HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/18/2008 - SECOND READING OF ORDINANCE NO. 026, 2008, AMENDIN ITEM NUMBER: 10
AGENDA ITEM SUMMARY DATE: March 18, 2008
FORT COLLINS CITY COUNCIL STAFF: Jim O'Neill
SUBJECT
Second Reading of Ordinance No. 026, 2008, Amending Chapters 8 and 23 of the City Code to
Update Miscellaneous Provisions Regarding Purchasing and Personal Property.
RECOMMENDATION
Staff recommends adoption of this Ordinance on Second Reading.
EXECUTIVE SUMMARY
This Ordinance, unanimously adopted on First Reading on March 4, 2008, changes Chapter 8,
Article IV Section 8 of the City Code, relating to purchasing and contracting. The changes to the
Code include housekeeping changes, increases to dollar limits and changes to improve speed,
flexibility, service, and accountability.
Council has given direction that the purchasing ordinance is to be reviewed on a periodic basis. The
following language will be placed in the purchasing manual where the rules and regulations for
administrating the purchasing ordinances are documented:
"The purchasing agent will conduct a periodic review of the purchasing code of the
city no less frequently than every five years. Recommendations for changes will be
made to the City Manager."
The attached chart shows the City of Fort Collins' position in relationship to other agencies. With
the change,the City moves to the top of other agencies. The level was selected based on the City's
purchasing volumes and where efficiencies could be found while still maintaining a balance of
competitive pricing and control. It is expected that this position will change as the City of Colorado
Springs is also in the process of updating its limits to improve efficiencies and is expected to raise
its bid and small purchase limits to $75,000 and$7,500 respectively. While the State of Colorado
is not currently planning changes, most major states have bid limits of$100,000 and at sometime
in the future staff expects a similar move at the state level.
ATTACHMENTS
1. Copy of First Reading Agenda Item Summary - March 4, 2008.
(w/o original attachments)
2. Comparison of Fort Collins limits to other agency limits.
ATTACHMENT 1
ITEM NUMBER: 16
AGENDA ITEM SUMMARY DATE: March 4, zoos
FORT COLLINS CITY COUNCIL FF: Jim O'Neill
OP
SUBJECT
First Reading of Ordinance No. 026,2008,Amending Chapters 8 and 23 of the Code of the City of
Fort Collins to Update Miscellaneous Provisions Regarding Purchasing and Personal Property.
RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading. The Finance Committee reviewed
the changes at its February 11, 2008 meeting and recommends adoption of the changes.
EXECUTIVE SUMMARY
Chapter 8, Article IV Section kf
t &J, lating to chasing and contracting was last
updated in 1996. The changes tot e Code include housekeeping changes,increases to dollar limits
and changes to improve speed, flexibility, service, and accountability.
BACKGROUND
The purchasing ordinances are periodically updated(1990, 1991 and 1996). Over the past two years
Purchasing has been working to identify changes which would make the processes more efficient
and effective. The proposed changes will eliminate some non-value added process, increase
flexibility and raise dollar thresholds. These changes will allow Purchasing to spend more time on
the larger more complex purchases, where the most value can be added.
Summary of Suggested Chang
es-
-war,
Dollar Limits would be incr 0 P y
Mini-Orders: from $2,000 to $5,000
Formal Bid Required: from $30,000 to $60,000
Council Approval of Exceptions: from $100,000 to $200,000
March 4, 2008 -2- Item No. 16
Sec 8-112. Definitions:
Definitions added/clarified:
• Alternative Delivery CodsConstruction Manage
• Design Build UF
• Design/Select/Build
• Price agreements
• Work order
• Work order contract
Sec 8-113. Policy
Allows for the City Manager to approve changes and modifications to the purchasing manual and
other purchasing policies.
Sec. 8-158. Competitive sealed proposals.
• Clarifies that Competitive sealed pro osals method of selection maybe used when the City
is using an Alternative live etho
Sec. 8-161. Minor purchases.
• Upy
Increase the dollar amount from $2,000 to $5,000.
• Adds a section authorizing the Purchasing Agent to authorize increased delegated purchasing
authority to departments to$10,000 if they are purchasing directly from a pricing agreement
and have received additional training.
Sec. 8-161. (c) Construction Change Orders.
• Changes the dollar limit to from $30,000 to $60,000.
Sec. 8-161. (d) Miscellaneous exceptions.
• Adds a section exempting the purchase of utility services from the authorized franchisee.
Sec. 8-162. Bids and perfor ce b s.
• Increase dollar limit fro 00 0 toJ be istent with State Statutes.
Sec. 8-165. Cooperative procurement plans.
• Clarifies the types of cooperative and pricing agreements which may be used.
March 4, 2008 -3- Item No. 16
Sec. 8-185. City Attorney review.
• Adds a section reiterating the City Charter provision that contracts be on forms approved by
the City Attorney.
Chapter 23, Article IV. Publ Prop - Di oPionoYPperty.
• Adds the ability to use publicly-accessible electronic media such as the city web site when
advertising the disposition of public property.
EXPLANATION OF CHANGES
Raising the dollar threshold will allow Purchasing to reduce processing times for lower dollar items
while still maintaining fiscal integrity of the system. It also allows Purchasing to concentrate
additional effort on the high dollar complex purchases where they can add the most value. Most
purchasing operations periodically review dollar levels to ensure that routine purchasing activity is
properly delegated. Dollar thresholds were last changed at the end of 1996 at which time they were
doubled.
Small Order Limit from $2,0(derlim
!7*
9000
Order amounts under the small0of
de ents. This is consistent with best
g Ppractice recognized by the Natitv ental chasing,of delegating small dollar
routine purchases to the using departments. For many of the items purchased, there are existing
contracts, such as for office supplies, computers and hardware. Departments are cognizant of
budgetary limitations. The more money each department can save on purchases, the more that is
available for other program uses. To quote one department: "We do some price shopping, the
internet now helps, but again the majority of our purchases are from local vendors and equipment
suppliers that we have used for many years and whom we trust. We are more likely to compare
larger expense items but again we take into consideration the quality of service and the convenience
we have experienced in the past." From another: "We have many short-term hourly employees plus
interns and volunteers who use mini-orders. Many teach classes that require supplies and rather that
a full time staff member shopping,we give mini-orders to the instructors to purchase what they need
—it can be paint,paper, food,beverage, etc. It is less expensive having the instructors do this than
paying a full time staff member to shop." All receipts are verified and reasonableness of cost before
payment is made.
Another vehicle for making pCha amo s d $2, s the Purchasing Cazd. Where it
is feasible,departments are en ake purchas on the Purchasing Card. The Card
is similar to a credit card but b ' c ls. include:
• Limiting the vendors where the Card can be used, i.e., no liquor stores, etc.
• No cash advances allowed.
• Limiting the individual purchase amount.
• Limiting the total number of purchases per day or month.
• Limiting the total dollar amount of purchases per month.
Purchasing Card transactions are spotted audited on a monthly basis.
March 4, 2008 -4- Item No. 16
This is another efficiency change. This will allow the Purchasing division to focus on larger
purchases while still ensuring that tax dollars are not wasted. Raising the small order limit to$5,000
will also result in time savings for departments with minimal fiscal impact. In 2007, there were
13,103 "mini orders" for purc d 0, t of 391,867. Raising the limit to
$5,000 would increase this t b 929, 2 d 0 i orders." Total small purchases
would then amount to 8.45% the to end' g ocessed the Purchasing Division.
Type of Small Number DollarAmount Average Purchase
Purchase
Mini Orders @ $2,000 13,103 $4,391,867 $ 335.18
limit
Additional Mini 889 $2,890,556 $3,251
Orders @ $5,000 limit
Purchasing 33,724 $4,908,924 $ 145.56
Card Purchases
Total 47 716 $12 191 347 $ 255.50
Larimer County, Denver, Colorado Springs and the State of Colorado allow
purchases up to $5,000 using the purchasing card.
Delegation of Additional Amounts up to $10,000
Proposes change would alsoC
101n m t elegate additional amounts up to
$10,000 for Departments who i and are uying from existing competitively
procured price agreements. It is the intention to require many of these purchases to be made using
the purchasing card which allows additional reporting and security. Examples of items include
allowing department technology representatives to buy approved equipment from established
computer price agreements.
Bid Threshold from $30,000 to $60,000
Raising the bid threshold to $60,000 over the last 21 months would have resulted in a reduction of
13.8%or 28 bids which could have been processed without a formal process. These products and
services will still be competitively procured but with a more streamlined process.
Miscellaneous Exception Limit from $100,000 to $200,000
Raising this limit would result in ati 3kifi4th apsed time to make the needed
purchase. The purchasing age oul s peYr
ligence to validate the purchase
and document the files to the equac f the revious 21 months, raising the
miscellaneous exception limit av aceptions being sent to the City
Manager for approval and only result in two fewer exceptions needing Council approval.
March 4, 2008 -5- Item No. 16
Public Notice of Auctions
Chapter 23, Article IV. Public Property - Disposition of Property
Adding the ability to use publWy-accle r i Yech as the city web will make the
process of disposing of surplu nt. o reach a broader market with
more detailed information th isi media.
ATTACHMENTS
1. Chart of limits used by other agencies.
2. Council Finance Committee Minutes - February 11, 2008.
COPY
ATTACHMENT
Other Agency Limits
Agency Bid Amount Small Purchase Proposed Proposed
Fort Collins �60,Ot10 $15,000
Denver $50,000 $5,000
Colorado Springs $50,000 $5,000 $75,000 $7,500
State of CO $50,000 $5,000
Westminster $30,000 $1,000
Englewood $25,000 $250
Loveland $25,000 $1,000
Larimer County $25,000 $51000
Aurora $10,000 $2,500
Boulder $5,000 $5,000
ORDINANCE NO. 026 , 2008
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING CHAPTERS 8 AND 23 OF THE CODE OF THE
CITY OF FORT COLLINS TO UPDATE MISCELLANEOUS PROVISIONS
REGARDING PURCHASING AND PERSONAL PROPERTY
WHEREAS, the Charter of the City of Fort Collins contains certain general provisions
concerning purchasing practices in Article V, Part IV; and
WHEREAS,the Code of the City of Fort Collins contains particular methods for bidding and
awarding contracts for the construction of improvements, and for the procurement of services and
materials in Chapter 8,Article IV,and for the disposition of obsolete or surplus property in Chapter
23, Article IV; and
WHEREAS, the portion of the Code that deals with purchasing was last modified by
Ordinance No. 144, 1996; and
WHEREAS, staff has reviewed the Code for the last eighteen months and identified and
discussed various issues related to the Article of Chapter 8 dealing with purchasing and the article
of Chapter 23 dealing with disposition of personal property; and
WHEREAS,staff has made recommendations to the City Council regarding these issues that
would increase flexibility and raise dollar thresholds; and
WHEREAS, City Council has determined that the amendments described in this Ordinance
are in the best interests of the City and its citizens.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That Section 8-112 of the Code of the City of Fort Collins is amended to add
the following definitions:
Alternative delivery method process shall mean a process of construction using
either the construction manager process,design/build process,or design/select/build
process.
Construction manager process shall mean the process of entering into a contract
for the design and construction of a project together with a contract with a business
organization having the expertise and resources to help manage the design and
construction of the project and establish a guaranteed maximum price for the project.
Design build process shall mean a process for managing a construction project
in which a primary or main contractor submits a combined proposal to provide the
design and construction services for the entire construction project.
Design/select/build process shall mean a process for managing a construction
project in which the design and construction of the project are contracted for
separately but the designer and construction contractor work with the City as part of
an integrated team for the design and construction of the project.
Pricing agreement shall mean an agreement by which procurements are
conducted by or on behalf of more than one governmental body.
Work order shall mean a written order defining a discrete service and/or material
with a definite project, price, and time of completion which is used in conjunction
with a work order contract to create an enforceable contract.
Work order contract shall mean a master contract for completion of a project or
provision of services or materials on an as-needed basis establishing all terms and
conditions requested by the City except those contained in the work orders to be
issued pursuant to the work order contract.
Section 2. That Section 8-113 of the Code of the City of Fort Collins is amended as
follows:
Sec. 8-113. Authority and duties of Purchasing Agent.
(a) The Purchasing Agent shall serve as the public purchasing official for the
City, and shall be responsible for the procurement of all materials, services,
professional services and construction for the City which are governed by the terms
of this Article.
(b) The Purchasing Agent may formulate and promulgate rules and regulations
for the administration of this Article, not inconsistent with the provisions of this
Article, with respect to purchasing procedures. Any rules and regulations
promulgated by the Purchasing Agent hereunder shall be effective upon the
Purchasing Agent's filing of the same with the City Clerk.
Section 3. That Section 8-158 of the Code of the City of Fort Collins is amended as
follows:
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Sec. 8-158. Competitive sealed proposals.
(a) Procurements for the following are eligible for award by competitive sealed
proposals:
(1) Materials and services when the Purchasing Agent determines in writing that the
use of competitive sealed bidding is either not practicable or not advantageous to
the City; and
(2) Professional services; and
(3) City improvements when the Purchasing Agent determines that the use of
alternative delivery methods will provide substantial benefit to the City
while retaining sufficient competitive pricing and/or performance.
Section 4. That Section 8-161 of the Code of the City of Fort Collins is amended as
follows:
Sec. 8-161. Exemptions to use of competitive bid or proposal.
(a) Minor purchases.
(1) The Purchasing Agent shall have the power to negotiate without formal
competition for the purchase of any materials, professional services,
services or construction not exceeding a cost of sixty thousand dollars
($60,000.) per year of contract. Where a project has been previously bid,
project managers may approve, pursuant to administrative guidelines
approved by the Purchasing Agent,change orders up to the minor purchase
limit established in this Subsection; provided, however, that no such
change order shall authorize any expenditure of funds in excess of the
amounts budgeted and appropriated for the project.
(3) The purchasing procedures adopted pursuant to § 8-113 of this Article may
authorize the purchase of materials,services or professional services in the
open market by other departments or agencies of the City,provided that no
such purchase shall exceed five thousand dollars ($5,000.) except that the
Purchasing Agent may authorize the procurement of materials and services
in an amount not to exceed ten thousand dollars ($10,000.) per
procurement when purchased pursuant to a pricing agreement approved by
the Purchasing Agent and purchased by an employee of the City authorized
by the Purchasing Agent to make such purchases.
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(4) No procurement will be divided so as to constitute a minor purchase under
this Subsection.
(b) Emergency purchases.
(3) A full written report of the circumstances of all emergency purchases over
two hundred thousand dollars ($200,000.) shall be made by the City
Manager to the City Council. The report shall be received by the City
Council in an open meeting, and such report shall be open to public
inspection.
(c) Construction change orders.
(1) Notwithstanding the provisions of Paragraph(a)(1)of this Section,one(1)
or more change orders to an existing construction contract may be executed
without competition unless the cumulative amount of such change orders
exceeds the greater of:
a. Fifteen(15) percent of the original contract amount; or
b. Sixty thousand dollars ($60,000.).
(d) Miscellaneous exemptions.
(3) The City Manager shall submit all procurements under this Subsection(d)
which are equal to or exceed a cost of two hundred thousand dollars
($200,000.) to the City Council in an open meeting for final approval.
(e) Purchase of utility services.
(f) Materials, certain services and construction competitively bid within
twenty-four (24) months. In any case where the City has, within the preceding
twenty-four (24) months, pursuant to an invitation for bids, awarded a contract for
the procurement of any materials or for the procurement of services, professional
services or construction bid on a unit price basis, the Purchasing Agent may
negotiate with the successful bidder for the purchase of additional quantities of the
materials or units of services or construction.The Purchasing Agent may,based upon
a reasonably prudent investigation of market conditions at the time, make
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procurements at a price warranted by such conditions, even if the resulting cost to
the City is greater than the amount of the previous award.
Section 5. That Section 8-162 of the Code of the City of Fort Collins is amended as
follows:
Sec. 8-162. Bid and performance bonds.
(b) All contracts for construction the cost of which exceed the sum of one
hundred thousand dollars ($100,000.) shall require a performance bond or other
equivalent security.
Section 6. That Section 8-165 of the Code of the City of Fort Collins is amended as
follows:
Sec. 8-165. Cooperative procurement plans.
The Purchasing Agent shall have the authority to join with other units of
government in cooperative procurement plans, including but not limited to the State
of Colorado and the Multiple Assembly of Procurement Officials, when the best
interests of the City would be served thereby. Upon written approval by the
Purchasing Agent, competitive sealed bids, competitive sealed proposals or pricing
agreements received by any other governmental agency shall be the equivalent of
bids or proposals received by the City and may be the basis for any procurement by
the City.
Section 7. That Division 4,Article III of Section 8 of the Code of the City of Fort Collins
is hereby amended by the addition of a new Section 8-185 which reads in its entirety as follows:
Sec. 8-185. City Attorney review.
All written contracts shall be on forms previously approved by the City Attorney
and any changes or additions shall be approved by the City Attorney.
Section 8. That Section 23-129 of the Code of the City of Fort Collins is hereby amended
to read as follows:
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Sec. 23-129. Disposition of perishable or hazardous property.
(a) If any property seized or otherwise obtained by the City is of a perishable
nature or of such nature as to make it inadvisable in the opinion of the Chief of
Police to retain possession, such property shall be forthwith advertised for sale at
public auction with public notice to be published in a newspaper of general
circulation throughout the City or shall be advertised via electronic media not less
than three (3) days prior to such sale, which notice shall contain the date, time and
place of such sale and the reason for the immediate sale. At the discretion of the
Purchasing Agent, such public sale or auction may also take place via means of
electronic media.
(d) For purposes of this Division,electronic media shall mean the Internet,the
City website, or other widely available resource on the World Wide Web.
Section 9. That Section 23-130 of the Code of the City of Fort Collins is hereby amended
to read as follows:
Sec. 23-130. Disposition of lost, abandoned or other unclaimed property.
Except as otherwise specifically provided for by law or ordinance,any property
seized or otherwise obtained by the City and not sold or destroyed as perishable,
hazardous or illegal property and which property has not been claimed by or
surrendered to the rightful owner may be disposed of in the following manner:
(2) After the expiration of such period of time and as soon thereafter as is
practicable,the purchasing agent must cause to be published once in a newspaper of
general circulation in the City, or advertise via electronic media, a general
description of the articles of property to be disposed of, which notice must contain
the following information:
(3) If within ten(10)days from the publication of the notice,no claim for such
property described in the notice shall have been made by the rightful owner, such
property shall become the property of the City and shall be disposed of in the
following manner:
c. All other property shall be sold at public auction including an auction
via electronic media in the manner and upon the terms described in the
above notice, with the proceeds of any such sale or sales to be paid to
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the Financial Officer to be placed in the general fund of the City after
deducting the cost of storage, advertising and selling.
Introduced, considered favorably on first reading, and ordered published this 4th day of
March, A.D. 2008, and to be presented for final passage on th th day of March, A.D. 2008.
MayokJ
ATTEST:
City Clerk
Passed and adopted on final reading on the 18th day of March, A.D. 2008.
Mayor
ATTEST:
City Clerk
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