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HomeMy WebLinkAboutItem No. 26 Policy Federal Award Programs LEMCText File City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake-elsinore.org File Number: TMP-2826 Agenda Date: 6/12/2018 Status: Consent AgendaVersion: 1 File Type: OrdinanceIn Control: City Council / Successor Agency Agenda Number: 26) Page 1 City of Lake Elsinore Printed on 6/7/2018 REPORT TO CITY COUNCIL To:Honorable Mayor and Members of the City Council From:Grant Yates, CityManager Prepared By: Shannon Buckley, Finance Manager Date:June 12, 2018 Subject:Policy Regarding Administration of Federal Award Programs; and Amend Chapter 3.08 of theLake Elsinore Municipal Code Adding Section 3.08.016 Regarding Federal Award Programs Recommendation adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ADOPTING CITY COUNCIL POLICY NO. 300-15, ADMINISTRATION OF FEDERAL AWARD PROGRAMS; and, introduceAN ORDINANCE OF THECITY COUNCIL OF THECITY OF LAKE ELSINORE, CALIFORNIA, ADDING LAKE ELSINORE MUNICIPAL CODE (LEMC) SECTION 3.08.016 REGARDING FEDERAL AWARD PROGRAMS Background The City of Lake Elsinore receives federal funding through various grant programs. As a result, the City is subject to the requirements of the Uniform Guidance which became effective for grant awards after December 26, 2014, with a three-year implementation period. On May 17, 2017, the Office of Management and Budget (OMB) issued a correcting amendment to the Uniform Guidance in the Federal Register to allow for an additional fiscal year to implement changes necessary to conform to the required procurement policies and procedures. The effective date for implementation of the procurement standards for non-federal entities like the City will start for fiscal years beginning on or after December 26,2017. Discussion As part of the requirements, the City must conform purchases made with federal funds to be in accordance with procurement standards in the Code of Federal Regulations, Title 2, Subpart D, Sections 200.317 through 200.326 as listed below. §200.317 Procurements by states §200.318 General procurements standards (including conflict of interest) §200.319 Competition §200.320 Methods of procurement to be followed §200.321 Contracting with small/minority and women’s business enterprise Administration of Federal Award Programs June 12, 2018 Page 2 §200.322 Procurement of recovered materials §200.323 Contract cost and price §200.324 Federal awarding agency or pass-through entity review §200.325 Bonding requirements §200.326 Contracted provisions Department of Administrative Services staff has sought initial guidance from the City's outside auditors, LSL CPAs, and the City Attorney’s Office in conforming the City’s purchasing practices to the new standards. The new policy, City Council Policy No. 300-15, is required to be implemented in the upcoming fiscal year. Accordingly, a resolution adopting City Council Policy No. 300-15 is before the City Council for consideration. The City’s auditors have further recommended that the policy be directly referenced in the City’s municipal code. Accordingly, an amendment to the City’s purchasing ordinance (LEMC Ch. 3.08) is also before the City Council for consideration. Together, the policy and the ordinance will implementthe uniform guidance requirements for purchases and contracts involving federal funding. Fiscal Impact There is no fiscal impact associated with this item. Exhibits A –Resolution Adopting City Council Policy No. 300-15 B –City Council Policy No. 300-15 C –Ordinance Adding Section 3.08.016 to the LEMC RESOLUTION NO. 2018-_____ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ADOPTING CITY COUNCIL POLICY NO. 300-15, ADMINISTRATION OF FEDERAL AWARD PROGRAMS Whereas, the City Council (Council) of the City of Lake Elsinore(City)is charged with the responsibility of establishing the laws of the City through the enactment of ordinances, resolutions and official policies; and, Whereas, Council Policies are an expression of Council’s direction as to the conduct of City business enacted to guide the various functions of the City and, where necessary, to establish procedures by which functions are performed; and, Whereas, the Council desires to adopt a Policy regarding the administration of federal award programs. NOW, THEREFORE, THECITY COUNCIL OF THE CITY OF LAKE ELSINOREDOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: Section 1.That the foregoingrecitals are true and correct and are incorporated herein by reference. Section 2. The Council of the City hereby adopts Council Policy No. 300-15, Administration of Federal Award Programs, as the City’s official policy related to purchases and contracts under which the City has received federal funding. Section 3. That the City Clerk shall certify to the passage and adoption of this Resolution and the same shall thereupon take effect and be in force. PASSED AND ADOPTED onthis 12th day of June2018. Natasha Johnson Mayor Attest: Susan M. Domen, MMC City Clerk Reso No. 2018 -________ Page 2 of 2 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Resolution No.2018-______ was adopted by the City Council of the City of Lake Elsinore, California, at the Regular meeting of ,2018,and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: Susan M. Domen, MMC City Clerk CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: Administration of Federal Award Programs Policy No. 300-15 Page No. 1of 6 1.Purpose of Policy. The purpose of this policy is to adopt procedures that apply to certain “cooperative agreements”, “grant agreements”, “federal financial assistance”, and “cost-reimbursement contracts” all otherwise known as“federal awards” as these terms are defined in the Code of Federal Regulations(“CFR”). (See 2 CFR 200.38, 200.24, 200.40, and 200.51). To the extent that there may be federal requirements for a city tofollow in the selection, award or administration of a contract supported by a federal award that are not covered by this policy, the City will use its best effortsto comply with those requirements. Those requirements are generally set forth in 2 CFR 200.318-200.326, as the same may be amended from time to time. 2.General Procurement Standards for Federal Award Programs. The City Administrative Services Department shall maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. To that end, the Administrative ServicesDepartment requires that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, orservice to be procured, and identify all requirements which must be fulfilled and all other factors to be used in evaluating bids or proposals. TheAdministrative Services Department shall ensure that all prequalified lists of persons, firms or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. (2 CFR 200.318(b); 2 CFR 200.319(b), (c), and (d)). 3. Conflicts of Interest. No employee, officer, or agent of the City may participate in the selection, award, or administration of a contract supported by a federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. Any violation of this section shall result in appropriate disciplinary action. (2 CFR 200.318(c)(1)). CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: Administration of Federal Award Programs Policy No. 300-15 Page No. 2of 6 4. Unnecessary or Duplicative Items. The City will avoid acquisition of unnecessary or duplicativeitems. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. The City encourages the use of federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs. (2 CFR 200.318(d) and (f)). 5. Award of Contracts. The City shall award contracts only to responsible contractorspossessing the ability to perform successfully under the terms and conditions of a proposed procurement. The City shall conduct procurements in a manner that prohibits the use of statutorily or administratively imposed local geographical preferences in the evaluation of bids or proposals, except in those cases where applicable federal statutes expressly mandate or encourage geographic preferences. (2 CFR 200.318(h); 2 CFR 200.319(b)). 6. Methodsof Procurement to be followed. The City will use one of the following methods of procurement. (a)Procurement by micro-purchases. Procurement by micro-purchases is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro- purchase threshold (2 CFR 200.67 Micro-purchase).The current threshold is $3,500 (subject to change). (b)Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or ratequotations must be obtained from an adequate number of qualified sources. The current threshold is $150,000 (subject to change). (c)Procurement by sealed bids (formal advertising). Bids are publicly solicited,and a firm fixed price contract (lump sum or unit price) is awarded to the bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bid method is the preferred method for procuring construction, if the conditions in paragraph (c)(1) of this section apply. CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: Administration of Federal Award Programs Policy No. 300-15 Page No. 3of 6 (1) In order for sealed bidding to be feasible, the following conditions should be present: (i) A complete, adequate, and realistic specification or purchase description is available; (ii) Two or more responsible bidders are willing and able to compete effectively for the business; and (iii) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally based onprice. (2) If sealed bids are used, the following requirements apply: (i) Bids must be solicited from an adequate number of known suppliers, providing them sufficient response time prior to the date set for opening the bids, for local, and tribal governments, the invitation for bids must be publicly advertised; (ii) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services forthe bidder to properly respond; (iii) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal governments, the bids must be opened publicly; (iv) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and (v) Any or all bids may be rejected if there is a sound documented reason. (d) Procurement by competitive proposals. The technique of competitive proposals is normally conducted with more than one source submitting an offer, and either a fixed price or cost-reimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids. If this method is used, the following requirements apply: CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: Administration of Federal Award Programs Policy No. 300-15 Page No. 4of 6 (1) Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Any response to publicized requests for proposals must be considered to the maximum extent practical; (2) Proposals must be solicited from an adequate number of qualified sources; (3) The City must have a written method for conducting technical evaluations of the proposals received and for selecting recipients; (4) Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and (5) The City may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby competitors' qualifications are evaluated,and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms are a potentialsource to perform the proposed effort. (e) Procurement by noncompetitive proposals. Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when one or more of the following circumstances apply: (1) The item is available only from a single source; (2) The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation; (3) The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-Federal entity; or (4) After solicitation of severalsources, competition is determined inadequate. (2 CFR 200.320). CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: Administration of Federal Award Programs Policy No. 300-15 Page No. 5of 6 7. Contracting with Small and Minority Businesses, Women’s Business Enterprises, and Labor Surplus Area Firms. (a) The City will take all necessary affirmative steps to assure that minority businesses, women's business enterprises, and labor surplus area firms are used when possible. (b) Affirmative steps must include: (1) Placing qualified small and minority businesses and women's business enterprises on solicitation lists; (2) Assuring that small and minority businesses, and women's business enterprises are solicited whenever they are potential sources; (3) Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority businesses, and women's business enterprises; (4) Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses, and women's business enterprises; (5) Using the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Minority Business Development Agency of the Department of Commerce; and (6) Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in paragraphs (1) through (5) of this section. (2 CFR 200.321). 8. Contract Cost and Price. The City will perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on facts surrounding the procurement; however, the City will make independent estimates before receiving bids or proposals. (2 CFR 200.323). CITY OF LAKE ELSINORE, CALIFORNIA COUNCIL POLICY MANUAL SUBJECT: Administration of Federal Award Programs Policy No. 300-15 Page No. 6of 6 9. Financial Management. The City’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, will be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The City’s financial management systems will include, as appropriate, the information listed in 2 CFR 200.302. 10. Internal Controls. The City will: (a) Maintain effective internal control over the Federal award that provides reasonable assurance that the Cityis managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. (b) Comply with Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the City’scompliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the Cityconsiders sensitive consistent with applicable Federal, state, local, and tribal laws regarding privacy and obligations of confidentiality.(2 CFR 200.303). 11. Requirements for Pass-Through Entities. To the extent that the City is a pass-through entity (as that term is defined in 2 CFR 200.74), the City, where applicable, will follow the requirements and guidelines of 2 CFR 300.331. ORDINANCE NO. 2018-____ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ADDING LAKE ELSINORE MUNICIPAL CODE (LEMC) SECTION 3.08.016 REGARDING FEDERAL AWARD PROGRAMS Whereas, the City Council of the City of Lake Elsinore has adopted a policy regarding Federal Award Programsas City Council Policy No. 300-15; and, Whereas, this Ordinance will provide a reference in thepurchasing section of theLake Elsinore Municipal Code to the adoption of the above-referenced policyand require compliance with the policy by the City’s purchasing officer and City departments. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: Section1.Section 3.08.016 is hereby added to the Lake Elsinore Municipal Code to read as follows: 3.08.016 Federal Awards. To the extent there may be federal requirements in the selection, award, oradministration of a purchase or a contract supportedby anaward of federal funds, the Purchasing Officer and all City departments shallcomply with the City’s adopted policy regarding federal award programs contained in City Council Policy No. 300-15. Section 2.CEQA This ordinance is exempt from the California Environmental Quality Act as there is no possibility that it may have a significant effect on the environment. Section3. Effective Date. ThisOrdinanceshallbecomeeffectiveat12:01a.m.onthethirty-first (31st)dayafterthe dateofadoption. Section 4.Certification. The City Clerk shall certify to the passage of this Ordinance and shall cause a synopsis of the same to be published according to law. Passed and Adopted on this _____dayof __________, 2018. Natasha Johnson Mayor Attest: Susan M. Domen, MMC, CityClerk ORDINANCE NO. 2018-___ Page 2of 2 STATEOF CALIFORNIA ) COUNTYOF RIVERSIDE ) ss. CITYOF LAKE ELSINORE) I,Susan M. Domen,MMC,CityClerkoftheCityofLake Elsinore,doherebycertifythat the foregoingOrdinanceNo. 2018-_____ wasintroduced at the Regular meeting of ________, 2018, andadopted bythe City CounciloftheCityofLake ElsinoreatitsRegularmeetingof ________, 2018,bythefollowingvote: AYES: NOES: ABSENT: ABSTAIN: IfurthercertifythatsaidSynopsiswaspublishedasrequiredbylawina newspaperofgeneral circulationintheCityofLake Elsinore,Californiaonthe _____dayof __________,2018, and onthe ______dayof _________,2018. Susan M. Domen, MMC CityClerk