Chapter 3.08
PURCHASING
Sections:
3.08.010 Adoption of purchasing system.
3.08.015 Compliance required – Effect of noncompliance.
3.08.020 Purchasing officer designated.
3.08.030 Duties and authority of the purchasing officer.
3.08.035 Limitations on expenditures.
3.08.050 Use of purchase orders required and exceptions.
3.08.070 Informal purchasing procedures.
3.08.080 Formal contract procedure.
3.08.085 Purchase of used equipment.
3.08.090 Inspection and testing.
3.08.095 Award and execution of contracts.
3.08.100 Change orders for contracts covering the purchase of supplies, services or equipment.
3.08.105 Change orders for contracts covering public works construction projects.
3.08.140 Contracts for professional services.
3.08.150 Recycled materials and products.
3.08.160 Public works contracts.
3.08.170 Prohibited practices and conflicts of interest.
3.08.010 Adoption of purchasing system.
In order to establish efficient and effective procedures for the purchase of supplies, services and equipment, and to secure for the city, supplies, services and equipment at the lowest possible cost commensurate with the quality needed, to exercise positive financial control over purchases, to clearly define authority for the purchasing function and to assure the quality of purchases, a purchasing system is hereby adopted.
Expenditure of funds for public works projects are covered by the provision of Section 20160 et seq. of the Public Contract Code of the State of California. (Ord. 293 § 3, 2002)
3.08.011 Definitions.
“Lowest responsible bidder,” as used in this chapter, shall mean the lowest bidder that is responsive to all of the bid requirements, is deemed capable, and that can assure reasonable quality and fitness and possess the ability and expertise to satisfactorily perform the required services and when necessary possess the required state or other license. (Ord. 293 § 3, 2002)
3.08.015 Compliance required – Effect of noncompliance.
No obligation for the payment of supplies, services and equipment shall be incurred by the city except as prescribed by this chapter. Any agreement for the purchase of supplies, services and equipment made contrary to the provisions of this chapter shall be void and any claim or demand against the city based thereon shall be invalid. (Ord. 293 § 3, 2002)
3.08.020 Purchasing officer designated.
The responsibility and authority for the purchasing of supplies, services and equipment is vested in the city manager, or such other person as the city manager may designate to be the purchasing officer of the city. (Ord. 293 § 3, 2002)
3.08.030 Duties and authority of the purchasing officer.
The purchasing officer shall have the authority to:
A. Negotiate, process the purchase of, and contract for all supplies, services and equipment needed by any city department or agency which derives its support wholly or in part from the city; provided, however, that any single expenditure or contract in excess of $50,000 shall require city council approval.
B. Make procurements:
1. In accordance with the purchasing procedures prescribed by this chapter; and
2. In accordance with relevant administrative policies approved by the city manager for internal control and operations management.
C. Act to procure for the city the needed supplies, equipment and services with the necessary quality, capacity, safety, performance ability and overall cost, considering labor and maintenance costs and other applicable factors required to meet the service objectives of the using department or agency at the least expense to the city.
D. Discourage collusion in bidding and discourage vendor uniform bidding; endeavor to obtain the most open competition possible on all purchases.
E. Prepare and recommend administrative regulations, including revisions and amendments thereto, governing the purchase of supplies, services and equipment for the city; said regulations shall be effective upon approval by the city manager.
F. Remain informed of current developments in the field of purchasing, prices, market conditions and new products.
G. Prescribe and maintain such forms as are reasonably necessary for the operation of this chapter and other rules and regulations.
H. Transfer between departments any unused goods and supplies within any fiscal year.
I. Sell or exchange any and all equipment, materials, fixtures and other personal property of the city having a salvage value and which are obsolete or unserviceable, or are surplus to the city, or for which replacement is to be purchased. The purchasing officer or designee may sell the same for the best price obtainable in the open market or, when he/she deems it advisable, to the highest bidder at public sale, or he/she may exchange the same for other property or for credit on other property. In the event the purchasing officer determines that any such obsolete or surplus property has no salvage value, he/she may dispose of it as he/she deems advisable in accordance with Chapter 2.52 SBMC et seq. Any employees involved in declaring property surplus, or in the sale of said property, are excluded from acquiring the surplus property in any way.
J. Prescribe, design and issue forms needed for the operation of this chapter and other applicable rules and regulations.
K. Grant authority to any department director to purchase or contract for specified supplies and equipment; but shall require that such purchases or contracts be made in conformity with purchasing procedures established in this chapter. All fiduciary duties and responsibilities of the purchasing officer are incumbent upon the department directors when acting in the capacity of purchasing officer, particularly when negotiating contracts for professional services.
L. Grant each department director authority to perform the duties and exercise the authority of the purchasing officer with a limit on purchases from the same vendor, purchased on the same day, to less than $5,000 in value, except to the extent that the city manager reserves the duties and authority for himself/herself.
M. Grant a one percent advantage in the bid price to in-town vendors whenever supplies and equipment are subject to sales tax. Price alone shall not be the determining factor but shall be considered along with the other factors, including, but not limited to, the ability of the bidder to deliver, prior experience with the bidder and other factors relating to the particular needs of the city for the supplies and equipment to be purchased. (Ord. 532 § 3, 2023; Ord. 460 § 2, 2015; Ord. 293 § 3, 2002)
3.08.035 Limitations on expenditures.
The purchasing officer shall not authorize total purchases in excess of the budget that has been approved by the city council for the fiscal year. (Ord. 293 § 3, 2002)
3.08.040 Requisitions.
Each department shall utilize the form of requisition prescribed by the purchasing officer. No purchasing requisitions shall be approved unless the department has a sufficient unencumbered balance in excess of all unpaid obligations in the department budget where the purchase is to be charged. (Ord. 293 § 3, 2002)
3.08.050 Use of purchase orders required and exceptions.
A. Purchase of supplies, services and equipment in excess of $5,000 shall be made only by purchase order. Except as otherwise provided in this chapter, no purchase order shall be issued unless the prior approval of the purchasing officer has been obtained. SBMC 3.08.070 and 3.08.080 shall not apply to the purchase of supplies, services or equipment under the following circumstances:
1. Emergency purchases as provided in SBMC 3.08.060; or
2. Purchases from the same vendor, made on the same day, by each department, of an estimated value of less than $5,000; or
3. Billing for utilities, and other similar payments, unless there exists maintenance or service agreements; or
4. Services provided only by another governmental agency where there exists a service agreement.
B. The purchasing officer may establish accounts with vendors for specified supplies, services and equipment. Open accounts shall be made pursuant to provisions of this chapter. The aggregate purchases under an open vendor account shall not exceed $5,000 per transaction. The accounts shall be open at the discretion of the purchasing officer after considering risk and need.
C. Except in cases of emergency or in cases where specific authority has first been obtained from the city council, the purchasing officer shall not issue any purchase order for supplies, services and equipment unless there exists an unencumbered appropriation in the fund account against which such purchase is to be charged. (Ord. 532 § 3, 2023; Ord. 460 § 3, 2015; Ord. 293 § 3, 2002)
3.08.060 Emergency purchases.
The city manager or designee may make emergency purchases, not to exceed $50,000, free of the provisions of this chapter upon a showing by any department that the purchase required is for the immediate protection of life, health, or property and there is a present, immediate and existing emergency which could not reasonably be foreseen, or to prevent or mitigate an emergency condition from occurring. Emergency purchases that exceed $50,000 in response to conditions that endanger life, health or safety are free from the provisions of this chapter, but are required to be ratified by the city council at the soonest available regular city council meeting. (Ord. 532 § 3, 2023; Ord. 460 § 4, 2015; Ord. 293 § 3, 2002)
3.08.070 Informal purchasing procedures.
The purchasing officer may make purchases of supplies, equipment or services with a value of less than $50,000 by following the informal bid procedures provided in this section:
A. Purchases of supplies, services and equipment of an estimated value of less than $50,000 may be made by the purchasing officer in accordance with the procedures set forth in this section. The purchasing officer shall solicit informal competitive bids for all such purchases; provided, however, informal competitive bidding shall not be required for any purchase that has an estimated value of less than $5,000.
B. Except where competitive bidding is not required, informal bids shall be solicited for purchases of supplies, services or equipment and awarded to the lowest responsible bidder, as follows:
1. The informal bids may be oral or written;
2. Whenever possible, at least three informal bids or quotations shall be obtained, and the award be given to the lowest responsible bidder;
3. The purchasing officer shall solicit informal bids or quotations from prospective responsible vendors by written request, by telephone, by public notice posted on a bulletin board in City Hall and/or by adjudicated newspaper publication;
4. The informal bid purchase shall not require city council approval; the city manager, or designee, is authorized to execute the contract for any such purchase. (Ord. 532 § 3, 2023; Ord. 460 § 5, 2015; Ord. 293 § 3, 2002)
3.08.080 Formal contract procedure.
Except as otherwise specifically provided in this section or in other sections of this chapter, purchases of supplies, services and equipment of an estimated value of $50,000 or more shall be by formal sealed written competitive bids. Awards of such contracts shall be made by the city council to the lowest responsible bidder in accordance with the following provisions:
A. Notices Inviting Bids. Notices inviting bids shall include a general description of the supplies, services or equipment to be purchased. Notices shall also state where bid forms and specifications may be secured as well as the time and place for opening bids. Notices inviting bids must be given by publication in a newspaper of general circulation throughout the city at least 10 calendar days before the date of opening the bids. The notice shall be published twice, not less than five days apart per Public Contract Code Subsection 20164 of the State of California. The notice shall specify that the award shall be made to the lowest responsible bidder in accordance with SBMC 3.08.080.
B. Bidders’ Security. When considered necessary by the purchasing officer, bidders’ security may be prescribed in the notices inviting bids. Bidders shall not be entitled to the return of bid securities. The city council, on the refusal or failure of the successful bidder to execute the contract, may award the contract to the next lowest responsible bidder.
C. Confidentiality of Bids. Any bid received pursuant to the provisions of this chapter shall not be disclosed directly or indirectly to any other bidder until the bidding is closed and further bidding is excluded.
D. Bid Opening Procedure. Sealed bids shall be submitted to the city clerk or designee and shall be identified as bids on the sealed envelope. All bids submitted by the deadline shall be opened at the time and place stated in the public notice. All bids received shall be open for public inspection in the city clerk’s office during business hours for 30 days after the bid opening. Bids will be destroyed in accordance with the city’s adopted records retention schedule. The city reserves the right to confirm mathematical accuracy of the bids prior to award of the contract.
E. Rejection of Bids. The city council may, at its discretion, reject any and all bids presented and readvertise for bids.
F. Tie Bids. If two or more bids are received for the same total amount, quality and service being equal, and if public interest will not permit the delay of readvertising for bids, the city council may accept the one it chooses or accept the lowest bid made by negotiation with the tie bidders.
G. Contracts Exceeding Bid Amount. Change orders for contracts for the purchase of supplies, services or equipment may not exceed the bid amount by more than 25 percent.
H. Performance Bonds. The purchasing officer shall have the authority to require a performance bond before entering into a contract. The bond will be in an amount reasonably necessary to protect the best interest of the city. If a performance bond is required, the form and amount shall be described in the notice inviting bids.
I. Splitting or Separating Purchases or Contract. Contracts for the purchase of supplies, equipment or services may not be split or separated into smaller work orders for the express purpose of circumventing purchasing procedures.
J. Returning Retention Withholdings. The purchasing officer shall be required to return the required 10 percent retention withholdings in accordance with the original signed contract, or 60 calendar days after a notice of completion has been signed by the authorized department director and the authorized project coordinator, provided there are no outstanding stop orders or mechanic’s liens. (Ord. 532 § 3, 2023; Ord. 460 § 6, 2015; Ord. 293 § 3, 2002)
3.08.085 Purchase of used equipment.
If opportunities arise to purchase used equipment, such equipment may be purchased without competitive bidding, provided all the following conditions are met:
A. The equipment being sold is warranted or, in the case of an “as-is, where-is” purchase, there is an inspection by a qualified party who certifies that the condition of the item is acceptable and adequate for efficient city use.
B. The dealer of the equipment is a bona fide and reputable dealer as verified through reference checks or the equipment is being purchased from another governmental entity.
C. The selling price of the equipment is less than $50,000, including tax, installation, freight, and any other additional acquisition costs.
D. If no bids are received from the formal bidding process for the purchase of used equipment with a selling price of over $50,000, a written request to commence negotiation with a vendor(s) must be submitted to the city manager for approval. Acceptance of the contract is subject to city council approval.
Justification for the sole source purchase of used equipment must be documented and maintained as part of the procurement file.
It is not allowable to purchase used equipment when procedures for the acquisition of new equipment have been circumvented to avoid the competitive bidding process. (Ord. 532 § 3, 2023; Ord. 460 § 7, 2015; Ord. 293 § 3, 2002)
3.08.090 Inspection and testing.
The purchasing officer shall supervise the inspection and testing of supplies and equipment delivered to determine their conformance with the specifications set forth in the purchase order or contract. The purchasing officer shall have authority to require chemical and physical tests of samples submitted with bids and samples of deliveries, which are necessary to determine their quality and conformance with specifications. Before payment is authorized, the satisfactory receipt of goods shall be established as prescribed in the administrative regulations governing the processing of purchase orders. (Ord. 293 § 3, 2002)
3.08.095 Award and execution of contracts.
Except in emergency situations pursuant to SBMC 3.08.060, all contracts for supplies, services and equipment in an estimated amount of $50,000, or more, shall be awarded by the city council. Contracts for supplies, services and equipment in an estimated amount of less than $50,000 shall be executed by the city manager or designee. (Ord. 532 § 3, 2023; Ord. 460 § 8, 2015; Ord. 293 § 3, 2002)
3.08.100 Change orders for contracts covering the purchase of supplies, services or equipment.
A. Change orders for contracts for the purchases of supplies, services and equipment may not exceed the original bid amount by more than 25 percent.
B. Change orders for an amount of less than $50,000 may be approved by the city manager if unencumbered funds are available.
C. Change orders for an amount of $50,000 or more shall require city council approval.
D. Any change order that results in the need for additional appropriation shall be approved by the city council. (Ord. 532 § 3, 2023; Ord. 460 § 9, 2015; Ord. 293 § 3, 2002)
3.08.105 Change orders for contracts covering public works construction projects.
A. Change orders for an amount of less than $5,000 shall be approved by the department director overseeing the project.
B. The city manager may approve any change order for $5,000 or more with the following limitations: 10 percent of the contract value, provided sufficient project appropriations exist.
C. The city council shall approve any change order for amounts that exceed any of the limitations in subsection (B) of this section. (Ord. 293 § 3, 2002)
3.08.110 Gratuities.
The offer of any gratuity to an official or employee by any vendor or contractor, or perspective vendor or contractor, shall be cause for declaring such individual or firm to be an irresponsible bidder as provided in SBMC 3.08.070 and 3.08.080. (Ord. 293 § 3, 2002)
3.08.120 Petty cash.
For the purpose of making purchases where the estimated cost is less than $100.00 per transaction, there is hereby created a petty cash account of a maximum of $2,000 from which the city finance department may make payments for approved purchases not exceeding $100.00 each. The account shall be replenished periodically by the city treasurer to cover checks written against the account. Claims submitted to the city finance office for reimbursement must be supported by sales slips or invoices for each purchase, must indicate the department for which the purchase is made, the authorized personnel requesting such purchase, and sufficient funds need to be available in the account charged.
Disbursements made from the petty cash account shall be presented to the city council for ratification along with the register of demands. (Ord. 293 § 3, 2002)
3.08.130 Exemptions.
Where otherwise required by this chapter, one or more procedures in this chapter may be waived, at the discretion of the purchasing officer, and the purchase carried forward, when:
A. Emergency purchases are required as provided in SBMC 3.08.060.
B. If the purchasing officer finds that such supplies, services or equipment are unique because of the quality, durability, availability or fitness for a particular use or if available from only one source, competitive bidding will not be required.
C. The goods, services, and/or equipment may be acquired from or in cooperation with another governmental agency that is acquiring or has acquired goods, services, and/or equipment through a cooperative purchasing plan or program which accomplishes the purposes of this chapter in accordance with state law and when economically advantageous to do so, including, but not limited to, another governmental agency with which the city has entered into a joint exercise of powers agreement for such purpose, pursuant to the provisions of Section 6502 of the Government Code of the State of California, provided both of the following conditions apply:
1. The sales price of the item to be purchased has been obtained through the competitive bidding process conducted within a previous 24-month period, by the other agency; and
2. The purchase can be made by the other governmental agency upon the same terms, conditions, and specifications at a lower price than can be obtained by the city through normal purchasing procedures.
D. The purchasing officer determines that competitive bidding is impossible, or not in the public’s interest. (Ord. 460 § 10, 2015; Ord. 293 § 3, 2002)
3.08.140 Contracts for professional services.
Because of their unique nature, it is in the best interest of the public, as allowed by state law, that contracts for professional services such as attorneys, accountants, architects, planning consultants, computer consultants, engineers, auditors, financial advisors, public relations consultants, real estate agents and brokers, insurance and bond agents and brokers, or other professional or consultant services of a similar nature, or at the discretion of the purchasing officer, be selected on the basis of demonstrated competence and on the professional qualifications necessary for the satisfactory performance of the services required, negotiated between parties rather than on the basis of cost alone. Therefore, the city manager is not limited to awarding professional services contracts to the lowest responsible bidder, but rather on the basis of demonstrated competence and qualifications for the types of service to be performed at a fair and reasonable price.
The procurement of professional services shall be as follows:
A. The city manager may exempt professional service contracts from the bid requirements of SBMC 3.08.070 for contracts less than $50,000 when it is necessary or convenient for the management of the city’s affairs.
B. The purchasing officer shall ascertain from informed sources the names of not less than three professionals qualified for the service desired who are professionally and financially qualified to undertake the proposed assignment. When three such professionals are not readily identifiable, the city manager may determine that a lesser number of professionals is adequate.
C. A request for proposal shall be provided to all potential candidates outlining the scope of services required, time frame for completion, pricing structure, liability insurance information and coverage and other pertinent information. Professionals must submit their responses in the specified format no later than the stated final due date for proposals. The response must include liability insurance information and coverage.
D. The evaluation process will be based on the criteria stated in the request for proposal but will generally include the scope of services offered, the professional’s capabilities and previous experience in the field.
E. After the proposals are evaluated, the purchasing officer will negotiate an agreement with the selected professional. If an agreement is not reached within a reasonable time, the purchasing officer will terminate discussion with the first candidate and open negotiations with the second choice. (Ord. 532 § 3, 2023; Ord. 460 § 11, 2015; Ord. 293 § 3, 2002)
3.08.150 Recycled materials and products.
It is the intent of the city to set an example in minimizing waste and promoting increased use of recycled materials and products. Certain recycled products, such as plastic products, glass containers, motor oil, paper, asphalt pavement, and latex paint, which do not compromise quality and effectiveness and are similar to nonrecycled products can and should be purchased at competitive prices. (Ord. 293 § 3, 2002)
3.08.160 Public works contracts.
Public works contracts, and expenditures for public works projects, will abide by the provisions of Section 20160 et seq. of the Public Contract Code of the state. (Ord. 293 § 3, 2002)
3.08.170 Prohibited practices and conflicts of interest.
Employees are specifically prohibited from all practices that might result in unlawful activity including, but not limited to, rebates, kickbacks, or other unlawful consideration. Employees shall be prohibited from participating in the selection process for a contract or in the making of a contract when those employees have a relationship with a person or business entity seeking a contract under this chapter or when the employee has a financial interest in a contract. (Ord. 293 § 3, 2002)