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:	March 1, 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 is the revised draft of the ordinance that 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. "Public contracts" include 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. Findings: 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. ---- Changes made to second reading draft of new Ordinance: After the first reading of this ordinance (February 15, 2005) Council directed the Legal Department to make certain changes. These changes are reflected in the new draft prepared for the second reading. These include the following: 1. Changed the contract threshold for Personal Services (Chapter 2.52) to be per contract rather than per year as originally proposed. 2. Included the definition for "advertising" as found in Resolution 2000-14. 3. Corrected language in Recital C, page 1. 4. Include a 25 percent cap for contract amendments for Chapter 2.52.050.B.1 and 2. Legal also changed the cap for Chapter 2.50.070.N.1 and 2 to reflect the 25 percent cap. Included below are the substantive changes suggested by staff: 1. Included definitions for "award," "bid," "exemptions," "proposal," "quote," and "services" in Section 2.50.010. 2. Including language for notification for sole-source contracts in Section 2.50.070.D. 3. Included procedures for procurement of goods or services not exceeding $5,000 (Section 2.50.070.F) as required by the new Public Contracting Code. 4. Included "abandoned" or "non-owned" property in the surplus property section, Section 2.50.090. 5. Made changes to Section 2.52.070.B and C because previous ordinance did not reflect the appropriate selection process for either intermediate, informal selection or for formal selection process for personal service contracts of $75,000 or more. 6. Deleted "banking services" from the exemptions because a formal competitive selection process will achieve greater cost savings to the City.
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 31, 2005, which would create a 30-day period where the City would be required to follow the Attorney General's Model Rules.
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Staff Recommendation: Approve second reading of ordinance with changes with emergency clause 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 as amended and findings that justify exemptions to the formal competitive selection process.
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Attachments: Please click on the link below to view the following attachments: • Proposed ordinance with changes from the first reading emphasized.

Contract-Procedures-Ordinance.pdf (121.6KB)

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