a) a project for the erection, improvement, painting or repair of public buildings and works. (b) Work in or about streams, bays, waterfronts, embankments, or other work for protection against overflow. (c) Street or sewer work except maintenance or repair. (d) Furnishing supplies or materials for any such project, including maintenance or repair of streets or sewers.

"Responsive bidder" shall mean a bidder who has placed an offer to furnish supplies, materials, equipment, or contractual services in conformity with the specifications, delivery terms, conditions and other requirements included in the request for bids.

"Services" shall mean any and all services, including but not limited to equipment services contracts.

"Surplus personal property" shall mean any personal property that is no longer needed or useable by the City.

(Ord. 303 § 1(part), 2007).

(Ord. No. 318, § 1, 4-26-2010)

The purchase of supplies, services, and equipment is the responsibility of the City Manager. It is the responsibility of the City Manager to ensure the adherence to the procedures prescribed in this chapter.

(Ord. 303 § 1(part), 2007).

Provided there is adequate unencumbered budget in the account against which the expenditure is to be charged:

A. Purchases with an estimated value up to twenty-five thousand dollars shall be approved by the City Manager or designee.

B. Purchases with an estimated value greater than twenty-five thousand dollars shall be approved by the City Council.

In the case where there does not exist an available unencumbered budget, the City Manager's contract authorization set forth above shall not exceed five thousand dollars.

(Ord. 303 § 1(part), 2007).

Purchases of supplies, services, and equipment with an estimated value of greater than two thousand five hundred dollars shall be by bid procedures pursuant to this section, except as otherwise provided in this chapter.

A. Minimum Number of Bids. Purchases shall be based on at least three bids, and shall be awarded to the lowest responsive and responsible bidder.

B. Solicitation of Bids. The City staff may solicit bids by telephone or in writing from prospective bidders. Written solicitation of bids may be by mailed solicitation, posting, or by publication in a newspaper of general circulation or in trade journals.

C. Response to Solicitation. If purchase cost is five thousand dollars or less, oral bids may be accepted. If the purchase cost is in excess of five thousand dollars, written bids shall be obtained.

D. Rejection of Bids. The City may reject any and all bids for any reason and may waive any irregularity in any bid that does not create an undue or unfair advantage to the bidder.

E. Cost of Bid Preparation. The cost of bid preparation shall be borne entirely by bidders and shall in no circumstance be a charge against the City.

F. Record of Bids. The records of bid shall be kept in accordance with the approved record retention policy.

G. Performance Bond. The City may in its discretion require a performance bond of the successful bidder in the full amount of the contract price.

(Ord. 303 § 1(part), 2007).

Bidding shall not be required when one of the following conditions pertains:

A. The amount of the purchase has a total estimated value of less than two thousand five hundred dollars.

B. Sole source purchases such as legal advertising, utilities, conferences, and Sheriff's department services.

C. An essential or critical need requires that an order be placed with the best available source of supply due to time constraints.

D. Purchases from vendors on the City Council approved vendor's list.

E. If, at the discretion of the City Manager, and upon a finding supported with written documentation, it is in the City's best interest in regard to product uniformity, total cost of acquisition, and/or similar considerations. These purchases must be approved by the City Manager or his/her designee.

F. Purchases made through a Cooperative Purchasing Program utilizing purchasing agreements maintained by the State, County, or other public agencies.

G. Emergency purchases pursuant to Section 3.04.120.

(Ord. 303 § 1(part), 2007).

(Ord. No. 318, § 2, 4-26-2010)

Proposals for all temporary staffing, professional and consultant services may be obtained pursuant to procedures determined by the City Manager. Selection shall be on the basis of demonstrated competence and on the professional qualifications necessary for the satisfactory performance of the services required. It is not mandatory that a contract for temporary staffing, professional and consultant services be awarded to the lowest bidder when it is believed that the quality of service or technical expertise provided by a higher bidder warrants their selection. Reasons for the selection of any bidder other than the lowest bidders shall be in writing and shall be retained with the record of bids.

(Ord. 303 § 1(part), 2007).

Except as provided in Sections 3.04.110 and 3.04.120, below, purchase of supplies, services and equipment where the cost exceeds two thousand five hundred dollars shall require a requisition and purchase order. Requisitions shall be approved by the City Manager as prescribed in Section 3.04.040 for budgetary and purchasing policy compliance. Upon final approval, the requisition will be converted to a purchase order and the funds will be encumbered. A requisition and purchase order may be issued for items costing less than two thousand five hundred dollars if required by the vendor or if the department wishes to use the purchase order as a mechanism to encumber funds.

(Ord. 303 § 1(part), 2007).

Except in cases of emergency, the City Manager shall not issue any purchase order for supplies, services, or equipment unless there exists an unencumbered appropriation in the account against which said purchase is to be charged. If when the purchase order is posted the account appears to be over budget, the City Manager shall create a budget transfer to cover said overage immediately.

(Ord. 303 § 1(part), 2007).

Purchase orders represent a contract between the City and the Vendor. Any substantial change to a purchase order shall be documented as a change order. Change orders shall be approved by the City Manager. A purchase order may not be increased by more than ten percent or two thousand five hundred dollars whichever is less, without a change order. If the contract is awarded by the City Council, the City Council may approve a contingency in addition to the contract award. The City Manager may approve change orders on City Council approved contracts up to the contingency amount. If the change order exceeds the contingency it must be taken to the City Council for additional authorization.

(Ord. 303 § 1(part), 2007).

Under certain circumstances, the use of a City credit card may be the most appropriate method of payment for purchases. The following policies and procedures are established to ensure internal control and timely payment of charges. City credit cards shall be available to staff for the conduct of official City business, including but not limited to the following purposes:

A. To charge the cost of meals when required in the conduct of official business, except when an employee has received a travel advance.

B. Authorized travel expenses and hotel charges.

C. Gasoline purchases.

D. Other circumstances where the use of a credit card best meets the needs as determined by the City Manager.

All receipts shall be turned into the finance staff when the credit card is returned.

Purchase made with credit cards shall follow normal budgetary guidelines and purchasing regulations.

(Ord. 303 § 1(part), 2007).

The City Manager, or his/her designee when he/she is not available, may authorize emergency purchases consistent with the provisions herein when the City is included in a proclaimed disaster or emergency upon showing that the purchase required is for the immediate preservation of health, safety and welfare, repair to existing City equipment which impacts ongoing City operations, or for the protection of improved property. The provisions of this section apply only to a present, immediate and existing emergency that could not reasonably be foreseen.

A. The limits of the City Manager's authority set forth in Section 3.04.040 shall apply unless the City Manager determines that goods and services must be procured before the City Council is able to assemble in emergency session in order to preserve life or personal safety or persons in the City; in such event, the City Manager may approve the immediate rental or purchase of any equipment, supplies, services or other items necessary in excess of the limits of his/her authority. All procurements that exceed the City Manager's authority shall be presented to the City Council for ratification and thereafter shall be publicly posted within sixty days of the award.

B. As soon as possible after emergency purchases are made, the City Manager shall submit to the Finance Director, with a copy to the City Council, a requisition and a notation that the commodity has been ordered on an emergency basis from the vendor designated. Upon receipt of requisitions, the Finance Director shall prepare purchase orders for emergency equipment, supplies, services or other items. The City Manager shall also prepare for the City's records a "Justification Form For Emergency Sole Source or No-Bid Purchase," with a copy to the City Council.

C. When making emergency purchases, whenever feasible the City Manager shall conduct telephonic or other electronic bid solicitation from potential vendors or suppliers to obtain competitive proposals. The City Manager may eliminate the ordinarily applicable noticing time period to expedite procurements providing that the bid period allows multiple providers to submit bids. When possible, a minimum of three bids should be obtained. Solicited bids that are non-responsive shall be counted in the minimum number of bids.

D. All invoices for debris clearance and removal shall be verified by the City prior to payment to the vendor for work completed and for confirmation of material disposal in accordance with all applicable state and federal regulations (for hazardous materials disposal).

(Ord. 303 § 1(part), 2007).

(Ord. No. 318, § 3, 4-26-2010)

In January each year, the City Manager will establish an "approved vendor list" and present it to the City Council for approval. This list will be comprised of vendors who have consistently provided excellent service to the City. This will be based on City standards for quality and price of services meaning that they have traditionally been the lowest bidder, they can deliver goods or services on time, or they consistently meet or exceed product/service specifications. Vendors on the approved vendor list shall be evaluated regularly by City staff for quality and price. Vendors not meeting City standards may be removed by the City Manager or designee at any time. Once removed, a vendor may be reconsidered for placement on the approved vendor list the following January.

(Ord. 303 § 1(part), 2007).

Situations in which a procurement of any product is obtainable only from a single vendor or sole source, and is not adaptable to competitive bidding. The City Manager shall negotiate with the vendor so that the City receives a fair and equitable price for the desired supplies, service, equipment or product.

(Ord. 303 § 1(part), 2007).

Purchases may be made under a cooperative purchasing program, utilizing purchasing agreements maintained by the State, County, or other public agencies are exempted from the requirements of this chapter. California Public Contract Code Section 10324 authorizes the Department of General Services to make purchases of supplies, equipment or materials on behalf of cities in those instances when the purchases can be made by the Department of General Services at a purchase price lower than the City can obtain through its normal purchasing procedures. In those instances where it is determined that purchasing through the State, the County or other governmental agency will result in savings to the City, the City is authorized to make such purchases.

(Ord. 303 § 1(part), 2007).

The City shall purchase and use recycled products and recycled materials when available unless determined by the City Manager to be financially infeasible. The City may at its option require its contractors and consultants to use recycled products in fulfilling contractual obligations.

(Ord. 303 § 1(part), 2007).

Public works projects shall be bid, advertised and awarded in accordance with applicable sections of the California Public Contract Code.

(Ord. 303 § 1(part), 2007).

The City Manager shall periodically review the City's equipment and inventory and complete a surplus property list for items deemed surplus or have become obsolete or worn out.

A. Trade In. The City Manager or designee shall have the authority to exchange for or trade in on new equipment surplus personal property.

B. Sale. The City Manager shall have the authority to dispose of surplus personal property by auction, sealed bids, for scrap or negotiated sale, whichever in the City Manager's judgment will provide the maximum return to the City.

C. Disposed as Trash. When the cost of locating a buyer exceeds the estimated sale price of surplus personal property or the item is obsolete or worn out or of minimal value, the City Manager may recycle, destroy or dispose of the item as trash.

D. Disposed as Gifts. The City Manager subject to the approval of the City Council may give surplus personal property to another public agency or special district such as a school district or library.

(Ord. 303 § 1(part), 2007).