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Home My WebLink About2005-1215 Study Session Packet Barbara Christenson City Recorder Council Meeting Packet CITY ()F AS H Lfl\.N D CITY COUNCIL STUDY SESSION AGENDA Thursday, December 15, 2005 at 5:00 p.m. Council Chambers, 1175 East Main Street 1. Ashland Fiber Network Contracting Review. 2. Public Contracts for Ashland Fiber Network. In compliance with the Americans with Disabilities Act, if you need .5>pecial assistance to participate in this meeting, please contact the City Administrator's office at (541) 488-6002 (TTY phone number 1-800-735-2900). Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to the meeting (28 CFR 35.102-35.104 ADA Title I). ~A' CITY OF ASHLJ\ND Council Communication Study Session - Ashland Fiber Network Contracting Review Meeting Date: December 15,2005 Department: Administrative I.ces Contributing Departments: NA Approval: Gino Grimaldi Primary Staff Contact: E-mail: Secondary Staff Contact: E-mail: Estimated Time: 60 Minutes Lee Tuneberg Md-- tuneberl@ashland.or.us NA Statement: Attached is the report from the audit firm of Pauly, Rogers & Associates who were commissioned to review past contracting practices for AFN. The Study Session is to receive the report and discuss contracting issues arising over the past six years. Background: A review was proposed at the end of the budget process as part of the Nine Steps to look at AFN, its operation and future with the City. The current audit firm used by the City was engaged to review documents and transactions extending back three years to understand operations, processes and test performance. In performing their work the auditors requested a significant amount of documents from the last six years to gain an understanding of the policies and procedures in place or initiated as part of operating AFN. Their report includes eight findings indicating areas worthy of reporting. The eight areas in subject form are: 1. Small purchases in a year not bid as a whole. Staff comments: It is ideal to bid a year's worth of work to allow all interested vendors to get a chance to provide a quote for the work in question and planning/cost efficiencies. Staff attempts to do this whenever possible. Several things have made this difficult to do for AFN such as: a. Manager time and availability. b. No formally adopted plan of work to be done. c. Frequent changes in priorities. d. Frequently shifting work to be done by internal staff rather than by contractor. e. Engaging a contractor to do work only when absolutely necessary. f. Cash flow problems affecting contract commitments. Much of this has lingered past "build-out" and requires more attention from AFN management. Staff is currently bidding such purchases when feasible but changes in short-term plans may cause infrequent recurrence by default, not by plan. Staff will minimize these occurrences. 2. No City employee certification regarding conflicts of interest. Staff comments: Initial buying and selling of goods and services is decentralized within the City. Such a concern has not been a material issue to date but was raised with the construction of AFN. Like no other utility, AFN ~~ partners, interacts, shares and competes with private industry on a daily basis. The City already references ethics, protocol and conflicts of interest in AMC Section 3.08.020 but did not have a form that employees personally signed. Staff has already begun to develop a more specific policy and a document for employees to sign. This will help mitigate any perception that actual or potential conflicts of interest are not managed. 3. Purchases of similar services from multiple vendors marked as sole source. Staff comments: During the last three years staff has been updating procedures and policies as local and state contracting rules have changed. At times there is confusion on which process or form is to be employed and general misunderstanding on what is exempted or sole sourced. All five of the requisitions in question were marked sole source and should have been changed before processing. The five contracts for bandwidth were done together to create redundancy (back-up) sources to ensure the system stayed active if therE! was a failure with anyone of them. All have been replaced with one contract to Qwest and one to Hunter (for redundancy) at a lower price. This comment comes from confusion on procedures and how to correctly complete forms. With the new rules being put into place, Legal and Finance staff members are working hard to train city-wide staff better and to monitor their documents for compliance. This is requiring considerable more staff hours to function. 4. Confusion regarding department responsible for contract negotiation and management. Staff comments: This is a challenge for all departments but I think the comment is "on point" for AFN. The standard for most departments is that they negotiate purchases, primarily using City forms. Only unique situations require contracts to go to Legal for review beyond the standard form. Normally, contracts, requisitions and purchase orders are entered into laserfiche for record keeping but the department originating the purchase keeps copies and manages the relationship with the vendor including renewal. Tracking and renewal is discussed in Item #5. AFN has unique activities that increase the importance of managing contracts because most of it differs from other City operations. Many of the agreements for AFN operations result in using the vendor's contracts under a "take it or leave it" perspective. This differs from much of the City's operations where the City controls the elements of the contract. Buying content to put on cable television is the best example of this. Operational agreements are examples where management and oversight are problematic for the following reasons: a. Manager time and availability. b. Beyond laserfiche, no centralized system established that is easy to use. c. Complexity of agreements causing confusion for anyone not close to the operation. d. Many original contracts established to renew automatically thus not requiring annual reviews unless an operational change warranted. When short-handed, longer-term issues like contract renewals often receive less attention when staff is busy taking care of the days' workload or issues. Not acceptable in the long-term but something that the City must manage. Finance has attempted to document contracts and purchase orders city-wide but the direct responsibility must rest with the department and division working within the agreement on a daily basis and relying on the service for continued operations. This issue should be resolved when the new Telecommunications Director is hired since it is anticipated that he or she would negotiate and manage AFN agreements, regardless of where contract copies are stomd. 5. Confusion regarding tracking and renewal of contracts. ~~ Staff comments: Due to the complexity and importance of such contracts they must be managed by AFN staff. AFN relies on contracts with ISPs, contracts for CATV content, sales agreements for commercial and bulk services, broadband and internet access, operational functionality and construction. AFN staff is also the most knowledgeable about changes in service needs, the industry, inherent interrelationships of activities and opportunities to make adjustments. This eliminates the ability of anyone outside the group to negotiate, monitor, manage and effect changes. Changes in top management, operational priorities and a limit on staff availability have contributed to this problem. Please note that programming agreements seem less subject to this comment because they are "must have" contracts extending 7, 10 or more years into the future and have a dedicated process and committee that meets monthly to consider changes. The example used is the Qwest contract renewal, or lack there of, in 2003. A dispute on services and prices resulted in a settlement regarding services rendered and amounts due. Once settled, everyone went back to their daily tasks and no one took the lead to negotiate a longer-term contract. Payments were made on a month-to- month basis similar to other utility costs. The auditor is probably right that successful renegotiation of the contract in advance of the dispute and negotiation of a new contract upon settlement "may have avoided this situation" and that of paying more for the services than necessary. Contributory in this assessment is the rapid change in broadband costs that could, in a long-term contract, result in costing more. The new agreement negotiated this summer resolved post-settlement and pricing issues with Qwest. However, the City did go without a formal contract from August 2003 until August 2005 on a month-to-month basis. Presenting this contract to the Local Contract Review Board (City Council) has been delayed several times awaiting this report. Staff is more closely monitoring contracts and purchase orders than before and improving the process during this year. 6. Insufficient detail provided on Requisitions and Purchase Orders. Staff comments: Staff may have been too accepting of the documentation and explanation received from departments on such purchases. Routinely AFN staff was having difficulty performing the minimum amount of work required by purchasing policies. A difficult task given all the things cited above. The example given relates to price per megabit and is appropriate for the instance cited. Currently, staff is educating, training and monitoring compliance of all City departments per the nE~wly revised purchasing rules. This is requiring considerable more staff time to get things down in writing and, when necessary, preparing items for going to the LCRB. Staff's example is the attached memo from the Telecommunications System Engineer explaining the purchase and benefit derived from the venclor selected. 7. Insufficient data to substantiate sole source determination on purchases. Staff comments: The City exempted many purchases in the beginning of AFN based upon operational needs. The contractor was identified as the sole source for initial construction and subsequent phases based upon a bid and agreement for continued "like" work. The auditor pointed out that the "sole source exemption" for construction ended December 2003. The exemption was erroneously thought to be in force during some of the examples cited by the auditor. Additionally, on some small jobs, staff called around to another vendor capable of doing "like work" and were not always given a quote...non-responsive from a purchasing view point...but not always documented. The example used was for bidding "sole source" work for DS3 services. Service was negotiated and purchased from five businesses in the valley yet all requisitions were marked as sole source. Sole source did not apply here. ~~ The purchase was questioned when it was submitted and told it was a required service to keep AFN running. It appears as though the City purchased from every known vendor, spreading the business around, .and gaining redundancy, but staff agrees it would have been better to document why five vendors were employed and explained any perceived benefit to different pricing rather than marking the requisition as sole source. 8. Confusion regarding exemption from bidding certain services. Staff comments: Ashland buys much of its programming and technical supplies from National Cable TV Coop (NCTC). From mid 1999 to December 2003 purchases for construction were exempt. As a cooperative association it supplies much of AFN's CATV programming that we can't get elsewhere. When construction was done a majority of the programming contracts with NCTC were in mid-contract. Items purchased during the 16 months from December 2003 and March 2005 were small in relation to the purchases during build-out. In March the City followed State guidelines for items most likely needing exemption including CATV programming. NCTC remains as one of the City's most reliable resource for technical supplies and equipment. Be that as it may, staff has stepped up its efforts to ensure bids, quotes or comparisons are done whenever possible to rectify this part of the buying process. Summary The State and City guidelines for purchasing and contracting are designed to facilitate an open process, give all vendors an opportunity to work with the City and to assist in keeping the price for goods low. Exemptions and exceptions are provided by both sets of guidelines for practical and cost saving reasons. We appreciate these guidelines and their goals and attempt to comply with them on a daily basis. Since inception, AFN's buying and contracting needs have been perceived to be different than other municipal purchasing and several exemptions or exceptions were put into place to allow for a stream-lined approach. This may be another indicator at how AFN does not adapt well to normal operations. Training, documenting and improving our purchasing guidelines, policies and processes is a daily task at the City. The guidelines, limits, exceptions and exemptions are complex and we routinely debate the nuances and interpretations. Related City Policies Oregon Purchasing guidelines Ashland Purchasing Rules Council Options: Accept report. Advise staff if there are additional steps needed. Request additional information. Staff Recommendation: Accept the report and staff responses. I~ Potential Motions: None, this is a study session. Attachments: Independent Accountants' Report dated September 16,2005 Resolution 99-64 and 10-26-99 supporting memo Written Findings - Qwest 9-15-05 ~~ RESOLUTION NO. ~ BEFORE THE CITY OF ASHLAND LOCAL CONTRACT REVIEW BOAHD RESOLUTION EXEMPTING FROM COMPETITIVE BIDDING EQUIPMENT PURCHASES THROUGH THE NATIONAL CABLE TELEVISION COOPERATIVE FOR THE ASHLAND FIBER NETWORK CABLE TELEVISION SYSTEM LCRB RESOLUTION Recitals: A. AMC 9 2.50.030.B permits the Ashland City Council sitting as the Local Contract Review Board to exempt contracts from competitive bidding if it finds: 1. The lack of bids will not result in favoritism or substantially diminish competition in awarding the contract; and 2. The exemption will result in substantial cost savings. B. This ordinance provides that in making such findings, the Board may consider the type, cost, amount of the contract, number of persons available to bid, and such other factors as the Board may deem appropriate. Where appropriate, the Board shall direct the use of alternate contracting and purchasing practices that take account of market realities and modem or innovative contracting and purchasing methods, which are also consistent with the publiC policy of encouraging competition. C. In order to exempt a public contract from competitive bidding, the Board shall adopt written findings that support the awarding of a particular public contract or a class of public contracts without competitive bidding. The findings must show that the exemption of a contract or class of contracts complies with the requirements of AMC 9 2.50.030.B. The Board adopts the information contained in the memorandum from Richard Holbo, Telecom Supervisor, and Mike Ainsworth, CATV Specialist, dated October 26, 1999, which is attached to this resolution, as findings justifying the exemption. The Board finds that this exemption will not result in favoritism or substantially diminish competition in the purchase of CATV programming, and the exemption will result in substantial cost savings. The Board resolves that an exemption be granted as follows: PURCHASE OF CABLE TELEVISION EQUIPMENT AND RELATED COMPONENTS, CONNECTORS AND HARDWARE THROUGH THE NATIONAL CABLE TELEVISIION COOPERATIVE AND ITS APPROVED EQUIPMENT MANUFACTURERS AND SUPPLIERS FOR THE ASHLAND FIBER NETWORK CABLE TELEVISION SYSTEM. This resolution was read by title only in accordance with Ashland Municipal Code 92.04 90 and duly PASSED and ADOPTED this ~ day of November, 1999. . '\ SIGNED and APPROVED this .3 daYOfNOV~),.~~ Catherine M. Shaw, Mayor m.n~ au No te, City Attorney 1- LCRB Resolution F\USER\PAUL\ORDlLCRB\LCRB res calJle coop AFN.wpd Memo Date: To: From: October 26, 1999 Honorable Mayor and City COlmcil Members '1 (7 Richard Hol?o~ Telecom Supervisor and Mike Ainswort.h ~rn. ~~ QJ~ CATV SpecIahst ~;0t~ \,k\\'o ~ \\'\.Q. ~~~v.).;:,r' ASHLAND FIBER NETWORK BIDDING EXEMPTION - A PROPOSAL FOR A CITY COUNCIL RESOLUTION Re: The Ashland Fiber Networkjoined the National Cable Television Cooperative (NCfC) as a participating system. The NCfC represents over 1000 cable operators in America, The total number of collective subscribers with the NCfC is over 10 million. The NCfC rank." third behind Time Warner Cable and TCI (ATT&T) in total subscriber size. Because of the enormous economies of scale of the total membership, the NCfC exercises "large system operator" leverage with cable network providers. Program fees are negotiated to the lowest possible per subscriber rate, far lower than an independent cable operator could negotiate on their own. We already have an exemption that allows us to purchase programming from the Co-Op. The NCfC exercise similar clout with equipment manufacturers and suppliers. Equipment and cable television related components, connectors, and various hardware can be ordered through NCfC approved vendors. Vendors must fIrst meet stringent NCfC delivery and quality requirements in addition to offering "favored nation" pricing on their products. As a member of the NCfC, the Ashland Fiber Network is able to receive pre-negotiated lowest industry prices on equipment to build and maintain our cable plant. The Ashland Fiber Network is proposing to the City Council that an Exemption be passed to allow AFN to make purchases with the NCfC's approved equipment vendors without satisfiying the requirement for a "Request for Purchase" proposal process. We have done numerous RFQ's over the past several months and the quotes coming back from the NCfC's approved vendors have consistently been the lowest. 10/28/99 Confidential CITY OF ASI--ILAND Memo DATE: September 15, 2005 TO: Lee Tuneberg, Finance Director FROM: Richard Holbo, Telecommunications Engineer RE: Written Findinas - QWEST, Internet Bandwidth and Local Loop Connection AFN must purchase Internet Bandwidth in order to provide high speed internet data services to our customers. AFNs current bandwidth needs are in excess of 70 Mbits per month. We currently purchase 30 Mbits from Hunter Communications at $1 OO/Mbit or $3,000 per month which is transmitted over the existing AFN owned fiber line that runs from Ashland to Medford. The remaining 45 Mbits of Internet Bandwidth that is required to meet our current needs is purchased from Owest for $78.22/Mbit which is received over a DS3 local loop connection that terminates directly in the AFN head end (AFN network control room). There are several sources for Internet Bandwidth; but, Owest's DS3 local loop connection is the only oth3r practical means of transmitting Internet Bandwidth directly to the AFN headend. Other companies could provide internet bandwidth via Owest's local loop connection; however, we feel it is in the City best interest at this time to negotiate directly with Glwest for the additional DS3 local loop connection (separate transmission line terminating directly in the AFN headend), including Internet Bandwidth. The Owest DS3 local loop connection provides network redundancy - secondary coverage - if there is an internet outage across the AFN fiber line from Ashland to Medford. Purchasing Internet Bandwidth from two sources and having two completely separate means of receivinu the Internet Bandwidth being transmitted to the AFN headend allows us to have greater control and network reliability. Public contracts for Internet Bandwidth are exempt from the competitive process; however, we did request quotes from several suppliers for Internet Bandwidth. Owest was the lowest bidder at $78.22/Mbit and Hunter Communications was the second lowest bidder at $1 OO/Mbit. We feel strongly at this time that it is in the City's best interest to have two sources for Internet Bandwidth. The Owest DS3 local loop connection is $3,000 per month, $36,000 per year. For a business the size of AFN, It is a standard practice in the industry to have a minimum of 2-3 separate isolated transmission lines. The Owest DS3 line is located underground and the AFN fiber line to Medford is located overhead. In the recent past, a fire in Medford destroyed the AFN fiber overhead line, and we had the Owest DS3 local loop underground connection to continue providing high speed internet and data services. We feel strongly at this time that the City must have a minimum of two means of receiving Internet Bandwidth. Ashland Fiber Network 90 N. Mountain Avenue Ashland, Oregon 97520 www.ashland.or.us ~~1I ... "1 INDEPENDENT ACCOUNTANTS' REPORT ON APPLYING AGREED-UPON PROCEDURES RELATED TO CITY OF ASHLAND & AFN PURCHASING SEPTEMBER 16, 2005 September 16,2005 To the City Council City of Ashland INDEPENDENT ACCOUNT ANTS' REPORT ON APPLYING AGREED-UPON PROCEDURES We have performed the procedures enumerated below, which were agreed upon by the Management of the City of Ashland. This engagement to apply agreed-upon procedures was performed in accordance with standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of the specified user(s) of the report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The accompanying report presents our findings and recommendations of the City of Ashland's AFN (Ashland Fiber Network) purchasing procedures, as it relates to following the City's purchasing procedures, documentation requirements and legal purchasing requirements. Our procedures looked at a sample of AFN's purchasing between March of 2002 and March of 2005. In performing our analysis and accompanying recommendations, we identified: . Purchasing laws that applied to AFN . Transactions where the City did not comply with standard documentation requirements or Oregon purchasing laws. . Other areas of potential significant improvement that came to our attention during our procedures. These procedures were accomplished by interviewing city staff and accounting personnel to determine the flow of purchasing information, and a sample of purchasing transactions to ascertain if proper purchasing processes were followed. Our report only covered the items listed above and more specifically our study did not cover the following areas: · The sufficiency of contracts, we are not attorney's and do not have the expertise to determine whether contract wording is sufficient to protect the City. · We did not review invoices to determine if the services were provided, and that all products purchased were accounted for. . We did not look at the contract for the fiber line between Ashland and Medford, where the agreement was for Hunter to build the line and the City provided the cable. · We did not ascertain whether or not Hunter Communications is the sole source provider for installing fiber optic cable. Based on the 1999 RFP's multiple vendors submitted proposals and there are multiple vendors (from the current yellow pages) who say they can provide this service. The only way to truly tell if Hunter Communications is a sole source is to bid these services and see if the City receives multiple proposals. If the City desires that we examine any other areas, we can discuss that and determine if our staffhas the expertise to provide the service, and we can give the City a quote on the cost of such services. Our analysis was not designed to express an opinion on the purchasing process structure, and we do not express such an opinion. Also, projections of any evaluation of the accounting system and purchasing processes to future periods are subject to the risk that procedures may become inadequate because of changed conditions. FINDINGS Our findings are as follows: #1 FINDING: We noted many small payments to Hunter Communications over the past 3 years for construction services. It appears that an operational decision was made to contract with the vendor for each project that arose, and not to bid an entire year of construction services. Most of the invoices fell under the $5,000 purchasing limits, so bids or quotes were not required by state law. We also noted that AFN does not have a written formal long term capital improvement plan. RECOMMENDATION: Best practices would be to bid these services once a year, based on the anticipated jobs for the year, which would be detailed in AFN's formal capital improvement plan #2 FINDING: Staff with purchasing duties are not required to sign annual certifications that say the employee has no personal interests, related interests, or other conflicts with vendors or potential vendors. RECOMMENDATION: The City should have all staff with purchasing responsibilities sign an annual certification that says they are free of personal interests, related interests, or other conflicts with vendors or potential vendors, and that they'll identify any potential conflicts as soon as they arise. #3 FINDING: In August of2004, the City submitted various RFPO's (request for purchase order) for DS 3 (bandwidth) services and all of them were marked as sole source. Since there are numerous vendors for these services, the RFPO's should not be marked as sole source. According to staff the City purchased the DS 3 from various vendors for the sake of redundancy to ensure that the system does not go down for a prolonged period. RECOMMENDATION: The City should correctly identify the purchasing methods applied on every PO / RFPO. #4 FINDING: There does not appear to be one person or department that is responsible for retaining AFN contracts at the City. Without a single department responsible for contract maintenance and retention, old contracts may not be valid or contracts may not exist where lthey should. RECOMMENDA TI ON: We recommend that staff responsible for purchasing these services keep the contracts and a database of the contracts so that they know when the contract expires and the monthly agreed upon charge. #5 FINDING: The City needs to track contracts better to ensure that no contracts are out of date or expired. We noted one instance where the Qwest contract was not renewed, and the City was on a month to month purchasing plan with Qwest. The City was at the mercy of changes that Qwest could make because there was no long term contract in place. Once the Qwest contract went month to month, the City was charged an extra $2,000 / month, which the City didn't pay because the charge was disputed by City staff. The City determined it to be in the best interest of the City to settle this dispute in August 2003. If a long term contract was in place with Qwest, the City may have avoided this situation. RECOMMENDATION: We recommend that the City review all contracts to ensure that the City's best interests are in place. #6 FINDING: We noted that PO's and RFPO's for DS 3 services did not detail the price per Mbit. RECOMMENDATION: All PO's for DS 3 services should show the price per Mbit, so that the City can be assured that the best price was used. If more expensive DS3 services are used (for redundancy sake), the justification needs to be evidenced either on the RFPO/ PO or other attached documentation. #7 FINDING: We noted many items that were marked sole source (Hunter, DS3), where it was not obvious that the vendor was a sole source. RECOMMENDATION: We recommend that all sole source purchases detail why it is a sole source, i.e. documentation that shows that the City contacted other vendors who declined to bid based on the fact that they do not perform those services. #8 FINDING: We noted that Resolution 99-64 exempts National Cable TV Coop from obtaining bids or quotes, but the memo attached to the resolution says that AFN wants to "streamline its purchasing process of crucial plant constructions components." Per City staff we understand that the crucial phase of construction ended in December 2003 . We also noted that the City adopted Ordinance 2917 in March of2005, which exempted purchases from this vendor from competitive purchasing (this includes programming and materials). But purchases between December of2003 and March of2005 did not receive bids or quotes. RECOMMENDATION: We recommend that ORS purchasing laws be followed on all items applicable. This report is intended solely for the use of City of Ashland and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. PAULY, ROGERS AND COMPANY, P.C. CITY OF ASHLl\ND Council Communication Study Session - Public Contracts for Ashland Fiber Network Meeting Date: December 15,2005 Department: Administrative~ices Contributing Departments: NA Approval: Gino Grimaldi Primary Staff Contact: E-mail: Secondary Staff Contact: E-mail: Lee Tuneberg pa-J- tuneberl@ashland.or.us NA Estimated Time: 60 Minutes Statement: Ashland Fiber Network (AFN) requires operations and contracting unlike any other city utility. This study session is to provide an opportunity for Council to understand the types of contracts utilized and discuss what, if any, changes to revenue contract negotiations as well as what exceptions or exemptions to the Public: Purchasing Rules adopted by the City should be allowed. Background: AFN is unlike the other utilities operated by the City in that it is not a traditional (essential) service provided by a municipality and that a majority of households are not direct customers. It also differs in many operational respects including: 1. Operates in a competitive environment. 2. Is built on a technology base that has the potential to change frequently. 3. Currently requires partners for delivering some services. In order to operate effectively in the above environment, as a division of municipal corporation, it must comply with purchasing guidelines established by the Local Contract Review Board (LCRB). The City Council is the LCRB unless it decides otherwise. It must also develop relationships and strike agreements with other service providers, peers and partners to ensure ongoing operations. When AFN began in 1999 certain blanket exceptions to the purchasing rules were established for operational sake. These exemptions were meant to give AFN operational flexibility and ease to make chan!leS to be competitive in its market. The exemptions were also done to expedite the construction of AFN to get it up and running in an expedited fashion. As for sales and revenue contracts, AFN was also given latitude by resolution in negotiating services and prices to "recruit" businesses to establish a revenue base. Telecommunications may have been new to Ashland and other government agencies in general but exemptions from bidding have been a necessary part of municipal operations for years. Even though purchasing guidelines are intended to provide a level playing field for any vendor wishing to do business with local government agencies, the state and political subdivisions have recognized that there are times when it is not cost effective or prudent to go through a formal bid process, or even gathering information. Most common examples are: . Emergencies where public safety or greater good is at stake ~l. ...~ · Bona fide situations where only one vendor can supply the goods or services · Operational necessity where it is more cost effective to use a known vendor To a certain degree, Ashland has used all three at times over AFN's history to do just that. In general, these have worked acceptably for the City but there have also been situations where these exceptions may have been loosely applied. City Process: The City has a decentralized purchasing process where departments are responsible for negotiating contracts specific to their need up to the point of executing a contract. Unless otherwise excepted or exempted the department responsible is to follow purchasing guidelines or obtain help from the Purchasing Agent and Finance staff. Procedures are documented, trained upon and followed as much as possible. Finance staft' attempts to help buyers to: a. Do it right. b, Train on existing rules and processes. c. Resolve problems when things do not go right. d, Change rules where necessary to assist in future compliance. Council is in the process of revising the City's rules based upon state guidelines. It is safe to say Ilhat these rules, amended or not, are complicated, confusing and subject to changes and interpretation. Additionally, the procedures developed can make it quite difficult to maintain momentum of an operation or to avoid work stoppage without using something like the three exceptions identified above. AFN routinely relies on such exceptions as part of daily operations. CATV programming contracts are an example. Most of the entries on the attached list of expense contracts are for contracts made with channel content providers that AFN has little choice. The norm for these cases is the contract format and conditions come from the vendor, they normally are for long periods (7 - 10 years) and we have little or no choice if we want to provide television viewing, Less routine for AFN is buying goods or services for the infrastructure and this is not straight forward like programming contracts. (That is not to say that managing programming contracts is easy). As with other utilities run by the City there are pressures to keep costs down through bidding services but unlike other departments, AFN is often forced to react to immediate changes that have small windows of opportunity. This does change the need to follow established procedures but may be the basis for changing rules that will impede operations or those that may not be complied with regardless of how staff tries. Examples of purchases that make following procedures difficult are: i. Buying unique equipment no longer available or supported by the manufacturer. ii. Bidding small, technical construction or repair work when an existing "partner" can do it. iii. Bidding, contracting and renegotiating services like broadband when technology is growing and prices per unit are dropping faster than the agreement can be finalized. iv. Bidding ongoing services between AFN and direct parties like Internet Service Providers Examples of revenue contracts not falling under purchasing guidelines are sales of services outside the established rates for CATV and internet services such as: i. High speed internet. r~~ II. Bulk cable television. iii. Advertising services. iv. Other customer services not identified. The City developed contracts that automatically renewed on an annual basis to minimize the need of renegotiating unless a change was desired. Automatic renewals on an annual basis also provided some assurance to both parties that operations would continue as agreed, allowing business planning and sufficient warning if something was to change. Operational agreements are those that do not automatically generate revenue or are necessarily a cost to the City. Examples are the agreements for operations with Hunter regarding the link from Ashland to Medford and the links within Medford. Also included is the list of Internet Service Providers. Due to the annual renewal or notification requirement contracts with the ISPs, they were changed to month-to-month agreements when the City decided to pursue the Options Committee work. Examples of operational contracts that do not fit well under purchasing guidelines or rate resolution exemptions are: i. ii. Hunter contract sharing the link between Ashland and Medford. Hunter contract regarding the link in Medford providing local broadcast services. Attached are lists of contracts in effect today. The list of AFN Expense Contracts include Direct Programming and NCTC Coop Programming contracts. Smaller purchase agreements are not included because of their short duration. At this time staff believes that the exemptions and exceptions in place or being considered assist the City to help AFN be compliant with Public Purchasing guidelines. However, Council should review and become comfortable with Section 2.050.070 Formal Competitive Selection Procedures - Exemptions, Paragraphs L, R & S as they relate to AFN. Exemptions to Formal Competitive Selection: L Contracts for purchase or sale of water, electricity, cemetery lots, cable and telecommunication services, including internet bandwidth, and the sale of telecommunication materials or products or other services, materials or products traditionally provided by the City; R Contracts to purchase specialized cable television equipment and related components, connectors and hardware through the National Cable Television Cooperative and its approved equipment manufacturers and suppliers for the Ashland Fiber Network cable television system. S. Contracts for the purchase of cable television programming for the Ashland Fiber Network cable television system. Revenue and Operational contract negotiations will continue to present challenges. Prior Councils and the Option Committee have identified the need for AFN management to have sufficient latitude to be able to negotiate contracts for selling new services or to quickly make changes in operational relationships to be successful. Recognizing potential changes in how AFN operates, Council could defer any changes in these areas of contracting until a new director is recruited or a significant decision is made on the future of AFN. ~.~. ._~"1 Related City Policies Oregon Purchasing guidelines Ashland Purchasing Rules Council Options: Accept report. Advise staff if there are additional steps needed. Request additional information. Staff Recommendation: Accept the report and discuss as needed. Potential Motions: None, this is a study session. Attachments: Ordinance - AMC Rules of Procedure for Public contracting,... List of AFN Revenue contracts List of AFN Operational contracts List of AFN Expense Contracts CATV Rate Resolution 2005-44 Exemption Resolution 99-64 r~~ ORDINANCE NO. AN ORDINANCE AMENDING THE ASHLAND MUNICIPAL CODE RELATING TO RULES OF PROCEDURE FOR PUBLIC CONTRACTING AND PERSONAL SERVICE CONTRACTS. Annotated to show deletions and additions to the Ordinance adopted March 1 , 2005. Deletions are and additions are underlined. THE PEOPLE OF THE CITY OF ASHLAND DO ORDAIN AS FOLLOWS: Section 1. Ashland Municipal Code Chapter 2.50 is amended to read as follows: Chapter 2.50 PUBLIC CONTRACTS Sections: 2.50.010 2.50.020 2.50.030 2.50.040 2.50.050 2.50.060 2.50.070 2.50.080 2.50.090 Definitions. Public Contracting Rules. Local Contract Review Board. Contracting Agency. Model Rules. Formal Competitive Selection Procedures. Formal Competitive Selection Procedures-Exemptions. Notice of Public Contracts. Disposal of Surplus and Abandoned Property. Section 2.50.010 Definitions. A. "Award" means the selection of a person to provide goods, services or public improvements under a public contract. The award of the contract is not binding on the City until the contract is executed and delivered by the Purchasing Agent or his or her delegee. B. "Advertising contracts" mean contracts for securing announcements in newspapers or magazines, during telecommunications broadcasts, upon billboards, through distribution of handbills, by direct mail, or though other mass media. To the extent that the Model Rules adopted by the Attorney General under ORS 279A, 279B, and 279C (the "Model Rules") allow more than this definition for advertising contracts, the Model Rules do not apply. C. "Bid" means a binding, sealed, written offer to provide goods, services or public improvements for a specified price or prices. 1- Public Contracting and Personal Service Contracts Ordinance Amendment-2005 D. "Exemptions" mean exemptions from the formal competitive selection procedures for public improvement contracts, contracts for goods and services, and personal service contracts of architects, engineers, land surveyors, and related services, as well as contracts and classes of contracts designated as "special procurements" under ORS 279B.085. E. "Formal competitive selection procedures" means procedures for public contracting as required by ORS 279B.050(1) (competitive sealed bids or competitive sealed proposals for goods and services), or ORS 279C.335(1) (competitive bids for public improvements) F. "Formal competitive selection process" means the process of using formal competitive selection procedures for the procurement of goods and sen/ices or for public improvements contracts and personal service contracts of architects, engineers, land surveyors, and related services. G. "Proposal" means a binding offer to provide goods, services or public improvements with the understanding that acceptance will depend on evaluation of factors other than, or in addition to, price. A proposal may be made in response to a request for proposals or under an informal solicitation. H. "Public contract" or "contract" for the purposes of this section means a sale or other disposal, or a purchase, lease, rental or other acquisition, by the contracting agency of personal property, services (but not including personal services as regulated in Chapter 2.52), public improvements, public works, minor alterations, or ordinary maintenance necessary to preserve a public improvement. "Public contract" does not include grants. I. "Quote" means a price offer made in response to an informal solicitation to provide goods, services or public improvements. J. "Services" means and includes all types of services (including construction labor) other than personal services as regulated in Section 2.52 of the Ashland Municipal Code. Section 2.50.020 Public Contracting Rules. The following rules are adopted as the city's public contracting rules. As provided by ORS 279A.065(5)(a), the Model Rules adopted by the Attorney General under ORS 279A, 279B, and 279C (the "Model Rules") do not apply, unless otherwise provided for herein or as adopted by ordinance or resolution by the Local Contract Review Board. Section 2.50.030 Local Contract Review Board. The City Council of the City of Ashland is designated as the Local Contract RElview Board under the State of Oregon Public Contracting Code. The Local Contract Review Board may delegate its powers and responsibilities consistent with the Oregon Public Contracting Code, the Model Rules, and the Ashland Municipal Code. Section 2.50.040 Contracting Agency. The Finance Director, or his/her designee is delegated the authority to exercise all authorities granted by the Public Contracting Code, ORS 279A, 279B, and 27BC, and all authority granted herein, and by subsequent ordinance or resolution. The Finance Director is designated as the City's "Contracting Agency" for purposes of contracting 2- Public Contracting and Personal Service Contracts Ordinance Amendment..2005 powers and duties assigned to the City of Ashland as a "Contracting Agency." For purposes of this chapter the "Contracting Agency" shall be referred to as the Purchasing Agent, who is the Finance Director or his/her designee. Section 2.50.050 Model Rules. Unless expressly provided herein, or by subsequent ordinance or resolution, the Model Rules, Divisions 46,47,48 and 49, adopted by the Attorney General under OHS 279A, 279B, and 279C, as they now exist, and as they may be amended in the future, and in the Ashland Municipal Code, are hereby adopted as the City's public contracting rules. Words and phrases used by these rules that are defined in ORS subchapters 279A, 279B, and 279C and in the Model Rules, have the same meaning as defined in ORS subchapters 279A, 279B, and 279C and the Model Rules. In the event that rules adopted by the Local Contract Review Board do not address a particular situation, the Model Rules apply. Section 2.50.060 Formal Competitive Selection Procedures. Administrative staff and departments have contracting authority and responsibilities as follows: A. The Purchasing Agent is authorized to: 1. Enter into public contracts not to exceed $75,000. 2. Enter into capital improvement contracts for public improvements approved by the City Council through the budgetary process for up to ten (10) percent over the identified amount in the Capitallmproveme~nt Plan (CIP). When a contract identified in the CIP exceeds ten (10) percent of the budgeted amount, such contract must be approved by the LHCB. 3. Approve change orders to contracts that have a cumulative cost of no more than twenty-five (25) percent of the original contract or $75,000, whichever is less. 4. Recommend that the Local Contract Review Board approve or disapprove public contract awards exceeding $75,000 5. Recommend that the Local Contract Review Board approve or disapprove change orders to contracts that have a cumulative cost over twenty-five (25) percent of the original contract or more than $75,000, whichever is less. If the Local Contract Review Board approves the recommended change orders that have a cumulative cost over twenty-five (25) percent of the original contract or more than $75,000, the Local Contract Review Board may authorize the Purchasing Agent to approve any additional change orders without seeking additional approval from the Local Contract Review Board. 6. Adopt forms, computer software, procedures, and administrative policies for all City purchases consistent with the Ashland Municipal Code. B. All contracting by departments shall conform to approved City purchasing procedures adopted by the Purchasing Agent or the Local Contract Review Board. C. Each department shall plan purchase requirements sufficiently in advance so that orders can be placed in economical quantities. 3- Public Contracting and Personal Service Contracts Ordinance Amendment..2005 . D. The Purchasing Agent shall process requisition forms and negotiate purchases on the most favorable terms in accordance with adopted ordinances, state laws (including the Public Contracting Code), policies and procedures. Section 2.50.070 Formal Competitive Selection Procedures-Exemptions. All public contracts shall be based upon formal competitive selection requirements of ORS 279B.050(1) or ORS 279C.335(1), except as expressly provided in this subsection, or by subsequent ordinance or resolution. Regardless of whether a contract is exempt from the formal competitive selection process or not, no service or work may be performed, and no goods, supplies or equipment may be delivered, until a city purchase order has been issued by the Purchasing Agent. This requirement may be waived, however, when circumstances exist that create a substantial risk of loss, damage, interruption of services or threat to public health or safety and that require prompt action to protect the interests of the City. The following classes of public contracts are hereby exempted from the formal competitive selection requirements of ORS 279B.050(1) and ORS 279C.335(1): A. Any contract exempted by the State of Oregon Public Contracting Code or Model Rules; B. Any contracts expressly exempted from formal competitive selection procedures adopted by ordinance or resolution by the Local Contract Review Board pursuant to ORS 279B.085; C. Purchases through federal programs pursuant to ORS 279A.180; D. In the event of an emergency involving an immediate hazard to the public health, safety, or welfare, the city administrator, finance director, or public works director may secure necessary goods and/or services without a formal competitive selection process, provided that the Local Contract Review Board, at a regularly scheduled meeting within 30 days of the procurement, is furnished with a full report of the circumstances and costs of the materials and/or services secured; E. Contracts for goods or services, or a class of goods or services, which are available from only one source. To the extent.reasonably practical, the Purchasing Agent shall negotiate with the sole source to obtain contract terms advantageous to the City. Sole source contracts for goods or services, or classes of goods or services, which are available from only one source which exceed $5,000, but do not exceed $75,000, must be approved by the Purchasing Agent. Sole source contracts for goods or services, or classes of goods or services, which are available from only one source which exceed $75,000 must be approved by the Local Contract Review Board. The Purchasing Agent shall provide public notice via the City's Internet website of the determination of a sole- source contract that exceeds $75,000 at least fourteen (14) days prior to the LCRB approval. The determination of a sole source must be based on written findings that may include: 1. That the efficient utilization of existing goods requires the acquisition of compatible goods or services; 2. That the goods or services required for the exchange of softwarEl or data with other public or private agencies are available from only one source; 3. That the goods or services are for use in a pilot or experimental project; 4- Public Contracting and Personal Service Contracts Ordinance Amendment-2005 4. Other findings that support the conclusion that the goods or servilces are available from only one source; F. Contracts for products, services or supplies if the value of the contract does not exceed $5,000. Any procurement of goods or services not exceeding $5,000 may be awarded in any manner deemed practical or convenient by the Purchasing Agent (or any person with purchasing authority), including by direct selection or award. A contract awarded under this section may be amended to exceed $5,000 only upon approval of the Purchasing Agent, and in no case may exceed $6,000. A procurement may not be artificially divided or fragmented so as to constitute a small procurement under this section; G. Contracts for the purchase of copyrighted materials where there is only one supplier available within a reasonable purchase area for such goods; H. Contracts for the placing of notice or advertisements in any medium; I. Contracts for the purchase of services, equipment or supplies for maintenance, repair or conversion of existing equipment if required for efficient utilization of such equipment; J. Contracts for the purpose of investment of public funds or the borrowin~l of funds; K. Purchases of goods or services pursuant to a requirements contract which was established by a formal competitive selection process. Purchases may also be made at prices established by a requirement contract or other agreement between another public body and a contractor if the requirements contract was established by a formal competitive selection process; L. Contracts for purchase or sale of water, electricity, cemetery lots, cable and telecommunication services, including internet bandwidth, and the sale of telecommunication materials or products or other services, materials or products traditionally provided by the City; M. Contract amendments, including change orders, extra work, field orders, or other changes in the original specifications which in the aggregate change thl9 original contract price or alters the work to be performed, may be made with the contractor if such change or alteration is less than twenty-five percent (:25%) of the initial contract, and is subject to the following conditions: 1. The original contract imposes binding obligation on the parties covering the terms and conditions regarding changes in the work; or 2. The amended contract does not substantially alter the scope or nature of the project; N. Contracts for the purchase of goods or services where the rate or price for the goods or services being purchased is established by federal, state or local regulating authority; O. Contracts not to exceed $50,000 for the purchase of goods, materials, supplies and services. For contracts for the purchase of goods, materials, supplies and services that are more than $5,000, but that do not exceed $50,000, a minimum of three competitive written quotes shall be obtained. The Purchasing Agent shall keep a written record of the source and amount of quotes received. If three quotes are not available, a lesser number will suffice, provided that a written record is made of the effort to obtain the quotes; 5- Public Contracting and Personal Service Contracts Ordinance Amendment.-2005 P. Contracts not to exceed $75,000 for public improvements, including contracts for services of architects, engineers, land surveyors and related services, (other than contracts for a highway, bridge or other transportation projects), if the following conditions are met: 1. The contract is for a single project and is not a component of or related to any other project; 2. When the amount of the public improvement contract (other than contracts for a highway, bridge or other transportation projects) is more than $5,000, but does not exceed $75,000, a minimum of three competitive written quotes shall be obtained. The Purchasing Agent shall keep a written record of the source and amount of quotes received. If three quotes are not available, a lesser number will suffice, provided that a written record is made of the effort to obtain the quotes; 3. The Purchasing Agent shall award the contract to the prospective contractor whose quote will best serve the interests of the City, taking into account price and other applicable factors, such as experience, specific expertise, availability, project understanding, contractor capacity and contractor responsibility. If the contract is not awarded on basis of lowest price, the Purchasing Agent shall make a written finding of the basis for the award; Q. Contracts for a highway, bridge or other transportation projects more than $5,000, but not to exceed $50,000, if the following conditions are compllied with: 1. The contract is for a single project and is not a component of or related to any other project; 2. When the amount of the contract for a highway, bridge or other transportation projects is more than $5,000, but does not exceed $50,000, a minimum of three competitive written quotes shall be obtained., The Purchasing Agent shall keep a written record of the source and amount of quotes received. If three quotes are not available, a lesser number will suffice, provided that a written record is made of the effort to obtain the quotes; 3. The Purchasing Agent shall award the contract to the prospective contractor whose quote will best serve the interests of the City, taking into account price and other applicable factors, such as experience, specific expertise, availability, project understanding, contractor capacity and contractor responsibility. If the contract is not awarded on basis of lowest price, the Purchasing Agent shall make a written finding of the basis for the award. R. Contracts to purchase specialized cable television equipment and related components, connectors and hardware through the National Cable Teli:wision Cooperative and its approved equipment manufacturers and suppliers for the Ashland Fiber Network cable television system. S. Contracts for the purchase of cable television programming for the Ashland Fiber Network cable television system. Section 2.50.080 Notice of Public Contracts. 6- Public Contracting and Personal Service Contracts Ordinance Amendment-2005 Notice of public improvement contracts or contracts for the purchase of goods or services may be published electronically instead of in a newspaper of general circulation if the Purchasing Agent finds that such publication is likely to be cost effective. If the public improvement contract has an estimated cost in excess of $125,000, the advertisement must be published in at least one trade newspapBr of general statewide concern. Section 2.50.090 Disposal of Surplus and Abandoned Property. The Purchasing Agent shall have the authority to dispose of surplus property and abandoned personal property not owned by the City by any means determined to be in the best interests of the City, including but not limited to, transfer to other departments, government agencies, non-profit organizations, sale, trade, auction, or destruction; provided however, that disposal of personal property having residual value of more than $10,000 shall be subject to authorization by the Local Contract Review Board. Section 2: Ashland Municipal Code Chapter 2.52 is amended to read as follows: Chapter 2.52 PERSONAL SERVICE CONTRACTS Sections: 2.52.010 2.52.020 2.52.030 2.52.040 2.52.050 2.52.060 2.52.070 2.52.080 Definitions. Purpose. Personal Service Contracts-Listed. Rules and Procedures. Formal Competitive Selection Procedures-Exemptions. Notice of Personal Service Contract. Screening Criteria. Selection Process. Section 2.52.010 Definitions. A. "Personal service contracts" include contracts for services that require specialized technical, artistic, creative, professional or communication skills or talent, unique and specialized knowledge, or the exercise of discretionary judgment skills, and for which the service depends on attributes that an3 unique to the service provider, other than contracts for an architect, engineer, land surveyor or provider of related services as defined in ORS 279C.1 00. B. "Purchasing Agent" means the Finance Director or his/her designee who has the authority to enter into personal service contracts. C. "Formal competitive selection procedures" means procedures for the selection of personal service contracts, which shall be the same formal procedures as are required for the selection of goods and services as required by ORS 27'9B.060 7 - Public Contracting and Personal Service Contracts Ordinance Amendment-2005 (competitive sealed proposals) and as clarified in the Model Rules, OAR 137- 047-0260. D. "Formal competitive selection process" means the process of using formal competitive selection procedures for the selection of personal service contracts. Section 2.52.020 Purpose. Personal service contracts will be used to retain the services of independent contractors (other than contracts for an architect, engineer, land surveyor or provider of related services as defined in ORS 279C.1 00). Nothing in this section shall apply to the employment of regular city employees. Section 2.52.030 Personal Service Contracts-Listed. Pursuant to ORS subchapter 279A.055(2), the following contracts or classes of contracts for personal services shall not be subject to the rules of procedure of Chapter 2.50 or the Model Rules unless provided herein: A. Accountants; B. Appraisers; C. Computer programmers; D. Lawyers; E. Psychologists; F. Investment Consultants; G. Insurance Consultants; H. Advertising Consultants; I. Marketing Consultants; J. Graphics Consultants; K. Training Consultants; L. Public Relations Consultants; M. Communications Consultants; N. Data Processing Consultants; O. Management Systems Consultants; P. Any other personal service contracts or classes of contracts that the Purchasing Agent or his/her designee identifies as personal service contracts. Section 2.52.040 Rules and Procedures. Personal service contracts are subject to the rules established by this section: A. Unless otherwise approved by the Purchasing Agent, all personal service contracts shall require the contractor to defend, indemnify, and hold hal"mless the City, its officers, agents and employees against and from any and all claims or demands for damages of any kind arising out of or connected in any way with the contractor's performance thereunder and shall include a waiver of contractor's right to ORS 30.285 and ORS 30.287 indemnification and defense. B. Unless otherwise approved by the Purchasing Agent, personal service contracts shall contain a provision requiring the person or entity providing the service to obtain and maintain liability insurance coverage in at least the amount of the City's tort liability limits, naming the City as an additional named insured, during the life of the contract. 8- Public Contracting and Personal Service Contracts Ordinance Amendment--2005 C. All personal service contracts shall contain all contract provisions mandated by state law and by the Ashland Municipal Code. These provisions may bH incorporated in the personal service contract by reference unless otherwise provided by law. D. The formal competitive selection procedures described in this section may be waived by the Purchasing Agent when an emergency exists that could not have been reasonably foreseen and requires prompt execution of a contract to remedy the situation that there is not sufficient time to permit utilization of the formal competitive selection procedures. E. Personal service contract proposals may be modified or withdrawn at any time prior to the execution of the contract. F. The Purchasing Agent shall establish internal procedures for the review, processing, and listing of all contracts, whether procured through a formal competitive selection process, or exempt from the formal competitive sE~lection procedures. Such review shall include a method for determining compliance with these rules. G. For personal service contracts that are anticipated to cost $5,000 or less, such contracts must be memorialized by a formal purchase order. H. For personal service contracts that are anticipated to exceed $5,000, but not exceed $25,000, at least three competitive written quotes from prospecj[jve contractors who shall appear to have at least minimum qualifications for the proposed assignment, shall be solicited. Each solicited contractor shall be notified in reasonable detail of the proposed assignment. Any or all intE!rested prospective contractors may be interviewed for the assignment by an appropriate City employee or by an interview committee. I. For personal service contracts that are anticipated to cost in excess of $25,000, the department head for the department that needs the services shall make the following determinations: 1. That the services to be acquired are personal services; 2. That a reasonable inquiry has been conducted as to the availability of City personnel to perform the services, and that the City does not have the personnel nor resources to perform the services required under the proposed contract; and 3. That the department has developed, and fully plans to implement, a written plan for utilizing such services which will be included in the contractual statement of work. J. All personal service contracts exceeding $25,000 shall be based upon formal competitive selection procedures, except as expressly provided in this subsection, or by subsequent ordinance or resolution. For personal service contracts that are anticipated to cost in excess of $25,000, the department head for the department that needs the services shall follow the formal competitive selection procedures for formal competitive sealed proposals as found in the Model Rules, OAR 137-047-0260. Regardless of whether a personal sl3rvice contract is exempt from the formal competitive selection process or not, no service or work may be performed until a purchase order has been issued. This requirement may be waived, however, when circumstances exist that create a 9- Public Contracting and Personal Service Contracts Ordinance Amendment-2005 substantial risk of loss, damage, interruption of services or threat to public health or safety and that require prompt action to protect the interests of the City. Section 2.52.050 Formal Competitive Selection Procedures-Exemptions. Contracts for personal services are exempt from formal competitive selection procedures if any of the following conditions exist: A. The contract amount is anticipated to be $25,000 or less. B. Contract amendments, which in the aggregate change the original contract price or alters the work to be performed, may be made with the contractor if such change or alteration is less than twenty-five (25%) of the initial contract and are subject to the following conditions: 1. The original contract imposes binding obligation on the parties covering the terms and conditions regarding changes in the work; or 2. The amended contract does not substantially alter the scope or nature of the project; C. The Purchasing Agent finds that there is only one person or entity within a reasonable area that can provide services of the type and quality requimd. D. The contract for services is subject to selection procedures established by the State or Federal government. E. The contract is for non-routine or non-repetitive type legal services outside the Legal Department. Section 2.52.060 Notice of Personal Service Contract Public notice of the request for proposal of a personal service contract shall be given in the same manner as provided under Section 2.50.080. Section 2.52.070 Screening Criteria. The following criteria shall be considered in the evaluation and selection of a personal service contractor for personal service contracts: A. Specialized experience in the type of work to be performed. B. Capacity and capability to perform the work, including any specialized siervices within the time limitations for the work. C. Educational and professional record, including past record of performance on contracts with governmental agencies and private parties with respect to cost control, quality of work, ability to meet schedules, and contract administration, where applicable. D. Availability to perform the assignment and familiarity with the area in which the specific work is located, including knowledge of designing or techniques peculiar to it, where applicable. E. Cost of the services. F. Any other factors relevant to the particular contract. Section 2.52.080 Selection Process. The following rules shall be followed in selecting a contractor for personal services: A. Personal service contracts less than $5,000, may be awarded in any manner deemed practical, including by direct selection or award by the Purchasing Agent 10- Public Contracting and Personal Service Contracts Ordinance Amendment-2005 (or any person with purchasing authority). A personal service contract awarded under this section may be amended to exceed $5,000 only upon approval of the Purchasing Agent, and in no case may exceed $6,000. A personal service contract may not be artificially divided or fragmented. B. For personal service contracts that exceed $5,000, but do not exceed $:25,000, the department head for the department that needs the services shall award the contract to the prospective consultant whose quote or proposal will best serve the interests of the City, taking into account all relevant criteria found in Section 2.52.060. The Department Head shall make written findings justifying the basis for the award. C. For personal service contracts that will cost $25,000 or more, the Department Head shall select a contractor based on the formal competitive selection processes found in the Model Rules and recommend that the City Council approve or disapprove the selected contractor. D. The City official conducting the selection of a personal service contact shall negotiate a contract with the best qualified offeror for the required services at a compensation determined in writing to be fair and reasonable. The foregoing ordinance was first read by title only in accordance with Article X, Section 2(C) of the City Charter on the day of ,2005, ,2005. and duly PASSED and ADOPTED this _ day of Barbara Christensen, City Recorder SIGNED and APPROVED this _ day of ,2005. John W. Morrison, Mayor Reviewed as to form: Mike Reeder, Assistant City Attorney 11- Public Contracting and Personal Service Contracts Ordinance Amendment-2005 City of Ashland AFN Revenue Contracts Customer Description Contracts Dates Renewal Ashland Springs Hotel Bulk 6/1/2000 5/31/2007 5 Stratford Inn Bulk 7/1/2001 6/30/2006 1 Holiday Inn Express Bulk 5/30/2001 4/31/2006 5 Plaza Inn and Suites. Bulk 6/15/2002 6/14/2007 1 Roger Ledbetter Bulk Month to Month 1 Innfuture (Palm Motel) Bulk 2/1/2004 1/31/2007 4 City of Ashland Highspeed 12/01/99 12/01/00 2 Project A, Inc. Highspeed 12/17/99 12/17/00 2 Ashland School Dist. Highspeed 09/01/99 08/31/01 1 OSFA Highspeed 12/21/99 12/21/00 2 SOU Highspeed 08/31/05 08/31/06 3 Ashland Comm. Hospital* Highspeed 6/21/05 6/21/08 2 Open Door Networks, Inc. Highspeed 12/08/00 12/08/01 2 Manmohan Patel Highspeed NA NA 1 Scott-Edelman Supply Highspeed 12/12/01 12/21/02 2 Ashland Home Net Highspeed 11/27/00 '11/27/01 2 Hunter Construction, Inc. Highspeed 02/07/02 02/07/05 2 Vortx, Inc Highspeed NA NA Sky, LLC Highspeed 11/12/02 11/12/03 2 Joe K Andrews Highspeed 12/02/03 12/02/04 2 Brammo Motorsports, LLC Highspeed 07/07/04 Month to Month 1 *There is a signed contract for increase services once the line is engineered Renewal Notes: 1. No provision 2. Automatically renews for one year term/30 day notice 3. Optional 3 one year renewals 4. Automatically renews for two year term 5. Automatically renews for two year term/90 day notice 12/6/2005H:\ADMIN FOLDER\AFN Contract listing Customer Hunter Constnuction Inc Hunter Construction Inc Hunter Constnuction Inc Hunter Construction Inc Hunter Constnuction Inc Owest Unique Screen Media Great Lakes Data Systems Inc. Sneak Preview Dex Media NCTC KOBI (NBC 5) TV Guide Channel KSYS (PBS 8) RVTV - Comm Access Government Access KTVL (CBS 10) KDRV (ABC 12) KMVU (FOX 26) Community Access KBLN Better Life TV ESD Educational Educational Access KSYS PBS-HD OVC Northwest Cable News Discovery Health Nickelodeon AFN Info / Blazers Discovery Lifetime VH-1 MTV Wisdom Television USA Network Fox Sports Northwest Noggin' TV Land EWTN MSNBC CNBC Spike TV M2 WB VH 1 Classic Rock CMT NASA Channel Classic Arts Showcase ESPN Classic FSTV Music Choice (45 chs) Discovery Science Discovery Kids VH 1 Classic Rock Lifetime Movie Network Discovery Home Discovery Times Fox Soccer Channel Discovery Military (Wings) BBC America IN DEMAND 30 PPV Chs. Hot Choice Playboy The Weather Channel The Learning Channel CNN en Espanol CNN Headline News CNN C-Span (House of Reps) City of Ashland AFN Expense Contracts Description Local Broadcast signal for KOBI, KYSY, KDRV, KMVU, KTVL Internet Bandwidth Contractor to manage coax line during move of Oak St Bridge project Contractor to pull and splice fiber, AFN Fiber Run Nevada St Underground and Ariel CATV-line to Medford Bandwidth, local loop connections from inside our headend to Owest Advertising on Varsity and Ashland Cinema Screens Pay Per View Billing Advertising Advertising Programming Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement Direct Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement Start Date 07/01/04 03/01/05 08/09/05 08/12/05 07/20/01 07/01/05 Expiration Date 06/30/05 03/01/06 08/09/05 09/12/05 07/20/06 06/30/07 OS/27/05 01/01/05 month to month 04/05 06/21/00 11/1/2004 1/3/2005 01/16/06 01/01/10 NA 12/31/2005 10/1/2010 12/31/2005 12/31/2005 Auto 1 Year 12/31/2005 12/31/2009 12/31/2006 10/1/2006 12/31/2006 12/31/2009 12/31/2006 12/31/2006 12/31/2006 7/15/2005 12/31/2005 12/31/2006 12/31/2006 11/1/2009 12/31/2008 12/31/2008 12/31/2009 12/31/2006 6/1/2011 12/31/2006 12/31/2006 none none 7/31/2014 none dish 10/3/2006 12/31/2006 12/31/2006 12/31/2009 12/31/2006 12/31/2006 12/31/2008 12/31/2006 12/31/2007 7/3112008 2/27/2008 12/31/2008 9/5/2006 6/30/2008 6/30/2008 3/14/2005 R.~newal 1 Notes One day project 2 2 3 4 5 6 7 7 8 Must carry 7 9 $850 is residentia 10 Upgraded Look Formerly Telemun 90% Penetraton Favored rates 12/6/2005H:IADMIN FOLDERIAFN Contract listing Customer C-Span (Senate) WTBS Hallmark Channel ABC Family Animal Planet The Travel Channel ESPN ESPN2 TNT Court TV American Movie Classics Ovation Arts & Entertainment Cartoon Network E! Entertainment Disney Channel The Golf Channel Sci-fi Channel Turner Classic Movies The History Channel IX Food Network BET Home & Garden TV Fox News Channel Comedy Central National Geographic Bravo G 4 Tech TV Style Oxygen Independent Film Channel Outdoor Life Network National Geographic BET on Jazz Women's Entertainment Trio Sundance Style Biography Channel History Channel International Inspirational Life ESPN Classic Speed Channel HBO HBO Plus HBO Signature HBO Family Showtime Showtime Extreme The Movie Channel Starz Starz2 Encore City of Ashland AFN Expense Contracts Description NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement NCTC Programming Agreement Start Date 9/1/2001 5/1/2002 Renewal Notes: 1. Automatically renews for one year term/30 day notice 2. Valid for specified project 3. Automatically renews for two year term/60 day notice 4. May automatically renew as needed to run the contracted number of ads 5. Automatically renews for one year term/120 day notice 6. Automatically renews 7. Auto renew every 5 years 8 Every 5 years 9. Auto renew every December 10. Auto renew Aug 1 launch Expiration Date 3/14/2005 12/31/2008 12/31/2006 12/31/2006 12/31/2006 12/31/2007 7/31/2014 7/31/2014 12/31/2008 12/31/2009 12/31/2007 expired in negotiations 12/31/2005 8/31/2007 12/31/2005 12/31/2005 12/31/2010 9/30/2007 4/15/2008 12/31/2005 12/31/2004 12/31/2009 12/31/2008 12/31/2009 10/7/2006 12/31/2004 12/31/2010 12/31/2008 12/31/2008 12/31/2010 3/31/2010 12/31/2008 12/31/2011 12/31/2010 12/31/2006 12/31/2007 5/1/2009 2/28/2006 12/31/2010 12/31/2005 12/31/2005 12/31/2007 7/31/2014 12/31/2007 11/30/2005 11/30/2005 11/30/2005 11/30/2005 2/28/2007 2/28/2007 2/28/2007 12/31/2006 12/31/2006 12/31/2006 Renewal Notes Odyssey change Fox Family chang Tech TV change 12/6/2005H:IADMIN FOLDERIAFN Contract listing City of Ashland AFN Operational Contracts Customer Description Contract Dates City of Medford Franchise Fees: Medford Ord #2001-107 7/26/01 7/26/2006 Qwest Bandwidth, local loop connections from 06/30/07 inside our headend to Qwest Hunter Construction, Inc. 13 Mile Fiber Cable to Medford. 9/5/2000 Hunter Construction Inc Local Broadcast signal for KOBI, 06/30/05 KYSY,KDRV, KMVU, KTVL Hunter Construction Inc Internet Bandwidth 03/01/06 Project A, Inc. ISP Month to Month Open Door Networks, Inc. ISP Month to Month Ashland Home Net ISP Month to Month Infostructure ISP Month to Month Vortx, Inc ISP Month to Month Unicom ISP Month to Month Jeff Net ISP Month to Month Computer Country ISP Month to Month Mighty Net ISP Month to Month Magic Wave ISP Month to Month Rio Communications, Inc. Rack Space & Loop Feed 7/1/04 Month to Month City of Ashland Highspeed 12/01/99 12/01/00 Project A, Inc. Highspeed 12/17/99 12/17/00 Ashland School Dist. Highspeed 09/01/99 08/31/01 OSFA Highspeed 12/21/99 12/21/00 SOU Highspeed 08/31/05 08/31/06 Ashland Comm. Hospital* Highspeed 6/21/05 6/21/08 Open Door Networks, Inc. Highspeed 12/08/00 12/08/01 Manmohan Patel Highspeed NA NA Scott-Edelman Supply Highspeed 12/12/01 12/21/02 Ashland Home Net Highspeed 11/27/00 11/27/01 Hunter Construction, Inc. Highspeed 02/07/02 02/07/05 Vortx, Inc Highspeed NA NA Sky, LLC Highspeed 11/12/02 11/12/03 Joe K Andrews Highspeed 12/02/03 12/02/04 Brammo Motorsports, LLC Highspeed 07/07/04 Month to Month *There is a signed contract for increase services once the line is engineered Renewal Notes: 1. Five years from signed Ordinance 7/2001 2. Automatically renews for two year term/60 day notice 3. No Provision 4. Termination requires 30 days written notice 5. Automatically renews for one year term/30 day notice 6. Optional 3 one year renewals Renewal 1 2 2 2 3 3 3 3 3 3 3 3 3 3 4 5 5 3 5 6 5 5 3 5 5 5 3 5 5 3 RESOLUTION NO. 2005- l.\ l\ A RESOLUTION ESTABLISHING CABLE TELEVISION AND INTERNET RATES FOR THE ASHLAND FIBER NETWORK, READOPTING ALL OTHER RATES WITHOUT CHANGE & REPEALING RESOLUTION NO 2005-37 THE CITY OF ASHLAND RESOLVES AS FOLLOWS: SECTION 1. The Attached rate schedule is adopted as the rates and fees for AFN Internet and AFN Cable Television provided by the City of Ashland Information Technology department, Ashland Fiber Network Division. These rates are effective with the Cycle 2 Billing on or after February 1 st of 2006. SECTION 2. Installation charges, equipment rental, bulk rates, and other charges may be set administratively. To the extent practicable, such fees shall be set to rE~cover, over a fiscally prudent period, the incremental cost of providing such service by taking into account all costs actually incurred. SECTION 3. Nothing in Section 1 or Section 2 shall preclude AFN staff temporarily reducing or waiving rates or charges in conjunction with promotional campai~lns, 2) establishing different and nondiscriminatory rates and charges for commercial customers, as allowed by federal law and regulations, or 3) establishing different and nondiscriminatory rates and charges for AFN high speed data and wholesale high speed data commercial customers, as allowed by federal law and regulations. SECTION 4. Resolution 2005-37 is repealed. SECTION 5. This resolution takes effect upon signing by the Mayor. This resolution was read by title only in accordance with Ashland Municipal Code S2.0 .090 duly PASSED and ADOPTED this ~ day of k.~ ,2005. i?k~ Barbara Christensen, City Recorder SIGNED and APPROVED this L day of ,2005. RESOLUTION NO. ~ BEFORE THE CITY OF ASHLAND LOCAL CONTRACT REVIEW BOARD RESOLUTION EXEMPTING FROM COMPETITIVE BIDDING EQUIPMENT PURCHASES THROUGH THE NATIONAL CABLE TELEVISION COOPERATIVE FOR THE ASHLAND FIBER NETWORK CABLE TELEVISION SYSTEM LCRB RESOLUTION Recitals: A. AMC 9 2.50.030.B permits the Ashland City Council sitting as the Local Contract Review Board to exempt contracts from competitive bidding if it finds: 1. The lack of bids will not result in favoritism or substantially diminish competition in awarding the contract; and 2. The exemption will result in substantial cost savings. B. This ordinance provides that in making such findings, the Board may consider the type, cost, amount of the contract, number of persons available to bid, and such othe~r factors as the Board may deem appropriate. Where appropriate, the Board shall direct the use of alternate contracting and purchasing practices that take account of market realities and modern or innovative contracting and purchasing methods, which are also consistent with the p1ublic policy of encouraging competition. C. In order to exempt a public contract from competitive bidding, the Board shall adopt written findings that support the awarding of a particular public contract or a class of public contracts without competitive bidding. The findings must show that the exemption of a contract or class of contracts complies with the requirements of AMC 92.50.030.B. The Board adopts the information contained in the memorandum from Richard Holbo, Telecom Supervisor, and Mike Ainsworth, CATV Specialist, dated October 26, 1999, which is attached to this resolution, as findings justifying the exemption. The Board finds that this exemption will not result in favoritism or substantially diminish competition in the purchase of CATV pmgramming, and the exemption will result in substantial cost savings. The Board resolves that an exemption be granted as follows: PURCHASE OF CABLE TELEVISION EQUIPMENT AND RELATED COMPONENlrS, CONNECTORS AND HARDWARE THROUGH THE NATIONAL CABLE TELEVISION COOPERATIVE AND ITS APPROVED EQUIPMENT MANUFACTURERS AND SUPPLIERS FOR THE ASHLAND FIBER NETWORK CABLE TELEVISION SYSTEM. This resolution was read by title only in accordance with Ashland Municipal Code 92.04 90 and duly PASSED and ADOPTED this ~ day of November, 1999. . "\ SIGNED and APPROVED this .3 daYOfNOV~J.-~~ Catherine M. Shaw, Mayor ~n~- au No te, City Attorney 1- LCRB Resolution F\USER\PAUL\ORDlLCRB\LCRB res cabl,e coop AFN.wpd