ITEM:		CONSENT CALENDAR
6.	CONSIDER ADOPTING RESOLUTION NO. 2013-29 TO AMEND THE SCOPE OF THE GENERAL MANAGER’S DELEGATED AUTHORITY TO APPROVE EXPENDITURES, AND ESTABLISH THE PROCESS BY WHICH EMERGENCY FUNDS ARE AUTHORIZED
Meeting Date:			November 18, 2013	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Suresh Prasad	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: The Administrative Committee reviewed this item on November 12, 2013 and recommended approval.
CEQA Compliance: N/A

SUMMARY: This agenda item addresses two matters; the scope of the General Manager’s delegated authority to approve expenditures, and the process by which emergency funds are authorized. Currently, the General Manager is authorized to approve expenditures up to $2,000 and emergency expenditures up to $20,000 without prior Board approval.

In order to increase operational efficiency and effectiveness, staff is proposing an increase in the dollar limits contained in the current purchasing procedures. The current limits are low based on current economic conditions. Many other cities have increased their limits in an effort to be more efficient and due to economic conditions, see attached survey data of local surrounding agencies as Exhibit 6-A. The data shows that only one agency of the survey cities have a purchasing limit of less than $25,000, while the other six agencies have a City Manager approval level of $25,000 or more. Therefore, it is recommended that the General Manager’s authority to authorize budgeted expenditures be increased to $15,000 and emergency authorization level be increased to $25,000.

Section 21621 of the Public Contract Code requires the District to let all work that exceeds $10,000 to the lowest responsible bidder following a call for bids and publication. If the Board increases General Manager’s delegated authority for contracts above $10,000, his exercise of delegated discretion must either comply with bid solicitation requirements, or fall within a recognized exemption to those requirements. A key exception to the general rule requiring publication and bid solicitation applies in cases of emergency. The following two definitions constitute an emergency:

1. A sudden, unexpected occurrence that poses a clear and eminent danger requiring immediate action to prevent or mitigate the loss or impairment of life, health, property or essential public services.

2. Channel protection, maintenance work or emergency work necessary to protect life and property from impending damage.

In situations where the first definition applies, Section 22050 of the Public Contract Code states that a four-fifths vote of the Board is required to respond to the general emergency and waive the bid requirement. Section 22050 also provides that the Board, by a four-fifths vote, may delegate its authority to respond to a future emergency. This delegation to a non-elected District officer may be achieved by resolution. If delegated authority is later exercised, the person exercising the delegated authority must report to the Board, at a meeting within seven days of the delegated act, or at its next regularly scheduled Board meeting if that meeting will occur not later than 14 days after the action, and justify why the emergency did not permit a competitive solicitation for bids and why the act was a necessary response to the emergency. It is important to note that these requirements do not apply to channel work as defined in the second definition.

RECOMMENDATION: It is recommended that the Board of Directors increase the delegated authority of the General Manager to authorize budgeted expenditures to $15,000 and emergency expenditures to $25,000. It is further recommended that the Board delegate authority to the General Manager to avoid the bid process in times of emergency by adopting the resolution attached as Exhibit 6-B. Lastly, it is recommended that in situations when the General Manager authorizes emergency contracts that are not required to be reported to the Board within seven days, that those contracts exceeding $15,000 be reported to the Board at its next regularly scheduled meeting.

BACKGROUND: Currently the General Manager is delegated the authority to approve purchases of up to $2,000 without receiving prior Board approval. Occasionally, emergency situations arise that require immediate purchases of goods and/or services in excess of $2,000 to prevent disruption of services such as Sleepy Hollow Fish Rearing Facility repairs, vehicle repairs and other necessary expenditures. In order to increase operational efficiency and effectiveness, staff is proposing an increase in the dollar limits contained in the current purchasing procedures.

EXHIBITS

6-A Survey Data of Surround Agencies

6-B Resolution No. 2013-29

U:\staff\Boardpacket\2013\20131118\ConsentClndr\06\item6.docx