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Agenda Item - 2024-12-03 - Number 14.1 - LORA Resolution 24-03, Amending Public Contracting Rules 14.1 o�� E 0 COUNCIL REPORT > V —w 0 OREGO� Subject: Resolution 24-47 and LORA Resolution 24-03, Lake Oswego Public Contract Rules Meeting Date: December 3, 2024 Staff Member: Evan Boone, Deputy City Attorney/ Deputy LORA Counsel Report Date: November 18, 2024 Department: City Attorney's Office/ LORA Counsel Action Required Advisory Board/Commission Recommendation ❑ Motion ❑ Approval ❑X Public Hearing ❑ Denial ❑ Ordinance ❑ None Forwarded ❑X Resolution ❑X Not Applicable ❑ Information Only Comments: ❑ Council Direction ❑ Consent Agenda Staff Recommendation: • City Council: Adopt Resolution 24-47 • LORA Board: Adopt LORA Resolution 24-03 Recommended Language for Motion: • City Council: Move to adopt Resolution 24-47. • LORA Board: Move to adopt LORA Resolution 24-03. Project/ Issue Relates To: Issue before Council (Highlight Policy Question): ❑Council Goals/Priorities ❑Adopted Master Plan(s) ❑X Not Applicable — Respect cv el'erce. Trust. Se-VI'', 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 2 BACKGROUND Legal and Related Services The 2016 Council / LORA Board adopted the AG Model Public Contracting Rules for soliciting and awarding public contracts,'while also retaining some Lake Oswego-specific public contracting rules.2 State law allows local governments to enter into personal services contracts, such as hiring outside professionals. When the City/ LORA hires for personal services, including legal services, it must choose based on factors in a solicitation document, regardless of the anticipated contract amount.3 Council / LORA Board may authorize exceptions to the general public contract solicitation requirements by adoption of"special procurements," which exempt certain public contracts from solicitation of multiple vendors, e.g., equipment repair and overhaul, concession and franchises, advertising, copyright and library materials, insurance, and sponsorship agreements.4 Delegation Authority State law sets certain procedures for how public contracts are solicited, selected, and awarded. Pursuant to those procedures, the decision to award a contract is made by the "contracting agency"— the Council / LORA Board. However, state law also allows the Council / LORA Board to delegate this authority to the City Manager/ LORA Executive Director. Like many other cities, the Council / LORA Board has authorized the City Manager/ LORA Executive Director to approve contracts on its behalf when the contract is less than a stated dollar maximum.' Lake Oswego Public Contract Rule 46-0140 contains a convenient chart for staff and the public to find the current delegated authority.' Intergovernmental Agreement to Sell Goods Intergovernmental Agreements (IGAs) are not "public contracts."' Similar to the delegation authority for public contracts below a certain amount, LOPCR 46-0140 is used to include the delegation of authority by the Council / LORA Board to allow the City Manager/ LORA Executive Director to enter into IGAs that are similar to a public contract, e.g., when the City/ LORA purchases goods, services, personal services and, rarer, public improvements from other governmental agencies, or IGAs for reciprocal support, e.g., mutual aid agreements or joint task forces. 1 OAR Ch. 137,Articles 046—049. 2 See City Resolution 16-29/LORA Resolution 16-03. 3 LOPCR 47-0277. 4 LOPCR 46-0131. 'City Resolution 18-03/LORA Resolution 18-01. 6 Amendment of the delegation of contracting authority is not subject to the statutory requirements for amendment of the public contracting rules because changing the parameters of the delegation of the City Manager/Executive Director to award contracts is not within the technical scope of the public contracting rules 7 ORS 279A.025(a)(A, E, F, I). Respect. Excellence. Trust. Service 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 3 DISCUSSION Legal and Related Services This resolution proposes an amendment of the special procurement rule for personal service contracts relating to the City Attorney/ LORA Counsel/or Human Resources Director obtaining outside legal counsel or contracting litigation /dispute resolution services. This amendment would allow, but not require, the City Attorney/ LORA Counsel/Human Resources Director to direct appoint (select) the outside legal counsel or related legal services without seeking multiple quotes. A class special procurement is permitted by ORS 2796.085(1) for a class of contracts when it is demonstrated that: "(a) Is unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts; and (b)(A) Is reasonably expected to result in substantial cost savings to the contracting agency or to the public; or (B) Otherwise substantially promotes the public interest in a manner that could not practicably be realized by complying with requirements that are applicable under ORS 2796.055, 2796.060, 2796.065 or 2796.070 or under any rules adopted thereunder." Legal Services Avoiding Favoritism and Protecting Competition: Exemptions for legal services are unlikely to encourage favoritism or diminish competition because the selection of outside counsel is based on specialized legal expertise, not personal preference. Legal matters often require immediate attention, and only attorneys with relevant expertise and qualifications can be considered, which naturally limits the pool of candidates but ensures fair competition among qualified professionals. The City Attorney's/ LORA Counsel's/ Human Resources Director's role in choosing counsel focuses on professional criteria, such as expertise and the absence of conflicts of interest, which prevents favoritism. Promoting Substantial Cost Savings: The exemption is expected to result in cost savings because it allows the City Attorney/ LORA Counsel/Human Resources Director to quickly hire outside counsel when legal matters arise or immediate legal expertise is needed. The standard procurement process can cause delays, leading to higher costs and legal risk if the City/ LORA misses deadlines, faces prolonged litigation, or is unable to respond effectively and proactively in legal disputes. Serving the Public Interest: Exempting legal services from the typical procurement process substantially promotes the public interest by ensuring the City/ LORA can address legal issues with the right expertise and without delay. This is crucial in matters where time-sensitive legal strategies are involved, such as litigation, settlement negotiations, and specialized property transactions. In such cases, the public's interest in protecting the city's legal rights is well served by allowing the City Attorney/ Respect. Excellence. Trust. Service 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 4 LORA Counsel/Human Resources Director to appoint counsel based on professional judgment and immediate need. Related Legal Services Due to the nature and procedure of dispute resolution/ litigation,there are times when persons or firms provide related legal expenses that are to be shared with other parties to the dispute, such as the costs of a mediator, arbitrator, expert witnesses, or litigation support services are shared with other parties, and that the selection of the person or firm is one that must either be negotiated with other parties or is to be selected in the manner provided by the dispute resolution process, e.g., selection from the panel of available arbitrators from the Portland Arbitration Service. In such cases the City/ LORA is not able to solicit multiple providers. This special procurement authority for obtaining related legal services is unlikely to encourage favoritism or to substantially diminish competition because, as described above, the manner of selection is constrained by the process in working within the dispute resolution / litigation procedures. The special procurement will substantially promote the public interest in a manner that could not practicably be realized by complying with requirements for the same reasons stated above. Delegation of Authority Contract Amount Increase Currently the City Manager/ LORA Executive Director is authorized to award and execute public contracts and similar intergovernmental agreements for services, personal services, and goods for up to $250,000; contracts in excess of the amount require council approval, typically on the Council consent agenda. Staff time is required to prepare the council report and the award and execution is delayed until after the council meeting. This resolution would increase the delegated contract authority to $500,000. The City Manager/ LORA Executive Director will advise the Council for the first 2 years-- starting April 1, 2025 and quarterly through December 31, 2026—of the contracts that are awarded above in the $250,000 - $500,000 range, by providing the name of the vendor, the purpose/scope of the contract, and the contract amount. Intergovernmental Agreement to Sell Goods The amendment to LOPCR 46-0140 would allow the City/ LORA to sell goods under an IGA to another governmental agency on the same basis as the existing authority to purchase goods from that governmental agency. Respect. Excellence. Trust. Service 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 5 ALTERNATIVES City Council: The Council may adopt all or part of the recommended amendments to LOPCR 46- 0131 and 46-0140. If a part of the proposed amendments will not be adopted, a revised form a resolution will be presented to the Council at a later meeting. LORA Board: LORA Resolution 24-03 concurs in the amendments and findings in City Resolution 24-47. If the LORA Board wishes to adopt less or more of the amendments than adopted by the City Council, or different findings, a revised form of resolution will be presented to the LORA Board at a later meeting. RECOMMENDATION Following a public hearing to receive public comment: • City Council: Adopt Resolution 24-47. • LORA Board:Adopt LORA Resolution 24-03 (concurring in the amendment and findings of City Council Resolution 24-47) ATTACHMENTS 1. City Council: Resolution 24-47 2. LORA: LORA Resolution 24-03 — Respect. Fv- PPP,',P Trust. 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY ATTACHMENT 1 LORA RESOLUTION 24-03 A RESOLUTION OF THE LAKE OSWEGO REDEVELOPMENT AGENCY CONCURRING IN THE AMENDMENT OF LAKE OSWEGO PUBLIC CONTRACT RULES 46-0131 SPECIAL PROCUREMENT (LEGAL AND RELATED SERVICES) AND 46-140 REGARDING DELEGATION OF AUTHORITY TO CITY MANAGER TO ENTER INTO PUBLIC CONTRACTS AND TO ENTER INTO INTERGOVERNMENTAL AGREEMENTS BY LAKE OSWEGO CITY COUNCIL RESOLUTION 24-47. WHEREAS, the Lake Oswego Redevelopment Agency Board by Resolution 16-03 has previously adopted the Lake Oswego Public Contracts Rules (LOPCR) as the public contracting rules of the Lake Oswego Redevelopment Agency (LORA), and WHEREAS, pursuant to LOPCR 46-0109 (LO) defines the "Local Contract Review Board" as the Lake Oswego Redevelopment Agency Board for contracts applicable to LORA (Section 1) and defines the "Contracting Agency" as LORA for contracts applicable to LORA (Section 2); and WHEREAS, the Board finds that there is a benefit to LORA to utilize the same public contracting rules for the procurement of goods, services, personal services and public improvements, due to increased familiarity by the shared staffing with the City of Lake Oswego, and due to familiarity by vendors with the LOPCRs on LORA projects; and WHEREAS, the City Council of the City of Lake Oswego has adopted Resolution 24-47, which makes certain findings and adopts amendments to the Lake Oswego Public Contract Rules; and the Board concurs in the findings and that amendments to the LOPCRs should be applied to public contracts and intergovernmental agreements for and by LORA; NOW,THEREFORE, BE IT RESOLVED the Lake Oswego Redevelopment Agency: Section 1. The findings and amendments to the Lake Oswego Public Contract Rules 46-0131 and 46-0140 as stated in Lake Oswego City Council Resolution 24-47 (Exhibit A), are hereby adopted. Section 2. Effective Date. This Resolution shall take effect upon passage. Considered and enacted at the regular meeting of the Lake Oswego Redevelopment Agency Board on the 3rd day of December, 2024. AYES: NOES: EXCUSED: ABSTAIN: Joseph M. Buck, Chair LORA Resolution 24-03 Page 1 of 2 ATTEST: Kari Linder, Recording Secretary APPROVED AS TO FORM: Ellen Osoinach, LORA Counsel LORA Resolution 24-03 Page 2 of 2 EXHIBIT A RESOLUTION 24-47 A RESOLUTION OF THE LAKE OSWEGO CITY COUNCIL AMENDING LAKE OSWEGO PUBLIC CONTRACT RULES 46-0131 SPECIAL PROCUREMENT (LEGAL AND RELATED SERVICES) AND 46-140 REGARDING DELEGATION OF AUTHORITY TO CITY MANAGER TO ENTER INTO PUBLIC CONTRACTS AND TO ENTER INTO INTERGOVERNMENTAL AGREEMENTS. WHEREAS, the City Council elects to increase the delegation of authority of the City Manager to execute public contracts and intergovernmental agreements for the purchase of goods, services and personal services to $500,000; and WHEREAS, the City Council has previously delegated to the City Manager the authority to enter into intergovernmental agreements for the purchase of goods, services and personal services below certain dollar value, which dollar value is similar to the authority delegated to enter into public contracts for goods, services, and personal services; and WHEREAS, the City Council finds that the City Manager should have the same authority regarding intergovernmental agreements for the sale of goods, services and personal services; and WHEREAS, delegation of authority granted by the City Council to the City Manager to enter into intergovernmental agreements for goods, services and personal services was made a part of the Lake Oswego Public Contracting Rule 46-140 solely for ease of reference, because (a) the grant of delegation of authority to execute public contracts as permitted by ORS 279A.075 is not regarding the rules for the exercise of the City's procurement authority under ORS 279A.050 or ORS 279.070, and (b) intergovernmental agreements are not "public contracts" per ORS 279A.025(2)(a)(I); and WHEREAS, the City Council finds that due to the nature of dispute resolution, there are times when persons or firms provide related legal expenses that are to be shared with other parties to the dispute, such as when the costs of a mediator, arbitrator, expert witnesses, or litigation support services are shared with other parties, and that the selection of the person or firm is one that must either be negotiated with other parties or selected in the manner provided by the dispute resolution process; and WHEREAS, the City Council finds that the procurement of outside legal services by the City's chief legal officer or Human Resources Director is a unique personal service. Legal matters often require immediate attention, specialized expertise, consistency of representation in ongoing legal matters, and ethical considerations specific to lawyers—practicalities which require an exemption that is unlikely encourage favoritism. Subjecting the acquisition and provisions of legal services to a regular solicitation process risks exposing the sensitive and confidential information inherent in those services and an exemption is likely to lead to cost savings. Making legal services contracts a "special procurement" substantially promotes the public interest by ensuring the city can address legal issues with the right expertise at the right time. Therefore, the City Council finds that the City Attorney should be able to direct appoint for outside legal services; and NOW,THEREFORE, BE IT RESOLVED by the City Council of the City of Lake Oswego that: Section 1. Findings. The City Council adopts the findings stated in the Recitals above and in the Council Report. Section 2. Lake Oswego Public Contract Rule 46-0140 (LO) is amended to as shown below, deleted text shown by and additional text showed by double underline. Resolution 24-47 Page 1 of 4 46-0131 (LO) Class Special Procurement Exemptions [This LOPCR is in addition to the Model Rules; it does not revise a Model Rule.] The following classes of contracts, in addition to other classes of contract authorized in these rules, i.e., small procurement, intermediate procurement, emergency procurement, in OAR 137-47 and 137-49, are exempt from the competitive bidding procurement requirements of these Rules to the extent provided: (1). GOODS AND SERVICES /// (2). PERSONAL SERVICES The following personal services are designated as personal services and may be made by direct appointment by the PCO: (a) Legal and Related Services (i). Litigation or Potential Litigation—Shared Services: When a person or entity is to provide services related to the dispute resolution process (whether in a pending or likely dispute), including an agreed-upon contractual dispute resolution process, mediation, arbitration, or litigation), such as the engagement of the servicers of a mediator, arbitrator, technical expert witness, appraiser, court reporter, copy service, or other litigation related services and: (1) the selection process is pursuant to the agreed-upon dispute resolution procedure (e.g., selection of mediator(s) or arbitrator(s)), or (2) the person or firm has been selected by another party to the dispute and the City is to bear a portion of the cost in order to receive the benefit of the provider's service or work product, such as testimony, appraisal, deposition transcripts, and photocopies. (ii). Legal Advice and Related Services to City:The City Attorney or the Human Resources Director(with approval of the City Attorney) may retain outside legal counsel, expert witnesses and consultants to assist the City Attorney in providing legal advice or services to the City or to the Human Resources Director in labor and employment matters. (3). PUBLIC IMPROVEMENT /// (4). GOODS AND SERVICES and/or PUBLIC IMPROVEMENT /// 46-0140(LO) Awarding Authority for Contracts, Amendments and Intergovernmental Agreements [This LOPCR is in addition to the Model Rules; it does not revise a Model Rule.] (1). When a rule states that the Contracting Agency is authorized to award a contract, the council, board, or person authorized to award the Contract on behalf of the Contracting Agency shall be as provided in this section. (2). The Lake Oswego City Council shall award all public contracts for the City of Lake Oswego unless otherwise provided by this section, or by resolution of the Council. Resolution 24-47 Page 2 of 4 (3). The Board of the Lake Oswego Redevelopment Agency shall award all public contracts for the Lake Oswego Redevelopment Agency unless otherwise provided by this section, or by resolution of the Board. (4). The Lake Oswego City Council, as the governing body of the City and LORA, hereby delegates authority to the PCO to Award Contracts and Amendments to Contracts, and to enter into Intergovernmental Agreements and Amendments to Intergovernmental Agreement as follows, and the PCO is hereby designated as the Awarding Authority and Change Order Authority, for the following classes of Contracts: Contract Awardable By PCO Special Limitations Maximum Amount /Scope Goods, Services, Personal Generally $500,000 Service contracts (including Amendments Architect, Engineer, Land Contract Amount $500,000 Surveyor, or Provider of Alter scope of work or time for performance None "Related Services" contracts for Public Improvements) Contract expense fully offset by fees, charges, $500,000 donations, or funds raised for services or programs offered through City Concession and Franchise Annual Gross Sales expected to exceed $500,000. Donated Goods and Services None Public Improvements, Public Generally $500,000 Works Amendments: Contract Amount $250,000 Alter scope of work or time for performance None Donated Public Improvement None Intergovernmental Agreements Authorized to be Executed by PCO Purchase or Sale of Goods and Generally $500,000 Services (materials, supplies, Donated Public Improvement None equipment, vehicles, services), Contract expense fully offset by fees, charges, $500,000 Personal Services donations, or funds raised for services or programs offered through City Donated Goods and Services None Amendments Contract Amount $500,000 Alter scope of work or time for performance None Public Improvements and Generally $500,000 Public Works; Personal Amendments: Services related to Public Contract Amount $500,000 Improvements and Public Alter scope of work or time for performance None Works Resolution 24-47 Page 3 of 4 Contract Awardable By PCO Special Limitations Maximum Amount /Scope Allocation of existing Agreement does not significantly affect the City's None equipment and personnel, ability to provide services within its own such as mutual aid agreements boundaries. or involvement in dedicated task forces. (5). Contracts, Amendments to Contracts, and Intergovernmental Agreements exceeding the above amounts shall be awarded or rejected by the City Council, following an evaluation and recommendation by the PCO, and the City Council is hereby designated as the Awarding Authority and Change Order Authority for such classes of contracts. Section 3. Effective Date. This Resolution shall take effect upon passage. Considered and enacted at the regular meeting of the City Council of the City of Lake Oswego on the 3rd day of December, 2024. AYES: NOES: EXCUSED: ABSTAIN: Joseph M. Buck, Mayor ATTEST: Kari Linder, City Recorder APPROVED AS TO FORM: Ellen Osoinach, City Attorney Resolution 24-47 Page 4 of 4