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CITY COUNCIL STAFF REPORT
DATE: February 4, 2009 Legislative
SUBJECT: INTRODUCE AN ORDINANCE OF THE CITY OF PALM SPRINGS,
CALIFORNIA, AMENDING SECTIONS 7.01.040 AND 7.09.030 AND
ADDING SECTION 1.01.231 TO THE PALM SPRINGS MUNICIPAL
CODE, ESTABLISHING A LOCAL BUSINESS PREFERENCE
PROGRAM
FROM: David H. Ready, City Manager
BY: Douglas Holland, City Attorney
SUMMARY
The City Council will consider the introduction of an ordinance that would establish a
local preference program for businesses located in the Coachella Valley in the purchase
of City supplies, materials, equipment, and contractual services. The Council will also
discuss approaches to initiating and reviewing requests for proposals and qualifications
and provide direction to staff.
RECOMMENDATION:
1. Waive the reading of the Ordinance text in its entirety and read by title only.
2. Introduce on first reading Ordinance No. , "AN ORDINANCE OF THE CITY
OF PALM SPRINGS, CALIFORNIA, AMENDING SECTIONS 7.01.040 AND
7.09.030 AND ADDING SECTION 1.01.231 TO THE PALM SPRINGS
MUNICIPAL CODE, ESTABLISHING A LOCAL BUSINESS PREFERENCE
PROGRAM."
3. Discuss existing process for Requests for Proposals (RFP) and Requests for
Qualifications) RFQ and provide direction to staff.
(0033G 1
City Council Staff Report
Local Preference Ordinance
Febmary 4,2009
STAFF ANALYSIS:
A. Local Preference Ordinance
The proposed Ordinance establishes two local preference programs. This policy is
predicated on a recognition that the City spends a significant amount of pubic funds on
purchasing supplies, materials, and equipment and in contracting for services. Many of
these dollars are derived from revenues generated from businesses within the entire
Coachella Valley.
The underlying assumption of the Ordinance is that funds generated in the community
should be placed back into the local economy. In order to achieve this goal, the
Ordinance establishes a local preference program for vendors in the provision of
supplies, materials, and equipment and for consultant services. Vendors from the
Coachella Valley would receive a 5% preference (up to $15,000.00) for bids on
supplies, materials, and equipment. In the contract services situation, the Ordinance
provides a general policy of providing local preference whenever practicable. This
policy would be implemented on a case-by-case basis, with each solicitation being
drafted to ensure that local consultants would be appropriately considered. This
approach provides greater flexibility to address each situation in a unique manner, as
warranted. An alternative approach would be to simply provide that local consultants
would receive a 5% bonus in points used in the evaluation of proposals.
The proposed Ordinance actually amends two existing local preference programs. The
City currently provides a small "local preference" in the purchase of supplies, materials,
and equipment. The preference is provided solely to vendors in Palm Springs, equal to
the amount of sales tax revenues that the City would derive from the transaction. The
City's current share of State sales taxes collected in the City is 1%. Thus, the local
vendor would receive a 1% local preference. The 1% is essentially viewed as a 1%
credit towards the amount bid by each City vendor. The current Code also provides a
"reciprocal preference" for contracts for services (expressly excluding professional
contracts). This preference is only applied if a company bidding on a services contract
is from a jurisdiction that has a local preference program. For example, if four
companies bid on a contracting proposal and one of the bidding companies is a City
company and another bidder is from a jurisdiction that provides a 3% local preference,
then the City vendor would receive a 3% preference when compared to the bidder from
the local preference jurisdiction. If the lowest bidder was not from a local preference
jurisdiction, the reciprocal preference would not be applied. The proposed Ordinance
would eliminate these two programs and replace them with a more favorable 5%
preference for Coachella Valley based vendors in the purchase of supplies, materials
and equipment, and would allow for a local preference for Coachella Valley based
vendors to be applied, when practicable, in the acquisition of both non-professional, as
well as professional, services.
('MSR, 1
City Council Staff Reporn
Local Preference Ordinance
February 4,2009
B. Request for proposals (RFP) and Statement of Qualifications (SOQ)
The City's Procurement Division conducts competitive Requests for Proposals and
Requests or Statements of Qualifications processes. The process typically commences
with a request from an end-user department. The Division develops the RFP or SOO
with input from the end-user department. When completed to the satisfaction of the
Division and the Department, notice of availability of the RFP or SOO is released
electronically to the vendor database, posted to the website, and advertised in
appropriate publications.
For professional services, per law, price is in a separate, sealed envelope and is not
considered in ranking the firms and is not opened until a final rank, based on
qualifications, has been determined. Price is then negotiated. In non-professional
services, price is submitted with the proposal and may be a factor in ranking the firms.
Once the responses are received, the Division prepares evaluation documents and
conducts the evaluation process. An evaluation committee (made up of an odd number,
usually 5 or 7, recently as many as 9), independently scores each submittal based on
the criteria provided in the RFP document (standard best practice criteria including:
qualifications, references, understanding of the project, and past experience with similar
projects). The Division and Department assemble the evaluation committee of staff with
general expertise and or knowledge of the subject. Recently, depending upon the
project, staff also included outside evaluators with specific and or special expertise to
join the committee (e.g. commercial graphic designers, landscape architects, etc.). The
addition of these evaluators appeared to enhance the dynamics of the review process
and we would anticipate continuing this practice.
Subsequent to the initial scores being tallied, the committee meets to discuss and
finalize rankings. The evaluation committee may short-list top ranked firms for
interviews/presentations. If done, firms enter the interview stage equal, and final
ranking is determined on interview scores. The Division allows short-listed firms three
to four weeks to prepare for their interview, providing the interview guidelines and new
criteria determined by the evaluation committee for the interview.
Once a firm is determined to be the highest ranked, the negotiation of an agreement
starts. If the Division and Department are unable to reach an agreement, negotiations
with the second highest scoring firm may commence. Once negotiations are complete
and a contract has been prepared, a Staff Report is submitted to recommend award of
the contract by the City Council.
We are requesting that the Council discuss whether the above process is acceptable.
There may be merit in submitting all RFQ's and SOO's with an estimated cost of over
$25,000 to the Council for approval before they are released. Additionally, Council
members my want to consider appointing a "subcommittee" or "liaison" to participate in
the evaluation process.
K 0536 1
City Council Staff Report
Local Preference Ordinance
February 4,2009
C. Sustainability
An enhanced local preference policy has the potential to achieve aspects of the City's
overall sustainability goals. For example, greater use of local/regional vendors reduces
the carbon footprint of travel and delivery requirements. Moreover, to the extent these
ordinance provisions strengthen our local economy; it contributes to an economic
balance and vitality essential for any community's long term sustainability program and
goals.
FISCAL IMPACT
The Ordinance contemplates a local preference program for vendors that could
potentially result in slightly higher costs for certain supplies, materials, and equipment.
Any such variances in costs, by comparison, should be offset by the positive affect of
such a policy on the local and regional economy.
Douglas Holland, City Attorney
David H. Ready, City Manager
(,10 3o I
i
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF PALM SPRINGS,
CALIFORNIA, AMENDING SECTIONS 7.01.040 AND
7.09,030 OF, AND ADDING SECTION 1,01.231 TO, THE
PALM SPRINGS MUNICIPAL CODE, ESTABLISHING A
LOCAL. BUSINESS PREFERENCE PROGRAM,
City Attorney Summary
This Ordinance establishes a preference program for
businesses located in the Coachella Valley in the purchase of
supplies, materials, equipment, and contractual services.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ORDAINS:
SECTION 1. Section 7.01.040 is amended by adding the following definitions:
"Director" means the City Manager or the City Manager's designee.
"Coachella Valley" means the area between the Salton Sea on the south, the San
Jacinto and Santa Rosa Mountains on the west, and the Little San Bernardino Mountains
on the east and north. For the purposes of this definition, "Coachella Valley" includes the
cities of Beaumont and Banning and the unincorporated areas between Banning and the
City of Palm Springs.
"Local Business" means a vendor, contractor, or consultant who has a valid physical
business address located within the Coachella Valley, at least six months prior to bid or
proposal opening date, from which the vendor, contractor, or consultant operates or
performs business on a day-to-day basis, and holds a valid business license by a
jurisdiction located in the Coachella Valley. Post office boxes are not verifiable and shall
not be used for the purpose of establishing such physical address.
"Solicitation" shall mean the City's process to obtain bids or proposals as provided in
this Title for the purchase of goods or services.
SECTION 2. Section 7.09.030.of the Palm Springs Municipal Code is amended to read:
7.09.030 Local Business Preference Program.
(1) Findings.
(a) The City annually spends significant amounts on purchasing supplies, materials,
and equipment, and contractual and professional services. The dollars used in
making these purchases are derived in large measure from taxes and fees derived
from Local Businesses and the City Council has determined that funds generated in
the community should, to the extent possible, be placed back in the local economy.
Therefore, the City Council has determined that it is in the best interest of the City to
give a preference to Local Businesses in making such purchases-whenever the
application of such a preference is reasonable in light of the dollar-value received in
6205191
ORDINANCE NO.
Page 3
residents and firms as opportunities occur and hire qualified local residents and firms
whenever feasible. In order for a Local Business to be eligible to claim the preference, the
business must request the preference in the Solicitation response and provide a copy of its
current business license from a jurisdiction in the Coachella Valley.
(5) Local Preference in Public Works Contracts Sub-Contractin . The prime
contractor shall use good faith efforts to sub-contract the supply of materials and
equipment to local business enterprises and to sub-contract services to businesses whose
work force resides within the Coachella Valley. The prime contractor shall submit evidence
of such good Faith efforts at the time of submission of bids. Good faith efforts may be
evaluated by placing advertisements inviting proposals in local newspapers, sending
request for proposals to local sub-contractors, or by demonstrating that no local sub-
contractors are qualified to perform the work or supply the materials or equipment. Any
notice inviting bids which may require the use of sub-contractors shall include notification of
this subsection. The City Council or Director may reject as non-responsive the bid of any
contractor proposing to use sub-contractors that fail to comply with the requirements of this
subsection-
(6) Exceptions to Local Business Preference Polic . The preference set forth in this
Section shall not apply to the following purchases or contracts:
(a) Goods or services provided under a cooperative purchasing agreement.
(b) Purchases or contracts which are funded in whole or in part by a governmental
entity and the laws, regulations, or policies governing such funding prohibit
application of that preference.
(c) Purchases made or contracts let under emergency or noncompetitive situations.
(d) Purchases with an estimated cost of$5,000.00 or less-
(e) Application of the local business preference to a particular purchase, contract,
or category of contracts for which the City Council is the awarding authority may
be waived at the City Council's discretion.
(7) Quality and Fitness. The preferences established in this Section shall in no way be
construed to inhibit, limit or restrict the right and obligation of the City Council and the
Director to compare quality and fitness for use of supplies, materials, equipment, and
services proposed for purchase and compare the qualifications, character, responsibility,
and fitness of all persons, firms, or corporations submitting bids or proposals. In addition,
the preferences established in this Section shall in no way be construed to prohibitthe right
of the City Council orthe Directorfrom giving any other preference permitted by law orthis
Title.
(8) Application. The Local Business Preference provided in this Section shall apply to
new contracts for supplies, materials, equipment, and services first solicited on or after
March 1, 2009- This Section shall be implemented in a manner consistent with otherwise
620518 1
ORDINANCE NO,
Page 5
(11) Promulgation of Administrative Rules. The Director is authorized to adopt
administrative rules supplemental to the provisions of this Title as necessary or appropriate
to implement the provisions of this Section. The provisions of this Section and the rules
adopted by the Director shall be provided to potential bidders, vendors, and contractors to
the widest extent practicable.
SECTION 3. Section 1.01.231 is added to the Palm Springs Municipal Code to read:
1.01.231. Refund of Fees.
A. Notwithstanding any other provision in this Code to the contrary, all claims against the
City with respect to any fee required pursuant to this Code and claimed to have been
overpaid, paid more than once, or collected, imposed or received by the City in a manner
not permitted by law, including without limitation any claim that such fee was imposed in
violation of constitutional or statutory law, shall be presented within the time and in the
manner prescribed by Part 3 of Division 3.6 of Title 1 of the California Government Code
(commencing with Section 900)for the claims to which that Part applies by its own terms,
as those provisions now exist or shall hereafter be amended, and as further provided by
this Section. Such fees may be refunded as provided in this Section.
B. Except as expressly provided in this Code, no refund shall be paid unless the
claimant, who actually paid the Fee for which a refund is sought produces written records
that establish the right to the claimed refund.
C_ Any claim made pursuant to this Section must be made in the manner and form
prescribed by Chapter 3.16 of this Code.
SECTION 4. If any section or provision of this Ordinance is for any reason held to be
invalid or unconstitutional by any court of competent jurisdiction, or contravened by reason
of any preemptive legislation, the remaining sections and/or provisions of this ordinance
shall remain valid. The City Council hereby declares that it would have adopted this
Ordinance, and each section or provision thereof, regardless of the fact that any one or
more section(s) or provision(s) may be declared invalid or unconstitutional or contravened
via legislation.
620518 1
ORDINANCE NO.
Page 7
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, California, do hereby certify
that Ordinance No. is a full, true and correct copy, and was introduced at a
regular meeting of the Palm Springs City Council on and adopted at a
regular meeting of the City Council held on the day of , 2009 by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
620519 1
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF PALM SPRINGS,
CALIFORNIA, AMENDING SECTIONS 7.01.040 AND
7,09,030 OF, AND ADDING SECTION 1.01.231 TO, THE
PALM SPRINGS MUNICIPAL CODE, ESTABLISHING A
LOCAL BUSINESS PREFERENCE PROGRAM
City Attorney Summary
This Ordinance establishes a preference program for
businesses located in the Coachella Valley in the purchase of
supplies, materials, equipment, and contractual services.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ORDAINS:
SECTION 1. Section 7.01.040 is amended by adding the following definitions:
"Director" means the City Manager or the City Manager's designee.
"Coachella Valley" means the area between the Salton Sea on the south, the San
Jacinto and Santa Rosa Mountains on the west, and the Little San Bernardino Mountains
on the east and north. For the purposes of this definition, "Coachella Valley includes the
cities of Beaumont and Banning and the unincorporated areas between Banning and the
City of Palm Springs.
"Local Business" means a vendor or consultant who has a valid physical business
address located within the Coachella Valley, at least six months prior to bid or proposal
opening date, from which the vendor or consultant operates or performs business on a
day-to-day basis, and holds a valid business license by a jurisdiction located in the
Coachella Valley. Post office boxes are not verifiable and shall not be used for the
purpose of establishing such physical address.
"Solicitation" shall mean the City's process to obtain bids or proposals as provided in
this Title for the purchase of goods or services.
SECTION 2. Section 7.01.060 is added to the Palm Springs Municipal Code to read:
7.09.030 Local Business Preference Program.
(1) Findings. The City annually spends significant amounts on purchasing supplies,
materials, and equipment, and contractual and professional services. The dollars used in
making these purchases are derived in large measure from taxes and fees derived from
Local Businesses and the City Council has determined that funds generated in the
community should,to the extent possible, be placed back in the local economy. Therefore,
the City Council has determined that it is in the best interest of the City to give a preference
to Local Businesses in making such purchases whenever the application of such a
preference is reasonable in light of the dollar-value received in relation to such expenditure.
Item 3 . 13 .
b 13o99 1
ORDINANCE NO.
Page 2
(2) Statement of Policy. It is the policy of the City to promote employment and business
opportunities for local residents and firms on all contracts and give preference to local
residents, workers, businesses, contractors, and consultants to the extent consistent with
the law and interests of the public.
(3) Local Preference in Purchasing. In the bidding of, or letting for procurement of,
supplies, materials, and equipment, as provided in this Title, the City Council or the
Director may give a preference to Local Businesses in making such purchase or awarding
such contract in an amount not to exceed five (5%) percent of the Local Business'total bid
price, or$15,000.00, whichever amount is lower. Total bid price shall include only the base
bid price but also adjustments to that base bid price resulting from alternates requested in
the Solicitation. In order for a Local Business to be eligible to claim the preference, the
business must request the preference in the Solicitation response and provide a copy of its
current business license from a jurisdiction in the Coachella Valley.
(4) Local Preference in Consultant Services. In awarding contracts for consultant
services, preference to Local Business shall be given whenever practicable pursuant to this
Title. The consultant will, to the extent legally possible, solicit applications for employment
and proposals for subcontractors for work associated with the proposed consultant contract
from local residents and firms as opportunities occur and hire qualified local residents and
firms whenever feasible. In order for a Local Business to be eligible to claim the
preference, the business must request the preference in the Solicitation response and
provide a copy of its current business license from a jurisdiction in the Coachella Valley.
(5) Local Preference in Public Works Contracts (Sub-Contracting. The prime contractor
shall use good faith efforts to sub-contract the supply of materials and equipment to local
business enterprises and to sub-contract services to businesses whose work force resides
within the Coachella Valley. The prime contractor shall submit evidence of such good faith
efforts at the time of submission of bids. Good faith efforts may be evaluated by placing
advertisements inviting proposals in local newspapers, sending request for proposals to
local sub-contractors, or by demonstrating that no local sub-contractors are qualified to
perform the work or supply the materials or equipment. Any notice inviting bids which may
require the use of sub-contractors shall include notification of this subsection. The City
Council or Director may reject as non-responsive the bid of any contractor proposing to use
sub-contractors that fail to comply with the requirements of this subsection.
(6) Exceptions to Local Business Preference Policy. The preference set forth in this
Section shall not apply to the following purchases or contracts:
(a) Goods or services provided under a cooperative purchasing agreement.
(b) Purchases or contracts which are funded in whole or in part by a governmental
entity and the laws, regulations, or policies governing such funding prohibit
application of that preference-
(c) Purchases made or contracts let under emergency or noncompetitive situations.
ORDINANCE NO.
Page 3
(d) Purchases with an estimated cost of $5,000.00 or less.
(e) Application of the local business preference to a particular purchase, contract,
or category of contracts for which the City Council is the awarding authority may
be waived at the City Council's discretion.
(7) Quality and Fitness. The preferences established in this Section shall in no way be
construed to inhibit, limit or restrict the right and obligation of the City Council and the
Director to compare quality and fitness for use of supplies, materials, equipment, and
services proposed for purchase and compare the qualifications, character, responsibility,
and fitness of all persons, firms, or corporations submitting bids or proposals. In addition,
the preferences established in this Section shall in no way be construed to prohibit the right
of the City Council or the Director from giving any other preference permitted by law or this
Title.
(8) Application. The Local Business Preference provided in this Section shall apply to
new contracts for supplies, materials, equipment, and services first solicited on or after
March 1, 2009. This Section shall be implemented in a manner consistent with otherwise
applicable provisions of this Title.
(9) Verification of Local Business Preference Eligibility. Any vendor or consultant
claiming to be a Local Business, shall so certify in the bid, in writing to the Director. The
Director shall not be required to verify the accuracy or any such certifications, and shall
have sole discretion to determine if a vendor or consultant meets the definition of"Local
Business." The decision of the Director declaring that any person or business is not a
Local Business shall be subject to appeal pursuant to the provisions of Chapter 2.50 of this
Code.
(10) Enforcement.
(a) The information furnished by each bidder requesting a Local Business
Preference shall be under penalty of perjury.
(b) No person or business shall knowingly and with intent to defraud,fraudulently
obtain, retain, attempt to obtain or retain, or aid another in fraudulently obtaining or
retaining or attempting to obtain or retain certification as a Local Business for the
purpose of this Section.
(c) No person or business shall willfully and knowingly make a false statement
with the intent to defraud, whether by affidavit, report, or other representation, to a
City official or employee for the purpose of influencing the certification or denial of
certification of any entity as a Local Business.
(d) A business which has obtained City certification as a Local Business by
reason of having furnished incorrect supporting information or by reason of having
withheld information, and which knew or should have known, the information
,,13wrq i
ORDINANCE N0,
Page 4
furnished was incorrect or the information withheld was relevant to its request for
certification, and which by reason of such certification has been awarded a contract
to which it would not otherwise have been enlitled, shall:
(i) Pay to the City any difference between the contract amount and
what the City's costs would have been if the contract had been
properly awarded;
(ii) In addition to the amount described in sub-section (i) above, be
assessed a penalty in an amount of not more than ten percent (10%)
of the amount of the contract involved; and
(iii) Be subject to debarment from future award of contracts from
the City-
(e) The penalties identified in (d)above shall also apply to any business that has
previously obtained proper certification and, as a result of a change in its status
would no longer be eligible for certification, fails to notify the Finance Department of
this information prior to responding to a Solicitation or accepting a contract award.
(11) Promulgation of Administrative Rules. The Director is authorized to adopt
administrative rules supplemental to the provisions of this Title as necessary or appropriate
to implement the provisions of this Section. The provisions of this Section and the rules
adopted by the Director shall be provided to potential bidders, vendors, and contractors to
the widest extent practicable.
SECTION 3. Section 1.01.231 is added to the Palm Springs Municipal Code to read:
1,01.231. Refund of Fees.
A. Notwithstanding any other provision in this Code to the contrary, all claims against the
City with respect to any fee required pursuant to this Code and claimed to have been
overpaid, paid more than once, or collected, imposed or received by the City in a manner
not permitted by law, including without limitation any claim that such fee was imposed in
violation of constitutional or statutory law, shall be presented within the time and in the
manner prescribed by Part 3 of Division 3.6 of Title 1 of the California Government Code
(commencing with Section 900) for the claims to which that Part applies by its own terms,
as those provisions now exist or shall hereafter be amended, and as further provided by
this Section. Such fees may be refunded as provided in this Section.
B. Except as expressly provided in this Code, no refund shall be paid unless the
claimant, who actually paid the Fee for which a refund is sought produces written records
that establish the right to the claimed refund-
C. ' Any claim made pursuant to this Section must be made in the manner and form
prescribed by Chapter 3.16 of this Code.
N 1361)9 1
ORDINANCE NO.
Page 5
SECTION 4. If any section or provision of this Ordinance is for any reason held to be
invalid or unconstitutional by any court of competent jurisdiction, or contravened by reason
of any preemptive legislation, the remaining sections and/or provisions of this ordinance
shall remain valid. The City Council hereby declares that it would have adopted this
Ordinance, and each section or provision thereof, regardless of the fact that any one or
more section(s)or provision(s) may be declared invalid or unconstitutional or contravened
via legislation.
SECTION 5. The Mayor shall sign and the City Clerk shall certify to the passage and
adoption of this Ordinance and shall cause the same, or the summary thereof, to be
published and posted pursuant to the provisions of law and this Ordinance shall take effect
thirty (30) days after passage.
PASSED, APPROVED, AND ADOPTED THIS — DAY OF , 2009.
MAYOR
ATTEST: APPROVED AS TO FORM:
James Thompson, City Clerk Douglas Holland, City Attorney
613691)1
ORDINANCE NO.
Page 6
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, California, do hereby certify
that Ordinance No, is a full, true and correct copy, and was introduced at a
regular meeting of the Palm Springs City Council on and adopted at a
regular meeting of the City Council held on the day of , 2009 by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
G 13GY9 1