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Home My WebLink About14-216 Adoption of A Res. City become subject to Ca Uniform PublicREPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: GRANT M. YATES CITY MANAGER DATE: JULY 22, 2014 SUBJECT: ADOPTION OF A RESOLUTION ELECTING TO HAVE THE CITY OF LAKE ELSINORE BECOME SUBJECT TO THE CALIFORNIA UNIFORM PUBLIC CONSTRUCTION COST ACCOUNTING ACT Recommendation: It is recommended the City Council approve and adopt: Resolution No. 2014- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ELECTING TO BECOME SUBJECT TO THE CALIFORNIA UNIFORM PUBLIC CONSTRUCTION COST ACCOUNTING ACT Background Under the California Public Contract Code, all public works projects valued over $5,000 are subject to detailed formal bid procedures. Common examples of public works projects are street improvement projects, public infrastructure and public buildings. In order to alleviate the cumbersome bid process for routine public works projects, the Legislature adopted the Uniform Public Construction Cost Accounting Act (the "Act "). The Act is a series of sections within the California Public Contract Code that allow a participating local agency to streamline the bidding process for public works projects up to $175,000 if the agency adopts certain procedures. Discussion State law broadly defines public works projects and sets a limit of $5,000, above which public works projects must be formally bid. For this reason, the City cannot bid for construction work in the same manner it contracts for purchased supplies, equipment, and professional services. Each formally bid public works project requires a newspaper Resolution Adopting Uniform Public Construction Cost Accounting Act July 22, 2014 Page 2 legal ad, the production and distribution of bid documents and oversight for the bid opening, followed by City Council approval. This process adds to the project schedule and is expensive for both the City and the competing contractors. In contrast, the Act dramatically raises the threshold imposing formal bid procedures. The Act provides for three categories of bid processing: 1. Negotiated purchase /city forces for public works up to $45,000; 2. Informal bid procedure for public works up to $175,000; 3. Formal bid procedures (as noted above) for public works over $175,000. For public works contracts up to $45,000, the City would have maximum flexibility and can use its own City employees, negotiate a contract, or issue a purchase order for the work with a licensed contractor upon City Manager approval. In order to take advantage of the informal bid procedures allowed by the Act for public works projects between $45,000 and $175,000, the City is required to develop work categories and maintain a list of contractors for each category. Any licensed contractor requesting inclusion on the list must be added. When a project is ready for bid, all contractors on the list must be notified of the request for bids and given 10 days to respond. In the event of a unique project falling outside of the established work categories, the City would advertise the request for bids by way of publication in specific trade journals in accordance with the Public Contract Code. While this streamlines the bid process, City Council approval of the low bid contractor is still required. In addition to developing and regularly updating the list of licensed contractors, the City is required to follow certain cost accounting procedures with respect to public works projects if city employees are employed for public works projects (as opposed to maintenance). The cost accounting procedures are to be employed by the public agency to estimate costs for determining if a public project is required to be bid out and to capture and record actual costs when a public project is performed by the City's own work force. The procedures follow normal accounting in the industry. The Public Works Department is evaluating the extent that city employees currently fall within this category and will comply with any required accounting and reporting requirements. There are no fees or dues for this program and the City can "opt out" at any time with a City Council resolution. By electing to become subject to the Act, City staff believes that the City should realize the following benefits: • Flexibility and efficiency in execution of public works projects. Quicker response time in starting and expediting projects of $175,000 and under. Resolution Adopting Uniform Public Construction Cost Accounting Act July 22, 2014 Page 3 • Decreased staff time and advertising costs for projects of $175,000 and under. • Reduction in the number of formal bids, saving time and money. • Minimized probability of bid protests. • Ability to reject any bids at City's discretion. Fiscal Impact While developing the contractor lists and implementing certain accounting procedures may require an initial investment of staff time, the ability to utilize informal bid procedures will reduce administrative costs and increase operational efficiencies, especially due to increased speed of project delivery. Prepared by: Vince Damasse, P.E. Director of Public Works Approved by: Grant M. Yates City Manager Attachments: Resolution No. 2014- RESOLUTION NO. 2014- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ELECTING TO BECOME SUBJECT TO THE CALIFORNIA UNIFORM PUBLIC CONSTRUCTION COST ACCOUNTING ACT WHEREAS, prior to the passage of Assembly Bill No. 1666, Chapter 1054, Statutes of 1983, which added Chapter 2, commencing with Section 22000, to Part 3 of Division 2 of the Public Contract Code, existing law did not provide a uniform cost accounting standard for construction work performed or contracted by local public agencies; and WHEREAS, Public Contract Code Section 22000 et seq., the Uniform Public Construction Cost Accounting Act (the "Act "), establishes such a uniform cost accounting standard; and WHEREAS, the California Uniform Construction Cost Accounting Commission (the "Commission ") established under the Act has developed uniform public construction cost accounting procedures for implementation by local public agencies in the performance of or in the contracting for construction of public projects. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, DOES HEREBY RESOLVE AND ORDER AS FOLLOWS: SECTION 1. Pursuant to Public Contract Code Section 22030, the City of Lake Elsinore elects to become subject to the uniform public construction cost accounting procedures set forth in the Act and to the Commission's policies and procedures manual and cost accounting review procedures, as they may each from time to time be amended. City Council Resolution No. 2014 -. Page 2 of 3 SECTION 2. That the City Clerk is directed to notify the Office of the State Controller of the City's election by forwarding a certified copy of this Resolution. SECTION 3. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED, AND ADOPTED, at a regular meeting of the City Council of the City of Lake Elsinore, California, on this 22nd day of July, 2014. Natasha Johnson, Mayor ATTEST: Virginia J. Bloom, City Clerk APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney STATE OF CALIFORNIA SS COUNTY OF RIVERSIDE CITY OF LAKE ELSINORE I, VIRGINIA J. BLOOM, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2014- was adopted by the City Council of the City of Lake Elsinore at a regular meeting held on the 22nd day of July, 2014 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Virginia J. Bloom, CMC City Clerk