HomeMy WebLinkAbout2020-03-02 City Council Regular Meeting Agenda Packet
February 27, 2020 6:02 PM City Council Regular Meeting Agenda Page1 MAYOR
Roland Velasco
COUNCIL MEMBERS
Marie Blankley
Dion Bracco
Peter Leroe-Muñoz
Carol Marques
Fred Tovar
Cat Tucker
CITY COUNCIL
AGENDA
CITY OF GILROY
CITY COUNCIL CHAMBERS, CITY HALL
7351 ROSANNA STREET
GILROY, CA 95020
SPECIAL MEETING 5:00 P.M.
REGULAR MEETING 6:00 P.M.
(The first regular meeting item will not be considered until a time certain of 7 p.m.)
MONDAY, MARCH 2, 2020
CITY COUNCIL PACKET MATERIALS ARE AVAILABLE ONLINE AT www.cityofgilroy.org
AGENDA CLOSING TIME IS 5:00 P.M. THE TUESDAY PRIOR TO THE MEETING
COMMENTS BY THE PUBLIC WILL BE TAKEN ON AGENDA ITEMS BEFORE ACTION IS TAKEN BY
THE CITY COUNCIL. Persons wishing to address the Council are requested, but not required, to
complete a Speaker’s Card located at the entrances. Public testimony is subject to reasonable
regulations, including but not limited to time restrictions for each individual speaker. A minimum
of 12 copies of materials should be provided to the City Clerk for distribution to the Council and
Staff. Please limit your comments to 3 minutes.
In compliance with the Americans with Disabilities Act, the City will make reasonable
arrangements to ensure accessibility to this meeting. If you need special assistance to participate
in this meeting, please contact the City Clerk a minimum of 72 hours prior to the meeting a t (408)
846-0204. A sound enhancement system is also available for use in the City Council Chambers.
If you challenge any planning or land use decision made at this meeting in court, you may be
limited to raising only those issues you or someone else rai sed at the public hearing held at this
meeting, or in written correspondence delivered to the City Council at, or prior to, the public
hearing. Please take notice that the time within which to seek judicial review of any final
administrative determination reached at this meeting is governed by Section 1094.6 of the
California Code of Civil Procedure.
A Closed Session may be called during this meeting pursuant to Government Code Section
54956.9 (d)(2) if a point has been reached where, in the opinion of t he legislative body of the City
on the advice of its legal counsel, based on existing facts and circumstances, there is a
significant exposure to litigation against the City.
Materials related to an item on this agenda submitted to the City Council after distribution of the
agenda packet are available for public inspection with the agenda packet in the lobby of
Administration at City Hall, 7351 Rosanna Street during normal business hours. These materials
are also available with the agenda packet on the City website at www.cityofgilroy.org subject to
Staff’s ability to post the documents before the meeting.
The City Council meets regularly on the first and third Monday of each month, at 6:00 p.m. If a
holiday, the meeting will be rescheduled to the following Monday, with the exception of the single
meeting in July which lands on the first day of the month not a holiday, Friday, Saturday or
Sunday.
City Council Regular Meeting Agenda
03/2/2020 Page2
KNOW YOUR RIGHTS UNDER THE GILROY OPEN GOVERNMENT ORDINANCE
Government's duty is to serve the public, reaching its decisions in full view of the public.
Commissions, task forces, councils and other agencies of the City exist to conduct the
people's business. This ordinance assures that deliberations are conducted before the
people and that City operations are open to the people's review.
FOR MORE INFORMATION ON YOUR RIGHTS UNDER THE OPEN
GOVERNMENT ORDINANCE, TO RECEIVE A FREE COPY OF THE ORDINANCE
OR TO REPORT A VIOLATION OF THE ORDINANCE, CONTACT THE OPEN
GOVERNMENT COMMISSION STAFF AT (408) 846-0204 or
shawna.freels@cityofgilroy.org
SPECIAL MEETING - CLOSED SESSION - 5:00 P.M.
CALL TO ORDER AND ROLL CALL
CLOSED SESSION
A. PUBLIC EMPLOYEE APPOINTMENT/EMPLOYMENT; Pursuant to
Government Code Section 54957 and Gilroy City Code Section 17A.11(2)
Name/Title Interim or Acting City Administrator
1. Public Comment on Closed Session Item
2. Adjourn to Closed Session
3. ADJOURN TO OPEN SESSION - Report of any action taken in Closed
Session and vote or abstention of each Councilmember if required by
Government Code Section 54957.1 and Gilroy Code Section 17A.13 (a);
Public Report of the vote to continue in closed session if required under
Gilroy Code Section 17A.11 (5)
4. ADJOURN SPECIAL MEETING
REGULAR MEETING - 6:00 P.M.
(The first regular meeting item will not be considered until a time certain of 7:00 p.m.)
I. OPENING
A. Call to Order
1. Pledge of Allegiance
2. Invocation
3. City Clerk's Report on Posting the Agenda
4. Roll Call
B. Orders of the Day
C. Employee Introductions
II. CEREMONIAL ITEMS
City Council Regular Meeting Agenda
03/2/2020 Page3 A. Proclamations, Awards, and Presentations
1. Recognition of Retiring Museum Volunteer Tom Howard
2. Proclamation Naming March Red Cross Month
3. Proclamation Naming the Week of March 9, 2020 Science Fair Week.
4. Recognition of Retiring Employee Mary Gutierrez
5. Recognition of Retiring Employee Joseph Deras
6. Recognition of Gabriel Gonzalez for His Service to the City as City
Administrator
III. PRESENTATIONS TO THE COUNCIL
PUBLIC COMMENT BY MEMBERS OF THE PUBLIC ON ITEMS NOT ON THE
AGENDA BUT WITHIN THE SUBJECT MATTER JURISDICTION OF THE CITY
COUNCIL (This portion of the meeting is reserved for persons desiring to address the Council
on matters not on this agenda. The law does not permit Council action or extended discussion of
any item not on the agenda except under special circumstances. If Council action is requested, the
Council may place the matter on a future agenda. Written material provided by public members for
Council agenda item “public comment by Members of the Public on items not on the agenda” will be
limited to 10 pages in hard copy. An unlimited amount of material may be provided electronically.)
A. Annual Silicon Valley Clean Energy Presentation
City Council Regular Meeting Agenda
03/2/2020 Page4 IV. REPORTS OF COUNCIL MEMBERS
Council Member Bracco – Gilroy Downtown Business Association Board (alternate),
Gilroy Sister Cities Association (alternate), Santa Clara Co. Library JPA, SCVWD Joint
Council-SCRWA-Board Water Resources Committee, South County Joint Planning
Advisory Committee (alternate), South County Regional Wastewater Authority Board,
South County Youth Task Force Policy Team (alternate), Street Naming Committee
Council Member Tucker –CalTrain Policy Group, Cities Association of Santa Clara Co.
Board of Directors, General Plan Advisory Committee, Santa Clara Valley Habitat
Agency Governing Board, Santa Clara Valley Habitat Agency Implementation Board,
Street Naming Committee, Visit Gilroy Board
Council Member Blankley - ABAG (alternate), Cities Association of Santa Clara Co.
Board of Directors (alternate), Economic Development Corporation Board, Gilroy Sister
Cities Association, Gilroy Youth Task Force (alternate), SCVWD Joint Council-SCRWA-
Board Water Resources Committee, South County Regional Wastewater Authority
Board, VTA Board of Directors Alternate, VTA Policy Advisory Committee, VTA South
County City Group
Council Member Marques - Gilroy Downtown Business Association Board, Gilroy
Gardens Board of Directors, Santa Clara Valley Habitat Agency Governing Board
(alternate), Santa Clara Valley Habitat Agency Implementation Board (alternate), Silicon
Valley Clean Energy JPA Board (alternate), URM Task Force Sub-Committee, VTA
Committee for Transit Accessibility (alternate)
Council Member Tovar –Santa Clara Co. Expressway Plan 2040 Policy Advisory
Board, Recycling and Waste Reduction Commission, Santa Clara Co. Library JPA
(alternate), SCVWD Water Commission (alternate), Silicon Valley Clean Energy JPA
Board, South County Regional Wastewater Authority Board, South County United for
Health, Street Naming Committee, VTA Committee for Transit Accessibility, VTA Policy
Advisory Committee (alternate)
Council Member Leroe-Muñoz - ABAG, CalTrain Policy Group (alternate), Gilroy
Youth Task Force, Historic Heritage Committee, SCVWD Water Commission, Silicon
Valley Regional Interoperability Authority Board, South County Youth Task Force Policy
Team, VTA Mobility Partnership
Mayor Velasco - Economic Development Corporation Board, General Plan Advisory
Committee, Historic Heritage Committee (alternate), Santa Clara Valley Habitat Agency
Governing Board, Santa Clara Valley Habitat Agency Implementation Board, South
County Joint Planning Advisory Committee, South County Regional Wastewater
Authority Board (alternate), URM Task Force Sub-Committee, VTA Mobility Partnership,
VTA South County City Group (alternate)
V. FUTURE COUNCIL INITIATED AGENDA ITEMS
VI. CONSENT CALENDAR (ROLL CALL VOTE)
All matters listed under the Consent Calendar are considered by the Cit y Council to be routine
and will be enacted by one motion. There will be no separate discussion of these items unless a
request is made by a member of the City Council or a member of the public. Any person desiring
to speak on any item on the consent calendar should ask to have that item removed from the
consent calendar prior to the time the Council votes to approve. If removed, the item will be
discussed in the order in which it appears.
City Council Regular Meeting Agenda
03/2/2020 Page5
A. Appointment to the Historic Heritage Committee and Opening of a
Recruitment for the Planning Commission, Parks and Recreation
Commission, Historic Heritage Committee and Building Board of Appeals
B. Approval of a Amicus Curiae Letter in Support of the City of Huntington
Beach Supreme Court Appeal
VII. BIDS AND PROPOSALS
A. Award a Contract to McKim Corporation in the Amount of $293,632 with a
Contingency of $29,369 for the Construction of the 2020 Annual Sidewalk
Gap Closure and Curb Ramp Improvements Project, Project No. 20-PW-256
1. Staff Report: Girum Awoke, Public W orks Director
2. Public Comment
3. Possible Action:
Approve a contract with McKim Corporation in the amount of $293,632 with a
project contingency of $29,369 for the construction of the 2020 Annual Sidewalk
Gap Closure and Curb Ramp Improvements Project, Project No. 20-PW -256,
and authorize the City Administrator to execute the contract and associated
documents.
VIII. PUBLIC HEARINGS - NONE
IX. UNFINISHED BUSINESS - NONE
X. INTRODUCTION OF NEW BUSINESS
A. Consideration of the Appointment of an Interim City Administrator or an
Acting City Administrator Effective March 13, 2020
1. Staff Report: Roland Velasco, Mayor
2. Public Comment
3. Possible Action:
a) Appoint an Interim City Administrator or an Acting City Administrator effective
March 13, 2020.
b) Consideration of the formation of a Council Ad-hoc Committee to address
Interim City Administrator salary and employment agreement.
B. Approval of the Updated City of Gilroy Travel and Expense Policy
1. Staff Report: Jimmy Forbis, Finance Director
2. Public Comment
3. Possible Action:
Approve the updated City of Gilroy Travel and Expense Policy.
C. Approval of the Updated City of Gilroy Purchasing Policy
City Council Regular Meeting Agenda
03/2/2020 Page6 1. Staff Report: Jimmy Forbis, Finance Director
2. Public Comment
3. Possible Action:
Approve the updated City of Gilroy Purchasing Policy.
D. Consideration of an Exception to the Rental Rates Specified in the
Residential Development Ordinance Affordable Housing Exemption
Procedure for a Project Located North of Luchessa Avenue, Between Miller
Avenue and West 10th Street Assessor Parcel Numbers 808-18-003
(portion), 808-19-022 and 808-19-023, Commonly Known as the Glen Loma
Ranch Below Market Rate Apartment Project (M 19-14)
1. Staff Report: Karen Garner, Community Development Director
2. Public Comment
3. Possible Action:
a) Adopt a resolution of the City Council of the City of Gilroy approving an
exception to the City’s RDO affordable housing exemption procedures to
allow rental rates within the Glen Loma Ranch Town Center Apartments
project to be affordable to households earning 50% to 80% of area me dian
income.
b) Direct staff to prepare revisions to the Residential Development Ordinance
and related policies to ensure conformance with state legislation and
consistency with regional and local housing goals.
E. Approval of a Housing Trust Fund Budget Amendment in the Amount of
$32,800 for Fiscal Year 2019-2020 and Fiscal Year 2020-2021 and Approval
of Project Sentinel's Housing Trust Fund Grant Application for Fair
Housing and Tenant Landlord Services
1. Staff Report: Karen Garner, Community Development Director
2. Public Comment
3. Possible Action:
a) Adopt a resolution of the City Council of the City of Gilroy amending the
Fiscal Year 2019-2020 and Fiscal Year 2020-2021 Housing Trust Fund
budgets in the amount of $32,800 to increase the total annual allocation
for two Housing Trust Fund programs to $47,000; $21,000 for fair housing
services and $26,000 for tenant-landlord services.
b) Approve the Housing Trust Fund grant to Project Sentinel for $47,000 to
provide fair housing and tenant landlord services in Fiscal Year 2019-2020
and Fiscal Year 2020-2021.
F. Lease Agreement with Advantage Peak LLC for a City Owned Property
Located at 140 5th Street, Gilroy (Willey House)
City Council Regular Meeting Agenda
03/2/2020 Page7 1. Staff Report: Shawna Freels, City Clerk
2. Public Comment
3. Possible Action:
Approve lease agreement with Advantage Peak LLC for a City owned property
located at 140 5th Street, Gilroy (Willey House).
G. Approval of a California Public Utility Commission Mandated Rule 20A
Utility Undergrounding District along Monterey Road from South of Eighth
Street to Tenth Street
1. Staff Report: Girum Awoke, Public Works Director
2. Public Comment
3. Possible Action:
Adopt a resolution of the City Council of the City of Gilroy approving a utility
undergrounding district along Monterey Road from South of Eighth Street to
Tenth Street.
XI. CITY ADMINISTRATOR'S REPORTS
XII. CITY ATTORNEY'S REPORTS
XIII. CLOSED SESSION
A. CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION; Pursuant to
Paragraph (1) of Subdivision (d) of 54956.9 and GCC Section 17A.11(3)(a); Law
Foundation v. City of Gilroy, Santa Clara Sup. Court Case #20CV263347; Date
Filed January 22, 2020
B. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to GC
Section 54956.8 and GCC Section 17A.8 (a) (2) Property: 3050 Hecker Pass
Highway, APN’s 783-05-011; 783-05-012; 783-05-013;810-17-014;015; 021; 024;
025; 026; 029; 810-18-002; 010; 011;801-19 -005;007; 010; 011; 014 (Gilroy Gardens
Property); Negotiators: Gabriel Gonzalez, City Administrator; Other Party to
Negotiations: Greg Edgar; Under Negotiation: Lease Price and Terms
1. Public Comment on Closed Session Items
2. City Attorney’s Advice Re: Entering into Closed Session
3. Adjourn to Closed Session
ADJOURN TO OPEN SESSION
Report of any action taken in Closed Session and vote or abstention of each
Councilmember if required by Government Code Section 54957.1 and Gilroy Code
Section 17A.13 (a); Public Report of the vote to continue in closed session if required
under Gilroy Code Section 17A.11 (5)
ADJOURNMENT
MEETING DATES
MARCH, 2020
2* Regular Meeting - 6:00 p.m., City Council Chambers
16* Regular Meeting - 6:00 p.m., City Council Chambers
City Council Regular Meeting Agenda
03/2/2020 Page8 APRIL, 2020
6* Regular Meeting - 6:00 p.m., City Council Chambers
20* Regular Meeting - 6:00 p.m., City Council Chambers
27 Special Joint Meeting with Valley Water and MH Council - 6:00 p.m.,
Morgan Hill Council Chambers
MAY, 2020
4* Regular Meeting - 6:00 p.m., City Council Chambers
18* Regular Meeting - 6:00 p.m., City Council Chambers
* meeting is webstreamed and televised
Proclamation of the City of Gilroy
Whereas, the City of Gilroy has a long history of helping our neighbors in need.
American Red Cross Month is a special time to recognize and thank our heroes – those
Red Cross volunteers and donors who give of their time and resources to help community
members; and
Whereas, these heroes help families find shelter after a home fire. They give blood
to help trauma victims and cancer patients. They deliver comfort items to military members
in the hospital. They use their lifesaving skills to save someone from a heart attack,
drowning or choking. They enable children around the globe to be vaccinated against measles
and rubella; and
Whereas, The American Red Cross depends on local heroes to deliver help and
hope during a disaster. We applaud our heroes here in Gilroy who give of themselves to
assist their neighbors when they need a helping hand; and
Whereas, across the country and around the world, the American Red Cross
responds to disasters big and small. In fact, every eight minutes the organization responds to
a community disaster, providing shelter, food, emotional support and other necessities to
those affected. It collects nearly 40 percent of the nation’s blood supply; provides 24-hour
support to military members, veterans and their families; teaches millions lifesaving skills,
such as lifeguarding and CPR; and through its Restoring Family Links program, connects
family members separated by crisis, conflict or migration ; and
Whereas, we dedicate the month of March to all those who support the
American Red Cross mission to prevent and alleviate human suffering in the face of
emergencies. Our community depends on the American Red Cross, which relies on donations
of time, money and blood to fulfill its humanitarian mission.
NOW, THEREFORE, I, Roland Velasco, Mayor of the City of Gilroy, on
behalf of the entire City Council, do hereby proclaim March 2020as
American Red Cross Month
and encourage all Citizens of Gilroy to support this outstanding organization and its noble
humanitarian mission.
_____________________
Mayor Roland Velasco
2.A.2
Packet Pg. 9 Communication: Proclamation Naming March Red Cross Month (Proclamations, Awards, and Presentations)
Proclamation of the City of Gilroy
WHEREAS, the Santa Clara Valley Science and Engineering Fair
Association, educators, judges and a host of dedicated volunteers will host the Synopsys
Silicon Valley Science and Engineering Championship, an exciting Science and
Engineering Fair, the 11th and 12th of March, 2020, and
WHEREAS, this Science and Engineering Fair will be held for the benefit of
our young people, their parents, teachers and the communities of Santa Clara County to
stimulate interest in the various aspects of the sciences and engineering, and
WHEREAS, this event will direct public attention towards the fields of science
and engineering by setting aside a time for creative participation on the part of all
interested students
NOW, THEREFORE, I, Roland Velasco, Mayor of the City of Gilroy, on behalf
of the entire City Council, do hereby proclaim the week of March 9th, 2020, as
SCIENCE FAIR WEEK
within our City and hereby urge all residents, particularly young people, to take part in
the observation of this inspiring and rewarding event.
_____________________
Mayor Roland Velasco
2.A.3
Packet Pg. 10 Communication: Proclamation Naming the Week of March 9, 2020 Science Fair Week. (Proclamations, Awards, and Presentations)
City of Gilroy
STAFF REPORT
Agenda Item Title: Appointment to the Historic Heritage Committee and Opening of a
Recruitment for the Planning Commission, Parks and Recreation
Commission, Historic Heritage Committee and Building Board of
Appeals
Meeting Date: March 2, 2020
From: Gabriel Gonzalez, City Administrator
Department: City Clerk
Submitted By: Shawna Freels
Prepared By: Suzanne Guzzetta
Suzanne Guzzetta
Strategic Plan Goals
☐ Fiscal Stability
☐ Downtown
Revitalization
☐ Economic
Development
☐ Neighborhood Services
☐ Enhanced Public
Safety
☐ Workforce Stability ☐ Public Engagement
RECOMMENDATION
Appoint a member to the Historic Heritage Committee and continue the recruitment for
the Planning Commission, Parks and Recreation Commission, Historic Heritage
Committee and Building Board of Appeals.
BACKGROUND
Three (3) Boards, Commissions and Committees continue to have seats vacant
as of December 31, 2019. The City held a recruitment period for a total of 13
weeks and the Council interviewed applicants at your December 9, 2019 and
subsequently made several appointments.
6.A
Packet Pg. 11
As an insufficient number of applications were submitted for a few of the City
Boards and Commissions, and recruitment efforts were extended for the Building
Board of Appeals and Historic Heritage Committee, and there was a resignation
from the Parks and Recreation Commission.
The Council is now asked to consider the appointment of members to the
following open seats:
Historic Heritage Committee – 2 seats
Applicant(s): David Matuszak
All applications are included with this staff report.
Recruitment efforts will continue for the Building Board of Appeals, Historic Heritage
Committee, and Parks and Recreation Commission. In addition, a vacancy has
occurred on the Planning Commission. That vacancy will be added to recruitment
efforts.
Attachments:
1. HHC Application - Matuszak, David
2. Revised 2020 Recruitment Flyer
6.A
Packet Pg. 12
City of Gilroy Application for Board, Commission and Committee
Appointment
City of Gilroy Application for Board, Commission, and Committee Appointment
All Commission, Board and Committee applications are a public record.
First Name David
Last Name Matuszak
Board/Commission/Committee Historic Heritage Committee
of Interest
Are you a registered voter Yes
within the City limits?
Physical Address 1
Physical Address 2 Field not completed.
Phone Number
E-mail Address
Alternate Phone Number
List your qualifications for this Resident for 20 years. Participant in Mill's Act process
appointment: for 2 properties. Life Member of Gilroy Historical Society
and current Board Member. Participant in Gilroy
Historical Society Architectural Awards Committee and
recipient of Architectural Award for Historic Home at
7751 Rosanna Street. Bachelor's Degree in Industrial
Education, graduate degrees in management,
supervision and administration, and doctorate in adult
continuing education.
List any service to the Member of Gilroy Chamber of Commerce and board
community including any prior member for 3 terms (9 years). Active in Gilroy Historical
appointments. Society and Gilroy After Hours Rotary Club.
What are you goals while Help recruit more participants in the various historic
serving on this preservation programs available to Gilroy residents.
Board/Commission/Committee? Provide user perspective to the process so that policy
6.A.a
Packet Pg. 13 Attachment: HHC Application - Matuszak, David (2663 : Appointments to City Boards, Commissions and Committees)
proposals help the participants effectively restore and
preserve their properties.
Why are you the most qualified Experience, education, and training in home remodeling
to serve on this and interest in historic preservation. Have completed two
Board/Commission/Committee? Mills Act applications (one of the first approved in the
city) and have assisted two other applicants complete
their applications (total of 16 Mills Act participants in city;
therefore, I have participated in 25%)
6.A.a
Packet Pg. 14 Attachment: HHC Application - Matuszak, David (2663 : Appointments to City Boards, Commissions and Committees)
BBuuiillddiinngg BBooaarrdd ooff AAppppeeaallss –– 11 sseeaatt
HHiissttoorriicc HHeerriittaaggee CCoommmmiitttteeee –– 11 sseeaatt
PPaarrkkss && RReeccrreeaattiioonn CCoommmmiissssiioonn –– 11 sseeaatt
PPllaannnniinngg CCoommmmiissssiioonn –– 11 SSeeaatt
Building Board of Appeals – 1 seat (term ending 12/31/2023)
This Board addresses matters pertaining to building and construction and hears all building appeals. The
Board is comprised of five (5) people qualified by experience and training, with one public member, and
meets as needed.
Historic Heritage Committee – 1 seats (term ending 12/31/2021)
This five (5) member body acts as an advisory board to the City Council and Planning Commission on issues
relating to the identification, protection, retention and preservation of historic sites and neighborhoods of the
City, and meets the 3rd Wednesday of each month at 6:00 p.m.
Parks & Recreation Commission – 1 seat (term ending 12/31/22)
This seven (7) member body advises the City Council, the Planning Commission and staff on matters pertaining
to public parks, urban forestry and recreation in the advancement of park and recreation planning and
programming. Meetings are held the 3rd Tuesday of each month at 6:00 p.m.
Planning Commission – 1 seats (term ending 12/31/2022)
This seven (7) member body acts as an advisory body to the Council in the review of planning applications
for land use entitlements including subdivisions, planned unit developments, zone changes, conditional use
permits and variances, and participates in comprehensive planning studies. Meetings are held the 1st
Thursday of each month at 6:30 p.m.
BBooaarrdd aanndd CCoommmmiissssiioonn OOppeenn SSeeaattss
AAPPPPLLYY NNOOWW ffoorr 22002200 OOppeenniinnggss!!
Applications are available online www.cityofgilroy.org and at City Hall
City Council will interview applicants the evening of Monday, April 6, 2020 during the City Council
Meeting in Council Chambers at City Hall, 7351 Rosanna St.
Applications may be submitted to: shawna.freels@cityofgilroy.org or
suzanne.guzzetta@cityofgilroy.org, or by mail to: City Clerk’s Office, 7351 Rosanna Street, Gilroy, CA
95020, and must be received by Wednesday April 1, 2020 at 5:00 p.m.
Call (408) 846-0204 or (408) 846-0469 with questions.
6.A.b
Packet Pg. 15 Attachment: Revised 2020 Recruitment Flyer (2663 : Appointments to City Boards, Commissions and Committees)
City of Gilroy
STAFF REPORT
Agenda Item Title: Approval of a Amicus Curiae Letter in Support of the City of
Huntington Beach Supreme Court Appeal
Meeting Date: March 2, 2020
From: Gabriel Gonzalez, City Administrator
Department: Administration
Submitted By: Gabriel Gonzalez
Prepared By: Shawna Freels
Trevin Barber
Strategic Plan Goals
☐ Fiscal Stability
☐ Downtown
Revitalization
☐ Economic
Development
☐ Neighborhood Services
Enhanced Public
Safety
☐ Workforce Stability ☐ Public Engagement
RECOMMENDATION
Approve a letter in support of the City of Huntington Beach’s appeal to the California
Supreme Court.
EXECUTIVE SUMMARY
The City of Huntington Beach has requested the support of the City of Gilroy to file a
letter of support with the California Supreme Court to review the opinion in City of
Huntington Beach v. Xavier Becerra et al., Court of Appeal Case No. G057013.
Like the City of Huntington Beach, the City of Gilroy is a Charter City. The outcome of
their court case will impact our efforts to provide a safe and secure City.
BACKGROUND
6.B
Packet Pg. 16
Huntington Beach is one of 121 California Charter Cities which are governed by
charters adopted by local voters. Huntington Beach had challenged a California law
limiting local law enforcement cooperation with federal agencies, SB 54 “the California
Values Act”, also known as the Sanctuary State law, arguing that it violated a section of
the State Constitution that gives Charter Cities “supreme authority” over municipal
affairs.
A local Court of Appeal issued a decision January 10, 2020, in favor of the State,
reversing a lower court’s ruling that the Sanctuary State law is unconstitutional as
applied to Charter Cities. The precedent right now is that SB54 is constitutional.
The Huntington Beach City Council has decided to appeal the January Court of Appeal
decision to the California Supreme Court. And will be filing their Petition for California
Supreme Court review in the coming weeks.
ANALYSIS
The City of Huntington Beach has asked all Charter Cities to help by submitting a letter
to the California Supreme Court, in Amicus support, to help let the highest court know
how important this issue is, how necessary it is to take this Appeal up, and what it
means for the future for local governments.
Taking action does not mean that the City of Gilroy would be involved in the Appeal
itself. A draft letter of support is attached for review and approval by the City Council.
FISCAL IMPACT/FUNDING SOURCE
None.
NEXT STEPS
If approved, staff will file the letter of support with the Supreme Court of California to
urge review in City of Huntington Beach v. Xavier Becerra et al., Court of Appeal Case
No. G057013.
Attachments:
1. Huntington Beach Amicus Brief 2020
2. Huntington Beach Amicus Brief 2020
6.B
Packet Pg. 17
City of Gilroy
Mayor’s Office
City Hall
7351 Rosanna Street
Gilroy, California
95020-6197
Roland Velasco, Mayor
roland.velasco@cityofgilroy.org
City Hall Office (408) 846-0227
Cell Phone (408)710-8508
www.cityofgilroy.org
February 24, 2020
The Honorable Tani G. Cantil-Sakauye
Chief Justice
Supreme Court of California
State Capitol Building, Room 5100
Sacramento, CA 95814
RE: SB 54 SC AMICUS Request for support; Huntington Beach Appeal to
California Supreme Court
Dear Chief Justice Tani G. Cantil-Sakauye and the Associate Justices of the Supreme
Court of California,
Pursuant to Rule 8.500(g) of the California Rules of Court, the City of Gilroy hereby
urges the Court to grant the City of Huntington Beach’s Petition for Review in City of
Huntington Beach v. Xavier Becerra et al., Court of Appeal Case No. G057013.
The City of Gilroy is a Charter City, and its Charter has expressly reserved to the City of
Gilroy the full extent of the authority granted to Charter Cities under the California
Constitution. The issue presented is an important unsettled question of law that affects
the fundamental division of power between home rule Charter Cities and the State
Legislature.
The impact of the Court of Appeal’s Opinion in this case, applying the four-part test
articulated in Cal. Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 54 Cal. 3d 1
to a matter specifically enumerated and defined in Article XI, section 5, Subdivision (b)
as a Core Municipal Affair is not limited to whether the state law at issue in this case is
unenforceable against Charter Cities.
Despite the import of this Court’s analysis in Johnson v. Bradley (1992) 4 Cal. 4th 389,
decided a year after Cal. Fed. Savings & Loan Assn., which supports Petitioner’s
argument that the four-part test is inapplicable to a matter that clearly qualifies as a Core
Municipal Affair under Article XI, section 5, subdivision (b), the Courts of Appeal have
mechanistically applied the four-part test to a number of matters that are Core Municipal
6.B.a
Packet Pg. 18 Attachment: Huntington Beach Amicus Brief 2020 (2670 : Approval of Letter of Amicus Support for Huntington Beach Supreme Court Petition)
Affairs. See Jauregui v. City of Palmdale (2014) 226 Cal. App. 4th 781 (manner of city
election), and Marquez v. City of Long Beach (2019) 32 Cal. App. 5th 552 (city employee
compensation). The Court of Appeal’s Opinion in this case, similarly, necessarily erodes
the home rule authority of Charter Cities, and it will embolden the State Legislature to
increasingly encroach on Charter Cities’ exclusive home rule authority. However this
Court may decide the matter on the merits, review is necessary to provide clarity to the
lower courts, the State Legislature, and Charter Cities about the scope of Charter Cities’
home rule authority and the appropriate test to apply when a state law encroaches on a
matter expressly committed to Charter Cities in Article XI, section 5, subdivision (b).
Therefore, the City of Gilroy requests that this Court grant the Petition for Review.
The City of Gilroy appreciates your individual attention and work effort in bringing about
clarity regarding the borders of State and Local powers and jurisdictions. If you have any
questions regarding our stance on this matter please contact our City Administrator
Gabriel Gonzalez. Mr. Gonzalez can be reached at his office phone number of 408-846-
0202 or by his work e-mail address at gabe.gonzalez@cityofgilroy.org.
Sincerely,
Roland Velasco
Mayor, City of Gilroy
cc: Associate Justices of the Supreme Court of California,
Gilroy City Council Members:
Mayor Pro Tempore Cat Tucker
Council Member Dion Bracco
Council Member Fred Tovar
Council Member Peter Leroe-Muñoz
Council Member Marie Blankley
Council Member Carol Marques
League of California Cities Regional Public Affairs Manager Seth Miller
Cities Association of Santa Clara County Executive Director Andi Jordan
6.B.a
Packet Pg. 19 Attachment: Huntington Beach Amicus Brief 2020 (2670 : Approval of Letter of Amicus Support for Huntington Beach Supreme Court Petition)
City of Gilroy
Mayor’s Office
City Hall
7351 Rosanna Street
Gilroy, California
95020-6197
Roland Velasco, Mayor
roland.velasco@cityofgilroy.org
City Hall Office (408) 846-0227
Cell Phone (408)710-8508
www.cityofgilroy.org
March 2, 2020
The Honorable Tani G. Cantil-Sakauye
Chief Justice
Supreme Court of California
State Capitol Building, Room 5100
Sacramento, CA 95814
RE: SB 54 SC AMICUS Request for support; Huntington Beach Appeal to
California Supreme Court; SC #S260766
To the Honorable Chief Justice Tani G. Cantil-Sakauye and the Associate Justices of the
Supreme Court of California,
Pursuant to Rule 8.500(g) of the California Rules of Court, the City of Gilroy hereby
urges the Court to grant the City of Huntington Beach’s Petition for Review in City of
Huntington Beach v. Xavier Becerra et al., Court of Appeal Case No. G057013, which
was given a Supreme Court file #S260766.
The City of Gilroy is a Charter City, and its Charter has expressly reserved to the City of
Gilroy the full extent of the authority granted to Charter Cities under the California
Constitution. The issue presented is an important unsettled question of law that affects
the fundamental division of power between home rule Charter Cities and the State
Legislature.
The impact of the Court of Appeal’s Opinion in this case, applying the four-part test
articulated in Cal. Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 54 Cal. 3d 1
to a matter specifically enumerated and defined in Article XI, section 5, Subdivision (b)
as a Core Municipal Affair is not limited to whether the state law at issue in this case is
unenforceable against Charter Cities.
Despite the import of this Court’s analysis in Johnson v. Bradley (1992) 4 Cal. 4th 389,
decided a year after Cal. Fed. Savings & Loan Assn., which supports Petitioner’s
argument that the four-part test is inapplicable to a matter that clearly qualifies as a Core
Municipal Affair under Article XI, section 5, subdivision (b), the Courts of Appeal have
6.B.b
Packet Pg. 20 Attachment: Huntington Beach Amicus Brief 2020 (2670 : Approval of Letter of Amicus Support for Huntington Beach Supreme Court Petition)
mechanistically applied the four-part test to a number of matters that are Core Municipal
Affairs. See Jauregui v. City of Palmdale (2014) 226 Cal. App. 4th 781 (manner of city
election), and Marquez v. City of Long Beach (2019) 32 Cal. App. 5th 552 (city employee
compensation). The Court of Appeal’s Opinion in this case, similarly, necessarily erodes
the home rule authority of Charter Cities, and it will embolden the State Legislature to
increasingly encroach on Charter Cities’ exclusive home rule authority. However this
Court may decide the matter on the merits, review is necessary to provide clarity to the
lower courts, the State Legislature, and Charter Cities about the scope of Charter Cities’
home rule authority and the appropriate test to apply when a state law encroaches on a
matter expressly committed to Charter Cities in Article XI, section 5, subdivision (b).
Therefore, the City of Gilroy requests that this Court grant the Petition for Review.
The City of Gilroy appreciates your individual attention and work effort in bringing about
clarity regarding the borders of State and Local powers and jurisdictions. If you have any
questions regarding our stance on this matter please contact our City Administrator
Gabriel Gonzalez. Mr. Gonzalez can be reached at his office phone number of 408-846-
0202 or by his work e-mail address at gabe.gonzalez@cityofgilroy.org.
Sincerely,
Roland Velasco
Mayor, City of Gilroy
cc: Associate Justices of the Supreme Court of California,
Gilroy City Council Members:
Mayor Pro Tempore Cat Tucker
Council Member Dion Bracco
Council Member Fred Tovar
Council Member Peter Leroe-Muñoz
Council Member Marie Blankley
Council Member Carol Marques
League of California Cities Regional Public Affairs Manager Seth Miller
Cities Association of Santa Clara County Executive Director Andi Jordan
6.B.b
Packet Pg. 21 Attachment: Huntington Beach Amicus Brief 2020 (2670 : Approval of Letter of Amicus Support for Huntington Beach Supreme Court Petition)
City of Gilroy
STAFF REPORT
Agenda Item Title: Award a Contract to McKim Corporation in the Amount of $293,632
with a Contingency of $29,369 for the Construction of the 2020
Annual Sidewalk Gap Closure and Curb Ramp Improvements
Project, Project No. 20-PW -256
Meeting Date: March 2, 2020
From: Gabriel Gonzalez, City Administrator
Department: Public Works Department
Submitted By: Girum Awoke
Prepared By: Girum Awoke
Eric Argamaso
Strategic Plan Goals
☐ Fiscal Stability
☐ Downtown
Revitalization
☐ Economic
Development
☐ Neighborhood Services
Enhanced Public
Safety
☐ Workforce Stability ☐ Public Engagement
RECOMMENDATION
Approve a contract with McKim Corporation in the amount of $293,632 with a project
contingency of $29,369 for the construction of the 2020 Annual Sidewalk Gap Closure
and Curb Ramp Improvements Project, Project No. 20-PW -256, and authorize the City
Administrator to execute the contract and associated documents.
EXECUTIVE SUMMARY
The City receives Community Development Block Grant (CDBG) Program funds from
the U.S. Department of Housing and Urban Development (HUD). One of the eligible
activities that can be funded under Capital Improvements is curb ramp and sidewalk
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improvements within the Neighborhood Revitalization Strategy Area (NRSA). For this
reason, the 2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements Project,
Project No. 20-PW -256 (Project) was created. The Project will install new sidewalks in
areas that are lacking safe pedestrian facilities, and construct curb ramps that meet
Americans with Disabilities Act (ADA) compliance. The CDBG capital improvement
allocation for the Project was approved by City Council on February 24, 2020 after a 30-
day comment period.
Staff advertised the Project in the San Jose Mercury News and on the City’s website
receiving seven bids. Staff recommends awarding a contract to the lowest bidder,
McKim Corporation, to construct the Project. The Project will be funded through grant
money received from the CDBG Program, Fund 254.
BACKGROUND
The City is a designated “entitlement” jurisdiction participating in the U.S. Department of
Housing and Urban Development’s (HUD) Community Development Block Grant
(CDBG) Program. This classification as an “entitlement” jurisdiction allows the City to
receive an annual allocation of CDBG funds. The City is required to spend a minimum
amount of these funds each year. The City is also required to submit an Annual Action
Plan (Plan) which identifies specific projects/activities within that fiscal/program year.
Due to unforeseen changes to the Plan, Council approved a substantial amendment to
the Plan on February 24, 2020 to re-allocate unspent monies from prior years to be
spent by May 2, 2020. The Community Development Department and Public Works
Department staff collaborated to identify projects that qualify in the Neighborhood
Revitalization Strategy Area (NRSA), as defined by HUD to spend CDBG funds. Staff is
also working to ensure all CDBG requirements are met.
Staff identified areas within the NRSA and prioritized work for infrastructure
improvements based on the following criteria:
1. Sidewalk Gap Closures
2. Construction of new curb ramps
3. Upgrading existing curb ramps on streets to be resurfaced in upcoming projects
4. Upgrading all other existing curb ramps
Staff focused on a project that would provide improvements towards an enhanced safe
route to school for Eliot Elementary School, Glen View Elementary School, and South
Valley Middle School. Based on this criterion, staff selected to do three sidewalk gap
closures and 38 curb ramp improvements for the Project. The work consists of new
sidewalks in areas that are lacking safe pedestrian facilities, improving existing
sidewalks, and constructing ADA compliant curb ramps. The following are specific
locations of work:
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1. Installation of new sidewalk along east side of Chestnut Avenue from north
of Ninth street to Eighth street
2. Installation of new sidewalk along east side of Alexander Station street from
north of Ninth street to south of Eighth street
3. Installation of new sidewalk/improved sidewalk and curb ramps at the
intersection of Railroad street and Old Gilroy street
4. ADA curb ramp improvements at the following streets:
i. Murray street north of I.O.O.F (6 locations)
ii. Alexander Station and Chestnut from Old Gilroy to Lewis street (17
locations)
iii. Eighth street from Monterey to Hanna street (5 locations)
iv. Eighth street from Alexander Station to Chestnut (4 locations)
ANALYSIS
On January 24, 2020, staff advertised the Project in the San Jose Mercury News and on
the City’s website with a bid opening date of February 19, 2020. One addendum was
issued for this bid on February 10, 2020. Staff received seven bids for the Project. A
summary of the bid results is shown below:
RANK COMPANY NAME BASE BID
AMOUNT
BID ALTERNATIVE 1
AMOUNT
TOTAL BID
AMOUNT
1 McKim Corporation $211,794.25 $81,837.29 $293,631.54
2 Precision Grade, Inc. $292,542 $63,400 $355,942
3 Don Chapin Company $298,175 $64,025 $362,200
4 EF&S Concrete, Inc. $310,720 $67,780 $378,500
5 Villalobos & Associates $329,320 $73,680 $403,000
6 JJR Construction $339,175 $79,900 $419,075
7 FBD Vanguard
Construction $357,295 $96,140 $453,435
The lowest responsive bidder is McKim Corporation with a base bid of $211,794.25.
The Engineer’s Estimate for the base bid is $363,000.00, and bid alternative 1 is
$49,000.00. The lowest bid is 41.6% lower than the engineer’s estimate for the base bid
and 28.7% below total bid (base bid+alternate 1).
Staff recommends awarding the construction contract to McKim Corporation for the
following reasons:
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1. McKim Corporation is a local firm having previously worked on projects in the
City.
2. The Project is time-sensitive. The City needs to spend CDBG funds which could
result in sanctions from HUD for not utilizing funds in a timely manner.
3. Some curb ramp improvements are along streets that will be repaved later this
summer using SB-1 funding. Streets that are repaved are required to have their
associated curb ramps upgraded. The more curb ramps we can upgrade along
these streets in advance of the paving project, the less paving funds will need to
be spent on concrete work leaving more funding for the paving of our City
streets.
Staff anticipates construction of the Project beginning in early March 2020 with tentative
completion by the end of May 2020.
ALTERNATIVES
1. City Council can award the Base Bid and Bid Alternative 1 to McKim Corporation
in the amount of $293,631.54; This cost will be reimbursed through the CDBG
Program. Costs will be carried in Fund 254 until reimbursements are received.
STAFF RECOMMENDS THIS OPTION.
2. City Council can award only the Base Bid to Mckim Corporation in the amount of
$211,794.25 THIS IS NOT THE MOST OPTIMUM ALTERNATIVE as it is much
more efficient to perform these additional improvement s using the same
contractor.
3. City Council can choose to not award any contract and reject all bids. STAFF
DOES NOT RECOMMEND THIS OPTION because this will cause a delay in the
Project and potentially incur additional costs due to rebidding. This could also
result in sanctions from HUD for not utilizing funds in a timely manner. .
FISCAL IMPACT/FUNDING SOURCE
The City receives funding from the Community Development Block Grant (CDBG)
Program annually from the United States Department of Housing and Urban
Development (HUD). McKim Corporation’s base bid amount is $211,794.25, and their
bid alternative 1 amount is $81,837.29. Staff recommends awarding both the Base Bid
and Bid Alternative 1 (with a 10% contingency). Costs associated with the Project will
be offset by CDBG reimbursements. The costs will be borne by the CDBG Fund, Fund
254, until reimbursed. Currently there is insufficient fund balance to cover the project
costs. If approved, the costs will drive the fund balance to negative amounts, which is
not an uncommon practice with reimbursement funding sources. Once the
reimbursements are received, the fund balance will return to a positive balance.
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PUBLIC OUTREACH
Staff will mail out letters to the community and schools in the project area informing
them of when the Project work will commence. The majority of this work will be
completed near Elliot Elementary School with some improvements on EighthStreet near
Glen View Elementary School and Murray Avenue near South Valley Middle School.
Staff will reach out to these schools to notify them that construction may occur while
school is in session. Staff will be providing letters in both English and Spanish. This
information will also be provided on our social media through Express, Facebook,
Nextdoor, and E-mail Express to ensure the public is aware of the Project. The
contractor also will be notifying residents 10 days and 48 -hours in advance of
construction.
NEXT STEPS
Upon Council’s approval of this contract, the contract will be executed and Staff will
work with the contractor to develop a final construction schedule to begin construction in
March 2020.
Attachments:
1. 20-PW -256 Plans 2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements
2. CDBG Project Schedule (draft)
3. Agreement Package
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7.A.a
Packet Pg. 27 Attachment: 20-PW-256 Plans 2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements (2625 : Award Contract to McKim Corporation
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Packet Pg. 34 Attachment: 20-PW-256 Plans 2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements (2625 : Award Contract to McKim Corporation
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Packet Pg. 35 Attachment: 20-PW-256 Plans 2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements (2625 : Award Contract to McKim Corporation
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Packet Pg. 36 Attachment: 20-PW-256 Plans 2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements (2625 : Award Contract to McKim Corporation
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Packet Pg. 37 Attachment: 20-PW-256 Plans 2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements (2625 : Award Contract to McKim Corporation
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Packet Pg. 43 Attachment: 20-PW-256 Plans 2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements (2625 : Award Contract to McKim Corporation
IDTask ModeTask Name Duration Start Finish1Plans, Specifications, and Estimates44 daysTue 11/19/19Tue 1/28/202Different Design Options20 daysTue 11/19/19Thu 12/19/193CEQA24 daysThu 12/19/19Tue 1/28/204NEPA20 daysWed 12/18/19Tue 1/21/20599% PSE11 daysThu 12/19/19Wed 1/8/206Final PSE Review to Paul5 daysWed 1/8/20Wed 1/15/207100% PSE3 daysWed 1/15/20Tue 1/21/208Advertise and Award39 daysTue 1/21/20Mon 3/16/209Request Bid Opening Date and Bid Number5 daysTue 1/21/20Tue 1/28/2010Advertise Bid15 daysTue 1/28/20Tue 2/18/2011Addendum0 daysThu 2/6/20Thu 2/6/2012Open Bid1 dayWed 2/19/20Wed 2/19/2013Review bid1 dayThu 2/20/20Thu 2/20/2014Send out Notice of Intent to Award1 dayFri 2/21/20Fri 2/21/2015Protest Clock5 daysThu 2/20/20Wed 2/26/2016Contract Compliance7 daysFri 2/21/20Mon 3/2/2017Staff Report Draft10 daysTue 1/28/20Mon 2/10/2018Staff Report Review11 daysFri 2/14/20Mon 3/2/2019CC Award of Contract0 daysMon 3/2/20Mon 3/2/2020Notice to Proceed (NTP) Contract Package10 daysTue 3/3/20Mon 3/16/2021Construction42 daysMon 3/9/20Tue 5/5/2022Pre-con meeting1 dayMon 3/9/20Mon 3/9/2023First day of Construction1 dayTue 3/17/20Tue 3/17/2024Construction complete35 daysWed 3/18/20Tue 5/5/202/63/2101724181522295121926291623181522295121926310Nov '19Dec '19Jan '20Feb '20Mar '20Apr '20May '20TaskSplitMilestoneSummaryProject SummaryExternal TasksExternal MilestoneInactive TaskInactive MilestoneInactive SummaryManual TaskDuration-onlyManual Summary RollupManual SummaryStart-onlyFinish-onlyDeadlineCriticalCritical SplitProgressPage 1Project: CDBG Project Schedule 12Date: Tue 1/7/207.A.bPacket Pg. 44Attachment: CDBG Project Schedule (draft) (2625 : Award Contract to McKim Corporation Sidewalk Gap
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00500-30
Project No. 20-PW-256
SECTION 00500
AGREEMENT
2020 ANNUAL SIDEWALK GAP CLOSURE & CURB RAMP IMPROVEMENTS
PROJECT - PROJECT NO. 20-PW-256
THIS AGREEMENT, made this day of , 2020, by
and between the City of Gilroy, hereinafter called the “City,” and
hereinafter called the “Contractor.”
W I T N E S S E T H:
WHEREAS, the City has caused the Contract Documents to be prepared
comprised of bidding and contract requirements and technical specifications and drawings for the
construction of the 2020 ANNUAL SIDEWALK GAP CLOSURE & CURB RAMP
IMPROVEMENTS PROJECTs, Project No. 20-PW-256, as described therein, and
WHEREAS, the Contractor has offered to perform the proposed work in
accordance with the terms of the Contract Documents.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties herein contained and to be performed, the City and Contractor agree as follows:
Article 1. Work.
Contractor shall complete the Work as specified or indicated in the Contract Documents.
Article 2. Contract Time.
The Work shall be completed by the Contractor in accordance with the Contract Documents
within the time period required by Paragraph 00810-2.0, Time Allowed for Completion, subject
to extension as expressly provided in the Contract Documents.
Article 3. Liquidated Damages.
The city and the contractor recognize that the city will suffer substantial damages and
significant financial loss as a result of the contractor’s delays in performance of the work
described in the contract documents. The city and the contractor hereby acknowledge and
agree that the damages and financial loss sustained as a result of any such delays in
7.A.c
Packet Pg. 45 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00500-31
Project No. 20-PW-256
performance will be extremely difficult and impractical to ascertain. Therefore, the city
and contractor hereby agree that in the event of such delays in performance, the city shall
be entitled to compensation by way of liquidated damages (and not penalty) for the
detriment resulting therefrom in accordance with paragraph 00700-6.5, liquidated
damages, of the contract documents. The city and the contractor further agree that the
amounts designated as liquidated damages are a reasonable estimate of the city’s damages
and financial loss in the event of any such delays in performance considering all of the
circumstances existing as of the date of this agreement, including the relationship of such
amounts to the range of harm to the city which reasonably could be anticipated as of the
date of this agreement and the expectation that proof of actual damages would be
extremely difficult and impractical.
By initialing this paragraph below, the parties hereto signify their approval and consent to
the terms of this article 3.
________________________________ ________________________________
City’s Initials Contractors Initials
Article 4. Contract Price.
In consideration of the Contractors performance of the Work in accordance with the Contract
Documents, the City shall pay the Contract Price set forth in the Contract Documents.
Article 5. Contract Documents.
The Contract Documents which comprise the entire agreement between City and Contractor
concerning the Work consist of this Agreement (Section 00500 of the Contract Documents) and
the following, all of which are hereby incorporated into this Agreement by reference with the
same force and effect as if set forth in full.
Invitation to Bid
Instructions to Bidders
Bid Documents
Designation of Subcontractors
Bid Guaranty Bond
Agreement
Acknowledgements
Performance Bond
Payment Bond
General Conditions
Supplementary Conditions
General Requirements
Standard Specifications (Caltrans)
Technical Specifications
Drawings
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Packet Pg. 46 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00500-32
Project No. 20-PW-256
Addenda, if any
Executed Change Orders, if any
Maintenance Bond
Notice of Award
Notice to Proceed
Article 6. Miscellaneous.
Capitalized terms used in this Agreement which are defined in Section 01090, References, of the
Contract Documents will have the meanings set forth in Section 01090, References.
Contractor shall not assign any rights, obligations, duties or responsibilities under or interest in
the Contract Documents without the prior written consent of the City, which consent may be
withheld by the City in its sole discretion. No assignment by the Contractor of any rights,
obligations, duties or responsibilities under or interests in the Contract Documents will be
binding on the City without the prior written consent of the City (which consent may be withheld
in City’s sole discretion); and specifically but without limitation monies that may become due
and monies that are due may not be assigned without such consent (except to the extent that the
effect of this restriction may be limited by law), and unless specifically stated to the contrary in
any written consent to an assignment, executed by the City, no assignment will release or
discharge the assignor from any liability, duty, obligation, or responsibility under the Contract
Documents.
Subject to the foregoing, the Contract Documents shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns. Nothing contained in the
Contract Documents shall in any way constitute a personal obligation of or impose any personal
liability on any employees, officers, directors, agents or representatives of the City or its
successor and assigns.
In accordance with California Business and Professions Code Section 7030, the Contractor is
required by law to be licensed and regulated by the Contractors’ State License Board which has
jurisdiction to investigate complaints against Contractors if a complaint regarding a latent act or
omission is filed within four years of the date of the alleged violation. A complaint regarding a
latent act or omission pertaining to structural defects must be filed within 10 years of the date of
the alleged violation. Any questions concerning the Contractor may be referred to the Registrar,
Contractors’ State License Board, P.O. Box 26000, Sacramento, California 95826.
IN WITNESS WHEREOF, this agreement has been executed on this day
of , .
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Packet Pg. 47 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00500-33
Project No. 20-PW-256
Name of Contractor Signature of City
City Administrator
Signature of Contractor Title of Signator
_____________________
Title of Signator Approved as to form by
City Attorney
ATTEST: ATTEST:
Signature Signature
Title of Signator Title of Signator
***END OF SECTION***
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2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00610-34
Project No. 20-PW-256
SECTION 00610
FAITHFUL PERFORMANCE BOND
KNOW ALL PERSONS BY THESE PRESENTS, THAT, WHEREAS, City of
Gilroy, hereinafter designated the “City,” has, on , , awarded to,
hereinafter designated as the “Principal,” a Contract for the construction of
the , and
WHEREAS, said Principal is required under the terms of said Contract to furnish
a bond for the faithful performance of said Contract:
NOW, THEREFORE, WE, the Principal, and , as Surety, are held and firmly
bound unto the City the penal sum of
dollars ($ ) lawful money of the
United States, for the payment of which sum well and truly to be made, we bind ourselves, our
heirs, executors, administrators, and successors, jointly and severally, firmly by these presents.
THE CONDITION OF THIS OBLIGATION IS SUCH, that if the above bounden
Principal, it or its heirs, executors, administrators, successors, or assigns, shall in all things stand
to and abide by, and well and truly keep and faithfully perform the covenants, conditions, and
agreements in the said contract and any alterations made as therein provided, on it or their part to
be kept and performed, at the time and in the manner therein specified, and in all respects
according to their true intent and meaning, and shall indemnify and save harmless, the City, its
officers and agents as therein stipulated, then this obligation shall become null and void;
otherwise it shall be and remain in full force and virtue.
It is acknowledged that the Contract provides for a one-year warranty period,
during which time this bond remains in full force and effect.
And the said Surety, for value received, hereby stipulates and agrees that no
change, extension of time, alteration, or addition to the terms of the Contract or to the work to be
performed thereunder or the specifications accompanying the same shall, in any way, affect its
obligations on this bond, and it does hereby waive notice of any such change, extension of time,
alteration, or addition to the terms of the Contract or to the work or to the specifications. Said
Surety hereby waives the provisions of Sections 2819 and 2845 of the Civil Code of the State of
California.
IN WITNESS WHEREOF, the above bounden parties have executed this
instrument under their seals this day of , , the name and corporate seal of each corporate
party being hereto affixed and these presents duly signed by its undersigned representative,
pursuant to authority of its governing body.
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Packet Pg. 49 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00610-35
Project No. 20-PW-256
____________________________
Principal
(Seal)
Signature for Principal
Title of Signator
Surety
(Seal)
Signature for Surety
Title of Signator
***END OF SECTION***
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2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00620-36
Project No. 20-PW-256
SECTION 00620
PAYMENT BOND
KNOW ALL PERSONS BY THESE PRESENTS, THAT, WHEREAS, City of
Gilroy , hereinafter designated as the “City,” has, on , , awarded to
, hereinafter designated as the “Principal,” a Contract for the construction of the
and
WHEREAS, said Principal is required to furnish a bond in connection and with
said Contract, providing that if said Principal, or any of it or its subcontractors shall fail to pay
for any materials, provisions, or other supplies used in, upon, for, or about the performance of
the work contracted to be done, or for any work or labor done thereon of any kind, the Surety of
this bond will pay the same to the extent hereinafter set forth:
NOW, THEREFORE, we, the Principal, and , as Surety, are held and firmly
bound unto the City the penal sum of
Dollars ($ ) lawful money
of the United States, for the payment of which sum well and truly to be made, we bind ourselves,
our heirs, executors, administrators, and successors jointly and severally, firmly by these
presents.
The Payment Bond for which this Section provides shall secure the payment of
those persons or entities to whom the Principal, its Subcontractors or its heirs, executors,
administrators, successors, or assigns, shall be become legally indebted for labor, materials,
tools, equipment or services of any kind used or employed by the bidder in performing the work,
or taxes or amounts to be withheld thereon. The Surety or Sureties will pay the following
amounts should the Principal or a Subcontractor fail to pay the same, plus reasonable attorneys’
fees to be fixed by the court if suit is brought upon the bond: (1) amounts due to any of the
persons named in California Civil Code Section 3181; (2) amounts due under the Unemployment
Insurance Code with respect to work contracted to be done or any work or labor thereon of any
kind; and (3) any amounts required to be deducted, withheld, and paid over to the Employment
Development Department from the wages of employees of the Principal and Subcontractors
pursuant to Section 13020 of the Unemployment Insurance Code with respect to the work and
labor. This Payment Bond shall inure to the benefit of any of the persons named in Civil Code
Section 3181 so as to give a right of action to those persons or their assigns in any suit brought
upon this bond.
And the said Surety, for value received, hereby stipulates and agrees that no
change, extension of time, alteration, or addition of the terms of the Contract or to the work to be
performed thereunder or the specifications accompanying the same shall, in any way, affect its
obligations of this bond, and it does hereby waive notice of any change, extension of time,
alteration, or addition to the terms of the contract or to the work or to the specifications. Said
7.A.c
Packet Pg. 51 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00620-37
Project No. 20-PW-256
Surety hereby waives the provisions of Sections 2819 and 2845 of the Civil Code of the State of
California.
IN WITNESS WHEREOF, the above bounded parties have executed this
instrument under their seals this day of , , the name and
corporate seal of each corporate party being hereto affixed and these presents duly signed by its
undersigned representative, pursuant to authority of its governing body
___________________________________
Principal
(Seal) Signature for Principal Title
Surety
(Seal)
Signature for Surety Title
***END OF SECTION***
7.A.c
Packet Pg. 52 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00630-38
Project No. 20-PW-256
SECTION 00630
CERTIFICATE OF INSURANCE
Return Completed
Certificate to
City of Gilroy (Agency)
This certifies to the Agency that the following described policies have been issued to the Insured named below and are in force at this
time.
Insured
Address
Description of operations/locations/products insured (show contract name and/or number, if any):
POLICIES AND INSURERS Bodily LIMITS Property
Injury Damage
POLICY
NUMBER
EXPIRATION
DATE
Workers’ Compensation
(Name of Insurer)
(Best’s Rating)
Employers Liability
$
Check policy type:
COMPREHENSIVE
GENERAL
LIABILITY , or
COMMERCIAL GENERAL
LIABILITY .
(Name of Insurer)
(Best’s Rating)
“Claims Made” Occurrence
Each Each
Occurrence Occurrence
$ $__________
Aggregate Aggregate
$ $
or Combined Single Limit
$
Aggregate $
BUSINESS AUTO POLICY
Liability Coverage
Symbol
Each Person Each Accident
$ $ $
Each Accident
$
or, Combined Single Limit $
UMBRELLA LIABILITY
(Name of Insurer)
(Best’s Rating)
“Claims Made” Occurrence
Occurrence/Aggregate $
Self-Insured Retention
$
7.A.c
Packet Pg. 53 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00630-39
Project No. 20-PW-256
The following coverage or conditions are in effect:Yes No
The Agency, its officials, and employees are named on all liability policies described
above as insureds as respects: (a) activities performed for the Agency by or on behalf of
the Named Insured, (b) products and completed operations of the Named Insured, and (c)
premises owned, leased or used by the Named Insured.
Products and Completed Operations
The undersigned will mail to the Agency 30 days written notice of cancellation or
reduction of coverage or limits
Cross Liability Clause (or equivalent wording)
Personal Injury, Perils A, B and C
Broad Form Property Damage
X, C, U& Hazards included
Contractual Liability Coverage applying to this Contract
Liquor Liability
Coverage afforded the Agency, its officials, employees and volunteers as Insureds applies
as primary and not excess or contributing to any insurance issued in the name of the
Agency
Waiver of subrogation from Workers’ Compensation Insurer
This certificate is issued as a matter of information. This certificate is not an insurance policy and does not amend, extend or alter the
coverage afforded by the policies listed herein. Notwithstanding any requirement, term or condition of any contract or other document
with respect to which this certificate of insurance may be issued or may pertain, the insurance afforded by the policies described
herein is subject to all the terms, exclusions and conditions of such policies.
Agency or Brokerage Insurance Company
Address Home Office
Name of Person to be Contacted Authorized Signature Date
Telephone No.
Note: Authorized signatures may be the agent’s if the agent has placed insurance through an agency agreement with the
insurer. If insurance is brokered, authorized signature must be that of official of insurer.
7.A.c
Packet Pg. 54 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00630-40
Project No. 20-PW-256
GENERAL LIABILITY ENDORSEMENT
City of Gilroy (“the Agency”) 7351 Rosanna Street
Gilroy, CA 95020
Attn: Risk Manager
A. POLICY INFORMATION Endorsement No.
1. Insurance Company Policy No.
2. Policy Term (from) (to)
3. Named Insured
4. Address of Named Insured
5. Limit of Liability Any One Incident/Aggregate $
6. Deductible or Self-Insured Retention:
(Nil unless otherwise specified): $
7. Coverage is equivalent:
Comprehensive General Liability form GL0002 (Ed 1/73)
Comprehensive General Liability “occurrence” form CG0001
Comprehensive General Liability “claims-made” form CG0002.....................................................................
8. Bodily Injury and Property Damage Coverage is: “claims-made” - “occurrence”
if claims-made, the retroactive date is .
NOTE: The Agency’s standard insurance requirements specify “occurrence” coverage. “Claims-made” coverage requires
special approval.
B. POLICY AMENDMENTS
This endorsement is issued in consideration of the policy premium. Notwithstanding any inconsistent statement in the policy to which
this endorsement is attached or any other endorsement attached thereto, it is agreed as follows:
1. INSURED. The Agency, its elected and appointed officers, officials, employees and volunteers are
included as insureds with regards to damages and defense of claims arising from: (a) activities
performed by or on behalf of the Named Insured, (b) products and completed operations of the Named
Insured, or (c) premises owned, leased or used by the Named Insured.
2. CONTRIBUTION NOT REQUIRED. As respects: (a) work performed by the Named Insured for or
on behalf of the Agency; or (b) products sold by the Named Insured to the Agency; or (c) premises
leased by the Named Insured from the Agency, the insurance afforded by this policy shall be primary
insurance as respects the Agency, its elected or appointed officers, officials, employees or volunteers; or
stand in an unbroken chain of coverage excess of the Named Insured’s scheduled underlying primary
coverage. In either event, any other insurance maintained by the Agency, its elected or appointed
officers, officials, employees and volunteers shall be in excess of this insurance and shall not contribute
with it.
3. SCOPE OF COVERAGE. This coverage, if primary, affords coverage at least as broad as:
7.A.c
Packet Pg. 55 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00630-41
Project No. 20-PW-256
(1) Insurance Services Office form number GL 002 (Ed. 1/73), Comprehensive General Liability
Insurance and Insurance Services Office form number GL 0404 Broad Form comprehensive
General Liability endorsement: or
(2) Insurance Services Office Commercial General Liability Coverage, “occurrence” form CG 0001
or “claims-made” form CG 0002; or
(3) If excess, affords coverage which is at least as broad as the primary insurance forms referenced
in the preceding sections (1) and (2).
3. SEVERABILITY OF INTEREST. The insurance afforded by this policy applies separately to each
insured who is seeking coverage or against whom a claim is made or a suit is brought, except with
respects to the Company’s limit of liability.
4. PROVISIONS REGARDING THE INSURED’S DUTIES AFTER ACCIDENT OR LOSS. Any
failure to comply with reporting provisions of the policy shall not affect coverage provided to the
Agency, its elected or appointed officers, officials, employees or volunteers.
5. CANCELLATION NOTICE. The insurance afforded by this policy shall not be suspended, voided,
cancelled, reduced in coverage or in limits except after thirty (30) days prior written notice by certified
mail return receipt requested has been given to the Agency. Such notice shall be addressed as shown in
the heading of this endorsement.
C. INCIDENT AND CLAIM REPORTING PROCEDURE
Incidents and claims are to be reported to the insurer at:
ATTN:
(Title) (Department)
(Company)
(Address)
(Telephone)
D. SIGNATURE OF INSURER OR AUTHORIZED REPRESENTATIVE OF THE INSURER
I, (print/type name), warrant that I have authority to bind the below listed insurance company and
by my signature hereon do so bind this company.
SIGNATURE OF AUTHORIZED REPRESENTATIVE
(original signature required on endorsement furnished to the Agency)
ORGANIZATION TITLE
ADDRESS TELEPHONE
7.A.c
Packet Pg. 56 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements -42
Project No. 20-PW-256
WORKER’S COMPENSATION/EMPLOYERS LIABILITY ENDORSEMENT
The City of Gilroy (“the Agency”)
7351 Rosanna Street
Gilroy, CA 95020
Attn: Risk Manager
A. POLICY INFORMATION Endorsement #
1. Insurance Company (“the Company”)
Policy Number
2. Effective Date of This Endorsement
3. Named Insured
4. Employer’s Liability Limit (Coverage B)
B. POLICY AMENDMENTS
In consideration of the policy premium and notwithstanding any inconsistent statement in the policy to which this
endorsement is attached or any other endorsement attached thereto, it is agreed as follows:
1.Cancellation Notice. The insurance afforded by this policy shall not be suspended,
voided, cancelled, reduced in coverage or in limits except after thirty (30) days prior
written notice by certified mail return receipt requested has been given to the Agency.
Such notice shall be addressed as shown in the heading of this endorsement.
2.Waiver of Subrogation. The Insurance Company agrees to waive all rights of
subrogation against the Agency, its elected or appointed officers, officials, agents and
employees for losses paid under the terms of this policy which arise from work
performed by the Named Insured for the Agency.
C. SIGNATURE OF INSURER OR AUTHORIZED REPRESENTATIVE OF THE INSURER
I, (print/type name), warrant that I have authority to bind the below listed
insurance company and by my signature hereon do so bind this company.
SIGNATURE OF AUTHORIZED REPRESENTATIVE
(original signature required on endorsement furnished to the
Agency)
ORGANIZATION TITLE
ADDRESS TELEPHONE
***END OF SECTION***
7.A.c
Packet Pg. 57 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00650-43
Project No. 20-PW-256
SECTION 00650
WORKERS’ COMPENSATION INSURANCE CERTIFICATE
In accordance with California Labor Code Section 1861, prior to commencement of work on the
Contract, the Contractor shall sign and file with the City the following certification:
“I am aware of the provisions of Section 3700 of the Labor Code which require every
employer to be insured against liability for workers’ compensation or to undertake self-
insurance in accordance with the provisions of that code, and I will comply with such
provisions before commencing the performance of the work of this contract.”
Signature
Name of Contractor
Title
Date
***END OF SECTION***
7.A.c
Packet Pg. 58 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
2020 Annual Sidewalk Gap Closure & Curb Ramp Improvements SECTION 00670-44
Project No. 20-PW-256
SECTION 00670
NOTICE OF NONDISCRIMINATION IN EMPLOYMENT
The undersigned contractor will not discriminate against any employee or applicant for
employment because of race, color, religion, sex, age, marital status or national origin. The
Contractor will take affirmative action to ensure that applicants are employed, and that
employees are treated during employment, without regard to their race, color, religion, sex, age,
marital status or national origin. Such action shall include, but not be limited to, the following:
Employment, upgrading, demotion, or transfer, recruitment advertising; layoff or termination;
rates of pay, or other forms of compensation; and selection for training, including apprenticeship.
The contractor agrees to post in conspicuous places, available to employees and applicants for
employment notice to be provided by the municipality setting forth the provisions of this
nondiscrimination clause.
Date Licensed General Contractor
Company License #
***POST IN CONSPICUOUS PLACE OF EMPLOYMENT***
***END OF SECTION***
7.A.c
Packet Pg. 59 Attachment: Agreement Package (2625 : Award Contract to McKim Corporation Sidewalk Gap Closure)
City of Gilroy
STAFF REPORT
Agenda Item Title: Consideration of the Appointment of an Interim City Administrator
or an Acting City Administrator Effective March 13, 2020
Meeting Date: March 2, 2020
From: Gabriel Gonzalez, City Administrator
Department: City Clerk
Submitted By: Shawna Freels
Prepared By: Roland Velasco
Shawna Freels
Strategic Plan Goals
☐ Fiscal Stability
☐ Downtown
Revitalization
☐ Economic
Development
☐ Neighborhood Services
☐ Enhanced Public
Safety
☐ W orkforce Stability ☐ Public Engagement
RECOMMENDATION
a) Appoint an Interim City Administrator or an Acting City Administrator effective
March 13, 2020.
b) Consideration of the formation of a Council Ad-hoc Committee to address Interim
City Administrator salary and employment agreement.
BACKGROUND
City Administrator Gabriel Gonzalez has resigned effective March 13, 2020. At the
opening of the March 2, 2020 meeting in closed session the City Council will interview
internal candidates to fill the vacancy for a temporary period, while a transition plan to fill
the position permanently is developed.
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At the conclusion of these interviews, in open session, the Council will then have the
opportunity to appoint an Interim City Administrator, subject to the approval of an
employment agreement to be approved at the March 16, 2020 regular meeting.
Alternatively, the Council may appoint an Acting City Administrator effective March 13,
2020 until the item is re-addressed at the March 16, 2020 regular meeting.
The Council may also wish to form a Council Ad-hoc Committee to address salary and
negotiations of an employment agreement.
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Packet Pg. 61
City of Gilroy
STAFF REPORT
Agenda Item Title: Approval of the Updated City of Gilroy Travel and Expense Policy
Meeting Date: March 2, 2020
From: Gabriel Gonzalez, City Administrator
Department: Finance Department
Submitted By: Jimmy Forbis
Prepared By: Jimmy Forbis
Bryce Atkins
Strategic Plan Goals
Fiscal Stability
☐ Downtown
Revitalization
☐ Economic
Development
☐ Neighborhood Services
☐ Enhanced Public
Safety
☐ Workforce Stability ☐ Public Engagement
RECOMMENDATION
Approve the updated City of Gilroy Travel and Expense Policy.
BACKGROUND
At the City Council Study Session on February 10, 2020, staff presented to Council the
draft updated travel policy for Council comment and direction. After the presentation,
there were no additional questions nor direction to make changes to the draft policy
update. Staff has prepared this report for Council approval of the updated travel policy.
ANALYSIS
Attached to this staff report is the staff report presented on February 10, 2020, which
contains the background and analysis regarding the proposed changes. The only
10.B
Packet Pg. 62
changes made since the version presented at the February 10 th meeting is the addition
of the last revised date in the header of the document.
ALTERNATIVES
Council may:
1. Adopt the proposed policy update. Recommended. Staff has worked to update
the policy with best practices and changes that meet the operational needs and
efficiencies of the City.
2. Modify or reject the proposed policy update. Not recommended. If rejected, the
current policy will remain in effect, and the efficiencies and best practices will
remain unrealized. If modified, additional time will be required to consider the
proposed modifications and its impact to other provisions within the draft policy.
FISCAL IMPACT/FUNDING SOURCE
None. The policy establishes procedural requirements and guidelines for costs related
to travel, but does not establish nor modify appropriations apart from those adopted by
the City Council in the operating budget of the City.
Attachments:
1. Travel and Expense Policy (Updated March 2, 2020)
2. Travel Policy Introduction Staff Report - February 10, 2020
10.B
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Page 1 of 12
CITY OF GILROY TRAVEL AND MEETING EXPENSE POLICY
Expense and Use of Public Resources
Originally Adopted by City Council on November 6, 2006
Last Revised on March 2, 2020
FINDINGS
Whereas, the City of Gilroy (the “City”) takes its stewardship over the use of its limited
public resources seriously; and,
Whereas, public resources should only be used when there is a substantial benefit to
the City. W hereas, such benefits include:
1. The opportunity to discuss the community’s concerns with state and federal officials;
2. Participating in regional, state and national organizations whose activities affect
the City’s interest;
3. Attending educational seminars designed to improve officials’ and employees’
skill and information levels; and
4. Promoting public service and morale by recognizing such service; and,
Whereas, legislative and other regional, state and federal agency business is frequently
conducted over meals. Sharing a meal with regional, state and federal officials is frequently
the best opportunity for a more extensive, focused and uninterrupted communication about
the City’s policy concerns; and,
Whereas, each meal expenditure must comply with the limits and reporting requirements
of local, state and federal law; and,
Whereas, this Policy provides guidance to elected and appointed officials (officials) and
employees on the use and expenditure of City resources, as well as the standards against
which those expenditures will be measured; and,
Whereas, this Policy satisfies the requirements of Government Code section 53232.2;
and,
Whereas, this Policy supplements the definition of actual and necessary expenses for
purposes of state laws relating to permissible uses of public resources; and,
Whereas, this Policy also supplements the definition of necessary and reasonable
expenses for purposes of federal and state income tax laws; and,
Whereas, this Policy also applies to any related charges made to a City credit card, cash
advances or other line of credit; and,
Whereas, this Policy complies with AB 1234.
AUTHORIZED EXPENSES
City funds, equipment, supplies (including letterhead), titles, and staff time must only be used
for authorized City business. Expenses incurred in connection with the following types of
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Page 2 of 12
activities generally constitute authorized expenses, as long as the other requirements of this
Policy are met. Effective and efficient implementation of these guidelines requires that
employees and Department Heads use sound and reasonable judgment in the expenditure of
City funds.
1. Communicating with representatives of regional, state and national government on
City adopted policy positions;
2. Participating in regional, state and national organizations whose activities affect
the City’s interests;
3. Attending educational seminars, conferences, training, conventions and other
functions designed to improve officials’ and employees’ skill and information
levels;
4. Attending City events;
5. Implementing a Cit y approved strategy for attracting or retaining businesses to the
Cit y, which will typically involve at least one staff member;
6. Attending business meetings, functions of local civic or community organizations
where there is a clear nexus between the event and City employee duty, i.e. not
purely social events;
7. Events where the City is a formal sponsor or participant, in performance of official
duties for the City, and when acting as an official City representative; or
8. Serving on professional organization or governmental committees, boards or task
forces.
All other expenditures require prior approval by the City governing body, including
international travel.
Examples of personal expenses that the City will not reimburse include, but are not limited to:
1. The personal portion of any trip (i.e. dry cleaning, laundry, etc.);
2. Political or charitable contributions or events;
3. Family expenses, including partner’s expenses when accompanying official or
employee on agency-related business, as well as children - or pet-related expenses;
4. Entertainment expenses, including theater, movies (either in-room or at the
theater), video games, sporting events (including gym, massage and/or golf related
expenses), or other cultural events;
5. Non-mileage personal automobile expenses, including repairs, traffic citations,
insurance or gasoline;
6. Personal losses incurred while on City business; and
7. Inaccurate receipts that are greater than the approvable cost of the item.
10.B.a
Packet Pg. 65 Attachment: Travel and Expense Policy (Updated March 2, 2020) (2657 : Travel Policy Update Adoption)
Page 3 of 12
Any questions regarding the propriety of a particular type of expense should be resolved by
the approving authority before the expense is incurred.
REIM BURSEMENTS FOR MEETINGS
General
Consistent with this Policy, expenses will be advanced and/or reimbursed for meals, lodging,
travel and expenses, utilizing the Cit y of Gilroy Travel and Expense Request Form.
Meetings and Service Subject To Reimbursements
To be entitled to payment under this Policy, the event in question must constitute one of the
following:
1. A meeting of the City Council within the meaning of Government Code section
54952.2(a);
2. A meeting of a City committee/board/commission or a meeting for Cit y staff within the
meaning of Government Code section 54952(b);
3. An advisory bod y meeting within the meaning of Government Code section 54952(b);
4. A conference or organized educational activit y conducted in compliance with
Government Code section 54952.2(c), including ethics training required b y
Government Code sections 53234 and following;
5. A meeting of any multi-jurisdictional governmental body on which a City
Councilmember serves as the City’s designated representative;
6. Any meeting attended or service provided on a given day at the formal request of the
City Council and for which the City Council approves payment;
7. Business meetings, functions of local civic or community organizations where there is a
clear nexus between the event and City employee duty, i.e. not purely social events;
8. Events where the City is a formal sponsor or participant, in performance of official
duties for the City, and when acting as an official City representative; or,
9. Meetings of a professional organization or governmental committees, boards or task
forces where an employee or official serves as a member of such a body.
COST CONTROL
To conserve City resources and keep expenses within community standards for public officials
and employees, expenditures should adhere to the following guidelines. In the event that
expenses are incurred which exceed these guidelines, the cost borne or reimbursed by the
City will be limited to the costs that fall within the guidelines.
P.O.S.T. (Officers Standards and Training)
10.B.a
Packet Pg. 66 Attachment: Travel and Expense Policy (Updated March 2, 2020) (2657 : Travel Policy Update Adoption)
Page 4 of 12
Police employees will be reimbursed under P.O.S.T. guidelines when eligible.
Transportation
The most economical mode and class of transportation reasonably consistent with
scheduling needs and cargo space requirements must be used, using the most direct and
time-efficient route. Government and group rates must be used when available.
When planning the transportation portion of a trip, the employee shall consider all aspects of
cost to the City including daily expenses, overtime, lost work time as well as actual
transportation costs. If an employee elects to use a mode of transportation other than the
most economical, the City will pay only the cost of the least expensive mode. The difference
in cost will be borne by the employee. No overtime or compensatory time off is granted for
attendance or travel to out-of-town functions other than that mandated by Federal Fair Labor
Standards Act requirements and/or approved Memoranda of Understanding. Overtime in
connection with travel on City business requires authorization from the Department Director.
The City will not pay for any additional costs related to the extension of stay beyond what is
required for business-related purposes (except due to travel restrictions caused by inclement
weather, lack of available transportation, or similar reasons), unless pre-approved by the
employee’s supervisor, Department Director, and City Administrator. If an employee extends
his/her stay beyond the business-related purpose, during normal work hours, the employee
must charge the time to his/her available leave balance.
Automobile
General
When two or more employees are traveling by vehicle, the employees should make every
effort to travel together. The City will pay all expenses, such as bridge tolls and parking fees,
incurred as the result of an employee’s authorized use of a vehicle while traveling on City
business. Employees requesting reimbursement for the payment of such expenses shall
obtain receipts and submit them with their reimbursement request. To drive a City or privately-
owned vehicle on City business an employee must possess a valid California driver’s license.
A driver of a privately-owned vehicle must also carry adequate liability insurance coverage,
and be responsible for any damage, service, or repair to the car occurring on the trip, as these
costs are included in the City’s per mile cost reimbursement.
City Vehicles
Use of City pool vehicles is encouraged if deemed the most economical mode of transportation
and no other family member or non-City employee will be accompanying the official or
employee. See attached City of Gilroy Use of City-Owned Vehicles Policy for additional
details. An employee who has been assigned a City vehicle on a full-time basis should use
that vehicle for business travel (except when air travel is the least costly mode of
transportation) and may not request compensation for the use of a private vehicle.
Personal Vehicles
Automobile mileage for use of a personal vehicle is reimbursed at Internal Revenue Service
10.B.a
Packet Pg. 67 Attachment: Travel and Expense Policy (Updated March 2, 2020) (2657 : Travel Policy Update Adoption)
Page 5 of 12
(“IRS”) rates presently in effect (see www.irs.gov ). These rates are designed to compensate
the driver for gasoline, insurance, maintenance, and other expenses associated with operating
the vehicle. This amount does not include bridge and road tolls, which are also approvable.
The IRS rates will not be paid for rental vehicles; only receipted fuel expenses and the rental
car cost will be reimbursed.
If an official or employee elects to use a personal vehicle, the mileage will only be reimbursed
up to the most economical mode of transportation cost (i.e. if a flight and shuttle/rental car
would be less than the cost of reimbursement for mileage cost, they would be reimbursed for
the lesser amount.)
Employees who receive a car allowance shall, as a condition for receipt of this allowance,
utilize their private vehicles for all City-related business and activities taking place within a 40
mile radius from Gilroy City Hall. Officials receiving auto allowance may claim mileage
reimbursement for City related business activities only for miles in excess of the 40 mile radius
from Gilroy City Hall in accord with the published IRS mileage rate.
Rental Vehicles
The use of rental vehicles is generally prohibited under this travel policy. However, special
exceptions may be recommended by department heads, and must be approved by the City
Administrator in order to be paid for, or reimbursed, by the City.
Ai rfare
Economy class airfares are presumed to be the most economical and reasonable for the
purposes of this Policy. City officials and employees on official business are prohibited from
traveling by private non-scheduled airplane unless a waiver of all claims for death and injury is
first executed to the satisfaction of the City Attorney and City Risk Manager. Travelers are
encouraged to make air reservations as early as feasible to obtain the greatest discount and to
consider the use of alternate but nearby airports to take advantage of the lowest fares.
Extension of the trip to cover a weekend stay to obtain a lower airfare does not entitle the
traveler to be reimbursed for the extra day's hotel costs or meal expenses. Travelers that
choose to use their personal frequent flyer miles for City business shall not be reimbursed for
the value of the tickets. If the airline charges for all checked baggage, the City will cover the
cost for one checked bag only. Excess baggage charges are not approvable. Upgrades of any
kind shall not be reimbursed, including early boarding. If a trip is cancelled and the employee
receives credit for the value of the airfare, the employee should use that credit for future
business travel. If the credit is used for personal travel, the employee should reimburse the City
for that amount. All cancelled trips must be reported.
Airport Parking
Long-term parking must be used for travel exceeding 24 hours. Transportation to/from airports,
bus or train stations will be reimbursed for either actual mileage if a personal vehicle is used or
for reasonable taxi fare, airport shuttle, van or other public transportation. If a personal vehicle
is left at the airport for more than one day, parking will be reimbursed per day based on long-
term parking rates or other transportation fare to/from the airport, whichever is lower. Parking
at the short-term rate will not be reimbursed for more than one day.
10.B.a
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Taxis/Shuttles/Trains/Other Mass Transit
Employees shall be compensated for train or other mass transit fares and fees provided
that it is the most logical and least expensive method of travel. Supplementary
transportation within the destination city shall be accomplished by hotel courtesy buses,
local shuttle services or public transportation, if available and logical. Taxi or car service
shall be used only when no other convenient, less costly mode of transportation is
available. Taxi or shuttle fares may be reimbursed, including a 15 percent gratuity per fare,
when the cost of such fares is equal or less than the cost of car rentals, gasoline and
parking combined, or when such transportation is necessary for time-efficiency.
Lodging
Lodging expenses will be reimbursed or paid for when travel on official City business (including
hotel parking fees) is greater than 50 miles from Gilroy City Hall or the employee’s residence,
or less if the travel reasonably requires an overnight stay at the discretion of the employee’s
Department Head, or the City Administrator in the case that the traveling employee is a
Department Head or appointed official. If multiple officials/employees are attending, room
sharing is not required.
Some hotels provide exemptions from transient occupancy tax for government employees.
Employees should request exemption for hotel transient occupancy taxes if applicable. No
reimbursement will be made when lodging is at a family/friend’s residence. Lodging expenses
will be limited to single occupant room rates. Travelers shall select single occupancy,
standard, non-deluxe accommodations and should stay at hotels offering economical lodging
rates. Unless authorized by the approving authority, fees to travel agents and travel agencies
will not be reimbursed for in-state, out-of-state travel, and international travel.
Conferences/Meetings
If such lodging is in connection with a conference, lodging expenses must not exceed the
group rate published by the conference sponsor for the meeting in question if such rates are
available at the time of booking. If the group rate is not available, see next section.
Other Lodging
Travelers must request government rates, when available. Lodging rates that are equal to or
less than government rates are presumed to be reasonable and hence approvable for purposes
of this Policy.
In the event that government rates are not available at a given time or in a given area, lodging
rates that do not exceed the median retail price for lodging for that area listed on travel websites
or an equivalent service shall be considered reasonable and hence approvable. The employee
must make an effort to obtain lodging at or near the facility where business-related activity is to
take place in order to minimize travel time and transportation costs. If an employee registers
too late to receive the discounted rate ordinarily offered for business-related activity, the
employee will make every effort to find accommodations near the location of the business-
related activity at a rate similar to the discounted rate.
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Meals
Conference and Overnight Travel Meals
The City will provide a per diem (“per day”) allowance for meals and incidentals to employees
who travel overnight for official City business. Travelers will receive a flat rate for meals and
will not be required to submit receipts. If travelers use a City Purchase Card to pay for meals,
it negates the per diem. The per diem rate varies and is dependent on the destination of
travel. The rates for the various travel destinations are available on the U.S. General Services
Administration website (http://www.gsa.gov/portal/content/104877) (these amounts are subject
to change every year).
Each city has a dollar value for the full day depending on the relative cost of meals in that
jurisdiction. When meals are provided as part of the cost of an event, that meal will be
deducted from the full day per diem rate. For days requiring transportation to and from the
location (i.e. departure day and return day), the meals allowed shall be reduced based on the
time of departure and return. If departure happens after 8:30 am, no breakfast is provided. If
after 1:30 pm, no lunch is provided. If return time is before 12:30 pm, then no lunch or dinner
is provided. If the return time is before 6:30 pm, no dinner is provided. Meals provided on days
of travel shall be deducted at full-value.
Local and One-Day Travel Meals
Local and one-day travel meals shall be reimbursed, as opposed to advanced via per diem
rates. Reimbursement for meals will be allowed only where the employee is attending a
seminar or conference as a representative of the City for a specific purpose, or where the
employee ’s attendance will directly benefit the City. No reimbursement will be allowed for
meetings that are of a social nature. Meal expenses and associated gratuities should be
moderate, taking into account community standards and the prevailing restaurant costs of the
area. These reimbursements shall not exceed the rates specified in the Internal Revenue
Service guidelines. See Government Code section 53232.2(c) and Publication 1542 at
www.irs.gov or www.policyworks.gov/perdiem.
The City will not pay for alcohol/bar expenses. Additionally, snacks, sodas, or water outside of
a meeting or meal are not approvable.
For group meal events organized b y others (for example, business meetings and other types
of activities that fall within the list of “authorized expenditures” above), the City recognizes that
the per person cost may exceed these maximums. Additionally, it is sometimes appropriate to
conduct City business with non-employees, such as consultants, oral board participants,
prospective businesses, etc., whereb y expenses will be incurred for food, beverage, taxes, tip,
etc. Actual amounts will be reimbursed with prior approval from the Department Head and/or
Cit y Administrator.
Meals will be reimbursed for a staff working breakfast, lunch, or dinner whether for an outside
meeting or held within a City of Gilroy facility or Gilroy dining establishment and approved by a
Department Head or City Administrator.
In addition, employees have the option of using a City credit card for meal expenses, which
10.B.a
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will be for the actual amount plus tip, and must be within the established limits as noted above.
Telephone/Fax/Cellular
Officials and employees will be reimbursed for actual telephone and fax expenses incurred on
City business.
Other
Baggage handling fees of up to $1 per bag and gratuities (when not associated with a per
diem amount) of up to 15 percent will be reimbursed. Expenses for which City officials and
employees receive reimbursement from another agency are not approvable. Other incidental
expenses related to City business (e.g. fax, tolls, parking fees, internet access, public
transportation) will be reimbursed at cost as supported by submitted receipts. Personal
expenses such as shoe shine, in-room entertainment, personal phone calls, traffic fines,
excess baggage charges, etc. will not be paid by the City. Laundry services are generally not
eligible for reimbursement. On a case-by-case basis, when an extended business trip extends
over seven (7) or more calendar days and the employee is required to conduct City business
in excess of five (5) days, reasonable laundry expenses may be reimbursed for necessary
business clothing.
Travel Time
An employee will be allowed travel time during work hours in excess of normal commute time.
If a non-exempt employee is required to travel beyond the normal work hours, they may be
entitled to overtime.
CREDIT CARD USE POLICY
City officials and employees may use City credit cards for such purposes as airline tickets
and hotel reservations by following the same procedures for cash advances. Receipts
documenting expenses incurred on the City credit card and compliance with this Policy must
be submitted within five business days of use. All other requirements and policies in effect
regarding purchasing and use of City credit cards apply.
City credit cards may not be used for personal expenses, even if the official or employee
subsequently reimburses the City. Utilizing a City credit card for meals will negate the per diem
advance per the meal discussion above.
Non-Attendance at Meeting/Conference
If an official or employee has registered for a conference or meeting and either determines that
they are unable to attend or do not attend, they will be responsible for all expenses that are
charged to the City of Gilroy that were not able to be refunded. Exceptions to this section of
the policy will be at the discretion of the employee’s Department Head.
APPROVAL AUTHORITY
No individual may authorize his/her own travel. Employee travel requests must be approved
by their supervisor or Department Head. Department Head travel shall be approved by the
City Administrator or designee and the City Administrator’s travel shall be approved by the
10.B.a
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Finance Director or designee. Councilmember travel shall be approved by the City Council.
Board, commission and/or committee member travel shall be limited to the budget that
Council has assigned for their advisory body, allocated by the staff liaison in cooperation with
the Chairperson of the advisory body, and approved by the respective commission and/or
committee.
Approval must be secured from appropriate approval authority before reimbursement will be
made.
Officials and employees must substantiate all expenses, excepting per diem advances. If an
official or employee receives an advance for an expense and fails to substantiate the
expense, such official or employee must return the advance to the City. The following
constitutes “substantiate” for the purpose of this policy: Within 30 days after the expense is
incurred, the official or employee shall submit to the City all receipts and other documentary
evidence substantiating the time, place, amount, and business connection of the expenditure.
Excepting the portion of an advance made to an employee as a per diem allowance (that
does not exceed the per diem rates of the federal government), an official or employee shall
return to the City, within 30 days upon return to work (or within 120 days after the expense
was incurred, whichever is earlier), any amount of an advance that is in excess of the actual
expense incurred. For example, if an employee receives an advance from the City of $100 to
cover the cost of attending a seminar and the actual cost turns out to be $95, such employee
shall return to the City the excess $5 within 30 days upon return to work.
AUDITS OF EXPENSE REPORTS
All expenses are subject to verification that they comply with this Policy. Requirements for
documentation and processing of travel and expense requests shall be at the discretion of the
Finance Department, approved by the City Administrator.
REPORTS TO GOVERNING BOARD
At the following City governing body meeting, each official shall briefly report on any meetings
attended for which reimbursement was paid.
If multiple officials attended, a joint report may be made. The report may be made orally or in
writing.
COM PLIANCE WITH LAWS
City officials should keep in mind that some expenditures may be subject to reporting under
the Political Reform Act and other laws. All agency expenditures are public records subject to
disclosure under the Public Records Act and other laws.
VIOLATION OF THIS POLICY
Under state law, use of public resources or falsifying Reimbursement Request Forms in
violation of this Policy may result in any or all of the following: 1) loss of reimbursement
privileges, 2) a demand for restitution to the City, 3) the agency’s reporting the expenses as
income to the elected or appointed official or employee to state and federal tax authorities
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(may result in additional tax liabilities), 4) civil penalties of up to $1,000 per day and three
times the value of the resources used, 5) prosecution for misuse of public resources, and 6)
discipline up to and including termination for employees.
The Travel and Expense Request Form shall include the above paragraph as an advisory on
each form.
If there are any questions regarding this Policy, contact your Department Head. If any
clarification is needed, they will discuss the issue with the Finance Director.
10.B.a
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CITY OF GILROY
USE OF CITY-OWNED VEHICLES POLICY
Revised 9-20-2006
The City of Gilro y provides vehicles to a few City emplo yees for the conducting of Cit y business. The
following are the Cit y policies in regards to such use.
1. In certain cases an employee is assigned a vehicle in the performance of his or her dail y dut y. The
vehicle is not to be used for personal purposes, including the commute to and from home.
2. In other cases, employees are, from time to time, directed to take a City-owned vehicle home with
them for use in case of emergency call outs. Such vehicles would include all police vehicles,
marked fire vehicles, and specialized utility repair trucks. Such vehicles are not to be used for
personal use except as required in order to take the vehicle to the emplo yee’s home and minimum
personal use en route.
Employees on “on-call duty” may take City vehicles home with the Department Head’s approval,
if the employee lives within the Gilroy General Plan area. Excluded from this need for
Department Head approval or living within the Gilroy General Plan area are the detectives and
current Police Department Communications Supervisor.
Use of Police and Fire vehicles for personal use other than commuting, when required in order to
allow the employee to respond at an y time in performance of Cit y business, will be addressed by
separate policy.
In some cases, employees would be allowed to take a City-owned vehicle home if that would be
the most economical way to start a trip to a conference or meeting.
3. Some specified employees are permitted to use a City-owned vehicle to commute to and from
their home and their worksite. Such vehicles are expressl y not to be used for personal purposes
other than commuting or minimum personal use (such as a stop for a personal errand on the way
between the employee’s home and worksite).
In compliance with regulations of the Internal Revenue Service (“IRS”), use of a Cit y-owned
vehicle by an employee only for commuting and minimal personal purposes will be reported to the
IRS as a taxable fringe benefit at the current rate per one-way trip for such use or by an amount
determined by actual mileage calculation. In the latter case, the employee must keep an up-to-date
monthly mileage record in his or her vehicle, and the employee’s W-2 form will reflect the actual
mileage of personal use multiplied by the IRS-approved rate per mile. The current one-way trip
rate and IRS mileage allowance figures are available from Human Resources.
In reporting this taxable fringe benefit to the IRS, the City will:
a. Once the method of calculation (per trip or per mile) is agreed upon with an employee, that
method of calculation (per trip or per mile) will be used for that employee for the entire tax
year. In the City of Gilroy, the tax year includes monthly paychecks received December 1
through November 30.
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b. The City will not withhold taxes on the vehicle use benefit. The value for the able use will be
included annually in gross income on the employee’s W-2 form, without an increase in
withholding.
10.B.a
Packet Pg. 75 Attachment: Travel and Expense Policy (Updated March 2, 2020) (2657 : Travel Policy Update Adoption)
City of Gilroy
STAFF REPORT
Agenda Item Title: Introduction of the Draft Travel and Expense Policy Update
Meeting Date: February 10, 2020
From: Gabriel Gonzalez, City Administrator
Department: Finance Department
Submitted By: Jimmy Forbis
Prepared By: Jimmy Forbis
Bryce Atkins
Strategic Plan Goals
Fiscal Stability
☐ Downtown
Revitalization ☐ Economic
Development
☐ Neighborhood Services
☐ Enhanced Public
Safety
☐ Workforce Stability ☐ Public Engagement
RECOMMENDATION
Receive report and provide direction to staff.
POLICY DISCUSSION
Should the City update its Travel and Expense Policy to reflect Per Diem rates, among
other changes?
BACKGROUND
Council adopted the City of Gilroy Reimbursement Policy: Expense and Use of Public
Resources (“Travel Policy”) on November 6, 2006. As time has progressed and the City
has adopted updated procedures and processes, particularly after the 2009 recession,
edits are being suggested to the City’s Travel Policy. These edits are intended to make
certain clarifications, streamline processes, and generally lessen the burden to manage
10.B.b
Packet Pg. 76 Attachment: Travel Policy Introduction Staff Report - February 10, 2020 (2657 : Travel Policy Update Adoption)
the Travel Policy while insuring that the proper reviews and approvals are conducted
before travel and other external meeting costs are incurred as a part of the work
conducted with the City.
ANALYSIS
Both the draft revised policy document and a document showing redline edits identifying
the changes from the original policy document are attached to this staff report. Below
are descriptions of the larger, substantive changes that are proposed.
Convert Reimbursement for Meals to Government Per Diem Rates
The proposed change would result in savings of staff time for the review of receipts from
employees travelling. Review and reconciliation of receipts, and the process to obtain
attestation for lost receipts takes a significant amount of staff time compared to the
amount of reimbursements granted. Additionally, staff is seeing frequent lost receipts,
which requires a paperwork process to reimburse the employee the expense.
Per Diem rates are a viable alternative to actual reimbursements and are a common
practice in many governmental agencies. Per Diem is distributed to the employee
before the trip is taken; ensuring adequate funds for meals and incidentals are available
to the employee for travel.
Additionally, there are no requirements for receipts and no additional staff time required
to verify and reconcile the receipts. Rates are determined based upon the destination
locality. Of the 10 Santa Clara County cities whose policies address meals specifically,
6 (or 60%) utilize per diem payments. The remaining cities either reimburses up to the
per diem rates, other established rates, or state only reasonable expenses are to be
reimbursed.
The General Services Administration (GSA) of the federal government maintains and
updates annually a list of IRS supported per diem rates for localities in the United
States. The proposed amendment would defer to the GSA rates for determining the
amount of per diem an employee is eligible for. Additionally, the daily rates are modified
to reflect departure and arrival times, and for when meals are provided for such training
or other purposes of the travel instance.
Currently, the City’s existing policy does not have a ceiling in place for the costs of the
meal expenses, however IRS regulations do determine the maximum amount that can
be reimbursed – anything over that amount could become a reportable tax liability.
The per diem rates would effectuate a maximum amount for meals. Additionally, by
having a set amount per eligible meal, neither the traveler nor supervisory and finance
staff will be required to maintain receipts and compel affidavits of missing receipts. The
proof of the meal expense amounts falls on the employee to retain for their tax
purposes.
10.B.b
Packet Pg. 77 Attachment: Travel Policy Introduction Staff Report - February 10, 2020 (2657 : Travel Policy Update Adoption)
Should the employee not use all of the per diem distributed in the course of the trip, the
employee will keep the remaining balance, and is to report the surplus amount on their
tax filings. It is the sole responsibility of the employee to report this, and is a matter
between the employee and both the Federal Internal Revenue Service and the
California Franchise Tax Board.
Lodging
The City’s existing policy established the reimbursement and granting of lodging for
overnight stays when travel reasonably requires an overnight stay. The proposed policy
would establish that any travel in excess of 50 miles from either City Hall or the
employee’s residence would allow for lodging to be provided at the City’s expense.
Lodging may also be granted at distances less than 50 miles with the approval of the
Department Head, or the City Administrator for Department Heads and appointed
officials. For example, the City Administrator may authorize lodging for planning
commissioners to stay overnight at the League of California Cities’ Planning
Commissioner Conferences held in the Monterey area, within the 50 mile radius, due to
the time that the event starts and stops each day, and the commute time to and from
the event.
Of the ten Santa Clara County cities that reference a distance requirement for lodging in
their policies, four are set for 50 miles, two state when the city’s business reasonably
requires an overnight stay, one city each requiring 40, 75, and 100 mile ranges, and one
city that authorizes overnight stay depending upon required departure and arrival times
back to City Hall or the employee’s residence.
As an illustrative example, with a requirement of 50 miles of travel, overnight stays
would be eligible by default beginning with the following cities, depending upon which
direction is travelled and where within the City the event is:
• North: Menlo Park via Highway 101; Union City via Highway 101 and Highway
880
• East: Eastern side of Los Banos via Highway 152; Gustine via Highway 152 and
Highway 33
• South: Soledad via Highway 101; Notley’s Landing (south of Carmel Highlands)
via Highway 101 and Highway 1
• West: Swanton via 152 and Highway 1
Rental Vehicles Generally Prohibited
Under the current policy, employees are reimbursed for use of rental vehicles. However,
with the breadth of public transportation and ridesharing options, the need for rental
vehicles is diminishing. The policy would generally prohibit the use of rental vehicles,
and are no longer subject to reimbursement. The draft policy language would allow the
10.B.b
Packet Pg. 78 Attachment: Travel Policy Introduction Staff Report - February 10, 2020 (2657 : Travel Policy Update Adoption)
City Administrator to authorize an exception to this prohibition of the use of rental
vehicles if conditions exist which require its use.
Increased authorized expenses list
The list of authorized expenses is proposed to include the addition of attending
business meetings, function of local civic or community organizations where there is a
clear nexus between the event and City employee duty; events where the City is a
formal sponsor or participant in performance of official duties when acting as a City
representative, and serving on professional organization or government committees,
boards or task forces.
Most economical means of travel means more than just cost
The proposed policy update adds a statement that an employee planning the travel
component in determining the most economical cost must consider any overtime, daily
expenses, lost work time and all other economic/fiscal impacts, and validate/include
them as part of the pre-approval application for travel expenses. Employees may
choose a higher cost travel, but the City will only reimburse the most economical means
of transportation and any difference is borne by the employee.
ALTERNATIVES
Council may determine any number of modifications to this updated policy, or direct
staff to not update the policy at this time.
FISCAL IMPACT/FUNDING SOURCE
The fiscal impact is neutral. The City’s adopted budget sets the amount of travel
expenses that could be incurred in the fiscal year, and the total appropriated amount is
not increasing nor decreasing as a result of this policy change. The amount of travel will
adjust to accommodate the changes in the policy.
CONCLUSION
Staff is of the opinion that the conversion to per diem rates, curtailments of rental
vehicle use, and other adjustments to the policy will help to protect public resources,
while streamlining the work historically done to validate the expenditures claimed for
travel.
NEXT STEPS
Once Council provides comments and direction on the policy, staff will then bring back
the policy, inclusive of the amendments, to Council for adoption.
Attachments:
1. DRAFT Updated Travel Policy
10.B.b
Packet Pg. 79 Attachment: Travel Policy Introduction Staff Report - February 10, 2020 (2657 : Travel Policy Update Adoption)
2. Travel Policy Redline Edits
10.B.b
Packet Pg. 80 Attachment: Travel Policy Introduction Staff Report - February 10, 2020 (2657 : Travel Policy Update Adoption)
City of Gilroy
STAFF REPORT
Agenda Item Title: Approval of the Updated City of Gilroy Purchasing Policy
Meeting Date: March 2, 2020
From: Gabriel Gonzalez, City Administrator
Department: Finance Department
Submitted By: Jimmy Forbis
Prepared By: Jimmy Forbis
Bryce Atkins
Strategic Plan Goals
Fiscal Stability
☐ Downtown
Revitalization
☐ Economic
Development
☐ Neighborhood Services
☐ Enhanced Public
Safety
☐ Workforce Stability ☐ Public Engagement
RECOMMENDATION
Approve the updated City of Gilroy Purchasing Policy.
BACKGROUND
At the City Council Study Session on February 10, 2020, staff presented to Council the
draft updated purchasing policy for Council comment and direction. After the
presentation, there were no additional questions nor direction to make changes to the
draft policy update. Staff has prepared this report for Council approval of the updated
purchasing policy.
ANALYSIS
Attached to this staff report is the staff report presented on February 10, 2020, which
contains the background and analysis regarding the proposed changes. The only
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changes made between the version presented at the February 10th meeting is the
removal of the word draft from the title page and headers, and the month on the cover
page being changed to March from February.
ALTERNATIVES
Council may:
1. Adopt the proposed policy update. Recommended. Staff has worked with a
purchasing consultant to develop a policy in keeping with best practices and legal
provisions regarding purchasing policies.
2. Modify or reject the proposed policy update. Not recommended. If rejected, the
current policy will remain in effect, and the efficiencies and best practices will
remain unrealized. If modified, additional time will be required to consider the
proposed modifications and its impact to other provisions within the draft policy
update and other purchasing requirements of the City Code.
FISCAL IMPACT/FUNDING SOURCE
None. The policy establishes procedural requirements and guidelines for procurement,
but does not establish nor modify appropriations apart from those adopted by the City
Council in the operating budget of the City.
Attachments:
1. Gilroy Purchasing Policy (Updated March 2, 2020)
2. February 10, 2020 Purchasing Policy Introduction Staff Report
10.C
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March 2020
City of Gilroy
Purchasing Policy
10.C.a
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Purchasing Policy
Table of Contents
i
Table of Contents
Section 1 – Purchasing Policy Overview .............................................................................................. 1
1.1 Purchasing Policy Overview .................................................................................................... 1
Section 2 – Code of Conduct and Ethics ............................................................................................... 3
2.1 Code of Conduct Overview ...................................................................................................... 3
2.2 Conflict of Interest ...................................................................................................................... 3
2.3 No Gratuities ............................................................................................................................... 3
2.4 Conduct with Vendors .............................................................................................................. 3
2.5 Disciplinary Actions for Policy Violations.............................................................................. 4
Governing Law(s) and Reference Documents ............................................................................ 4
Section 3 – Purchasing System Authorities and Responsibilities ................................................... 5
3.1 Decentralized Purchasing System Overview ......................................................................... 5
3.2 General Categories of Purchases .............................................................................................. 5
3.3 Authority to Award Contracts ................................................................................................. 6
3.4 Responsibilities of Purchasing Division .................................................................................. 7
3.5 Responsibilities of City Staff ..................................................................................................... 7
3.6 Authorized and Unauthorized Purchases .............................................................................. 8
3.7 Contracting Requirements ........................................................................................................ 8
Governing Law(s) and Reference Documents .......................................................................... 10
Section 4 – Procurement Methods........................................................................................................ 11
4.1 Procurement Methods Overview ........................................................................................... 11
4.2 Selecting the Appropriate Procurement Method ................................................................. 11
4.3 Purchasing Card Program ................................................................................................... 12
4.4 Informal Procurement Procedures ......................................................................................... 12
4.5 Formal Bidding Procedures .................................................................................................... 13
4.6 Request for Proposals .............................................................................................................. 16
4.7 Two-step Competitive Bidding Processes ............................................................................ 19
Governing Law(s) and Reference Documents .......................................................................... 19
4.8 Emergency Procurement ......................................................................................................... 19
4.9 Purchases Exempt from Competitive Bidding ..................................................................... 20
Governing Law(s) and Reference Documents .......................................................................... 21
4.10 Cooperative Purchases .......................................................................................................... 21
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Purchasing Policy
Table of Contents
ii
Governing Law(s) and Reference Documents .......................................................................... 23
Section 5 – Specification Development .............................................................................................. 24
5.1 Specifications for Competitive Bidding – Overview ........................................................... 24
Governing Law(s) and Reference Documents .......................................................................... 25
Section 6 – Sourcing and Standardization ......................................................................................... 26
6.1 Sourcing and Standardization Overview ............................................................................. 26
6.2 Single and Sole Sourcing ......................................................................................................... 26
6.3 Standardization ........................................................................................................................ 26
Section 7 – Special Policies and Programs ......................................................................................... 27
7.1 Special Programs and Policies Overview ............................................................................. 27
7.2 Local Purchasing Preference ................................................................................................... 27
7.3 Minority, Disabled and Woman Owned Business Policy Statement ................................ 28
7.4 Environmentally Preferable Purchasing Policy ................................................................... 29
7.5 Policies and Procedures for Purchases Utilizing Federal Grant Funding ........................ 29
Section 8 – Purchasing-related Instructions and Procedures .......................................................... 30
8.1 Bid/Proposal Protest Procedures ............................................................................................ 30
8.2 Central Supply Stores .............................................................................................................. 31
8.3 Certificates of Insurance and Coverage Requirements ....................................................... 31
8.4 Instructions to Bidders............................................................................................................. 31
8.5 Lease, Rental and Lease-to-Purchase Procurements ........................................................... 32
8.6 Life Cycle Cost Analysis .......................................................................................................... 32
8.7 Service Provider Evaluation ................................................................................................... 33
8.8 Surplus Property Disposal ...................................................................................................... 33
8.9 Used Automobile Purchases ................................................................................................... 35
Section 9 – Glossary of Terms............................................................................................................... 36
9.1 Definitions ................................................................................................................................. 36
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Purchasing Policy
Section 1 – Purchasing Policy Overview
1
Section 1 – Purchasing Policy Overview
1.1 Purchasing Policy Overview
The purpose of this manual is to provide basic information for procuring goods and services
consistent with adopted policies and procedures, and best practices. This manual is intended to
provide sufficient information and reference detail to enable City employees to be fully aware
of, and comply with, City purchasing policies, and to effectively participate in the purchasing
program.
This section of the purchasing policies and procedures manual establishes the legal
requirements of the procurement function within the City organization and establishes
procurement expectations to safeguard fairness, system integrity and ethical practices.
1. Legal Requirements. The legal bases for the purchasing system are established below.
Several sections of the City Charter enumerate authorities relative to purchasing-
related functions:
Section 703. Establishes that the City Administrator:
• Can enter into contracts on behalf of the city involving Council-
appropriated expenditures and bid or proposals approved by
Council.
• Will implement a citywide purchasing system.
Section 800. Requires in paragraph 4 that purchasing rules and
regulations be included in the administrative code which shall be
amended by ordinance as necessary.
Section 1104. Specifies in paragraph 3 that during any fiscal year city
employees cannot spend or incur any obligations to spend money for any
purpose without a budgeted appropriation.
Section 1109. Contains requirements for bidding public works
construction projects.
Section 1110. Contains certain requirements that bidders must follow
when bidding on city projects.
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Purchasing Policy
Section 1 – Purchasing Policy Overview
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The City Code Section 2.43(c) establishes the responsibilities of the purchasing
function.
2. Expectations of Fair and Open Procurement.
Secure goods and services at the lowest possible cost commensurate with the
quality needed.
Endeavor to obtain the most open competition possible for all purchases.
Encourage competitive pricing from responsive and responsible business
providers that are qualified, capable and willing to meet the city’s requirements.
Fulfill the requirements of Charter and City Code in the procurement of goods
and services.
Safeguard the city’s reputation for fairness, integrity and ethical practices.
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Section 2 – Code of Conduct and Ethics
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Section 2 – Code of Conduct and Ethics
2.1 Code of Conduct Overview
All employees are responsible for impartially assuring fair competitive access to city
procurement opportunities by responsible suppliers and contractors. In addition, all employees
shall conduct themselves in a manner that avoids any impropriety, or appearance of
impropriety, and that fosters the highest level of public confidence in the integrity of Gilroy’s
purchasing system.
2.2 Conflict of Interest
No employee shall participate in a city procurement when the employee knows that:
1. The employee or the employee’s spouse, domestic partner, child, stepchild, parent or
stepparent will benefit financially from the procurement; and/or
2. The employee or the employee’s spouse, domestic partner, child, stepchild, parent or
stepparent is negotiating or has an employment arrangement contingent on or will be
affected by the procurement.
Upon discovery of an actual or potential conflict of interest, an employee shall immediately
withdraw from further participation in the procurement.
2.3 No Gratuities
No city employee shall solicit, demand, accept or agree to accept a gift of goods or services,
payment, loan, advance, deposit of money, or employment offer presented, promised in return
for, or in anticipation of favorable consideration in a city procurement.
2.4 Conduct with Vendors
Conduct with vendors who provide goods or services to the city shall be fair, open and
transparent. City employees shall:
1. Refrain from showing favoritism to vendors or being unduly influenced.
2. Safeguard confidentiality when required to do so.
3. Select vendors on the basis of meeting appropriate and fair criteria.
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2.5 Disciplinary Actions for Policy Violations
City employees shall abide by and be accountable for the codes of conduct established in this
section. Policy violations may result in disciplinary actions in accordance with the city’s
established procedures, consistent with state law.
Governing Law(s) and Reference Documents
1. Section 809 of the City Charter
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Section 3 – Purchasing System Authorities and Responsibilities
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Section 3 – Purchasing System Authorities and Responsibilities
3.1 Decentralized Purchasing System Overview
The city has adopted a decentralized purchasing system. This means that for most purchases,
requesting departments can directly solicit bids or proposals and place orders with suppliers,
subject to the limitations established in policy and subject to the approval of the appropriate
award authority. Nothing precludes staff from seeking procurement assistance from the finance
director or purchasing coordinator, especially to clarify policies, processes and procedures.
In a decentralized purchasing system, it is very important that all employees understand and
abide by the city’s procurement rules/polices and ensure their fair and consistent application.
3.2 General Categories of Purchases
City purchase categories generally consist of the following categories, for which different
procurement methods may apply (see Section 4, Procurement Methods, page 11):
1. Goods. The purchase of goods consists of materials, equipment and supplies needed by
any department.
2. Services. City staff may require contracts for services, which fall into two categories:
a. General Services. Services rendered such as custodial services, building/
equipment maintenance, and machinery/equipment rental, excluding contracts
for public works projects or professional services.
b. Professional Services. Services provided by a person or firm engaged in a
profession based on highly specialized and/or technical knowledge or skill, such
as the professions of accountant, attorney, artist, architect, landscape architect,
construction manager, engineer, environmental consultant, dentist, physician,
training or educational consultant, or land surveyor, and whose services are
considered distinct and unique to such a degree that bidding of such services
may not be feasible, if appropriately justified and documented (see Subsection
4.9, Exemptions from Competitive Bidding, page 20).
3. Public Works Projects. Public works pertain to the construction, alteration, repair, or
improvement of any public structure, building, road, or other public improvement of
any kind, including demolitions, and the construction and installation of drainage
systems, lighting and signaling systems, sewer and water systems, and park and
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recreational facilities. Maintenance required to preserve a public improvement is not
considered a public work.
3.3 Authority to Award Contracts
The following section outlines the various contract award authorities established under the
decentralized Purchasing System.
1. Award Authority. Contract award authority is established by dollar threshold for each
of the following entities:
a. City Council. Purchases or contracts for goods and services of $100,000 or more,
and public works contracts exceeding $35,000, must be awarded by the City
Council.
b. City Administrator. Purchases or contracts up to $99,999 may be awarded by the
City Administrator, with the exception of public works contracts exceeding
$35,000.
c. Department Heads. As authorized by the City Administrator, department heads
may make purchases and enter into contracts for goods and services up to
$49,999, and for public works construction contracts up to $34,999.
d. Staff. Purchases up to $2,999 may be made at the staff level as designated by
department directors.
2. Authority to Legally Bind City. Unless specifically authorized as established in this section or
elsewhere in City policy, staff other than the City Administrator and department heads
cannot enter into contractual arrangements to purchase goods or services or otherwise
legally bind the City for such purchases.
3. Award Authority Determined by One Transaction. For the purpose of determining the
appropriate award authority, contract amounts are defined by what constitutes a single
or one transaction. This rule also applies to competitive bidding (the estimate of dollar
value of the transaction dictates the level of bidding required).
a. One-time Purchases. Each discrete, one-time purchase is a single transaction.
b. Blanket Purchase Orders. The contract term of a blanket purchase order is
generally considered a single transaction, subject to total contract length
requirements established in a competitive bidding process. See also Subsection
3.7.6.b on page 9.
Examples: A blanket order in the amount of $10,000 that is issued for vehicle
parts for a one-year period is a single transaction. Subsequent annual renewals of
the blanket order are considered separate, single transactions.
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A five-year blanket order for on-call maintenance work in the amount of $25,000
each year (for a total of $125,000) requires Council approval.
c. Contract Amendments. Dollar increases to existing contracts require the sum of
the original contract to be added to the amount of the amendment to determine
the single transaction value.
Example: The City Administrator awards a contract for $75,000 and a $30,000
amendment is required. The resulting transaction is $105,000, now requiring
Council approval.
3.4 Responsibilities of Purchasing Division
1. Purchasing Function. As established in Section 2.43(c) of the City Code, the purchasing
division is responsible for:
a. Purchasing materials, supplies, and equipment (goods) and services for use by
all departments when appropriate.
b. Preparing standard specifications for goods and services wherever possible.
c. Maintaining a purchase order system and issuing purchase orders as required.
d. Verifying that all bids and proposals are in accordance with policy requirements.
e. Establishing and operating a system of stores for the bulk purchase of commonly
used items.
f. Selling surplus personal property of the City, subject to the determinations and
approval of department heads, the City Administrator and the City Council.
3.5 Responsibilities of City Staff
1. Responsibilities of all employees. As keepers of the public trust, all City employees are
required to discharge their duties fairly, impartially and with the highest degree of
integrity. In support of these concepts as they apply to the purchase of goods and
services, City staff shall:
a. Clearly identify procurement needs and the availability of funding.
b. Work with the purchasing coordinator to develop suitable competitive
specifications.
c. Participate in the evaluation of bids and proposals as required.
d. Inspect goods delivered and services performed to determine conformity with
established requirements and contractual obligations.
e. Authorize payment for conforming goods and services.
f. Notify the purchasing coordinator of non-conforming goods or services.
g. Document tangible or intangible value to the city when requisitioning goods or
services without competition.
h. Recognize that fair and open competition results in better value to the city.
i. Understand and be accountable for the policies and procedures established for
purchasing goods and services.
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2. Purchasing Requisition Required. Goods and services purchases that will require a
contract, purchase order, or blanket purchase order, including public works
construction, must be initiated with a properly documented and approved purchase
requisition which includes:
a. Concise description of the purchase which adequately communicates need.
b. Actual or estimated dollar amount.
c. Valid charge/project and object number.
d. Verification of available funding or identification that funding is needed.
e. Price quotes with recommended vendor selection and appropriate award
justification.
f. Bid exemption documentation as required.
3.6 Authorized and Unauthorized Purchases
This section defines authorized and unauthorized purchases and how they are memorialized
and establishes that employees can be held responsible for unauthorized purchases that are not
ratified by the appropriate award authority.
1. Authorized Purchases. Purchases are authorized only when the appropriate award
authority has approved the purchase. Only the City Council, City Administrator, and
department heads, or authorized designee in writing from the City Administrator, may
legally bind the city to a contract.
2. Unauthorized Purchases. Purchases approved by anyone other than the designated
award authorities are unauthorized. It is the responsibility of every employee to
understand the policy requirements and avoid unauthorized purchases to the greatest
extent possible.
3. Ratification Process Required. Unauthorized purchases are required to be ratified by
the appropriate award authority. For unauthorized purchases to be considered for
ratification, the following steps must occur:
a. The employee making the unauthorized purchase must provide a written
explanation of why the purchase was made.
b. The written explanation must be reviewed and approved by the appropriate
award authority.
4. Restitution. In the event that a vendor has been paid and the unauthorized purchase is
not subsequently ratified, the employee may be held responsible for reimbursing the
city.
3.7 Contracting Requirements
The following section explains the various contracting requirements associated with making
purchases with City funds.
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1. Contract Award. A contract is not considered to be awarded until it is approved by the
appropriate award authority, i.e., the City Council, City Administrator or authorized
department head as described in Section 3.6 above.
2. Standard Contract Terms and Conditions. Use of the city’s standard contracts (or
terms and conditions for purchase orders) provided by the City Attorney are preferable
to using vendor-provided contracts. If presented with a vendor-provided agreement,
staff should attempt to replace it with the city’s standard agreement or standard terms
and conditions for purchase orders. The purchasing coordinator can assist with the
negotiation process as necessary.
3. Written Contract Requirement. Written contracts on city templates provided by the
City Attorney are required for services with a value of $10,000 or more. Services with a
value of less than $10,000 should be put on purchase orders with standard terms and
conditions, unless compelling factors such as liability or risk dictate the use of a written
agreement.
4. City-provided Scope of Work Requirement. Contracts should include well-defined
scopes of work provided by city staff and the use of consultant or vendor-provided
work scopes should be minimized to the greatest extent possible.
5. No Contract Splitting. Under no circumstances can any contract be split or separated
into smaller components to determine the appropriate award authority or for any other
purpose.
6. Contract Types. The city utilizes several different types of contracts depending on the
nature of the purchase and requirements of the City Attorney’s Office.
a. Purchase Orders. Purchase orders are used to make discrete, non-recurring
purchases of goods and/or services. Depending on the cost and complexity of
the purchase, a written agreement may be required. Purchase orders are
required for most city transactions.
b. Blanket Purchase Orders. Blanket purchase orders are term contracts, usually
established for one-year periods for routine, recurring or as-needed purchases of
goods and/or services. Blanket purchase orders can be renewed annually
according to the terms established through competitive bidding or negotiation,
or as approved by the appropriate award authority. Blanket purchase orders
may also be established for multi-year periods and/or as master goods/services
agreements.
Blanket purchase orders may be established for as-needed small construction or
maintenance projects and/or for urgent or emergency repairs where time is of the
essence. These types of arrangements are referred to as Job Order Contracts
(JOCs) and are bid on a unit cost basis with contracts awarded based on not-to-
exceed amounts approved by the appropriate award authority.
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c. Service Agreements. Depending on the cost and complexity, agreements may
be required for general or professional services. These are referred to as General
Services Agreements (GSAs), Professional Services Agreements (PSAs), Master
Service Agreements (MSAs) or Master Professional Service Agreements (MPSA).
d. Confirming Orders. Confirming orders are written purchase orders that
confirm previously placed verbal orders. This form of contract may be utilized
for urgent or emergency purchases but requesting departments must use
prudent judgment.
7. Key Contracting Prerequisites. Contractors or vendors conducting business in the city
or working on city property or in city rights-of-way must be properly licensed, insured,
and otherwise comply with all lawful requirements such as obtaining a business license
as required by the Finance Department and having appropriate insurance coverage as
required by the risk manager. The contractor or vendor must include the City of Gilroy
as an “additional insured” on their insurance policy and provide up-to-date insurance
certificates with required policy endorsements. These requirements must be met before
any work can commence.
Governing Law(s) and Reference Documents
1. Section 2.43(c) of the City Code
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Section 4 – Procurement Methods
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Section 4 – Procurement Methods
4.1 Procurement Methods Overview
This section outlines the various methods of procurement to be used by employees who have
authority and/or responsibility for procurement processes and procedures.
Below are guiding principles by which staff participating in procurement processes must abide:
Purchases shall be based on competitive bidding processes whenever possible, unless
otherwise exempt in accordance with Subsection 4.9, Purchases Exempt from Competitive
Bidding on page 20.
The complexity of the bidding process, and the applicable requirements, increase with the
dollar value of the procurement.
Under no circumstances shall purchases be artificially split to use a more simplified process.
In situations where goods and/or services can be defined with a high degree of specificity,
then a contract will be awarded to the lowest responsive and responsible bidder through a
bid process.
If the purchase is solution-based and cannot be exactly defined, then a best-value process
may be used where the city can pay a higher price for a good and/or service if the overall
value can be justified.
Measured use of cooperative purchasing programs and piggyback agreements, which
leverage volume purchases, secure value pricing and reduce administrative overhead, is
encouraged.
Staff must take into account the city’s special policies and procedures for many
procurements. These include environmental procurement, application of the 3% local
purchasing preference (except for public works construction and professional services),
disadvantaged business enterprises and purchases using federal grant funds (see Section 7,
Special Policies and Programs, page 27).
4.2 Selecting the Appropriate Procurement Method
To select an appropriate procurement method, employees should know the category of
purchase (type of goods, services or public works project) and have an estimated cost in mind.
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For goods and services purchases, competitive bidding and approval thresholds are determined
by each transaction.
1. Goods and services transactions $2,999 or less. Goods and services $2,999 or less may be
made without a competitive process. This amount is consistent with the threshold
established for purchases utilizing federal funding (see Subsection 7.5, Policies and
Procedures for Purchases Utilizing Federal Grant Funding, page 29). However, nothing
should preclude employees from “value shopping” to help ensure that the best possible
value is being obtained in exchange for public funds.
2. Goods and services transactions between $3,000 and $99,999. Goods and services with an
estimated value between $3,000 and $99,999 in a single transaction must be procured using
the methods established in the Informal Procurement Procedures in Subsection 4.4 below.
3. Goods and services purchases $100,000 or more. Goods and services purchases with an
estimated value of $100,000 or more in a single transaction must be procured using formal
bidding or proposal procedures established in Subsection 4.5, Formal Bidding Procedures
on page 13.
4. Public works projects. In accordance with Section 1109 of the City Charter, Public works
projects anticipated to exceed $35,000 must be conducted through sealed bidding and
awarded by Council, in further accordance with the bidding procedures established in
Subsection 4.5, Formal Bidding Procedures, page 13.
4.3 Purchasing Card Program
As an alternative, efficient method of making small dollar purchases, a purchasing card
program has been established for use by employees based on operational need. In many
instances, purchasing cards can be used to buy needed materials and supplies, rather than using
purchase orders.
Purchasing cards are approved by department heads and issued by the purchasing coordinator,
to be used in strict accordance with the Purchasing Card Policy.
4.4 Informal Procurement Procedures
Informal procurement procedures apply to purchases of goods and services anticipated to be
less than $100,000, and for public works project less than $35,000. Such purchases may be made
by staff in accordance with this section.
1. Purchases $2,999 or less. Purchases of goods and services less than $3,000 may be made by
staff without obtaining price quotes. However, staff are encouraged to price shop whenever
possible to ensure the city is receiving the best value in exchange for public funds.
2. Purchases between $3,000 and $24,999. Purchases in this estimated price range may be
made by staff with department director approval and based, to the best extent possible, on
at least three written price quotes. Contracts are typically awarded to the lowest responsive
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and responsible provider, but best value determinations can be made on factors in addition
to pricing if the justification is properly documented and in the best interest of the City.
3. Purchases between $25,000 and $99,999. Purchases of goods and services in this estimated
price range (and public works projects less than $35,000) may be made using informal bid
and/or request for proposal documents, as follows:
a. Invitation to Quote. Use this template for goods and/or services with an estimated cost
at or below $49,999 (or for a lower threshold amount if required by a department head
or the purchasing coordinator). If a contract is not being awarded to the lowest
responsive and responsible bidder, the purchasing requisition must contain a concise
explanation to justify the selection, including evaluation factors if appropriate or
requested by the purchasing coordinator.
b. Informal Request for Proposals (RFP). Use this template for services (or in some cases
specialized goods or a mix of goods and services) between $50,000 and $99,999 that are
procured through a best value, rather than low bid, process. Informal RFPs may also be
required for professional services less than $50,000 as required by department heads.
Best value procurements are awarded based on factors in addition to price (e.g., the city
may pay more for a solution if the overall value can be justified), and are conducted
through an evaluation process similar to but less formal than that required for formal
competitive proposals (see Subsection 4.6, Request for Proposals, on page 16).
4. Prevailing Wage Requirements. The payment of prevailing wages is required for
maintenance contracts over $15,000 and construction contracts over $25,000. Additionally,
such contracts must follow California Department of Industrial Relations (DIR) contractor
registration requirements for contractors and their subcontractors (see also Subsection
4.5.3.h on page 15).
4.5 Formal Bidding Procedures
Formal sealed bidding using an Invitation for Bids (IFB) is required for purchases anticipated to
be more than $100,000, including materials and equipment (goods), certain services, and public
works construction projects greater than $35,000. Contracts associated with formal bids are
awarded to the lowest responsive and responsible bidder. The requirements detailed below
apply.
1. Coordination with Purchasing. These actions must be coordinated with Purchasing
before conducting a formal bid process:
a. Obtain a Bid Number. The purchasing coordinator will assign a bid number
that will be used to track the project throughout its life cycle.
b. Request Bid Opening Date. The purchasing coordinator will determine
availability of Council chambers to conduct the public bid opening.
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c. Creation of Bid File. All bidding documents created in conjunction with each
bid must be sent to the purchasing coordinator so that a bid file constituting the
city’s official record can be kept in strict accordance with the records retention
schedule.
2. Advertising the Bid Opportunity. All formal bids should be publicly noticed by the
purchasing coordinator or designated staff for at least 14 calendar days prior to the date
and time set for receiving bids, either in a local newspaper (for public works
construction) or on the City’s website, unless a shorter timeframe is warranted.
a. Notice Inviting Bids. The Notice Inviting Bids (NIB) specifies:
i. The date, time and place where and when bids will be received, publicly
opened and the bids of each bidder read out loud.
ii. The name of the staff member to whom bids must be addressed.
iii. General description of the goods, services or construction work required.
3. Invitation for Bids (IFB). An Invitation for Bids (IFB) is the bid template required for
use with formal bids. The IFB must include at least the following elements:
a. Notice Inviting Bids. The IFB must include the bid notice that was used to
advertise the bid.
b. Instructions to Bidders. Bid documents must include instructions to bidders to
explain the bidding process and explain the city’s requirements (see also
Subsection 8.4, Instructions to Bidders, page 31).
c. Bid Specifications. Detailed specifications that provide technical design and/or
performance requirements are required for all IFBs.
d. Subcontractor Listing. Contractors bidding on city projects must include a
listing of subcontractors.
e. Non-collusion Affidavit. Contractors bidding on city projects must provide a
notarized affidavit certifying that they have not colluded with any other entity
in providing a bid.
f. Bid Forms and Schedules. The bid document must include applicable bid forms
and schedules necessary for determining the lowest responsive and responsible
bidders.
g. Bond Forms as Required. Many awarded projects will require that contractors
provide executed faithful performance bonds (to guarantee their work) and
payment bonds (to guarantee payments to subcontractors).
h. Contractor/Subcontractor DIR Registration Section. Bids for construction and
maintenance work must include a form for contractors to provide their
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Department of Industrial Relations (DIR) contractor registration numbers
(applies to contractors and their subcontractors) to ensure prevailing wage
compliance. This information must be provided by City staff to the DIR on the
PWC-100 Form following contract award.
i. Draft Contract if required. The bid documents must include a draft contract
with the city’s terms and conditions.
j. Instructions for Bid Addenda. Questions received within 10 business days of
the due date will be answered in the form of a properly issued bid addendum.
No change or modification to the plans or specifications can be made without
such notification. Bid addenda must be provided to all holders of official bid
documents and posted to the city’s website.
4. Bid Security. A bid security in the form of a bid bond, cash, certified check or other
acceptable instrument, in an amount not exceeding 10% of the bid price, may be
required. If a bid security is required, it must be stated in the bid documents.
5. Public Bid Opening. Sealed bids will be publicly opened in the presence of at least one
witness (typically the purchasing coordinator) at the time and location specified. If
members of the public are present, the names of each bidder and their total bid pricing
will be read aloud, and the apparent low bidder will be announced.
6. Late Bids. Under no circumstances can late bids be accepted.
7. Bid Summary. Following the bid opening a bid summary will be prepared by the user
department and posted to the city’s website.
8. Evaluating Bids and Awarding a Contract. The contract award process includes steps
detailed below.
a. Bid Analysis. Each bidder will be evaluated by designated staff to determine
whether their bid is responsive (complies with all material requirements of the
bid) and if they are responsible (have the skill and ability necessary to complete
the work).
b. Council Report. The user department will prepare a report to Council
recommending contract award to the lowest responsive and responsible bidder
and/or a recommendation for bid rejection.
c. Bid Rejection. The finance director will issue any notice of rejection of any and
all bids, or any non-responsive bids, and the bid may be re-advertised at the
city’s discretion, except that Council is the rejecting authority for all public
works bids deemed excessive or unsatisfactory, per Section 1109 of the City
Charter. If a contractor provides more than one bid for the same work, those
bids must be rejected by the appropriate rejection authority (Section 1110 of the
City Charter).
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d. Determining Bidder’s Responsiveness and/or Responsibility. Bids determined
to be non-responsive at the bid opening shall not be accepted. Subsequent
determinations of bid responsiveness and bidder responsibility during the due
diligence period must be carefully considered, with the latter requiring a much
higher level of due process for contractors.
e. Bid Protest Procedures. In the event of a protest by a contractor who has
submitted a timely bid, the protesting party must be afforded the opportunity to
voice their concerns through the formal process outlined in Section 8,
Purchasing-related Instructions and Procedures on page 30.
f. Contract Execution. Upon Council approval, designated staff will prepare and
send a contract package, including performance and payment bonds and
identification of any other requirements such as insurance, business license, etc.,
to the awarded contractor.
If the contractor fails to enter into the contract, their bid bond will be forfeited
and deposited in the general fund. If a bid bond was not required (in the case of
goods or services purchases), then the contractor who fails to execute the
contract will be liable for the difference between its bid and the next lowest bid,
plus administrative expenses and any required legal costs.
9. Prevailing Wage Requirements. Maintenance contracts exceeding $15,000 and
construction contracts exceeding $25,000 can only be awarded to contractors who are
registered with the DIR (including any subcontractors) for the purpose of determining
prevailing wage compliance. Awarded contracts must be registered with the DIR by
designated staff within 30 days of award. Awarding a contract to a contractor who is not
registered with the DIR can result in penalties to the City.
10. Return of Bid Securities. Once a contract has been executed, the security accompanying
the accepted bids, and the unsuccessful bids, must be returned.
11. Submit Purchasing Requisition. Following contract approval by Council, a requisition
must be submitted to the purchasing coordinator so a purchase order can be generated.
4.6 Request for Proposals
Competitive sealed proposals using a Request for Proposals (RFP) process are used when
contracting for services estimated to be more than $100,000, or for solutions where procurement
needs cannot be determined with a high degree of specificity, unless otherwise exempt from
competition as described in Subsection 4.9, Purchases Exempt from Competitive Bidding on
page 20. Such procurements are conducted by competitive negotiation processes, rather than
awarding a contract to the lowest responsive and responsible bidder, as follows:
1. Coordination with Purchasing. These actions must be coordinated with the purchasing
coordinator before conducting a formal proposal process:
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a. Obtain an RFP Number. The purchasing coordinator will assign an RFP
number that will be used to track the project throughout its life cycle.
b. Creation of an RFP File. All proposal documents created in conjunction with
each RFP must be sent to the purchasing coordinator so that a file constituting
the city’s official record can be kept in strict accordance with records retention
policies.
2. Request for Proposals. An RFP using the city’s standard template(s) must be prepared
and advertised.
3. Best Value. RFPs are awarded based on the best overall value to the city, as opposed to
lowest responsive and responsible bid, and include evaluation of qualitative and/or
quantitative factors in addition to price.
4. Advertising the RFP Opportunity. RFPs will be publicly noticed by the purchasing
coordinator at least 14 calendar days prior to the date and time set for receiving
proposals, either in a local newspaper (if required) or on the city’s website, unless a
shorter timeframe is warranted.
5. RFP Document Contents. The RFP document shall include, at minimum, a Notice
Inviting Proposals; instructions to proposers, including protest procedures if warranted;
evaluation factors and their relative importance; specifications, requirements or scope(s)
of work describing the required goods and/or services; proposal forms and schedules;
any required bond forms; insurance requirements; and contract terms and conditions.
6. Evaluation Program. Once RFP responses are received, the proposals will be
confidentially evaluated and scored in accordance with criteria and procedures
established by the user department with input of the purchasing coordinator as
necessary. Interviews, presentations, site visits, etc., may be conducted depending on the
nature of the procurement.
Once a top-rated proposer is identified, good faith negotiations will commence. If an
agreement cannot be reached in consideration of cost and/or scope, the next highest-
rated proposer will be engaged, and so on, until a mutually acceptable agreement is
reached.
7. Qualifications-Based Selection Procedures. RFPs for certain professional or specialized
services may, by law, require Qualifications-Based Selection (QBS) procedures where
consultants or consulting firms are evaluated on their demonstrated competence and
professional qualifications before pricing can be considered. The QBS selection process is
typically associated with architectural, engineering, environmental, land surveying
and construction management firms in accordance with Section 4525 et. seq. of the
California Government Code or its federal counterpart, the Brooks Act. However,
nothing shall preclude staff from utilizing a QBS process for other types of RFPs if in the
best interest of the city.
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Once a top-rated proposer is identified, then scope and fee negotiations commence. If an
acceptable contract cannot be finalized in consideration of scope and/or cost, then the
purchasing coordinator may commence scope and fee discussions with the next highest-
rated proposer, and so on, until a mutually acceptable agreement is reached. This type of
process is also referred to as a Request for Qualifications (RFQL) or Request for
Statements of Qualifications (RSQ).
8. Process Integrity. To protect the identity of the proposers and safeguard the integrity of
the evaluation process, all City employees participating in the evaluation of
competitively sealed proposals shall maintain strict confidentiality as well as disclose
any real or perceived conflicts of interest that may arise.
The Finance Director and/or City Attorney will review any disclosed potential conflicts
of interest and make a determination about the evaluator’s continued participation in
the procurement.
9. One Response Received. If only one RFP response is received and staff wishes to
proceed with the procurement (rather than rejecting the proposal), the purchasing
coordinator will document the effort used to generate proposal responses prior contract
negotiations.
10. Rejection of proposals. The finance director will issue any notice of rejection of any and
all proposals, or any non-responsive proposals, and the RFP would then be re-
advertised at the City’s discretion. If a proposer provides more than one RFP response
for the same work, those responses must be rejected (Section 1110 of the City Charter).
11. Late Proposals Refused. RFP responses received after the designated closing date and
time cannot be accepted and must be returned unopened unless opening is required for
identification purposes.
12. Awarding a Contract. The contract award process includes the following steps:
a. Council Report. Following the technical evaluation and competitive negotiation
processes, the user department will prepare a report to Council recommending
contract award to the firm whose solution provides the best value to the city.
b. Determining Proposer Responsiveness and/or Responsibility. Determinations
of proposer responsiveness and responsibility must be carefully considered,
with the latter requiring a much higher level of due process for contractors.
c. Proposal Protest Procedures. In the event of a protest by a proposer who has
submitted a timely RFP response, the protesting party must be afforded the
opportunity to voice their concerns through the formal process outlined in
Section 8, Purchasing-related Instructions and Procedures on page 30.
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d. Contract Execution. Prior to Council approval, staff can begin the contract
execution process by obtaining signature(s) from the awardee. Upon Council
approval, the contract execution process can be completed.
13. Submit Purchasing Requisition. Following contract approval by Council, a requisition
must be submitted to the purchasing coordinator so that a purchase order can be
generated.
4.7 Two-step Competitive Bidding Processes
For some procurements, it may be advantageous to conduct a two-step competitive process
where the first step is used to “shortlist” or prequalify interested firms. This type of
procurement begins with a Request for Qualifications (RFQ or RFQL) process, followed by
either an Invitation for Bids (IFB) or a Request for Proposals (RFP) process, depending on the
situation.
The RFQ/IFB process (RFQ/B) can be utilized to contract for important construction projects or
maintenance service contracts for which detailed specifications can be articulated. At the outset,
the prequalification process utilizes minimum threshold requirements that prospective bidders
must meet (determined by an evaluation process) to provide a sealed bid, to be awarded to the
lowest responsive and responsible bidder.
The RFQ/RFP process (RFQ/P) can be an effective way to contract for services or system
solutions where professional or technical expertise or complex functional requirements, are
critical and overriding considerations. In this type of procurement, submitting firms are
evaluated based on their qualifications (which can include minimum threshold requirements),
followed by a competitive negotiation.
Governing Law(s) and Reference Documents
1. City Charter
2. City Code
3. California Department of Industrial Relations (DIR) Contractor Registration Information
4. California Qualifications Based Selection (QBS) Requirements
5. Federal Brooks Act
4.8 Emergency Procurement
This section establishes the fundamental elements required for emergency procurements.
1. Emergency Procurements Defined. Emergency procurements are those purchases
defined as immediately necessary for the preservation of life, health or property, or for
the continued operation of a department. Emergency procurements required as the
result full or partial activations of the Emergency Organization shall be conducted in
conjunction with Chapter 9 of the City Code (Emergency Organization and Functions).
2. Authority and Responsibility. The City Administrator or their designee may make or
authorize others to make emergency procurements, regardless of cost.
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3. Competitive Bidding. Emergency procurements shall be made with such competition
as is practical under the circumstances, or that is required for reimbursement funding,
and shall be limited to those goods and services necessary to satisfy the emergency
need.
4. Written Report and Ratification Required. In such circumstances where emergency
procurements are required, the department head or designee shall provide a written
report of the procurement to the appropriate award authority, including a description
of the emergency and the basis for selection of the contractor. A copy of this report shall
be included in the procurement records maintained by the purchasing coordinator.
4.9 Purchases Exempt from Competitive Bidding
This section describes the types of purchases that may be exempted from competitive bidding
requirements, subject to the appropriate approvals.
1. Enumerated Bid Exemptions. The following may be appropriately justified as
exemptions to the competitive bidding requirement:
a. Emergency procurements as defined herein.
b. Situations where solicitations of bids or proposals would for any reason be
unavailing or impossible.
c. Professional or specialized services as defined in Subsection 3.2, General
Categories of Purchases on page 5.
d. Public library collection materials.
e. Insurance, bonds or financial services.
f. Single or sole source goods or services as defined herein.
g. Highly specialized equipment developed or designed for a special activity or
function or whose purpose is in the best interests of the City due to
compatibility with existing equipment or training of personnel.
h. Procurements funded by grants, donations or gifts when any special conditions
require the purchase of particular materials and/or services.
i. Purchase of surplus property owned by another public entity, or payment to
other public entities or utilities.
j. Membership dues, conventions, training, travel arrangements, or
advertisements in magazines, newspapers, or other media.
k. Works of art, entertainment or performance.
l. Goods procured for resale to the public.
m. Where competitive bids or proposals have been solicited and no bid or proposal
has been received. In such situations the City Administrator may proceed to
have the goods procured or services performed without further competitive
bidding.
n. Computer software license or subscription renewals.
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o. Human Resources investigation, legal services, and medical services, including
but not limited to, fitness for duty evaluations, expert witnesses, and other
employment related medical services.
p. Regulatory permits.
q. Subscriptions.
r. Reimbursements and/or refunds of payments made to the City.
s. In other cases when specifically authorized by the Council (if over $100,000)
after a finding and determination that it is in the best interests of the city.
2. Negotiations. The purchasing coordinator or designated staff can conduct negotiations,
if/as appropriate, as to price, delivery and terms and may require the submission of cost
or price data in connection with the award of a contract that does not require
competitive bidding.
3. Competitive Bidding When Possible. Nothing in this section shall preclude the
solicitations of competitive bids or proposals, when possible.
4. Documentation and Approval Required. Goods or services proposed to be exempt
from a competitive bidding process must be appropriately documented and approved
before a transaction can be conducted, as follows:
a. Purchases greater than $50,000 require City Administrator approval that must
accompany a purchase requisition before a purchase is made.
b. Purchases between $3,000 and $49,999 require approval by the Finance Director
or designee that must accompany a purchase requisition before a purchase is
made.
Governing Law(s) and Reference Documents
1. Chapter 9 of the City Code
4.10 Cooperative Purchases
This section discusses fundamental elements of cooperative purchasing programs. Use of
purchasing cooperatives is encouraged as a way of obtaining goods and services by aggregating
volume, securing value pricing, and reducing administrative overhead. Measured use of
purchasing cooperatives can significantly reduce the time and resources needed to
competitively bid goods and services contracts.
1. Authority to Use Cooperative Purchasing Programs. The purchase of goods and/or
services made under cooperative purchase programs, leveraging purchasing
agreements maintained or utilized by the state, county or other public or quasi-public
agencies, is authorized under Section 703 of the City Charter, Powers and Duties of the
City Administrator. Cooperative purchasing contracts must be approved by the
appropriate award authority.
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2. Competitive Bidding. Cooperative purchasing programs should be based on
competitively awarded contracts whenever possible, and documentation as to the
advantage of the cooperative purchase will be retained by the purchasing coordinator
in conjunction with the value analysis requirements listed below.
3. Purchasing Cooperatives. There are numerous purchasing cooperatives the staff can
evaluate for use. Some leading cooperatives include state contracts such as California
Multiple Award Schedules (CMAS) of the Department of General Services (DGS); U.S.
Communities Cooperative Purchasing; National Joint Powers Alliance (NJPA); NASPO
ValuePoint (formerly WSCA-NASPO, or the Western States Contracting Alliance-
National Association of State Procurement Officials); and federal General Services
Administration (GSA) procurements (GSA Advantage for State and Local
Governments).
4. Value Analysis. The determination to make a purchase using a purchasing cooperative
agreement requires an analysis to determine whether the procurement represents the
best value to the city. Purchases using any given cooperative need not be based on the
absolute lowest pricing and may consider factors in addition to price such as the time
and/or resources needed to competitively bid the good or service. The analysis will be
performed and documented by user departments, with assistance provided by the
purchasing coordinator.
5. Piggyback Contracting. Subject to the appropriate approval authority, authorized staff
may enter into contracts for goods and services purchases, the pricing and terms of
which have been previously established by another public agency. The following
requirements apply to piggyback contracts, and must be verified by the purchasing
coordinator prior to contract award:
a. The parties to the original contract agree to the piggyback.
b. The contract is for identical or nearly identical goods and/or services.
c. The original contract resulted from competitive bidding or proposal procedures
similar to those required by the city.
d. The original contract was awarded within two years of the city’s purchase, or
written justification is provided to support the use of an older solicitation.
e. The price of the purchase is comparable to that estimated by the requesting
department.
Provided that the above conditions are met and the purchase is approved by the
appropriate award authority, the purchasing coordinator will issue a purchase order
and/or execute (or cause to be executed) a separate contract with the vendor selected by
the originating agency which incorporates by reference the original solicitation, terms,
conditions and prices.
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Governing Law(s) and Reference Documents
1. Section 703 of the City Charter
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Section 5 – Specification Development
5.1 Specifications for Competitive Bidding – Overview
Specifications define precise requirements for the solicitation of goods and/or services. Writing
specifications is a collaborative process between user departments and the purchasing
coordinator to translate specific needs into detailed requirements.
1. Definition. A specification is a precise description of the physical characteristics,
quality, or desired outcomes of a commodity to be procured, which a supplier must be
able to produce or deliver to be considered for contract award.
2. Collaborative Process. Writing bids or proposal specifications is a collaborative process
between user department and purchasing to develop specifications with the goal of
promoting competition.
3. Clear Language. Specifications should use plain language that is relevant to and
understood by the bidding community.
4. Promote Competition. Good specifications should promote and not unduly restrict
competition. Use of restrictive specifications must be properly justified in accordance
with the provisions of this section.
5. Specification Attributes. There are essentially two types of specifications: design and
performance. Specifications typically contain elements of design and performance and
may be viewed as a continuum with each element on opposing ends.
a. Design Specifications. Design specifications establish the characteristics that a
commodity must possess, and may include manufacturing details such as
engineered plans, drawings or blueprints.
b. Performance Specifications. Performance specifications describe a commodity’s
desired outcome.
i. Functional Descriptions or Requirements. Performance specifications
may utilize functional descriptions of defined tasks or desired results.
Functional requirements are typically used for solutions such as software
systems.
ii. Brand Name Specifications. In areas where the city has standardized a
particular product such as fleet vehicles, staff may use one brand name
manufacturer, subject to approval by a department head (see also Section
6, Sourcing and Standardization on page 26). Brand name specifications
are restrictive, limit competition, and can result in increased cost. Use of
brand name specifications must be carefully evaluated before using them
in competitive bid documents.
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iii. Brand Name or Approved Equal. Specifications that contain “brand
name or approved equal” are based on functional equivalency and
should be used whenever possible to promote competition and reduce
pricing.
6. Specification Development. Specification development is a critical part of the
competitive bidding process. In many cases specifications can be highly complex and
technical and require subject-matter expertise beyond that of city staff. The following
steps should be considered when developing specifications.
a. Collaborate. Meet with stakeholders of the procurement to formulate and
understand needs, and to internally peer review the specifications.
b. Conduct Market Research and Analysis. Research and analysis help inform
product design and/or performance and create understanding of market and
supply chain trends.
c. Contact Other Public Agencies. Other public agencies may have conducted a
similar procurement and can share information and valuable insight.
d. Seek Professional Assistance. In some instances, contractors or consultants
must be engaged to create complex or highly technical specifications.
Note: NEVER obtain or accept specifications directly from a potential bidder. This will
give the bidder an unfair competitive advantage, require that the bidder be disqualified,
and may result in protest actions or legal challenges.
Governing Law(s) and Reference Documents
1. Best practice document on specifications
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Section 6 – Sourcing and Standardization
6.1 Sourcing and Standardization Overview
It is city policy that purchases be based on competitive bidding whenever possible to maximize
the best value in the expenditure of public funds. Competition tends to be limited when goods
or services are sourced to one entity or standardized to one particular brand or manufacturer.
Careful consideration must be given before a decision is made to standardize products and/or
to request single or sole sourced procurements.
6.2 Single and Sole Sourcing
1. Single Source. Single source is defined as the selection of a good or service that may be
available from two or more sources, but there is compelling reason to select one
particular vendor.
2. Sole Source. Sole source is defined as the selection of a good or service that can only be
obtained from one supplier or manufacturer because of its specialized, proprietary or
unique in character.
Single and sole source procurements must be properly documented and approved in
accordance with city policies and procedures.
6.3 Standardization
1. Standardization. Standardization is an organized process to adopt one product or group
of products to be used by the city, such as particular computer hardware or software.
Product standardization may be utilized to create efficiencies, enhance safety, increase
productivity, promote brand consistency, or to foster interoperability.
Product standardization decisions are made by consensus of the executive team after
careful consideration and review of recommendations from staff.
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Section 7 – Special Policies and Programs
7.1 Special Programs and Policies Overview
Depending on the amount and/or type of purchase, there are several policies and programs that
must be considered. These include:
Application of Local Purchasing Preference;
Minority, Disabled and Woman Owned Business Policy Statement;
Environmentally Preferable Products; and
Policies and Procedures for Purchases Utilizing Federal Grant Funds.
Each is described below.
7.2 Local Purchasing Preference
The City Council has established a 5% local purchasing preference to be given to local
businesses who respond to bidding opportunities or otherwise contract with the city (excluding
public works construction and professional services), under the following guidelines and
conditions.
1. Definition of Local Business. A local business is defined as a vendor or contractor who:
a. Has a fixed place of business in the city limits and the point of sale occurs within
the city limits,
b. Is current in the payment of their business license tax, and
c. Is in compliance with city laws and does not owe money to the city.
2. Applicable Purchasing Methods. The local preference will be applied to competitive
bidding or letting contracts for the purchase of goods and applicable/associated services,
whether by formal bid, informal bid, or competitive proposal processes.
3. Making the Calculation. The local preference calculation will be determined as follows:
a. The purchasing coordinator will apply a 5% discount to the total bid pricing
provided by the local business for the purpose of calculating the lowest
responsive and responsible bidder.
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b. If a competitive negotiation process is used, then the local business will be
assigned 5% of the total evaluation points.
4. Inapplicability. Application of the local business preference does not apply in the
following situations:
a. Purchases of goods and services through legal contracts of other governmental
jurisdictions or public agencies, or cooperative purchasing agreements;
b. Contracts for professional or legal services;
c. Purchases or contracts which are funded, in whole or in part, by a governmental
entity, or private and public grants and the laws, regulations or policies
governing such funding prohibit application of the local preference; and
d. Purchases made under emergency situations.
5. Reserved Rights. The local purchasing preference does not prohibit the Council or
purchasing coordinator from comparing quality or basing purchasing decisions on the
quality of goods and/or services.
6. Notification. Information regarding the local purchasing preference should be provided
to prospective bidders to the best extent possible, but failure to do so will not be
grounds for invalidation of any purchase order or contract awarded under the city’s
purchasing policies.
7.3 Minority, Disabled and Woman Owned Business Policy Statement
It is the policy of the City to ensure full and equitable opportunities for minority business
enterprises, women business enterprises, disabled business enterprises, and local small
businesses.
To assure equitable opportunities for participation, the purchasing coordinator or designated
staff carry out the following programs:
Contractors must sign a certification that they and their subcontractors are in
compliance with the City’s Fair Employment Practices Policy
City staff works to actively develop vendors in these disadvantaged classifications on a
day-to-day basis.
Bidding opportunities will be provided to known vendors in targeted groups.
The purchasing coordinator will assist in the development of technical assistance
programs for these disadvantaged classifications.
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7.4 Environmentally Preferable Purchasing Policy
Purchases for goods and services shall ascribe, wherever and whenever possible, to the
Environmentally Preferable Purchasing Policy. The current policy can be found at the below
link.
\\org-srvr\depts$\Finance\Purchasing\Policy\Reso 2007-50 Environmental Preferable
Purchasing Policy.pdf
7.5 Policies and Procedures for Purchases Utilizing Federal Grant
Funding
When purchasing goods and services under a federal grant award, the city is required to follow
the provisions of 2 CFR Part 200 Subpart A §200.318 General Procurement Standards through
§200.326 Contract Provisions.
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Section 8 – Purchasing-related Instructions and Procedures
This section contains several purchasing-related instructions and procedures.
8.1 Bid/Proposal Protest Procedures
Contractors who have submitted timely bids or proposals may wish to protest or appeal a
contracting decision or procurement made by the appropriate award authority. Protest actions
must follow the procedures provided below. Protests of appeals, which are not submitted in
accordance with these procedures, will not be considered.
1. Protesting Party. Only bidders or proposers who have submitted timely bids or
proposals can initiate a protest action or appeal.
2. Protest Procedures. The following procedural steps must be followed to consider a
protest:
a. The protest must be in writing and delivered/sent by registered mail. Once
received, it will be date stamped at the Finance Department counter.
b. The protest must be filed within five working days after the announced decision
to award a contract.
c. Copies of the protest and all supporting documentation must be concurrently
transmitted to all other parties with a direct financial interest that may be
adversely impacted by the outcome of the protest. Such parties shall include all
other bidders who appear to have a reasonable prospect of receiving an award
depending upon the outcome of the protest.
d. The protesting party must bear all of its own costs and fees in conjunction with
protest or appeals processes.
3. Protest Filing. The written protest shall:
a. Include the name, street address, business phone number and email address of
the protestor.
b. Identify the project under protest by name, IFB, RFP or quotation number.
c. Contain a concise statement of the grounds for protest.
d. Include all supporting documentation.
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4. Protest Review Prior to Award. The purchasing coordinator or designated staff will
withhold contract award pending disposition of the protest unless it is determined that
an emergency exists. Upon review with the City Attorney, the purchasing coordinator or
designee will respond in writing to the material issues raised in the protest no later than
ten working days after receipt of the protest.
5. Right of Appeal. The protestor may appeal the initial determination to the finance
director in writing within five working days after notification of the purchasing
coordinator’s decision. The finance director will review the submitted information and
render a final decision within ten working days.
6. Protest Received and Reviewed After Contract Award. Protests after award will not be
considered unless the protest concerns a matter which arises after the award or could
not have been discovered or reasonably known prior to award.
8.2 Central Supply Stores
A central supply storeroom for commonly used supplies has been established in the Finance
Department and may be accessed by all employees on a self-serve basis. Departments are not
charged for supplies.
Notify the purchasing coordinator if a stock outage is noticed or if any specific supply is getting
low, and the item(s) will be restocked. Office supplies not carried in the central storeroom can
be evaluated for stock based on need (notify the purchasing coordinator) or obtained through
blanket purchase orders or on purchasing cards. The purchasing coordinator can also assist
with special orders for items not commonly carried.
8.3 Certificates of Insurance and Coverage Requirements
To minimize the city’s exposure to loss, all contractors must be appropriately insured and must
include the city as an “additional insured” on their insurance policy. Contractors are also
responsible for up-to-date insurance certificates with required policy endorsements that provide
the city with required insurance coverage and indemnity provisions.
The Human Resources/Risk Management Department maintains current insurance
requirements. Please refer to the insurance requirements in effect at the time of procurement.
8.4 Instructions to Bidders
Clear, concise and consistent instructions to bidders and proposers (hereafter “bidders”) are a
key part of the bidding process and help to enhance process clarity and ensure that prospective
offerors are informed of all city requirements.
The instructions inform bidders how to prepare and submit bids, establish mandatory
requirements, cover the bid addendum process, and how to withdraw or protest bids, among
many other items. The instructions for IFBs and RFPs are similar but contain important
differences due to the way contracts are awarded (low bid versus best value). The instructions
for each type of competitive process are contained in the bidding templates.
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In some cases, modifications can be made to the instructions, but this must be done in
consultation with the purchasing coordinator and/or City Attorney’s Office.
8.5 Lease, Rental and Lease-to-Purchase Procurements
In some cases it may be beneficial to rent or lease equipment rather than purchasing it due to
funding availability, length of time the equipment is needed, etc. Under certain circumstances it
may be optimal to purchase the equipment at the end of the lease period. Equipment rentals or
leasing may make the best economic sense in these situations:
Week-to-week or month-to-month rentals of short duration (less than one year).
Leasing for short timeframes (more than six months but less than three years).
Renting/leasing to evaluate equipment suitability prior to purchase. In these instances,
a “no-cost” purchase order may be a better option if the vendor is willing.
Leasing equipment when a new or improved design is imminent and the leasing
charges can be applied to the purchase cost of the new item.
Securing a lease to purchase because the purchase price exceeds the current
appropriation.
When considering equipment rental, lease or lease-to-purchase agreements, it is highly
recommended that the following provisions be negotiated and included in the agreement:
Lease and lease-to-purchase agreements should include a non-appropriation clause for
multi-year financing.
Agreements under any scenario should include a “cancellation for convenience” clause.
A percentage of payments should be applied to an eventual purchase.
Leasing agreements must include the annual interest rate, along with a payment
schedule that shows each principal and interest payment (to be forwarded to the
Accounting Division).
A lease-to-purchase agreement for capital equipment should have a minimum life
expectancy of five years.
Equipment leasing must be carefully considered. Leased equipment costs more than purchasing
outright, and if the equipment is not purchased, the city cannot take advantage of any residual
value.
8.6 Life Cycle Cost Analysis
Life cycle analysis, or total cost of ownership (TCO), considers the long-term cost of equipment
assets and citywide systems such as the financial system. Costs include acquisition, installation,
ongoing maintenance and end of life disposal.
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8.7 Service Provider Evaluation
When preparing to contract for services, it is important to evaluate service providers to
determine whether they are independent contractors or if they are more appropriately
characterized as temporary employees.
8.8 Surplus Property Disposal
All city equipment, supplies, and vehicles (“personal property” or “property”) will eventually
reach the end of their useful life and must be disposed of, and to the best extent possible,
generate revenue through sale or traded-in when new equipment is purchased. The following
procedures apply to the disposal of surplus property:
Surplus Disposal. It is the responsibility of department heads to determine when an
item is obsolete or excess surplus property. After such determination is made, the
surplus property may be transferred to another department or used as a trade-in for
new equipment. Surplused items may be donated, sold through a competitive sealed
bid process, or sold at public auction to another governmental or non-profit entity. For
final disposal, City Council shall approve of items to be surplused.
Sale of Surplus Property. As required by Section 2.43(c)(6) of the City Code, the sale of
surplus property is subject the approval of the City Administrator except that sale of
property having a value consistent with those classified as fixed assets by the fixed asset
accounting rules in effect at the time of the request must be approved by Council.
Property List. The department surplusing an item shall submit a list of property items,
the current value, and the asset number, if applicable, to the purchasing coordinator. The
purchasing coordinator will periodically compile a list of excess items and provide it to
all departments for review, and will subsequently obtain approval from the City
Administrator and/or City Council. Upon approval, the following three options are
available to dispose of the items:
o Sale to Another Governmental Entity. Surplus personal property may be sold
at fair market value to another governmental entity (or non-profit organization).
Such entity will have no more than 3 weeks to accept or reject the offer. If
accepted, the entity will be invoiced by Accounts Receivable. All applicable sales
tax shall be included. Note: The receiving entity is responsible for transportation
and liability of the item
o Auction. This option provides a convenient and efficient means of disposing
surplus. After an item has been declared surplus, the purchasing coordinator
will coordinate with the surplusing department to arrange for pickup by the
auction company.
o Competitive Bids. The purchasing coordinator may require that sealed bids be
obtained for certain surplus equipment, such as vehicles with considerable
resale value. Sealed bids shall be advertised in a newspaper of general
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circulation 10 days prior to the bid opening. Prospective bidders shall have the
opportunity to evaluate the equipment prior to bid opening as prescribed by the
purchasing coordinator. Award will be made to the bidder most responsive to
the City’s needs.
The equipment shall be bid upon in “as-is” condition with no warranty, and a
10% deposit in the form of a money order or cashier’s check must be submitted
at the time of bid opening, with a balance due within 7 calendar days. Deposits
will be returned to unsuccessful bidders within 14 calendar days.
Donations of Surplus and Preferred Recipients. In order of preference, surplus items
may be donated to: 1) the Gilroy Unified School District; 2) the Gilroy Chamber of
Commerce. Surplus property unlikely to generate significant revenue and that are not
transferred to other departments may be donated to other public agencies, to Gilroy’s
sister cities, or to non-profit organizations.
Any donation of surplus property to a non-profit organization shall be approved by the
City Council upon findings that the non-profit is qualified under section 501(c)(3) of the
Internal Revenue Code and that the donation will benefit the City and its constituents.
All donations pursuant to this section shall be without warranty, express or implied,
and the transferee shall agree to defend, indemnify and hold harmless the City, its
officers and employees, from any claim, cause of action, damage, loss or liability arising
out of the condition of the property or its use by the organization or subsequent
transferee.
Specialized Police Department Surplus. Upon the request of the Gilroy Police Chief
and with City Council approval, surplus items of a unique nature, i.e., guns, vests, and
other protective equipment may be disposed of in an appropriate manner to suitable
recipients. Disposal shall incorporate the Range Master’s Policy in regard to the sale of
guns to a Gilroy police officer or other law enforcement officer.
Stolen Property. All stolen property shall be held by the police department for a period
of 6 months. Periodic lists shall be prepared by the police department and submitted to
the purchasing coordinator, to be agendized and declared surplus. Items will be
disposed of in the most equitable manner. The only exception is Bicycles, which shall
only be sold at public auction once declared surplus.
Tracking Surplus. Regardless of the value established in policy, departments shall
furnish a memorandum to the purchasing coordinator for tracking low value items.
Broken or unrepairable items considered trash need not be listed in the memorandum.
Revenue. The revenue received for the sale of surplus property shall be deposited in
the General Fund or other appropriate fund for certain equipment sales.
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8.9 Used Automobile Purchases
For efficiency purposes, the Council has waived formal bidding procedures for purchasing used
vehicles under the following conditions:
A budgeted appropriation exists.
A determination is made by the fleet manager that purchasing a used vehicle is in the
city’s best interest.
All Gilroy used-car vendors are notified of the city’s intent to purchase.
The following procedures and requirements must be followed to purchase a used vehicle:
The fleet manager will develop specifications based on the user department’s needs.
The fleet manager will solicit at least three written quotes utilizing informal
procurement procedures; two of which must be solicited from Gilroy vendors.
The used vehicle must have less than 25,000 miles and be less than 2 years old.
A thorough inspection of each vehicle under consideration will be performed by Fleet
Division staff, who will make a recommendation for purchase.
The fleet manager will submit a purchasing requisition for department head
authorization.
After the issuance of a purchase order, Fleet Division staff will arrange for
transportation to the city and ensure vehicle registration. They are also responsible for
submitting sale documentation to accounts payable in a timely manner.
The fleet manager will prepare a report for Council review.
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Section 9 – Glossary of Terms
9.1 Definitions
This section defines relevant purchasing terms and terminology in use by the City of Gilroy.
Agreement. A mutual, written understanding between two or more competent parties, whereby
one party agrees to perform as defined in the agreement and the other party agrees to
compensation for the performance rendered in accordance with the agreement conditions.
Agreement and contract may be used synonymously.
Amendment. An agreed upon modification to an existing contract.
Appropriation. Authorization by the City Council to expend budgeted funding for city operations
and infrastructure, or other designated purposes.
Award. The acceptance of a bid or proposal; the presentation of a purchase agreement by the
award authority to a bidder or offeror.
Award Authority. The governing body or staff person authorized to approve the purchase of
goods and services on behalf of the city; the staff person(s) authorized to approve or execute
procurement contracts and otherwise legally bind the city.
Best Value Procurement. A procurement that is awarded based on factors in addition to price. Best
value procurements are mainly conducted through the competitive proposal process.
Bid Addendum. A bid addendum is a document issued to all known participants (“planholders”)
in a competitive bid process that makes a change to the bid documents/project (i.e., changes to
specifications), or process (like a bid due date extension).
Bid Opening. The process in which sealed bids are publicly opened, in the presence of at least one
witness, at the time and place specified in the invitation for bids.
Blanket Purchase Order (BPO). A limited-term contract for goods and/or services based on unit
pricing, typically for one-year renewable periods. BPOs may be established with indefinite
quantities, allowing end users flexibility to order products when needed, or for on-call services.
Change Order. A contract modification consisting of additions or reductions in work or materials
approved by the City Council or purchasing coordinator.
Commodity. Goods consisting of supplies, materials and equipment.
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Competitive Bidding. The process of soliciting and obtaining formal and informal bids, including
price quotations, from competing sources, by which an award is made to the lowest responsive
and responsible bidder.
Competitive Proposals. The process of soliciting and obtaining formal and informal proposals
from competing sources, by which an award is made to the proposer whose solution provides the
best value to the city. The award may be made based on factors in addition to price, e.g., a higher
price can be paid for goods and/or services if the value can be justified.
Conflict of Interest. A conflict of interest in conjunction with a city purchase is a situation where
an employee or a member of the employee’s family stands to benefit financially from the
procurement.
Contract. See Agreement.
Cooperative Procurements. A variety of arrangements whereby two or more public entities
purchase goods and/or services from the same supplier or multiple suppliers using a single
competitive bid or proposal; the combining of the requirements of two or more public entities to
leverage the benefits of volume purchases, including administrative savings and other
demonstrable advantages.
Encumbrance. An accounting entry that commits an appropriated dollar amount to be spent.
Formal Sealed Bid. A procurement method for goods and/or services anticipated to be greater
than $100,000 whereby sealed Invitations for Bids (IFBs) are submitted and publicly opened, with a
contract awarded to the lowest responsive and responsible bidder.
Formal Sealed Proposal. A procurement method for goods and/or services anticipated to be
greater than $100,000 whereby sealed Requests for Proposals (RFPs) or similar proposal documents
are submitted and reviewed by an evaluation committee based on established criteria, with a
contract awarded to the responsive and responsible proposer whose solution provides the best
overall value to the city.
General Services. Work performed or services rendered by independent contractors such as
custodial services, building and equipment maintenance, machinery and equipment rental, and
utility services, excluding contracts for public works.
Goods. Supplies, materials and equipment to be furnished or used by any department of the city,
including items purchased by the city and furnished to contractors for use in public works projects.
Informal Bid or Proposal. Competitive bids or proposals anticipated to be $100,000 or less
conducted under informal procurement procedures.
Invitation for Bids (IFB). The type of bid document typically used in a competitive (formal) sealed
bidding process. Components include but may not be limited to a bid invitation, instructions to
bidders, bid schedule(s), terms and conditions and technical specifications.
Job Order Contract. As-needed contracts for small construction or maintenance projects and/or for
urgent or emergency repairs where time is of the essence. These types of contracts are bid on a unit
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cost basis and awarded based on not-to-exceed amounts approved by the appropriate award
authority. Job Order Contracts may be established as Master Agreements.
Local Purchasing Preference. A 3% bid preference granted to local bidders whose principal place
of business is located within city limits, subject to policy limitations.
Lowest Responsive and Responsible Bidder. The bidder to be awarded a contract who fully
complies with all material bid requirements, whose past performance and financial capacity is
determined to be acceptable and has offered the lowest price.
Master Agreement. A contract that is awarded to multiple qualified providers pursuant to a
primary agreement with a standard set of terms and conditions, typically created under a
competitive proposal process. Once established, services are distributed among providers with
discrete project work negotiated through task orders; also referred to as Master Service
Agreements (MSA) or Master Professional Service Agreements (MPSA).
Piggybacking. A form of intergovernmental cooperative purchasing whereby the city utilizes the
contract pricing and terms of another government agency.
Prevailing Wages. The wage rates, including fringe benefits, paid to a majority of workers in a
geographic area for the same type of work on similar projects as established by the California
Department of Industrial Relations.
Professional Services. Services provided by a person or firm engaged in a profession based on
highly specialized and/or technical knowledge or skill; services considered distinct and unique to
such a degree that bidding may not be feasible, if appropriately justified and documented. Some
examples include accountants, attorneys, artists, architects, engineers and physicians.
Public Works. The construction, alteration, repair, or improvement of any public structure,
building, road, or other public improvement of any kind, including demolitions, and the
construction and installation of drainage systems, lighting and signaling systems, sewer and water
systems, and park and recreational facilities.
Purchase Order. A legally binding contract issued by purchasing staff to a vendor which includes
the terms and conditions of a transaction.
Purchase Requisition. The document required to be submitted through the financial system to
begin the procurement process. Purchase requisitions must be properly documented and approved
for the procurement process to proceed.
Ratification. The process by which an unauthorized purchase is approved or ratified by the
appropriate award authority after-the-fact.
Request for Proposals (RFP). The solicitation document used to solicit proposals for goods and/or
services from potential providers.
Request for Qualifications (RFQL). Also referred to as Requests for Statements of Qualifications
(RSQ), this type of solicitation seeks to establish qualified applicants or pools of applicants for as-
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needed services, sometimes under Master Professional Service Agreements (MPSA); most
commonly used for architectural and engineering services or other highly specialized consultants.
Request for Quotations (RFQ). The type of bid document used for obtaining competitive quotes
through the informal procurement procedures.
Responsible Bidder. A bidder is considered responsible if they possess the demonstrated ability,
capacity, experience and skill to provide the goods and/or services in accordance with the city’s
requirements; has a record of satisfactory or better performance under prior contracts with the city
and other entities; and has complied with laws, regulations and guidelines governing prior or
existing contracts.
Responsive Bidder. A person or entity who has submitted a bid which conforms in all material
respects to a bid or proposal solicitation.
Single Source. A good or service that may be available from more than one source, but a
compelling justification can be made to obtain the good or service from one particular vendor.
Sole Source. A situation where a good or service can only be obtained from one source due to its
proprietary or specialized nature.
Specification. A precise description of the physical characteristics, quality, or desired outcomes of
a commodity to be procured, which a supplier must be able to produce or deliver to be considered
for award of a contract. There are two types of specifications: design and performance.
Standardization. The process to adopt one product or group of products to be used by the city,
such as particular computer hardware or software.
Surplus Property. Supplies, materials, and equipment that is no longer used or has become
obsolete, to be sold, exchanged or donated by the purchasing coordinator in accordance with
policy provisions covering surplus property donations.
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City of Gilroy
STAFF REPORT
Agenda Item Title: Introduction of the Draft Purchasing Policy Update
Meeting Date: February 10, 2020
From: Gabriel Gonzalez, City Administrator
Department: Finance Department
Submitted By: Jimmy Forbis
Prepared By: Jimmy Forbis
Bryce Atkins
Strategic Plan Goals
Fiscal Stability
☐ Downtown
Revitalization ☐ Economic
Development
☐ Neighborhood Services
☐ Enhanced Public
Safety
☐ Workforce Stability ☐ Public Engagement
RECOMMENDATION
Receive report and provide direction to staff.
EXECUTIVE SUMMARY
Staff has been working to update the City’s Purchasing Policy to meet the current
operational needs of the City, while maintaining the values of transparency, open
competition, and prudent fiscal management. The proposed update to the policy is
being introduced to obtain Council comments and direction, which will be incorporated
into the proposed policy for later consideration of adoption by the City Council.
BACKGROUND
In 1993 the City of Gilroy adopted the City’s current Purchasing Policy. Since then, the
policy has been updated in piecemeal over the course of the last 17 years. Staff
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recognized the significant undertaking to update the policy and thus engaged the
assistance of Management Partners to provide experienced consultants to facilitate the
update. Management Partners has assisted several entities, including Sunnyvale in
updating their purchasing policies to ensure that they adhere to not only legal
requirements, but also recognized best practices.
Management Partners met with each City department to obtain input from City staff.
The resulting update to the purchasing policy is being presented to Council tonight in
draft form.
ANALYSIS
There are numerous changes within the updated policy and thus staff has included the
entire policy as part of this Council report. Staff believes that there are significant policy
changes for Council to consider and thus, a list of substantive changes proposed in the
policy update are described below.
1. Consolidated multiple separate policy sub-sections into a cohesive single
policy
The City’s current policy is a document comprised of numerous independent
policy statements adopted over several years. The statements do not effectively
cross-relate (at times creating conflicting policies). Over time, components of the
purchasing policy have been updated in individual components as opposed to
comprehensive reviews and updates.
Additionally, the statements include procedures that are specific to the current
financial software, or processes that are ministerial in nature and subject to
staffing and organization role changes. A sound policy document typically does
not include specific organizational procedures.
Local purchasing preference
The City’s current local preference level constitutes a 3% discount to the
estimate or bid for a good or service that is not associated with a Public Works
project. The draft policy update increases the local purchasing preference to
provide a 5% discount amount for the purposes of selecting the lowest quote or
bid. A survey of other cities was conducted, and the 5% rate is consistent with
the general practice of other municipalities. The definition of what constitutes a
local vendor is contained in the draft policy and requires a vendor to have a place
of business within the boundaries of the City, the point of sale be located within
the City of Gilroy, be current in the payment of their business license tax, and is
in compliance with city laws and does not currently have an outstanding debt to
the City.
It is important to note that this discount cannot be applied to a public works
project. These projects are governed by the California Public Contracting Code,
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and outlines requirements that the lowest responsive and responsible bidder will
be awarded the project. This type of bidding prohibits the application of a local
preference policy for the purposes of selecting a contractor. The Purchasing
Policy, like the City Charter, delineates the requirements for public works projects
separately from the other goods and services that may be purchased.
2. Increased staff level of award authority from $999 to $2,999
The current purchasing policy grants all staff the authority to make purchases
totaling less than $1,000, and to make such purchases without the requirement
of competitive bidding. The latest update to this section of the policy was in 1993.
At that time, this amount provided sufficient level of authorization, but over the
years the cost of products and basic/small services has increased dramatically.
Staff is therefore requesting that the Council grant staff level positions the ability
to make purchases that are up to $2,999 and to do so without competitive
bidding. The policy still identifies that staff should continue to seek competitive
bidding whenever possible.
The intent of noncompetitive bidding at this amount is to avoid having businesses
invest their time in developing proposals and subsequently be eliminated in the
competitive process. The other award authority levels remain intact from the
most recent Council approved update to the current purchasing policy.
3. Increased amount that requires a contract from $1,000 to $10,000
In the current purchasing policy, staff is required to enter into the City’s standard
form of agreement for all purchases of services over $1,000. For larger contracts
this does not present an issue. However, vendors with smaller contracts are
reluctant to enter lengthy contractual agreements for such services at very low
dollar amounts. The time to review the contract, significant insurance
requirements, contract management, and the formalized structure for small
projects had relegated this process to be considered unfriendly to small
businesses.
Staff is requesting through the draft policy update to exempt the purchase of
goods, and the purchase of services up to $10,000 from requiring a written
contract. Instead, the purchase will be made via purchase order, which provides
the City’s standard terms and conditions (T&C) of the purchase as a part of the
purchase order, and essentially operates as a smaller contract form. The
purchase order T&C will act in similar fashion to the terms of a contract, but in a
manner consistent with the smaller level of purchasing and risk from the
procurement. This recommendation is consistent with other cities of Gilroy’s
size.
4. Clarification of award authority
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The proposed policy clarifies that the level of award authority required is based
on a single transaction (the value of the contract or purchase as a whole). If a
contract is being awarded for multiple years with an annual cost, the award
authority is determined by the product of the annual cost multiplied by all of the
years to be awarded.
The policy continues to enforce the standard that purchases are not to be split
over several years to avoid or reduce the proper level of award authority required
to complete the purchase.
5. Enhanced listing of purchases that are exempt from competitive bidding
The City’s current policy identifies three main areas of exemption from purchase
orders, though it leaves ambiguity about exception to competitive purchasing:
a) 801 fund reimbursement/contracts
b) Contract employment agencies
c) Legal fee expenses
d) Employment benefits, payroll transactions
e) Employee Reimbursement
The updated policy is more specific and lists types of purchases being
recommended for exemption. These recommendations are based on the nature
of the purchases themselves or the potentially sensitive information that would be
exposed in pursing competitive bidding.
The list of exemptions are below taken from the policy, section 4.9.1:
a) Emergency procurements as defined herein.
b) Situations where solicitations of bids or proposals would for any reason be
unavailing or impossible.
c) Professional or specialized services as defined in Subsection 3.2, General
Categories of Purchases on page 5.
d) Public library collection materials.
e) Insurance, bonds or financial services.
f) Single or sole source goods or services as defined herein.
g) Highly specialized equipment developed or designed for a special activity
or function or whose purpose is in the best interests of the City due to
compatibility with existing equipment or training of personnel.
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h) Procurements funded by grants, donations or gifts when any special
conditions require the purchase of particular materials and/or services.
i) Purchase of surplus property owned by another public entity, or payment
to other public entities or utilities.
j) Membership dues, conventions, training, travel arrangements, or
advertisements in magazines, newspapers, or other media.
k) Works of art, entertainment or performance.
l) Goods procured for resale to the public.
m) Where competitive bids or proposals have been solicited and no bid or
proposal has been received. In such situations the City Administrator may
proceed to have the goods procured or services performed without further
competitive bidding.
n) Computer software license or subscription renewals.
o) Human Resources investigation, legal services, and medical services,
including but not limited to, fitness for duty evaluations, expert witnesses,
and other employment related medical services.
p) Regulatory permits.
q) Subscriptions.
r) Reimbursements and/or refunds of payments made to the City.
s) In other cases when specifically authorized by the Council (if over
$100,000) after a finding and determination that it is in the best interests of
the city.
6. Clarification about which methods to use for competitive purchasing
The current policy identifies request for proposals and bidding processes,
however there are aspects to the processes that are ambiguous or missing.
Additionally, updates to the levels of authority made in the past are in many
instances conflict with the sections regarding the identification of the proper
method of securing competitive bids, proposals and quotes. The policy clarifies
the methods themselves, the reasons why certain methods are used for the
types of deliverables, and additional guidance to staff on the proper requirements
to evaluate the resulting bids and proposals. It further clarifies the requirements
for each method of procurement in clear language compared to the approval
requirements currently in the purchasing policy.
7. Cooperative purchases including piggyback contracting
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The proposed policy more thoroughly describes the ability to utilize cooperative
purchases, including joint purchasing authorities and collaboratives. The update
also authorizes the practice of using piggyback contracting, which would allow
staff to use a contract for goods and/or services that another public agency
utilizes, so long as the contract was reached through competitive bidding. The
provision requires that the product is the same that was awarded through the
contract, and cannot be significantly modified.
8. Minor updates to the surplus process
The update proposes to remove the Gilroy Youth Center from the priority of
outside organizations to which staff may donate surplussed items, as the Youth
Center is operated by the City and would therefore not meet the definition of a
surplus item. Additionally, the value of the sale that requires Council approval is
proposed to be based on the fixed asset accounting rules in effect at the time of
surplus. This would set the amount of the sale which needs Council approval to
be $10,000.
ALTERNATIVES
This is an introductory item. Council may provide direction to staff to bring the draft
policy update as-is for Council adoption, recommend changes to the proposed policy
update, or direct staff to cease the update efforts for the City’s Purchasing Policy.
FISCAL IMPACT/FUNDING SOURCE
None. This is an introductory item, and does not bear an impact on the City’s financial
position.
CONCLUSION
Once direction is received, staff will make the changes directed and return to Council for
adoption at a future Council meeting.
Attachments:
1. Gilroy Draft Purchasing Policy (February 2020)
2. Current Purchasing Policy
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City of Gilroy
STAFF REPORT
Agenda Item Title: Consideration of an Exception to the Rental Rates Specified in the
Residential Development Ordinance Affordable Housing
Exemption Procedure for a Project Located North of Luchessa
Avenue, Between Miller Avenue and West 10th Street Assessor
Parcel Numbers 808-18-003 (portion), 808-19-022 and 808-19-023,
Commonly Known as the Glen Loma Ranch Below Market Rate
Apartment Project (M 19-14)
Meeting Date: March 2, 2020
From: Gabriel Gonzalez, City Administrator
Department: Community Development Department
Submitted By: Karen Garner
Prepared By: Karen Garner
Melissa Durkin
Strategic Plan Goals
☐ Fiscal Stability
☐ Downtown
Revitalization
☐ Economic
Development
☐ Neighborhood Services
☐ Enhanced Public
Safety
☐ Workforce Stability ☐ Public Engagement
RECOMMENDATION
a) Adopt a resolution of the City Council of the City of Gilroy approving an exception
to the City’s RDO affordable housing exemption procedures to allow rental rates
within the Glen Loma Ranch Town Center Apartments project to be affordable to
households earning 50% to 80% of area median income .
b) Direct staff to prepare revisions to the Residential Development Ordinance and
related policies to ensure conformance with state legislation and consistency with
regional and local housing goals.
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EXECUTIVE SUMMARY
The primary funding agency for affordable housing projects in California, California
Housing Finance Agency (CalHFA), recognizes that inadequate housing is being
produced for very-low income and middle income households. To bolster housing
production targeted to these income groups, CalHFA is funding housing in the middle
income range, in exchange for producing housing in the very-low income range.
The Pacific Companies would like to rent units in the Glen Loma Ranch below-market
rate apartment project at rates consistent with CalHFA funding. The Pacific Companies
would need an exception to Gilroy’s affordable housing policy to implement this rental
structure. The proposed rental structure would help Gilroy meets its Regional Housing
Needs Allocation (RHNA) requirements and would provide housing to under-served
very-low income and middle income families. If The Pacific Companies does not obtain
approval of this exception, all apartments within this project would rent in accordance
with the City’s policy. The City’s policy is outdated and does not address current RHNA
requirements. Because of this, renting units in accordance with the City policy would
not advance the City in meeting its RHNA requirements.
POLICY DISCUSSION
Policy Question
Should the City Council approve an exception to the rental rates specified in the “RDO
Affordable Housing Exemption Procedure”?
Con
The proposed rental structure would not contribute to the City’s progress toward
meeting Moderate Income RHNA Requirements.
Pro
The proposed rental structure would result in 76 units being affordable to Very-low
Income households. Allowing units to rent at this level would reduce the City’s
outstanding Very-low Income RHNA obligation from 163 units to 87 units. In addition,
38 of the units would be affordable to “missing Middle” income households, which is an
underserved segment of Gilroy’s housing market.
BACKGROUND
Gilroy’s Affordable Housing Policy
The City’s “RDO Affordable Housing Exemption Procedure” (Policy) was first adopted in
1992 as a policy of the Residential Development Ordinance (RDO). The RDO is the
City’s growth management ordinance and regulates the amount of residential
development that can occur over specified time periods. The Policy’s original intent was
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to ensure affordable projects provided housing at defined levels of affordability (see
attachment). It should be noted that with the passage of SB 330, the City’s RDO related
to limiting the number of housing units is no longer valid. Some policies related to
affordability may still be valid, but are outdated and not reflective of Regional Housing
Needs Allocation (RHNA) goals.
Since its initial adoption, the Policy has become the City’s de facto affordable housing
policy. The Policy sets forth required affordability levels for all affordable projects,
including projects within Neighborhood District areas, such as Glen Loma Ranch. The
Policy states that affordable projects must rent 100% of units at rents restricted to
households earning up to 60% of Area Median Income (AMI), which is within the Low
income housing range. In practice, most affordable rental projects constructed in Gilroy
have rent structures requiring a deeper level of affordability, due to requirements of the
developers’ funding sources.
Glen Loma Ranch Affordable Housing Requirements
The Glen Loma Ranch (GLR) Development Agreement (DA) requires 15.1% of the units
constructed in GLR to be affordable. Most of the affordable units are slated to be
developed in the Town Center neighborhood, on a lot designated in the Specific Plan as
the “Affordable Housing Area” (see GLR Land Use Plan attachment).
The DA requires up to 256 affordable units to be constructed in GLR, if the project
develops the Specific Plan maximum of 1,693 units. The DA requires affordable units
to be constructed as follows:
a. 106 units income-restricted in conformance with the Policy. These would be
multi-family units;
b. 75 senior affordable units. These units would be both income-restricted in
conformance with the Policy and restricted to households in which at least one
resident is 62 or older.
c. 75 senior non-restricted units. These units would be affordable by design (i.e.
smaller units, with correspondingly smaller sales prices or rental rates), but would
not be income-restricted.
If fewer than 1,693 units are constructed, the number of affordable units required would
be reduced proportionately. Since we now know that it is likely that a maximum of 1,350
units will be constructed, Glen Loma Ranch would likely need to provide only 204
affordable/senior units. Most of these units would be constructed in the Town Center
neighborhood of Glen Loma Ranch, which includes the Affordable Housing Area wh ere
The Pacific Companies will develop the below-market rate apartment project.
Affordable units not constructed within the Town Center neighborhood will be
constructed in neighborhoods that have not yet received development approval,
specifically, the Malvasia multi-family area, Rocky Knoll and Canyon Creek.
Gilroy’s Progress toward Meeting RHNA Requirements
10.D
Packet Pg. 133
The California Department of Housing and Community Development (HCD) determines
the total number of new homes that need to be constructed in each region in California,
and the affordability levels of those homes. The Association of Bay Area Governments
(ABAG), the regional governmental agency for Santa Clara County, determines the fair
share of housing each city, town and county in the Bay Area must develop. The
process by which ABAG allocates this housing is called the Regional Housing Needs
Allocation (RHNA) process. The RHNA cycle is concurrent with each agency’s Housing
Element cycle, so Housing Element policies and goals can be tailored to facilitate
development of the required housing.
Gilroy’s current Housing Element/RHNA cycle runs from 2015-2023. The chart below
shows the progress Gilroy has made toward meeting the RHNA requirements through
2018.
Regional Housing Needs Assessment Progress (2015 – 2018)
Income Level
RHNA
Allocation
by
Income
2015 2016 2017 2018
Units
Permitted
To-date
Units
Remaining
Extremely-Low
Income
(0 – 30% AMI) 236
0 0 0 37 37
163
Very-Low
(31 – 50% AMI)
26 0 10 0 36
Low
(51 – 80% AMI)
160 249 0 192 38 479 0
Moderate
(81 – 120%AMI)
217 7 0 0 0 7 210
Above Moderate
(Above 120%
AMI)
475 406 321 243 156 1,126 0
Total 1,088 688 321 445 231 1,685
Remaining Need 373
10.D
Packet Pg. 134
AMI=Area Median Income
As the chart shows, Gilroy has exceeded Low and Above -Moderate RHNA
requirements, but still needs to make significant progress toward meeting Extremely-
low/Very-low and Moderate RHNA requirements.
Missing Middle Housing
The term “missing middle” applies to households that earn too much money to qualify
for low income housing, but not enough money to pay market rates for housing. Most of
the apartment projects constructed in Gilroy in recent years (Harvest Park Apartments,
Alexander Station, and The Cannery at Lewis Street) are Tax Credit-funded projects
that rent apartments to Low and Very-Low income households. Households earning
above 60% AMI do not qualify to rent any of these apartments, and have to compete for
the limited number of market-rate apartments available in Gilroy, which tend to be older
housing stock.
CalHFA has chosen to fund production of housing targeted to households earning up to
80% AMI to address the needs of the “missing middle.” Under the CalHFA program, in
exchange for providing housing affordable to households earning up to 80% AMI,
developers must also provide housing affordable to households earning up to 50% AMI.
Households earning up to 50% AMI are considered Very-Low Income, another income
group for which inadequate housing has been constructed. This rental structure meets
the dual need of providing housing to middle income and very-low income households.
Planning Commission Action
The Planning Commission recommended approval of the proposed Policy exception by
a vote of 5-1-1 at their January 16, 2020 meeting. The Commission discus sion focused
on project financing. There was no public comment related to this application.
The Planning Commission recommended that Council direct staff to revise the “RDO
Affordable Housing Exemption Procedure” by a vote of 6-0-1 at their January 16, 2020
meeting.
ANALYSIS
The Pacific Companies requests a Policy exception to rent 24% of the apartments in the
Glen Loma Ranch Town Center apartment project to households earning up to 80%
AMI, in exchange for renting 48% of the units to households earning 50 % AMI (see
developer’s attached letter). The proposed rental structure is consistent with CalHFA
funding requirements. The apartments will be constructed on the site designated within
the Town Center neighborhood as “Affordable.” In addition, as required by state law,
two units must be occupied by on-site managers, and would be unrestricted. The
proposed rental structure is as follows:
10.D
Packet Pg. 135
*Indicates units designated for on-site managers
For reference, the following 2019 Tax Credit income limits and rental rates would apply
to Santa Clara County; the California Tax Credit Allocation Committee (CTCAC) adjusts
these rates annually.
Income Limits
Income Limits One-Person
Household
Two-Person
Household
Three-Person
Household
Four-Person
Household
50% AMI $51,250 $58,550 $65,850 $73,150
60% AMI $61,500 $70,260 $79,020 $87,780
80% AMI $82,000 $93,680 $105,360 $117,040
Rental Rates
Income Limits One-Bedroom Two-Bedroom Three-Bedroom
50% AMI $1,372 $1,646 $1,902
60% AMI $1,647 $1,975 $2,283
80% AMI $2,196 $2,634 $3,044
Under The Pacific Company’s proposal, 48% of the units would be rented to households
earning up to 50% AMI, which is considered Very-Low Income. In exchange for renting
48% of the units to Very-Low Income households, 24% of the units would be rented to
households, earning up to 80% AMI, which is still in the Low income range.
If the City’s current Policy requirements were applied to this project, 100% of the units
would be rented to Low income households. The City has already fulfilled its RHNA
Income Levels Family Apartments Senior Apartments Percent out of
158 units
50% AMI (Very-low) 49 27 48%
60% AMI (Low) 26 16 27%
80% AMI (Low) 4 34 24%
120% AMI
(Moderate)
No Restriction 1* 1* 1%
Totals 80 78
10.D
Packet Pg. 136
requirements for that income group. Therefore, applying the Policy requirements to this
project would not further assist the City in meeting that RHNA requirement.
Allowing the proposed Policy exception and implementing the proposed rental structure
would allow the city to make significant progress toward meeting Very-Low income
housing requirements. The project would provide 76 units at that level, bringing the
remaining needed Very-Low income units down to 87. The project would also rent 80
units to Low income households. As stated above, the City has already fulfilled its
RHNA requirements for that income group, so these additional units will not further
assist the City in meeting that RHNA requirement. The two manager’s units may be
eligible to count toward Moderate income housing; that determination will be made
through discussions with the State Department of Housing and Community
Development, based on the rents of those units.
Amendments to the Affordable Housing Policy
Several recent changes in state law and specifically SB 330, have eliminated cities’
abilities to place numerical growth limits on residential development invalidating Gilroy’s
RDO Ordinance. In addition, the current affordability requirements contained within
related policies are not addressing RHNA requirements for Very-Low Income or
Moderate income housing. For these reasons, several provisions of the ordinance and
related policies are either no longer enforceable or no longer meet the City’s needs.
Therefore, along with recommending approval of the proposed policy exceptions, the
Planning Commission and staff recommend that Council direct staff to propose policy
revisions to ensure compliance with state housing laws and RHNA requirements. Staff
would bring back the proposed revisions to the Planning Commission and City Council
at a later date.
ALTERNATIVES
1. The City Council could adopt a resolution approving M 19-14, which would allow
the applicant to rent 48% of the units in the Glen Loma Ranch BMR apartment
project at rents affordable to Very-low Income households. The City Council
could also direct staff to revise the Policy to reflect current state law and better
address Gilroy’s RHNA requirements. STAFF RECOMMENDS THIS OPTION
because it would allow Gilroy to make progress toward meeting its RHNA
obligations and would bring the Policy into compliance with state law.
2. The City Council could deny M 19-14 if the Council determines that revising the
rent structure is not in Gilroy’s best interest. A denial would result in all units
within this project renting to Low Income households. STAFF DOES NOT
RECOMMEND THIS OPTION because Gilroy has already met its Low Income
RHNA obligations for this Housing Element cycle.
10.D
Packet Pg. 137
The City Council could also allow the Policy to remain unchanged. STAFF
DOES NOT RECOMMEND THIS OPTION because the Policy is out of
compliance with state law and is inconsistent with Gilroy’s RHNA requirements.
FISCAL IMPACT/FUNDING SOURCE
The applicant paid all costs associated with processing this request. Revision of the
RDO ordinance and related policies will be completed by staff with no additional fiscal
impact anticipated.
CONCLUSION
If The Pacific Companies does do not receive approval of this exception request, all
units in this project will rent at 60% AMI, in accordance with the Policy. The City does
not need additional units in this income category to meet RHNA requirements. The City
does need additional units in the 50% AMI (Very-low Income) category to meet RHNA
requirements, and needs units in the 80% AMI (Low Income) category to address the
needs of middle income households. Therefore, staff believes approval of the
applicant’s request would benefit the City.
NEXT STEPS
If the City Council approves this exception request, the City Attorney would prepare a
regulatory agreement memorializing the approved rental rates. T he City and the
developer would be parties to the agreement.
If the City Council directs staff to revise the RDO Ordinance and related policies, staff
will add the revisions to the Community Development Department work plan and bring
back recommended revisions in accordance with that work plan.
Attachments:
1. RDO Affordable Housing Exemption Policy
2. GLR Land Use Plan
3. Developer's Request
4. Resolution M 19-16
10.D
Packet Pg. 138
RDO AFFORDABLE HOUSING EXEMPTION
PROCEDURE
City of Gilroy
Revised October 7, 2013
Section 1.00 Statement of Intent
It is the intent of this policy to set forth the specific criteria and guidelines for
the affordable housing exemption provided in the City of Gilroy Zoning
Ordinance, Section 50.62 (b) (3) and (4). The goal of this exemption is to
enhance public welfare by meeting the current and future housing needs of all
segments of the community. This exemption is intended to encourage private
developers to construct housing that is affordable to Very Low, Low and
Moderate income households, as specified in this document.
Section 1.01 Definitions
Affordable Housing: A dwelling unit, either rented or owned, which is
affordable to households with Very Low, Low, or Moderate incomes, as
specified by this document.
Applicant: Any person, partnership, corporation, firm, or any entity or
combination of entities, which seek permits or approval for residential
development in the City of Gilroy.
Dwelling Unit: Housing which is designed and intended for occupancy as a
residence by one
(1) household. This term includes condominiums, townhouses, single-
family homes, multi-family homes and apartments.
HUD: United States Department of Housing and Urban Development.
Resale Controls: Legal restrictions imposed upon property owners by the
City to ensure that the dwelling units will remain affordable to Very Low,
Low, and Moderate income households, as defined in this document, for a
specified time.
10.D.a
Packet Pg. 139 Attachment: RDO Affordable Housing Exemption Policy (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
Residential Development (RDO): All development that includes single
family dwellings, multi-family dwellings, condominiums, townhouses,
cooperative developments, and land subdivisions intended to be sold to
the public for residential use.
Residential Development Ordinance: Section 50.60 of the City of Gilroy
Zoning Ordinance that encourages responsible growth in the community,
and restricts the amount of housing which may be constructed each year.
Very Low, Low and, Moderate Income Levels: Income categories
established by HUD for Santa Clara County. Very Low and Low income
levels are calculated based on Median household size and income.
Section 1.02 General Requirements
(A) One hundred percent (100%) of the housing units granted an
exemption from the Residential Development Ordinance under this
program must be sold and/or rented at prices that are affordable to
Very Low, Low, or Moderate income households, as specified by
sections 1.03 and 1.04. The procedure for this exemption shall be as
follows:
Procedure:
(1) The applicant must apply for an "RDO Affordable Housing Exemption," and
must submit all required fees at the time of application. Consideration for
approval of this application shall be made in accordance with the criteria
contained within Zoning Ordinance section 50.62.
(2) At the time of application for the exemption, the applicant must specify the
number of units to be constructed. The applicant must also identify the number
of units that will be affordable to households with Very Low, Low, and Moderate
incomes, as defined by this document.
(3) Rental and/or sale prices of all units shall be reviewed and approved by the
City, and shall be affordable to households with Very Low, Low, and Moderate
incomes, as specified by sections 1.03 and 1.04.
(4) Approval of the application will be based upon compliance with this policy
and all other City requirements, as may be updated from time to time. The
applicant must receive approval of the RDO exemption prior to Tentative Map
approval. In situations where a Tentative Map is not required, the applicant
must receive approval of the RDO exemption prior to Architectural and Site
Review approval.
(5) After approval of this application, and prior to receiving Tentative Map
10.D.a
Packet Pg. 140 Attachment: RDO Affordable Housing Exemption Policy (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
approval (or Architectural and Site Review approval in situations where
Tentative Maps are not required), the applicant must enter into a contract with
the City (hereafter referred to as Agreement) agreeing to provide affordable
housing as delineated in this policy, and as approved by the City Council. This
Agreement will assure affordability of the units. Failure to comply with the terms
of the Agreement will void all approvals, and the project will not be allowed to
proceed without complying with the Residential Development competition
procedures of Zoning Ordinance section 50.60, regardless of the stage of
construction of the project.
10.D.a
Packet Pg. 141 Attachment: RDO Affordable Housing Exemption Policy (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
(B) The applicant shall advertise the existence and terms of this policy to the
general public and accept applications from prospective purchasers and tenants.
The applicant shall keep a list of all qualified purchasers and tenants, and shall
make this list, along with pertinent financial data, available to the City upon
request.
(C) All tentative maps, architectural and site reviews, or other development
permits approving residential development shall contain conditions sufficient to
ensure compliance with the requirements set forth in this policy. These
conditions shall include but not be limited to conditions that specify the number
of affordable units (whether for sale or rental), their prices and Resale Controls.
(D) All dwelling units proposed under this program must be constructed with
the same quality of design, construction and materials as required for market
rate housing. This requirement shall apply to projects that consist solely of
affordable housing units, as well as projects that combine affordable housing
with market rate housing.
(E) Low and Very Low income rental units constructed through this program
shall be affordable for a minimum of 55 years, and Low and Very Low income
for-sale units shall be affordable for a minimum of 30 years. Grant deeds and/or
Codes, Covenants and Restrictions (CC&Rs) for units constructed under this
program shall state that these units are required to remain affordable for these
time periods, and shall be recorded against the property with the County
Recorder of Santa Clara County.
(F) Resale controls shall be incorporated as part of the Agreement signed by
individual purchasers of these units. This Agreement shall be recorded against
the property with the county recorder of Santa Clara County.
(G) The developer shall provide the City with a detailed outreach and
advertising plan, in order to insure the housing needs of existing Gilroy Very
Low, Low, and Moderate Income residents are met.
Section 1.03 Procedure for Renting Affordable Units
(A) The City reserves the right to review documents and verify the eligibility of
all prospective tenants.
(B) In the event an income increase disqualifies a tenant [from hereon referred
to as Over-Income Tenant] from meeting the income requirements to rent a
unit through this program, the following rules shall apply:
(1) The property owner shall re-certify incomes annually. If a tenant is found to
make more than 120% of the maximum income to qualify as a Low Income
household, the tenant will be given up to 90 days to relocate.
10.D.a
Packet Pg. 142 Attachment: RDO Affordable Housing Exemption Policy (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
(2) During the time the Over-Income Tenant continues to rent the unit, the
rental rate of the unit may not increase above the maximum rental rates per
bedroom size which are determined by the City (see Appendix).
(C) The developer shall specify, in the Agreement entered into with the City,
the number of units that are to be constructed and the number of bedrooms in
each unit.
(D) Cost of Housing:
10.D.a
Packet Pg. 143 Attachment: RDO Affordable Housing Exemption Policy (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
Rental housing constructed through this program shall be affordable to
Very Low, Low, and Moderate income households, consistent with the
intent of this policy. Rental rates shall be equivalent to the California
Tax Credit Allocation Committee (CTCAC) 60% income level rental rates
for Santa Clara County. The rental rates shall be revised with every
published revision of California Tax Credit Allocation Committee
(CTCAC) rental rates. (See Appendix)
Tenants in this program may be required to pay a cleaning and/or
security deposit of not more than the cost of the monthly rent.
10.D.a
Packet Pg. 144 Attachment: RDO Affordable Housing Exemption Policy (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
Section 1.04 Procedure for Selling Affordable Dwelling Units
(A) All saleable dwelling units constructed through this program shall be sold to
households that qualify for affordable housing, as defined in this document. For
thirty years from the sales date, resale of these homes shall be subject to a
resale Agreement that will ensure that these units remain affordable housing for
a period of years as specified in the Agreement. The standard time period for
affordability should be no less than 30 years. Transfer of these homes shall be
to Very Low, Low, and Moderate Income households, and will be subject to the
same resale restrictions applied to the original sale. Transfers by gift, devise, or
inheritance to an existing spouse, surviving joint tenant, or a spouse as part of
a dissolution proceeding, or in connection with marriage shall not be considered
a transfer for the purpose of this policy.
(B) The City reserves the right to review and approve documents verifying the
eligibility of all homebuyers, prior to sale and transfer of each property.
(C) All dwelling units constructed under the terms of this program shall be
sold to owners who occupy the residences as their principal place of residence.
(D) Resale of these units shall be conducted as provided for in this policy.
Upon resale, the purchaser's income must correspond to the initial income
category established for this unit by the developer.
(E) All homebuyers shall enter into an Agreement, recorded on the property,
which provides that the home shall be subject to Resale Controls.
(F) Cost of Housing:
a. Houses constructed in this program should be affordable to Low and
Moderate Income households in the following ratios:
1 At least 40% of the units should be affordable to households earning
below 60% of Median Income.
2 At least 15% of the units should be affordable to households earning
above 60% up to 80% of Median Income.
3 At least 15% of the units should be affordable to households earning
above 80% up to 100% of the Median Income.
4 Not more than 30% of the units should be sold to households earning
above 100% up to 120% of Median Income.
10.D.a
Packet Pg. 145 Attachment: RDO Affordable Housing Exemption Policy (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
The Median Income shall be as published by the California Department of
Housing and Community Development for Santa Clara County.
b. Residences constructed in this program shall be sold at or below the
City of Gilroy’s published sales prices based on the pricing structure
calculated using the factors contained in section c., below. Such sales
shall be undertaken , prior to initiating outreach and marketing efforts
required in Section 1.02.G of this document.
c. The following factors shall be incorporated into the calculation of the sales
prices for all future affordable housing units in Gilroy. Each item shall be
separately documented.
i. Downpayment: 3.5% of the loan amount
ii. Interest Rate: FHA rate at time of purchase
iii. Property Tax: City of Gilroy property tax rate of 1.26706% of assessed
value
iv. Homeowners Insurance: Include in sales price calculation
v. Length of Deed Restriction: 30 years
vi. Private Mortgage Insurance: FHA rate of 1.35% of the loan amount
vii. Homeowner’s Association Dues: Include in sales price calculation
viii. Mid-Range Income Categories: Evenly distribute the price points in
10% increments over the income categories, rounding to whole units
starting from the low point of each category. For example, if the
project is required to provide five low income units in the above 60% to
80% of the Average Median Income (AMI) range, three of the units
would be priced for households at 70% of the AMI and two at 80%.
(G) If the developer is unable to find Low and Moderate Income buyers who
are qualified to purchase homes through this program, the developer shall be
required to continue to solicit potential Low and Moderate Income buyers for
eight (8) months after the date of issuance of the Certificate of Occupancy.
After this time, the developer shall be allowed to sell the homes to any person,
without regard to income levels. These homes shall, however, be sold at Low
and Moderate Income prices, as determined by the City, and shall remain
affordable, in accordance with this policy. The applicant shall provide the City
with a report on the marketing efforts of these projects, prior to the end of the
eight (8) month period.
10.D.a
Packet Pg. 146 Attachment: RDO Affordable Housing Exemption Policy (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
(H) For sale homes constructed through this program shall not be leased or
rented, unless exceptional circumstances are established by the owner that the
leasing or renting of the home is necessary and approved by the City Planning
Division and Division of Housing and Community Development. Any such lease
or rental shall be consistent with the rental rates as established by this policy
for Very Low, Low, and Moderate Income households and limited in time to not
more than one-year.
10.D.a
Packet Pg. 147 Attachment: RDO Affordable Housing Exemption Policy (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
APPENDIX
RENTAL UNITS
Rental rates will be based on unit size, and will not distinguish between the
income levels of the renters. The rental rate for a unit is found by using the
following steps:
1. The typical household size each unit can accommodate is determined by
using figure 1, although the number of people actually housed in each unit
will vary by circumstance.
2. Rental rates shall be equivalent to the California Tax Credit Allocation
Committee (CTCAC) 60% income-level rental rates for Santa Clara County.
Figure 1
The project manager shall provide the City with a rental report in January, April, July and
October of each year. This report shall provide the following elements:
1. Name of the project
2. Number of Units in the project
3. Rental rate of each unit
4. Name, unit number, and income level of each lease holder
Number of Bedrooms In
Dwelling Unit
Typical Household Size
Single Residential Occupancy 1
Studios 1
1 2
2 3
3 4
4 6
5 8
10.D.a
Packet Pg. 148 Attachment: RDO Affordable Housing Exemption Policy (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
FOR-SALE UNITS:
HUD income limits shall be used to determine eligibility for participation in this
program.
Houses constructed in this program should be affordable to Low and Median
Income households in the following ratios:
1 At least 40% of the units should be affordable to households earning 50%
to 60% of Santa Clara County Median Income, as defined in the Policy.
2 At least 15% of the units should be affordable to households earning
above 60% up to 80% of Median Income.
3 At least 15% of the units should be affordable to households earning
above 80% up to 100% of the Median Income.
4 Not more than 30% of the units should be sold to households earning
above 100% up to 120% of Median Income.
The City Council may permit an exception to the above ratios and approve the
allocation of market-rate units from the Market-Rate Exempt pool, not to
exceed 25% of the total units in a development, if the development meets the
following criteria:
a) Total Affordable Units in a project meet the following affordability
levels (calculated as a percentage of the total affordable units):
• 20% below 50% of Santa Clara Median Income
• 25% between 50% and 80% of Santa Clara Median Income
• 25% between 80% and 100% of Santa Clara Median Income
• 30% between 100% and 120% of Santa Clara Median Income
b) The project complies with the requirements of the Neighborhood
District policy.
c) A Master Plan is required
d) The development provides substantial public and/or private infrastructure
improvements, beyond those required by the “Neighborhood District
Policy,” as negotiated through a Development Agreement.
The applicant shall submit proposed sales rates to staff, with backup
documentation demonstrating that the units will be affordable to buyers in each
income category in the specified percentages. The following provisions will
apply to all homes sold under this program:
• Prices for homes sold in this program will be based on the homebuyer
putting a maximum of a 10% down payment on the home.
• The monthly mortgage shall include PITI.
• All projects constructed through this program must provide a minimum of
10.D.a
Packet Pg. 149 Attachment: RDO Affordable Housing Exemption Policy (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
three bedrooms in twenty percent (20%) of the units.
• Applicants are responsible for financing their units.
10.D.a
Packet Pg. 150 Attachment: RDO Affordable Housing Exemption Policy (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
10.D.bPacket Pg. 151Attachment: GLR Land Use Plan (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
Ph: 208.461.0022 // Fax: 208.461.3267 // 430 E. State Street, Ste. 100 // Eagle, ID 83616 // www.tpchousing.com
December 27, 2019
Melissa Durkin
Planner II
City of Gilroy Community Development Department
7351 Rosanna Street
Gilroy, CA 95020
Re: Request for Exception to “RDO Affordable Housing Exemption Procedure”
Glen Loma Ranch Rental Affordable Housing Project
Dear Ms. Durkin,
Thank you for your continued support of our efforts to develop affordable housing in the City of
Gilroy. I am writing to request that the City allow an exception to its RDO Affordable Housing
Exemption Procedure (“RDO Procedure”) for the rental units to be constructed as part of the
Glen Loma Ranch project.
As you are aware, we have received approvals from the City for the 158-unit Glen Loma Ranch
affordable rental project. The allocation of units at various types and income levels is as
follows:
Income Targeting Family Affordable Senior Affordable Senior Affordable by
Design
50% AMI 8 6
60% AMI 71 55 16
No Restriction 1* 1*
Totals 80 62 16
*Indicates units designated for on-site managers
In an effort to finance the project, we applied for and were awarded funding from CalHFA’s
Mixed-Income Program. One of the requirements of this program is that at least 20% of the tax
credit financed units be reserved for households earning up to 80% AMI and at least another
10% of the total units serve households up to 120% AMI. The introduction of units targeted at
80% AMI triggers a new federal election not previously available to tax credit projects known as
“income averaging” wherein the project can earn tax credits on units at 80% AMI (as opposed
to the previous cap of 60% AMI) so long as the income targeting on the tax credit units averages
60% AMI or less. Note that any units above 80% AMI are not eligible for tax credits and are not
included in the income averaging calculation.
10.D.c
Packet Pg. 152 Attachment: Developer's Request (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
Page 2 of 3
With the addition of the CalHFA Mixed-Income Program financing, we are requesting that the
City approve the income-targeting below while concurrently satisfying 158 units of the total
Glen Loma Ranch inclusionary housing obligations:
Income Targeting Family Affordable Senior Affordable
50% AMI 49 27
60% AMI 26 16
80% AMI 4 34
120% AMI 0 0
No Restriction 1* 1*
Totals 80 78
*Indicates units designated for on-site managers
We offer the following in support of our request:
1) The City of Gilroy has seen substantial construction of rental units targeted at the 60%
area median income level over the past several years. Our company alone has delivered
over 300 such units. We are aware of one other project developed by Meta Housing
which will also cover this income level. While it is clear that there continues to be a
need for rental housing targeted at this level by virtue of the fact that our projects are
fully occupied, there is also a need for affordable housing at both lower and higher
income levels based on how many individuals and families we’ve had to turn away,
some of whom were over income. Units targeted above 60% of the area median
income will serve schoolteachers, nurses, government officials, firefighters and other
essential members of the workforce who normally do not qualify at lower affordability
levels. More units targeted at 50% AMI will help an underserved segment of the Gilroy
workforce while delivering much-needed very-low income units to meet the City’s RHNA
goals.
2) Policy makers in the state have come to realize that the housing shortage crisis has
significantly increased the amount of people adversely affected. As such, they have
designed specific funding programs to target this “missing middle” that has been
historically neglected. CalHFA’s Mixed-Income Program is one such program and
incentivizes and funds the production of housing targeted at 80% and 120% of the area
median income. The current RDO Procedure pre-dates these recent policy initiatives
and programs and would prevent a developer from accessing this funding source, which
is why we are asking for this exception. Note, we did successfully petition CalHFA to
allow us to forego producing any units targeted at 120% of area median income because
we provided evidence that such rents would not provide a sufficient discount to
prevailing market rents in Gilroy. Here is a link to CalHFA’s program for your reference:
https://www.calhfa.ca.gov/multifamily/mixedincome/forms/termsheet-
mixedIncome.pdf?v=1.007.
10.D.c
Packet Pg. 153 Attachment: Developer's Request (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
Page 3 of 3
3) For decades, existing federal, state and local funding programs have targeted below 60%
of area median income while the free market has served individuals and families who
can pay the highest prices the market will support. With the price of homes and rents
continuing to climb over the last 5 years, more and more of the workforce find
themselves in a position where they do not qualify at 60% of area median income, yet
they cannot afford market prices. This results in longer commutes from more
affordable places or complete relocations altogether. Having units produced in the City
at higher income levels but still below market will help alleviate this problem.
An exception to the RDO Procedure for this project will produce a more balanced inclusionary
housing development that serves a broader spectrum of the workforce who need affordable
housing while at the same time bringing more diversity to the Glen Loma Ranch neighborhood.
Thank you for considering this request, and please contact me with any questions. We look
forward to our continued partnership with the City to address its affordable housing needs.
Sincerely,
Caleb Roope
President / C.E.O.
10.D.c
Packet Pg. 154 Attachment: Developer's Request (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
RESOLUTION NO. 2020-XX
RESOLUTION NO. 2020-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GILROY APPROVING AN EXCEPTION TO THE CITY'S RDO
AFFORABLE HOUSING EXEMPTION PROCEDURE TO
ALLOW RENTAL RATES WITHIN THE GLEN LOMA RANCH
TOWN CENTER APARTMENT PROJECT TO BE
AFFORDABLE TO HOUSEHOLDS EARNING 50% TO 80% OF
AREA MEDIAN INCOME
WHEREAS, The Pacific Companies received approval to construct 158 below market
rate apartment units within the Glen Loma Ranch Specific Plan Town Center Neighborhood
(“Apartments”); and
WHEREAS, the Glen Loma Ranch Development Agreement requires 15.1% of the units
constructed in Glen Loma Ranch to be affordable in accordance with the City of Gilroy’s RDO
Affordable Housing Exemption Procedure; and
WHEREAS, 156 of the Apartments will be subject to regulatory restrictions that require
affordability in accordance with the City of Gilroy’s RDO Affordable Housing Exemption
Procedure; and
WHEREAS, the existing percentages defining affordability within the RDO Affordable
Housing Exemption Procedure make it difficult for the City to address the housing needs of
Very Low-Income and middle-income households, or meet state Regional Housing Needs
Allocation requirements; and
WHEREAS, the primary funding agency for affordable housing projects in California is
the California Housing Finance Agency (CalHFA); and
WHEREAS, CalHFA recognizes that inadequate housing is being produced for Very
Low-income and middle-income households; and
WHEREAS, to bolster housing production targeted to these income groups, CalHFA is
funding housing in the middle-income range, up to 80% Area Median Income, in exchange for
producing housing in the Very Low-Income range, up to 50% Area Median Income.
WHEREAS, The Pacific Companies would like to rent Apartment units at rates
consistent with CalHFA funding; and
10.D.d
Packet Pg. 155 Attachment: Resolution M 19-16 (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
RESOLUTION NO. 2020-XX
WHEREAS, The Pacific Companies proposes to rent 24% of the Apartments to
households earning up to 80% Area Median Income, in exchange for renting 48% of the units to
households earning 50% Area Median Income, consistent with CalHFA funding;
WHEREAS, The Pacific Companies would need an exception to the RDO Affordable
Housing Exemption Procedure to implement this rental structure; and
WHEREAS, the proposed rental structure would help the City meet Regional Housing
Need Allocation requirements for Very Low-Income households, and provide housing for
middle-income households; and
WHEREAS, the Planning Commission held a duly noticed public meeting on January 16,
2020, at which time the Planning Commission considered the staff report dated January 16, 2020
("Planning Commission Staff Report") as well as all evidence received, including public
testimony.
WHEREAS, the City Council held a duly noticed public meeting on March 2, 2020, at
which time the City Council considered the staff report dated March 2, 2020 ("City Council Staff
Report") as well as all evidence received, including public testimony; and
WHEREAS, the location and custodian of the documents or other materials that
constitute the record of proceedings upon which this policy exception is based is the office of the
City Clerk.
NOW, THEREFORE, BE IT RESOLVED THAT:
1. The City Council of the City of Gilroy hereby approves re a proposed policy exception to
the RDO Affordable Housing Exemption Procedure; and
2. The City Council of the City of Gilroy hereby directs staff to propose revisions to the
RDO Affordable Housing Exemption Procedure to ensure compliance with state housing
laws and Regional Housing Needs Allocation requirements
10.D.d
Packet Pg. 156 Attachment: Resolution M 19-16 (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
RESOLUTION NO. 2020-XX
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF GILROY on this
2nd day of March, 2020 by the following roll call vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
APPROVED:
___________________________
Roland Velasco, Mayor
ATTEST:
__________________________________
Shawna Freels, City Clerk
10.D.d
Packet Pg. 157 Attachment: Resolution M 19-16 (2632 : Exception to RDO Affordable Housing Exemption (M 19-14))
City of Gilroy
STAFF REPORT
Agenda Item Title: Approval of a Housing Trust Fund Budget Amendment in the
Amount of $32,800 for Fiscal Year 2019-2020 and Fiscal Year
2020-2021 and Approval of Project Sentinel's Housing Trust Fund
Grant Application for Fair Housing and Tenant Landlord Services
Meeting Date: March 2, 2020
From: Gabriel Gonzalez, City Administrator
Department: Community Development Department
Submitted By: Karen Garner
Prepared By: Karen Garner
Robert Carrera
Strategic Plan Goals
☐ Fiscal Stability
☐ Downtown
Revitalization
☐ Economic
Development
☐ Neighborhood Services
☐ Enhanced Public
Safety
☐ Workforce Stability ☐ Public Engagement
RECOMMENDATION
a) Adopt a resolution of the City Council of the City of Gilroy amending the Fiscal
Year 2019-2020 and Fiscal Year 2020-2021 Housing Trust Fund budgets in
the amount of $32,800 to increase the total annual allocation for two Housing
Trust Fund programs to $47,000; $21,000 for fair housing services and
$26,000 for tenant-landlord services.
b) Approve the Housing Trust Fund grant to Project Sentinel for $47,000 to
provide fair housing and tenant landlord services in Fiscal Year 2019-2020
and Fiscal Year 2020-2021.
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EXECUTIVE SUMMARY
The City provides public service grants to community benefit organizations through two
funds; the federal Community Development Block Grant (CDBG) and the local Housing
Trust Fund (HTF). On May 6, 2019, Council approved the Fiscal Year 2020 (FY20) and
Fiscal Year 2021 (FY21) budget which included $388,352 to several community benefit
organizations to provide public services and housing rehabilitation services. These
services help fulfill the goals and objectives of CDBG and HTF funds. At the time of
adoption, $14,200 of this budgeted amount was set aside for Fair Housing and Tenant
Landlord Services, although no provider was identified at that time.
At the December 4, 2019 Community and Neighborhood Revitalization Committee (now
the Housing and Neighborhood Revitalization Committee), the committee
recommended that the City Council approve award of Fair Housing and Tenant
Landlord Services to Project Sentinel. The committee also recommended that the
amount of the award be increased from $14,200 to $47,000 annually based on Project
Sentinel’s proposal and consistent with the amount to provide those services in previous
years. These services would be funded solely with HTF funds and the fund can support
the increase of $32,800. Of the $47,000, $21,000 would be allocated to Fair Housing
Programs and $26,000 for Landlord-Tenant Counseling and Dispute Resolution
Services.
Project Sentinel will provide these important services at no -cost to low-income Gilroy
residents. With the implementation of AB 1482, SB 329, and SB 222 effective January
1, 2020, Project Sentinel’s services will be even more important to help residents
understand the new tenant protections afforded under these recently enacted laws.
POLICY DISCUSSION
Should the Council approve the Project Sentinel grant application for $47,000 to provide
Fair Housing and Tenant Landlord Services in FY 2020 and 2021?
Also, should the Council increase the annual allocation in the HTF from $14,200
annually to $47,000 annually in the FY 2020 and 2021 budget, for a total allocation of
$94,000 among both annual budgets, for the purpose of providing grant funds for Fair
Housing and Tenant-Landlord services to Gilroy clients?
BACKGROUND
The City of Gilroy currently provides grants to non-profits for community programs and
services through two funding sources; the federal Community Development Block Grant
(CDBG) and the local Housing Trust Fund (HTF) and has historically approved grants
for services for two-year periods. The City of Gilroy is a CDBG recipient and administers
the grant under the rules and regulations set forth by the United States Department of
Housing and Urban Development (HUD). The Housing Trust Fund is a local fund that is
administered based on the rules and regulations set forth by the City Council. Although
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the HTF and CDBG are separate funds, administration and timing of distribution of the
funds have been similar due to the similar goals and objectives of the two funds.
On May 6, 2019, the City Council approved funding allocations for combined CDBG and
HTF grant distributions for Public Service and Housing Rehabilitation Projects in the FY
2020 and FY 2021 budgets. The Council’s action included allocations totaling $388,352
for HTF, CDBG (Public Services), and CDBG (Housing Rehabilitation) projects, as
follows:
Figure 1: Chart of City Budget Allocations to Community Benefit Organizations
Available Funding Source
Agency Project Housing Trust
Fund
CDBG Block
Grant (Public
Service)
CDBG Block
Grant (Housing
Rehabilitation)
The Health Trust Meals on Wheels $20,000 N/A N/A
Gilroy
Compassion
Center
Day Care for the
Homeless $23,800 $16,318 N/A
St. Joseph’s
Family Center
Homeless Prevention and
Safety Net Services $50,000 N/A N/A
St. Joseph’s
Family Center Gilroy Street Team $35,000 N/A N/A
Silicon Valley
Independent
Living Center
Housing and Emergency
Services for Persons with
Disabilities
$25,000 N/A N/A
Catholic
Charities
Long Term Care
Ombudsman N/A $9,624 N/A
Live Oak Adult
Day Services Adult Day Care Gilroy N/A $11,549 N/A
Gilroy
Recreation
Department
Swim Lessons and Youth
Center N/A $38,497 N/A
Rebuilding
Together Silicon
Valley
Rebuilding Home Repair,
Rehabilitation and
Accessibility Modification
N/A N/A $144,364
(Future
Proposal)
Fair Housing and Tenant-
Landlord Services $14,200 N/A N/A
TOTALS FOR EACH FUNDING SOURCE $168,000 $75,988 $144,364
GRAND TOTAL $388,352
When these allocations were approved, no applications had been received for Fair
Housing and Tenant Landlord Services. Project Sentinel had intended to apply, but
missed the deadline for submitting their proposal. The CNRC recommended, and the
Council approved setting aside $14,200 annually for these services, although it was
known that proposals for these services would likely be significantly more based on
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agreements in previous years. Staff also noted that a subsequent Request For
Proposals (RFP) would be issued for both of these services and that a budget
amendment to the HTF may be necessary.
On October 25, 2019, the City issued an RFP for Fair Housing and Tenant Landlord
Services. The RFP stated that the current funding allocation for both of these services
was $14,200 annually, but there may be a potential to increase that funding to $47,000
annually. A total of one proposal was received for these services, submitted by Project
Sentinel, who has historically provided both these services in the City of Gilroy. Project
Sentinel’s application proposed providing Fair Housing Services at $21,000 annually
and Landlord-Tenant Counseling and Dispute Resolution Services at $26,000 annually.
The CNRC met on December 4, 2019 to review Project Sentinel’s proposal. It was
suggested that the CNRC consider the request under both the approved funding
amount (i.e. $14,200) and a potential amended funding (i.e. $47,000). As such, the
CNRC made the following recommendations:
Approve HTF funded grant allocation recommendations to Council in the amount
of $7,810 for Fair Housing services and $6,390 for Landlord-Tenant Counseling
and Dispute Resolution services based for a total of $14,200.
Approve HTF funded grant allocation recommendations to Council in the amount
of $21,000 for Fair Housing services and $26,000 for Landlord-Tenant
Counseling and Dispute Resolution services if the City Council approves a
$47,000 HTF funding allocation for these programs.
ANALYSIS
The budget amendment for these two services will restore the grant funding level back
to its historic funding levels. From Fiscal Year 2012 to Fiscal Year 2019, the funding
level for Fair Housing services has been $21,000 annually, while funding for Tenant
Landlord Services during that same time period has been between $20,000 to $30,000
annually, with it being $26,000 in FY 2019. These services were all provided by Project
Sentinel during that timeframe.
Increasing the grant allocation to $47,000 annually will provide Project Sentinel the
funds to serve more Gilroy clients for these services. In their grant application, Proje ct
Sentinel projected that the grant funds at these increased levels would allow them to
serve approximately 38 unduplicated Gilroy clients for Fair Housing services and 237
unduplicated Gilroy clients for Tenant Landlord services. The majority of clients
benefiting from these services fall into the Low to Extremely Low spectrum of income.
ALTERNATIVES
1. Amend Budget: Council may approve the Project Sentinel grant application for
both services and approve a budget amendment to increase the annual
allocation of HTF grants for Fair Housing and Landlord-Tenant Counseling and
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Dispute Resolution Programs by $32,800 to $47,000 annually for FY 2020 and
FY 2021. This action is recommended, as it would provide needed services
to support Gilroy clients.
2. Maintain Budget: Council may keep funding level for both of these services at
$14,200 annually and award Project Sentinel with the HTF funded grant
allocation recommendations in the amount of $7,810 for the Fair Housing
Program and $6,390 for the Landlord-Tenant Counseling and Dispute Resolution
Program. This would lead to a reduction in Gilroy clients served by Project
Sentinel for these services. As such, this action is not recommended.
3. Reject the Bid and Budget Amendment: Council may reject both the grant
application by Project Sentinel for both services and the budget amendment. This
would restart the application process for these services and create a gap in
services for Gilroy clients. As such, this action is not recommended.
FISCAL IMPACT/FUNDING SOURCE
The budget amendment would increase the annual allocation of public service grants
from the Housing Trust Fund for FY 2020 and 2021 from $168,000 annually to $200,800
annually.
Revenue from the Housing Trust Fund is primarily funded through the repayment of
promissory notes secured by and trust deeds recorded on property titles and equity
share payments from sale, or resale, of Below-Market Rate (BMR) properties. There is
an adequate fund balance to absorb the additional expenditure of $32,800 and it will not
negatively impact the Fund. This budget amendment will not have any impact to the
General Fund.
CONCLUSION
For years, Project Sentinel has successfully provided these services to many low-
income Gilroy residents to help protect them from housing discrimination and
tenant/landlord issues. Project Sentinel provides these services at no-charge. Similar
services sought from a private attorney would be cost prohibitive for most low-income
residents. This grant approval and increased allocation will allow Project Sentinel to
continue to provide these services to Gilroy residents at a level they have been
providing for the past decade.
PUBLIC OUTREACH
Regarding outreach of the grant opportunities, the Housing Division released RFPs and
notified nonprofits in the south county area of the available opportunities thorough an
established network. The Community and Neighborhood Revitalization Committee
meetings are publicly noticed with opportunities for members of the public to provide
comment on recommendations for the award of funds for the various services.
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Regarding outreach on the services that Project Sentinel will provide, the City and
Project Sentinel work together to market and promote their services and refer potential
clients directly to Project Sentinel.
Attachments:
1. CNRC Meeting Minutes (12-4-2019)
2. FY 20 and 21 Grant Application (Project Sentinel Fair Housing)
3. FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution)
4. Resolution HTF Budget Amendment
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10.E.a
Packet Pg. 164 Attachment: CNRC Meeting Minutes (12-4-2019) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and Tenant Landlord Services)
10.E.a
Packet Pg. 165 Attachment: CNRC Meeting Minutes (12-4-2019) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and Tenant Landlord Services)
10.E.b
Packet Pg. 166 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
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Packet Pg. 167 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
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Packet Pg. 168 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
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Packet Pg. 169 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
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Packet Pg. 170 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
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Packet Pg. 171 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
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Packet Pg. 172 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
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Packet Pg. 173 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
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Packet Pg. 174 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
10.E.b
Packet Pg. 175 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
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Packet Pg. 176 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
10.E.b
Packet Pg. 177 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
10.E.b
Packet Pg. 178 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
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Packet Pg. 179 Attachment: FY 20 and 21 Grant Application (Project Sentinel Fair Housing) (2489 : Housing Trust Fund Budget Amendment: Fair Housing and
10.E.c
Packet Pg. 180 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 181 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 182 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 183 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 184 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 185 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 186 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 187 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 188 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 189 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 190 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 191 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 192 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
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Packet Pg. 193 Attachment: FY 20 and 21 Grant Application (Project Sentinel Tenant Landlord Resolution) (2489 : Housing Trust Fund Budget Amendment:
RESOLUTION NO. 2020-XX
RESOLUTION NO. 2020-XX
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF GILROY AMENDING THE BUDGET FOR
THE CITY OF GILROY FOR FISCAL YEAR 2019-2020
AND FISCAL YEAR 2020-2021 IN THE HOUSING
TRUST FUND AND APROPRIATING PROPOSED
EXPENDITURE AMENDMENTS
WHEREAS, the City Administrator prepared and submitted to the City Council a budget
for the City of Gilroy for Fiscal Years 2019-2020 and 2020-2021, and the City Council carefully
examined, considered and adopted the same on June 3, 2019; and
WHEREAS, City Staff has prepared and submitted to the City Council a proposed
amendment to said budget for Fiscal Year 2019-2020 and Fiscal Year 2020-2021 for the City of
Gilroy in the staff report dated March 2, 2020 for the approval of Project Sentinel's FY 2020 and
FY 2021 Housing Trust Fund Grant Application for Fair Housing and Tenant Landlord Services;
and
WHEREAS, the City Council has carefully examined and considered the same and is
satisfied with said budget amendments.
NOW, THEREFORE, BE IT RESOLVED THAT appropriations for both Fiscal Year
2019-2020 and 2020-2021 are each hereby increased in the Housing Trust Fund, Fund 259, by
$32,800.
PASSED AND ADOPTED this March 2, 2020 by the following roll call vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
APPROVED:
___________________________
10.E.d
Packet Pg. 194 Attachment: Resolution HTF Budget Amendment [Revision 1] (2489 : Housing Trust Fund Budget Amendment: Fair Housing and Tenant
RESOLUTION NO. 2020-XX
ATTEST: Roland Velasco, Mayor
_________________________
Shawna Freels, City Clerk
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Packet Pg. 195 Attachment: Resolution HTF Budget Amendment [Revision 1] (2489 : Housing Trust Fund Budget Amendment: Fair Housing and Tenant
City of Gilroy
STAFF REPORT
Agenda Item Title: Lease Agreement with Advantage Peak LLC for a City Owned
Property Located at 140 5th Street, Gilroy (Willey House)
Meeting Date: March 2, 2020
From: Gabriel Gonzalez, City Administrator
Department: Administration
Submitted By: Gabriel Gonzalez
Prepared By: Shawna Freels
Trevin Barber
Strategic Plan Goals
Fiscal Stability
Downtown
Revitalization ☐ Economic
Development
☐ Neighborhood Services
☐ Enhanced Public
Safety
☐ Workforce Stability ☐ Public Engagement
RECOMMENDATION
Approve lease agreement with Advantage Peak LLC for a City owned property located
at 140 5th Street, Gilroy (Willey House).
BACKGROUND
History of Center
The Willey Cultural Center (the Center) borrows its name from Judge Howard Willey,
one of the city’s earliest justices of the peace. The home was originally built in 1857 for
James K. Rule, who worked as a pastor next door at the Gilroy Christian Church. When
he purchased the home from Rule’s daughter in 1893, Willey added bay windows and
other improvements so his daughters could hold music recitals. The property changed
hands several times over the years until the city purchased it in 1988. Since then, the
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City has used the Center to host (a) city-led meetings (i.e. developer’s roundtable, city
commission retreats, and South County Youth Task Force), (b) an election polling
station, and (c) other small, private events.
Description of Center
The Willey Cultural Center’s address is 140 5th St, Gilroy, CA 95020. The property
consists of 2,187 rentable square foot. It is a Folk Victorian/Classic Revival, two -story,
wood-frame, building that was constructed circa 1857, has been periodically maintained
over the ensuring years, and is in average condition. T he building is situated on a land
parcel of approximately .26 acres or 11,347 square feet. The inside of the facility is
relatively small with a maximum dinning occupancy of 30 and assembly occupancy of
49. The house is set with multiple rooms which present an opportunity to utilize the
house as a permanent commercial office space. The City has operated the facility as a
community center that can be rented hourly for special events.
ANALYSIS
The City was presented with an offer from Advantage Peak LLC to rent the Center and
use it as their principal place of business on a long-term basis. Under the proposed
lease terms Advantage Peak LLC would also be allowed to rent the space to individuals
or organizations for special events.
Proposed Lease Agreement Terms
The proposed lease agreement stipulates the terms and conditions of the agreement. In
summary, the agreement would have a term of five years beginning March 1, 2020. The
monthly base rent would be $3,000 and commencing in year two and each year through
year five a CPI adjustment of three percent 3% will be added to the monthly rent. The
lease agreement has three options to extend, each of two years. Per the City’s
independent appraisal of the property the market rent for the property is concluded a t
$1.40 per square foot per month on a triple net basis. The proposed monthly rent of
$3,000 is almost equal to the appraised market rent of $3,061.80 (2,187 sq.ft. X $1.40 =
$3,061.80).
Potential Benefits
The proposed lease agreement would provide an additional $36,000 per year in gross
revenue. Further, leasing to a single tenant reduces the overhead and labor task
associated with managing a revolving door of occupants at the Center. Although the
value of that reduction has not been precisely calculated, staff estimates a savings of
approximately $9,600 a year. In sum, the total net benefit to the City could be $45,600
in value equivalent terms.
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Pivoting from a special event space to a single tenant lease could add value to both the
City and the community. The City would receive a more stable revenue source while the
business community may receive an additional rent-space to utilize for meetings.
ALTERNATIVES
1. Approve the Proposed Lease: The proposed lease agreement is attached for
review and approval. If approved it would be executed per Council’s direction.
Staff recommends this option because it would bring needed financial stability
to the City and provide room for another business to operate in Gilroy.
2. Deny the Proposed Lease: Staff does not recommend this option because it
would limit revues to the City and deny a business an opportunity to operate in
the City of Gilroy
FISCAL IMPACT/FUNDING SOURCE
The proposed lease agreement would provide an additional $36,000 per year in gross
revenue to the General Fund.
Attachments:
1. Lease Agreement with Advantage Peak LLC
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10.F.a
Packet Pg. 199 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
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Packet Pg. 200 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
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Packet Pg. 201 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
10.F.a
Packet Pg. 202 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
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Packet Pg. 203 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
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Packet Pg. 204 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
10.F.a
Packet Pg. 205 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
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Packet Pg. 206 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
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Packet Pg. 207 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
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Packet Pg. 208 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
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Packet Pg. 209 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
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Packet Pg. 210 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
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Packet Pg. 211 Attachment: Lease Agreement with Advantage Peak LLC (2669 : Lease Agreement for the Wiley House)
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City of Gilroy
STAFF REPORT
Agenda Item Title: Approval of a California Public Utility Commission Mandated Rule
20A Utility Undergrounding District along Monterey Road from
South of Eighth Street to Tenth Street
Meeting Date: March 2, 2020
From: Gabriel Gonzalez, City Administrator
Department: Public Works Department
Submitted By: Girum Awoke
Prepared By: Girum Awoke
Gary Heap
Strategic Plan Goals
☐ Fiscal Stability
☐ Downtown
Revitalization
☐ Economic
Development
☐ Neighborhood Services
Enhanced Public
Safety
☐ Workforce Stability ☐ Public Engagement
RECOMMENDATION
Adopt a resolution of the City Council of the City of Gilroy approving a utility
undergrounding district along Monterey Road from South of Eighth Street to Tenth
Street.
BACKGROUND
In 1967, the California Public Utility Commission (CPUC) established tariff rules (now
commonly referred to as the Rule 20A) for a Utility Undergrounding Program. This
statewide program was created to eliminate the concentration of overhead electric and
telecommunication lines and wooden utility poles along major arterial streets, public
areas of scenic value, and the downtown or civic center core.
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Rule 20A allows cities and counties to receive an annual allocation of monetary credits
that are allowed to accumulate for the eventual expenditure and benefit of
undergrounding unattractive overhead wires in their community. The program is
financed by the rate payers under the Public Purpose Program. The citywide priorities
for utility undergrounding through the Rule 20A program should be based on a regular
review and update of a long term master plan. When a city’s Rule 20A balance is
adequate enough to finance the cost of a utility undergrounding project, the City Council
elects to establish an undergrounding district and create a capital improvement project.
When a city elects to move forward with the planning, design, and construction of a
Rule 20A project, the total projected cost of eligible soft and hard costs will eventually
be deducted from an agency’s Rule 20A balance. One of the beneficial features of the
Rule 20A program is that it allows an agency to obtain an advance, up to five years,
from their annual allocation and to acquire additional Rule 20A funds from another
agency. The provision to utilize future allocations allows a high priority project to
strategically move forward into construction where present value dollars will provide
more value than deferring for a future and costlier construction project. Additionally, with
the heavy volume of private development construction activities in the Bay Area,
another consideration is the possibility of combining Rule 20A funds with a private
development’s requirement to underground overhead lines within their development
project through the use of the Rule 20B program.
ANALYSIS
The City of Gilroy currently has approximately $3,268,000 in Rule 20A credits. PG&E
allocates Rule 20A Work Credits to communities to convert overhead electric
infrastructure to underground infrastructure. Once a community has identified a project
that is in the public interest and passed a municipal resolution forming an underground
district, the community can initiate the project with the utility. To fund the project, a
community may utilize its accrued annual Rule 20A Work Credits plus borrow forward
future Work Credits for a maximum of five years from the utility.
When communities do not utilize their available credits, a portion of their credits may be
re-assigned to other communities that are ready and able to use those credits for
undergrounding projects. Based on CPUC Resolution E-4971, communities can
become active (and avoid transferring their Rule 20A Work Credits) by forming an
undergrounding district.
The CPUC considers any community to be active and not subject to reallocation if it
satisfies any of the following criteria:
1. Formally adopts an undergrounding district ordinance which expires at
completion of work within the district boundaries; or
2. Has started or completed construction of an undergrounding conversion
project within the last 8 years, defined as 2011 or later; or
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3. Has received Rule 20A allocations from the utility for only 5 years or fewer due
to recent incorporation.
RECOMMENDATION
Staff recommends the City Council adopt a resolution designating a utility
undergrounding district as shown in the attached exhibit, thereby avoiding reallocation
of any Rule 20A credits.
ALTERNATIVES
Council may elect not to adopt this resolution, however, this alternative is NOT
RECOMMENDED for the following reasons:
This will result in the potential reassignment of Rule 20A credits
This will result in potential delay if and when the City is ready to implement an
undergrounding project in the downtown core area
FISCAL IMPACT/FUNDING SOURCE
Adoption of this resolution will not result in any financial impacts. However, the City may
have to allocate funds in the future for a utility undergrounding project that will include
ancillary improvements not paid for by PG&E and/or the other utilities such as street
scape, landscaping, sidewalk reconstruction and other downtown beautification efforts.
Attachments:
1. Resolution PG&E Undergrounding
2. UG UTILITY DISTRICT MAP rev 1
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RESOLUTION NO. 2020-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GILROY CREATING A UTILITY UNDERGROUNDING
DISTRICT ALONG MONTEREY ROAD FROM SOUTH OF
EIGHTH STREET TO TENTH STREET
WHEREAS, the California Public Utilities Commission (CPUC) has
authorized electric and telecommunication utilities to convert overhead utility
lines and facilities to underground pursuant to Electric Rule 20 and
Telecommunication Rule 32, and
WHEREAS, pursuant to certain criteria, CPUC rules allow participating
cities and counties to establish legislation authorizing the creation of underground
utility districts within which existing overhead electric distribution and
telecommunication distribution and service facilities will be converted to
underground, and
WHEREAS, the City of Gilroy, has adopted an ordinance authorizing the
City Council to designate areas within which all existing overhead poles,
overhead wires and overhead equipment associated with the distribution of
electric power, telecommunication services and cable television should be
removed and replaced with underground wires and facilities; and
WHEREAS, each year the City of Gilroy is notified by PG&E regarding
the allocation of work credits for conversion of overhead electric distribution lines
and facilities to underground, known as Rule 20A allocations, and
WHEREAS, the Director of Public Works for City of Gilroy has consulted
with PG&E and determined that the City has accumulated Rule 20A work credits
or PG&E has agreed that the City may borrow against future credits sufficient to
complete a future overhead to underground conversion project, and
WHEREAS, the City of Gilroy and the affected utilities will agree that
each utility shall complete the engineering of their respective portion of the
Overhead to Underground Utility Conversion in the Monterey Road
Undergrounding district, and
WHEREAS, the City Council of the City of Gilroy has now received the
report from the Director of Public Works recommending that the area identified in
Exhibit 1 should be designated as an underground utility district within which all
existing overhead poles, overhead wires and overhead equipment associated with
the distribution of electric power, telecommunication services and cable television
should be removed and replaced with underground wires and facilities; and
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Packet Pg. 220 Attachment: Resolution PG&E Undergrounding [Revision 2] (2634 : PGE Rule 20A Undergrounding Project District Adoption Resolution)
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City
of Gilroy that:
Section 1. The public interest requires the removal of all existing utility poles
[excepting those poles supporting streetlights or traffic signals], overhead wires
and associated overhead structures and installation of underground wires and
facilities for supplying electric power, communication, or similar associated
services within the areas as shown in Exhibit 1, attached hereto, with such area
being designated as the Monterey Road Underground Utility District, and
Section 2, That the utility companies, cable television services and other affected
services shall commence work on installation of underground facility installation
in Monterey Road Underground Utility District and that as each phase of
undergrounding is complete and ready for conversion from overhead to
underground utility facilities, all fronting property owners shall be notified of the
schedule for conversion of all utility service lines, and
Section 3, The electric utility shall use the underground conversion allocation
computed pursuant to decisions of the California Public Utilities Commission for
the purpose of providing to each premises requiring it in Monterey Road
Underground Utility District a maximum of one hundred feet of individual
electric service trenching and conductor (as well as backfill, paving and conduit,
if required) and each other serving utility shall provide service trenching and
conductor in accordance with its rules and tariffs on file with the California Public
Utilities Commission or as required by its Franchise Agreement with the City of
Gilroy, and
Section 4. The electric utility shall use said underground conversion allowance
allocation, up to a maximum amount of $1,500 per service entrance excluding
permit fees, for the conversion of electric service panels to accept underground
service in the Monterey Road Underground Utility District, and
Section 5. That upon notification as specified in Section 2, all property owners in
Monterey Road Underground Utility District shall have each property served from
such electric overhead facilities shall have installed in accordance with PG&E’s
rules for underground service, all electrical facility changes on the premises
necessary to receive service from the underground facilities of PG&E as soon as it
is available; and
underground electrical entrance facilities installed and inspected pursuant to the
City of Gilroy Electrical Code within sixty (60) days and that should any property
owner fail to install satisfactory underground electrical entrance facilities by the
date specified in the notice, the electric utility shall notify the Director of Public
Works who shall, within thirty (30) days direct the electric utility in writing to
discontinue electrical service to the property, without recourse, pursuant to Rule
11 until electrical entrance facilities are ready to accept underground electrical
conductors and have passed the necessary inspection requirements, and
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Packet Pg. 221 Attachment: Resolution PG&E Undergrounding [Revision 2] (2634 : PGE Rule 20A Undergrounding Project District Adoption Resolution)
Section 6. That once all services have been converted from overhead to
underground, the utility companies, cable television services and other affected
services shall remove all poles (except as specified above) and associated
overhead facilities in Monterey Road Underground Utility District, and PG&E is
authorized to discontinue its overhead electric service upon completion of the
underground distribution system.
PASSED AND ADOPTED this 2nd day of March, 2020 by the following
roll call vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
APPROVED:
________________________
ATTEST: Roland Velasco, Mayor
_________________________
Shawna Freels, City Clerk
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Packet Pg. 222 Attachment: Resolution PG&E Undergrounding [Revision 2] (2634 : PGE Rule 20A Undergrounding Project District Adoption Resolution)
City of Gilroy
6,803
City of Gilroy, GIS Services
1,133.8
1:NAD_1983_StatePlane_California_III_FIPS_0403_Feet
566.90 Feet1,133.80
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Packet Pg. 223 Attachment: UG UTILITY DISTRICT MAP rev 1 (2634 : PGE Rule 20A Undergrounding Project District Adoption Resolution)