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Home My WebLink About13. Adopt Reso Increasing Limit of Informal Contracts for PW ConstructionTO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM- OFFICE OF THE CITY MANAGER BY: DELFINO R. CONSUNJI, P.E., DIRECTOR OF PUBLIC WORKSICITY MTE: AUGUST 28, 2018 RECOMMENDATION That the City Council adopt: • The City Charter, Article XII, Section 1211. CONTRACTS ON PUBLIC WORKS was modified through a popular vote on November 5, 1996. This charter amendment permits the City Council (by a two-thirds vote) to raise the monetary limits of public works informal contracts and contracts for work or materials without calling for bids (when authorized by the City Council) by not more than the increase in the Engineering News Record's (ENR) Construction Cost Index (CCI). The November 5, 1996 charter amendment also increased the limit of informal public works contracts to $15,000 and the limit for work or materials without calling for bids when authorized by the City Council to $30,000 which were later increased by Resolution No. 12-7315 on January 10, 2012 to $23,000 and $46,000, respectively. Currently, City Charter, Article XII, Section 1211. CONTRACTS ON PUBLIC WORKS reads, "Except, as hereinafter expressly provided, every contract involving an expenditure of more than $23,000 for the construction of improvement (excluding maintenance and repair) of public buildings, works, streets, drains, sewers, utilities, parks and playgrounds, and each separate purchase of materials or supplies for the same, where the expenditure required for such purchase shall exceed the sum of $23,000, shall be let to the lowest responsible bidder after notice by publication in the official newspaper by two or more insertions, the first of which shall be at least ten days before the time for opening bids. The City Council may reject any and all bids presented and may readvertise in its discretion. After rejecting bids, or if no bids are received, or without advertising for bids if the total amount of the contract or project is $46,000 or less, then the City Council may declare and determine that in its opinion, the work in question may be performed better or more economically by the City with its own employees, or that the materials or supplies may be purchased at a lower price in the open market, and after the adoption of resolution to this effect by the affirmative vote of a majority of the total members of the City Council, it may proceed to have said work done or such materials or supplies PROPOSED INCREASES TO PUBLIC WORKS CONTRACTS AUGUST 28, 2018 PAGE #2 purchased in the manner stated, without further observance of the provisions of this section. Such contracts may be let and such purchases made without advertising for bids, if such work or the purchase of such materials or supplies shall be deemed by the City Council to be urgent necessity for the preservation of life, health or property, and shall be authorized by the affirmative vote of at least two-thirds of the total members of the City Council. The limitations as provided in this section may be increased by adoption of a resolution by the affirmative vote of two-thirds of the total members of the City Council provided, however, that such increase shall not be greater in percentage than the percentage change in the CCI of the Los Angeles Metropolitan Area as reported by the ENR from the effective date of this section to the date of the change. The current limits of public works contracts are: $23,000 for informal contracts and $46,000 for work or materials without calling for bids when authorized by the City Council. These limits have not been adjusted for more than six years. Over this time, project costs have escalated significantly thereby limiting the Public Works Department's ability to complete smaller projects effectively and efficiently. Over the past six years, the ENR's CCI has increased from 10088.80 to 11940.25. This is an increase of 18.35 percent and therefore, staff is recommending that the existing $23,000 limit for informal contracts and $46,000 limit for work or materials be increased to $27,000 and $54,000 respectively. Fiscal Responsibility ._.. FISCAL IMPACT By adopting the proposed resolution, the informal bid amount is increased to $27,000 resulting in fewer projects having to be formally bid. This will result in savings to the City based on reduced staff time preparing documents relating to the formal bid process and costs in advertising for solicitation of bids. It is difficult, however, to quantify these savings because of the unknown number of informal bids falling within the $23,000 to $27,000 range. Similarly, it will be difficult to quantify savings with the increase of limit to $54,000 for work or materials without asking for bids when authorized by the City Council because of the unknown number of these types of work falling between $46,000 to $54,000 range. ATTACHMENTS Attachment -A - Resolution IN WHEREAS, the Downey City Charter Was amended on November 711978� through a �.a-tular vote to increase the limit of Aublic works contriref&�ykevd-*' tok to $15,000, without calling for bids When authorized by the City Council; and WHEREAS, the Downey City Charter Amendment of 1978 permits the Downey City Council to raise such limits by not more than the increase in the Construction Cost Index by a 2/3 vote of the City Council; and WHEREAS, the Downey City Charter Was amended on November 5 '1996, through a drd •4r�'•, f (Trd1UFMS- to $30,000 Without calling for bids when authorized by the City Council; and WHEREAS, the Downey City Council passed the Resolution No. 12-7315 on January 127 2012 increasing the limit of public works contracts to $23,000 and of work and materials to $46,000 without calling for bids when authorized by the City Council; and WHEREAS, the Downey City Charter Amendment of November 5,1996 permits the Downey City Council to raise such limits by not more than the increase in the construction cost index of the Los Angeles Metropolitan Area as reported by the Engineering News Record by a 2/3 vote of the City Council; and WHEREAS, the Engineering News Record reports that its Composite Construction Cost Index rose from 10088.80 for December 2011 to 11940.25 in June 2018. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DoEg HEREBY RESOLVE AS FOLLOWS: SECTION 1. That the limit for informal contracts for public works projects be increased from $23,000 to $27,000. StdT1614 1. That the limit for permitting informal public Works contracts to be performel by city employees and the limit for purchasing materials and supplies on the open market without calling for bids when authorized by the City Council be increased from $46,000 to $54,000. SECTION 3 That the increases set forth in this Resolution are consistent wit t e percentage change in the construction cost index of the Los Angeles Metropolitan Area as reported �y the Cngineering News Record from the effective date of Section 1211 to the date 1.1 the change. SECTION 4. That Resolution No. 12-7315 is hereby repealed. MID"IMUM . 0 A - RESOLUTION NO. PAGE 2 SECTION 6. That the Gity Clerk certify the adoption of this Resolution an e instructe to annotate Section 1211 of the Downey City Charter as to its adoption, SEAN ASHTON, Mayor RAFTHIRT-311111 Leit r, tYX 1 1,11 11 V7F-i7,TtT-1*71J1TRj1Gj at a Kuyvar ineu-tirly flem pri ine /-6- 551, 1 u y e o owing • to wit: AYE& Council •:_.. NOES: Council Member: AB i.. Member: ABSTAIN, Council Member: MARIA ALICIA DUARTE, CIVIC, City Clerk