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Home My WebLink AboutJ- 3 Approval to Increase Purchase Oder with Cardlock Fuels of A b%.11 uir '51A. lit, :-- . Nr 9 The City of Azusa s 9<�Foa� ) 1 CONSENT CALENDAR TO: Honorable Mayor and Council Members FROM: Roy E. Bruncker,Director of Community Development Airs Louie H. Pedroza Jr., Superintendent of Public Works VIA: Rick Cole, City Manager Date: January 19, 1999 Subject: Approval to Increase Purchase Order with CardLock Fuels Recommendation Approve to increase Purchase Order with CardLock Fuels to $25,000. Background On November 2, 1998 Council approved a Blanket Purchase Order to CardLock Fuels in the amount of$10,000 to temporary fuel city vehicles during our Underground Storage Tank (UST's) closure. This estimate was based on the City trucks and equipment. However, due to the Police Department soil contamination,the activation of the dispensers was delayed and all Police vehicles were using the CardLock Fuel facility. The awarded contractor to remove and replace the UST's at the City Yard has informed us that there will be a slight delay in acquiring the replacement tanks due to the high demand. Thus, for the uncontrollable reasons, fueling at the CardLock facility will require an increase in the Purchase Order amount. The price per gallon that we are paying for fueling at CardLock fluxes on a weekly basis. According to our current invoices from CardLock, the City has been charged as low as 1.10 per gallon for gasoline, including State fees and sales tax, to as high as 1.32 per gallon which averages at 1.21 per gallon. Prior to CardLock,the City was paying an average of.90 per gallon, which includes only sales tax. The cost we are paying for diesel fuel from CardLock fluxes from as low as .80 per gallon to as high as 1.19 per gallon, which averages to 1.00 per gallon. The City cost for diesel prior to CardLock averaged .85 per gallon. State fees and sales tax applies the same as gasoline. Fiscal Impact Approximately .30 cent per gallon increase for gasoline and .15 per gallon for diesel. Staff travel time to fuel is minimal as city vehicles are mobile throughout the day. 0tilvt,t-4 (/I 9199 LAW OFFICES OF BEST BEST & KRIEGER LLP Current Situation: Article VII of Chapter 2 of the Azusa Municipal Code sets forth the City's existing bidding and purchasing rules for supplies, services and equipment - "non-public works projects." Under the existing rules, the City is supposed to seek public bids prior to purchasing supplies, services and equipment where the value of the contract is $500.00 or more. The bidding requirements for these items can be waived with the City Council's approval. For practical and efficiency reasons, staff often seeks the Council's approval to waive the bidding requirements. As for the "public works projects,"the City must comply with Public Contracts Code 20162. Proposal to Increase Efficiency: "Non-public works projects"-- Since the City has complete discretion to adopt its own rules for the purchasing of supplies, equipment and services, the city attorney met with representatives from each department to identify the types of services, equipment and supplies that the City most often purchases and the usual costs associated with such purchases. Staff determined that it would be more efficient to increase the threshold amount for applicable bidding requirements and city council approval. Staff recommends that public bidding for services and equipment be conducted only for purchases of$75,000 or more. For purchases of more than $25,000, but less than $75,000, staff recommends that the council authorize the city manager to approve such purchases and that the city manager provide the city council with a receive and file report on the consent calendar once a month. The report will set forth the type of purchase, the party with whom the city contracted and confirm that the expenditure was a budgeted item. As for purchases of less than $25,000, these purchases would only be subject to department head approval. These recommendations for"non-public works projects" and the proposed applicable bidding, approval and contracting rules are as set forth in the attached matrix-- attachment 1. "Public works projects" -- Although the City cannot establish rules for public works projects, the City has a choice. One option is to use the rules set forth in Public Contracts Code Section 20162 (bid out projects of$5,000 or more). This is the one the City is currently using. Under this Section, the City must bid out certain construction projects and certain types of maintenance work. The alternative is to elect to follow the California Uniform Public Construction Cost Accounting Act. Under the Act, the City does not have to use the State bidding procedures for projects that are under $25,000. For projects less that $75,000, but more that $25,000 the City may use a more informal bidding process as set forth in the Act. This informal process involves the following: • Maintaining a list of qualified contractors. • Mailing notice inviting informal bids 1) to contractors on the list, AND/OR 2) to construction trade journals within the county, to be specified by the City Council. • Mailing notices at least 10 days before bids are due. RVPUB\NGS\56056 -2- • LAW OFFICES OF BEST BEST & KRIEGER LLP • Notices must describe the project in general terms, how to get more detailed project information, and state the time and place for opening bids. • The City Council can delegate the authority to award the contract to a City staff member(City Manager, Public Works Director, Purchasing Officer, etc.). As for projects of$75,000 or more, the State public bidding requirements apply. (Refer to the matrix - attachment 1 for a summary of rules under the Act. The Act, also more broadly defines "maintenance" projects which are not subject to State public bidding rules. If the Act, is adopted by a city, the city gains the discretion to adopt its own procedures for bidding out maintenance work. (The definitions of"public project" and "maintenance" under the Act are set forth in the matrix at attachment 1.) The purpose for proposing that the City decide to become subject to the Act and adopt new purchasing rules is to improve efficiency and to implement a more workable procedure that will be consistently followed. Adoption of Policies and Procedures: The proposed ordinance provides for the adoption of operating rules and procedures by the Council. The city attorney recommends that staff adopt the operating rules and procedures after receiving input from the Council and staff members who will use the new program. The rules and procedures policy will also include a model contract program that will ensure consistent contracts with safeguards concerning insurance and indemnification and other administrative matters. (Draft model contracts have been included in the Council packets.) Due to the voluminous nature of these documents they were not copies for all packets. However, they are on file in the City Clerk's office for review. Fiscal Impact: Although it is difficult to specify the exact cost saving of approving the staff recommendations, it is certain that the rules will increase efficiency and create savings in terms of staff time and paperwork. The use of papers and supplies would also decrease as a result of not having to bid all of the work that is currently subject to bidding under the State law and the City's own rules. The proposed actions will also reduce legal fees in that the number of items to be checked for State law compliance will be reduced significantly and the new proposal involves the adoption of model contracts. Attachments: 1. Matrix summarizing proposed bidding and contracting rules 2. Proposed Resolution regarding election to become to the Act 3. Proposed Resolution regarding adoption of informal bidding for public works projects 4. Proposed Ordinance amending the Municipal Code concerning bidding and purchasing RVPUB\NGS\56056 -3-