Council Communication

An Ordinance Amending the Ashland Municipal Code Relating to Rules of Procedure for Public Contracting and Personal Service Contracts; Repealing Chapters 2.50 and 2.52 of the Ashland Municipal Code and Resolutions No. 2000-15, No. 2000-14, No. 99-68, No. 99-64, and No. 99-30; and Declaring an Emergency.
Meeting Date:	February 15, 2005		Primary Staff Contact:	Mike Reeder, 488-5350 reederm@ashland.or.us
Department:	Legal		Secondary Staff Contact:	Mike Franell, 488-5350 franellm@ashland.or.us
Contributing Departments:	Finance; Public Works
Approval:	Gino Grimaldi

Statement: This ordinance sets forth the rules of procedure that govern the City's public contracts for goods, services, public improvements, architectural, engineering and related services contracts, as well as contracts for personal services. The ordinance repeals Ashland Municipal Code Chapters 2.50, "Local Contract Review Board" and 2.52, "Purchasing Agent" and related resolutions, which deal with public contracts and personal service contracts.
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Background: The new state Public Contracting Code (ORS subchapters 279A, 279B, and 279C) replaces the old Public Contracting Code, ORS chapter 279, and becomes effective March 1, 2005. The new Public Contracting Code requires local governments to adopt (or re-adopt) rules of procedure for local public contracting codes or be subject to the Model Rules. The Model Rules are not to be relied on for all of a city's contracting needs. For example, the Model Rules do not: 1) create special classes of contracts that are exempt from the general requirements for competitive bids and proposals, 2) provide procedures for the screening and selection of personal service contracts, 3) address issues of delegation of authority for decision making activities that the statutes assign to "contracting agencies," and 4) provide procedures for the disposal of surplus property. In order for the City to establish procedures that include the above-mentioned subject matter or that differ from the Model Rules, it must adopt such rules with an effective date of March 1, 2005. This ordinance repeals old AMC Chapters 2.50 and 2.52. The new Chapter 2.50 establishes rules of procedure for public contracts (including contracts for goods and services and public improvement contracts, and contracts for architectural, engineering, land surveying, and "related services." Chapter 2.50 also creates classes of contracts that are exempt from the formal competitive selection process, such as contracts not exceeding $5,000, emergency contracts, and sole-source contracts. The new Chapter 2.52 establishes rules of procedure for "personal service contracts" that include contracts for services other than architectural, engineering, land surveying, and "related services". Examples of personal service contracts include contracts for consultants for advertising, public relations, appraisers, and accountants. Most of the policies adopted in this ordinance have been adopted previously by ordinance or resolution, but since the state's new Public Contracting Code effectively repeals the City's old rules, the City must adopt new public contracting and personal service contracts rules. Generally, most of the substantive portions of this ordinance originate either from the new state Public Contracting Code requirements, or are taken from old Chapters 2.50 and 2.52, or are taken from the past resolutions concerning public contracting and personal service contracts. Below are the substantive changes that originate from city staff, for which this council has discretion: - 1. Section 2.50.070: Requiring only a purchase order (rather than a purchase order and a contract) where practicable before the start of a contract that is exempt from the formal competitive selection process. Staff made this change because many public contracts require only a purchase order and do not also require a contract, and therefore, the old language does not reflect the reality of purchasing. A purchase order is usually required (absent emergencies) for all public contracts, while a formal written contract is not always required. 2. Chapter 2.52 "Personal Service Contracts": Throughout this entire chapter regulating personal service contracts thresholds are segmented by cost per year rather than cost per contract. For example, the formal competitive selection process (competitive proposals) is required for contracts that exceed $75,000 per year, rather than per contract. Not requiring RFPs for contracts not to exceed $75,000 per year will reduce the workload for city staff, while allowing flexibility in retaining qualified contractors. The City must also adopt findings that justify the exemptions from the formal competitive selection procedures of the Public Contracting Code. The following are the findings that relate to the exemptions to the formal competitive selection processes for public contracts: The Council finds the contracts listed in this ordinance exempted from the formal competitive selection procedures of the Public Contracting Code upon these findings: It is unlikely such exemptions will encourage favoritism or substantially diminish competition. The Council also finds that the awarding of public contracts pursuant to the exemptions will result in substantial cost savings.
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Related City Policies: As noted above, this new ordinance repeals AMC Chapters 2.50 and 2.52 and the related resolutions.
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Council Options: Adoption of the ordinance by emergency so as to be effective March 1, 2005. Adoption of the ordinance, without declaration of emergency, so as to be effective March 15, 2005, which would create a two week period where the City would be required to follow the Attorney General's Model Rules.
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Staff Recommendation: Staff recommends adoption of this ordinance by emergency in order to become effective by March 1, 2005, the effective date of the new Public Contracting Code and Model Rules.
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Potential Motions: Move to adopt the attached ordinance and findings that justify exemptions to the formal competitive selection process.
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Attachments: • Proposed Ordinance • Current AMC Chapters 2.50 and 2.52, past resolutions regarding public contracting, exemptions and personal service contracts, and a "Public Contracting Code and Personal Services" overview document.   (PDF Format)

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