EXTRACTION OF MINUTES OF MEETING OF TOWN BOARD ADOPTING LOCAL LAW NO.

1 OF 2011 AMENDING CHAPTER 51 OF THE TOWN OF IRONDEQUOIT CODE RELATING TO PURCHASING POLICY At a regular meeting of the Town Board of the Town of Irondequoit, Monroe County, New York held at the Town Hall, 1280 Titus Avenue, in said Town of Irondequoit, on Tuesday, the ___ day of July 2011 at 7:00 P.M. local time; there were PRESENT: Mary Joyce DAurizio Stephanie Aldersley Deborah Essley Paul Marasco John Perticone Harter Secrest & Emery LLP Town Supervisor Town Board Member Town Board Member Town Board Member Town Board Member Attorneys for the Town

Town Board Member ______________ offered the following resolution and moved its adoption: WHEREAS, the Town of Irondequoit Purchasing Policies and Procedures, incorporated into the Town Code as Chapter 51 have been recently reviewed by the Town Comptroller, department heads and the Attorneys for the Town as part of the annual review contemplated by General Municipal Law Section 104-b(4); and WHEREAS, the Town Comptroller has recommended several amendments and additions to the Town Code as adopted by Local Law No. 9 of 1999 (November 30, 1999), incorporated into a document entitled Proposed Amendments: Town of Irondequoit Purchasing Policies and Procedures (Discussion Draft Rev. March 2011) which has been circulated to the Town Board for its review; and WHEREAS, the amendments and additions proposed by the Town Comptroller would conform the Town Code to amendments to the General Municipal Law relating to the dollar value of contracts for goods and services and for public works subject to formal bidding; would clarify the role of the Town Board relative to appropriations for contracts; would authorize the Town Supervisor to implement regulations consistent with Board policy; and would establish policy preferences for (a) considering the life cycle costs or goods or services when evaluating bids or proposals and (b) encourage environmentally preferable purchasing whenever feasible and economically responsible; and WHEREAS, the Town Board held a public hearing on the proposed amendments to the Town Code on Tuesday, June 21, 2011 at 7:35 p.m. local time and all parties entitled to and wishing to be heard were heard at such hearing. NOW, THEREFORE, BE IT RESOLVED that Chapter 51 of the Town Code is revised by amending Sections 51-1; 51-3; 51-4; 51-8; 51-9 and 51-10, and adding new Sections 51-1A and 51-5 pursuant to the provisions of the following Local Law: 1

 Town of Irondequoit Local Law No. 1 of 2011 A local law to amend the Code of the Town of Irondequoit related to contract policy. Be it enacted by the Town Board of the Town of Irondequoit, County of Monroe, State of New York as follows: 1. AMENDMENTS TO TOWN CODE. Chapter 51-1, of the Code of the Town of Irondequoit is hereby amended to read as follows: 51-1. Compliance with State Law; Sealed Bidding; Exceptions to Sealed Bidding A. The Town of Irondequoit has adopted the policies and procedures described herein to comply with General Municipal Law (GML), Section 103 and Section 104-b. Section 104-b requires municipalities to further define how procurements were made in accordance with Sect. 103. B. Public sealed bidding is required for the initial purchase of an item or group of similar items costing more than $20,000, or if it is reasonably anticipated purchasing in excess of $20,000 during the fiscal year for an item or group of similar items. Sealed bids are also required for a Public Works (Labor and Materials) or services contract where the cost exceeds $35,000 annually. A Public Works contract is defined as an improvement to a public facility in which the majority of the costs are labor. Any questions concerning whether items should be publicly bid should be addressed to the attorneys for the Town. C. Exceptions to sealed bidding would include: Purchases from State, County and City contracts. Purchases of prison-made goods under Correction Law 184 and 186. Purchases of products from preferred sources (State Finance Law 162). Emergency purchases as defined by GML 103. Purchases from a proprietary source. Purchase of surplus supplies from federal, state and local governments, districts or public benefit corporations (GML 103). Professional Services. True Leases. D. All legal requirements must be complied with, including, but not limited to General Municipal Law 103, 104-a, 104-b, State Highway Law 142 and 284, State Finance Law and Town Law. 2. AMENDMENTS TO TOWN CODE. Chapter 51 of the Code of the Town of Irondequoit is hereby amended to add a new Section 51-1A to read as follows:
Comment [L1]: Increasing the bidding requirements from $10,000 to $20,000 for goods, and from $20,000 to $35,000 for public works is a change to match identical increases in NYS General Municipal Law Section 103 since the last revisions to the Town purchasing code.

 51-1A. General Statement of Policy Stewardship of public funds will be best served if the elected legislative body of the Town has the opportunity to question proposals, review the selection process and expressly authorize entry into contracts before they become a charge upon Town funds; where purchases take into account the life cycle costs of products, and not merely the initial cost; and where reasonable efforts have been made to use environmentally preferable products whenever feasible. (1). No contract for goods or services in excess of ten thousand dollars ($10,000) shall be awarded, and no payment shall be authorized, unless the Town Board has by resolution approved such contract and authorized its execution by the Town Supervisor or his/her delegate or other Town official authorized by law to execute contracts, approved as to form by the Attorneys for the Town. No charge in excess of the amount appropriated will be authorized or paid unless and until the Town Board has approved, by resolution, such additional expense. (2). No contract for goods and services in any amount shall be awarded, and no payment authorized, unless funds sufficient to cover such obligation have been authorized by the Town Board in the town budget or an amendment thereto. (3). "Costs"1 as used in this policy shall be quantifiable and may include, without limitation, the price of the given good or service being purchased; the administrative, training, storage, maintenance or warranties, delivery schedules, financing costs and foregone opportunity life cycle costs of the given good or service being costs or savings associated with construction, energy use, maintenance, operation, and salvage, recycling or disposal. "Price" unless otherwise specified means the amount of money set as consideration for the sale of a commodity or service and may include, but is not limited to, when applicable and when specified in the solicitation, delivery charges, installation charges and other costs. As provided by General Municipal Law 104-a, with reference to recycled products, "reasonably competitive" shall mean that the cost of the recycled product does not exceed a cost premium of ten percent above the cost of a comparable product that is not a recycled product or, if at least fifty percent of the secondary materials utilized in the manufacture of that product are generated from the waste stream in New York state, the cost of the recycled product does not exceed a cost premium of fifteen percent above the cost of a comparable product that is not a recycled product. (4). It is the policy of the Town of Irondequoit, whenever practicable, to opt for environmentally preferable purchasing, particularly with reference to use of nontoxic materials; and use of recovered, recycled, remanufactured or reusable materials, as such terms are defined in State law; waste reduction and/or waste prevention, consistent with State and Federal law and regulations applicable at the time of contract. This policy includes, but is not limited to the provisions of
1

The definitions of cost and price are drawn from State Finance Law 160(5).

 General Municipal Law 104-a. The Administration is encouraged to use products and components meeting minimum content standards for recycled or secondary materials as promulgated or amended by the U.S. Environmental Protection Agency and/or the N.Y. State Department of Environmental Conservation, whenever such materials meet the Towns use requirements and are economically responsible. 3. AMENDMENTS TO TOWN CODE. Chapter 51-3, of the Code of the Town of Irondequoit is hereby amended to read as follows: 51-3. Purchasing Code of Ethics A. B. To consider first, the interests of the Town of Irondequoit and the improvement of its Government. To endeavor to obtain the greatest value for every dollar expended. This includes consideration, in planning specifications and in reviewing bids and proposals, lifespan analysis for purchases, whenever appropriate (Initial cost plus maintenance/replacement parts plus operating costs plus disposal costs). To be receptive to advice and suggestions, insofar as such advice and suggestions are not in conflict with legal or moral restrictions in purchasing procedures. To strive for knowledge of municipal equipment and supplies in order to recommend items that may either reduce cost or increase efficiency. To consider green or environmentally preferable alternatives in drafting specifications whenever such products can meet performance requirements. For example, can a toxic or hazardous product be replaced with a non-hazardous alternative? Are there durable, reusable and/or remanufactured alternatives that eliminate waste? Can the product be purchased with recycled content? What recycling opportunities exist regionally for the product? To insist on and expect honesty in sales representation whether offered verbally or in writing, through advertising or in a sample of a product submitted. Local suppliers will be given first consideration when all factors are equal, including price.
Comment [L2]: Existing policy is a verbatim restatement of NYS General Municipal Law Section 104b. The State can and does revise the statute on occasion. In addition, some language is applicable primarily to entities other than towns, and could cause confusion. To ensure that our reference is always to current law, and to avoid potential confusion, we recommend removal of the statutory text, and replacement which language which incorporates the state statute by reference.

C. D. E.

F. G. 4.

AMENDMENTS TO TOWN CODE. Chapter 51-4, of the Code of the Town of Irondequoit is hereby amended to read as follows: 51-4. Statutory provisions regarding procurement policies and procedures. New York State statutes regulating purchasing and procurement by towns, including but not limited to General Municipal Law Section 104-b, in effect at the time of the approval of any Town of Irondequoit contract, and State regulations enacted pursuant to such statutes, as applicable to Town contracts, shall be deemed to be incorporated by reference in the Town of Irondequoit purchasing policy. 4

 5. AMENDMENTS TO TOWN CODE. Chapter 51 of the Code of the Town of Irondequoit is hereby amended to add a new Section 51-5 to read as follows: 51-5. Administrative Regulations and Guidelines The Town Board delegates to the Town Supervisor, in consultation with the Town Comptroller, the function of specifying required actions and developing the detailed arrangements under which day-to-day purchasing functions of the Town will be managed. These rules and detailed arrangements shall constitute the administrative regulations governing the Town administration. They must be, in every respect, consistent with the policies adopted by the Board. The Board, itself, reserves the right to develop and adopt regulations when required by Law; or where the Town Supervisor recommends Board action, in light of strong community interest. 6. AMENDMENTS TO TOWN CODE. Chapter 51-8, of the Code of the Town of Irondequoit is hereby amended to read as follows: 51-8. Competitive Bidding Categories; Exceptions to Competitive Bidding A. It is the intention of the Irondequoit Town Board that the bidding levels for purchase and public works contracts for the Town coincide with the bidding levels established for State contracts under General Municipal Law 103, as such statute may be amended from time to time. In the event that the dollar amounts for bidding state purchase or public works contracts are amended, such amendments shall be deemed to apply automatically to Town contracts under this section, and this section shall be deemed to be amended accordingly. B. Categories of Procurements: this list identifies whether these categories are subject to the competitive bidding requirements of Section 103 or the local policies required by Section 104-b. Subject to Bidding (103) Purchase and Public Work Contracts 1. 2. 3. 4. Purchase Contract - Above $20,000 Purchase Contract - Below $20,000 Contract for Public Work - Above $35,000? Contract for Public Work - Below $35,000? X X X X
Comment [L4]: Here, too, the dollar figures are adjusted to match those in General Municipal Law Section 103. Comment [L3]: Section 51.5 is reserved in the current code. This material is new.

Local Policies (104-b)

Procurements Excepted from both l03 and 104-b 5. Preferred Sources (State Finance Law, Section 162) X 5

 6. 7. 8. Correctional Institutions (Correction Law, Sections 184, 186) State Contract (GML, Section 104) County Contract (GML, Section 103[3]) X X X

Procurements Excepted from l03 9. 10. 11. 12. 13. 14. 15. Emergencies (GML, Section 103[4]) Sole Source (e.g., patented or monopoly item) Professional Services True Leases Insurance Second-Hand Equipment from Another Government (GML, Section 103[6]) Certain Municipal Hospital Purchases (GML, Section 103[8] X X X X X X X

C. The following is a description of the various exceptions to the requirements of GML 103: Preferred Sources. Under State Finance Law, 162, all suitable products and services, as determined and approved by the New York State Office of General Services, shall be procured by any political subdivision in accordance with applicable specifications of the political subdivision from qualified charitable non-profit agencies for the blind, qualified non-profit agencies for other severely handicapped, qualified special employment programs for the mentally ill or veterans workshops, which have been approved by the Commissioner of Social Services, Education or Mental Health, as the case may be, and which are organized under the laws of New York State and are manufacturing such products or performing such services within the State, whenever the products are available at a price determined by O.G.S. Competitive bidding requirements are not applicable to these purchases. Goods Made in Correctional Institutions. Under Correction Law, 184, the Commissioner of Correctional Services is required to cause to be manufactured by inmates in state correctional institutions items as are required by the state and political subdivisions, and to furnish these items at prices as shall be fixed and determined, upon requisition. That section provides: No article so manufactured ... shall be purchased from any other source ... unless the commissioner ... shall certify that the same cannot be furnished upon such requisition, and no claim therefor shall be audited or paid without such certificate. (see also Correction Law, 186) Since the Legislature has provided a purchasing requirement for articles manufactured in correctional institutions which is contrary to section 103, section 103 has no application to such purchases. Under the Correction Law, a Town may apply to the Department of Correctional 6

 Services for a waiver which would allow the Town to make the purchase from other sources pursuant to normal competitive bidding requirement. In addition, a Town may appeal the purchase price on the basis that it unreasonably exceeds fair market price (Correction Law, 186). For further information on this program, political subdivisions may contact the Department of Correctional Services, Division of Correctional Industries. State Contracts. Pursuant to General Municipal Law, 104, political subdivisions and districts therein are authorized to make purchases, in excess of $500.00, of materials, equipment, and supplies (except printed material) through the NYS Office of General Services (OGS), subject to rules established by OGS (see State Finance Law, 163). Section 104 provides that purchases by the Town through OGS are excepted from competitive bidding requirements. A Town may purchase numerous items at the same prices and under the same terms and conditions as the State. Under section 104, all purchases are subject to audit and inspection by the political subdivision and the political subdivision must accept sole responsibility for payment to the vendor. No official may make a purchase through the OGS when bids have already been received unless the purchase may be made upon the same terms, conditions and specifications, but at a lower price, through OGS. Information on these items contained in specific state contracts may be obtained by calling (518) 474-6717. County Contracts. Pursuant to General Municipal Law, 103(3), purchases through the county are exempted from the competitive bidding requirements of General Municipal Law, 103. As with purchases through OGS, all purchases are subject to audit and inspection by the Town and the Town must accept sole responsibility for payment to the vendor. No local official may make a purchase through the county when bids have already been received unless the purchase may be made upon the same terms, conditions and specifications, but a lower price, through the county. Information relative to county purchase contracts may be obtained from the Monroe County purchasing office by calling 428-5400. Limitations on State or County Contracts. The exception for State or county contract purchases applies only when purchases are made from the current State or county vendor, or in certain cases, a listed agent or distributor, whose contract has been extended to political subdivisions. Thus, the Town may not, as an exception to bidding requirements, purchase from a vendor other than a vendor holding a current State or county contract which has been extended to political subdivisions, even if the purchase is equal to or below the State or county price. For example, if a quote or bid were less than the state or county contract price the Town cannot simply accept that lower price without going through the normal bid or quotation process. Purchases from vendors holding State or county contracts may not be made upon terms and conditions which materially or substantially vary from the State or county contract. Also, these exceptions relate to both purchase contracts, and contracts for public work. Other Governmental Entities. There is no general exception for purchases through federal contracts or contracts of municipalities other than counties. So, for example, the Town may not purchase through a contract of the U.S. Government, a village, city, school district or BOCES, or another town. It should be noted, however, that pursuant to Article 5-G of the General Municipal Law (119-m, et seq.), municipal corporations are authorized to enter into cooperative purchase agreements (See City of Rochester Contracts). 7

 City of Rochester Contracts. In December, 1995, the Town Board adopted a resolution to allow the Town to be named on the City of Rochester contracts and thus be able to purchase from these contracts. All above policies concerning State/county contracts apply to these. True Leases. The courts have held that true lease agreements are neither purchases nor contracts for public work and, thus, are not subject to bidding under General Municipal Law, 103. Competitive bidding requirements may not be avoided by simply casting an agreement, which is truly a purchase or contract for public work, as a lease or rental. Although, no one factor is determinative, the following factors are to be considered when determining whether an agreement is a true lease or an installment purchase contract: 1. 2. 3. 4. 5. 6. 7. 8. Transaction is a device intended to circumvent the competitive bidding statutes; Intent to transfer title to Town, present or not; Town assumes indicia of ownership (i.e. risk of loss, maintenance, repairs, insurance); Principal and interest component present in payment; Useful life of property involved; Acquisition of equity by Town during term of the agreement; Fair market rental value; Value of option to purchase at end of the agreement; and/or

9. Total cost of payments in comparison to fair market value of property at inception of contract. Insurance. The courts have held that insurance coverage is not subject to formal competitive bidding. Emergencies. An exception to the competitive bidding requirements exists for emergency situations (GML, 103 [4]). There are three basic statutory criteria to be met in order to fall within this exception. These are that (1) the situation arises out of an accident or other unforeseen occurrence or condition; (2) the circumstances affect public buildings, public property or the life, health, safety or property of the Towns residents; and (3) the situation requires immediate action which cannot await competitive bidding. Generally, there must be a present, immediate and existing condition which is creating an imminent threat or danger and which requires such immediate action that a further delay to comply with competitive bidding requirements would be so detrimental to the public interest that it overcomes the strong public policy in favor of bidding. Further, because the emergency must result from an accident or unforeseen occurrence, it is doubtful the Town may invoke the emergency exception in a situation which is the result of inaction or dilatory behavior on the part of local officials and which, therefore, could have been foreseen in time to advertise for bids. Even when the Town Board passes a resolution that a public emergency exists, the public interest dictates that 8

 purchases are made at the lowest possible costs, seeking competition by informal solicitation of quotes or otherwise, to the extent practicable under the circumstances. Sole Source. Competitive bidding is not required under section 103 of the General Municipal Law in those limited situations when a Town, in the public interest, requires particular goods or services which uniquely serve the public interest, for which there is no substantial equivalent and which are, in fact, available from only one source (see, gen, 1986 Op.St.Compt. No. 86-25, p. 41). Thus, for example, if the Town, acting in good faith and without intent to arbitrarily inhibit or restrict competition, determines that a particular patented item is required in the public interest and it is further determined that such item is available only from one source so that no possibility of competition exists, competitive bidding may not be required for the procurement of the item. A sample form is attached. In making these determinations, the Town should document, among other things, the unique benefits of the item as compared to other items available in the marketplace, that no other item provides substantially equivalent or similar benefits; and that, considering the benefits received, the cost of the item is reasonable when compared to other products or services in the marketplace. In addition, the Town should document that, as a matter of fact, there is no possibility of competition for the procurement. Professional Services. The courts have held that professional services are not contracts for public work, as that phrase is used in the bidding statutes, and, therefore, are not subject to competitive bidding procedures. The determination of whether the professional service exception is applicable in given situations must be made on a case-by-case basis, examining the particular services to be acquired. Generally, professional services involve specialized expertise, use of professional judgment, and/or high degree of creativity. Also, the services generally are to be performed by particular designated individuals. Finally, the courts have noted that professional service contracts often involve a relationship of personal trust and confidence. Among the services that have been held to be exempt from competitive bidding under this exception are those of an engineer, architect, land surveyor, attorney, physician, and insurance brokers. Generally, if the situation warrants a solicitation of costs, an effective method would be a Request for Proposal (RFP). The extent of the RFP would be decided on a case-by-case basis. Second-Hand Equipment from Other Governments. There is a statutory exception to competitive bidding requirements which permits the purchase of surplus and second-hand supplies, materials, or equipment without competitive bidding from the Federal or State government or from any other political or public benefit corporation within the State (GML, 103[6]). However, purchases of used items from any other source (e.g. private sources like auctions or going out-of-business sales) are not exempt from bidding requirements. 7. AMENDMENTS TO TOWN CODE. Chapter 51-9, of the Code of the Town of Irondequoit is hereby amended to read as follows: 51-9. Determination of procedure; documentation of whether a procurement is subject to competitive bidding. 9

 A. Proposed procurements must be analyzed. This includes determining whether a proposed procurement is subject to competitive bidding, and if not, documenting how the decision is reached. Three initial questions are involved: Is the proposed procurement a purchase contract or a contract for public work? If it is either, is the amount above the applicable threshold in section 103? If so, do any exceptions apply? If it is not, what type of procurement is it? B. With the increase in the bidding limits under current State law, it is important to distinguish between contracts for public work and purchase contracts, as these terms are not defined in the General Municipal Law. This distinction is especially important because there is a $15,000 difference between the bidding thresholds and because the Town Board is responsible for establishing procedures for procurements below the bidding thresholds. C. In general, purchase contracts involve the acquisition of commodities, materials, supplies, or equipment, while contracts for public work involve services, labor, or construction. Each procurement must be reviewed on a case by case basis to determine which kind of purchase it would be. If it would involve a substantial amount of service, to the extent that the service provided to the Town is the focal point and the acquisition of goods is incidental, then it would be considered a contract for public work. Conversely, if the service or labor is only minimal or incidental to the acquisition of goods, it would be considered a purchase contract. D. For example, a contract for interior painting of a building involves both material (paint) and labor (painting). In most instances the labor component of the contract will be predominant making it a contract for public work. In contrast, replacing a boiler furnace, while involving both equipment (the boiler) and labor, will in most instances consist primarily of a charge for the equipment, making it a purchase contract. E. In documenting whether a proposed procurement is below the bidding limits, records should include evidence of written or verbal quotes (telephone logs, etc.) to substantiate that the price of the item or service would not exceed the bidding limits. In addition, since similar procurements to be made in a fiscal year must be considered in the aggregate for purposes of determining whether a particular item must be bid, the responsible individual could document the amount expended in previous years and that the monetary thresholds are not anticipated to be exceeded in the current year, and therefore, bidding would not be required. In this process, the amount anticipated to be spent in the current year should be documented because the amount involved may affect the method of competition to be sought. Documentation should also explain how it was determined that the procurement was either a purchase or a public works contract. 8. AMENDMENTS TO TOWN CODE. Chapter 51-10, of the Code of the Town of Irondequoit is hereby amended to read as follows: 51-10. Documentation required for purchase orders and contract awards for nonbid procurements A.Verbal Quotations - A telephone log or other record should provide at a minimum: date, item or service desired, price quoted, name of vendors representative.
Comment [L5]: Current code reads effective January 1, 1992 and is thus not current with existing State law. Comment [L6]: The current code says $10,000 which was the difference between the bidding threshold for goods and for public works under the prior version of State law.

10

 B.Written Quotations -Vendors should provide at a minimum: date, description of item or details of service to be provided, price quoted, name of contract and signature. Quotes transmitted by fax are acceptable. C. Procurements subject to Section 104-b are listed in the following chart with illustrative policies and procedures. It is the intention of the Irondequoit Town Board that the bidding levels for purchase and public works contracts for the Town coincide with the bidding levels established for State contracts under General Municipal Law 103, as such statute may be amended from time to time. In the event that the dollar amounts for bidding state purchase or public works contracts are amended, such amendments shall be deemed to apply automatically to Town contracts under this section, and this section shall be deemed to be amended accordingly, and the upper and lower limits of the ranges set forth herein shall be adjusted proportionately.

Dollar Limits

Verbal Quotes 1 Or More 3 Or More

Written Quotes 3 Or More

Public Bid

Purchase Contracts Below $20,000 Under 500 500 9,999 10,000 - 19,999 Purchase Contracts Above $20,000 X X X X

Comment [L7]: The bidding thresholds are adjusted to match current State law. The ranges on the chart are adjusted proportionately.

Contract for Public Work Below $35,000 Under 1,000 1,000 - 9,999 10,000 - 34,999 Contract for Public Work Above $35,000 X X X X

D. Price Documentation Copies of the Verbal Quotation record or the written quotation (with the above information) must be attached to each Purchase Order as it is processed for ordering. 11

 Purchase Orders without this information will be returned to the ordering department. A sample of the Town of Irondequoit Quotation Log is attached. 9. EFFECTIVE DATE. This local law shall be effective forty-five (45) days following the adoption of this Resolution, as provided by Municipal Home Rule Law Section 24 (1)(a); or upon filing with the Secretary of State, as provided by Municipal Home Rule Law Section 27 (3), whichever shall occur later. Seconded by Town Board member _______________ and duly put to vote, which resulted as follows: Town Supervisor Town Board Member Town Board Member Town Board Member Town Board Member DAurizio Aldersley Essley Marasco Perticone voting voting voting voting voting

12