HomeMy WebLinkAbout2012-03-19 Ordinance 5148Ordinance No. 5148
. Ordinance of the Council of the City of Palo Alto Amending
Sections 2.30.340 and 2.30.360 of Chapter 2.30 of Title 2
[Contract and Purchasing Procedures] of the Palo Alto
Municipal Code to Exempt from the Competitive Solicitation
Requirements and Impose A Minimum Creditworthiness
Requirement In Regard To Contracts Awarded under the Palo
Alto Clean Local Energy Accessible Now Program
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Section 2.30.340 of Chapter 22.04 of Title 2 of the Palo Alto Municipal
Code is hereby amended to read, as follows:
2.30.340 Contracts for wholesale utility commodities.
(a) Solicitation of Contracts
(1) Contracts for purchase or sale-incidental-to-purchase of wholesale utility
commodities providing for an estimated expenditure of $65,000.00 or less shall be solicited by
informal bid or informal request for proposal in accordance with the provisions of Section
2.30.400. Contracts for a purchase or sale-incidental-to-purchase of wholesale utility
commodities providing for an estimated expenditure of $65,000.00 or more shall be solicited by
formal bid, formal request for proposal or combination thereof, in accordance with the provisions
of Sections 2.30.410, 2.30.420 or 2.30.430.
(2) . Master contracts containing general terms and conditions for wholesale utility
commodities that provide for. the execution of one or more individual water, gas or electricity
purchase and sale-incidental-to-purchase transactions under the terms of the master contract,
shall be solicited by formal bid, formal request for proposals, or combination thereof, in
,accordance with the provisions of Sections 2.30.420, 2.30.430 or 2.30.440.
It is expected that the city will enter into several master contracts with different
counterparties for the purchase and sale-incidental-to-purchase of gas and electricity utility
commodities at wholesale. Whenever the city desires to execute an individual purchase or sale-
incidental-to-purchase transaction for gas or electricity commodities at wholesale, any
counterparty who executes a master contract with the city and who is otherwise eligible to bid for
or propose in regard to the particular transaction in accordance with the city's Energy Risk
Management Policies, Guidelines and Procedures Manual shall be solicited, in writing (by mail,
facsimile or electronic mail), and shall be eligible to tender a bid or proposal on the transaction.
The counterparty offering the price for wholesale utility commodities deemed to be the most
advantageous to the city shall be eligible for award of a contract for the transaction.
(b) Basic Terms and Conditions. For contracts not otherwise within the city
manager's authority to award, the council may by resolution authorize the city manager to award
and sign a contract with a qualified, eligible counterparty for the purchase and incidental sale of
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wholesale utility commodities. This authority shall extend to contracts awarded under any city
"feed-in tariff' energy program entitled "Clean Local Energy Accessible Now Program" or any
similarly entitled program. The resolution shall specify the limits of the authority delegated,
including the maximum dollar amount of the authority and the duration of the contracts and/or
transactions that may be executed under the delegation of authority.
Any resolution delegating authority to the city manager to contract for electricity shall
specify generally at least the following terms and conditions: quantity and the description of
energy and energy services to be procured, including, but not limited to, on-peak and off-peak
energy and ancillary services; term, specifying a not-to-exceed period of time; period of delivery
denoted in years or months or years and months; and point of delivery or the locus on the
interstate transmission system at which transfer of title is made.
Any resolution delegating authority to contract for gas shall specify generally at least the
following terms and conditions: quantity and the description of gas services to be procured,
including, but not limited to, scheduled gas and gas transportation services; term, specifying a
not-to-exceed period of time); period of delivery denoted in years or months or years and
months; and point of delivery of the locus on the interstate transmission system at which transfer
of title is made.
(c) Required Contract Terms for Gas and Electric Procurement Contracts. The city
shall use standardized form contracts for the procurement of gas and electricity, as practicable,
including, but not limited to, form contracts created and copyrighted by the Edison Electric
Institute, the Western States Power Pool Inc., and the North American Energy Standards Board,
Inc. and contracts used by a city "feed-in tariff' energy program. Unless waived by resolution of
the council, a contract for procurement of gas or electricity and any amendment to the contract
shall not be awarded by the city and executed by the duly authorized representatives of the city,
unless the following terms and conditions are required: (1) governing law shall be the laws of the
state of California; (2) choice of venue shall be the county of Santa Clara; and (3) a counterparty
shall obtain and maintain during the term of the contract the minimum credit rating established
as of the date of award of contract of not less than a BBB-credit rating established by Standard
& Poors and a Baa3 credit rating established by Moody's Investors Services, but the minimum
credit rating requirement shall apply to a counterparty which is awarded a contract under a city
"feed-in tariff' energy program only to the extent the counterparty sells a quantity of energy in
excess of the threshold established by that program.
(d) Public Agency Contracts. The city may procure and make sales-incidental-to-
purchase of wholesale utility commodities from energy counterparties through public agencies,
including, but not limited to, the Northern California Power Agency and the Western Area Power
Administration. The city may engage the public agency to act as the agent of the city to procure
wholesale utility commodities, provided that the public agency conducts a competitive selection
process and awards one or more contracts in substantial compliance with the contract
procurement procedures and requirements of this chapter. The city attorney shall determine
whether the contract procurement process substantially complies with the provisions of this
chapter. For the purposes of this Section 2.30.340, the public agency process shall be deemed to
substantially comply if the public agency (1) conducts a formal or an informal bidding or
proposal process to solicit bids or proposals for the provision of wholesale utility commodities,
(2) executes a standardized form contract, including a form contract created and copyrighted by
the Edison Electric Institute and the Western States Power Pool, Inc. or equivalent, as
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determined by the city attorney, and (3) unless waived by resolution of the city council, the
standardized form contract requires or specifies (a) the governing law shall be the laws of the
state of California, (b) the choice of venue shall be identified according to either the county in
which such public agency does business or the preference for federal or sate court jurisdiction
over the public agency and the energy counterparty and the contract, and ( c) the energy
counterparty shall obtain and maintain during the term of the contract the minimum credit rating
established as of the date of award of contract of not less than a BBB-credit rating established by
Standard & Poors and a Baa3 credit rating established by Moody's Investors Services.
( e) Risk Management Policies, Guidelines and Procedures Manual. All procurement
of gas and electricity by contract for wholesale utility commodities shall conform to the
requirements of the city's Energy Risk Management Policies, Guidelines and Procedures
Manual.
SECTION 2. Section 2.30.360 of Chapter 22.04 of Title 2 of the Palo Alto Municipal
Code is hereby amended to read, as follows:
2.30.360 Exemptions from competitive solicitation requirements.
The following are exemptions from the informal and formal competitive solicitation
requirements of this chapter. It is expected that the exemptions will be narrowly applied. The
department requesting an exemption shall provide all relevant information supporting the
application of the exemption to the purchasing manager. Based on this information, the
purchasing manager shall make a recommendation to the city manager and the city manager shall
determine whether an exemption from competitive solicitation requirements applies. Nothing
herein is intended to preclude use of competitive solicitations where possible.
(a) Emergency contracts as defined in Section 2.30.210(t).
(b) Situations where solicitations of bids or proposals would for any reason be
impractical, unavailing or impossible provided that in the case of a public works project, the
project is not otherwise required by the Charter to be formally bid., These situations are those
where solicitations of bids or proposals would not be useful or produce any advantage for the
city. Situations where solicitations of bids or proposals would be impractical, unavailing or
impossible, include, but are not limited to, the following:
(1) Specifications cannot be drawn in a way that would enable more than one vendor or
contractor to meet them;
(2) Due to circumstances beyond the control of the city, the time necessary to use the
competitive solicitation process procedures and requirements would result in a substantial
economic loss to the city, or the substantial interference with a required city operation; and
(3) Special conditions attached to a grant, donation or gift requires the use of particular
goods andlor services.
All requests for exemptions under this subsection shall be supported by written
documentation (facsimile or electronic mail may be used), approved by the department head and
forwarded to purchasing.
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( c) Where competitive bids or requests for proposals have been solicited and no bid
or proposal has been received or no bid or proposal meeting the requirements of the invitation to
. bid or request for proposal has been received, provided that, in the case of a public works project,
the project is not otherwise required by the. Charter to be formally bid.
(d) Contracts for goods, wholesale commodities and related services, general services
or professional services available from only one source where there is no adequate substitute or
equivalent provider. Examples of acceptable sole source purchases are: equipment for which
there is no comparable competitive product, proprietary products sold directly from the
manufacturer, a component or replacement part for which there is no commercially available
substitute and which can be obtained only from the manufacturer, items where there is only one
authorized distributor in the area, and items where compatibility with items in use by the city is
an overriding consideration. All requests for sole source purchases shall be supported by written
documentation (facsimile or electronic mail may be used), approved by the office or department
head and forwarded to purchasing.
(e) Contracts for goods where, pursuant to Section 2.30.900, the city manager has
determined that standardization of the supplies, materials or equipment is permissible.
(f) Placement of insurance coverage and bonds.
(g) Legal services contracts, including outside counsel and experts for litigation or
other legal proceedings.
(h) Professional services contracts for private development related studies and
services when funded wholly by private developers.
(i) Professional services contracts where the estimated total expenditure by the city,
regardless ofterm, does not exceed $25,000.00.
CD Cooperative purchases where the city participates with one or more other
governmental or public agencies in a cooperative agreement, provided the solicitation process
used is substantially similar to the process required by this chapter; or
(k) The use of another governmental or public agency's contract provided: (i) the
agency used a solicitation method substantially similar to the method required by this chapter;
(ii) the contract allows other agencies to utilize or the vendor authorizes the city to utilize; (iii)
the contract is consistent with requirements specified in this code; and (iv) there is an overall
value to the city's utilizing the contract versus the city performing it's own solicitation.
(1) Contracts with the Northern California Power Agency, the Transmission Agency
of Northern California, and the Western Area Power Administration to procure wholesale utility
commodities and related services that meet the requirements of Section 2.30.340( d).
(m) Contracts with the Pacific Gas and Electric Company and the California
Independent System Operator Corporation for energy transmission services to the extent
necessary and expedient to provide for the general health, safety and welfare of its citizens.
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(n) Contracts with any public agency or governmental body to construct a public work
where the public agency or governmental body has used methods similar to those required by
this chapter to contract for the work.
(0) Contracts with any public utility holding a certificate of public convenience and
necessity or any entity holding a cable communications system franchise pursuant to Chapter
2.10 construct a public work where such work involves property of such public utility or cable
communications system franchisee and is otherwise of direct concern to both the city and such
public utility or cable communications system franchisee, provided that the project is not
otherwise required by the Charter to be formally bid.
(P) Contracts with private developers to construct public improvements in connection
with their development project even if the city contributes funds to the improvement project,
provided that the project is not otherwise required by the Charter to be formally bid.
(q) Projects where the public work is performed by the city with its own employees.
(r) Contracts where the estimated total expenditure by the city does not exceed
$5,000.00.
(s) Contracts with entities to procure at wholesale utility commodities and related
services under a city "feed-in tariff' energy program that meets the requirements of Section
2.30.340(c).
SECTION 3. The Council finds that this is not a project under the California
Environmental Quality Act and, therefore, no environmental impact assessment is necessary.
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SECTION 4. This ordinance shall be effective on the thirty-first day after the date of its
adoption.
INTRODUCED: MARCH 5, 2012
PASSED: MARCH 19,2012
AYES: BURT, ESPINOSA, HOLMAN, KLEIN, PRICE, SCHARFF, SCHMID,
SHEPHERD,YEH
NOES:
ABSENT:
ABSTENTIONS:
APPROVED AS TO FORM:
Senior Asst. City Attorney
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