TITLE VI FINANCIAL MANAGEMENT CODE

6.16.010 Purpose

The purpose of this policy is to provide a broad overview of the standards and methods to guide the District in obtaining goods, equipment, materials, and professional and technical services. It shall be the District’s policy to procure all goods and services in an open manner that permits, wherever possible, the agency to receive the best quality and best value of public funds.

6.16.020 Fundamental Principles

The District's Procurement Policy is guided by the following principles:

1. Conduct the procurement process in an open, equitable, competitive, and fair manner without conflicts of interest or possibility or appearance of impropriety, or improper business relationships; and
2. Maintain quality standards; and
3. Promote the standardization and simplification of goods, materials, and equipment; and
4. Promote cost-savings, economy, and efficiency in District procurement activities; and
5. Establish and maintain an arm's length relationship with all vendors; and
6. Provide appropriate public access to contracting information; and
7. Ensure compliance with all applicable state and federal laws and regulations.

6.16.030 Administrative Guidelines

This policy sets forth the following standards and methods to be followed by the District in obtaining goods and services. This policy shall be maintained and updated, as necessary, to implement appropriate changes to maintain consistency with all applicable laws and regulations, and/or best procurement practices and standards as established by other external references.

6.16.040 Confidential Information

Information furnished by vendors and/or contractors regarding price, terms, performance specifications, or other data, other than information available at a public bid opening will be confidential until after the award.

6.16.050 Conflicts of Interest

No director, officer, employee or agent of the District shall participate in any procedure(s), task(s), or decision(s) relative to initiation, evaluation, award, or administration of a contract if a conflict of interest, real or apparent, exists. Such a conflict of interest arises when (a) the director, officer, employee or agent, (b) any member of their immediate family, (c) any of their business associates, or (d) an organization which employs, or which is about to employ, any of the above described individuals has a financial or other interest in a firm that participates in a District procurement process or that is selected for an award.

The standards governing the determination as to whether such an interest exists are set forth in the Political Reform Act (Section 8100 et seq. of the California Government Code) and in Sections 1090, 1091, and 1091.5 of the California Government Code.

6.16.100 Procurement Authority

In general, Board Authorization is required for all procurements exceeding $10,000. The Board, at its discretion, may authorize the General Manager to approve all procurements, execute agreements, amend agreements and change orders in an amount greater than $10,000.

Unless otherwise authorized by the Board, the General Manager is authorized to approve all procurements and agreements, in an amount not to exceed $10,000. The General Manager may approve all contract amendments and change orders as follows:

1. When the original contract amount exceeds $10,000, (and has been approved by the Board), the General Manager may approve amendments and change orders up to a total cumulative amount not to exceed $10,000; and
2. When the Board approves any contract amendment or change order, the General Manager may approve subsequent contract amendments or change orders up to a total cumulative amount not to exceed $10,000; and
3. The General Manager has $10,000 authorization to approve contract amendments and change orders after each Board action on that contract.

Unless otherwise authorized by the General Manager, the Water Supervisor and Wastewater Supervisor are each authorized to approve individual procurements in an amount not to exceed $1,000 each, or $5,000 in aggregate per month. The General Manager approval shall be required for any contract amendment(s) and/or change order(s), regardless of value.

6.16.110 Methods of Procurement

All purchases and contracts, whether by informal bidding or formal bidding, shall be made on a competitive basis to the greatest extent practicable. The method of procurement, such as informal bids or, formal competitive bidding, shall be appropriate for the type of procurement and shall be in the best interest of the District.

1. Competitive bids should be requested for maintenance repairs and public work greater than $50,000 and awarded to the lowest responsive, responsible bidder. Alternative methods of procurement, such as a design-build approach, may be utilized and in full compliance with all applicable requirements.
2. Formal competitive bidding shall be used when purchasing goods and related services greater than $50,000 and awarded to the lowest responsive, responsible bidder. On a case-by-case basis, a Best Value Approach may be used in evaluating the bids received.
3. Formal competitive proposals that evaluate factors in addition to price shall be used when purchasing professional services greater than $50,000. Specialized State and federal laws will apply to the procurement of professional services as identified in Section 4525 of the Government Code.
4. An informal procurement method may be utilized for the purchase of goods and services when the estimated expenditure is greater than $10,000 but does not exceed $50,000. To the extent reasonable, a minimum of three written quotes shall be obtained that permit prices and other terms to be compared. The District will make every effort to undertake adequate outreach to ensure open competition. The District's informal bidding procedures using a lowest responsive, responsible bidder standard for bid comparison will serve as the typical standard on which to base the purchase of materials, equipment, or supplies; unless it is determined by the General Manager that it is in the District's best interest to apply a Best Value Approach.
5. An informal procurement method may be utilized for the purchase of goods and services when the estimated expenditure does not exceed $10,000. To the extent reasonable, a minimum of one written quote shall be obtained.
6. In certain circumstances, a competitive negotiation process utilizing an RFP process may be necessary or appropriate to accomplish the District's procurement goals, such as to procure specialized goods and related services.
7. The use of existing Cooperative Purchasing Agreements resulting from a cooperative procurement is encouraged in order to reduce duplicative effort and to achieve cost economies.
8. The District may purchase items or services without further competition under the following conditions:
   1. If the District rejects bids received in connection with a procurement of materials, supplies and equipment requiring formal competitive bidding, or
   2. When no bids or proposals are received in response to an Invitation to Bid or RFPs, in which case the General Manager is authorized to procure the required item or services through direct negotiations with a vendor or to resolicit as appropriate.

6.16.115 Documentation and Consideration of Bids and Proposals

Formal competitive bidding requires preparation of bid documents that clearly set forth all requirements which must be fulfilled for the bid to be considered responsive and, once bids are received, an award, if made, to the lowest responsive and responsible bidder. The District may only contract with persons, firms or entities that are qualified and possess the ability to perform successfully under the terms and conditions of the bid solicitation documents.

The General Manager is authorized to establish protest procedures for competitive bidding processes, which shall be specified in the bid solicitation documents. Board approval is required when rejecting all bids received for any procurement exceeding $100,000.

6.16.120 Execution of Procurement Contract Documents

All District contracts and amendments shall be in writing and executed prior to beginning performance under the contract. The General Manager shall execute all contracts on behalf of the District that are duly approved by the Board and delegated to the General Manager. The General Manager shall have the authority to evaluate, award, and execute contracts, amendments, and change orders not subject to Board approval.

6.16.125 Contract Administration

The District shall administer all contracts to ensure that contractors conform to the terms, conditions, and specifications of all contracts and to ensure all purchases and services are received in a timely manner.

6.16.130 Exclusions from Procurement Policy

A non-exclusive list of examples of non-discretionary services not governed under this policy includes, but is not limited to:

1. Electrical, water, internet, phone, or other regulated utility services provided by a municipality or vendor; and
2. Advertisements placed in a newspaper of general circulation; and
3. Non-discretionary payments to other government agencies, including permit fees; and
4. Association dues; and
5. Procurement of existing inventory items.

6.16.130 Sole and Single Source Procurements

Regardless of the estimated cost of procurement, the District is not required to engage in the competitive bidding process when procuring materials, equipment, supplies or services for which there exists a single or proprietary sole source of supply. The General Manager is authorized to make a single or sole source determination in lieu of following the competitive procurement requirements outlined herein for procurements that do not exceed $10,000. When the total cumulative amount exceeds $10,000, the approval of single or sole source procurement shall be made by the Board.

6.16.135 Discretion to Waive the Competitive Process

The Board may waive the requirements for formal competitive bidding or other procedures set forth in this Policy, when a determination is made that the best interests of the District are served thereby, and provided there is adequate documentation of the need for such material, supplies, equipment, public works or services. These circumstances shall be evaluated on a case-by-case basis, keeping in mind the fundamental principles of procurement set forth in this Policy. The findings justifying the waiver must be documented in the record.

6.16.140 Emergency Contracts

For procurements requiring competitive bidding and/or Board approval, in case of any sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services, the Board hereby authorizes the General Manager to take all necessary and proper measures in such emergency conditions to maintain the District's systems in operation. The Board also grants the General Manager the authority to determine that there is insufficient time for competitive bidding and that public interest and necessity demand the immediate expenditure of public money to safeguard life, health, or property. If the General Manager makes such a determination, the General Manager may expend or enter into a contract involving the expenditure of any sum needed in such emergency without observance of the provisions requiring competition, bids or notice. The General Manager shall promptly report on the reasons and necessity for proceeding without a competitive solicitation to the Board at the next available meeting, provided that the General Manager reports to the Board no later than 30 days after the General Manager takes such emergency action. Upon hearing the General Manager report, the Board shall determine, by a majority vote, whether or not there is a need to continue the emergency action. The Board shall continue to evaluate the emergency action, determining whether or not the emergency procurement is still required, at every regularly scheduled meeting thereafter until the action is terminated.

6.16.145 Purchasing Credit Card

To facilitate small purchases to meet daily operational needs and to take advantage of prompt payment discounts offered by suppliers, employees designated by the General Manager will be authorized to use a purchasing credit card as issued by by Board-authorized bank agreement.

Use of the District purchasing credit card is restricted solely to the General Manager, Assistant General Manager, Water Supervisor, and Wastewater Supervisor unless otherwise approved on a case-by-case basis by the General Manager, and is limited to the procurement authority limits as established herein. No blanket authority for use of the District purchasing credit card shall be granted to any other District employee.

6.16.150 Disposal of Non-Real District Property

Any District property including supplies, materials, tools, vehicles, or equipment having a useful life greater than one year, excluding real estate, that can no longer effectively be utilized by the District based on the following criteria or as otherwise determined by the General Manager, shall be decommissioned and subject to disposal.

• Wear and tear leading to maintenance that is more costly than replacement; or
• Age beyond design or operational life; or
• Technological obsolescence; or
• Procedural or operational changes approved by the General Manager; or
• Supplies, materials or equipment that are retired from use; or
• Design and specification changes that leave commodities unused; or
• New systems that produce stocks of unusable or unneeded leftover items.

Declared decommissioned item(s) shall be stored at the direction of the General Manager until such time as the item(s) can be properly disposed of. Such items shall be disposed of in a manner clearly most advantageous to the District, as determined by the General Manager, utilizing one of the following methods:

1. Transfer to another public agency, educational institution or non-profit (501.C) upon a written request and determination by the General Manager that it is in the public interest to do so; or
2. Sale to other local, state or federal government entities, public utilities and/or other special districts, as negotiated by the General Manager; or
3. Used as a trade-in for credit toward the acquisition of new property, subject to approval of the General Manager; or
4. Returned to the manufacturer for buy-back credit toward the purchase of new property; or
5. Sold at public auction through any other reputable auction organization, including online auctions, with the terms of all such sales being a cashier’s check or money order in the amount of the full purchase price plus any fees associated with the sale; or
6. In the case of decommissioned vehicles or equipment, sold to a licensed dealership with the terms of all such sales being a cashier’s check or money order in the amount of the full purchase price.

All District license plates shall be removed from decommissioned vehicles and equipment prior to sale.

Decommissioned property may be discarded and/or recycled if no bids are received at auction, no buyer can be found, where the item has minimal or no value to the District, the cost of disposal of such property would exceed the recovery value, or as otherwise determined by the General Manager.

Unless awarded by public auction, no employee or Board member, or their immediate family, may acquire any decommissioned District property.

6.16.155 Disposal Real District Property

Sale of District real property shall be in conformance with California Government Code Sections 65402 and 54222.

Surplus real property will be sold by public bid. At the District's discretion, a Notice of Sale shall be published in a newspaper of general circulation in the District at least once each week for two successive weeks. The notice shall contain a description of the property, a statement of time and place where bids are to be opened and read, and a statement of the time in which bids are to be accepted or rejected.

The Notice of Sale may contain any reservation by the District of easements or other interests, a statement if higher oral bids are to be received at the opening, a minimum acceptable price, and any other term or condition with regard to the transfer of title.

Bids for the purchase of real property will be accepted or rejected by the Board of Directors. Documents for the conveyance of title to real property will be executed by the President of the Board of Directors upon authorization by the Board of Directors.

6.16.160 Replacement of District Vehicles and Equipment

All District light vehicles and equipment having a GVW less than 14,000 lbs shall be reviewed for replacement after 10 years or 100,000 miles. All District trailers, and heavy equipment having a GVW greater than or equal to 14,000 lbs, shall be reviewed for replacement after 12 years.

Each fiscal year, maintenance records of vehicles/equipment meeting the criteria set forth herein will be reviewed. Vehicles/equipment with good maintenance records may be retained and reviewed annually thereafter for replacement. Light vehicles with low mileage and/or good maintenance records may be retained until it is deemed cost effective to replace them. Vehicles/equipment with poor service/maintenance histories can be considered for early replacement at the discretion of the General Manager.

6.16.165 Scrap Metal

Scrap metal that accumulates through the replacement of damaged and/or unserviceable items in the course of District operations shall be sold as scrap to local scrap dealers at prevailing rates.

District employees are expressly prohibited from taking and/or selling for personal gain any District property, even if designated as scrap.

6.16.170 Revenue Generating Contracts/Concessions

To the extent they are not otherwise governed by District policies, concession agreements are contracts where the District grants permission to use District facilities or property to vendors to sell products or services, for which the District may receive a percentage of the proceeds and/or a flat rate of compensation. Generally, these arrangements are at no direct cost to the District.

Where it is determined that a number of potential vendors are available to provide similar products or services, a competitive procurement procedure should be followed taking into consideration the economic return to the District, quality of the product, service and experience of the vendor, or other criteria that may be established in the RFP.

Contracts generating $10,000 per year or more in revenue are subject to Board approval. Contracts generating less than $10,000 per year in revenue may be approved by the General Manager.