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FY2013-11 Amending Title 3 Revenue and Finance Chapter 3.30 Contract, Purchase, Sale, and Transfer Procedures 1 2 Introduced by: Administrative Official 3 Requested by: Assembly member Bonney 4 Drafted by: Assembly member Bonney, 5 Assembly member Austerman, and Borough Attorney 6 Introduced: 01/03/2013 7 Public Hearing: 01/17/2013 8 Amended: 01/17/2013 9 Adopted: 01/17/2013 10 KODIAK ISLAND BOROUGH 11 ORDINANCE NO. FY2013 -11 12 13 AN ORDINANCE OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH 14 AMENDING TITLE 3 REVENUE AND FINANCE CHAPTER 3.30 CONTRACT, 15 PURCHASE, SALE, AND TRANSFER PROCEDURES TO MAKE INFORMATION 16 ABOUT BOROUGH CONTRACTS MORE READILY AVAILABLE TO THE PUBLIC 17 AND OTHER RELATED MATTERS 18 19 WHEREAS, the Kodiak Island Borough has established procedures for entering into 20 contracts for goods and services in a manner intended to be cost - effective for the Borough 21 and fair to all potential contracts; and 22 23 WHEREAS, the procedures set forth in Chapter 3.30 of the Kodiak Island Borough 24 Code should be amended to have the Borough Manager report to the Assembly regarding 25 certain contracts entered into under the Manager's administrative authority, although it is 26 the Assembly's intent that any delay in reporting will not affect the validity of the contract; 27 and • 28 29 WHEREAS, notices to potential bidders and proposers should be made available by 30 electronic means, as well as by newspaper publication; and 31 32 WHEREAS, the privileges and immunities clause of the United States Constitution 33 significantly limits the right of the Borough to grant a contracting preference to local 34 residents or companies; and 35 36 NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND 37 BOROUGH THAT: 38 39 Section 1: This ordinance is of a general and permanent nature and shall become a 40 part of the Kodiak Island Borough Code of Ordinances; 41 42 Section 2: Kodiak Island Borough Code Chapter 3.30 Contract, Purchase, Sale, and 43 Transfer Procedures is hereby amended as follows: 44 45 3.30.010 Contract, purchase and sale and transfer procedure. 46 The manager may carry out any of the following: 47 A. Contract for, purchase, or issue purchase authorizations for all supplies, materials, 48 equipment, and services for the offices, departments, and agencies of the borough; 49 B. Sell surplus, obsolete, or unusable personal property for the offices, department, and 50 agencies of the borough; Kodiak Island Borough, Alaska Ordinance No. FY2013 -11 Page 1 of 7 51 C. Transfer supplies, material, and equipment to or between the offices, departments, 52 and agencies of the borough; or 53 D. Contract for the construction, repair, or improvements of borough facilities. 54 55 3.30.020 Limitation on manager's authority. 56 The manager may not make an acquisition, sale, transfer, or contract authorized by KIBC 57 3.30.010 if the value of the property, service, or contract exceeds $25,000 without first 58 obtaining assembly approval with the exception of utility bills, which may be paid without 59 assembly approval. Similar types of work, even if performed in different geographic 60 locations, are considered "in the aggregate" regardless of the project, contract, 61 purchase orders, or change order and require assembly notification if the total 62 payment to one contractor exceeds $25,000 in one fiscal year. The manager will 63 report to the assembly, at its next regular meeting, contracts of $25,000 or less 64 between the borough and a) a member of the assembly, b) an assembly member's 65 immediate family, or c) a business in which the assembly member is associated or 66 has an ownership interest. immediate family of an assembly member means a 67 parent; sibling; child by blood, adoption, or marriage, spouse; grandparent or 68 grandchild. 69 70 3.30.030 Open market procedures. 71 A. Purchases, sales, or contracts authorized by KIBC 3.30.010 having an estimated 72 value in excess of $15,000 but less than $25,000 shall be made in the open market 73 without newspaper advertisement. 74 B. Market purchases, sales, and contracts for over $500.00 shall, whenever possible, be 75 ' based on at least two sempetitive -bids- quotes and shall be awarded to the lowest 76 responsible bidder, or in the case of a sale, to the highest responsible bidder, except a 77 local preference for purchasing shall be allowed for purchases of $15,000 or less if 78 that bid does not exceed the lowest responsible bid by more than not -to- exceed 79 20 10 percent. e :. .•..: . .: : : t u. e • - - _ 80 -- : e :: - e •: e- rchase -puce. for purchases of more than $15,000 but not 81 moro than $25,000. 82 C. The manager, or authorized designee, may solicit oral or written bids for open market 83 purchases or sales, and shall maintain a record of all bids received. 84 D. The sale of all surplus, obsolete, or unusable personal property shall be advertised by 85 electronic means or in a newspaper of general circulation publishod within the 86 borough unless authorized to the contrary by the assembly. 87 E. The purchase of utilities is exempt from this section. 88 89 3.30.040 Advertising for bids. 90 A. Purchases, sales, or contracts authorized by KIBC 3.30.010 having an estimated 91 value of more than $25,000 may be made only after a notice calling for bids issued by 92 electronic means or is printed in a newspaper of general circulation published- within 93 the borough once a week for not less than three consecutive weeks prior to the date of 94 the bid opening. The notice shall contain a general description of the property, work, Kodiak island Borough, Alaska Ordinance No. FY2013 -11 Page 2 of 7 95 or service; state where the bid forms and specifications may be obtained; specify the 96 place for submission of bids and the time by which they must be received. 97 B. The purchase or contract shall be awarded to the lowest responsible bidder, or in the 98 case of a sale to the highest responsible bidder. 99 C. Utilities are exempt from this section. 100 101 3.30.050 Processing of bids. 102 Notwithstanding other provisions of this chapter relating to the award after competitive bid 103 for purchases, sales, and contracts, the borough may: 104 A. Reject defective or nonresponsive bids; 105 B. Waive any irregularities in any and all bids; 106 C. Reject all bids; 107 D. Negotiate with two or more of the lowest bidders, if bid prices are in excess of the 108 money available or authorized, for a reduction in the scope, quality, or quantity of the 109 purchase, service, or contract; or 110 E. Readvertise for bids with or without making changes in the plans or specifications. 111 112 3.30.060 Local preference. 113 The assembly may, in its discretion, direct an award of a contract for the purchase of 114 personal property or services after competitive bidding to a responsible bidder who 115 maintains a business office or store within the borough from which the property or service 116 would be provided, if that bid does not exceed the lowest responsible bid by more than 10 117 percent. 118 119 3.30.070 Exception to bidding requirements. 120 The requirements of this chapter relating to solicitation of competitive bids and award to 121 the lowest responsible bidder shall not apply to: 122 A. Contracts for professional or unique services. The Assembly shall review contracts 123 for professional or unique services such as architects, engineers, surveyors, 124 attorneys, or accountants if the manager recommends exempting the contract 125 from the regular bidding process. Professional services means professional, 126 technical, or consultant's services that are predominately intellectual in 127 character, result in the production of a report or the completion of a task, and 128 include analysis, evaluation, prediction, planning, or recommendation; 129 B. Contracts for property or services necessitated by an emergency, if the delays 130 required for compliance with the bidding requirements would jeopardize the public 131 health or welfare; 132 C. Contracts for audit and insurance services that may be bid at up to five -year intervals; 133 D. Contracts entered into using a competitive sealed proposal process as set forth 134 in KIBC 3.30.110; 135 E. Contracts with a municipality or other political subdivision to the extent authorized by 136 statute with the assembly holding a public hearing on contracts exceeding $100,000; 137 or Kodiak Island Borough, Alaska Ordinance No. FY2013 -11 Page 3 of 7 138 F. Contracts for street improvements involving donated services and materials when the 139 assembly has determined not to create an assessment district and has approved a 140 project. The following steps shall be taken before a proposed contract is submitted to 141 the assembly for approval: 142 1. An applicant shall first submit to the engineering and facilities department director 143 a proposal that fully complies with Chapters 4.45, 16.70, and 16.80 KIBC along 144 with a cost estimate that reasonably describes the value of the services and 145 materials included in the proposal as well as the procedure for addressing any 146 change orders; 147 2. After the engineering and facilities department director accepts the proposal, the 148 applicant shall submit to the borough finance director proof of ability to comply with 149 Chapter 3.65 KIBC; and 150 3. The proposal shall be referred to the applicable road service area board for review 151 and recommendation to the assembly; 152 4. After the borough finance director approves the proposed bonding and a 153 recommendation has been received from any reviewing service area board, the 154 assembly shall hold a public hearing with notice to affected property owners as 155 follows: 156 a. Publication in a newspaper of general circulation in the borough at least once a 157 week for two consecutive weeks prior to the public hearing; 158 b. Mailing at least 15 days before the public hearing to all record owners of 159 property with frontage on the street to be improved. "Record owners" means 160 the person or persons listed as the owner of the property on the current 161 property tax records of the assessor. The notice shall be mailed to the record 162 owner at the address stated in the assessor's tax records; and 163 c. Every notice of a public hearing required by this section shall state the date, 164 time, location, and purpose of the public hearing and shall describe the 165 improvement. The notice shall also state that, if the assembly approves the 166 proposal, no assessment district will be formed and the borough will not 167 participate in the allocation or collection of costs among the respective property 168 owners. 169 5. After the public hearing, the assembly may approve the project, with or without 170 additional conditions. If the assembly approves the project, it shall authorize the 171 manager to execute the contract. 172 173 3.30.080 Lowest responsible bidder. 174 in determining the lowest responsible bidder, the assembly shall may consider: 175 A. The bid price; 176 B. The ability, capacity and skill of the bidder to perform the contract within the time 177 specified; 178 C. The character, integrity, reputation, judgment, and experience of the bidder; and 179 D. The quality of performance of previous contracts; and Kodiak Island Borough, Alaska Ordinance No. FY2013 -11 Page 4 of 7 180 E. If more than one bidder is determined to be responsible using the factors 181 described in A, B, and C, then the responsible bidder with the lowest bid price 182 will be considered to be the lowest responsible bidder. 183 184 3.30.090 Requirements mandatory. 185 Except as provided in KIBC 3.30.110, a purchase, contract, or sale involving 186 expenditure of borough funds or other assets in excess of $25,000 subject to the 187 provisions of this chapter shall not be valid, enforceable or binding upon the borough 188 unless the established requirements have been satisfied and the contract, purchase, or 189 sale approved by the assembly. 190 191 3.30.100 Change orders — Manager authority. 192 The manager, or designee, is authorized, without assembly approval, to enter into change 193 orders with respect to borough eenst etiein projects where the amount of additional 194 expenditure occasioned by the change order or orders does not, in the aggregate, exceed 195 $48;999 the total amount appropriated for the project, including any df.414 196 designated project contingency. The manager, or designee, shall report monthly to the 197 assembly the nature and amount of such change orders. 199 _ „, , , , Ja-fet Oct y to borough' 4 pro ;ectc whoro tho , amount o€ 200 I '60:00141:T45101:4,0 ituro occacionad by the change„ orderor ordGt dogs not,,,,inZ ttio m 201 202 Vie-- �.._�_.x , . 203 ostlers' Project approval should include a budget for the project that includeds an 204 appropriation of contingency funds. The manager may authorize change orders up 205 I to the appropriated amount 4 for that project. Change orders of up to 5% in excess 206 of the appropriated project amount, and not exceeding $200,000 for a particular 207 contract, require approval by: 208 A. The mayor and deputy presiding officer; 209 B. The mayor and one assembly member in the absence of the deputy presiding officer 210 C. The deputy presiding officer and one assembly member in the absence of the mayor; 211 or 212 D. Any two assembly members in the absence of the mayor and deputy presiding officer 213 214 I Such approval may be by signature or electronic signature. A change order in 215 excess of $200,000 for a contract or more than 5% in excess of the appropriated 216 I project amount requires assembly approval. 217 218 3.30.105 Circumvention of bidding requirements prohibited. 219 No person shall subdivide an acquisition of supplies, materials, equipment, or services 220 into more than one purchase order, contract, or change order if the acquisition of said 221 items or services would normally, reasonably, and customarily be conducted under a 222 single purchase order, contract, or change order, and if the subdivision has the effect of 223 avoiding or circumventing the competitive bidding requirements, or the limitations on the Kodiak Island Borough, Alaska Ordinance No. FY2013 -11 Page 5 of 7 224 authority to make acquisitions or to award contracts or change orders contained in this 225 chapter. Similar types of work, even if performed in different geographic locations, 226 are considered "in the aggregate" regardless of the project, contract, purchase 227 orders, or change order and require assembly notification if the total payment to 228 one contractor exceeds $25,000 in one fiscal year. 229 230 3.30.110 Competitive sealed proposals — Negotiated procurement. 231 A. If the manager determines that use of competitive sealed bidding is not practicable, 232 the borough may procure supplies, services or construction by competitive sealed 233 proposals under this section. 234 B. The manager shall solicit competitive sealed proposals by issuing a request for 235 proposals. The request for proposals shall state, or incorporate by reference, all 236 specifications and contractual terms and conditions to which a proposal must respond 237 and shall state the factors to be considered in evaluating proposals and the relative 238 importance of those factors. Public notice of a request for proposals shall be given in 239 accordance with KIBC 3.30.040. 240 C. Sealed proposals shall be designated as such on an outer envelope and shall be 241 submitted by mail or in person at the place and no later than the time specified in the 242 request for proposals. Proposals not submitted at the place or within the time so 243 specified shall not be opened or considered. 244 D. Proposals shall be received at the time and place designated in the request for 245 proposals and shall be opened so as to avoid disclosing their contents to competing 246 proponents during the process of negotiation. Proposals and tabulations thereof shall 247 be open to public inspection only after the contract award. 248 E. In the manner provided in the request for proposals, the manager may negotiate with 249 those responsible proponents whose proposals are determined by the manager to be 250 reasonably responsive to the request for proposals. Negotiations shall be used to 251 clarify and assure full understanding of the requirements of the request for proposals. 252 The manager may permit proponents to revise their proposals after submission and 253 prior to award to obtain best and final offers. Proponents deemed eligible for 254 negotiations shall be treated equally regarding any opportunity to discuss and revise 255 proposals. In conducting negotiations or requesting revisions, neither the manager nor 256 any other borough director or employee shall disclose any information derived from 257 proposals of competing proponents. 258 F. Awards shall be made by written notice to the responsible proponent whose final 259 proposal is determined to be most advantageous to the borough. No criteria other than 260 those set forth in the request for proposals may be used in proposal evaluation. If the 261 manager determines that it is in the best interest of the borough to do so, the borough 262 may reject all proposals. 263 264 3.30.115 Delinquency. 265 A. The borough shall not award a contract or purchase order to any person, corporation, 266 or other business entity who is delinquent in paying (1) any tax levied by the borough; 267 (2) any special assessment levied by the bdrough; (3) any charge for utility or Kodiak Island Borough, Alaska Ordinance No. FY2013 -11 Page 6 of 7 268 municipal waste services; or (4) any other borough fee due under the code, unless the 269 person, corporation, or other business entity cures the delinquency within 30 days 270 after the mailing of written notice of the delinquency. In the case of a closely held 271 business, this prohibition shall also apply to the delinquency of their legal principals or 272 officers. For purposes of this section, a payment shall be considered "delinquent" 273 when it is not made on or before the applicable deadline established by the Kodiak 274 Island Borough Code, or by written notice if the code does not establish a deadline, or, 275 if the code does not establish a deadline and a deadline is not established in a written 276 notice, within 60 days of the mailing of written notice that the payment is due, 277 B. The borough may terminate any contract or purchase order if the person, corporation, 278 or other business entity and, in the case of a closely held business, their legal 279 principals or officers, becomes delinquent in payment of any of the items listed in 280 subsection (A) of this section, unless the delinquency is cured within 30 days after 281 mailing of written notice as above. 282 C. The borough may deduct from any amount otherwise due the person, corporation, or 283 other business entity and, in the case of a closely held business, their legal principals 284 or officers under any contract or purchase order an amount equal to the total of all 285 such delinquent amounts that the contractor owes for (1) taxes levied by the borough; 286 (2) special assessments levied by the borough; (3) charges for borough utility or 287 municipal waste services; and (4) other borough fees due under the code. 288 D. Nothing in this section shall prevent any person, corporation, or other business entity 289 and, in the case of a closely held business, their legal principals or officers from 290 paying under protest any tax, special assessment, utility or municipal waste charge, or 291 other borough fee, or pursuing appropriate judicial or administrative action to contest 292 or recover any such tax, assessment, charge or fee. 293 E. For purposes of this section, the term "closely held business" shall mean a 294 corporation, limited liability company or other business entity which has less than five 295 unrelated (by blood or marriage) owners. 296 297 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH 298 THIS SEVENTEENTH DAY OF JANUARY, 2013 299 300 KODIAK ISLAND BOROUGH 301 302 '^ 303 304 A E Jerome M. Sel.y, Borougb.M. — 306 ,t.CJ 307 Nova M. Javier, MMC, Boroug Clerk Kodiak Island Borough, Alaska Ordinance No. FY2013 -11 Page 7 of 7