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Home My WebLink AboutPW Minor Contract Award Limit____________________________________________________________________________________ FOR CITY CLERK ONLY File No.: 9-3-40 Council Meeting: 11/20/2017 Disposition: Resolution 14416 Agenda Item No: 4.d Meeting Date: November 20, 2017 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Public Works Prepared by: Bill Guerin, Director of Public Works City Manager Approval: __________ TOPIC: MINOR CONTRACT AWARD LIMIT SUBJECT: RESOLUTION APPROVING AND AUTHORIZING THE PUBLIC WORKS DIRECTOR TO AWARD MINOR CONTRACTS IN AN AMOUNT LESS THAN ONE HUNDRED SEVETY FIVE THOUSAND DOLLARS ($175,000) RECOMMENDATION: Adopt the resolution. BACKGROUND: The San Rafael Municipal Code Chapter 11.50 “Public Works Contract Policy” establishes procedures for Public Works contracts, outlining maximum contract amounts for different types of competitive bidding and awarding procedures. The municipal code defines several types of Public Works contracts with distinct competitive bidding requirements for “major contracts” and “minor contracts”: Major contracts are defined as contracts for the performance of public works in an amount exceeding $125,000. This limit mirrors the California Public Contracts Code and has other requirements such as a minimum 10 day contract notice, and a requirement to formally award to the lowest, responsive, and responsible bidder. A formal award requires City Council action. Minor contracts are defined as contracts for the performance of public works in an amount of up to $125,000; however the definition allows the minor contract amount to be modified by resolution of the City Council. Minor contracts follow an informal bidding process, which includes soliciting proposals from at least three contractors. The City’s procedure for minor contracts also mirrors the California Public Contracts code. Based on the City’s municipal code, minor contracts may be awarded by the Director of Public Works or City Manager, and do not require award by City Council. On occasion the Department of Public Works will bring and informal project to Council for award if there is significant interest in the project by council member or the general public. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 San Rafael’s Municipal Code Section 11.50.020 G. sets the City’s informal or minor contract limit at $125,000. Over the last 10 years the cost of construction has increased significantly such that the minor contract limit has been raised to $175,000 within the Public Contracts Code. ANALYSIS: Significant inflation, especially in construction prices, has occurred since the current informal bid limit of $125,000 was set. This means that more public works projects are pushed into the major contract category: requiring both a formal bidding process and award by City Council. Staff is recommending at this time that the dollar amount defining a minor Public Works contract be increased to match Article 3 section 22032 (a) and (b) of the California Public Contracts Code amount. Allowing minor construction contracts to follow an informal bidding process and be awarded by the Public Works Director, as opposed to City Council, saves considerable time and staffing resources required with the formal bidding and City Council award process. A higher threshold of $175,000 would minimize excess processing and award documentation and expedite the completion of small construction projects related to streets, parks, drainage, and facility repairs. In today’s construction climate, where prices and demand are high due to the booming economy, allowing more small construction projects to benefit from an informal bidding and awarding process will allow Public Works complete smaller project quickly. It is important to reiterate that the competitive bidding process is not waived for minor contracts (≤$125,000 currently, and ≤$175,000 proposed). The informal bidding process required for all minor contracts still requires the City to forward a bid inquiry to a minimum of three bidders, ensuring that bids are still awarded to the lowest and most responsible bidder. Public Works generally utilizes the same bid specifications and documentation and regularly solicits to more than three bidders for minor construction projects. FISCAL IMPACT: There is no financial impact resulting from this action. OPTIONS: 1. Approve the resolution increasing the minor contract limit as defined in section 11.050.020 F and G to $175,000. 2. Modify the resolution increasing the minor contract limit as defined in section 11.050.020 F and G to an amount specified by the City Council. 3. Do not approve the resolution and do not change the minor contract limit as specified in section 11.050.020 F and G. RECOMMENDED ACTION: Adopt the resolution. ATTACHMENTS: 1. Resolution RESOLUTION NO. 14416 A RESOLUTION OF THE SAN RAFAEL CITY COUNCIL APPROVING AND AUTHORIZING THE PUBLIC WORKS DIRECTOR TO AWARD MINOR CONTRACTS IN AN AMOUNT LESS THAN ONE HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($175,000) WHEREAS, Chapter 11.50 of the San Rafael Municipal Code generally mirrors the California Public Contracts Code, which dictates the requirements for bidding and awarding municipal public works projects; and WHEREAS, both San Rafael’s Municipal Code and the California Public Contracts Code allow the governing body of the public agency to delegate the authority to award informal, or minor contracts to the Public Works Director up to a specific limit; and WHEREAS, delegating the award of minor construction projects to the Public Works Director saves time, minimizes administration cost and expedites the completion of smaller construction projects; and WHEREAS, San Rafael’s Municipal Code Section 11.50.020 G sets the City’s informal, or minor contract limit at $125,000 and allows the minor contract amount to be modified by resolution of the City Council; and WHEREAS, the California Public Contracts Code section 22034 informal bid limit changes from year to year depending upon the cost of construction and is currently set at $175,000; and WHEREAS, City staff has recommended that the minor contract amount be increased to match the Public Contracts Code amount. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL RESOLVES to increase the minor contract limit as defined in section 11.050.020 G to $175,000. I, ESTHER C. BEIRNE, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of said City held on the Monday, the 20th day of November, 2017 by the following vote, to wit: AYES: COUNCILMEMBERS: Bushey, Colin, Gamblin, McCullough & Mayor Phillips NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None ESTHER C. BEIRNE, City Clerk STAFF REPORT APPROVAL ROUTING SLIP Staff Report Author: Kevin McGowan Date of Meeting: 11/20/2017 Department: Public Works Topic: MINOR CONTRACT AWARD LIMIT Subject: RESOLUTION APPROVING AND AUTHORIZING THE PUBLIC WORKS DIRECTOR TO AWARD MINOR CONTRACTS IN AN AMOUNT LESS THAN ONE HUNDRED SEVETY FIVE THOUSAND DOLLARS ($175,000) Type: (check all that apply) ☒ Consent Calendar ☐ Public Hearing ☐ Discussion Item ☒ Resolution ☐ Ordinance ☐ Professional Services Agreement ☐ Informational Report *If PSA, City Attorney approval is required prior to start of staff report approval process Was agenda item publicly noticed? ☐ Yes ☒No Date noticed: ☐Mailed ☐Site posted ☐Marin IJ Due Date Responsibility Description Completed Date Initial / Comment DEPARTMENT REVIEW FRIDAY noon 11-3 Director Director approves staff report is ready for ACM, City Attorney & Finance review. 11-3-17 ☒ BG CONTENT REVIEW MONDAY morning 11-6 Assistant City Manager City Attorney Finance ACM, City Attorney & Finance will review items, make edits using track changes and ask questions using comments. Items will be returned to the author by end of day Wednesday. Click here to enter a date. 11/8/2017 11/9/2017 ☒ ☒ LG ☒ MM DEPARTMENT REVISIONS FRIDAY noon 11-10 Author Author revises the report based on comments receives and produces a final version (all track changes and comments removed) by Friday at noon. Click here to enter a date. ☒ ACM, CITY ATTORNEY, FINANCE FINAL APPROVAL MONDAY morning 11-13 Assistant City Manager City Attorney Finance ACM, City Attorney & Finance will check to see their comments were adequately addressed and sign-off for the City Manager to conduct the final review. Click here to enter a date. 11/14/2017 11/13/2017 ☒ ☒ LG ☒ Van TUES noon 11-14 City Manager Final review and approval 11/15/2017 ☒ JS