BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
------------------------------------------------------------------
|Bill No: |SB 1082 |Hearing |4/13/16 |
| | |Date: | |
|----------+---------------------------------+-----------+---------|
|Author: |McGuire |Tax Levy: |No |
|----------+---------------------------------+-----------+---------|
|Version: |3/28/16 |Fiscal: |No |
------------------------------------------------------------------
-----------------------------------------------------------------
|Consultant|Favorini-Csorba |
|: | |
-----------------------------------------------------------------
Regional park and open-space districts: general manager:
powers
Increases, from $25,000 to $50,000, the maximum value of
contracts which the Sonoma County Agricultural Preservation and
Open Space District may enter into without using a formal bid
process.
Background
Regional park and open space districts must advertise contracts
for supplies, materials, labor, and construction and award them
to the lowest responsible bidder. With the board of directors'
approval, a district's general manager can award smaller jobs
without advertising and without written contracts. The manager
must report this spending at the board's next regular meeting.
When the Legislature created open space districts in 1933, the
threshold for advertising bids was $500. Currently, nearly all
open space districts can spend up to $25,000 for
non-construction supplies, materials, and labor, and up to
$25,000 on new construction projects without going through a
formal bidding process (AB 745, Levine, 2014).
The $25,000 threshold for construction contracts has applied to
all open space districts since 1983 (AB 746, Campbell, 1983).
The bid threshold for non-construction contracts was increased
SB 1082 (McGuire) 3/28/16 Page 2
of ?
from $10,000 to $25,000 for the East Bay Regional Park District
in 1999 (AB 584, Aroner, 1999) and for the Midpeninsula Regional
Open Space District in 2002 (AB 953, Simitian, 2002). In 2015,
AB 495 (Gordon) allowed those two districts to sign contracts
for any purpose of up to $50,000 without bidding. In addition
to being subject to board approval, AB 495 required any
expenditures in this manner to be reported to the board.
Sonoma County voters authorized the creation of the Sonoma
County Agricultural Preservation and Open Space District
(SCAPOSD) in 1990 to permanently protect the greenbelts, scenic
viewsheds, farms and ranches and natural areas of Sonoma County.
To date, SCAPOSD has acquired or protected 106,000 acres of
farmland and open space. A quarter cent sales tax, authorized
through 2031, supports the majority of the district's roughly
$36 million annual budget. The Sonoma County Board of
Supervisors serves as the governing board of SCAPOSD. The
district's activities include acquisition, protection, and
maintenance of open space and agricultural lands, conservation
planning to identify high-priority lands for protection or
acquisition, and administration of a grant program.
The formal bid process for public contracts can be
time-consuming and costly. Because inflation has eroded the
districts' buying power since their $25,000 bid thresholds were
enacted, SCAPOSD must go through the effort and expense of
seeking bids for relatively low-value contracts. Sonoma County
officials want the Legislature to raise the dollar threshold at
which the district must seek formal bids on contracts.
Proposed Law
Senate Bill 1082 allows the general manager of SCAPOSD, with the
approval of its board of directors, to bind the district, in
accordance with board policy, and without advertising, for the
payment of supplies, materials, labor, or other valuable
consideration for any purpose, including new construction of a
building, structure, or improvement, in amounts not exceeding
$50,000.
SB 1082 requires that all expenditures must be reported to the
board of directors at its next regular meeting.
SB 1082 (McGuire) 3/28/16 Page 3
of ?
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . The Sonoma County Agricultural Preserve
and Open Space District reports that in 2015, the district went
through a formal bidding process to award 6 contracts with
values that fell in the $25,000 to $50,000 range. At an average
administrative cost of $7,360 per contract, these contracts cost
the district over $44,000. Avoiding a formal bid process for
contracts worth less than $50,000 will allow SCAPOSD to complete
numerous projects more quickly and reduce staff time and
administrative costs associated with formal bidding. Moreover,
the Sonoma County Board of Supervisors increased the bid
threshold for other departments and affiliated agencies within
the county on March 15, 2016. Since the Board of Supervisors
serves as the board of the district, they want to also increase
the threshold for SCAPOSD, but state law prevents them from
doing so. SB 1082 makes the necessary change to allow this to
occur, and the savings that the district will realize as a
result of the higher bid threshold in SB 1082 will allow the
district to devote more resources towards its core mission of
preserving open space and agricultural lands.
2. Accountability and efficiency . State law regulating local
contracting attempts to balance the goals of accountability and
efficiency. For decisions to be accountable, public officials
must spend the public's money in full view. Inviting bids and
awarding contracts to the lowest possible bidder is an effective
method of ensuring transparency for the expenditures of public
funds. While increasing the limits on the amount for which
districts may contract without the formal bid process, allows
for greater efficiency in local government spending, it may also
result in a loss of accountability and transparency on the use
of public funds.
3. Next in line ? In 2014, AB 745 (Levine) raised the
non-construction contract bid thresholds for several park and
open space districts, bringing their thresholds up to the same
$25,000 level that state law had previously granted only to a
SB 1082 (McGuire) 3/28/16 Page 4
of ?
few districts. Just last year, AB 495 (Gordon, 2015) raised the
threshold for the East Bay Regional Park District and the
Midpeninsula Regional Open Space District to $50,000 for all
types of contracts. Other districts may follow suit in asking
for the same authority. Moreover, inflation has eroded the
value of the amounts that open space districts may contract for
without bidding. For example, using the Consumer Price Index to
adjust for inflation, the $25,000 threshold for construction
contracts that was enacted in 1983 would be the equivalent of a
$62,000 threshold in 2016. The $25,000 thresholds for
non-construction contracts enacted in 1999 and 2002 would be the
equivalent of roughly $37,000 and $33,500 thresholds,
respectively, in 2015. As an alternative to the Legislature's
periodically adjusting and equalizing various districts' bid
thresholds, the Committee may wish to consider amending SB 1082
to automatically adjust bid thresholds periodically to reflect
increases in construction costs as measured by a specified
inflation index.
4. Special legislation . The California Constitution prohibits
special legislation when a general law can apply (Article IV,
§16). SB 1082 contains findings and declarations explaining the
need for legislation that applies only to the Sonoma County
Agricultural Preservation and Open Space District.
Support and
Opposition (4/7/16)
Support : Sonoma County Agricultural Preservation and Open Space
District (sponsor); Sonoma County Board of Supervisors.
Opposition : Unknown.
-- END --