Meetings

December 10, 2004
(For Board: December 17, 2004)

REPORT OF THE RULES, POLICY AND INDUSTRIAL
RELATIONS COMMITTEE/COMMITTEE OF THE WHOLE

Honorable Board of Directors
Golden Gate Bridge, Highway
and Transportation District

Honorable Members:

A meeting of the Rules, Policy and Industrial Relations Committee/Committee of the Whole was held in the Board Room, Administration Building, Toll Plaza, San Francisco, California, on Friday, December 10, 2004, at 10:07 a.m., Chair Middlebrook presiding.

Committee Members Present (7): Chair Middlebrook; Directors Harrison, Herná ndez, Murray, Pahre and Reilly; President Smith (Ex Officio)
Committee Members Absent (1): Director McGoldrick
Other Directors Present (5): Directors Cochran, Eddie, Martini, Shahum and Stroeh

Committee of the Whole Members Present (12): Directors Cochran, Eddie, Herná ndez, Martini, Murray, Pahre, Reilly, Shahum and Stroeh; Second Vice President Harrison; First Vice President Middlebrook; President Smith
Committee of the Whole Members Absent (6): Directors Ammiano, Boro, Brown, Kerns, McGoldrick and Sandoval

Staff Present: General Manager Celia G. Kupersmith; District Engineer Denis J. Mulligan; Auditor-Controller Joseph M. Wire; Secretary of the District Janet S. Tarantino; Attorney David J. Miller; Deputy General Manager/Bridge Division Kary H. Witt; Deputy General Manager/Bus Division Susan C. Chiaroni; Deputy General Manager/Ferry Division James P. Swindler; Deputy General Manager/Administration and Development Teri W. Mantony; Public Affairs Director Mary C. Currie; Marketing and Communications Director Linda J. Mitchell; Executive Assistant to the General Manager Amorette Ko; Assistant Clerk of the Board Karen B. Engbretson

Visitors Present: None

1.

Approve Amendments to the Procurement Manual and the Rules of the Board Regarding the General Manager’s Authorization for Contract Change Orders

In a memorandum to Committee, Auditor-Controller Joseph Wire and General Manager Celia Kupersmith provided staff’s recommendation for amending the Procurement Manual and the Rules of the Board relative to the General Manager’s change order authority. The report stated that the Board of Directors, by Resolution No. 2001-163 at its meeting of October 26, 2001, adopted revisions to the Procurement Manual, including specific procedures for contract change orders or amendments. The report noted that the revised Procurement Manual increased the procurement authority limits of the General Manager, by authorizing the General Manager or her designee to award or execute agreements and leases for equipment, services or construction for amounts under $100,000. The Procurement Manual provided for somewhat more restrictive approval authority for the General Manager for change orders, with the following criteria: (1) the change order must be funded with the contract contingency; (2) total change orders for the contract cumulatively do not exceed ten percent (10%) of the original contract price; and, (3) the change order does not exceed $50,000. All other change orders not meeting the above criteria are subject to approval by the Board of Directors.

The report noted that during the past three years since these new procurement rules have been in effect, staff has experienced some operational delays in approving necessary change orders to contracts under $100,000. In some cases, Board authorization has been required for change orders that exceed 10% of the original contract amount, even though the General Manager approved the original contract within her authority limits. For example, a recent change order in the amount of $10,000 required Board approval, when the underlying $40,000 contract had been authorized within the General Manager’s authority. In an effort to streamline procurement processes and increase the District’s overall productivity and responsiveness, staff recommends that the General Manager’s authority limits for change orders be increased to $100,000 (inclusive of the base contract amount) without Board approval. For larger contracts over $100,000, the existing change order authority would not be affected.

The report further stated that staff recommends the following changes to the language of Procurement Manual, Section X, Contract Administration, Subsection D, Change Orders and Contract Amendments, Paragraph 2, Procedures, and Rule V, Duties of the General Manager, of the Rules of the Board (changes in bold):

DISTRICT’S PROCUREMENT MANUAL

“The General Manager is authorized to approve change orders to contracts awarded in accordance with the procedures set forth in this Procurement Manual if all of the following criteria are met:
(a) Where the original contract amount is $100,000 or less, the General Manager is authorized to approve change orders up to an amount that, when combined with the original contract amount, does not exceed $100,000.
(b) Where the original contract amount exceeds $100,000, the General Manager is authorized to approve change orders when (i) the change order can be funded within the contract contingency; (ii) total change orders for the contract cumulatively do not exceed ten percent (10%) of the original contract price; and (iii) the change order does not exceed $50,000.
All other change orders shall be approved by the Board of Directors.”

DISTRICT’S RULES OF THE BOARD

“The General Manager shall act as Purchasing Agent and shall designate a purchaser to have charge of all procurements. The General Manager shall have authority to purchase supplies, equipment and materials and to arrange for work in the manner provided for in the Procurement Manual. The General Manager is authorized to execute any leases or agreements and expend funds for procurements and activities included within the approved annual budget as follows: (1) up to $100,000, inclusive of any change orders, for equipment, supplies, materials, services or construction; (2) contracts over $100,000, the General Manager may authorize change orders or contract amendments, cumulatively not to exceed ten percent (10%) of the original contract, and not to exceed $50,000 for any single change order; and (3) up to $100,000 for leases and licenses of real property in which the District is a lessee or licensee. ”

A copy of the report is available in the Office of the District Secretary.

At the meeting, Joseph Wire summarized the staff report, noting that the recommended change in the General Manager’s authority limit for change orders will correct an anomaly in the Procurement Manual, by making the upper limit of change order authority consistent with the authority limit for awarding contracts.

Staff recommended, and the Committee concurred by motion made and seconded by Directors STROEH/PAHRE to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Rules, Policy and Industrial Relations Committee recommends that the Board of Directors approve an amendment to the Procurement Manual, Section X, Contract Administration, Subsection D, Change Orders and Contract Amendments, Paragraph 2, Procedures; and, approve an amendment to the Rules of the Board, Rule V, Duties of the General Manager , as outlined below, to increase the General Manager’s change order authority limit to approve change orders in an amount that, when combined with the original contract amount, does not exceed $100,000:

Procurement Manual, Section X, Contract Administration, Subsection D, Change Orders and Contract Amendments, Paragraph 2, Procedures

“The General Manager is authorized to approve change orders to contracts awarded in accordance with the procedures set forth in this Procurement Manual if all of the following criteria are met:
(a) Where the original contract amount is $100,000 or less, the General Manager is authorized to approve change orders up to an amount that, when combined with the original contract amount, does not exceed $100,000.
(b) Where the original contract amount exceeds $100,000, the General Manager is authorized to approve change orders when (i) the change order can be funded within the contract contingency; (ii) total change orders for the contract cumulatively do not exceed ten percent (10%) of the original contract price; and, (iii) the change order does not exceed $50,000.
All other change orders shall be approved by the Board of Directors.”

Rules Of The Board, Rule V, Duties of the General Manager

“The General Manager shall act as Purchasing Agent and shall designate a purchaser to have charge of all procurements. The General Manager shall have authority to purchase supplies, equipment and materials and to arrange for work in the manner provided for in the Procurement Manual. The General Manager is authorized to execute any leases or agreements and expend funds for procurements and activities included within the approved annual budget as follows: (1) up to $100,000, inclusive of any change orders, for equipment, supplies, materials, services or construction; (2) contracts over $100,000, the General Manager may authorize change orders or contract amendments, cumulatively not to exceed ten percent (10%) of the original contract, and not to exceed $50,000 for any single change order; and (3) up to $100,000 for leases and licenses of real property in which the District is a lessee or licensee.”

Action by the Board - Resolution
NON-CONSENT CALENDAR

AYES (12): Directors Cochran, Eddie, Herná ndez, Martini, Murray, Pahre, Reilly, Shahum and Stroeh; Second Vice President Harrison; First Vice President Middlebrook; President Smith
NOES (0): None

2.

Adopt Amended Conflict of Interest Code

In a memorandum to Committee, Deputy General Manager/Administration and Development Teri Mantony, Secretary of the District Janet Tarantino and General Manager Celia Kupersmith reported on staff ’s recommendation regarding the District’s Conflict of Interest Code (Code). The report stated that the California Government Code requires every local agency to review its Code in each even-numbered year and to amend the Code, if necessary. The report stated that this year’s review resulted in amendments that were presented at the October 8, 2004, meeting of the Rules, Policy and Industrial Relations Committee. The Code was amended to reflect changes in the list of designated positions which participate in decisions that may have a material effect on the District’s financial interests.

The proposed amendments to the Code were as follows:

1. The list of designated employees has been updated to delete the title of the following position, which has been abolished:

Operations Superintendent

2. The list of designated employees has been updated to include the following new positions and/or titles:

Procurement and Retail Operations Director
Budget and Programs Analysis Manager
Manager of Organizational Development
Manager of Technical Services
Information Systems Project Manager
Superintendent of Facilities and Maintenance
Terminal Operations Superintendent
Security and Emergency Management Specialist

3. The list of designated employees has been updated to transfer the following positions from the Bridge Division to the District Division:

Purchasing Officer
Senior Buyer
Buyer

The report also stated that during the 45-day public comment period from October 8 to November 22, 2004, in which the amended Code was available for review, no comments were received. Therefore, staff recommends at this time that the amended Code be adopted, after which the Code will be filed with the State of California Fair Political Practices Commission. A copy of the report is available in the Office of the District Secretary.

At the meeting, Janet Tarantino summarized the staff report, noting that an extensive public notification process was used for distributing and posting the proposed amendments to the Code during the 45-day public comment period.

Staff recommended, and the Committee concurred by motion made and seconded by Directors PAHRE/MURRAY to forward the following recommendation to the Board of Directors for its consideration:

RECOMMENDATION

The Rules, Policy and Industrial Relations Committee recommends that the Board of Directors adopt the District’s amended Conflict of Interest Code and submit it to the State of California Fair Political Practices Commission for approval.

Action by the Board - Resolution
NON-CONSENT CALENDAR

AYES (12): Directors Cochran, Eddie, Herná ndez, Martini, Murray, Pahre, Reilly, Shahum and Stroeh; Second Vice President Harrison; First Vice President Middlebrook; President Smith
NOES (0): None

3.

Public Comment

There was no public comment.

4. Adjournment

All business having been concluded, the meeting was declared adjourned at 10:12 a.m.

Respectfully submitted,

Maureen Middlebrook, Chair
Rules, Policy and Industrial Relations Committee

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