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Senate Engrossed |
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State of Arizona Senate Fiftieth Legislature First Regular Session 2011
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SENATE BILL 1322 |
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AN ACT
amending title 9, Arizona Revised Statutes, by adding chapter 9; relating to managed competition for city services.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 9, Arizona Revised Statutes, is amended by adding chapter 9, to read:
CHAPTER 9
MANAGED COMPETITION FOR CITY SERVICES
ARTICLE 1. GENERAL PROVISIONS
9-1001. Definitions
In this chapter, unless the context otherwise requires:
1. "Competitive service city" means a city with a population of more than five hundred thousand persons.
2. "Municipal services" means all services furnished directly or indirectly by a competitive service city for the benefit of the public or its residents, including all related internal management services, technology services, physical asset services, facilities services, support services, enterprise and fee-funded services and administrative services. Municipal services do not include the duties performed by the mayor or city council, the city manager or the city attorney.
9-1002. Competition mandate; municipal services; fee; exemption
A. Notwithstanding any law to the contrary, no later than the end of the first fiscal year after the effective date of this chapter, every competitive service city shall furnish all municipal services with an anticipated or actual cost of seventy-five thousand or more dollars through a city department or an independent contractor by way of a service contract that has been entered into through open and competitive bidding. A competitive service city may enter into a service contract through open and competitive bidding for those municipal services that have an anticipated or actual cost of less than seventy-five thousand dollars.
B. Any state agency or political subdivision of this state, including a municipality or a department of a municipality, a special district or a quasi-governmental body, may bid for a municipal service contract pursuant to this chapter but shall also comply with section 9-1007. If a municipal service contract is awarded to an independent contractor pursuant to this chapter, a competitive service city shall not preclude or hinder its municipal employees from terminating their employment with the municipality to accept employment with the independent contractor unless a conflict of interest or corruption would result. The city manager of each competitive service city is responsible for administering and monitoring all municipal service contracts with independent contractors and city departments.
C. Any competitive service city conducting open and competitive bidding pursuant to subsection a of this section for the procurement of construction services or professional services shall comply with section 34‑603 or 41-2578 and must employ generally accepted accounting principles when considering bids submitted by municipal employees. Permit applicants may use the professional services provider of their choice for plan submission, permitting and inspections. Competitive service cities may charge a reasonable fee for permits issued.
D. Any bidder seeking to perform a municipal service pursuant to subsection A of this section may incorporate within a bid the use of any municipal facility or equipment that a competitive service city would use in performing the same municipal service.
E. This chapter does not apply to municipal judges, police officers who are certified peace officers, municipal firefighters or 911 operators or tax collection and audit enforcement functions of a competitive service city or if compliance would violate any applicable federal law or regulation.
9-1003. Precompetition assessment
A. No later than three months before the end of the first fiscal year after the effective date of this chapter, and thereafter as determined by ordinance, the city manager of each competitive service city shall prepare a report prescribing a written statement of work for each municipal service to be put into open and competitive bidding and describing the services to be contracted, the anticipated contract price and the performance standards to be incorporated into those contracts. The city manager shall transmit this report to the city council, and the council shall consider the report within thirty days of its transmission. If approved by a majority of the city council, the statement of work is deemed adopted by the city as its final statement of work for each municipal service to be put into open and competitive bidding. The city shall immediately commence with open and competitive bidding on the municipal services that are adopted.
B. The disapproval of a city council is only valid if the city council proposes, by resolution, specific modifications to the statement of work in sufficient detail to guide the city manager in implementing an open and competitive bid. The city manager shall incorporate the specific modifications into a final statement of work within thirty days. The final statement of work will then be deemed adopted by the city council and the city council shall immediately begin conducting open and competitive bidding for the municipal services that are adopted.
9-1004. Open and competitive bidding of services
No later than one month before the end of the first fiscal year after the effective date of this chapter, the city council, by ordinance, shall provide for standards and processes ensuring transparent, open and competitive bidding by independent contractors and city departments for contracts to furnish municipal services pursuant to this chapter, including provisions to guard against corruption and conflicts of interest. The competitive service city shall reasonably tailor the scale and complexity of operations to be performed under a municipal service contract offered for competitive bidding to generate competitive bids from the private sector that offer the highest quality, lowest cost and most reliable performance. Selection of professional services must comply with sections 34-603 and 41‑2578.
9-1005. Minimum contract standards
A. The city manager of a competitive service city shall award contracts pursuant to this chapter to the bidder who is able to provide reasonable assurance of fulfilling the competitive service city's contract standards at the lowest cost to the city. No contract awarded pursuant to this chapter may have a term longer than five years with three one year renewals before the related services must be offered again by the competitive service city through open and competitive bidding pursuant to this chapter. A longer term may be awarded only for a contract with an independent contractor or public-private partnership involving significant fixed capital investments, with a contract term equal to the amortization schedule reasonable in that industry. For purposes of this chapter, the competitive service city's contract standards shall specify desired, measurable performance outcomes from the contracted work, shall not override the managerial discretion of independent contractors in determining how best to fulfill those contract standards and shall not dictate the amount or composition of compensation to be paid by independent contractors to their employees or authorized subcontractors in meeting those performance outcomes.
B. The bids of any independent contractor providing services to competitive service cities shall meet the following minimum contract standards during the term of any service contract:
1. All bidders, public or private, must be able to provide reasonable performance and payment bonds, parent company guarantees, letters of credit or other acceptable form of security or a combination of any of these securities, the penal sum or amount of which may be less than one hundred per cent of the value of the contract involved based on the competitive service city's determination, made on a facility-by-facility basis, of what is required to adequately protect the competitive service city.
2. All bidders, public or private, must maintain an adequate level of liability insurance consistent with the city's risk management requirements. The cost of liability insurance must be included in all bids submitted pursuant to section 9-1002, subsection A.
3. The independent contractor must have appropriate safety policies and procedures in place to protect the public and its employees in providing the service.
4. The independent contractor must perform background checks on employees performing any service for which the competitive service city requires background checks of municipal employees.
5. The independent contractor must acknowledge that the competitive service city may rightfully terminate and rescind any contract awarded to the independent contractor in the event of any material breach of the contract.
9-1006. Transparency in bidding and performance
A. All bid related communications and supporting materials submitted for consideration by competitive service cities are public records.
B. The city manager and all city departments of each competitive service city shall perform annual performance audits for contracted services, the cost of which must be accounted for and incorporated into any bid. The city manager of each competitive service city shall seek an independent performance audit every five years to evaluate the accuracy and completeness of the municipality's performance audits. All performance audits are public records.
9-1007. Transparency in the cost of municipal employment
Any state agency or political subdivision of this state, including a competitive service city, a department of a competitive service city, a special district, public-private partnership that includes municipal employees or a quasi-governmental body, that bids on a municipal service contract must specifically disclose and incorporate budgeting for reasonably anticipated overtime to be paid to the bidder's employees as well as the present value of anticipated retirement benefits to be paid to the bidder's employees that vest during the term of the related service contract based on the bidder's average employee attrition rate over the preceding five years.
9-1008. Taxpayer standing
Notwithstanding any law to the contrary, taxpayers residing in a competitive service city may bring a special action in any court of competent jurisdiction to enforce this chapter.
Sec. 2. Existing contracts
This act does not apply to existing vested contractual or intergovernmental agreements for the furnishing of municipal services that have been entered into before the effective date of this act. When the vested contractual or intergovernmental agreements expire, the agreements may only be continued if they are municipal services that are subject to this act and if they are continued or renegotiated pursuant to this act.