99-694�t���crr�Z� �
Council File # 1 / — t� �` T
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CTTY OF SAINT PAUL, MINNESOTA �3
Presented B�
Refened To
An admiiiistrative ordinance
to provide rules and procedures for
employee performance plans and
for managed competition contracts.
THE COUNCIL OF THE CITY OF SAINT PAUL DOES ORDAIN:
Section 1
PUBUSU�n
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A new Chapter 85 is hereby enacted as part of the Saint Paul Administrative Code to read
as foilows:
Section 85.01. Statement of Purpose.
Managed competition is a process that enables city employees to achieve greater
efficiency and productivity in performing vuious city services by competing with pxivate
vendors for the delivery of those services. It is intended to facilitate city employee participation
in a process that will result in employee-formulated performance plans to achieve gains in
producfivity and efficiency. It may lead to the negotiation of managed competition contracts
between the city and private contractars. This ordinance is intended to set forth requirements and
procedures to be followed when opening a city service to the managed competition proposal
process.
Section 85.02. Definitions.
(a) Board. The Compete Saint Paul Board.
(b) Business uniz A group of employees submitting a proposed performance plan under
the managed competition program.
(c) City department. Any department, board, commission, office, or division of the city
of Saint Paul.
(d) Ciry service. A function performed by employees of the city, p�
� to ,3.
(e) F'inttnce director. The director ofthe office of financial services, and his/her successor
or designee. �, Gqy
4 ( fl Managed competition request for proposal A eit� proposal for the solicitation of a
5 responsive �zo on sal or proposals ji� from one or more private parties who seek the awazd of a
6 contract for the provision of city services, or jiil for contractine or subcontracting out anv city
7 service or service ,
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10 (g) Operating department. The city department in which the employees in a business unit
11 have been requested to prepare or have prepared a performance plan, or have carried out in whole
12 or in part such a performance plan, or whose city services may be contracted out to private
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(h) Performance plan. A p1an, strategy or program by which city employees seek to
perform or deliver city services.
(i) Purchasing director. The director of the division of contract and analysis services in
the department of technology and management services, or his/her successor or designee.
Section 85.03. Compete Saint Paul Bottrd.
23 The Boazd is hereby created. Its membership sha11 be representative of a diverse range of
24 citizan viewpoints regarding the implementation and administration of the city's activities in
25 relation to managed competition. The Board shall consist of seven (7) voring members, who
26 shall be appointed by the mayar and approved by the city council. Initially, three (3) members
27 shali be appointed for a term of three (3) years each, two (2) members shall be appointed for a
28 term of two (2} years each, and two (2) members shall each be appointed for a term of one year.
29 Thereafter, the terms of inembers shall be for three (3) yeazs and until their successors aze
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Section 85.04. Board powers and duties.
(a) Advice to mayor and city council. The Board shall advise the mayor and city council
on matters relating to the selection of city services for performance plans and managed
competition requests far proposals, including but not limited to planning, promotion, training,
contract development and contractor qualifications for such activities.
39 (b) Review ofperformance plans and managed competition requests for proposals. All
40 perfonnance plans and managed competition requests for proposals sha11 be submitted to the
41 Board for its review and recommendations. No performance plan, managed competition request
42 for proposal, or proposal relating to such a pIan sha11 be sent to private parties for res�onses or
43 implemented without prior Board review and consideration of its recommendations. The Board
44 shall review and make written recommendations to the mayor and city council on all
45 performance plans and managed competition requests for proposals. The Board may recommend
46 changes in such plans or proposals. The Board shall provide the finance director and purchasing
47 director with an opporhuiity to make recommendations on such performance plans and managed
48 competition requests for proposals, and shall include those recommendations in their transmittal
49 to the mayor and city council. �q
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1 (c) Initiation ofperformance plans. The Boazd may on its own initiative ldentify and � �
2 recommend city services for incorporarion in performance plans or in the managed competition
3 request for proposal process, and shall submit its recommendations therefor in writing to the
4 mayor and ciry council. Any proposals for performance plans or managed competition that result
5 from the Board 'uutiative are subject to Board review and recommendarion under subsection (b)
6 above.
8 (d) Board staff. The Board shall be staffed by an employee of the mayor's office and an
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employee of the city council's investigation and research center. Such staff shall advise the
Boazd on a monthly basis of activities related to the development of performance plans or
managed competition request for proposals.
(e) Board meetings. The Boazd shall meet at least quarterly and at other times at the
discretion of the Board. Notice of the time, place and purpose of a board meeting shall be given
as required by law.
(fj Board organization. The Board shall elect o�cers and make rules for the conduct of
its business.
(g) Delegation ofpowers. The Board may by nxle provide for the delegation of one or
more Board duties, responsibilities and powers to the finance director or the purchasing director
Such rules and amendments thereto are not effective until consented to by the mayar or his or her
designee, and filed with the city clerk.
Section 85.05. Budget of the Board.
The Bou shail submit an annual budget proposal to the appropriate officials for
inclusion in the city's budget, which proposal may contain, but is not be limited to, funds for
travel, training, per diem, postage, copying and supplies. This budget shall be included within the
budget of an appropriate city department or office.
Section 85.06. Regulations and procedures for performance plans.
(a) Znitiatlon and prepara[iorz Performance plans may be initiated by the head of the
operating deparhnent or business unit either on his or her own initiative, at the request of the
employees involved, or in response to a suggestion by the Board. The affected employees and
their bargaining unit representatives shall be given a reasonable opportunity to participate fully in
the prepazation and drafting of a performance plan, and shall be given training which can be used
in such prepazation and drafting. Such training shall include, but not be limited to, how to
measure and cost their services, and methods by which such services may be more efficiently
delivered or productivity increased. Except as otherwise provided by the Minnesota Public
Employees Labor Relations Act ("PELRA"), the participation of the bargaining unit
representatives in the preparation of the performance plan shail be limited to a°meet and confer"
basis as defined in PELRA.
(b) The first performance plan. The first performance plan shall be effective for a period
of two years, during which period of time and for 60 days after the expiration of such p1an, no
part of the city services subject to such plan shall be contracted out pursuant to or resulting from
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a managed competition request for proposal.
(c) Decision on whether to continue under a performance plan. The $oard shail
2 xecommend, at least 45 days before the ending date of a performance plan, to the mayor and city
3 council whether the business unit involved shall continue operating under the same or a revised
4 performance plan, or the city services involved shall be considered for competitive proposals
5 xesulting from a managed competition request for proposals. The mayor and city council may
6 continue with the same performance plan, provide for a revised performance plan, require that
7 either the same or a revised plan shall be compared with outside competitive bids, or that the city
8 services shall be performed by outside bidders. The decision on the foregoing 4 options sha11 be
9 made by the mayor and city council by resolution, which resolution shall be considered and acted
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on by the council. Such resolution or resolutions shall be sponsored by the council president as a
courtesy in order to place it or them before the council, at the request of the mayor or any council
member. Such resolution may also decide, in addition to the said 4 options, whether (1) the scope
and content of Yhe managed competition request for proposal is adequate, and (2) the affected
city services shall be performed under a performance plan or the lowest responsible bid received
pursuant to or resulting from the managed competition request for proposal. If such resolution
does not decide the last two issues, those issues shall be decided by the mayor and the council in
one ar more other resolutions as the case may be, which resolutions shail similarly be sponsored
by the council president in order to place them before the council.
(d) Term of subsequent performance plans. Any performance plan after the first one shall
continue for a period of two yeazs, subject to continuation or not as provided above.
(e) Internal competitive proposal. A performance plan or any revision thereof which is
prepared for the purpose of, or will be reasonably likely to be used for, competing with proposals
from private parties in response to a city managed competition request for proposal sha11 be
deemed to be an internal competitive proposal for the purposes of Minnesota Statutes, Section
1337, relating to general nonpublic data.
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29 Section 85.07. Regulations and procedures for managed competition request for proposals.
30 (a) Initiation and preparation. Managed competition requests for proposals may be
31 initiated by the head of the operaung department or business unit either on his or her own
32 iniriative, at the request of the employees involved, or in response to a suggestion by the Board.
33 No mana ed competition request for proposals shall be sent to private parties for response until
34 completion of the first performance plan under Section 85.06(b� and until approval thereafter by
35 the mavor and council pursuant to the rorocedures in Section 85.06(cl.
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(b) Two years internal operation. The Board may review or make recommendations on a
managed competition request for proposal at any time, but no action may be taken by the mayor
or city council on such proposal except as provided in Section 85.06 above.
(c) Existence of private providers. A managed competition request far proposal shall not
be considered by the Boazd, mayor or city council unless there are at least three private parties or
entities which currently provide the particular service or services in such proposal, or unless it
can be reasonably foreseen that a request for proposals or bids will result in at least three
responsible competitive proposals or bids for the service or services invoived.
47 (d) City must retain capacity to provide service. No city service shall be contracted out to
48 private parties in its entirety. The City shall retain in every case the provision of 25 percent of
49 (1) the service or (2) the capacity to provide the service.
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(e) Outside contr°actors.
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3 (i) Disqualification. A private party responding to a managed competition request for
4 proposal, together with its supervisory employees while in the employ of said contractor, shall be
5 disqualified from bidding on or responding to such proposal, if such party or such employees
6 have a record of material or repeated noncompliance with any relevant federal or state regulatory
7 statute including, but not lunited to, statutes concerning labar relarions, occupational safety and
8 health, nondiscrimination and affirmative action, environmental protection and conflicts of
9 interest.
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(ii) Financial and background information. Each such private parry shall submit, in its
response to a managed competition request for proposal, such financial and background
information as the Board may recommend to allow the mayor and the city council to make an
informed decision on the financial viability of the party and its ability to carry out and deliver the
city services in question. Such information may include, but is not limited to, financial and
business references, financial records and past contracts or delivery of municipal services.
(iii) Employment of city employees. Each such private party shall offer any available
employee positions, and any positions created as a result of the contract, to city employees who
are subject to layoff due to the elimination of positions because of the compefition contract and
who satisfy the hiring criteria of the contractor.
(fj Specifications. Each managed competition request for proposal shall contain bid
specifications and such other instructions to prospective bidders as may be necessary, including
clear advice to prospective bidders on or responders to any managed competition request for
proposal that the city is not obligated to enter into any managed competition contract, and
reserves the right to continue with the same or revised performance plan, whether in existence or
prepared thereafter by the employees involved. Each such managed competition contract shall
aiso contain all of the contract requirements in Section 85.09.
Section 85.08. Ethics requlrements.
Nothing in this chapter is intended to amend or modify or supersede the provisions of
Section 24.03(A) of the Saint Paul Administrative Code. In addition thereto, no city employee
whose position in the city enables such an employee to influence the selection of a contractor,
shall be employed in any capacity by a private pariy submitting a bid in response to a managed
competition request for proposal, or have any other direct or indirect financial interest in the
selection of a contractor. Any city empioyee involved in preparing the request for a managed
competition request for proposal may not later submit a bid for or response to that same matter or
contract. The private party responsible for the response to the management competition request
far proposais shall not have been an employee in the business unit or business units covered by
the said request for proposals during the six-month period before the response was submitted by
the said privaYe pariy.
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1 Section 85.09. Contract r-equirements. � q �
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3 The following provisions shall be contained in any competitive contract awarded to a
4 private entity chosen to deliver city services according to a managed competition request for
5 proposal:
7 (a) Specifzed minimum wage rates. All contractors and their subcontractors under a
8 managed competition contract shall conform to all applicable labor laws of the State of
9 Minnesota and all other applicable laws, ordinances and Iegal zequirements affecting the
10 contracted wark in the City of Saint Paul. All contracts and subcontracts entered into under a
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managed competition contract shall provide that the wages paid and benefits paid or provided to
the occupational groups utilized in such managed competition contract shall not be less than the
wages paid and benefits paid or provided to comparable positions in the classified civil service
system. If no comparable job class exists, the contractors and subcontractors shall pay at least the
state prevailing wage rate for the occupation. If thete is no state prevailing wage rate for the
occupation involved, the federal prevailing wage rate shali be paid.
(b) Standards. Each managed competition contract sha11 contain specified service and
performance standards that shall be met by the contractor.
(c) Contract length. No managed competition contract shall be for a term longer than two
years.
(d) Termination. Each such managed competition contract shall provide for termination
in the event of failure to meet established service standards or any other violation of the contract
requirements.
Section 85.10. Cost savings distribution.
Up to one-half of the cost savings resulting from delivery of city services under
performance plans by city employees may be used by the city for bonuses to the employees
performing under the managed competition arrangement and to improve workplace conditions of
the operating department. The city and bargaining units may negotiate amendments to existing
coilective bazgaining agreements if and as necessary to implement the intent of this section. No
distribution of cost sauings to an operating department sha11 be made until all the terms of the
performance plan or contract have been met.
Section 85.11. Reports.
Any cit7 department that implements managed competition through a contract or has a
performance plan in place with city employees shall present an annual status report on the
implementation of the program and the performance of the contractor or the city employees, as
applicabie, to the city council.
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Requested by Department of:
By:
Section 8512. Collective bargaining, statutory provisions.
Qq_49y
Nothing in this chapter shall abrogate or madify any rights or obligations (1) to bargain
coilectively about any terms or conditions of employment, or (2) existing under the Minnesota
Public Employment Labor Relations Act.
Section 2
This ordinance sha11 take effect and be in force thirty (30) days after its passage, approval
and publication.
Adopted by Council: Date (� � .1p \`lqg
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Adoption Certified by Council Secretary
By: �.a�. C3- ,: ^� ,.^.�'2--�'-
Form Ap roved by City Attorney
gY: , �. I4-I�v'
Approved by Mayor for Submission to Council
By:
Approved by MayoY: Date ��
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Adopted by Council: IJate _ 1 ctry_ 3� 0.� —
Adoption Certified by Counci7 Secretary
By:
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CITY OF SAINT PA[TI., 390 crry xorr Telephone: 65Z-266-8510
Norm Coleman, Mayor IS West Kellogg Boulevard Facsimile: 651-266-8513
Saint Paul, MN SSIO2
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Veto of Managed Competition Ordinance (CF 99-69A) `��
October 26, 1999
City Councilmember:
I am returning CF 99-694, the Managed Competition Ordinance, with my veto. I do so with the
full knowledge that a majority of the Council has indicated they intend to ovenide my veto.
I believe it is important for Saint Paul homeowners to know that your decisiun to pass this
flawed ordinance, and your equally ill-advised effort to override my veto, will deprive them
a minimum of $20 million from costs savings that could have been achieved through
competition.
While a majority of the Council hides behind a"lack of communication" for their excuse in
passing an ordinance that you a11 admit is terribly flawed, Saint Paul taxpayers are being
penalized for a lack of courage to stand up to Public Employee Union leadership.
I will commit to you that their will be no "lack of communication" to 5aint Paul property
t�payers from this office about the high cost to them from the Council's unwillingness to
embrace competition in City government as a way to improve government operations,
reduce the costs of government and ultimately save money for taxpayers.
Last Wednesday, the City Council passed a so-called managed competition ordinance that will
stop competition cold. It discourages the private sector from bidding by saddling them with
requirements that no one would want to meet.
This amended ordinance is the worst possible abuse of the grocess that I have seen since
becoming Mayor.
First, there was no public input at a11 on the amendment. The Council's efforts to hide behind
public meetings while quietly amending ordinances without public knowledge cannot go
unnoticed.
Second, there was no efFort to engage Departsnent and Office Directors in this matter. Any
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Department and Office Director would have come right out and clearly indicated to the Councii
that this ordivance was bad the way it was - but it became even more detrimental once axnended.
Unforiunately, this lack of public input or input by those who aze running our City on a day-to-
day basis threatens - in the words of Department and Office Directors - the ability of this City to
deliver services and perform criticai City functions if this amended ordinauce stands.
When Council President Dan Bostrom and I announced a 3�-day moratorium on competition
efforts last August, I was hopeful that we could reach agreement with city labor unions on how to
implement a competition effort in Saint Paul.
Unfortunately, we were unable to agree on any issue of requiriug private empioyers to pay higher
City wages. Unions believe that higher City wages were the appropriate result of pay equity and
thought those wage and benefit scales should be imposed across the board to the private sector.
The major concern of City Unions was being embarrassed to losing competition because of
higher wages.
The ordinance approved by the City Council is flawed throughout. Beginning with its statement
of purpose, it is cleaz that this plan is intended to protect the parochial interests of city unions, not
the citizens I was elected to serve.
What this ordinance should be about is improving the city's ability to deliver services as
efficiently, productively and cost-effectively as possible by encouraging city employees to
compete with private vendors.
Instead, this ordinance deprives property tagpayers of potential savings of $20 million -
perhaps even greater savings - because of the fear of the Council to stand up to public
employee union leadership. This is an outrage of the sort that demands public notice.
The ordinance is flawed in several areas which I will outline below. I offered numerous changes
during our discussions with the unions that I believed would establish a competition program that
works while responding to city employees' greatest concern: job security.
Aowever, let me be clear about one thing. Saint Paul City employees are not to blame for
the inability of their union leadership to act responsibly, or for that matter, for the Council
to act responsibly.
Citv emulovees asked for job security - they were provided it Unfortunately their union
leadership rejected this commitment in an effort to maintain the status uo
The ordinance, as amended does not brovide iob security for citv employePs. If employees were
to lose a city service to the private sector, there would be no assurance of continued employment
with the City. Job security has been a key concem of city employees, yet the City Council has
chosen to ignore this concern.
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unportant where employee pians require substantial investment in technology or
capital equipment. Tluough the RFP process ciry employees would have another 45-
60 days to refine their business plan.
After reviewing the private sector bids and comparing them to the city employees'
business plan the Mayor could decide to implement the business pian or recommend
awud of a coniraet to a private bidder. Any decision to contract out the service
would ultimately require city council review and approval.
3) Prepare performance plans for all city services
The ordinance will require a11 citv services. whether rorovided by citv em l�ovees or
private contractors. to be subject to its requirements. Prior to issuing any RFP, this
ordivance will require City department heads to prepare and 'unplement a performance
plan on every single service that is currently being performed by outside contractors.
In other words, before any street plowing, library cataloging, architectural drawing, or any
other city service which is currently being done outside can remain outside, an advisory
boazd then the City Council would need to first review whether outside contracting is
appropriate. The city employees would haue to be given the opporiunity to do this work
under the terms of a performance plan for a minimum of two yeazs. Only then could a
decision be made to contract out the service. In the meantime, the work won't get done -
or it will cost even mare money as we wrestle with the nighhnaze of a bureaucracy thaY s
been created by this ordinance.
Under my�ro�osal there wouid be no requirement to force a two-veaz delav on services
we now contract out while departments develop and 'un�lement �erformance plans for
those services. No services we currendy contract out would be affected. Snow plowing,
street constxuction and library services would continue uninterrupted.
4) Hiring requirement on private employers
The ordinance will rec�uire private em�lovers to offer cit� emplovees available or new
jobs resultin� from wimiinga city contract. This represents another attempt to eliminate
any prospect of competition with the private sector. If winning a ciiy contract means the
private employer would be forced to hire city employees if there aze openings, that
employer will not bid for the service in the first place.
Under my�ro�osal there would be no hirin�requirements forprivate bidders because
there would be no need for such a requirement. No city employee would lose their job,
so hiring requirements would be meaningless. In the course of discussions with city
unions, however, I did support language that would invite private bidders to indicate
whether they would hire city employees whose posi6ons would be elnninated through a
managed competition contract. An employer's willingness to hire city employees could
be given substantial weight in evaluating competition proposals.
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S7 Wage and benefit requirement on private bidders
The ordinance will zequire grivate bidders to pav their employees the same wa e� and
benefits as cit�employees in compazable uositions. It will impose the city's civil service
system and wage scales on the private sector. Employers will be required to compaze
each of their j obs to specific city job titles - of which theze aze over 500 different titles
and classifications - to determine a pay rate for potentially each one of these 500 different
ritles and classifications. Such a requirement is fundamentaily unfair to the private sector,
especially given the reality that some city employees are paid 20-40% above their
counterparts in other public or private orgauizations. The requirement also will create a
bureaucratic nightmare for both private bidders and the city and will further ensure that
the private sector will be shut out of competition for city services.
Under my proposal nrivate contractors biddine for city services wouid be required to pav
at least a threshold wage to their employees. In discussions with the unions, I offered two
thresholds: one for workers with basic skills, experience, traiiung and educarion; another
for workers with more advanced skills, eta I also offered to established thresholds for
separate occupational groupings, such as clerical, technical, professional, supervisory,
building trades and others.
6) Contract length
The ordinance requires that a11 managed competition contracts with outside vendors be
limited to two-yeazs. This will prohibit the City from considering proposals for
operations where a longer timeline is desirable. Private employers will not bid on city
services that may require substantial capital investment if the time period far recovering
that investment is limited. Again, this is a provision intended to kill competition.
Under my pronosal no such time Innit would be piaced on contracts. I would allow
private bidders to propose the time frame that best meets their needs, or give them
options for bidding on varying time periods. Thus, we could accommodate short,
seasonal services as well as larger operations that would require a multi-year contract.
On behalf of S�int Paul property taxpayers, I reject this ordinance.
YVV'
Mayor
5u�sr�ru� q-2���9
Presented By
Refened To
Council File # 99 `(O/�
Ordinance #
Gteen Sheet # �!/ L � 3�
3 �{ /
Committee Date :
An administrative ordinance
to provide rules and procedures for
employee performance plans and
for managed competition contracts.
THE COUNCIL OF THE CITY OF SAINT PAUL DOES
Section 1
A new Chapter 85 is hereby enacted as part of
as foilows:
Section 85.01. Statement ofPurpose.
Paul Administrative Code to read
Managed competition is a process that nables ciry employees to achieve greater
efficiency and productivity in perfornvng v ous city services by competing with private
vendors for the delivery of those services. t is intended to facilitate city employee participation
in a process that wiil result in employee orxnulated performance plans to achieve gains in
productivity and efficiency. It may le to the negotiation of managed competition contracts
between the city and private contra ors. This ordinance is intended to set forth requirements and
procedures to be followed when ening a city service to the managed competition proposal
process.
Section 85.02.
(a) Board.
ro> B;
the managed
ORDINANCE
CITY OF SAINT PAUL, MINNESOTA
Saint Paul Board.
unit. A group of employees submitting a proposed performance plan under
ition program.
(c) cty department. Any department, board, commission, office, or division of the city
of Saint aul. �
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(d) City service. A function performed by employees of the city.
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(e) Finance director. The director of the office of fmancial services, and hislher successor
or designee.
(fl Managed competition requestfor proposal. A city proposai for the solicitation of
responsive proposals from private parties who seek the award of a contract for the provision of
city services, which awazd would be made after a process that compares (1) the performance
plans of city employees with (2) the responses of such private parties.
(g) Operating depar-tment. The city department in which the employees in a busine unit
have been requested to prepare or have prepared a performance plan, or have carried out ' whole
or in part such a performance plan, or whose city services may be contracted out to p� ate
parties.
(h) Performance plan. A pian, strategy or program by which city
perform or deliver city services.
(i) Purchasing director. The director of the division of com
the department of technology and management services, or his/her
Section 85.03. Compete Saint Paul Board.
seek to
analysis services in
ir or designee.
The Board is hereby created. Its membership shal e representative of a diverse range of
catizen viewpoints regarding the implementation and a inistrarion of the city's activities in
relation to managed competition. The Board shall c sist of seven (7) voting members, who
shall be appointed by the mayor and approved by e city council. Initially, three (3) members
shall be appointed for a term of three (3) years e h, two (2) members shall be appointed for a
term of two (2) years each, and two (2) memb s sha11 each be appoinfed for a term of one year.
Thereafter, the terms of inembers sha11 be f three (3) years and until their successors aze
appointed and approved.
Section 85.04. Board powers and
(a) Advice to mayor and ty council. The Board shall advise the mayor and city council
on matters relating to the sele on of city services for performance plans and managed
competition requests for pro osals, including but not limited to planning, promotion, training,
contract development and ontractor qualifications for such activities.
(b} Review of erformance plans and managed competition requests for proposals. All
performance plans d managed competition requests for proposals shali be submitted to the
Board for its revi and recommendations. No performance plan, managed competition request
far proposal, or roposal relating to such a plan shall be implemented without prior Board review
and consider on of 3ts recommendations. The Board shall review and make written
to the mayor and city council on all performance plans and managed
petit n requests for proposals. The Boazd may recommend changes in such plans or
�os s. The Board shall provide the finance director and purchasing director with an
� ity to make recommendations on such performance plans and managed competition
ests for proposals, and sha11 include those recommendations in their transmittal to the mayor
city council.
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(c) Initiation ofperformance plans. The Board may on its own initiative identify and �� �
recommend city services for incorporation in perFormance plans or in the managed competifion
request for proposal process, and shall submit its recommendations therefor in writing to the
mayor and city councii. Any proposals for performance plans or managed competition that result
from the Boazd initiative are subject to Boazd review and recommendation under subsection (b) �
above.
(d) Board staff. The Boazd shali be staffed by an employee of the mayor's office
employee of the city council's investigation and reseazch center. Such staff shall advise
Boazd on a monthly basis of activities related to the development of performance plan�t
managed competifion request for proposals. /�
(e) Board meetings. The Board shall meet at least �nen�y �ua
the discretion of the Boazd. Notice of the time, place and purpose of a
given as required by law.
(f) Board organization. The Boazd shall elect officers and
its business. ,
shall be
rules for the conduct of
(g) Delegation of powers. The Boazd may by rule pr ide for the delegation of one or
more Board duties, responsibilities and powers to the fin e director or the purchasing director
Such rules and amendments thereto are not effective consented to by the mayor or his or her
designee, and filed with the city clerk.
Section 85.05. Budget of the Board
The Board shall submit an annual
inclusion in the clty's budget, which proF
travel, training, per diem, postage, copy�'r
Section 85.06. Regultttions and
3dget proposal to the appropriate officials for
,a1 may contain, but is not be limited to, funds for
and supplies. This budget shall be included within the
for performance plans.
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34 (a) Znitiation and pre ration. Perforniance plans may be initiated by the head of the
35 operating department or b ness unit either on his or her own initiative, at the request of the
36 employees involved, ar i response to a suggestion by the Board. The affected employees and
37 their bargaining unit re esentatives shall be given a reasonable opportunity to participate fully in
38 the prepazation and ing of a performance plan, and shall be given training which can be used
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in such preparation d drafting. Such training shall include, but not be limited to, how to
measure and cost eir services, and methods by which such services may be more efficiently
delivered or pr uctivity increased. Except as otherwise provided by the Minnesota Public
Employees L or Relations Act ("PELRA"), the participation of the bargaining unit
representa ' es in the prepazation of the performance p1an sha11 be limited to a"meet and confer"
basis as fined in PELRA.
�(b) The�rst performance plan. The first performance plan sha11 be effective for a period
of o years, during which period of time and for 60 days after the expiration of such plan, no
p of the city services subject to such plan sha11 be contracted out pursuant to or resulting from
managed competition request for proposal.
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(c) Decision on whether to continue under a performance plan. The Board shall
3 recommend, at least 45 days before the ending date of a performance plan, to the mayor and city
4 council whether the business unit involved shall continue operating under the same or a revised
5 performance plan, or the city services involved shall be considered for competitive proposals
6 resulting from a managed competition request for proposals. The mayor and city council ma
7 continue with the same performance plan, provide for a revised performance plan, require at
8 either the same or a revised plan shall be compared with outside competitive bids, or t the ciry
9 services shall be performed by outside bidders. The decision on the foregoing 4 opf s shall be
10 made by the mayor and city council by resolution, which resolution sha11 be cons ered and acted
11 on by the council. Such resolution or resolutions shall be sponsored by the co cil president as a
12 courtesy in order to place it or them before the council, at the request of the ayor or any council
13 member. Such resolution may aiso decide, in addition to the said 4 optio , whether (1) the scope
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and content of the managed competition request for proposal is adequa ,, and (2) the affected
city services sha11 be performed under a perfornzance p1an or the 1ow st responsible bid received
pursuant to or resulting from the managed competition request for - roposal. If such resolution
does not decide the last two issues, those issues shall be decide y the mayor and the council in
one or more other resolutions as the case may be, which reso tions sha11 similarly be sponsored
by the council president in order to place them before the c cil.
(d) Term of subsequent performance plans. performance plan after the first one shall
continue for a period of two years, subject to conti ation or not as provided above.
(e) Internal competitive proposal. A pe ormance plan or any revision thereof which is
prepared far the purpose of, or will be reaso ly likely to be used for, competing with proposals
from private parties in response to a city aged competition request for proposal shall be
deemed to be an internal competitive pr osal for the purposes of Minnesota Statutes, Section
1337, relating to general nonpublic d a.
Section 85.07. Regulations and
managed competition request for proposals.
(a) Initiation andprep ration. Managed competition requests for proposals may be
initiated by the head of the erating department or business unit either on his or her own
initiative, at the request o he employees invoived, or in response to a suggestion by the Boazd.
36 (b) Two years ' ternal operation. The Board may review or make recommendations on a
37 managed competitio request for proposal at any time, but no acrion may be taken by the mayor
38 ar city council on ch proposal except as provided in Section 85.06 above.
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40 (c) Exis ence ofprivate providers. A managed competition request for proposal shall not
41 be considere y the Boazd, mayor or city council unless there aze at least three private parties or
42 entities whi currently provide the particular service or services in such proposal, or unless it
43 can be re onably foreseen that a request far proposals or bids will result in at least three
44 responsi e competitive proposals or bids for the service or services involved.
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46 (d) City must retain capacity to provide service. No city service shali be contracted out to
47 pri te parties in its entirety. The City shall retain in every case the provision of 25 percent of
48 ( the service or (2) the capacity to provide the service.
49 �
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(e) Outside contractors.
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business references, financial records and past contracts or
3 (i) Disqualifzcation. A private party responding to a managed competition request for
4 proposal, together with its supervisory employees while in the employ of said contractor, sha11
5 disqualified from bidding on or responding to such proposal, if such party or such employee
6 have a record of material or repeated noncompliance with any relevant federal or state re ator
7 statute including, but not lunited to, statutes conceming labor relations, occupational s�ty and
8 health, nondiscrunination and affirmarive action, environmental protection and conf�cts of
9 interest.
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11 (ii) Financial and background information. Each such private party , all submit, in its
12 response to a managed competition request far proposal, such financial background
13 information as the Boazd may recommend to allow the mayor and the c� council to make an
14 informed decision on the fmancial viability of the pariy and its abilityt#o carry out and deliver the
15 city services in question. Such information may include, but is not I�mted to, financial and
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(iii) Employment of city employees. Each such p�
employee positions, and any positions created as a result
are subject to layoff due to the elimination of positions b
who satisfy the hiring criteria of the contractor. �
(fl Specif:cations. Each managed co:
specifications and such other instructions to
clear advice to prospeative bidders on or res
pxoposal that the city is not obligated to ent�
reserves the right to continue with the sam
prepared thereafter by the employees inv v
also contain all of the contract requir nts
Section &5.08. Ethics
�l,`�-C��
of municipal services.
arty shall offer any available
contract, to city employees who
of the competition contract and
etiti request far proposal shall contain bid
�s ective bidders as may be necessary, including
ers to any managed competition request for
nto any managed competition contract, and
revised performance plan, whether in existence or
Each such managed competition coniract sha11
in 5ection 85.09.
Nothing in this chapter � intended to amend or modify or supersede the provisions of
Section 24.03(A) of the Saint aul Administrative Code. In addition thereto, no city employee
35 whose position in the city
36 shall be employed in any
37 competition request for�
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such an employee to influence the selection of a contractor,
by a private party submitting a bid in response to a managed
or have any other direct or indirect financialinterestin the
selection of a contract . Any city employee involved in preparing the request for a managed
competition request r proposal may not later submit a bid for or response to that same matter or
contract. The priv party responsible for the response to the management competition request
for proposals sh not have been an employee in the business unit or business units covered by
the said reques or proposals during the six-month period before the response was submitted by
the said priva pariy.
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Secfion 85.09. Contract requirements.
�t����y
The following provisions shall be contained in any competitive contract awarded to a
private entity chosen to deliver city services according to a managed competition request for
proposal:
(a) Specifzed minimum wage rates.
�s9zs: - - - - -
federal prevailing wage rate sha11 be vaid•
(b) Standards. Each managed competition
pexformance standazds that sha11 be met by the co�
(c) Contract length. No managed
years.
(d) Termination. Each such
in the event of failure to meet esta�
requirements. ,
Section 85.10. Cost savings
shall contain specified service and
contract shall be for a term longer than two
ed competition contract shall provide for termination
service standards or any other violation ofthe contract
U to one-half of t c�ost savings resulting from delivery of city services under
performance plans by ci employees may be used by the city for bonuses to the employees
perForming under the aged competition arrangement and to improve workplace conditions of
the operating dep nt. The city and bargaining units may negotiate amendments to existing
collective bargainii agreements if and as necessary to implement the intent of this section. No
distribution of co savings to an operating department shall be made imtil all the terms of the
performance pl or contract have been met.
Section 85.�1. Reports.
� city department that implements managed competirion through a contract or has a
e plan in place with city employees sha11 present an annual status report on the
ition of the program and the performance of the contractor or the city employees, as
to the city council.
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Secfion 8512. ColZective bmgaining; statutory provisions.
Nothing in this chapter shall abrogate or modify any rights or obligations (1) to bargain
collectively about any terms or conditions of employment, or (2) existing under the Minnesota
Public Employment Labor Relations Act. �
Section 2
This ordinance shali take effect and be in force thiriy (30) days aft�f'its passage, approval
and publicarion. �
Requested by Department of:
By:
Adopted by
Adoption C
Date
by Council Secretary
FoYm Appr v=d,by Cit Ab orney
BY:
�r -z� �g
Approved by Mayo for S ission to Council
By: ay:
Appxoved Mayor: Date
sy_
��S�T�Tf.�T� a-1-9a
ORDINANCE
OF SA71 jT PAUL, MINNESOTA
Pr�sent�a sy
Referred To
An administrative or�
to provide rules and pro
employee performance
for managed competitio�
THE COUNCIL OF THE CITY OF SAINT P
� for
and
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A new Chapter 85 is hereby
as follows:
Council File # ��
Ordinance #
Green Sheet
part of the Saint Paui Administrative Code to read
Section 85.01. Statement of Purpose.
Managed competition is a rocess that enables city employees to achieve greater
efficiency and productivity in p orming various city services by competing with private
vendors for the delivery of tho e services. It is intended to facilitate city employee participation
in a process that will result i employee-formulated performance plans to achieve gains in
productivity and efficiency It may lead to the negotiation of managed competition contracts
between the city and priv te contractors. This ordinance is intended to set forth requirements and
procedures to be follow d when opening a city service to the managed competition proposal
process.
Section 85.02. De nitions.
(a) Boa d The Compete Saint Paul Board.
(b) usiness unit. A group of employees submitting a proposed performance plan under
the man ed competition program.
(c) City department. Any depariment, board, commission, office, or division of the city
t Paul.
(d) City service. A function performed by employees of the city.
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1 (e) Finance director. The director of the office of fmancial services, and his/her successoz �(
2 or designee.
- 1.
4 ( fl Managed competition request for proposal. A city proposal for the solicitation of
5 responsive proposals from private parties who seek the award of a contract for the provision of
6 city services, which awatd would be made after a process that compares (1} the perform �e
7 plans of city employees with (2) the responses of such private parties.
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(g) Operating department. The city department in which the employees in a b siness unit
have been requested to prepaze or have prepared a performance plan, or haue carrie out in whole
or in part such a performance plan, or whose city services may be contracted out t private
parties.
(h) Performance plan. A plan, strategy or program by which city e loyees seek to
perform ar deliver city services.
(i) Purchasing director. The direct�r of the division of contr t and analysis services in
the department of technology and management services, or hislhe successor or designee.
Section 85.03. Compete Saint Paul Board.
The Board is hereby created. Its membership s be representative of a diverse range of
citizen viewpoints regarding the implementation and inistration of the city's activities in
relation to managed comperition. The Board shall nsist of seven (7) voting members, who
shall be appointed by the mayor and approved b the city council. Initially, three (3) members
shall be appointed for a term of three (3) year each, two (2) members sha11 be appointed for a
term of two (2) years each, and two (2) me f bers shall each be appointed far a term of one year.
Thereafter, the terms of inembers sha11 b for three (3) years and until their successors are
appointed and approved.
Section 85.04. Board powers and
(a) Advice to mayor and ty council. The Board shall advise the mayor and city council
on matters relating to the selec 'on of ciTy services for performance plans and managed
competition requests for prop sals, including but not limited to planning, promotion, training,
contract development and c tractor qualifications for such activities.
(b) Review of per rmance plans and managed competition requests for proposals. Ali
performance plans and anaged compefition requests for proposals shall be submitted to the
Board for its review d recommendations. No performance plan, managed competition request
for proposal, or pro sa1 relating to such a plan sha11 be implemented without prior Board review
and consideration f its recommendations. The Board shall review and make written
the mayor and city council on all performance plans and managed
competition re ests for proposals. The Board may recommend changes in such plans or
proposals. T Boazd shall provide the finance director and purchasing director with an
opportuni to make recommendations on such performance plans and managed competition
request�for proposals, and shall include those recommendations in their transmittal to the mayor
and city council.
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1 (c) Initiation ofperformance p7ans. The Board may on its own initiative identify and �q..(��{�
2 recommend city services for incorporation in performance plans or in the managed competition
3 request far proposal process, and shall submit ats recommendations therefar in cvriting to the
4 mayor and city councii. Any proposals for performance plans or managed competiuon that result
5 from the Board initiarive are subject to Boazd review and recommendation under subsection (b)
6 above. i
(d) Board staff. The Boazd shall be staffed by an employee of the mayor's pffice and an
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employee of the city council's investigation and research center. Such staff sha advise the
Boazd on a monthly basis of activities related to the development of perform ce plans or
managed competition request for proposals.
(e) Board meetings. The Board shall meet at least monthly. Noti e of the tnne, place and
purpose of a board meeting shall be given as required by law.
( fl Board organization. The Board shall elect officers and�nake rules for the conduct of
its business. /
(g) Delegation of powers. The Board may by rule ovide for the delegation of one or
more Board duties, responsibilities and powers to the fi ce director or the purchasing director
Such rules and amendments thereto are not effective u til consented to by the mayor ar his or her
designee, and filed with the city clerk.
Section 85.05. Budget of the Board.
The Board shall submit an annual b dget proposal to the appropriate officials for
inciusion in the city's budget, which pro sal may contain, but is not be limited to, funds for
travel, training, per diem, postage, cop mg and supplies.
Section 85.06. Regulations and prc�,a�` edures for performance plans.
(a) Initiation and prepar tion. Perfotmance plans may be initiated by the head of the
operating department or busin s unit either on his or her own initiative, at the request of the
employees involved, or in re onse to a suggestion by the Boazd. The affected employees and
their bar ainin unit re res ntatives shall be given a reasonable opportunity to participate fully in
the preparation and drafti g of a performance plan, and shall be given training which can be used
in such preparation and afting. Such training sha11 include, but not be lunited to, how to
measure and cost their ervices, and methods by which such services may be more efficiently
delivered or producti rty increased. Except as otherwise provided bv the Minnesota Public
(b) Th first performance plan. The first performance plan sha11 be effective for a period
of two yeaz during which period of time and for 60 days after the expiration of such plan, no
part of the ity services subject to such plan shall be contracted out pursuant to or resulting from
a manag�'d competition request for proposal.
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(c) Decision on whether to continue under a performance plan. The Board shall qg �`�'�'�-
recommend, at least 45 days before the ending date of a performance plan, to the mayor and city
council whether the business unit invoived shall continue operating under the same or a revised
performance plan, or the city services involved shall be considered for competitive proposals
resulting 8om a managed competition request for proposals. The mayor and ciry council may
continue with the same perfonnauce plan, provide for a revised performazice p1an, require thax
either the same or a revised plan shall be compazed with outside competitive bids, or that city
services shall be performed by outside bidders. The decision on the foregoing 4 optio all be
made by the mayor and ciry council by resolurion, which resolution shall be consid d and acted
on by the council. Such resolurion or resolutions shail be sponsored by the coun ' president as a
courtesy in order to place it or them befare the council, at the request of the or or any council
member. Such resolution may also decide, in addition to the said 4 options, hether (1) the scope
and content of the managed competition request for proposal is adequate d(2) the affected
city services shall be performed under a performance plan or the lowes responsible bid received
pursuant to or resulting from the managed competition request for p posal. If such resolution
does not decide the last two issues, those issues shall be decided b the mayor and the council in
one or mare other resolutions as the case may be, which resolut ns shall similarly be sponsored
by the council president in order to place them before the co cil.
(d) Term of subsequent performance plans. Any rformance plan after the first one sha11
continue for a period of iwo years, subject to continua 'on or not as provided above.
(e) Internal competitive proposal. A perfo ance plan or any revision thereof which is
prepared for the purpose of, or will be reasonab likely to be used for, competing with proposals
from private parties in response to a city m ged competition request for proposal sha11 be
deemed to be an internal competitive grop a1 far the purposes of Minnesota Statutes, Section
13.37, relating to general nonpublic dat
Section 85.01. Regulations and
{a) Initiation and prep�
initiated by the head of the op�
initiative, at the request of the
(b) Two years i,
managed competition x
or city council on such
for managed competition request for proposals.
Managed competition requests for proposals may be
department or business unit either on his or her own
�ees involved, or in response to a suggestion by the Board.
operation. The Board may review or make recommendations on a
for proposal at any time, but no action may be taken by the mayor
a1 except as provided in Section 85.Q6 above.
(c) Existence private providers. A managed competition request for proposal shall not
be considered by th oatd, mayor ot city council unless there aze at teast three private parties or
entities which curr ntly provide the particular service or services in such proposal, or unless it
can be reasonabl foreseen that a request for proposals or bids wili result in at least three
responsible co etirive proposals or bids for the service or services involved.
(d) C must retain capacity to provide service. No city service shall be contracted out to
private p es in its entirety. The City shall retain in every case the provision of 25 percent of
(1) the se ice ar(2) the capacity to provide the service.
4 �� -� I
1 (e) Outside contractors.
3 (i) Disqual�cation. A private party responding to a managed competition request
4 proposal, together with its supervisory employees while in the empioy of said contractor,
5 disqualified from bidding on or responding to such proposal, if such parry or such em }
a�, �cg�.
be
6 have a recard of material or repeated noncompliance with any relevant federal or s e regulatory
7 statute including, but not lunited to, statutes concerning labor relations, occupati al safety and
8 health, nondiscriininarion and affirmarive action, environmental protection and onflicts of
4 interest.
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(ii) Financial and backgr-ound information. Each such private p shail submit, in its
response to a managed competition request for proposal, such financi and background
information as the Board may recommend to ailow the mayor and th city council to make an
informed decision on the financial viability of the party and its abi ' ta carry out and deliver the
city services in question. Such information may include, but is n limited to, financial and
business references, financial records and past contracts or del' ery of municipal services.
(iii) Employment of city employees. Each such
employee posirions, and any positions created as a resi
are subject to layoff due to the elimination of position;
who satisfy the hiring criteria of the contractar. �
( fl Specifzcations. Each managed cot
specifications and such other instrucrions to
clear advice to prospective bidders on or r
proposal that the city is not obligated to t
reserves the right to continue with the e
prepazed thereafter by the employees nvolv
also contain all of the contract req � ements
Section 85.08. Ethics
party shall offer any available
� contract, to city employees who
e of the competition contract and
request for proposal sha11 contain bid
ve bidders as may be necessary,including
ponders to any managed competition request for
er into any managed competition contract, and
or revised performance plan, whether in existence or
ed. Each such managed competition contract shall
in Secfion 85.09.
Nothing in this chapt r is intended to amend or modify or supersede the provisions of
Section 24.03(A) of the S' t Paul Administrative Code. In addition thereto, no city employee
whose position in the city enables such an employee to influence the selection of a contractor,
shall be employed in capacity by a private party submitting a bid in response to a managed
competition request f proposal, or have any other direct or indirect financial interest in the
selection of a contra or. Any city employee involved in preparing the request for a managed
competition reque for proposal may not later submit a bid for or response to that same matter or
contract. The pri te party responsible for the response to the management competition request
for proposals s 1 not have been an employee in the business unit or business units covered by
the said reque for proposals during the six-month period before the response was submitted by
the said prlv e party.
�,,%a
Section 85.09. Contract requirements.
The following provisions shail be contained in any competitive contract awarded to a
private entity chosen to deliver city services according to a managed competition request
proposal:
aa����.
(a) Specifzed minimum wage rates. All contractors and their subcontract s under a
managed competition contract shall pay at least step one of the comparable jo class, or if no
compazable job class e�sts, sha11 pay at least the federal prevailing wage r e for the occupation.
All contractors must also pay or provide benefits compazable to those o red to employees in the
city's personnei system.
(b) Standards. Each managed competition contract shall cg�itain specified service and
performance standards that shall be met by the contractor. �
(c) Conrract length. No managed competition
shall be for a term longer than two
years.
(d) Termination. Each such managed con
in the event of failure to meet established service
requirements.
contract shall provide for termination
is or any other violation of the contract
Section 8510. Cost savings distribution.
Cost savings resulting from delive of city services under performance plans by city
employees may be used by the city for nuses to the employees performing under the managed
competition arrangement and to impro e warkplace conditions of the operating department. The
city and bargaining units may negot te amendments to existing collective bargaining agreements
if and as necessary to implement intent of tkris section. I�TO distribution of cost savings to an
operating deparhnent shall be m e until all the terms of the performance plan or contract have
been met.
Section 85.11. Reports.
Any city dep nt that implements managed competition through a contract or has a
performance plan in pl e with city employees shall present an annual status report on the
implementation of th rogtam and the performance of the contractor or the city etnployees, as
appiicable, to the ci council.
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Section 85.12. Collective bargaining; statutory provisions.
Nothing in ttus chapter shall abrogate or modify any rights or obligations (1) to bazgain
collectively about any terms or conditions of employment, or (2) existing under the Minne$ota
Public Employment Labor Relations Act. f
Requested by nepartment of:
By:
Date
by Council Secretary
Adopted by
Adoption C
By:
Approved t�
BY _ _ _�
1q��.�
Ttus ordinance shall take effect and be in force thirty (30) days r its passage, approval
and publication.
Section 2
Fosm Approved by City Att ney
By: % "�� ( �
Approved by Mayor for Sub ssion to Council
BY:
Date
5 u b sf-�`f� ��t� ��q
Council File # / ( ` � � Y
Ordinance #
Green Sheet # (f/ � � 3 �
Presented By
L'.��� .�-.'�1�.7
Committee
a6
An administrative ordinance
to provide rules and procedures
employee performance plans a
for managed competition con�
THE COUNCIL OF THE CITY OF SAINT PAUL DOE� ORDAIN:
Section
A new Chapter 85 is hereby enacted as
as follows:
Section 85.01. Statement ofPurpose.
Managed competition is a
efficiency and productivity in per
vendors for the delivery of those :
in a process that will result in em�
productivity and efficiency. It ma
between the city and private con
procedures to be followed whe�
process. f
Section 85.02.
(a) Board The
(b) Business
the managed compe
tc) Czh'
of Saint Paul. i
ORDINANCE
CITY OF SAINT PAUL, MINNESOTA
of the Saint Paul Administrative Code to read
� at enables city empioyees to achieve greater
various city services by competing with private
s. It is intended to facilitate city employee particapation
-formulated performance plans to achieve gains in
to the negotiation of managed competition contracts
. This ordinance is intended to set forth requirements and
; a city service to the managed competition proposal
Saint Paul Board.
A group of employees submitting a proposed performance plan under
program.
Any deparhnent, board, commission, office, or division of the city
(d) City service. A function performed by employees of the city.
�,,�.��
(e) Finance directar. The director of the office of financial services, and hislher successor
or designee. G�Q— G�y
(fl Managed competition requestfor proposal. A city proposal for the solicitation of
responsive proposals from private parties who seek the award of a contract for the provision i
city services, which award would be made after a proces that compazes (1) the performanc
plaus of city employees with (2) the responses of such private parties.
9 (g) Operating department. The city department in which the employees � business unit
1� have been requested to prepare or have prepazed a performance p1an, or have c'ed out in whole
11 or in part such a performance plan, or whose city services may be contracted ut to private
12 parties.
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14 (h) Performance plan. A plan, strategy or program by which ' employees seek to
I S perform or deliver city services.
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(i) Purchasing director. The director of the division
the depariment of technology and management services, or
Section 85.03. Compete Saint Paut Board.
ract and analysis services in
successor or designee.
The Boazd is hereby created. Its membership 1 be representative of a diverse range of
citizen viewpoints regarding the implementation an administration of the city's activities in
relation to managed competition. The Board shal consist of seven (7) voring members, who
shall be appointed by the mayor and approved b the city counciL Inifially, three (3) members
sha11 be appointed for a term of three (3) years ach, two (2) members shall be appointed for a
term of two (2} yeazs each, and two (2) mem ers shall each be appointed for a term of one year.
Thereafter, the terms of inembers shall be f r three (3) years and until their successors are
appointed and approved.
Section 85.04. Board powers and
(a) Advice to mayor and
on matters relating to the selecti
competition requests for propo
contract development and co�
�council. The Board shall advise the mayor and city council
of city services far performance plans and managed
including but noE limited to planning, pxomotiQn, training,
>r qualifications for such activities.
(b) Review ofper rmance plans and managed competitian requests for proposals. All
perfonnauce plans and aged competition requests for proposals sha11 be submitted to the
Boazd for its revie d recommendations. No performance plan, managed competition request
for proposal, or proposal relating to such a plan shall be implemented without prior Board review
and consideration of its recommendations. The Board shall review and make written
recommendations to the mayor and city council on all performance plans and managed
competition requests for proposals. The Boazd may recommend changes in such plans or
proposals. The Board shall provide the finance director and purchasing director with an
opportunity to make recommendations on such performance pians and managed competition
requests for proposals, and shall include those recommendations in their transmittal to the mayor
and city council.
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1 (c) Initiation ofperformance pdans The Boazd may on its own initiative identify and q�' fO9
2 recommend city services for incorparation in performance plans or in the managed competition
3 request for proposal process, and shall submit its recommendations therefor in writing to the
4 mayor and city council. Any proposals for performance plans or managed competition t result
5 from the Boazd initiative aze subject to Board review and recommendation under su ection (b)
6 above.
8 (d) Board staff. The Board shail be staffed by an employee of the
9 employee of the ciTy counciPs investigation and research center. Suc t
10 Boazd on a monthly basis of activities related to the development o erfi
11 managed competition request for proposais.
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(e) &oard meetings. The Boazd shall meet at least
purpose of a boazd meeting sha11 be given as required by,
( fl Board organization. The Board shall
its business.
yor's office and an
shall advise the
iance plans or
Notice of the time, place and
and make rules for the conduct of
(g) Delegation of powers. The Board y by rule provide for the delegation of one or
mare Board duties, responsibilities and pow s to the finance directar or the purchasing director
Such rules and amendments thereto are no ffective until consented to by the mayor or his or her
designee, and filed with the city clerk.
24 Section 85.05. Budget of the Board.
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26 The Board shall submit ival budget proposal to the appropriate officials for
27 inclusion in the city's budget, w�ch proposal may contain, but is not be limited to, funds for
28 travel, training, per diem, pos ge, copying and supplies.
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Section 85.06. Regulation�and procedures for performance plans.
(a) Initiation a preparation. Performance plans may be initiated by the head of the
operating departmen or business unit either on his or her own initiative, at the request of the
employees involve , or in response to a suggestion by the Board. The affected employees shall
be given a reaso ble opportunity to participate fully in the preparation and drafting of a
performance an, and sha11 be given training which can be used in such prepazation and drafting.
Such trairi g shall include, but not be limited to, how to measure and cost their services, and
methods by which such services may be more efficiently delivered or productivity increased.
(b) The fzrstperformance plan. The first performance plan shall be effective for a period
of two years, during which period of time and for 60 days after the expiration of such plan, no
part of the city services subject to such plan shall be contracted out pursuant to or resulting from
a managed competition request for proposal.
(c) Decision on whether to continue under a performance plan. The Board shall
recommend, at least 45 days before the ending date of a performance plan, to the mayor and city
council whether the business unit involved sha11 continue operating under the same or a revised
performance pian, or the city services involved shall be considered for competitive proposals
resulting from a managed competition request for proposals. The mayor and city council may
�,���,�
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1 c t 'th the rfo e 1 r v'de f r ' d rf 1 � th t� 9 ''� �
on mue wi same pe rmanc p an, p o i o a revise pe ormance p an, require a
2 either the same or a revised plan shall be compazed with outside competitive bids, or that the city
3 services shall be performed by outside bidders. The decision on the foregoing 4 options shall be
4 made by the mayor and city council by resolution, wluch resolution sha11 be considered and acted
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on by the council. Such resolution or resolutions shall be sponsored by the council president as a
courtesy in order to place it or them before the council, at the request of the mayor or aFr4 council
member. Such resolution may also decide, in addifion to the said 4 options, whethe i) the scope
and content of the managed competition request for proposal is adequate, and (2 e affected
city services shall be performed under a performance plan or the lowest resp sible bid received
10 pursuant to or resulting from the managed competition request for propos . If such resolution
11 does not decide the last two issues, those issues shall be decided by the ayor and the council in
12 one or more other resolutions as the case may be, which resolutions s all similazly be sponsored
13 by the council president in order to place them before the council.
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15 (d) Term of subsequent performance plans. Any perfo ance plan after the first one shall
16 continue for a period of two years, subject to continuation o ot as provided above.
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(e) Internal compezitive proposal. A performanc pian or any revision thereof which is
prepazed for the purpose of, or will be reasonably like to be used for, competing with proposals
from private parties in response to a city managed c petition request for proposal shall be
deemed to be an internal competitive proposal for e purposes of Minnesota Statutes, Section
13.37, relating to general nonpublic data.
Section 85.07. Regulations and
(a) Iniization and prepnration.
initiated by the head of the operating �
initiative, at the request of the emplo�
managed competition request for proposttls.
naged competition requests for proposals may be
stment or business unit either on his or her own
involved, or in response to a suggestion by the Board.
(b) Two years internal op ration. The Board may review or make recommendations on a
managed comperition request f proposal at any time, but no acfion may be taken by the mayor
or city council on such propo I except as provided in Section 85.06 above.
(c) Existence ofpr' ate providers. A managed competition request for proposal shall not
be considered by the Bo d, mayor or city council unless there aze at least three private parties or
entities which current provide the particulaz service or services in such proposal, or unless it
can be reasonably f eseen that a request for proposals or bids will result in at least three
responsible comp irive proposals or bids for the service ar services involved.
(d) Ciry must retttin capacity to provide service. No city service shall be contracted out to
private parties in its entirety. The City shali retain in every case the provision of 25 percent of
(1) the service or (2) the capacity to provide the service.
(e) Outside contractors.
(i) Disqual�cation. A private pariy responding to a managed competition request for
proposal, together with its supervisory employees while in the employ of said contractor, shall be
disqualified from bidding on or responding to such proposal, if such pariy or such employees
have a record of material or repeated noncompliance with any relevant federal or state regulatory
4 ���,��
1 statute including, but not limited to, statutes conceming labor relations, occupational safety and � _ G9�
2 health, nondiscrimination and affirmative action, environmental protection and conflicts of
3 interest.
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5 (ii) Financial and background information. Each such private parry shall submit, in its
6 response to a managed competition request for proposal, such financial and background
7 information as the Board may recommend to allow the mayor and the city council to make an
8 informed decision on the financial viabiliry of the party and its ability to carry out an eliver the
9 city services in question. Such information may include, but is not lunited to, fm ial and
10 business references, financial records and past contracts or delivery of
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12 (iii) Employment of city employees. Each such private party
13 employee positions, and any positions created as a result of the coni
14 aze subject to layoff due to the elimination of positions because of
1 S who sarisfy the hiring criteria of the contractor.
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services.
alj�ffer any available
� to city employees who
competition contraet and
( fl Specifications. Each managed competition reque for proposal shall contain bid
specifications and such other inshuctions to prospective dders as may be necessary, including
clear advice to prospective bidders on or responders to p managed competition request for
proposal that the city is not obligated to enter into managed competition contract, and
reserves the right to continue with the same or revi ed performance plan, whether in existence or
prepared thereafter by the employees invoived.
also contain all of the contract requirements in,
such managed competition contract shall
m 85.09.
Section 85.08. Ethics requirements.
Nothing in tlus chapter is intend to amend or modify or supersede the provisions of
Section 24.03(A) of the Saint Paul A �nistrative Code. In addition thereto, no city employee
whose position in the city enables s an employee to influence the selection of a contractor,
shall be employed in any capacity a private party submitting a bid in response to a managed
competition request for proposal r have any other direct or indirect financial interest in the
selection of a contractor. Any c' employee involved in preparing the request for a managed
competition request for propo al may not later submit a bid for or response to that same matter or
contract. The private party r sponsible for the response to the management competition request
for proposals shali not hau been an employee in the business unit or business units covered by
the said request for pzop sals during the six-month period before the response was submitted by
the said private party.
Section 85.09. Corffract requirements.
The following provisions shall be contained in any competitive contract awarded to a
private entity chosen to deliver city services according to a managed competition request for
proposal:
(a) Specifted minimum wage rates. All contractors under a managed competition contract
shall pay at least step one of the comparable job class, or if no comparable job class exists, shall
pay at least the federal prevailing wage rate for the occupation. All contractors must also pay
benefits comparable to those offered to employees in the city's personnel system.
(b) Standards. Each managed competition contract shall contain specified service and �
�g ��.
5
performance standards that shall be met by the contractor.
years.
(c} Contract length. No managed competition contract shall be for a term longer than iwo
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(d) Termination. Bach such managed competition contract shall provide for ' ation
in the event of failure to meet established service staudazds or any other violatio of the contract
requirements.
aq_�9`�
Section 85.10. Cost savings distribution.
Cost savings resulting from delivery of city services under erfortnance plans by city
employees may be used by the city for bonuses to the employee performing under the managed
competition anangement and to improve workplace conditio of the operating department. The
city and bargaining units may negotiate amendments to ex' ting collective bargaining agreements
if and as necessary to implement the intent of this sectio . No distribution of cost savings to an
operating department shali be made until all the terms f the performance plan or contract have
been met.
Section 85.11. Reports.
Any city department that implements anaged competition through a contract or has a
performance pian in place with city employe s shall present an annual status report on the
implementation of the program and the per ormance of the contractar or the city employees, as
applicable, to the city council.
Section 85.12. Collective bargaining; tatutory provisions.
Nothing in this chapter shall rogate or modify any rights ar obligations (1) to bazgain
collectively about any terms or co 'tions of employment, or (2) existing under the Minnesota
Public Employment Labor Relati ns Act.
Section 2
This ordinance shal take effect and be in force thirry (30) days after its passage, approval
and publication.
Requested by Department of:
Adopted by Council: Date
Adoption Certified by Council Secretary
By:
Approved by Mayor: Date
By:
Form Appsoved by City At rney
B Y= � ��l'" �/ /
Approved by May r for Submission to Council
By:
sy:
OFFICE OF THE CITY ATTORNEY
Claytnn M. Robinsoq Jr., Ciry Attomey �� �
l
CITY OF SA1NT PAUL
Norm Coleman, Mayos
civrt Divis;on
4D0 City Hall
FS West KeIlogg BHd
Saint Paul, Mrnnesora SSIO2
Te7ephone: 651266-8710
Foccin:ile: 651298-56I9
3uly 14, 1499
Fred Owusu, Director
Office of Citizen Services
City Clerk
170 City Hall
Re: Attached Ordinance
Dear Mr. Owusu:
The Office of the City Attorney is at this time unable to approve the attached proposed ordinance
as to form as required by Secrion 3.02(3) ofthe St. Paul Administrative Code. The process of
conducting the legal reseazch and analysis necessary to form a conclusion as to the legal
sufficiency of the ordinance has been underway and wili require addifional work by this office.
This statement of reasons is made and will be filed with the city clerk in order to permit the
introduction of the ordinance without form approval under said Section 3.02(3).
Very huly yours,
. _ �•
Philip B. B e
Deputy City Attomey
Council File # �l�Cvq l�
Green Sheet # �_
�
Presented by
Ciry Service. A
Referred To
AN ORDINANCE ESTABLISHING CHAPTER _ ENTITLED "MAI�IAGED C014�PETITIOl�i" OF
THE SAINT PAUL ADMINISTRATIVE CODE TO PROVIDE A�'RAMEWOR� BY WHICH THE
CITY OF SAINT PAI3L CAN ENTER INTO CONTRACTS WITH
EXISTING CIT'Y EMPLOYEES AND OUTSIDE ENTITIES, TO P]
CURRENTLY PERFORMED BY CI1'Y EMPL(
THE COUNCII. OF THE CITY OF 5AINT PAUL DOES
Section I.
Chapter_ Managed
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.Ol Statement of Purpose.
6 arrangement.
7 .02 Defmitions.
8 Business Unit. A group of
9 City Department. Any d,�p
Committee
2S, INCLUDING
CITY SERVICES
2 The requirements and procedwes in this ordi ce shali be followed when opening a city service to
3 managed competition through the request f, proposals (RFP) or bidding process. Managed competi6on
4 is a process in which city employees currently pedornung a service that has been selected for potential
5 outside contracting may submit a bid or,rproposai to provide that service through a managed competition
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� IS
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Managed
compete �
ORDINANCE
CITY OF SAINT PAUL, MINNESOTA
submitting a bid under managed competition.
boazd, commission, office, ot division of the city of Saint Paul.
performed by employees of the city.
�. A process by wluch a city department authorizes employees of the department to
businesses or firms for a managed competition contract.
�. A set of requirements transmitted from a buyer to a seller in any kind of purchasing
A specificarion may take the form of a request for proposals (RFP) or a bid specification.
.03
Saint Paul Bosrd created.
is hereby created a Compete 5aint Paul Boazd (hereinafter referred to as the "boazd") whose
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purpose shall be to represent a diverse rauge of citizen viewpoints regazding the implementation and
administrarion of the city's competitive bidding activities. The board shall consist of thirteen 3) voting
members, seven of whom aze appointed by the mayor and six of whom are appointed by the ouncil.
Initially, four (4) members sha11 be appointed for a term of three (3) years, three (3) mem s shall be
appointed for a term of two (2) years and four (4) members shall be appointed for a te of one yeaz.
Thereafter, ffie terms of commission members shall be for three (3) years and until th successors aze
appointed. �
.04 Compete Saint Paul Board powers and duties.
The board shall serve as an advisory body to the mayor and city council o matters relating to the
competitive bidding of city services. It sha11 oversee the planning, pro tion, training, contract
development and contract qualifications for the competitive bidding a�vities of the city. The board shali
also review and comment upon all proposals for competitive biddin and shall recommend for city council
approval the selection of any competitive bid to perform a city se ice or function. All such
recommendations transmitted to the council shall contain the re mmendations of the director of fmancial
services and the head of purchasing division of the departme of management and technological services.
The board sha11 be kept informed by the mayor's office of competitive bidding initiatives of all city
departments and agencies. The board sha11 meet at least �onthly and notice of the time, place and
purpose of a board meeting shall be published once in t�``e official newspaper of the city at least ten (10)
days before the day of the meeting. An outline of the roposal shall be transmitted to the mayor and city
council at the time the request is made for a notice a�the public hearing.
To dischazge its duties and responsibilities, the � oazd sha11 have the power to elect its own officers and
make its own rules for the conduct of its busi ss. Such rules may provide for the delegarion of boazd
duties, responsibilities and powers to the di ctor of financial services and head of the purchasing division
of the department of management and tec ological services or such employees under their direction as
they designate, in accordance with, and bject, to law. Such rules and amendments thereto aze not
effective until filed with the city cier e board shall also be staffed by an employee of the mayor's
office and city council reseazch. �
.OS Compete Saint Paui
45 For the operations of the
46 training, per diem, posta,
47 appropriate officials for�
48 .06 Selection of citv�e�
including staff salaries and other related expenses, such as travel,
ying and supplies, an annual proposed budget shall be submitted to the
�n in the city's budget.
for managed competition.
49 The Boazd shall ve responsibility for identifying and selecting services for managed competition. In
50 order for a serv' e to be selected, the following criteria shall be met:
51 (1) The bus' ess unit providing the city service shail be given a period of not less than one yeaz prior to
� 2 making request for proposals or bids to nnprove opera6ons and reduce costs for the services covered
3 by the tential competitive contract. The business unit shall be prov3ded the resources, which shall be
54 derived from the administration's budget, to hire a consultant if desired. If such measures are found to be
�-���
� 55 unsuccessful by the Boazd, the Board shall recommend to the city council and mayor that the service be
6 opened for managed competirion. Upon approval by the city council and mayor, the business unit and its
57 respective deparhnent or office must be notified by the Boazd at least ninety days in advance of the
58 pending managed comgetition process.
59 (2) The Boazd must establish that at least three private entities exist which provide the servic to be
60 competitively contracted for or at least three competitive bids for the service have been m e by private
61 entifies to the city. If three such private entities do not exist, the Boazd shail demonstra that a request
62 for proposals or bids will result in at least three competitive proposals or bids for the �SC;rvice.
63 (3) The Compete Saint Paul Boazd may recommend that up to 75 percent of the �eivice may be bid out
64 under managed competition. �
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65 When a city service has been selected for managed competition, an outlin�of the specification for
66 managed competition shall be submitted by the Boazd to the city counci�and the mayor far approval.
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.07 Specification for managed competition.
The ouUine of the specification for managed competition prese ed to the Mayor and City Council by the
Boazd must contain:
(1) Griteria to be used by the city to evaluate proposals i�X1ie RFP process is used;
(2) Clearly specified quantity and quality standazds t�contractor must achieve to maintain the contract;
(3) Specified minimum wage rates. All contracto�s with a managed competition contract shall pay at
least step one of the comparable job class, or if �o comparable job class exists, sha11 pay at least the
federal prevailing wage rate for the occupatiot�� All contractors must also pay benefits compazable to
those offered to compazable employees in tl�e'�ciry's personnel system.
76 (4) A provision requiring the contractor t� offer available employee positions pursuant to the contract to
77 qualified classified city employees of e department whose position is eliminated because of the
78 competition contract and who satis e hiring qualifications of the contractor;
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$3
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(5) A schedule indicating the
(6) The length of the
If the outline is not
comments from the
If the outlined s�
division for fuli
.08 Rules for
of the RFP process and the conversion process;
to exceed two yeazs.
by the mayor and city councit, it shall be returned to the Board with
;,il andlor mayor explaining the reasons for the rejection.
is approved by the mayor and city council, it shall be sent to the Purchasing
and publication.
or bid specification.
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All potenrial contractors shall submit a seated proposal before the advertised deadline for such proposals;
(1) Such proposals or bids may not be altered after such deadline;
(2) Proposals or bids shall be submitted to the purchasing division and the division shall
such proposals and make the contents of the proposals public at such deadline.
.09 Non-City-Employee Contractor Qualifications and Requirements.
Certain conditions and qualifications must be met in order for a non-city
eligible to submit a successful proposal or bid;
open
to be
94 (1) The contractor responsible for the bid may not have been a city employee for the six months prior to
45 the bid submission deadline. j��
96 (2) No city employee whose position in the city enables such an e�' loyee to influence the selection of a
97 contractor, and no spouse or economic dependent of such emplo ee, shall be employed in any capacity by
98 a proposer or have any other direct or indirect financial intere�'in the selection of a contractor.
99 (3} Anyone involved in preparing the request for bids or �oposals may not submit a proposal or bid for
100 that same contract. //
� 1 (4) The contractor and its supervisory employees, �hile in the empioy of said contractor, have no
2 adjudicated record of substantial or repeated wilfu�noncompliance with any relevant federal or state
103 regulatory statute including, but not limited to„�tatutes concerning labor relations, occupational safely
104 and health, nondiscrimination and affirmativ�ction, environmental protection and conflicts of interest.
105 (5) The name of any subcontractor, subc�i4sultant or supplier whose shaze of the contract exceeds Fifiy
106 Thousand Dollars ($50,000.00) of the q�(intract amount.
107 (6) The names of any unions with �fiich the contractor has a collective bazgaining agreement.
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1Q8 (7) The contractor shail provide ` ee relevant business references.
1�9 (8) The contractor shall sub�a t financial records indicating financiai viability.
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(9) The contractor sha11 eet a11 other applicable requirements in the Saint Paul Administrative Code
Chapter 82. Purchasi Procedures; Public Contracts, and Chapter 86. Signing of Contracts, Deeds,
Bonds, and Checks.
.10 City role i ssisting city employees in submitting a bid.
If employee of the departrnent soliciting competitive bids or proposals inform the departmettt head of
their desi to submit a bid for the sole purpose of providing the services that aze the subject of the
request or bids, the administration shall provide the business unit or units with comgrehensive training
for the bidding process. The admuustration and city council shall assemble a team comprised of
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, j� 8 managers, knowledgeable employees, representatives of exclusive representative of the affected
bargaining unit(s), and any consultauts approved by the Board to assist the business unit or units in
120 preparing the bid. �
121 11 Coniract Requirements. The following provisions shall be contained in any mperifive contract:
122 (1) Provisions requiring the contractor to comply with a policy ofnondisc ' ation and equal
123 opportunity for all persons as provided by Saint Paul Legislative Code, C�t�er 183. Human Rights.
124
125 (2) Specified m;n;mum wage rates. A11 contractors with a managed catnpetition contract shall pay at
126 least step one of the comparable job class, or if no comparable job class e�sts, sha11 pay at ieast the
127 federal prevailing wage rate for the occupation. All contractors m�t also pay benefits compazable to
128 those offered to employees in the city's personnel system. s �
129 (3} A description of the manner in wluch the contractor wilLaneet the provisions requiring the contractor
130 to offer available employee positions pursuant to the contra to qualified classified city employees of the
131 depariment whose employment is terminated because o� the competition contract and who satisfy the
132 hiring criteria of the contractor. q '`
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(4) A provision requiring the contractor to su
name, address, social security number, hours
previous quarter.
(5) A description of the total contract
(6) A statement of the length of the
.12 Awarding the contract.
�rterly payroll records to the department, listing the
and the hourly wage paid for each employee in the
down by activity.
not to exceed the two-year limit.
The Purchasing Division will �rtify in writing to the city council and mayor for their approval that the
quality of the services to be p"iovided by the designated bidder is likely to satisfy the quality requirements
of the statement prepared p�,txr"" suant to the secrion of this chapter titled "Statement of services grogosed
for managed competition� and to equal or exceed the quality of services which could be provided by
regulaz agency employe�`"s pursixant to the estimate of the costs of city employees in the relevant business
unit providing the sut�ect services, including, but not limited pension, insurance and other employee
benefit costs. � `
The certification include a cost savings calculation. The cost savings must be calculated by
subuacting av �dable costs from the total contract cost. Avaidable costs include, but aze not limited to
the cost o£ p curement, contract negotiation and awazd, processing, and contract monitoring and
evaluation. e total contract cost includes the contractor cost, administration cost, conversion cost and
inclusion f a calculation of the loss of any new revenue the in-house service would have generated.
The c tract award may not be made unless the foilowing conditions have been met:
(1 e business unit or private bidders or proposers received no advantage over other the bidders or
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proposers;
(2) The evaluation process was objective and fair;
(3) All requirements governing proposals or bids by business units of the
(4) the mayor and city council must approve by resolution all competifive
Ail parties are bound by the same terms, conditions, financial penalties
.13 Contract termina4ion.
standards.
met;
159 The managed competirion contract may be ternunated by the city� any time for failure to meet
160 established quality and quantity standazds or violation of any of khe contract requirements.
161 If the contract is awarded to city employees, and if during a�ry financial quarter during the term of the
162 contract the cost of the business unit attributable to the se `ice provided pursuant to any request for
163 proposals or bids exceeds the contract price for the perio�d such service, the city department shall
164 issue a new request for proposals or bids for such se ��e wrthin one hundred twenty (120) days after the
165 end of such fmancial quarter. ,
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.14 Cost savings distribution if the contract
Cost savings resulting from contracting
city department as follows:
to city employees.
employees to provide services shall be utilized by the
170 (1) Any cost savings gained by a city �epartment from successfully fulfilling the terms of a contract with
171 a business unit may be retained by su�h department.
172 (2) Up to one-half of the savings�nay be distributed as bonuses to the employees in the business unit that
173 performed the services under the contract through an employee bonus award plan established by the city
174 department and approved by t�e mayor and council, except that no bonus awazded to an employee may
175 exceed an amount equal to bwo times that employee's annual salary.
176 (3) Up to one-half of such amount may be retained and expended by the city deparhnent to improve the
177 workplace conditions the employees in the business unit that performed the services under contract.
178 (4) No distributi " of cost savings to a business unit may be made until all the terms of the contract have
179 been compieted�
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(S) Any di bution of cost savings to a business unit shall be made as a lump sum payment to such
business 't.
.15 ntract Administration.
e city department head, with the assistance of the Boazd, sha11 be responsible for implementing
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competition in that department and for monitoring a service contract entered into by the deparlment
under competition.
Any city department that implements compefition for a contract shall present an annual status report on
such implementation on or before January 1 of each year to the city council. �1
.16 Applicability of other laws.
(1) Nothing in tlus ordinance shall abrogate the obligation or rights of any
any terms or conditions of employment as provided for in any other ordins
191 (2) Nothing in this ordinance shall be construed to require compe
192 Chapter 82. Purchasing Procedtues; Public Contracts and Chapter
193 Bonds Checks of the Saint Paul Administrative Code.
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195
Section II.
11us ordinance shall take effect and be in force thirty (30)
�✓to collectively bazgain
or other law.
all contracts authorized by
mg of Contracts, Deeds,
after its passage, approval and publication.
by Deparknent oE
�J
Ben anav
Blak
Bostrom
Colem
Harris
Lan try
Reiter
Adopted by Council:
Date
Adoption Certified by
B : ,P
Approved by M� or:
Date
B:
�
Fomi Approved by City Attomey
$TA'►fbW,tl D' d f 2CRSOtLS Qll aSlf NA! 1 7U
sv: SecnM 3.v213) � Qd �i,Qt W�, �C'� l�i✓�-
Secretary
Approved by Mayor for Submission to Council
,
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CTI'Y OF SAINT PAUL 390 Ciry Ha[I Teleplwne: 651-266-8510
NormColemarz,Mayor ISWestKeiloggBoulevard Facsimite:651-266-8513
Sairst Paul, MN 55102
August 25, 1999
Council President Dan Bostrom and Members of the City Council
310 City Hall
Saint Paul, MN 55102
Dear Council President Bostrom and Members of the City Council:
In order for Saint Paul to continue to deliver high-quality City services for taxpayers, we must
inject competition irrto City government.
Competition doesn't save money by itself. The result of competition does.
Sun Country Airlines is saving travelers money today because it was willing to offer competition
to Northwest Airlines.
Nobody would expect Sun Country Airlines to wait two years to a11ow Northwest Airlines to
figure out if it wants to be competitive or not.
Yet, that is what the Saint Paul City Counci] and Saint Paul City Employee labor unions want
SainY Paul ta�cpayers to do.
W ait.
For two years.
Two years before there is competition.
Two years before tazpayers can see any savings in City government.
'I�vo years before taapayers can have any hope of seeing savings in City govemment
returned to them.
If we began to inject competition in City services today, we could begin seeing millions of dollars
of savings in short order.
�
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Council President Dan Bostrom and Members of the City CouncIl Q�'� `�
Page 2
August 25, 1999
Based upon the egperiences of other cities, we could see savings in our City's Water Utility
of between three and nine million dollars. In our fleet operations, we could see one million
dollars in savings.
Just in those two departments we could see savings of four to ten million dollars — and if we
saved just five percent on our entire City budget because of competition, we would save $20
million for Saint Paul taapayers.
And, a five percent savings is conservative. Other communities are saving 10%-15% and
even more.
The "Compete Saint Paul" initiative which I proposed several months ago remains one of the top
priorities of this Administration.
I firmly believe that we must aggressively pursue the opportunity to improve the delivery of City
services through competition. And, if competition succeeds in providing us cost savings, that
those savings should be returned to Saint Paul taa�payers.
Competition has worked in other cities across the country. In Charlotte, North Cazolina, where
the program was implemented in 1991, 34 services have been put out for bid in the past three
years. Twenty-four of those have been awarded to City workers. Some of the savings realized
there were $2.5 million over five years in residential garbage, trash, and recycling collection;
$180,000 annually in specialized transportation services; and $62,000 over a three-year contract
to read a quarter of the residential water meters.
In Phoenix, nearly 80 services have been subjected to the competitive bidding process, and nearly
half of the awards went to City workers. Savings there have exceeded $30 million.
In Indianapolis, 80 services haue been bid out since 1992 and the result has been two property taac
reductions and $419 million in actual and contractual savings. City employees have won
two-thirds of the awards involving unionized workers, and customer satisfaction is up.
Competition should not result in a reduction in the delivery or the quality of services. In
fact, I am fully prepared to work with labor to ensure that the same demands we have for
services delivered currenUy by City government are a condition of any RFP that is issued
for a competitive bid.
It is clear that Saint Paul City government must reform itself. We must change the way we
do business. We must be prepared to compete with others in the private and public sector.
Studies show Saint Paul employee salaries are consistently far above average. For instance,
mechanics who repair City cars are paid 41% more than mechanics who do the same work for
other cities.
Council President Dan Bostrom and Members of the City Council "{ "I '�� �
Page 3
August 25, 1999
Clerical employees at City Hall are paid nearly 38% more than clerical employees at the State
Capitol.
The average Saint Paul City worker is paid 20% more than the average for all employees in
the State of Minnesota.
I want to make the position of this Administration perfectly clear. We aze prepared to sit down
with labor leaders to address issues of concem to both labor and management. However, those
discussions must be frank and honest and cannot be conditioned upon what either party will or
will not support before they are prepazed to sit down and reason together.
I recenUy offered to meet with the head of the Saint Paul Trades and Labor Assembly.
This offer was rejected.
The counter to my offer was to sit down with 15 heads of different labor unions representing City
employees. While this may seem like a reasonable request, I do not believe it is lost on anyone
that the first step to a process of discussion is for the head of labor and management to sit down
and have a conversation.
I have met with all the union leadership. These kinds of ineetings do not produce the
one-to-one dialogue needed to resolve concerns and move this process forward.
This offer remains open. If the head of the Saint Paul Trades and Labor Assembly is
prepared to meet, I will be prepared to meet to discuss what I hope are our mutual interests
and concerns about protecting the rights of City employees and Saint Paul taxpayers.
If the goal of labor and the City Council is to kill competition, the Benanav ordinance before the
City Council accomplishes that goal.
If it is the goal of labor and the City Council to take away the tools of management from this
Administration through the passage of the Benanav ordinance, it is clear we have only two
options.
We can cut City services and raise property taxes on homeowners and small business — or
we can lay off City employees in order to balance our budget.
I will not raise property taxes on homeowners and small businesses.
Fundamentally, there are many items in the ordinance that this Administration is prepazed to
support. However, there are several conditions that, pure and simple, will destroy our ability to
effectively manage the operations of City government and provide millions of dollars of savings to
Saint Paui taxpayers.
Council President Dan Bostrom and Members of the City Council ��! "�� f
Page 4
August 25, 1999
Here aze my concerns about provisions in the ordinance that I believe kill comperition, and disable
our efforts to save taxpayers millions of dollars:
The requirement that a"Performance Plan" be implemented for a period of two years before
any competitive bid could be released outright stops competition. We don't have two years.
There cannot be any competition if we ue not engaged to compete with those outside of
City government. This "Performance Plan" concept has City employees competing with the
status qno — not with similar bodies in the public and private sector.
A mandaYe that outside contractors would have to hire qualified City employees who would
be displaced by contracting out a service. Clearly, it is my belief that any organization
would want to hire qualified employees to deliver services to its clients. However, if a
particular contractor does not need additional workers, it would be folly to require this of
them. There are many ways that can be explored to protect displaced workers
A requirement that all outside contractors performing City services pay their employees the
same or comparable wages and benefits as paid to City employees. Obviously, we support
paying employees a fair and competitive wage for quality services. However, where our
wages aze unreasonably higher to begin with, this is a requirement that is simply designed to
kill competition.
It would restrict the length of any outside contracts to two years, which would greatly
diminish the possibility of achieving significant savings. Many contracts are more
competitive and cost-effective based on the years of delivery of that service. I would
certainly support stringent quality control guidelines to address any quality service delivery
issues during the length of term of any outside contract.
It would require that any sauings resulting from competition be given only to City
employees and the departments they work for, not the tazpaying public who pays for the
services in the Srst place. Our taxpayers expect that any savings they receive from
competition be returned to them. If those savings can be invested in areas that aze critical to
the safety, quality, and affordability of our City, I will support those efforts. However, our
first goal should be to return to taafpayers any savings that aze realized as a result of cost
savings achieved through competition.
These requirements go too faz and sway the balance of interests in favor of public employee
unions without regard to the rights of taxpayers.
As I stated in the beginning of this letter. I am prepared to sit down with the head of the
Saint Paul Trades and Labor Assembly at any time. In fact, the sooner the better.
I azn prepared to sit down with the Council to discuss this ordinance and how it can be drafted in
a way that addresses concems about job security, management of outside contracts, and other
issues.
Council President Dan Bostrom and Members of the City Council
Page 5
August 25, 1999
However, this ordinance, if it passes in its current form, cannot be supported by this
Administrarion. Any future Administration will be unduly restrained by the requirements in this
ordinance which defeat any ability to achieve millions of dollars of cost savings for taxpayers.
Any future Administration will be prohibited from exploring in a timely fashion the ability to
deliver high quatity services to taspayers at a cost that taxpayers are willing to support.
This ordinance does not provide structure; it provides barriers to competition and savings for
Saint Paul taxpayers.
Let's work together to achieve the goals that I believe taxpayers want to see achieved. They
want real savings in City govemment. They want solid delivery of quality services for the taac
dollars we collect. And, they want to see competition be given a chance in City government.
Sun Country Airlines didn't wait for two years before it began offering savings to consumers.
Saint Paul City government shouldn't wait two years before it begins offering savings to its
taxpayers.
cerely,
1ZL---, l.�'1��it--
Norm Coleman
Mayor
�q-�q�
�t���crr�Z� �
Council File # 1 / — t� �` T
� �� �4�v�.+�. U.t�.� �O l �. } `� � Ordinance #
r
'(� v � ���� Green Sheet # � � �D
' '`4�,`a'S ���O�TINAN �r�- l\13l ° lR �
CTTY OF SAINT PAUL, MINNESOTA �3
Presented B�
Refened To
An admiiiistrative ordinance
to provide rules and procedures for
employee performance plans and
for managed competition contracts.
THE COUNCIL OF THE CITY OF SAINT PAUL DOES ORDAIN:
Section 1
PUBUSU�n
1' r ..r
A new Chapter 85 is hereby enacted as part of the Saint Paul Administrative Code to read
as foilows:
Section 85.01. Statement of Purpose.
Managed competition is a process that enables city employees to achieve greater
efficiency and productivity in performing vuious city services by competing with pxivate
vendors for the delivery of those services. It is intended to facilitate city employee participation
in a process that will result in employee-formulated performance plans to achieve gains in
producfivity and efficiency. It may lead to the negotiation of managed competition contracts
between the city and private contractars. This ordinance is intended to set forth requirements and
procedures to be followed when opening a city service to the managed competition proposal
process.
Section 85.02. Definitions.
(a) Board. The Compete Saint Paul Board.
(b) Business uniz A group of employees submitting a proposed performance plan under
the managed competition program.
(c) City department. Any department, board, commission, office, or division of the city
of Saint Paul.
(d) Ciry service. A function performed by employees of the city, p�
� to ,3.
(e) F'inttnce director. The director ofthe office of financial services, and his/her successor
or designee. �, Gqy
4 ( fl Managed competition request for proposal A eit� proposal for the solicitation of a
5 responsive �zo on sal or proposals ji� from one or more private parties who seek the awazd of a
6 contract for the provision of city services, or jiil for contractine or subcontracting out anv city
7 service or service ,
8 .
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10 (g) Operating department. The city department in which the employees in a business unit
11 have been requested to prepare or have prepared a performance plan, or have carried out in whole
12 or in part such a performance plan, or whose city services may be contracted out to private
13 parties.
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(h) Performance plan. A p1an, strategy or program by which city employees seek to
perform or deliver city services.
(i) Purchasing director. The director of the division of contract and analysis services in
the department of technology and management services, or his/her successor or designee.
Section 85.03. Compete Saint Paul Bottrd.
23 The Boazd is hereby created. Its membership sha11 be representative of a diverse range of
24 citizan viewpoints regarding the implementation and administration of the city's activities in
25 relation to managed competition. The Board shall consist of seven (7) voring members, who
26 shall be appointed by the mayar and approved by the city council. Initially, three (3) members
27 shali be appointed for a term of three (3) years each, two (2) members shall be appointed for a
28 term of two (2} years each, and two (2) members shall each be appointed for a term of one year.
29 Thereafter, the terms of inembers shall be for three (3) yeazs and until their successors aze
30 appointed and approved.
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Section 85.04. Board powers and duties.
(a) Advice to mayor and city council. The Board shall advise the mayor and city council
on matters relating to the selection of city services for performance plans and managed
competition requests far proposals, including but not limited to planning, promotion, training,
contract development and contractor qualifications for such activities.
39 (b) Review ofperformance plans and managed competition requests for proposals. All
40 perfonnance plans and managed competition requests for proposals sha11 be submitted to the
41 Board for its review and recommendations. No performance plan, managed competition request
42 for proposal, or proposal relating to such a pIan sha11 be sent to private parties for res�onses or
43 implemented without prior Board review and consideration of its recommendations. The Board
44 shall review and make written recommendations to the mayor and city council on all
45 performance plans and managed competition requests for proposals. The Board may recommend
46 changes in such plans or proposals. The Board shall provide the finance director and purchasing
47 director with an opporhuiity to make recommendations on such performance plans and managed
48 competition requests for proposals, and shall include those recommendations in their transmittal
49 to the mayor and city council. �q
2 � ,,�,
1 (c) Initiation ofperformance plans. The Boazd may on its own initiative ldentify and � �
2 recommend city services for incorporarion in performance plans or in the managed competition
3 request for proposal process, and shall submit its recommendations therefor in writing to the
4 mayor and ciry council. Any proposals for performance plans or managed competition that result
5 from the Board 'uutiative are subject to Board review and recommendarion under subsection (b)
6 above.
8 (d) Board staff. The Board shall be staffed by an employee of the mayor's office and an
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employee of the city council's investigation and research center. Such staff shall advise the
Boazd on a monthly basis of activities related to the development of performance plans or
managed competition request for proposals.
(e) Board meetings. The Boazd shall meet at least quarterly and at other times at the
discretion of the Board. Notice of the time, place and purpose of a board meeting shall be given
as required by law.
(fj Board organization. The Board shall elect o�cers and make rules for the conduct of
its business.
(g) Delegation ofpowers. The Board may by nxle provide for the delegation of one or
more Board duties, responsibilities and powers to the finance director or the purchasing director
Such rules and amendments thereto are not effective until consented to by the mayar or his or her
designee, and filed with the city clerk.
Section 85.05. Budget of the Board.
The Bou shail submit an annual budget proposal to the appropriate officials for
inclusion in the city's budget, which proposal may contain, but is not be limited to, funds for
travel, training, per diem, postage, copying and supplies. This budget shall be included within the
budget of an appropriate city department or office.
Section 85.06. Regulations and procedures for performance plans.
(a) Znitiatlon and prepara[iorz Performance plans may be initiated by the head of the
operating deparhnent or business unit either on his or her own initiative, at the request of the
employees involved, or in response to a suggestion by the Board. The affected employees and
their bargaining unit representatives shall be given a reasonable opportunity to participate fully in
the prepazation and drafting of a performance plan, and shall be given training which can be used
in such prepazation and drafting. Such training shall include, but not be limited to, how to
measure and cost their services, and methods by which such services may be more efficiently
delivered or productivity increased. Except as otherwise provided by the Minnesota Public
Employees Labor Relations Act ("PELRA"), the participation of the bargaining unit
representatives in the preparation of the performance plan shail be limited to a°meet and confer"
basis as defined in PELRA.
(b) The first performance plan. The first performance plan shall be effective for a period
of two years, during which period of time and for 60 days after the expiration of such p1an, no
part of the city services subject to such plan shall be contracted out pursuant to or resulting from
�' ��,q�
a managed competition request for proposal.
(c) Decision on whether to continue under a performance plan. The $oard shail
2 xecommend, at least 45 days before the ending date of a performance plan, to the mayor and city
3 council whether the business unit involved shall continue operating under the same or a revised
4 performance plan, or the city services involved shall be considered for competitive proposals
5 xesulting from a managed competition request for proposals. The mayor and city council may
6 continue with the same performance plan, provide for a revised performance plan, require that
7 either the same or a revised plan shall be compared with outside competitive bids, or that the city
8 services shall be performed by outside bidders. The decision on the foregoing 4 options sha11 be
9 made by the mayor and city council by resolution, which resolution shall be considered and acted
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on by the council. Such resolution or resolutions shall be sponsored by the council president as a
courtesy in order to place it or them before the council, at the request of the mayor or any council
member. Such resolution may also decide, in addition to the said 4 options, whether (1) the scope
and content of Yhe managed competition request for proposal is adequate, and (2) the affected
city services shall be performed under a performance plan or the lowest responsible bid received
pursuant to or resulting from the managed competition request for proposal. If such resolution
does not decide the last two issues, those issues shall be decided by the mayor and the council in
one ar more other resolutions as the case may be, which resolutions shail similarly be sponsored
by the council president in order to place them before the council.
(d) Term of subsequent performance plans. Any performance plan after the first one shall
continue for a period of two yeazs, subject to continuation or not as provided above.
(e) Internal competitive proposal. A performance plan or any revision thereof which is
prepared for the purpose of, or will be reasonably likely to be used for, competing with proposals
from private parties in response to a city managed competition request for proposal sha11 be
deemed to be an internal competitive proposal for the purposes of Minnesota Statutes, Section
1337, relating to general nonpublic data.
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29 Section 85.07. Regulations and procedures for managed competition request for proposals.
30 (a) Initiation and preparation. Managed competition requests for proposals may be
31 initiated by the head of the operaung department or business unit either on his or her own
32 iniriative, at the request of the employees involved, or in response to a suggestion by the Board.
33 No mana ed competition request for proposals shall be sent to private parties for response until
34 completion of the first performance plan under Section 85.06(b� and until approval thereafter by
35 the mavor and council pursuant to the rorocedures in Section 85.06(cl.
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(b) Two years internal operation. The Board may review or make recommendations on a
managed competition request for proposal at any time, but no action may be taken by the mayor
or city council on such proposal except as provided in Section 85.06 above.
(c) Existence of private providers. A managed competition request far proposal shall not
be considered by the Boazd, mayor or city council unless there are at least three private parties or
entities which currently provide the particular service or services in such proposal, or unless it
can be reasonably foreseen that a request for proposals or bids will result in at least three
responsible competitive proposals or bids for the service or services invoived.
47 (d) City must retain capacity to provide service. No city service shall be contracted out to
48 private parties in its entirety. The City shall retain in every case the provision of 25 percent of
49 (1) the service or (2) the capacity to provide the service.
�
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(e) Outside contr°actors.
aq•�g�t
3 (i) Disqualification. A private party responding to a managed competition request for
4 proposal, together with its supervisory employees while in the employ of said contractor, shall be
5 disqualified from bidding on or responding to such proposal, if such party or such employees
6 have a record of material or repeated noncompliance with any relevant federal or state regulatory
7 statute including, but not lunited to, statutes concerning labar relarions, occupational safety and
8 health, nondiscrimination and affirmative action, environmental protection and conflicts of
9 interest.
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(ii) Financial and background information. Each such private parry shall submit, in its
response to a managed competition request for proposal, such financial and background
information as the Board may recommend to allow the mayor and the city council to make an
informed decision on the financial viability of the party and its ability to carry out and deliver the
city services in question. Such information may include, but is not limited to, financial and
business references, financial records and past contracts or delivery of municipal services.
(iii) Employment of city employees. Each such private party shall offer any available
employee positions, and any positions created as a result of the contract, to city employees who
are subject to layoff due to the elimination of positions because of the compefition contract and
who satisfy the hiring criteria of the contractor.
(fj Specifications. Each managed competition request for proposal shall contain bid
specifications and such other instructions to prospective bidders as may be necessary, including
clear advice to prospective bidders on or responders to any managed competition request for
proposal that the city is not obligated to enter into any managed competition contract, and
reserves the right to continue with the same or revised performance plan, whether in existence or
prepared thereafter by the employees involved. Each such managed competition contract shall
aiso contain all of the contract requirements in Section 85.09.
Section 85.08. Ethics requlrements.
Nothing in this chapter is intended to amend or modify or supersede the provisions of
Section 24.03(A) of the Saint Paul Administrative Code. In addition thereto, no city employee
whose position in the city enables such an employee to influence the selection of a contractor,
shall be employed in any capacity by a private pariy submitting a bid in response to a managed
competition request for proposal, or have any other direct or indirect financial interest in the
selection of a contractor. Any city empioyee involved in preparing the request for a managed
competition request for proposal may not later submit a bid for or response to that same matter or
contract. The private party responsible for the response to the management competition request
far proposais shall not have been an employee in the business unit or business units covered by
the said request for proposals during the six-month period before the response was submitted by
the said privaYe pariy.
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1 Section 85.09. Contract r-equirements. � q �
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3 The following provisions shall be contained in any competitive contract awarded to a
4 private entity chosen to deliver city services according to a managed competition request for
5 proposal:
7 (a) Specifzed minimum wage rates. All contractors and their subcontractors under a
8 managed competition contract shall conform to all applicable labor laws of the State of
9 Minnesota and all other applicable laws, ordinances and Iegal zequirements affecting the
10 contracted wark in the City of Saint Paul. All contracts and subcontracts entered into under a
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managed competition contract shall provide that the wages paid and benefits paid or provided to
the occupational groups utilized in such managed competition contract shall not be less than the
wages paid and benefits paid or provided to comparable positions in the classified civil service
system. If no comparable job class exists, the contractors and subcontractors shall pay at least the
state prevailing wage rate for the occupation. If thete is no state prevailing wage rate for the
occupation involved, the federal prevailing wage rate shali be paid.
(b) Standards. Each managed competition contract sha11 contain specified service and
performance standards that shall be met by the contractor.
(c) Contract length. No managed competition contract shall be for a term longer than two
years.
(d) Termination. Each such managed competition contract shall provide for termination
in the event of failure to meet established service standards or any other violation of the contract
requirements.
Section 85.10. Cost savings distribution.
Up to one-half of the cost savings resulting from delivery of city services under
performance plans by city employees may be used by the city for bonuses to the employees
performing under the managed competition arrangement and to improve workplace conditions of
the operating department. The city and bargaining units may negotiate amendments to existing
coilective bazgaining agreements if and as necessary to implement the intent of this section. No
distribution of cost sauings to an operating department sha11 be made until all the terms of the
performance plan or contract have been met.
Section 85.11. Reports.
Any cit7 department that implements managed competition through a contract or has a
performance plan in place with city employees shall present an annual status report on the
implementation of the program and the performance of the contractor or the city employees, as
applicabie, to the city council.
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Requested by Department of:
By:
Section 8512. Collective bargaining, statutory provisions.
Qq_49y
Nothing in this chapter shall abrogate or madify any rights or obligations (1) to bargain
coilectively about any terms or conditions of employment, or (2) existing under the Minnesota
Public Employment Labor Relations Act.
Section 2
This ordinance sha11 take effect and be in force thirty (30) days after its passage, approval
and publication.
Adopted by Council: Date (� � .1p \`lqg
1
Adoption Certified by Council Secretary
By: �.a�. C3- ,: ^� ,.^.�'2--�'-
Form Ap roved by City Attorney
gY: , �. I4-I�v'
Approved by Mayor for Submission to Council
By:
Approved by MayoY: Date ��
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Adopted by Council: IJate _ 1 ctry_ 3� 0.� —
Adoption Certified by Counci7 Secretary
By:
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GREEN SHEET
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CITY OF SAINT PA[TI., 390 crry xorr Telephone: 65Z-266-8510
Norm Coleman, Mayor IS West Kellogg Boulevard Facsimile: 651-266-8513
Saint Paul, MN SSIO2
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Veto of Managed Competition Ordinance (CF 99-69A) `��
October 26, 1999
City Councilmember:
I am returning CF 99-694, the Managed Competition Ordinance, with my veto. I do so with the
full knowledge that a majority of the Council has indicated they intend to ovenide my veto.
I believe it is important for Saint Paul homeowners to know that your decisiun to pass this
flawed ordinance, and your equally ill-advised effort to override my veto, will deprive them
a minimum of $20 million from costs savings that could have been achieved through
competition.
While a majority of the Council hides behind a"lack of communication" for their excuse in
passing an ordinance that you a11 admit is terribly flawed, Saint Paul taxpayers are being
penalized for a lack of courage to stand up to Public Employee Union leadership.
I will commit to you that their will be no "lack of communication" to 5aint Paul property
t�payers from this office about the high cost to them from the Council's unwillingness to
embrace competition in City government as a way to improve government operations,
reduce the costs of government and ultimately save money for taxpayers.
Last Wednesday, the City Council passed a so-called managed competition ordinance that will
stop competition cold. It discourages the private sector from bidding by saddling them with
requirements that no one would want to meet.
This amended ordinance is the worst possible abuse of the grocess that I have seen since
becoming Mayor.
First, there was no public input at a11 on the amendment. The Council's efforts to hide behind
public meetings while quietly amending ordinances without public knowledge cannot go
unnoticed.
Second, there was no efFort to engage Departsnent and Office Directors in this matter. Any
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Department and Office Director would have come right out and clearly indicated to the Councii
that this ordivance was bad the way it was - but it became even more detrimental once axnended.
Unforiunately, this lack of public input or input by those who aze running our City on a day-to-
day basis threatens - in the words of Department and Office Directors - the ability of this City to
deliver services and perform criticai City functions if this amended ordinauce stands.
When Council President Dan Bostrom and I announced a 3�-day moratorium on competition
efforts last August, I was hopeful that we could reach agreement with city labor unions on how to
implement a competition effort in Saint Paul.
Unfortunately, we were unable to agree on any issue of requiriug private empioyers to pay higher
City wages. Unions believe that higher City wages were the appropriate result of pay equity and
thought those wage and benefit scales should be imposed across the board to the private sector.
The major concern of City Unions was being embarrassed to losing competition because of
higher wages.
The ordinance approved by the City Council is flawed throughout. Beginning with its statement
of purpose, it is cleaz that this plan is intended to protect the parochial interests of city unions, not
the citizens I was elected to serve.
What this ordinance should be about is improving the city's ability to deliver services as
efficiently, productively and cost-effectively as possible by encouraging city employees to
compete with private vendors.
Instead, this ordinance deprives property tagpayers of potential savings of $20 million -
perhaps even greater savings - because of the fear of the Council to stand up to public
employee union leadership. This is an outrage of the sort that demands public notice.
The ordinance is flawed in several areas which I will outline below. I offered numerous changes
during our discussions with the unions that I believed would establish a competition program that
works while responding to city employees' greatest concern: job security.
Aowever, let me be clear about one thing. Saint Paul City employees are not to blame for
the inability of their union leadership to act responsibly, or for that matter, for the Council
to act responsibly.
Citv emulovees asked for job security - they were provided it Unfortunately their union
leadership rejected this commitment in an effort to maintain the status uo
The ordinance, as amended does not brovide iob security for citv employePs. If employees were
to lose a city service to the private sector, there would be no assurance of continued employment
with the City. Job security has been a key concem of city employees, yet the City Council has
chosen to ignore this concern.
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unportant where employee pians require substantial investment in technology or
capital equipment. Tluough the RFP process ciry employees would have another 45-
60 days to refine their business plan.
After reviewing the private sector bids and comparing them to the city employees'
business plan the Mayor could decide to implement the business pian or recommend
awud of a coniraet to a private bidder. Any decision to contract out the service
would ultimately require city council review and approval.
3) Prepare performance plans for all city services
The ordinance will require a11 citv services. whether rorovided by citv em l�ovees or
private contractors. to be subject to its requirements. Prior to issuing any RFP, this
ordivance will require City department heads to prepare and 'unplement a performance
plan on every single service that is currently being performed by outside contractors.
In other words, before any street plowing, library cataloging, architectural drawing, or any
other city service which is currently being done outside can remain outside, an advisory
boazd then the City Council would need to first review whether outside contracting is
appropriate. The city employees would haue to be given the opporiunity to do this work
under the terms of a performance plan for a minimum of two yeazs. Only then could a
decision be made to contract out the service. In the meantime, the work won't get done -
or it will cost even mare money as we wrestle with the nighhnaze of a bureaucracy thaY s
been created by this ordinance.
Under my�ro�osal there wouid be no requirement to force a two-veaz delav on services
we now contract out while departments develop and 'un�lement �erformance plans for
those services. No services we currendy contract out would be affected. Snow plowing,
street constxuction and library services would continue uninterrupted.
4) Hiring requirement on private employers
The ordinance will rec�uire private em�lovers to offer cit� emplovees available or new
jobs resultin� from wimiinga city contract. This represents another attempt to eliminate
any prospect of competition with the private sector. If winning a ciiy contract means the
private employer would be forced to hire city employees if there aze openings, that
employer will not bid for the service in the first place.
Under my�ro�osal there would be no hirin�requirements forprivate bidders because
there would be no need for such a requirement. No city employee would lose their job,
so hiring requirements would be meaningless. In the course of discussions with city
unions, however, I did support language that would invite private bidders to indicate
whether they would hire city employees whose posi6ons would be elnninated through a
managed competition contract. An employer's willingness to hire city employees could
be given substantial weight in evaluating competition proposals.
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S7 Wage and benefit requirement on private bidders
The ordinance will zequire grivate bidders to pav their employees the same wa e� and
benefits as cit�employees in compazable uositions. It will impose the city's civil service
system and wage scales on the private sector. Employers will be required to compaze
each of their j obs to specific city job titles - of which theze aze over 500 different titles
and classifications - to determine a pay rate for potentially each one of these 500 different
ritles and classifications. Such a requirement is fundamentaily unfair to the private sector,
especially given the reality that some city employees are paid 20-40% above their
counterparts in other public or private orgauizations. The requirement also will create a
bureaucratic nightmare for both private bidders and the city and will further ensure that
the private sector will be shut out of competition for city services.
Under my proposal nrivate contractors biddine for city services wouid be required to pav
at least a threshold wage to their employees. In discussions with the unions, I offered two
thresholds: one for workers with basic skills, experience, traiiung and educarion; another
for workers with more advanced skills, eta I also offered to established thresholds for
separate occupational groupings, such as clerical, technical, professional, supervisory,
building trades and others.
6) Contract length
The ordinance requires that a11 managed competition contracts with outside vendors be
limited to two-yeazs. This will prohibit the City from considering proposals for
operations where a longer timeline is desirable. Private employers will not bid on city
services that may require substantial capital investment if the time period far recovering
that investment is limited. Again, this is a provision intended to kill competition.
Under my pronosal no such time Innit would be piaced on contracts. I would allow
private bidders to propose the time frame that best meets their needs, or give them
options for bidding on varying time periods. Thus, we could accommodate short,
seasonal services as well as larger operations that would require a multi-year contract.
On behalf of S�int Paul property taxpayers, I reject this ordinance.
YVV'
Mayor
5u�sr�ru� q-2���9
Presented By
Refened To
Council File # 99 `(O/�
Ordinance #
Gteen Sheet # �!/ L � 3�
3 �{ /
Committee Date :
An administrative ordinance
to provide rules and procedures for
employee performance plans and
for managed competition contracts.
THE COUNCIL OF THE CITY OF SAINT PAUL DOES
Section 1
A new Chapter 85 is hereby enacted as part of
as foilows:
Section 85.01. Statement ofPurpose.
Paul Administrative Code to read
Managed competition is a process that nables ciry employees to achieve greater
efficiency and productivity in perfornvng v ous city services by competing with private
vendors for the delivery of those services. t is intended to facilitate city employee participation
in a process that wiil result in employee orxnulated performance plans to achieve gains in
productivity and efficiency. It may le to the negotiation of managed competition contracts
between the city and private contra ors. This ordinance is intended to set forth requirements and
procedures to be followed when ening a city service to the managed competition proposal
process.
Section 85.02.
(a) Board.
ro> B;
the managed
ORDINANCE
CITY OF SAINT PAUL, MINNESOTA
Saint Paul Board.
unit. A group of employees submitting a proposed performance plan under
ition program.
(c) cty department. Any department, board, commission, office, or division of the city
of Saint aul. �
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(d) City service. A function performed by employees of the city.
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(e) Finance director. The director of the office of fmancial services, and hislher successor
or designee.
(fl Managed competition requestfor proposal. A city proposai for the solicitation of
responsive proposals from private parties who seek the award of a contract for the provision of
city services, which awazd would be made after a process that compares (1) the performance
plans of city employees with (2) the responses of such private parties.
(g) Operating depar-tment. The city department in which the employees in a busine unit
have been requested to prepare or have prepared a performance plan, or have carried out ' whole
or in part such a performance plan, or whose city services may be contracted out to p� ate
parties.
(h) Performance plan. A pian, strategy or program by which city
perform or deliver city services.
(i) Purchasing director. The director of the division of com
the department of technology and management services, or his/her
Section 85.03. Compete Saint Paul Board.
seek to
analysis services in
ir or designee.
The Board is hereby created. Its membership shal e representative of a diverse range of
catizen viewpoints regarding the implementation and a inistrarion of the city's activities in
relation to managed competition. The Board shall c sist of seven (7) voting members, who
shall be appointed by the mayor and approved by e city council. Initially, three (3) members
shall be appointed for a term of three (3) years e h, two (2) members shall be appointed for a
term of two (2) years each, and two (2) memb s sha11 each be appoinfed for a term of one year.
Thereafter, the terms of inembers sha11 be f three (3) years and until their successors aze
appointed and approved.
Section 85.04. Board powers and
(a) Advice to mayor and ty council. The Board shall advise the mayor and city council
on matters relating to the sele on of city services for performance plans and managed
competition requests for pro osals, including but not limited to planning, promotion, training,
contract development and ontractor qualifications for such activities.
(b} Review of erformance plans and managed competition requests for proposals. All
performance plans d managed competition requests for proposals shali be submitted to the
Board for its revi and recommendations. No performance plan, managed competition request
far proposal, or roposal relating to such a plan shall be implemented without prior Board review
and consider on of 3ts recommendations. The Board shall review and make written
to the mayor and city council on all performance plans and managed
petit n requests for proposals. The Boazd may recommend changes in such plans or
�os s. The Board shall provide the finance director and purchasing director with an
� ity to make recommendations on such performance plans and managed competition
ests for proposals, and sha11 include those recommendations in their transmittal to the mayor
city council.
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(c) Initiation ofperformance plans. The Board may on its own initiative identify and �� �
recommend city services for incorporation in perFormance plans or in the managed competifion
request for proposal process, and shall submit its recommendations therefor in writing to the
mayor and city councii. Any proposals for performance plans or managed competition that result
from the Boazd initiative are subject to Boazd review and recommendation under subsection (b) �
above.
(d) Board staff. The Boazd shali be staffed by an employee of the mayor's office
employee of the city council's investigation and reseazch center. Such staff shall advise
Boazd on a monthly basis of activities related to the development of performance plan�t
managed competifion request for proposals. /�
(e) Board meetings. The Board shall meet at least �nen�y �ua
the discretion of the Boazd. Notice of the time, place and purpose of a
given as required by law.
(f) Board organization. The Boazd shall elect officers and
its business. ,
shall be
rules for the conduct of
(g) Delegation of powers. The Boazd may by rule pr ide for the delegation of one or
more Board duties, responsibilities and powers to the fin e director or the purchasing director
Such rules and amendments thereto are not effective consented to by the mayor or his or her
designee, and filed with the city clerk.
Section 85.05. Budget of the Board
The Board shall submit an annual
inclusion in the clty's budget, which proF
travel, training, per diem, postage, copy�'r
Section 85.06. Regultttions and
3dget proposal to the appropriate officials for
,a1 may contain, but is not be limited to, funds for
and supplies. This budget shall be included within the
for performance plans.
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34 (a) Znitiation and pre ration. Perforniance plans may be initiated by the head of the
35 operating department or b ness unit either on his or her own initiative, at the request of the
36 employees involved, ar i response to a suggestion by the Board. The affected employees and
37 their bargaining unit re esentatives shall be given a reasonable opportunity to participate fully in
38 the prepazation and ing of a performance plan, and shall be given training which can be used
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in such preparation d drafting. Such training shall include, but not be limited to, how to
measure and cost eir services, and methods by which such services may be more efficiently
delivered or pr uctivity increased. Except as otherwise provided by the Minnesota Public
Employees L or Relations Act ("PELRA"), the participation of the bargaining unit
representa ' es in the prepazation of the performance p1an sha11 be limited to a"meet and confer"
basis as fined in PELRA.
�(b) The�rst performance plan. The first performance plan sha11 be effective for a period
of o years, during which period of time and for 60 days after the expiration of such plan, no
p of the city services subject to such plan sha11 be contracted out pursuant to or resulting from
managed competition request for proposal.
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(c) Decision on whether to continue under a performance plan. The Board shall
3 recommend, at least 45 days before the ending date of a performance plan, to the mayor and city
4 council whether the business unit involved shall continue operating under the same or a revised
5 performance plan, or the city services involved shall be considered for competitive proposals
6 resulting from a managed competition request for proposals. The mayor and city council ma
7 continue with the same performance plan, provide for a revised performance plan, require at
8 either the same or a revised plan shall be compared with outside competitive bids, or t the ciry
9 services shall be performed by outside bidders. The decision on the foregoing 4 opf s shall be
10 made by the mayor and city council by resolution, which resolution sha11 be cons ered and acted
11 on by the council. Such resolution or resolutions shall be sponsored by the co cil president as a
12 courtesy in order to place it or them before the council, at the request of the ayor or any council
13 member. Such resolution may aiso decide, in addition to the said 4 optio , whether (1) the scope
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and content of the managed competition request for proposal is adequa ,, and (2) the affected
city services sha11 be performed under a perfornzance p1an or the 1ow st responsible bid received
pursuant to or resulting from the managed competition request for - roposal. If such resolution
does not decide the last two issues, those issues shall be decide y the mayor and the council in
one or more other resolutions as the case may be, which reso tions sha11 similarly be sponsored
by the council president in order to place them before the c cil.
(d) Term of subsequent performance plans. performance plan after the first one shall
continue for a period of two years, subject to conti ation or not as provided above.
(e) Internal competitive proposal. A pe ormance plan or any revision thereof which is
prepared far the purpose of, or will be reaso ly likely to be used for, competing with proposals
from private parties in response to a city aged competition request for proposal shall be
deemed to be an internal competitive pr osal for the purposes of Minnesota Statutes, Section
1337, relating to general nonpublic d a.
Section 85.07. Regulations and
managed competition request for proposals.
(a) Initiation andprep ration. Managed competition requests for proposals may be
initiated by the head of the erating department or business unit either on his or her own
initiative, at the request o he employees invoived, or in response to a suggestion by the Boazd.
36 (b) Two years ' ternal operation. The Board may review or make recommendations on a
37 managed competitio request for proposal at any time, but no acrion may be taken by the mayor
38 ar city council on ch proposal except as provided in Section 85.06 above.
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40 (c) Exis ence ofprivate providers. A managed competition request for proposal shall not
41 be considere y the Boazd, mayor or city council unless there aze at least three private parties or
42 entities whi currently provide the particular service or services in such proposal, or unless it
43 can be re onably foreseen that a request far proposals or bids will result in at least three
44 responsi e competitive proposals or bids for the service or services involved.
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46 (d) City must retain capacity to provide service. No city service shali be contracted out to
47 pri te parties in its entirety. The City shall retain in every case the provision of 25 percent of
48 ( the service or (2) the capacity to provide the service.
49 �
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(e) Outside contractors.
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business references, financial records and past contracts or
3 (i) Disqualifzcation. A private party responding to a managed competition request for
4 proposal, together with its supervisory employees while in the employ of said contractor, sha11
5 disqualified from bidding on or responding to such proposal, if such party or such employee
6 have a record of material or repeated noncompliance with any relevant federal or state re ator
7 statute including, but not lunited to, statutes conceming labor relations, occupational s�ty and
8 health, nondiscrunination and affirmarive action, environmental protection and conf�cts of
9 interest.
1Q
11 (ii) Financial and background information. Each such private party , all submit, in its
12 response to a managed competition request far proposal, such financial background
13 information as the Boazd may recommend to allow the mayor and the c� council to make an
14 informed decision on the fmancial viability of the pariy and its abilityt#o carry out and deliver the
15 city services in question. Such information may include, but is not I�mted to, financial and
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(iii) Employment of city employees. Each such p�
employee positions, and any positions created as a result
are subject to layoff due to the elimination of positions b
who satisfy the hiring criteria of the contractor. �
(fl Specif:cations. Each managed co:
specifications and such other instructions to
clear advice to prospeative bidders on or res
pxoposal that the city is not obligated to ent�
reserves the right to continue with the sam
prepared thereafter by the employees inv v
also contain all of the contract requir nts
Section &5.08. Ethics
�l,`�-C��
of municipal services.
arty shall offer any available
contract, to city employees who
of the competition contract and
etiti request far proposal shall contain bid
�s ective bidders as may be necessary, including
ers to any managed competition request for
nto any managed competition contract, and
revised performance plan, whether in existence or
Each such managed competition coniract sha11
in 5ection 85.09.
Nothing in this chapter � intended to amend or modify or supersede the provisions of
Section 24.03(A) of the Saint aul Administrative Code. In addition thereto, no city employee
35 whose position in the city
36 shall be employed in any
37 competition request for�
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such an employee to influence the selection of a contractor,
by a private party submitting a bid in response to a managed
or have any other direct or indirect financialinterestin the
selection of a contract . Any city employee involved in preparing the request for a managed
competition request r proposal may not later submit a bid for or response to that same matter or
contract. The priv party responsible for the response to the management competition request
for proposals sh not have been an employee in the business unit or business units covered by
the said reques or proposals during the six-month period before the response was submitted by
the said priva pariy.
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Secfion 85.09. Contract requirements.
�t����y
The following provisions shall be contained in any competitive contract awarded to a
private entity chosen to deliver city services according to a managed competition request for
proposal:
(a) Specifzed minimum wage rates.
�s9zs: - - - - -
federal prevailing wage rate sha11 be vaid•
(b) Standards. Each managed competition
pexformance standazds that sha11 be met by the co�
(c) Contract length. No managed
years.
(d) Termination. Each such
in the event of failure to meet esta�
requirements. ,
Section 85.10. Cost savings
shall contain specified service and
contract shall be for a term longer than two
ed competition contract shall provide for termination
service standards or any other violation ofthe contract
U to one-half of t c�ost savings resulting from delivery of city services under
performance plans by ci employees may be used by the city for bonuses to the employees
perForming under the aged competition arrangement and to improve workplace conditions of
the operating dep nt. The city and bargaining units may negotiate amendments to existing
collective bargainii agreements if and as necessary to implement the intent of this section. No
distribution of co savings to an operating department shall be made imtil all the terms of the
performance pl or contract have been met.
Section 85.�1. Reports.
� city department that implements managed competirion through a contract or has a
e plan in place with city employees sha11 present an annual status report on the
ition of the program and the performance of the contractor or the city employees, as
to the city council.
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Secfion 8512. ColZective bmgaining; statutory provisions.
Nothing in this chapter shall abrogate or modify any rights or obligations (1) to bargain
collectively about any terms or conditions of employment, or (2) existing under the Minnesota
Public Employment Labor Relations Act. �
Section 2
This ordinance shali take effect and be in force thiriy (30) days aft�f'its passage, approval
and publicarion. �
Requested by Department of:
By:
Adopted by
Adoption C
Date
by Council Secretary
FoYm Appr v=d,by Cit Ab orney
BY:
�r -z� �g
Approved by Mayo for S ission to Council
By: ay:
Appxoved Mayor: Date
sy_
��S�T�Tf.�T� a-1-9a
ORDINANCE
OF SA71 jT PAUL, MINNESOTA
Pr�sent�a sy
Referred To
An administrative or�
to provide rules and pro
employee performance
for managed competitio�
THE COUNCIL OF THE CITY OF SAINT P
� for
and
����
1
A new Chapter 85 is hereby
as follows:
Council File # ��
Ordinance #
Green Sheet
part of the Saint Paui Administrative Code to read
Section 85.01. Statement of Purpose.
Managed competition is a rocess that enables city employees to achieve greater
efficiency and productivity in p orming various city services by competing with private
vendors for the delivery of tho e services. It is intended to facilitate city employee participation
in a process that will result i employee-formulated performance plans to achieve gains in
productivity and efficiency It may lead to the negotiation of managed competition contracts
between the city and priv te contractors. This ordinance is intended to set forth requirements and
procedures to be follow d when opening a city service to the managed competition proposal
process.
Section 85.02. De nitions.
(a) Boa d The Compete Saint Paul Board.
(b) usiness unit. A group of employees submitting a proposed performance plan under
the man ed competition program.
(c) City department. Any depariment, board, commission, office, or division of the city
t Paul.
(d) City service. A function performed by employees of the city.
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1 (e) Finance director. The director of the office of fmancial services, and his/her successoz �(
2 or designee.
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4 ( fl Managed competition request for proposal. A city proposal for the solicitation of
5 responsive proposals from private parties who seek the award of a contract for the provision of
6 city services, which awatd would be made after a process that compares (1} the perform �e
7 plans of city employees with (2) the responses of such private parties.
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(g) Operating department. The city department in which the employees in a b siness unit
have been requested to prepaze or have prepared a performance plan, or haue carrie out in whole
or in part such a performance plan, or whose city services may be contracted out t private
parties.
(h) Performance plan. A plan, strategy or program by which city e loyees seek to
perform ar deliver city services.
(i) Purchasing director. The direct�r of the division of contr t and analysis services in
the department of technology and management services, or hislhe successor or designee.
Section 85.03. Compete Saint Paul Board.
The Board is hereby created. Its membership s be representative of a diverse range of
citizen viewpoints regarding the implementation and inistration of the city's activities in
relation to managed comperition. The Board shall nsist of seven (7) voting members, who
shall be appointed by the mayor and approved b the city council. Initially, three (3) members
shall be appointed for a term of three (3) year each, two (2) members sha11 be appointed for a
term of two (2) years each, and two (2) me f bers shall each be appointed far a term of one year.
Thereafter, the terms of inembers sha11 b for three (3) years and until their successors are
appointed and approved.
Section 85.04. Board powers and
(a) Advice to mayor and ty council. The Board shall advise the mayor and city council
on matters relating to the selec 'on of ciTy services for performance plans and managed
competition requests for prop sals, including but not limited to planning, promotion, training,
contract development and c tractor qualifications for such activities.
(b) Review of per rmance plans and managed competition requests for proposals. Ali
performance plans and anaged compefition requests for proposals shall be submitted to the
Board for its review d recommendations. No performance plan, managed competition request
for proposal, or pro sa1 relating to such a plan sha11 be implemented without prior Board review
and consideration f its recommendations. The Board shall review and make written
the mayor and city council on all performance plans and managed
competition re ests for proposals. The Board may recommend changes in such plans or
proposals. T Boazd shall provide the finance director and purchasing director with an
opportuni to make recommendations on such performance plans and managed competition
request�for proposals, and shall include those recommendations in their transmittal to the mayor
and city council.
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1 (c) Initiation ofperformance p7ans. The Board may on its own initiative identify and �q..(��{�
2 recommend city services for incorporation in performance plans or in the managed competition
3 request far proposal process, and shall submit ats recommendations therefar in cvriting to the
4 mayor and city councii. Any proposals for performance plans or managed competiuon that result
5 from the Board initiarive are subject to Boazd review and recommendation under subsection (b)
6 above. i
(d) Board staff. The Boazd shall be staffed by an employee of the mayor's pffice and an
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employee of the city council's investigation and research center. Such staff sha advise the
Boazd on a monthly basis of activities related to the development of perform ce plans or
managed competition request for proposals.
(e) Board meetings. The Board shall meet at least monthly. Noti e of the tnne, place and
purpose of a board meeting shall be given as required by law.
( fl Board organization. The Board shall elect officers and�nake rules for the conduct of
its business. /
(g) Delegation of powers. The Board may by rule ovide for the delegation of one or
more Board duties, responsibilities and powers to the fi ce director or the purchasing director
Such rules and amendments thereto are not effective u til consented to by the mayor ar his or her
designee, and filed with the city clerk.
Section 85.05. Budget of the Board.
The Board shall submit an annual b dget proposal to the appropriate officials for
inciusion in the city's budget, which pro sal may contain, but is not be limited to, funds for
travel, training, per diem, postage, cop mg and supplies.
Section 85.06. Regulations and prc�,a�` edures for performance plans.
(a) Initiation and prepar tion. Perfotmance plans may be initiated by the head of the
operating department or busin s unit either on his or her own initiative, at the request of the
employees involved, or in re onse to a suggestion by the Boazd. The affected employees and
their bar ainin unit re res ntatives shall be given a reasonable opportunity to participate fully in
the preparation and drafti g of a performance plan, and shall be given training which can be used
in such preparation and afting. Such training sha11 include, but not be lunited to, how to
measure and cost their ervices, and methods by which such services may be more efficiently
delivered or producti rty increased. Except as otherwise provided bv the Minnesota Public
(b) Th first performance plan. The first performance plan sha11 be effective for a period
of two yeaz during which period of time and for 60 days after the expiration of such plan, no
part of the ity services subject to such plan shall be contracted out pursuant to or resulting from
a manag�'d competition request for proposal.
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(c) Decision on whether to continue under a performance plan. The Board shall qg �`�'�'�-
recommend, at least 45 days before the ending date of a performance plan, to the mayor and city
council whether the business unit invoived shall continue operating under the same or a revised
performance plan, or the city services involved shall be considered for competitive proposals
resulting 8om a managed competition request for proposals. The mayor and ciry council may
continue with the same perfonnauce plan, provide for a revised performazice p1an, require thax
either the same or a revised plan shall be compazed with outside competitive bids, or that city
services shall be performed by outside bidders. The decision on the foregoing 4 optio all be
made by the mayor and ciry council by resolurion, which resolution shall be consid d and acted
on by the council. Such resolurion or resolutions shail be sponsored by the coun ' president as a
courtesy in order to place it or them befare the council, at the request of the or or any council
member. Such resolution may also decide, in addition to the said 4 options, hether (1) the scope
and content of the managed competition request for proposal is adequate d(2) the affected
city services shall be performed under a performance plan or the lowes responsible bid received
pursuant to or resulting from the managed competition request for p posal. If such resolution
does not decide the last two issues, those issues shall be decided b the mayor and the council in
one or mare other resolutions as the case may be, which resolut ns shall similarly be sponsored
by the council president in order to place them before the co cil.
(d) Term of subsequent performance plans. Any rformance plan after the first one sha11
continue for a period of iwo years, subject to continua 'on or not as provided above.
(e) Internal competitive proposal. A perfo ance plan or any revision thereof which is
prepared for the purpose of, or will be reasonab likely to be used for, competing with proposals
from private parties in response to a city m ged competition request for proposal sha11 be
deemed to be an internal competitive grop a1 far the purposes of Minnesota Statutes, Section
13.37, relating to general nonpublic dat
Section 85.01. Regulations and
{a) Initiation and prep�
initiated by the head of the op�
initiative, at the request of the
(b) Two years i,
managed competition x
or city council on such
for managed competition request for proposals.
Managed competition requests for proposals may be
department or business unit either on his or her own
�ees involved, or in response to a suggestion by the Board.
operation. The Board may review or make recommendations on a
for proposal at any time, but no action may be taken by the mayor
a1 except as provided in Section 85.Q6 above.
(c) Existence private providers. A managed competition request for proposal shall not
be considered by th oatd, mayor ot city council unless there aze at teast three private parties or
entities which curr ntly provide the particular service or services in such proposal, or unless it
can be reasonabl foreseen that a request for proposals or bids wili result in at least three
responsible co etirive proposals or bids for the service or services involved.
(d) C must retain capacity to provide service. No city service shall be contracted out to
private p es in its entirety. The City shall retain in every case the provision of 25 percent of
(1) the se ice ar(2) the capacity to provide the service.
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1 (e) Outside contractors.
3 (i) Disqual�cation. A private party responding to a managed competition request
4 proposal, together with its supervisory employees while in the empioy of said contractor,
5 disqualified from bidding on or responding to such proposal, if such parry or such em }
a�, �cg�.
be
6 have a recard of material or repeated noncompliance with any relevant federal or s e regulatory
7 statute including, but not lunited to, statutes concerning labor relations, occupati al safety and
8 health, nondiscriininarion and affirmarive action, environmental protection and onflicts of
4 interest.
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(ii) Financial and backgr-ound information. Each such private p shail submit, in its
response to a managed competition request for proposal, such financi and background
information as the Board may recommend to ailow the mayor and th city council to make an
informed decision on the financial viability of the party and its abi ' ta carry out and deliver the
city services in question. Such information may include, but is n limited to, financial and
business references, financial records and past contracts or del' ery of municipal services.
(iii) Employment of city employees. Each such
employee posirions, and any positions created as a resi
are subject to layoff due to the elimination of position;
who satisfy the hiring criteria of the contractar. �
( fl Specifzcations. Each managed cot
specifications and such other instrucrions to
clear advice to prospective bidders on or r
proposal that the city is not obligated to t
reserves the right to continue with the e
prepazed thereafter by the employees nvolv
also contain all of the contract req � ements
Section 85.08. Ethics
party shall offer any available
� contract, to city employees who
e of the competition contract and
request for proposal sha11 contain bid
ve bidders as may be necessary,including
ponders to any managed competition request for
er into any managed competition contract, and
or revised performance plan, whether in existence or
ed. Each such managed competition contract shall
in Secfion 85.09.
Nothing in this chapt r is intended to amend or modify or supersede the provisions of
Section 24.03(A) of the S' t Paul Administrative Code. In addition thereto, no city employee
whose position in the city enables such an employee to influence the selection of a contractor,
shall be employed in capacity by a private party submitting a bid in response to a managed
competition request f proposal, or have any other direct or indirect financial interest in the
selection of a contra or. Any city employee involved in preparing the request for a managed
competition reque for proposal may not later submit a bid for or response to that same matter or
contract. The pri te party responsible for the response to the management competition request
for proposals s 1 not have been an employee in the business unit or business units covered by
the said reque for proposals during the six-month period before the response was submitted by
the said prlv e party.
�,,%a
Section 85.09. Contract requirements.
The following provisions shail be contained in any competitive contract awarded to a
private entity chosen to deliver city services according to a managed competition request
proposal:
aa����.
(a) Specifzed minimum wage rates. All contractors and their subcontract s under a
managed competition contract shall pay at least step one of the comparable jo class, or if no
compazable job class e�sts, sha11 pay at least the federal prevailing wage r e for the occupation.
All contractors must also pay or provide benefits compazable to those o red to employees in the
city's personnei system.
(b) Standards. Each managed competition contract shall cg�itain specified service and
performance standards that shall be met by the contractor. �
(c) Conrract length. No managed competition
shall be for a term longer than two
years.
(d) Termination. Each such managed con
in the event of failure to meet established service
requirements.
contract shall provide for termination
is or any other violation of the contract
Section 8510. Cost savings distribution.
Cost savings resulting from delive of city services under performance plans by city
employees may be used by the city for nuses to the employees performing under the managed
competition arrangement and to impro e warkplace conditions of the operating department. The
city and bargaining units may negot te amendments to existing collective bargaining agreements
if and as necessary to implement intent of tkris section. I�TO distribution of cost savings to an
operating deparhnent shall be m e until all the terms of the performance plan or contract have
been met.
Section 85.11. Reports.
Any city dep nt that implements managed competition through a contract or has a
performance plan in pl e with city employees shall present an annual status report on the
implementation of th rogtam and the performance of the contractor or the city etnployees, as
appiicable, to the ci council.
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Section 85.12. Collective bargaining; statutory provisions.
Nothing in ttus chapter shall abrogate or modify any rights or obligations (1) to bazgain
collectively about any terms or conditions of employment, or (2) existing under the Minne$ota
Public Employment Labor Relations Act. f
Requested by nepartment of:
By:
Date
by Council Secretary
Adopted by
Adoption C
By:
Approved t�
BY _ _ _�
1q��.�
Ttus ordinance shall take effect and be in force thirty (30) days r its passage, approval
and publication.
Section 2
Fosm Approved by City Att ney
By: % "�� ( �
Approved by Mayor for Sub ssion to Council
BY:
Date
5 u b sf-�`f� ��t� ��q
Council File # / ( ` � � Y
Ordinance #
Green Sheet # (f/ � � 3 �
Presented By
L'.��� .�-.'�1�.7
Committee
a6
An administrative ordinance
to provide rules and procedures
employee performance plans a
for managed competition con�
THE COUNCIL OF THE CITY OF SAINT PAUL DOE� ORDAIN:
Section
A new Chapter 85 is hereby enacted as
as follows:
Section 85.01. Statement ofPurpose.
Managed competition is a
efficiency and productivity in per
vendors for the delivery of those :
in a process that will result in em�
productivity and efficiency. It ma
between the city and private con
procedures to be followed whe�
process. f
Section 85.02.
(a) Board The
(b) Business
the managed compe
tc) Czh'
of Saint Paul. i
ORDINANCE
CITY OF SAINT PAUL, MINNESOTA
of the Saint Paul Administrative Code to read
� at enables city empioyees to achieve greater
various city services by competing with private
s. It is intended to facilitate city employee particapation
-formulated performance plans to achieve gains in
to the negotiation of managed competition contracts
. This ordinance is intended to set forth requirements and
; a city service to the managed competition proposal
Saint Paul Board.
A group of employees submitting a proposed performance plan under
program.
Any deparhnent, board, commission, office, or division of the city
(d) City service. A function performed by employees of the city.
�,,�.��
(e) Finance directar. The director of the office of financial services, and hislher successor
or designee. G�Q— G�y
(fl Managed competition requestfor proposal. A city proposal for the solicitation of
responsive proposals from private parties who seek the award of a contract for the provision i
city services, which award would be made after a proces that compazes (1) the performanc
plaus of city employees with (2) the responses of such private parties.
9 (g) Operating department. The city department in which the employees � business unit
1� have been requested to prepare or have prepazed a performance p1an, or have c'ed out in whole
11 or in part such a performance plan, or whose city services may be contracted ut to private
12 parties.
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14 (h) Performance plan. A plan, strategy or program by which ' employees seek to
I S perform or deliver city services.
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(i) Purchasing director. The director of the division
the depariment of technology and management services, or
Section 85.03. Compete Saint Paut Board.
ract and analysis services in
successor or designee.
The Boazd is hereby created. Its membership 1 be representative of a diverse range of
citizen viewpoints regarding the implementation an administration of the city's activities in
relation to managed competition. The Board shal consist of seven (7) voring members, who
shall be appointed by the mayor and approved b the city counciL Inifially, three (3) members
sha11 be appointed for a term of three (3) years ach, two (2) members shall be appointed for a
term of two (2} yeazs each, and two (2) mem ers shall each be appointed for a term of one year.
Thereafter, the terms of inembers shall be f r three (3) years and until their successors are
appointed and approved.
Section 85.04. Board powers and
(a) Advice to mayor and
on matters relating to the selecti
competition requests for propo
contract development and co�
�council. The Board shall advise the mayor and city council
of city services far performance plans and managed
including but noE limited to planning, pxomotiQn, training,
>r qualifications for such activities.
(b) Review ofper rmance plans and managed competitian requests for proposals. All
perfonnauce plans and aged competition requests for proposals sha11 be submitted to the
Boazd for its revie d recommendations. No performance plan, managed competition request
for proposal, or proposal relating to such a plan shall be implemented without prior Board review
and consideration of its recommendations. The Board shall review and make written
recommendations to the mayor and city council on all performance plans and managed
competition requests for proposals. The Boazd may recommend changes in such plans or
proposals. The Board shall provide the finance director and purchasing director with an
opportunity to make recommendations on such performance pians and managed competition
requests for proposals, and shall include those recommendations in their transmittal to the mayor
and city council.
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1 (c) Initiation ofperformance pdans The Boazd may on its own initiative identify and q�' fO9
2 recommend city services for incorparation in performance plans or in the managed competition
3 request for proposal process, and shall submit its recommendations therefor in writing to the
4 mayor and city council. Any proposals for performance plans or managed competition t result
5 from the Boazd initiative aze subject to Board review and recommendation under su ection (b)
6 above.
8 (d) Board staff. The Board shail be staffed by an employee of the
9 employee of the ciTy counciPs investigation and research center. Suc t
10 Boazd on a monthly basis of activities related to the development o erfi
11 managed competition request for proposais.
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(e) &oard meetings. The Boazd shall meet at least
purpose of a boazd meeting sha11 be given as required by,
( fl Board organization. The Board shall
its business.
yor's office and an
shall advise the
iance plans or
Notice of the time, place and
and make rules for the conduct of
(g) Delegation of powers. The Board y by rule provide for the delegation of one or
mare Board duties, responsibilities and pow s to the finance directar or the purchasing director
Such rules and amendments thereto are no ffective until consented to by the mayor or his or her
designee, and filed with the city clerk.
24 Section 85.05. Budget of the Board.
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26 The Board shall submit ival budget proposal to the appropriate officials for
27 inclusion in the city's budget, w�ch proposal may contain, but is not be limited to, funds for
28 travel, training, per diem, pos ge, copying and supplies.
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Section 85.06. Regulation�and procedures for performance plans.
(a) Initiation a preparation. Performance plans may be initiated by the head of the
operating departmen or business unit either on his or her own initiative, at the request of the
employees involve , or in response to a suggestion by the Board. The affected employees shall
be given a reaso ble opportunity to participate fully in the preparation and drafting of a
performance an, and sha11 be given training which can be used in such prepazation and drafting.
Such trairi g shall include, but not be limited to, how to measure and cost their services, and
methods by which such services may be more efficiently delivered or productivity increased.
(b) The fzrstperformance plan. The first performance plan shall be effective for a period
of two years, during which period of time and for 60 days after the expiration of such plan, no
part of the city services subject to such plan shall be contracted out pursuant to or resulting from
a managed competition request for proposal.
(c) Decision on whether to continue under a performance plan. The Board shall
recommend, at least 45 days before the ending date of a performance plan, to the mayor and city
council whether the business unit involved sha11 continue operating under the same or a revised
performance pian, or the city services involved shall be considered for competitive proposals
resulting from a managed competition request for proposals. The mayor and city council may
�,���,�
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1 c t 'th the rfo e 1 r v'de f r ' d rf 1 � th t� 9 ''� �
on mue wi same pe rmanc p an, p o i o a revise pe ormance p an, require a
2 either the same or a revised plan shall be compazed with outside competitive bids, or that the city
3 services shall be performed by outside bidders. The decision on the foregoing 4 options shall be
4 made by the mayor and city council by resolution, wluch resolution sha11 be considered and acted
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on by the council. Such resolution or resolutions shall be sponsored by the council president as a
courtesy in order to place it or them before the council, at the request of the mayor or aFr4 council
member. Such resolution may also decide, in addifion to the said 4 options, whethe i) the scope
and content of the managed competition request for proposal is adequate, and (2 e affected
city services shall be performed under a performance plan or the lowest resp sible bid received
10 pursuant to or resulting from the managed competition request for propos . If such resolution
11 does not decide the last two issues, those issues shall be decided by the ayor and the council in
12 one or more other resolutions as the case may be, which resolutions s all similazly be sponsored
13 by the council president in order to place them before the council.
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15 (d) Term of subsequent performance plans. Any perfo ance plan after the first one shall
16 continue for a period of two years, subject to continuation o ot as provided above.
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(e) Internal compezitive proposal. A performanc pian or any revision thereof which is
prepazed for the purpose of, or will be reasonably like to be used for, competing with proposals
from private parties in response to a city managed c petition request for proposal shall be
deemed to be an internal competitive proposal for e purposes of Minnesota Statutes, Section
13.37, relating to general nonpublic data.
Section 85.07. Regulations and
(a) Iniization and prepnration.
initiated by the head of the operating �
initiative, at the request of the emplo�
managed competition request for proposttls.
naged competition requests for proposals may be
stment or business unit either on his or her own
involved, or in response to a suggestion by the Board.
(b) Two years internal op ration. The Board may review or make recommendations on a
managed comperition request f proposal at any time, but no acfion may be taken by the mayor
or city council on such propo I except as provided in Section 85.06 above.
(c) Existence ofpr' ate providers. A managed competition request for proposal shall not
be considered by the Bo d, mayor or city council unless there aze at least three private parties or
entities which current provide the particulaz service or services in such proposal, or unless it
can be reasonably f eseen that a request for proposals or bids will result in at least three
responsible comp irive proposals or bids for the service ar services involved.
(d) Ciry must retttin capacity to provide service. No city service shall be contracted out to
private parties in its entirety. The City shali retain in every case the provision of 25 percent of
(1) the service or (2) the capacity to provide the service.
(e) Outside contractors.
(i) Disqual�cation. A private pariy responding to a managed competition request for
proposal, together with its supervisory employees while in the employ of said contractor, shall be
disqualified from bidding on or responding to such proposal, if such pariy or such employees
have a record of material or repeated noncompliance with any relevant federal or state regulatory
4 ���,��
1 statute including, but not limited to, statutes conceming labor relations, occupational safety and � _ G9�
2 health, nondiscrimination and affirmative action, environmental protection and conflicts of
3 interest.
4
5 (ii) Financial and background information. Each such private parry shall submit, in its
6 response to a managed competition request for proposal, such financial and background
7 information as the Board may recommend to allow the mayor and the city council to make an
8 informed decision on the financial viabiliry of the party and its ability to carry out an eliver the
9 city services in question. Such information may include, but is not lunited to, fm ial and
10 business references, financial records and past contracts or delivery of
11
12 (iii) Employment of city employees. Each such private party
13 employee positions, and any positions created as a result of the coni
14 aze subject to layoff due to the elimination of positions because of
1 S who sarisfy the hiring criteria of the contractor.
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alj�ffer any available
� to city employees who
competition contraet and
( fl Specifications. Each managed competition reque for proposal shall contain bid
specifications and such other inshuctions to prospective dders as may be necessary, including
clear advice to prospective bidders on or responders to p managed competition request for
proposal that the city is not obligated to enter into managed competition contract, and
reserves the right to continue with the same or revi ed performance plan, whether in existence or
prepared thereafter by the employees invoived.
also contain all of the contract requirements in,
such managed competition contract shall
m 85.09.
Section 85.08. Ethics requirements.
Nothing in tlus chapter is intend to amend or modify or supersede the provisions of
Section 24.03(A) of the Saint Paul A �nistrative Code. In addition thereto, no city employee
whose position in the city enables s an employee to influence the selection of a contractor,
shall be employed in any capacity a private party submitting a bid in response to a managed
competition request for proposal r have any other direct or indirect financial interest in the
selection of a contractor. Any c' employee involved in preparing the request for a managed
competition request for propo al may not later submit a bid for or response to that same matter or
contract. The private party r sponsible for the response to the management competition request
for proposals shali not hau been an employee in the business unit or business units covered by
the said request for pzop sals during the six-month period before the response was submitted by
the said private party.
Section 85.09. Corffract requirements.
The following provisions shall be contained in any competitive contract awarded to a
private entity chosen to deliver city services according to a managed competition request for
proposal:
(a) Specifted minimum wage rates. All contractors under a managed competition contract
shall pay at least step one of the comparable job class, or if no comparable job class exists, shall
pay at least the federal prevailing wage rate for the occupation. All contractors must also pay
benefits comparable to those offered to employees in the city's personnel system.
(b) Standards. Each managed competition contract shall contain specified service and �
�g ��.
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performance standards that shall be met by the contractor.
years.
(c} Contract length. No managed competition contract shall be for a term longer than iwo
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(d) Termination. Bach such managed competition contract shall provide for ' ation
in the event of failure to meet established service staudazds or any other violatio of the contract
requirements.
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Section 85.10. Cost savings distribution.
Cost savings resulting from delivery of city services under erfortnance plans by city
employees may be used by the city for bonuses to the employee performing under the managed
competition anangement and to improve workplace conditio of the operating department. The
city and bargaining units may negotiate amendments to ex' ting collective bargaining agreements
if and as necessary to implement the intent of this sectio . No distribution of cost savings to an
operating department shali be made until all the terms f the performance plan or contract have
been met.
Section 85.11. Reports.
Any city department that implements anaged competition through a contract or has a
performance pian in place with city employe s shall present an annual status report on the
implementation of the program and the per ormance of the contractar or the city employees, as
applicable, to the city council.
Section 85.12. Collective bargaining; tatutory provisions.
Nothing in this chapter shall rogate or modify any rights ar obligations (1) to bazgain
collectively about any terms or co 'tions of employment, or (2) existing under the Minnesota
Public Employment Labor Relati ns Act.
Section 2
This ordinance shal take effect and be in force thirry (30) days after its passage, approval
and publication.
Requested by Department of:
Adopted by Council: Date
Adoption Certified by Council Secretary
By:
Approved by Mayor: Date
By:
Form Appsoved by City At rney
B Y= � ��l'" �/ /
Approved by May r for Submission to Council
By:
sy:
OFFICE OF THE CITY ATTORNEY
Claytnn M. Robinsoq Jr., Ciry Attomey �� �
l
CITY OF SA1NT PAUL
Norm Coleman, Mayos
civrt Divis;on
4D0 City Hall
FS West KeIlogg BHd
Saint Paul, Mrnnesora SSIO2
Te7ephone: 651266-8710
Foccin:ile: 651298-56I9
3uly 14, 1499
Fred Owusu, Director
Office of Citizen Services
City Clerk
170 City Hall
Re: Attached Ordinance
Dear Mr. Owusu:
The Office of the City Attorney is at this time unable to approve the attached proposed ordinance
as to form as required by Secrion 3.02(3) ofthe St. Paul Administrative Code. The process of
conducting the legal reseazch and analysis necessary to form a conclusion as to the legal
sufficiency of the ordinance has been underway and wili require addifional work by this office.
This statement of reasons is made and will be filed with the city clerk in order to permit the
introduction of the ordinance without form approval under said Section 3.02(3).
Very huly yours,
. _ �•
Philip B. B e
Deputy City Attomey
Council File # �l�Cvq l�
Green Sheet # �_
�
Presented by
Ciry Service. A
Referred To
AN ORDINANCE ESTABLISHING CHAPTER _ ENTITLED "MAI�IAGED C014�PETITIOl�i" OF
THE SAINT PAUL ADMINISTRATIVE CODE TO PROVIDE A�'RAMEWOR� BY WHICH THE
CITY OF SAINT PAI3L CAN ENTER INTO CONTRACTS WITH
EXISTING CIT'Y EMPLOYEES AND OUTSIDE ENTITIES, TO P]
CURRENTLY PERFORMED BY CI1'Y EMPL(
THE COUNCII. OF THE CITY OF 5AINT PAUL DOES
Section I.
Chapter_ Managed
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.Ol Statement of Purpose.
6 arrangement.
7 .02 Defmitions.
8 Business Unit. A group of
9 City Department. Any d,�p
Committee
2S, INCLUDING
CITY SERVICES
2 The requirements and procedwes in this ordi ce shali be followed when opening a city service to
3 managed competition through the request f, proposals (RFP) or bidding process. Managed competi6on
4 is a process in which city employees currently pedornung a service that has been selected for potential
5 outside contracting may submit a bid or,rproposai to provide that service through a managed competition
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Managed
compete �
ORDINANCE
CITY OF SAINT PAUL, MINNESOTA
submitting a bid under managed competition.
boazd, commission, office, ot division of the city of Saint Paul.
performed by employees of the city.
�. A process by wluch a city department authorizes employees of the department to
businesses or firms for a managed competition contract.
�. A set of requirements transmitted from a buyer to a seller in any kind of purchasing
A specificarion may take the form of a request for proposals (RFP) or a bid specification.
.03
Saint Paul Bosrd created.
is hereby created a Compete 5aint Paul Boazd (hereinafter referred to as the "boazd") whose
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purpose shall be to represent a diverse rauge of citizen viewpoints regazding the implementation and
administrarion of the city's competitive bidding activities. The board shall consist of thirteen 3) voting
members, seven of whom aze appointed by the mayor and six of whom are appointed by the ouncil.
Initially, four (4) members sha11 be appointed for a term of three (3) years, three (3) mem s shall be
appointed for a term of two (2) years and four (4) members shall be appointed for a te of one yeaz.
Thereafter, ffie terms of commission members shall be for three (3) years and until th successors aze
appointed. �
.04 Compete Saint Paul Board powers and duties.
The board shall serve as an advisory body to the mayor and city council o matters relating to the
competitive bidding of city services. It sha11 oversee the planning, pro tion, training, contract
development and contract qualifications for the competitive bidding a�vities of the city. The board shali
also review and comment upon all proposals for competitive biddin and shall recommend for city council
approval the selection of any competitive bid to perform a city se ice or function. All such
recommendations transmitted to the council shall contain the re mmendations of the director of fmancial
services and the head of purchasing division of the departme of management and technological services.
The board sha11 be kept informed by the mayor's office of competitive bidding initiatives of all city
departments and agencies. The board sha11 meet at least �onthly and notice of the time, place and
purpose of a board meeting shall be published once in t�``e official newspaper of the city at least ten (10)
days before the day of the meeting. An outline of the roposal shall be transmitted to the mayor and city
council at the time the request is made for a notice a�the public hearing.
To dischazge its duties and responsibilities, the � oazd sha11 have the power to elect its own officers and
make its own rules for the conduct of its busi ss. Such rules may provide for the delegarion of boazd
duties, responsibilities and powers to the di ctor of financial services and head of the purchasing division
of the department of management and tec ological services or such employees under their direction as
they designate, in accordance with, and bject, to law. Such rules and amendments thereto aze not
effective until filed with the city cier e board shall also be staffed by an employee of the mayor's
office and city council reseazch. �
.OS Compete Saint Paui
45 For the operations of the
46 training, per diem, posta,
47 appropriate officials for�
48 .06 Selection of citv�e�
including staff salaries and other related expenses, such as travel,
ying and supplies, an annual proposed budget shall be submitted to the
�n in the city's budget.
for managed competition.
49 The Boazd shall ve responsibility for identifying and selecting services for managed competition. In
50 order for a serv' e to be selected, the following criteria shall be met:
51 (1) The bus' ess unit providing the city service shail be given a period of not less than one yeaz prior to
� 2 making request for proposals or bids to nnprove opera6ons and reduce costs for the services covered
3 by the tential competitive contract. The business unit shall be prov3ded the resources, which shall be
54 derived from the administration's budget, to hire a consultant if desired. If such measures are found to be
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� 55 unsuccessful by the Boazd, the Board shall recommend to the city council and mayor that the service be
6 opened for managed competirion. Upon approval by the city council and mayor, the business unit and its
57 respective deparhnent or office must be notified by the Boazd at least ninety days in advance of the
58 pending managed comgetition process.
59 (2) The Boazd must establish that at least three private entities exist which provide the servic to be
60 competitively contracted for or at least three competitive bids for the service have been m e by private
61 entifies to the city. If three such private entities do not exist, the Boazd shail demonstra that a request
62 for proposals or bids will result in at least three competitive proposals or bids for the �SC;rvice.
63 (3) The Compete Saint Paul Boazd may recommend that up to 75 percent of the �eivice may be bid out
64 under managed competition. �
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65 When a city service has been selected for managed competition, an outlin�of the specification for
66 managed competition shall be submitted by the Boazd to the city counci�and the mayor far approval.
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.07 Specification for managed competition.
The ouUine of the specification for managed competition prese ed to the Mayor and City Council by the
Boazd must contain:
(1) Griteria to be used by the city to evaluate proposals i�X1ie RFP process is used;
(2) Clearly specified quantity and quality standazds t�contractor must achieve to maintain the contract;
(3) Specified minimum wage rates. All contracto�s with a managed competition contract shall pay at
least step one of the comparable job class, or if �o comparable job class exists, sha11 pay at least the
federal prevailing wage rate for the occupatiot�� All contractors must also pay benefits compazable to
those offered to compazable employees in tl�e'�ciry's personnel system.
76 (4) A provision requiring the contractor t� offer available employee positions pursuant to the contract to
77 qualified classified city employees of e department whose position is eliminated because of the
78 competition contract and who satis e hiring qualifications of the contractor;
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(5) A schedule indicating the
(6) The length of the
If the outline is not
comments from the
If the outlined s�
division for fuli
.08 Rules for
of the RFP process and the conversion process;
to exceed two yeazs.
by the mayor and city councit, it shall be returned to the Board with
;,il andlor mayor explaining the reasons for the rejection.
is approved by the mayor and city council, it shall be sent to the Purchasing
and publication.
or bid specification.
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All potenrial contractors shall submit a seated proposal before the advertised deadline for such proposals;
(1) Such proposals or bids may not be altered after such deadline;
(2) Proposals or bids shall be submitted to the purchasing division and the division shall
such proposals and make the contents of the proposals public at such deadline.
.09 Non-City-Employee Contractor Qualifications and Requirements.
Certain conditions and qualifications must be met in order for a non-city
eligible to submit a successful proposal or bid;
open
to be
94 (1) The contractor responsible for the bid may not have been a city employee for the six months prior to
45 the bid submission deadline. j��
96 (2) No city employee whose position in the city enables such an e�' loyee to influence the selection of a
97 contractor, and no spouse or economic dependent of such emplo ee, shall be employed in any capacity by
98 a proposer or have any other direct or indirect financial intere�'in the selection of a contractor.
99 (3} Anyone involved in preparing the request for bids or �oposals may not submit a proposal or bid for
100 that same contract. //
� 1 (4) The contractor and its supervisory employees, �hile in the empioy of said contractor, have no
2 adjudicated record of substantial or repeated wilfu�noncompliance with any relevant federal or state
103 regulatory statute including, but not limited to„�tatutes concerning labor relations, occupational safely
104 and health, nondiscrimination and affirmativ�ction, environmental protection and conflicts of interest.
105 (5) The name of any subcontractor, subc�i4sultant or supplier whose shaze of the contract exceeds Fifiy
106 Thousand Dollars ($50,000.00) of the q�(intract amount.
107 (6) The names of any unions with �fiich the contractor has a collective bazgaining agreement.
/
1Q8 (7) The contractor shail provide ` ee relevant business references.
1�9 (8) The contractor shall sub�a t financial records indicating financiai viability.
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(9) The contractor sha11 eet a11 other applicable requirements in the Saint Paul Administrative Code
Chapter 82. Purchasi Procedures; Public Contracts, and Chapter 86. Signing of Contracts, Deeds,
Bonds, and Checks.
.10 City role i ssisting city employees in submitting a bid.
If employee of the departrnent soliciting competitive bids or proposals inform the departmettt head of
their desi to submit a bid for the sole purpose of providing the services that aze the subject of the
request or bids, the administration shall provide the business unit or units with comgrehensive training
for the bidding process. The admuustration and city council shall assemble a team comprised of
0
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, j� 8 managers, knowledgeable employees, representatives of exclusive representative of the affected
bargaining unit(s), and any consultauts approved by the Board to assist the business unit or units in
120 preparing the bid. �
121 11 Coniract Requirements. The following provisions shall be contained in any mperifive contract:
122 (1) Provisions requiring the contractor to comply with a policy ofnondisc ' ation and equal
123 opportunity for all persons as provided by Saint Paul Legislative Code, C�t�er 183. Human Rights.
124
125 (2) Specified m;n;mum wage rates. A11 contractors with a managed catnpetition contract shall pay at
126 least step one of the comparable job class, or if no comparable job class e�sts, sha11 pay at ieast the
127 federal prevailing wage rate for the occupation. All contractors m�t also pay benefits compazable to
128 those offered to employees in the city's personnel system. s �
129 (3} A description of the manner in wluch the contractor wilLaneet the provisions requiring the contractor
130 to offer available employee positions pursuant to the contra to qualified classified city employees of the
131 depariment whose employment is terminated because o� the competition contract and who satisfy the
132 hiring criteria of the contractor. q '`
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(4) A provision requiring the contractor to su
name, address, social security number, hours
previous quarter.
(5) A description of the total contract
(6) A statement of the length of the
.12 Awarding the contract.
�rterly payroll records to the department, listing the
and the hourly wage paid for each employee in the
down by activity.
not to exceed the two-year limit.
The Purchasing Division will �rtify in writing to the city council and mayor for their approval that the
quality of the services to be p"iovided by the designated bidder is likely to satisfy the quality requirements
of the statement prepared p�,txr"" suant to the secrion of this chapter titled "Statement of services grogosed
for managed competition� and to equal or exceed the quality of services which could be provided by
regulaz agency employe�`"s pursixant to the estimate of the costs of city employees in the relevant business
unit providing the sut�ect services, including, but not limited pension, insurance and other employee
benefit costs. � `
The certification include a cost savings calculation. The cost savings must be calculated by
subuacting av �dable costs from the total contract cost. Avaidable costs include, but aze not limited to
the cost o£ p curement, contract negotiation and awazd, processing, and contract monitoring and
evaluation. e total contract cost includes the contractor cost, administration cost, conversion cost and
inclusion f a calculation of the loss of any new revenue the in-house service would have generated.
The c tract award may not be made unless the foilowing conditions have been met:
(1 e business unit or private bidders or proposers received no advantage over other the bidders or
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proposers;
(2) The evaluation process was objective and fair;
(3) All requirements governing proposals or bids by business units of the
(4) the mayor and city council must approve by resolution all competifive
Ail parties are bound by the same terms, conditions, financial penalties
.13 Contract termina4ion.
standards.
met;
159 The managed competirion contract may be ternunated by the city� any time for failure to meet
160 established quality and quantity standazds or violation of any of khe contract requirements.
161 If the contract is awarded to city employees, and if during a�ry financial quarter during the term of the
162 contract the cost of the business unit attributable to the se `ice provided pursuant to any request for
163 proposals or bids exceeds the contract price for the perio�d such service, the city department shall
164 issue a new request for proposals or bids for such se ��e wrthin one hundred twenty (120) days after the
165 end of such fmancial quarter. ,
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.14 Cost savings distribution if the contract
Cost savings resulting from contracting
city department as follows:
to city employees.
employees to provide services shall be utilized by the
170 (1) Any cost savings gained by a city �epartment from successfully fulfilling the terms of a contract with
171 a business unit may be retained by su�h department.
172 (2) Up to one-half of the savings�nay be distributed as bonuses to the employees in the business unit that
173 performed the services under the contract through an employee bonus award plan established by the city
174 department and approved by t�e mayor and council, except that no bonus awazded to an employee may
175 exceed an amount equal to bwo times that employee's annual salary.
176 (3) Up to one-half of such amount may be retained and expended by the city deparhnent to improve the
177 workplace conditions the employees in the business unit that performed the services under contract.
178 (4) No distributi " of cost savings to a business unit may be made until all the terms of the contract have
179 been compieted�
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(S) Any di bution of cost savings to a business unit shall be made as a lump sum payment to such
business 't.
.15 ntract Administration.
e city department head, with the assistance of the Boazd, sha11 be responsible for implementing
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competition in that department and for monitoring a service contract entered into by the deparlment
under competition.
Any city department that implements compefition for a contract shall present an annual status report on
such implementation on or before January 1 of each year to the city council. �1
.16 Applicability of other laws.
(1) Nothing in tlus ordinance shall abrogate the obligation or rights of any
any terms or conditions of employment as provided for in any other ordins
191 (2) Nothing in this ordinance shall be construed to require compe
192 Chapter 82. Purchasing Procedtues; Public Contracts and Chapter
193 Bonds Checks of the Saint Paul Administrative Code.
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195
Section II.
11us ordinance shall take effect and be in force thirty (30)
�✓to collectively bazgain
or other law.
all contracts authorized by
mg of Contracts, Deeds,
after its passage, approval and publication.
by Deparknent oE
�J
Ben anav
Blak
Bostrom
Colem
Harris
Lan try
Reiter
Adopted by Council:
Date
Adoption Certified by
B : ,P
Approved by M� or:
Date
B:
�
Fomi Approved by City Attomey
$TA'►fbW,tl D' d f 2CRSOtLS Qll aSlf NA! 1 7U
sv: SecnM 3.v213) � Qd �i,Qt W�, �C'� l�i✓�-
Secretary
Approved by Mayor for Submission to Council
,
�q �� �
CTI'Y OF SAINT PAUL 390 Ciry Ha[I Teleplwne: 651-266-8510
NormColemarz,Mayor ISWestKeiloggBoulevard Facsimite:651-266-8513
Sairst Paul, MN 55102
August 25, 1999
Council President Dan Bostrom and Members of the City Council
310 City Hall
Saint Paul, MN 55102
Dear Council President Bostrom and Members of the City Council:
In order for Saint Paul to continue to deliver high-quality City services for taxpayers, we must
inject competition irrto City government.
Competition doesn't save money by itself. The result of competition does.
Sun Country Airlines is saving travelers money today because it was willing to offer competition
to Northwest Airlines.
Nobody would expect Sun Country Airlines to wait two years to a11ow Northwest Airlines to
figure out if it wants to be competitive or not.
Yet, that is what the Saint Paul City Counci] and Saint Paul City Employee labor unions want
SainY Paul ta�cpayers to do.
W ait.
For two years.
Two years before there is competition.
Two years before tazpayers can see any savings in City government.
'I�vo years before taapayers can have any hope of seeing savings in City govemment
returned to them.
If we began to inject competition in City services today, we could begin seeing millions of dollars
of savings in short order.
�
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Council President Dan Bostrom and Members of the City CouncIl Q�'� `�
Page 2
August 25, 1999
Based upon the egperiences of other cities, we could see savings in our City's Water Utility
of between three and nine million dollars. In our fleet operations, we could see one million
dollars in savings.
Just in those two departments we could see savings of four to ten million dollars — and if we
saved just five percent on our entire City budget because of competition, we would save $20
million for Saint Paul taapayers.
And, a five percent savings is conservative. Other communities are saving 10%-15% and
even more.
The "Compete Saint Paul" initiative which I proposed several months ago remains one of the top
priorities of this Administration.
I firmly believe that we must aggressively pursue the opportunity to improve the delivery of City
services through competition. And, if competition succeeds in providing us cost savings, that
those savings should be returned to Saint Paul taa�payers.
Competition has worked in other cities across the country. In Charlotte, North Cazolina, where
the program was implemented in 1991, 34 services have been put out for bid in the past three
years. Twenty-four of those have been awarded to City workers. Some of the savings realized
there were $2.5 million over five years in residential garbage, trash, and recycling collection;
$180,000 annually in specialized transportation services; and $62,000 over a three-year contract
to read a quarter of the residential water meters.
In Phoenix, nearly 80 services have been subjected to the competitive bidding process, and nearly
half of the awards went to City workers. Savings there have exceeded $30 million.
In Indianapolis, 80 services haue been bid out since 1992 and the result has been two property taac
reductions and $419 million in actual and contractual savings. City employees have won
two-thirds of the awards involving unionized workers, and customer satisfaction is up.
Competition should not result in a reduction in the delivery or the quality of services. In
fact, I am fully prepared to work with labor to ensure that the same demands we have for
services delivered currenUy by City government are a condition of any RFP that is issued
for a competitive bid.
It is clear that Saint Paul City government must reform itself. We must change the way we
do business. We must be prepared to compete with others in the private and public sector.
Studies show Saint Paul employee salaries are consistently far above average. For instance,
mechanics who repair City cars are paid 41% more than mechanics who do the same work for
other cities.
Council President Dan Bostrom and Members of the City Council "{ "I '�� �
Page 3
August 25, 1999
Clerical employees at City Hall are paid nearly 38% more than clerical employees at the State
Capitol.
The average Saint Paul City worker is paid 20% more than the average for all employees in
the State of Minnesota.
I want to make the position of this Administration perfectly clear. We aze prepared to sit down
with labor leaders to address issues of concem to both labor and management. However, those
discussions must be frank and honest and cannot be conditioned upon what either party will or
will not support before they are prepazed to sit down and reason together.
I recenUy offered to meet with the head of the Saint Paul Trades and Labor Assembly.
This offer was rejected.
The counter to my offer was to sit down with 15 heads of different labor unions representing City
employees. While this may seem like a reasonable request, I do not believe it is lost on anyone
that the first step to a process of discussion is for the head of labor and management to sit down
and have a conversation.
I have met with all the union leadership. These kinds of ineetings do not produce the
one-to-one dialogue needed to resolve concerns and move this process forward.
This offer remains open. If the head of the Saint Paul Trades and Labor Assembly is
prepared to meet, I will be prepared to meet to discuss what I hope are our mutual interests
and concerns about protecting the rights of City employees and Saint Paul taxpayers.
If the goal of labor and the City Council is to kill competition, the Benanav ordinance before the
City Council accomplishes that goal.
If it is the goal of labor and the City Council to take away the tools of management from this
Administration through the passage of the Benanav ordinance, it is clear we have only two
options.
We can cut City services and raise property taxes on homeowners and small business — or
we can lay off City employees in order to balance our budget.
I will not raise property taxes on homeowners and small businesses.
Fundamentally, there are many items in the ordinance that this Administration is prepazed to
support. However, there are several conditions that, pure and simple, will destroy our ability to
effectively manage the operations of City government and provide millions of dollars of savings to
Saint Paui taxpayers.
Council President Dan Bostrom and Members of the City Council ��! "�� f
Page 4
August 25, 1999
Here aze my concerns about provisions in the ordinance that I believe kill comperition, and disable
our efforts to save taxpayers millions of dollars:
The requirement that a"Performance Plan" be implemented for a period of two years before
any competitive bid could be released outright stops competition. We don't have two years.
There cannot be any competition if we ue not engaged to compete with those outside of
City government. This "Performance Plan" concept has City employees competing with the
status qno — not with similar bodies in the public and private sector.
A mandaYe that outside contractors would have to hire qualified City employees who would
be displaced by contracting out a service. Clearly, it is my belief that any organization
would want to hire qualified employees to deliver services to its clients. However, if a
particular contractor does not need additional workers, it would be folly to require this of
them. There are many ways that can be explored to protect displaced workers
A requirement that all outside contractors performing City services pay their employees the
same or comparable wages and benefits as paid to City employees. Obviously, we support
paying employees a fair and competitive wage for quality services. However, where our
wages aze unreasonably higher to begin with, this is a requirement that is simply designed to
kill competition.
It would restrict the length of any outside contracts to two years, which would greatly
diminish the possibility of achieving significant savings. Many contracts are more
competitive and cost-effective based on the years of delivery of that service. I would
certainly support stringent quality control guidelines to address any quality service delivery
issues during the length of term of any outside contract.
It would require that any sauings resulting from competition be given only to City
employees and the departments they work for, not the tazpaying public who pays for the
services in the Srst place. Our taxpayers expect that any savings they receive from
competition be returned to them. If those savings can be invested in areas that aze critical to
the safety, quality, and affordability of our City, I will support those efforts. However, our
first goal should be to return to taafpayers any savings that aze realized as a result of cost
savings achieved through competition.
These requirements go too faz and sway the balance of interests in favor of public employee
unions without regard to the rights of taxpayers.
As I stated in the beginning of this letter. I am prepared to sit down with the head of the
Saint Paul Trades and Labor Assembly at any time. In fact, the sooner the better.
I azn prepared to sit down with the Council to discuss this ordinance and how it can be drafted in
a way that addresses concems about job security, management of outside contracts, and other
issues.
Council President Dan Bostrom and Members of the City Council
Page 5
August 25, 1999
However, this ordinance, if it passes in its current form, cannot be supported by this
Administrarion. Any future Administration will be unduly restrained by the requirements in this
ordinance which defeat any ability to achieve millions of dollars of cost savings for taxpayers.
Any future Administration will be prohibited from exploring in a timely fashion the ability to
deliver high quatity services to taspayers at a cost that taxpayers are willing to support.
This ordinance does not provide structure; it provides barriers to competition and savings for
Saint Paul taxpayers.
Let's work together to achieve the goals that I believe taxpayers want to see achieved. They
want real savings in City govemment. They want solid delivery of quality services for the taac
dollars we collect. And, they want to see competition be given a chance in City government.
Sun Country Airlines didn't wait for two years before it began offering savings to consumers.
Saint Paul City government shouldn't wait two years before it begins offering savings to its
taxpayers.
cerely,
1ZL---, l.�'1��it--
Norm Coleman
Mayor
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Council File # 1 / — t� �` T
� �� �4�v�.+�. U.t�.� �O l �. } `� � Ordinance #
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'(� v � ���� Green Sheet # � � �D
' '`4�,`a'S ���O�TINAN �r�- l\13l ° lR �
CTTY OF SAINT PAUL, MINNESOTA �3
Presented B�
Refened To
An admiiiistrative ordinance
to provide rules and procedures for
employee performance plans and
for managed competition contracts.
THE COUNCIL OF THE CITY OF SAINT PAUL DOES ORDAIN:
Section 1
PUBUSU�n
1' r ..r
A new Chapter 85 is hereby enacted as part of the Saint Paul Administrative Code to read
as foilows:
Section 85.01. Statement of Purpose.
Managed competition is a process that enables city employees to achieve greater
efficiency and productivity in performing vuious city services by competing with pxivate
vendors for the delivery of those services. It is intended to facilitate city employee participation
in a process that will result in employee-formulated performance plans to achieve gains in
producfivity and efficiency. It may lead to the negotiation of managed competition contracts
between the city and private contractars. This ordinance is intended to set forth requirements and
procedures to be followed when opening a city service to the managed competition proposal
process.
Section 85.02. Definitions.
(a) Board. The Compete Saint Paul Board.
(b) Business uniz A group of employees submitting a proposed performance plan under
the managed competition program.
(c) City department. Any department, board, commission, office, or division of the city
of Saint Paul.
(d) Ciry service. A function performed by employees of the city, p�
� to ,3.
(e) F'inttnce director. The director ofthe office of financial services, and his/her successor
or designee. �, Gqy
4 ( fl Managed competition request for proposal A eit� proposal for the solicitation of a
5 responsive �zo on sal or proposals ji� from one or more private parties who seek the awazd of a
6 contract for the provision of city services, or jiil for contractine or subcontracting out anv city
7 service or service ,
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10 (g) Operating department. The city department in which the employees in a business unit
11 have been requested to prepare or have prepared a performance plan, or have carried out in whole
12 or in part such a performance plan, or whose city services may be contracted out to private
13 parties.
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(h) Performance plan. A p1an, strategy or program by which city employees seek to
perform or deliver city services.
(i) Purchasing director. The director of the division of contract and analysis services in
the department of technology and management services, or his/her successor or designee.
Section 85.03. Compete Saint Paul Bottrd.
23 The Boazd is hereby created. Its membership sha11 be representative of a diverse range of
24 citizan viewpoints regarding the implementation and administration of the city's activities in
25 relation to managed competition. The Board shall consist of seven (7) voring members, who
26 shall be appointed by the mayar and approved by the city council. Initially, three (3) members
27 shali be appointed for a term of three (3) years each, two (2) members shall be appointed for a
28 term of two (2} years each, and two (2) members shall each be appointed for a term of one year.
29 Thereafter, the terms of inembers shall be for three (3) yeazs and until their successors aze
30 appointed and approved.
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Section 85.04. Board powers and duties.
(a) Advice to mayor and city council. The Board shall advise the mayor and city council
on matters relating to the selection of city services for performance plans and managed
competition requests far proposals, including but not limited to planning, promotion, training,
contract development and contractor qualifications for such activities.
39 (b) Review ofperformance plans and managed competition requests for proposals. All
40 perfonnance plans and managed competition requests for proposals sha11 be submitted to the
41 Board for its review and recommendations. No performance plan, managed competition request
42 for proposal, or proposal relating to such a pIan sha11 be sent to private parties for res�onses or
43 implemented without prior Board review and consideration of its recommendations. The Board
44 shall review and make written recommendations to the mayor and city council on all
45 performance plans and managed competition requests for proposals. The Board may recommend
46 changes in such plans or proposals. The Board shall provide the finance director and purchasing
47 director with an opporhuiity to make recommendations on such performance plans and managed
48 competition requests for proposals, and shall include those recommendations in their transmittal
49 to the mayor and city council. �q
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1 (c) Initiation ofperformance plans. The Boazd may on its own initiative ldentify and � �
2 recommend city services for incorporarion in performance plans or in the managed competition
3 request for proposal process, and shall submit its recommendations therefor in writing to the
4 mayor and ciry council. Any proposals for performance plans or managed competition that result
5 from the Board 'uutiative are subject to Board review and recommendarion under subsection (b)
6 above.
8 (d) Board staff. The Board shall be staffed by an employee of the mayor's office and an
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employee of the city council's investigation and research center. Such staff shall advise the
Boazd on a monthly basis of activities related to the development of performance plans or
managed competition request for proposals.
(e) Board meetings. The Boazd shall meet at least quarterly and at other times at the
discretion of the Board. Notice of the time, place and purpose of a board meeting shall be given
as required by law.
(fj Board organization. The Board shall elect o�cers and make rules for the conduct of
its business.
(g) Delegation ofpowers. The Board may by nxle provide for the delegation of one or
more Board duties, responsibilities and powers to the finance director or the purchasing director
Such rules and amendments thereto are not effective until consented to by the mayar or his or her
designee, and filed with the city clerk.
Section 85.05. Budget of the Board.
The Bou shail submit an annual budget proposal to the appropriate officials for
inclusion in the city's budget, which proposal may contain, but is not be limited to, funds for
travel, training, per diem, postage, copying and supplies. This budget shall be included within the
budget of an appropriate city department or office.
Section 85.06. Regulations and procedures for performance plans.
(a) Znitiatlon and prepara[iorz Performance plans may be initiated by the head of the
operating deparhnent or business unit either on his or her own initiative, at the request of the
employees involved, or in response to a suggestion by the Board. The affected employees and
their bargaining unit representatives shall be given a reasonable opportunity to participate fully in
the prepazation and drafting of a performance plan, and shall be given training which can be used
in such prepazation and drafting. Such training shall include, but not be limited to, how to
measure and cost their services, and methods by which such services may be more efficiently
delivered or productivity increased. Except as otherwise provided by the Minnesota Public
Employees Labor Relations Act ("PELRA"), the participation of the bargaining unit
representatives in the preparation of the performance plan shail be limited to a°meet and confer"
basis as defined in PELRA.
(b) The first performance plan. The first performance plan shall be effective for a period
of two years, during which period of time and for 60 days after the expiration of such p1an, no
part of the city services subject to such plan shall be contracted out pursuant to or resulting from
�' ��,q�
a managed competition request for proposal.
(c) Decision on whether to continue under a performance plan. The $oard shail
2 xecommend, at least 45 days before the ending date of a performance plan, to the mayor and city
3 council whether the business unit involved shall continue operating under the same or a revised
4 performance plan, or the city services involved shall be considered for competitive proposals
5 xesulting from a managed competition request for proposals. The mayor and city council may
6 continue with the same performance plan, provide for a revised performance plan, require that
7 either the same or a revised plan shall be compared with outside competitive bids, or that the city
8 services shall be performed by outside bidders. The decision on the foregoing 4 options sha11 be
9 made by the mayor and city council by resolution, which resolution shall be considered and acted
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on by the council. Such resolution or resolutions shall be sponsored by the council president as a
courtesy in order to place it or them before the council, at the request of the mayor or any council
member. Such resolution may also decide, in addition to the said 4 options, whether (1) the scope
and content of Yhe managed competition request for proposal is adequate, and (2) the affected
city services shall be performed under a performance plan or the lowest responsible bid received
pursuant to or resulting from the managed competition request for proposal. If such resolution
does not decide the last two issues, those issues shall be decided by the mayor and the council in
one ar more other resolutions as the case may be, which resolutions shail similarly be sponsored
by the council president in order to place them before the council.
(d) Term of subsequent performance plans. Any performance plan after the first one shall
continue for a period of two yeazs, subject to continuation or not as provided above.
(e) Internal competitive proposal. A performance plan or any revision thereof which is
prepared for the purpose of, or will be reasonably likely to be used for, competing with proposals
from private parties in response to a city managed competition request for proposal sha11 be
deemed to be an internal competitive proposal for the purposes of Minnesota Statutes, Section
1337, relating to general nonpublic data.
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29 Section 85.07. Regulations and procedures for managed competition request for proposals.
30 (a) Initiation and preparation. Managed competition requests for proposals may be
31 initiated by the head of the operaung department or business unit either on his or her own
32 iniriative, at the request of the employees involved, or in response to a suggestion by the Board.
33 No mana ed competition request for proposals shall be sent to private parties for response until
34 completion of the first performance plan under Section 85.06(b� and until approval thereafter by
35 the mavor and council pursuant to the rorocedures in Section 85.06(cl.
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(b) Two years internal operation. The Board may review or make recommendations on a
managed competition request for proposal at any time, but no action may be taken by the mayor
or city council on such proposal except as provided in Section 85.06 above.
(c) Existence of private providers. A managed competition request far proposal shall not
be considered by the Boazd, mayor or city council unless there are at least three private parties or
entities which currently provide the particular service or services in such proposal, or unless it
can be reasonably foreseen that a request for proposals or bids will result in at least three
responsible competitive proposals or bids for the service or services invoived.
47 (d) City must retain capacity to provide service. No city service shall be contracted out to
48 private parties in its entirety. The City shall retain in every case the provision of 25 percent of
49 (1) the service or (2) the capacity to provide the service.
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(e) Outside contr°actors.
aq•�g�t
3 (i) Disqualification. A private party responding to a managed competition request for
4 proposal, together with its supervisory employees while in the employ of said contractor, shall be
5 disqualified from bidding on or responding to such proposal, if such party or such employees
6 have a record of material or repeated noncompliance with any relevant federal or state regulatory
7 statute including, but not lunited to, statutes concerning labar relarions, occupational safety and
8 health, nondiscrimination and affirmative action, environmental protection and conflicts of
9 interest.
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(ii) Financial and background information. Each such private parry shall submit, in its
response to a managed competition request for proposal, such financial and background
information as the Board may recommend to allow the mayor and the city council to make an
informed decision on the financial viability of the party and its ability to carry out and deliver the
city services in question. Such information may include, but is not limited to, financial and
business references, financial records and past contracts or delivery of municipal services.
(iii) Employment of city employees. Each such private party shall offer any available
employee positions, and any positions created as a result of the contract, to city employees who
are subject to layoff due to the elimination of positions because of the compefition contract and
who satisfy the hiring criteria of the contractor.
(fj Specifications. Each managed competition request for proposal shall contain bid
specifications and such other instructions to prospective bidders as may be necessary, including
clear advice to prospective bidders on or responders to any managed competition request for
proposal that the city is not obligated to enter into any managed competition contract, and
reserves the right to continue with the same or revised performance plan, whether in existence or
prepared thereafter by the employees involved. Each such managed competition contract shall
aiso contain all of the contract requirements in Section 85.09.
Section 85.08. Ethics requlrements.
Nothing in this chapter is intended to amend or modify or supersede the provisions of
Section 24.03(A) of the Saint Paul Administrative Code. In addition thereto, no city employee
whose position in the city enables such an employee to influence the selection of a contractor,
shall be employed in any capacity by a private pariy submitting a bid in response to a managed
competition request for proposal, or have any other direct or indirect financial interest in the
selection of a contractor. Any city empioyee involved in preparing the request for a managed
competition request for proposal may not later submit a bid for or response to that same matter or
contract. The private party responsible for the response to the management competition request
far proposais shall not have been an employee in the business unit or business units covered by
the said request for proposals during the six-month period before the response was submitted by
the said privaYe pariy.
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1 Section 85.09. Contract r-equirements. � q �
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3 The following provisions shall be contained in any competitive contract awarded to a
4 private entity chosen to deliver city services according to a managed competition request for
5 proposal:
7 (a) Specifzed minimum wage rates. All contractors and their subcontractors under a
8 managed competition contract shall conform to all applicable labor laws of the State of
9 Minnesota and all other applicable laws, ordinances and Iegal zequirements affecting the
10 contracted wark in the City of Saint Paul. All contracts and subcontracts entered into under a
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managed competition contract shall provide that the wages paid and benefits paid or provided to
the occupational groups utilized in such managed competition contract shall not be less than the
wages paid and benefits paid or provided to comparable positions in the classified civil service
system. If no comparable job class exists, the contractors and subcontractors shall pay at least the
state prevailing wage rate for the occupation. If thete is no state prevailing wage rate for the
occupation involved, the federal prevailing wage rate shali be paid.
(b) Standards. Each managed competition contract sha11 contain specified service and
performance standards that shall be met by the contractor.
(c) Contract length. No managed competition contract shall be for a term longer than two
years.
(d) Termination. Each such managed competition contract shall provide for termination
in the event of failure to meet established service standards or any other violation of the contract
requirements.
Section 85.10. Cost savings distribution.
Up to one-half of the cost savings resulting from delivery of city services under
performance plans by city employees may be used by the city for bonuses to the employees
performing under the managed competition arrangement and to improve workplace conditions of
the operating department. The city and bargaining units may negotiate amendments to existing
coilective bazgaining agreements if and as necessary to implement the intent of this section. No
distribution of cost sauings to an operating department sha11 be made until all the terms of the
performance plan or contract have been met.
Section 85.11. Reports.
Any cit7 department that implements managed competition through a contract or has a
performance plan in place with city employees shall present an annual status report on the
implementation of the program and the performance of the contractor or the city employees, as
applicabie, to the city council.
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Requested by Department of:
By:
Section 8512. Collective bargaining, statutory provisions.
Qq_49y
Nothing in this chapter shall abrogate or madify any rights or obligations (1) to bargain
coilectively about any terms or conditions of employment, or (2) existing under the Minnesota
Public Employment Labor Relations Act.
Section 2
This ordinance sha11 take effect and be in force thirty (30) days after its passage, approval
and publication.
Adopted by Council: Date (� � .1p \`lqg
1
Adoption Certified by Council Secretary
By: �.a�. C3- ,: ^� ,.^.�'2--�'-
Form Ap roved by City Attorney
gY: , �. I4-I�v'
Approved by Mayor for Submission to Council
By:
Approved by MayoY: Date ��
B '': �ti� �e� �'v� `a I r�i-� � �� ,�
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Adopted by Council: IJate _ 1 ctry_ 3� 0.� —
Adoption Certified by Counci7 Secretary
By:
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GREEN SHEET
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TOTAL # OF SIGNATURE PAGES
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CITY OF SAINT PA[TI., 390 crry xorr Telephone: 65Z-266-8510
Norm Coleman, Mayor IS West Kellogg Boulevard Facsimile: 651-266-8513
Saint Paul, MN SSIO2
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Veto of Managed Competition Ordinance (CF 99-69A) `��
October 26, 1999
City Councilmember:
I am returning CF 99-694, the Managed Competition Ordinance, with my veto. I do so with the
full knowledge that a majority of the Council has indicated they intend to ovenide my veto.
I believe it is important for Saint Paul homeowners to know that your decisiun to pass this
flawed ordinance, and your equally ill-advised effort to override my veto, will deprive them
a minimum of $20 million from costs savings that could have been achieved through
competition.
While a majority of the Council hides behind a"lack of communication" for their excuse in
passing an ordinance that you a11 admit is terribly flawed, Saint Paul taxpayers are being
penalized for a lack of courage to stand up to Public Employee Union leadership.
I will commit to you that their will be no "lack of communication" to 5aint Paul property
t�payers from this office about the high cost to them from the Council's unwillingness to
embrace competition in City government as a way to improve government operations,
reduce the costs of government and ultimately save money for taxpayers.
Last Wednesday, the City Council passed a so-called managed competition ordinance that will
stop competition cold. It discourages the private sector from bidding by saddling them with
requirements that no one would want to meet.
This amended ordinance is the worst possible abuse of the grocess that I have seen since
becoming Mayor.
First, there was no public input at a11 on the amendment. The Council's efforts to hide behind
public meetings while quietly amending ordinances without public knowledge cannot go
unnoticed.
Second, there was no efFort to engage Departsnent and Office Directors in this matter. Any
�
aq- c�a�
Department and Office Director would have come right out and clearly indicated to the Councii
that this ordivance was bad the way it was - but it became even more detrimental once axnended.
Unforiunately, this lack of public input or input by those who aze running our City on a day-to-
day basis threatens - in the words of Department and Office Directors - the ability of this City to
deliver services and perform criticai City functions if this amended ordinauce stands.
When Council President Dan Bostrom and I announced a 3�-day moratorium on competition
efforts last August, I was hopeful that we could reach agreement with city labor unions on how to
implement a competition effort in Saint Paul.
Unfortunately, we were unable to agree on any issue of requiriug private empioyers to pay higher
City wages. Unions believe that higher City wages were the appropriate result of pay equity and
thought those wage and benefit scales should be imposed across the board to the private sector.
The major concern of City Unions was being embarrassed to losing competition because of
higher wages.
The ordinance approved by the City Council is flawed throughout. Beginning with its statement
of purpose, it is cleaz that this plan is intended to protect the parochial interests of city unions, not
the citizens I was elected to serve.
What this ordinance should be about is improving the city's ability to deliver services as
efficiently, productively and cost-effectively as possible by encouraging city employees to
compete with private vendors.
Instead, this ordinance deprives property tagpayers of potential savings of $20 million -
perhaps even greater savings - because of the fear of the Council to stand up to public
employee union leadership. This is an outrage of the sort that demands public notice.
The ordinance is flawed in several areas which I will outline below. I offered numerous changes
during our discussions with the unions that I believed would establish a competition program that
works while responding to city employees' greatest concern: job security.
Aowever, let me be clear about one thing. Saint Paul City employees are not to blame for
the inability of their union leadership to act responsibly, or for that matter, for the Council
to act responsibly.
Citv emulovees asked for job security - they were provided it Unfortunately their union
leadership rejected this commitment in an effort to maintain the status uo
The ordinance, as amended does not brovide iob security for citv employePs. If employees were
to lose a city service to the private sector, there would be no assurance of continued employment
with the City. Job security has been a key concem of city employees, yet the City Council has
chosen to ignore this concern.
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unportant where employee pians require substantial investment in technology or
capital equipment. Tluough the RFP process ciry employees would have another 45-
60 days to refine their business plan.
After reviewing the private sector bids and comparing them to the city employees'
business plan the Mayor could decide to implement the business pian or recommend
awud of a coniraet to a private bidder. Any decision to contract out the service
would ultimately require city council review and approval.
3) Prepare performance plans for all city services
The ordinance will require a11 citv services. whether rorovided by citv em l�ovees or
private contractors. to be subject to its requirements. Prior to issuing any RFP, this
ordivance will require City department heads to prepare and 'unplement a performance
plan on every single service that is currently being performed by outside contractors.
In other words, before any street plowing, library cataloging, architectural drawing, or any
other city service which is currently being done outside can remain outside, an advisory
boazd then the City Council would need to first review whether outside contracting is
appropriate. The city employees would haue to be given the opporiunity to do this work
under the terms of a performance plan for a minimum of two yeazs. Only then could a
decision be made to contract out the service. In the meantime, the work won't get done -
or it will cost even mare money as we wrestle with the nighhnaze of a bureaucracy thaY s
been created by this ordinance.
Under my�ro�osal there wouid be no requirement to force a two-veaz delav on services
we now contract out while departments develop and 'un�lement �erformance plans for
those services. No services we currendy contract out would be affected. Snow plowing,
street constxuction and library services would continue uninterrupted.
4) Hiring requirement on private employers
The ordinance will rec�uire private em�lovers to offer cit� emplovees available or new
jobs resultin� from wimiinga city contract. This represents another attempt to eliminate
any prospect of competition with the private sector. If winning a ciiy contract means the
private employer would be forced to hire city employees if there aze openings, that
employer will not bid for the service in the first place.
Under my�ro�osal there would be no hirin�requirements forprivate bidders because
there would be no need for such a requirement. No city employee would lose their job,
so hiring requirements would be meaningless. In the course of discussions with city
unions, however, I did support language that would invite private bidders to indicate
whether they would hire city employees whose posi6ons would be elnninated through a
managed competition contract. An employer's willingness to hire city employees could
be given substantial weight in evaluating competition proposals.
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S7 Wage and benefit requirement on private bidders
The ordinance will zequire grivate bidders to pav their employees the same wa e� and
benefits as cit�employees in compazable uositions. It will impose the city's civil service
system and wage scales on the private sector. Employers will be required to compaze
each of their j obs to specific city job titles - of which theze aze over 500 different titles
and classifications - to determine a pay rate for potentially each one of these 500 different
ritles and classifications. Such a requirement is fundamentaily unfair to the private sector,
especially given the reality that some city employees are paid 20-40% above their
counterparts in other public or private orgauizations. The requirement also will create a
bureaucratic nightmare for both private bidders and the city and will further ensure that
the private sector will be shut out of competition for city services.
Under my proposal nrivate contractors biddine for city services wouid be required to pav
at least a threshold wage to their employees. In discussions with the unions, I offered two
thresholds: one for workers with basic skills, experience, traiiung and educarion; another
for workers with more advanced skills, eta I also offered to established thresholds for
separate occupational groupings, such as clerical, technical, professional, supervisory,
building trades and others.
6) Contract length
The ordinance requires that a11 managed competition contracts with outside vendors be
limited to two-yeazs. This will prohibit the City from considering proposals for
operations where a longer timeline is desirable. Private employers will not bid on city
services that may require substantial capital investment if the time period far recovering
that investment is limited. Again, this is a provision intended to kill competition.
Under my pronosal no such time Innit would be piaced on contracts. I would allow
private bidders to propose the time frame that best meets their needs, or give them
options for bidding on varying time periods. Thus, we could accommodate short,
seasonal services as well as larger operations that would require a multi-year contract.
On behalf of S�int Paul property taxpayers, I reject this ordinance.
YVV'
Mayor
5u�sr�ru� q-2���9
Presented By
Refened To
Council File # 99 `(O/�
Ordinance #
Gteen Sheet # �!/ L � 3�
3 �{ /
Committee Date :
An administrative ordinance
to provide rules and procedures for
employee performance plans and
for managed competition contracts.
THE COUNCIL OF THE CITY OF SAINT PAUL DOES
Section 1
A new Chapter 85 is hereby enacted as part of
as foilows:
Section 85.01. Statement ofPurpose.
Paul Administrative Code to read
Managed competition is a process that nables ciry employees to achieve greater
efficiency and productivity in perfornvng v ous city services by competing with private
vendors for the delivery of those services. t is intended to facilitate city employee participation
in a process that wiil result in employee orxnulated performance plans to achieve gains in
productivity and efficiency. It may le to the negotiation of managed competition contracts
between the city and private contra ors. This ordinance is intended to set forth requirements and
procedures to be followed when ening a city service to the managed competition proposal
process.
Section 85.02.
(a) Board.
ro> B;
the managed
ORDINANCE
CITY OF SAINT PAUL, MINNESOTA
Saint Paul Board.
unit. A group of employees submitting a proposed performance plan under
ition program.
(c) cty department. Any department, board, commission, office, or division of the city
of Saint aul. �
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(d) City service. A function performed by employees of the city.
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(e) Finance director. The director of the office of fmancial services, and hislher successor
or designee.
(fl Managed competition requestfor proposal. A city proposai for the solicitation of
responsive proposals from private parties who seek the award of a contract for the provision of
city services, which awazd would be made after a process that compares (1) the performance
plans of city employees with (2) the responses of such private parties.
(g) Operating depar-tment. The city department in which the employees in a busine unit
have been requested to prepare or have prepared a performance plan, or have carried out ' whole
or in part such a performance plan, or whose city services may be contracted out to p� ate
parties.
(h) Performance plan. A pian, strategy or program by which city
perform or deliver city services.
(i) Purchasing director. The director of the division of com
the department of technology and management services, or his/her
Section 85.03. Compete Saint Paul Board.
seek to
analysis services in
ir or designee.
The Board is hereby created. Its membership shal e representative of a diverse range of
catizen viewpoints regarding the implementation and a inistrarion of the city's activities in
relation to managed competition. The Board shall c sist of seven (7) voting members, who
shall be appointed by the mayor and approved by e city council. Initially, three (3) members
shall be appointed for a term of three (3) years e h, two (2) members shall be appointed for a
term of two (2) years each, and two (2) memb s sha11 each be appoinfed for a term of one year.
Thereafter, the terms of inembers sha11 be f three (3) years and until their successors aze
appointed and approved.
Section 85.04. Board powers and
(a) Advice to mayor and ty council. The Board shall advise the mayor and city council
on matters relating to the sele on of city services for performance plans and managed
competition requests for pro osals, including but not limited to planning, promotion, training,
contract development and ontractor qualifications for such activities.
(b} Review of erformance plans and managed competition requests for proposals. All
performance plans d managed competition requests for proposals shali be submitted to the
Board for its revi and recommendations. No performance plan, managed competition request
far proposal, or roposal relating to such a plan shall be implemented without prior Board review
and consider on of 3ts recommendations. The Board shall review and make written
to the mayor and city council on all performance plans and managed
petit n requests for proposals. The Boazd may recommend changes in such plans or
�os s. The Board shall provide the finance director and purchasing director with an
� ity to make recommendations on such performance plans and managed competition
ests for proposals, and sha11 include those recommendations in their transmittal to the mayor
city council.
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(c) Initiation ofperformance plans. The Board may on its own initiative identify and �� �
recommend city services for incorporation in perFormance plans or in the managed competifion
request for proposal process, and shall submit its recommendations therefor in writing to the
mayor and city councii. Any proposals for performance plans or managed competition that result
from the Boazd initiative are subject to Boazd review and recommendation under subsection (b) �
above.
(d) Board staff. The Boazd shali be staffed by an employee of the mayor's office
employee of the city council's investigation and reseazch center. Such staff shall advise
Boazd on a monthly basis of activities related to the development of performance plan�t
managed competifion request for proposals. /�
(e) Board meetings. The Board shall meet at least �nen�y �ua
the discretion of the Boazd. Notice of the time, place and purpose of a
given as required by law.
(f) Board organization. The Boazd shall elect officers and
its business. ,
shall be
rules for the conduct of
(g) Delegation of powers. The Boazd may by rule pr ide for the delegation of one or
more Board duties, responsibilities and powers to the fin e director or the purchasing director
Such rules and amendments thereto are not effective consented to by the mayor or his or her
designee, and filed with the city clerk.
Section 85.05. Budget of the Board
The Board shall submit an annual
inclusion in the clty's budget, which proF
travel, training, per diem, postage, copy�'r
Section 85.06. Regultttions and
3dget proposal to the appropriate officials for
,a1 may contain, but is not be limited to, funds for
and supplies. This budget shall be included within the
for performance plans.
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34 (a) Znitiation and pre ration. Perforniance plans may be initiated by the head of the
35 operating department or b ness unit either on his or her own initiative, at the request of the
36 employees involved, ar i response to a suggestion by the Board. The affected employees and
37 their bargaining unit re esentatives shall be given a reasonable opportunity to participate fully in
38 the prepazation and ing of a performance plan, and shall be given training which can be used
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in such preparation d drafting. Such training shall include, but not be limited to, how to
measure and cost eir services, and methods by which such services may be more efficiently
delivered or pr uctivity increased. Except as otherwise provided by the Minnesota Public
Employees L or Relations Act ("PELRA"), the participation of the bargaining unit
representa ' es in the prepazation of the performance p1an sha11 be limited to a"meet and confer"
basis as fined in PELRA.
�(b) The�rst performance plan. The first performance plan sha11 be effective for a period
of o years, during which period of time and for 60 days after the expiration of such plan, no
p of the city services subject to such plan sha11 be contracted out pursuant to or resulting from
managed competition request for proposal.
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(c) Decision on whether to continue under a performance plan. The Board shall
3 recommend, at least 45 days before the ending date of a performance plan, to the mayor and city
4 council whether the business unit involved shall continue operating under the same or a revised
5 performance plan, or the city services involved shall be considered for competitive proposals
6 resulting from a managed competition request for proposals. The mayor and city council ma
7 continue with the same performance plan, provide for a revised performance plan, require at
8 either the same or a revised plan shall be compared with outside competitive bids, or t the ciry
9 services shall be performed by outside bidders. The decision on the foregoing 4 opf s shall be
10 made by the mayor and city council by resolution, which resolution sha11 be cons ered and acted
11 on by the council. Such resolution or resolutions shall be sponsored by the co cil president as a
12 courtesy in order to place it or them before the council, at the request of the ayor or any council
13 member. Such resolution may aiso decide, in addition to the said 4 optio , whether (1) the scope
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and content of the managed competition request for proposal is adequa ,, and (2) the affected
city services sha11 be performed under a perfornzance p1an or the 1ow st responsible bid received
pursuant to or resulting from the managed competition request for - roposal. If such resolution
does not decide the last two issues, those issues shall be decide y the mayor and the council in
one or more other resolutions as the case may be, which reso tions sha11 similarly be sponsored
by the council president in order to place them before the c cil.
(d) Term of subsequent performance plans. performance plan after the first one shall
continue for a period of two years, subject to conti ation or not as provided above.
(e) Internal competitive proposal. A pe ormance plan or any revision thereof which is
prepared far the purpose of, or will be reaso ly likely to be used for, competing with proposals
from private parties in response to a city aged competition request for proposal shall be
deemed to be an internal competitive pr osal for the purposes of Minnesota Statutes, Section
1337, relating to general nonpublic d a.
Section 85.07. Regulations and
managed competition request for proposals.
(a) Initiation andprep ration. Managed competition requests for proposals may be
initiated by the head of the erating department or business unit either on his or her own
initiative, at the request o he employees invoived, or in response to a suggestion by the Boazd.
36 (b) Two years ' ternal operation. The Board may review or make recommendations on a
37 managed competitio request for proposal at any time, but no acrion may be taken by the mayor
38 ar city council on ch proposal except as provided in Section 85.06 above.
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40 (c) Exis ence ofprivate providers. A managed competition request for proposal shall not
41 be considere y the Boazd, mayor or city council unless there aze at least three private parties or
42 entities whi currently provide the particular service or services in such proposal, or unless it
43 can be re onably foreseen that a request far proposals or bids will result in at least three
44 responsi e competitive proposals or bids for the service or services involved.
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46 (d) City must retain capacity to provide service. No city service shali be contracted out to
47 pri te parties in its entirety. The City shall retain in every case the provision of 25 percent of
48 ( the service or (2) the capacity to provide the service.
49 �
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(e) Outside contractors.
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business references, financial records and past contracts or
3 (i) Disqualifzcation. A private party responding to a managed competition request for
4 proposal, together with its supervisory employees while in the employ of said contractor, sha11
5 disqualified from bidding on or responding to such proposal, if such party or such employee
6 have a record of material or repeated noncompliance with any relevant federal or state re ator
7 statute including, but not lunited to, statutes conceming labor relations, occupational s�ty and
8 health, nondiscrunination and affirmarive action, environmental protection and conf�cts of
9 interest.
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11 (ii) Financial and background information. Each such private party , all submit, in its
12 response to a managed competition request far proposal, such financial background
13 information as the Boazd may recommend to allow the mayor and the c� council to make an
14 informed decision on the fmancial viability of the pariy and its abilityt#o carry out and deliver the
15 city services in question. Such information may include, but is not I�mted to, financial and
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(iii) Employment of city employees. Each such p�
employee positions, and any positions created as a result
are subject to layoff due to the elimination of positions b
who satisfy the hiring criteria of the contractor. �
(fl Specif:cations. Each managed co:
specifications and such other instructions to
clear advice to prospeative bidders on or res
pxoposal that the city is not obligated to ent�
reserves the right to continue with the sam
prepared thereafter by the employees inv v
also contain all of the contract requir nts
Section &5.08. Ethics
�l,`�-C��
of municipal services.
arty shall offer any available
contract, to city employees who
of the competition contract and
etiti request far proposal shall contain bid
�s ective bidders as may be necessary, including
ers to any managed competition request for
nto any managed competition contract, and
revised performance plan, whether in existence or
Each such managed competition coniract sha11
in 5ection 85.09.
Nothing in this chapter � intended to amend or modify or supersede the provisions of
Section 24.03(A) of the Saint aul Administrative Code. In addition thereto, no city employee
35 whose position in the city
36 shall be employed in any
37 competition request for�
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such an employee to influence the selection of a contractor,
by a private party submitting a bid in response to a managed
or have any other direct or indirect financialinterestin the
selection of a contract . Any city employee involved in preparing the request for a managed
competition request r proposal may not later submit a bid for or response to that same matter or
contract. The priv party responsible for the response to the management competition request
for proposals sh not have been an employee in the business unit or business units covered by
the said reques or proposals during the six-month period before the response was submitted by
the said priva pariy.
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Secfion 85.09. Contract requirements.
�t����y
The following provisions shall be contained in any competitive contract awarded to a
private entity chosen to deliver city services according to a managed competition request for
proposal:
(a) Specifzed minimum wage rates.
�s9zs: - - - - -
federal prevailing wage rate sha11 be vaid•
(b) Standards. Each managed competition
pexformance standazds that sha11 be met by the co�
(c) Contract length. No managed
years.
(d) Termination. Each such
in the event of failure to meet esta�
requirements. ,
Section 85.10. Cost savings
shall contain specified service and
contract shall be for a term longer than two
ed competition contract shall provide for termination
service standards or any other violation ofthe contract
U to one-half of t c�ost savings resulting from delivery of city services under
performance plans by ci employees may be used by the city for bonuses to the employees
perForming under the aged competition arrangement and to improve workplace conditions of
the operating dep nt. The city and bargaining units may negotiate amendments to existing
collective bargainii agreements if and as necessary to implement the intent of this section. No
distribution of co savings to an operating department shall be made imtil all the terms of the
performance pl or contract have been met.
Section 85.�1. Reports.
� city department that implements managed competirion through a contract or has a
e plan in place with city employees sha11 present an annual status report on the
ition of the program and the performance of the contractor or the city employees, as
to the city council.
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Secfion 8512. ColZective bmgaining; statutory provisions.
Nothing in this chapter shall abrogate or modify any rights or obligations (1) to bargain
collectively about any terms or conditions of employment, or (2) existing under the Minnesota
Public Employment Labor Relations Act. �
Section 2
This ordinance shali take effect and be in force thiriy (30) days aft�f'its passage, approval
and publicarion. �
Requested by Department of:
By:
Adopted by
Adoption C
Date
by Council Secretary
FoYm Appr v=d,by Cit Ab orney
BY:
�r -z� �g
Approved by Mayo for S ission to Council
By: ay:
Appxoved Mayor: Date
sy_
��S�T�Tf.�T� a-1-9a
ORDINANCE
OF SA71 jT PAUL, MINNESOTA
Pr�sent�a sy
Referred To
An administrative or�
to provide rules and pro
employee performance
for managed competitio�
THE COUNCIL OF THE CITY OF SAINT P
� for
and
����
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A new Chapter 85 is hereby
as follows:
Council File # ��
Ordinance #
Green Sheet
part of the Saint Paui Administrative Code to read
Section 85.01. Statement of Purpose.
Managed competition is a rocess that enables city employees to achieve greater
efficiency and productivity in p orming various city services by competing with private
vendors for the delivery of tho e services. It is intended to facilitate city employee participation
in a process that will result i employee-formulated performance plans to achieve gains in
productivity and efficiency It may lead to the negotiation of managed competition contracts
between the city and priv te contractors. This ordinance is intended to set forth requirements and
procedures to be follow d when opening a city service to the managed competition proposal
process.
Section 85.02. De nitions.
(a) Boa d The Compete Saint Paul Board.
(b) usiness unit. A group of employees submitting a proposed performance plan under
the man ed competition program.
(c) City department. Any depariment, board, commission, office, or division of the city
t Paul.
(d) City service. A function performed by employees of the city.
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1 (e) Finance director. The director of the office of fmancial services, and his/her successoz �(
2 or designee.
- 1.
4 ( fl Managed competition request for proposal. A city proposal for the solicitation of
5 responsive proposals from private parties who seek the award of a contract for the provision of
6 city services, which awatd would be made after a process that compares (1} the perform �e
7 plans of city employees with (2) the responses of such private parties.
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(g) Operating department. The city department in which the employees in a b siness unit
have been requested to prepaze or have prepared a performance plan, or haue carrie out in whole
or in part such a performance plan, or whose city services may be contracted out t private
parties.
(h) Performance plan. A plan, strategy or program by which city e loyees seek to
perform ar deliver city services.
(i) Purchasing director. The direct�r of the division of contr t and analysis services in
the department of technology and management services, or hislhe successor or designee.
Section 85.03. Compete Saint Paul Board.
The Board is hereby created. Its membership s be representative of a diverse range of
citizen viewpoints regarding the implementation and inistration of the city's activities in
relation to managed comperition. The Board shall nsist of seven (7) voting members, who
shall be appointed by the mayor and approved b the city council. Initially, three (3) members
shall be appointed for a term of three (3) year each, two (2) members sha11 be appointed for a
term of two (2) years each, and two (2) me f bers shall each be appointed far a term of one year.
Thereafter, the terms of inembers sha11 b for three (3) years and until their successors are
appointed and approved.
Section 85.04. Board powers and
(a) Advice to mayor and ty council. The Board shall advise the mayor and city council
on matters relating to the selec 'on of ciTy services for performance plans and managed
competition requests for prop sals, including but not limited to planning, promotion, training,
contract development and c tractor qualifications for such activities.
(b) Review of per rmance plans and managed competition requests for proposals. Ali
performance plans and anaged compefition requests for proposals shall be submitted to the
Board for its review d recommendations. No performance plan, managed competition request
for proposal, or pro sa1 relating to such a plan sha11 be implemented without prior Board review
and consideration f its recommendations. The Board shall review and make written
the mayor and city council on all performance plans and managed
competition re ests for proposals. The Board may recommend changes in such plans or
proposals. T Boazd shall provide the finance director and purchasing director with an
opportuni to make recommendations on such performance plans and managed competition
request�for proposals, and shall include those recommendations in their transmittal to the mayor
and city council.
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1 (c) Initiation ofperformance p7ans. The Board may on its own initiative identify and �q..(��{�
2 recommend city services for incorporation in performance plans or in the managed competition
3 request far proposal process, and shall submit ats recommendations therefar in cvriting to the
4 mayor and city councii. Any proposals for performance plans or managed competiuon that result
5 from the Board initiarive are subject to Boazd review and recommendation under subsection (b)
6 above. i
(d) Board staff. The Boazd shall be staffed by an employee of the mayor's pffice and an
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employee of the city council's investigation and research center. Such staff sha advise the
Boazd on a monthly basis of activities related to the development of perform ce plans or
managed competition request for proposals.
(e) Board meetings. The Board shall meet at least monthly. Noti e of the tnne, place and
purpose of a board meeting shall be given as required by law.
( fl Board organization. The Board shall elect officers and�nake rules for the conduct of
its business. /
(g) Delegation of powers. The Board may by rule ovide for the delegation of one or
more Board duties, responsibilities and powers to the fi ce director or the purchasing director
Such rules and amendments thereto are not effective u til consented to by the mayor ar his or her
designee, and filed with the city clerk.
Section 85.05. Budget of the Board.
The Board shall submit an annual b dget proposal to the appropriate officials for
inciusion in the city's budget, which pro sal may contain, but is not be limited to, funds for
travel, training, per diem, postage, cop mg and supplies.
Section 85.06. Regulations and prc�,a�` edures for performance plans.
(a) Initiation and prepar tion. Perfotmance plans may be initiated by the head of the
operating department or busin s unit either on his or her own initiative, at the request of the
employees involved, or in re onse to a suggestion by the Boazd. The affected employees and
their bar ainin unit re res ntatives shall be given a reasonable opportunity to participate fully in
the preparation and drafti g of a performance plan, and shall be given training which can be used
in such preparation and afting. Such training sha11 include, but not be lunited to, how to
measure and cost their ervices, and methods by which such services may be more efficiently
delivered or producti rty increased. Except as otherwise provided bv the Minnesota Public
(b) Th first performance plan. The first performance plan sha11 be effective for a period
of two yeaz during which period of time and for 60 days after the expiration of such plan, no
part of the ity services subject to such plan shall be contracted out pursuant to or resulting from
a manag�'d competition request for proposal.
i� �f
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(c) Decision on whether to continue under a performance plan. The Board shall qg �`�'�'�-
recommend, at least 45 days before the ending date of a performance plan, to the mayor and city
council whether the business unit invoived shall continue operating under the same or a revised
performance plan, or the city services involved shall be considered for competitive proposals
resulting 8om a managed competition request for proposals. The mayor and ciry council may
continue with the same perfonnauce plan, provide for a revised performazice p1an, require thax
either the same or a revised plan shall be compazed with outside competitive bids, or that city
services shall be performed by outside bidders. The decision on the foregoing 4 optio all be
made by the mayor and ciry council by resolurion, which resolution shall be consid d and acted
on by the council. Such resolurion or resolutions shail be sponsored by the coun ' president as a
courtesy in order to place it or them befare the council, at the request of the or or any council
member. Such resolution may also decide, in addition to the said 4 options, hether (1) the scope
and content of the managed competition request for proposal is adequate d(2) the affected
city services shall be performed under a performance plan or the lowes responsible bid received
pursuant to or resulting from the managed competition request for p posal. If such resolution
does not decide the last two issues, those issues shall be decided b the mayor and the council in
one or mare other resolutions as the case may be, which resolut ns shall similarly be sponsored
by the council president in order to place them before the co cil.
(d) Term of subsequent performance plans. Any rformance plan after the first one sha11
continue for a period of iwo years, subject to continua 'on or not as provided above.
(e) Internal competitive proposal. A perfo ance plan or any revision thereof which is
prepared for the purpose of, or will be reasonab likely to be used for, competing with proposals
from private parties in response to a city m ged competition request for proposal sha11 be
deemed to be an internal competitive grop a1 far the purposes of Minnesota Statutes, Section
13.37, relating to general nonpublic dat
Section 85.01. Regulations and
{a) Initiation and prep�
initiated by the head of the op�
initiative, at the request of the
(b) Two years i,
managed competition x
or city council on such
for managed competition request for proposals.
Managed competition requests for proposals may be
department or business unit either on his or her own
�ees involved, or in response to a suggestion by the Board.
operation. The Board may review or make recommendations on a
for proposal at any time, but no action may be taken by the mayor
a1 except as provided in Section 85.Q6 above.
(c) Existence private providers. A managed competition request for proposal shall not
be considered by th oatd, mayor ot city council unless there aze at teast three private parties or
entities which curr ntly provide the particular service or services in such proposal, or unless it
can be reasonabl foreseen that a request for proposals or bids wili result in at least three
responsible co etirive proposals or bids for the service or services involved.
(d) C must retain capacity to provide service. No city service shall be contracted out to
private p es in its entirety. The City shall retain in every case the provision of 25 percent of
(1) the se ice ar(2) the capacity to provide the service.
4 �� -� I
1 (e) Outside contractors.
3 (i) Disqual�cation. A private party responding to a managed competition request
4 proposal, together with its supervisory employees while in the empioy of said contractor,
5 disqualified from bidding on or responding to such proposal, if such parry or such em }
a�, �cg�.
be
6 have a recard of material or repeated noncompliance with any relevant federal or s e regulatory
7 statute including, but not lunited to, statutes concerning labor relations, occupati al safety and
8 health, nondiscriininarion and affirmarive action, environmental protection and onflicts of
4 interest.
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(ii) Financial and backgr-ound information. Each such private p shail submit, in its
response to a managed competition request for proposal, such financi and background
information as the Board may recommend to ailow the mayor and th city council to make an
informed decision on the financial viability of the party and its abi ' ta carry out and deliver the
city services in question. Such information may include, but is n limited to, financial and
business references, financial records and past contracts or del' ery of municipal services.
(iii) Employment of city employees. Each such
employee posirions, and any positions created as a resi
are subject to layoff due to the elimination of position;
who satisfy the hiring criteria of the contractar. �
( fl Specifzcations. Each managed cot
specifications and such other instrucrions to
clear advice to prospective bidders on or r
proposal that the city is not obligated to t
reserves the right to continue with the e
prepazed thereafter by the employees nvolv
also contain all of the contract req � ements
Section 85.08. Ethics
party shall offer any available
� contract, to city employees who
e of the competition contract and
request for proposal sha11 contain bid
ve bidders as may be necessary,including
ponders to any managed competition request for
er into any managed competition contract, and
or revised performance plan, whether in existence or
ed. Each such managed competition contract shall
in Secfion 85.09.
Nothing in this chapt r is intended to amend or modify or supersede the provisions of
Section 24.03(A) of the S' t Paul Administrative Code. In addition thereto, no city employee
whose position in the city enables such an employee to influence the selection of a contractor,
shall be employed in capacity by a private party submitting a bid in response to a managed
competition request f proposal, or have any other direct or indirect financial interest in the
selection of a contra or. Any city employee involved in preparing the request for a managed
competition reque for proposal may not later submit a bid for or response to that same matter or
contract. The pri te party responsible for the response to the management competition request
for proposals s 1 not have been an employee in the business unit or business units covered by
the said reque for proposals during the six-month period before the response was submitted by
the said prlv e party.
�,,%a
Section 85.09. Contract requirements.
The following provisions shail be contained in any competitive contract awarded to a
private entity chosen to deliver city services according to a managed competition request
proposal:
aa����.
(a) Specifzed minimum wage rates. All contractors and their subcontract s under a
managed competition contract shall pay at least step one of the comparable jo class, or if no
compazable job class e�sts, sha11 pay at least the federal prevailing wage r e for the occupation.
All contractors must also pay or provide benefits compazable to those o red to employees in the
city's personnei system.
(b) Standards. Each managed competition contract shall cg�itain specified service and
performance standards that shall be met by the contractor. �
(c) Conrract length. No managed competition
shall be for a term longer than two
years.
(d) Termination. Each such managed con
in the event of failure to meet established service
requirements.
contract shall provide for termination
is or any other violation of the contract
Section 8510. Cost savings distribution.
Cost savings resulting from delive of city services under performance plans by city
employees may be used by the city for nuses to the employees performing under the managed
competition arrangement and to impro e warkplace conditions of the operating department. The
city and bargaining units may negot te amendments to existing collective bargaining agreements
if and as necessary to implement intent of tkris section. I�TO distribution of cost savings to an
operating deparhnent shall be m e until all the terms of the performance plan or contract have
been met.
Section 85.11. Reports.
Any city dep nt that implements managed competition through a contract or has a
performance plan in pl e with city employees shall present an annual status report on the
implementation of th rogtam and the performance of the contractor or the city etnployees, as
appiicable, to the ci council.
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Section 85.12. Collective bargaining; statutory provisions.
Nothing in ttus chapter shall abrogate or modify any rights or obligations (1) to bazgain
collectively about any terms or conditions of employment, or (2) existing under the Minne$ota
Public Employment Labor Relations Act. f
Requested by nepartment of:
By:
Date
by Council Secretary
Adopted by
Adoption C
By:
Approved t�
BY _ _ _�
1q��.�
Ttus ordinance shall take effect and be in force thirty (30) days r its passage, approval
and publication.
Section 2
Fosm Approved by City Att ney
By: % "�� ( �
Approved by Mayor for Sub ssion to Council
BY:
Date
5 u b sf-�`f� ��t� ��q
Council File # / ( ` � � Y
Ordinance #
Green Sheet # (f/ � � 3 �
Presented By
L'.��� .�-.'�1�.7
Committee
a6
An administrative ordinance
to provide rules and procedures
employee performance plans a
for managed competition con�
THE COUNCIL OF THE CITY OF SAINT PAUL DOE� ORDAIN:
Section
A new Chapter 85 is hereby enacted as
as follows:
Section 85.01. Statement ofPurpose.
Managed competition is a
efficiency and productivity in per
vendors for the delivery of those :
in a process that will result in em�
productivity and efficiency. It ma
between the city and private con
procedures to be followed whe�
process. f
Section 85.02.
(a) Board The
(b) Business
the managed compe
tc) Czh'
of Saint Paul. i
ORDINANCE
CITY OF SAINT PAUL, MINNESOTA
of the Saint Paul Administrative Code to read
� at enables city empioyees to achieve greater
various city services by competing with private
s. It is intended to facilitate city employee particapation
-formulated performance plans to achieve gains in
to the negotiation of managed competition contracts
. This ordinance is intended to set forth requirements and
; a city service to the managed competition proposal
Saint Paul Board.
A group of employees submitting a proposed performance plan under
program.
Any deparhnent, board, commission, office, or division of the city
(d) City service. A function performed by employees of the city.
�,,�.��
(e) Finance directar. The director of the office of financial services, and hislher successor
or designee. G�Q— G�y
(fl Managed competition requestfor proposal. A city proposal for the solicitation of
responsive proposals from private parties who seek the award of a contract for the provision i
city services, which award would be made after a proces that compazes (1) the performanc
plaus of city employees with (2) the responses of such private parties.
9 (g) Operating department. The city department in which the employees � business unit
1� have been requested to prepare or have prepazed a performance p1an, or have c'ed out in whole
11 or in part such a performance plan, or whose city services may be contracted ut to private
12 parties.
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14 (h) Performance plan. A plan, strategy or program by which ' employees seek to
I S perform or deliver city services.
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(i) Purchasing director. The director of the division
the depariment of technology and management services, or
Section 85.03. Compete Saint Paut Board.
ract and analysis services in
successor or designee.
The Boazd is hereby created. Its membership 1 be representative of a diverse range of
citizen viewpoints regarding the implementation an administration of the city's activities in
relation to managed competition. The Board shal consist of seven (7) voring members, who
shall be appointed by the mayor and approved b the city counciL Inifially, three (3) members
sha11 be appointed for a term of three (3) years ach, two (2) members shall be appointed for a
term of two (2} yeazs each, and two (2) mem ers shall each be appointed for a term of one year.
Thereafter, the terms of inembers shall be f r three (3) years and until their successors are
appointed and approved.
Section 85.04. Board powers and
(a) Advice to mayor and
on matters relating to the selecti
competition requests for propo
contract development and co�
�council. The Board shall advise the mayor and city council
of city services far performance plans and managed
including but noE limited to planning, pxomotiQn, training,
>r qualifications for such activities.
(b) Review ofper rmance plans and managed competitian requests for proposals. All
perfonnauce plans and aged competition requests for proposals sha11 be submitted to the
Boazd for its revie d recommendations. No performance plan, managed competition request
for proposal, or proposal relating to such a plan shall be implemented without prior Board review
and consideration of its recommendations. The Board shall review and make written
recommendations to the mayor and city council on all performance plans and managed
competition requests for proposals. The Boazd may recommend changes in such plans or
proposals. The Board shall provide the finance director and purchasing director with an
opportunity to make recommendations on such performance pians and managed competition
requests for proposals, and shall include those recommendations in their transmittal to the mayor
and city council.
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1 (c) Initiation ofperformance pdans The Boazd may on its own initiative identify and q�' fO9
2 recommend city services for incorparation in performance plans or in the managed competition
3 request for proposal process, and shall submit its recommendations therefor in writing to the
4 mayor and city council. Any proposals for performance plans or managed competition t result
5 from the Boazd initiative aze subject to Board review and recommendation under su ection (b)
6 above.
8 (d) Board staff. The Board shail be staffed by an employee of the
9 employee of the ciTy counciPs investigation and research center. Suc t
10 Boazd on a monthly basis of activities related to the development o erfi
11 managed competition request for proposais.
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(e) &oard meetings. The Boazd shall meet at least
purpose of a boazd meeting sha11 be given as required by,
( fl Board organization. The Board shall
its business.
yor's office and an
shall advise the
iance plans or
Notice of the time, place and
and make rules for the conduct of
(g) Delegation of powers. The Board y by rule provide for the delegation of one or
mare Board duties, responsibilities and pow s to the finance directar or the purchasing director
Such rules and amendments thereto are no ffective until consented to by the mayor or his or her
designee, and filed with the city clerk.
24 Section 85.05. Budget of the Board.
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26 The Board shall submit ival budget proposal to the appropriate officials for
27 inclusion in the city's budget, w�ch proposal may contain, but is not be limited to, funds for
28 travel, training, per diem, pos ge, copying and supplies.
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Section 85.06. Regulation�and procedures for performance plans.
(a) Initiation a preparation. Performance plans may be initiated by the head of the
operating departmen or business unit either on his or her own initiative, at the request of the
employees involve , or in response to a suggestion by the Board. The affected employees shall
be given a reaso ble opportunity to participate fully in the preparation and drafting of a
performance an, and sha11 be given training which can be used in such prepazation and drafting.
Such trairi g shall include, but not be limited to, how to measure and cost their services, and
methods by which such services may be more efficiently delivered or productivity increased.
(b) The fzrstperformance plan. The first performance plan shall be effective for a period
of two years, during which period of time and for 60 days after the expiration of such plan, no
part of the city services subject to such plan shall be contracted out pursuant to or resulting from
a managed competition request for proposal.
(c) Decision on whether to continue under a performance plan. The Board shall
recommend, at least 45 days before the ending date of a performance plan, to the mayor and city
council whether the business unit involved sha11 continue operating under the same or a revised
performance pian, or the city services involved shall be considered for competitive proposals
resulting from a managed competition request for proposals. The mayor and city council may
�,���,�
3 �
1 c t 'th the rfo e 1 r v'de f r ' d rf 1 � th t� 9 ''� �
on mue wi same pe rmanc p an, p o i o a revise pe ormance p an, require a
2 either the same or a revised plan shall be compazed with outside competitive bids, or that the city
3 services shall be performed by outside bidders. The decision on the foregoing 4 options shall be
4 made by the mayor and city council by resolution, wluch resolution sha11 be considered and acted
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on by the council. Such resolution or resolutions shall be sponsored by the council president as a
courtesy in order to place it or them before the council, at the request of the mayor or aFr4 council
member. Such resolution may also decide, in addifion to the said 4 options, whethe i) the scope
and content of the managed competition request for proposal is adequate, and (2 e affected
city services shall be performed under a performance plan or the lowest resp sible bid received
10 pursuant to or resulting from the managed competition request for propos . If such resolution
11 does not decide the last two issues, those issues shall be decided by the ayor and the council in
12 one or more other resolutions as the case may be, which resolutions s all similazly be sponsored
13 by the council president in order to place them before the council.
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15 (d) Term of subsequent performance plans. Any perfo ance plan after the first one shall
16 continue for a period of two years, subject to continuation o ot as provided above.
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(e) Internal compezitive proposal. A performanc pian or any revision thereof which is
prepazed for the purpose of, or will be reasonably like to be used for, competing with proposals
from private parties in response to a city managed c petition request for proposal shall be
deemed to be an internal competitive proposal for e purposes of Minnesota Statutes, Section
13.37, relating to general nonpublic data.
Section 85.07. Regulations and
(a) Iniization and prepnration.
initiated by the head of the operating �
initiative, at the request of the emplo�
managed competition request for proposttls.
naged competition requests for proposals may be
stment or business unit either on his or her own
involved, or in response to a suggestion by the Board.
(b) Two years internal op ration. The Board may review or make recommendations on a
managed comperition request f proposal at any time, but no acfion may be taken by the mayor
or city council on such propo I except as provided in Section 85.06 above.
(c) Existence ofpr' ate providers. A managed competition request for proposal shall not
be considered by the Bo d, mayor or city council unless there aze at least three private parties or
entities which current provide the particulaz service or services in such proposal, or unless it
can be reasonably f eseen that a request for proposals or bids will result in at least three
responsible comp irive proposals or bids for the service ar services involved.
(d) Ciry must retttin capacity to provide service. No city service shall be contracted out to
private parties in its entirety. The City shali retain in every case the provision of 25 percent of
(1) the service or (2) the capacity to provide the service.
(e) Outside contractors.
(i) Disqual�cation. A private pariy responding to a managed competition request for
proposal, together with its supervisory employees while in the employ of said contractor, shall be
disqualified from bidding on or responding to such proposal, if such pariy or such employees
have a record of material or repeated noncompliance with any relevant federal or state regulatory
4 ���,��
1 statute including, but not limited to, statutes conceming labor relations, occupational safety and � _ G9�
2 health, nondiscrimination and affirmative action, environmental protection and conflicts of
3 interest.
4
5 (ii) Financial and background information. Each such private parry shall submit, in its
6 response to a managed competition request for proposal, such financial and background
7 information as the Board may recommend to allow the mayor and the city council to make an
8 informed decision on the financial viabiliry of the party and its ability to carry out an eliver the
9 city services in question. Such information may include, but is not lunited to, fm ial and
10 business references, financial records and past contracts or delivery of
11
12 (iii) Employment of city employees. Each such private party
13 employee positions, and any positions created as a result of the coni
14 aze subject to layoff due to the elimination of positions because of
1 S who sarisfy the hiring criteria of the contractor.
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services.
alj�ffer any available
� to city employees who
competition contraet and
( fl Specifications. Each managed competition reque for proposal shall contain bid
specifications and such other inshuctions to prospective dders as may be necessary, including
clear advice to prospective bidders on or responders to p managed competition request for
proposal that the city is not obligated to enter into managed competition contract, and
reserves the right to continue with the same or revi ed performance plan, whether in existence or
prepared thereafter by the employees invoived.
also contain all of the contract requirements in,
such managed competition contract shall
m 85.09.
Section 85.08. Ethics requirements.
Nothing in tlus chapter is intend to amend or modify or supersede the provisions of
Section 24.03(A) of the Saint Paul A �nistrative Code. In addition thereto, no city employee
whose position in the city enables s an employee to influence the selection of a contractor,
shall be employed in any capacity a private party submitting a bid in response to a managed
competition request for proposal r have any other direct or indirect financial interest in the
selection of a contractor. Any c' employee involved in preparing the request for a managed
competition request for propo al may not later submit a bid for or response to that same matter or
contract. The private party r sponsible for the response to the management competition request
for proposals shali not hau been an employee in the business unit or business units covered by
the said request for pzop sals during the six-month period before the response was submitted by
the said private party.
Section 85.09. Corffract requirements.
The following provisions shall be contained in any competitive contract awarded to a
private entity chosen to deliver city services according to a managed competition request for
proposal:
(a) Specifted minimum wage rates. All contractors under a managed competition contract
shall pay at least step one of the comparable job class, or if no comparable job class exists, shall
pay at least the federal prevailing wage rate for the occupation. All contractors must also pay
benefits comparable to those offered to employees in the city's personnel system.
(b) Standards. Each managed competition contract shall contain specified service and �
�g ��.
5
performance standards that shall be met by the contractor.
years.
(c} Contract length. No managed competition contract shall be for a term longer than iwo
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(d) Termination. Bach such managed competition contract shall provide for ' ation
in the event of failure to meet established service staudazds or any other violatio of the contract
requirements.
aq_�9`�
Section 85.10. Cost savings distribution.
Cost savings resulting from delivery of city services under erfortnance plans by city
employees may be used by the city for bonuses to the employee performing under the managed
competition anangement and to improve workplace conditio of the operating department. The
city and bargaining units may negotiate amendments to ex' ting collective bargaining agreements
if and as necessary to implement the intent of this sectio . No distribution of cost savings to an
operating department shali be made until all the terms f the performance plan or contract have
been met.
Section 85.11. Reports.
Any city department that implements anaged competition through a contract or has a
performance pian in place with city employe s shall present an annual status report on the
implementation of the program and the per ormance of the contractar or the city employees, as
applicable, to the city council.
Section 85.12. Collective bargaining; tatutory provisions.
Nothing in this chapter shall rogate or modify any rights ar obligations (1) to bazgain
collectively about any terms or co 'tions of employment, or (2) existing under the Minnesota
Public Employment Labor Relati ns Act.
Section 2
This ordinance shal take effect and be in force thirry (30) days after its passage, approval
and publication.
Requested by Department of:
Adopted by Council: Date
Adoption Certified by Council Secretary
By:
Approved by Mayor: Date
By:
Form Appsoved by City At rney
B Y= � ��l'" �/ /
Approved by May r for Submission to Council
By:
sy:
OFFICE OF THE CITY ATTORNEY
Claytnn M. Robinsoq Jr., Ciry Attomey �� �
l
CITY OF SA1NT PAUL
Norm Coleman, Mayos
civrt Divis;on
4D0 City Hall
FS West KeIlogg BHd
Saint Paul, Mrnnesora SSIO2
Te7ephone: 651266-8710
Foccin:ile: 651298-56I9
3uly 14, 1499
Fred Owusu, Director
Office of Citizen Services
City Clerk
170 City Hall
Re: Attached Ordinance
Dear Mr. Owusu:
The Office of the City Attorney is at this time unable to approve the attached proposed ordinance
as to form as required by Secrion 3.02(3) ofthe St. Paul Administrative Code. The process of
conducting the legal reseazch and analysis necessary to form a conclusion as to the legal
sufficiency of the ordinance has been underway and wili require addifional work by this office.
This statement of reasons is made and will be filed with the city clerk in order to permit the
introduction of the ordinance without form approval under said Section 3.02(3).
Very huly yours,
. _ �•
Philip B. B e
Deputy City Attomey
Council File # �l�Cvq l�
Green Sheet # �_
�
Presented by
Ciry Service. A
Referred To
AN ORDINANCE ESTABLISHING CHAPTER _ ENTITLED "MAI�IAGED C014�PETITIOl�i" OF
THE SAINT PAUL ADMINISTRATIVE CODE TO PROVIDE A�'RAMEWOR� BY WHICH THE
CITY OF SAINT PAI3L CAN ENTER INTO CONTRACTS WITH
EXISTING CIT'Y EMPLOYEES AND OUTSIDE ENTITIES, TO P]
CURRENTLY PERFORMED BY CI1'Y EMPL(
THE COUNCII. OF THE CITY OF 5AINT PAUL DOES
Section I.
Chapter_ Managed
�
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.Ol Statement of Purpose.
6 arrangement.
7 .02 Defmitions.
8 Business Unit. A group of
9 City Department. Any d,�p
Committee
2S, INCLUDING
CITY SERVICES
2 The requirements and procedwes in this ordi ce shali be followed when opening a city service to
3 managed competition through the request f, proposals (RFP) or bidding process. Managed competi6on
4 is a process in which city employees currently pedornung a service that has been selected for potential
5 outside contracting may submit a bid or,rproposai to provide that service through a managed competition
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� IS
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Managed
compete �
ORDINANCE
CITY OF SAINT PAUL, MINNESOTA
submitting a bid under managed competition.
boazd, commission, office, ot division of the city of Saint Paul.
performed by employees of the city.
�. A process by wluch a city department authorizes employees of the department to
businesses or firms for a managed competition contract.
�. A set of requirements transmitted from a buyer to a seller in any kind of purchasing
A specificarion may take the form of a request for proposals (RFP) or a bid specification.
.03
Saint Paul Bosrd created.
is hereby created a Compete 5aint Paul Boazd (hereinafter referred to as the "boazd") whose
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purpose shall be to represent a diverse rauge of citizen viewpoints regazding the implementation and
administrarion of the city's competitive bidding activities. The board shall consist of thirteen 3) voting
members, seven of whom aze appointed by the mayor and six of whom are appointed by the ouncil.
Initially, four (4) members sha11 be appointed for a term of three (3) years, three (3) mem s shall be
appointed for a term of two (2) years and four (4) members shall be appointed for a te of one yeaz.
Thereafter, ffie terms of commission members shall be for three (3) years and until th successors aze
appointed. �
.04 Compete Saint Paul Board powers and duties.
The board shall serve as an advisory body to the mayor and city council o matters relating to the
competitive bidding of city services. It sha11 oversee the planning, pro tion, training, contract
development and contract qualifications for the competitive bidding a�vities of the city. The board shali
also review and comment upon all proposals for competitive biddin and shall recommend for city council
approval the selection of any competitive bid to perform a city se ice or function. All such
recommendations transmitted to the council shall contain the re mmendations of the director of fmancial
services and the head of purchasing division of the departme of management and technological services.
The board sha11 be kept informed by the mayor's office of competitive bidding initiatives of all city
departments and agencies. The board sha11 meet at least �onthly and notice of the time, place and
purpose of a board meeting shall be published once in t�``e official newspaper of the city at least ten (10)
days before the day of the meeting. An outline of the roposal shall be transmitted to the mayor and city
council at the time the request is made for a notice a�the public hearing.
To dischazge its duties and responsibilities, the � oazd sha11 have the power to elect its own officers and
make its own rules for the conduct of its busi ss. Such rules may provide for the delegarion of boazd
duties, responsibilities and powers to the di ctor of financial services and head of the purchasing division
of the department of management and tec ological services or such employees under their direction as
they designate, in accordance with, and bject, to law. Such rules and amendments thereto aze not
effective until filed with the city cier e board shall also be staffed by an employee of the mayor's
office and city council reseazch. �
.OS Compete Saint Paui
45 For the operations of the
46 training, per diem, posta,
47 appropriate officials for�
48 .06 Selection of citv�e�
including staff salaries and other related expenses, such as travel,
ying and supplies, an annual proposed budget shall be submitted to the
�n in the city's budget.
for managed competition.
49 The Boazd shall ve responsibility for identifying and selecting services for managed competition. In
50 order for a serv' e to be selected, the following criteria shall be met:
51 (1) The bus' ess unit providing the city service shail be given a period of not less than one yeaz prior to
� 2 making request for proposals or bids to nnprove opera6ons and reduce costs for the services covered
3 by the tential competitive contract. The business unit shall be prov3ded the resources, which shall be
54 derived from the administration's budget, to hire a consultant if desired. If such measures are found to be
�-���
� 55 unsuccessful by the Boazd, the Board shall recommend to the city council and mayor that the service be
6 opened for managed competirion. Upon approval by the city council and mayor, the business unit and its
57 respective deparhnent or office must be notified by the Boazd at least ninety days in advance of the
58 pending managed comgetition process.
59 (2) The Boazd must establish that at least three private entities exist which provide the servic to be
60 competitively contracted for or at least three competitive bids for the service have been m e by private
61 entifies to the city. If three such private entities do not exist, the Boazd shail demonstra that a request
62 for proposals or bids will result in at least three competitive proposals or bids for the �SC;rvice.
63 (3) The Compete Saint Paul Boazd may recommend that up to 75 percent of the �eivice may be bid out
64 under managed competition. �
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65 When a city service has been selected for managed competition, an outlin�of the specification for
66 managed competition shall be submitted by the Boazd to the city counci�and the mayor far approval.
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.07 Specification for managed competition.
The ouUine of the specification for managed competition prese ed to the Mayor and City Council by the
Boazd must contain:
(1) Griteria to be used by the city to evaluate proposals i�X1ie RFP process is used;
(2) Clearly specified quantity and quality standazds t�contractor must achieve to maintain the contract;
(3) Specified minimum wage rates. All contracto�s with a managed competition contract shall pay at
least step one of the comparable job class, or if �o comparable job class exists, sha11 pay at least the
federal prevailing wage rate for the occupatiot�� All contractors must also pay benefits compazable to
those offered to compazable employees in tl�e'�ciry's personnel system.
76 (4) A provision requiring the contractor t� offer available employee positions pursuant to the contract to
77 qualified classified city employees of e department whose position is eliminated because of the
78 competition contract and who satis e hiring qualifications of the contractor;
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(5) A schedule indicating the
(6) The length of the
If the outline is not
comments from the
If the outlined s�
division for fuli
.08 Rules for
of the RFP process and the conversion process;
to exceed two yeazs.
by the mayor and city councit, it shall be returned to the Board with
;,il andlor mayor explaining the reasons for the rejection.
is approved by the mayor and city council, it shall be sent to the Purchasing
and publication.
or bid specification.
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All potenrial contractors shall submit a seated proposal before the advertised deadline for such proposals;
(1) Such proposals or bids may not be altered after such deadline;
(2) Proposals or bids shall be submitted to the purchasing division and the division shall
such proposals and make the contents of the proposals public at such deadline.
.09 Non-City-Employee Contractor Qualifications and Requirements.
Certain conditions and qualifications must be met in order for a non-city
eligible to submit a successful proposal or bid;
open
to be
94 (1) The contractor responsible for the bid may not have been a city employee for the six months prior to
45 the bid submission deadline. j��
96 (2) No city employee whose position in the city enables such an e�' loyee to influence the selection of a
97 contractor, and no spouse or economic dependent of such emplo ee, shall be employed in any capacity by
98 a proposer or have any other direct or indirect financial intere�'in the selection of a contractor.
99 (3} Anyone involved in preparing the request for bids or �oposals may not submit a proposal or bid for
100 that same contract. //
� 1 (4) The contractor and its supervisory employees, �hile in the empioy of said contractor, have no
2 adjudicated record of substantial or repeated wilfu�noncompliance with any relevant federal or state
103 regulatory statute including, but not limited to„�tatutes concerning labor relations, occupational safely
104 and health, nondiscrimination and affirmativ�ction, environmental protection and conflicts of interest.
105 (5) The name of any subcontractor, subc�i4sultant or supplier whose shaze of the contract exceeds Fifiy
106 Thousand Dollars ($50,000.00) of the q�(intract amount.
107 (6) The names of any unions with �fiich the contractor has a collective bazgaining agreement.
/
1Q8 (7) The contractor shail provide ` ee relevant business references.
1�9 (8) The contractor shall sub�a t financial records indicating financiai viability.
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(9) The contractor sha11 eet a11 other applicable requirements in the Saint Paul Administrative Code
Chapter 82. Purchasi Procedures; Public Contracts, and Chapter 86. Signing of Contracts, Deeds,
Bonds, and Checks.
.10 City role i ssisting city employees in submitting a bid.
If employee of the departrnent soliciting competitive bids or proposals inform the departmettt head of
their desi to submit a bid for the sole purpose of providing the services that aze the subject of the
request or bids, the administration shall provide the business unit or units with comgrehensive training
for the bidding process. The admuustration and city council shall assemble a team comprised of
0
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, j� 8 managers, knowledgeable employees, representatives of exclusive representative of the affected
bargaining unit(s), and any consultauts approved by the Board to assist the business unit or units in
120 preparing the bid. �
121 11 Coniract Requirements. The following provisions shall be contained in any mperifive contract:
122 (1) Provisions requiring the contractor to comply with a policy ofnondisc ' ation and equal
123 opportunity for all persons as provided by Saint Paul Legislative Code, C�t�er 183. Human Rights.
124
125 (2) Specified m;n;mum wage rates. A11 contractors with a managed catnpetition contract shall pay at
126 least step one of the comparable job class, or if no comparable job class e�sts, sha11 pay at ieast the
127 federal prevailing wage rate for the occupation. All contractors m�t also pay benefits compazable to
128 those offered to employees in the city's personnel system. s �
129 (3} A description of the manner in wluch the contractor wilLaneet the provisions requiring the contractor
130 to offer available employee positions pursuant to the contra to qualified classified city employees of the
131 depariment whose employment is terminated because o� the competition contract and who satisfy the
132 hiring criteria of the contractor. q '`
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(4) A provision requiring the contractor to su
name, address, social security number, hours
previous quarter.
(5) A description of the total contract
(6) A statement of the length of the
.12 Awarding the contract.
�rterly payroll records to the department, listing the
and the hourly wage paid for each employee in the
down by activity.
not to exceed the two-year limit.
The Purchasing Division will �rtify in writing to the city council and mayor for their approval that the
quality of the services to be p"iovided by the designated bidder is likely to satisfy the quality requirements
of the statement prepared p�,txr"" suant to the secrion of this chapter titled "Statement of services grogosed
for managed competition� and to equal or exceed the quality of services which could be provided by
regulaz agency employe�`"s pursixant to the estimate of the costs of city employees in the relevant business
unit providing the sut�ect services, including, but not limited pension, insurance and other employee
benefit costs. � `
The certification include a cost savings calculation. The cost savings must be calculated by
subuacting av �dable costs from the total contract cost. Avaidable costs include, but aze not limited to
the cost o£ p curement, contract negotiation and awazd, processing, and contract monitoring and
evaluation. e total contract cost includes the contractor cost, administration cost, conversion cost and
inclusion f a calculation of the loss of any new revenue the in-house service would have generated.
The c tract award may not be made unless the foilowing conditions have been met:
(1 e business unit or private bidders or proposers received no advantage over other the bidders or
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158
proposers;
(2) The evaluation process was objective and fair;
(3) All requirements governing proposals or bids by business units of the
(4) the mayor and city council must approve by resolution all competifive
Ail parties are bound by the same terms, conditions, financial penalties
.13 Contract termina4ion.
standards.
met;
159 The managed competirion contract may be ternunated by the city� any time for failure to meet
160 established quality and quantity standazds or violation of any of khe contract requirements.
161 If the contract is awarded to city employees, and if during a�ry financial quarter during the term of the
162 contract the cost of the business unit attributable to the se `ice provided pursuant to any request for
163 proposals or bids exceeds the contract price for the perio�d such service, the city department shall
164 issue a new request for proposals or bids for such se ��e wrthin one hundred twenty (120) days after the
165 end of such fmancial quarter. ,
166
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.14 Cost savings distribution if the contract
Cost savings resulting from contracting
city department as follows:
to city employees.
employees to provide services shall be utilized by the
170 (1) Any cost savings gained by a city �epartment from successfully fulfilling the terms of a contract with
171 a business unit may be retained by su�h department.
172 (2) Up to one-half of the savings�nay be distributed as bonuses to the employees in the business unit that
173 performed the services under the contract through an employee bonus award plan established by the city
174 department and approved by t�e mayor and council, except that no bonus awazded to an employee may
175 exceed an amount equal to bwo times that employee's annual salary.
176 (3) Up to one-half of such amount may be retained and expended by the city deparhnent to improve the
177 workplace conditions the employees in the business unit that performed the services under contract.
178 (4) No distributi " of cost savings to a business unit may be made until all the terms of the contract have
179 been compieted�
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181
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(S) Any di bution of cost savings to a business unit shall be made as a lump sum payment to such
business 't.
.15 ntract Administration.
e city department head, with the assistance of the Boazd, sha11 be responsible for implementing
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competition in that department and for monitoring a service contract entered into by the deparlment
under competition.
Any city department that implements compefition for a contract shall present an annual status report on
such implementation on or before January 1 of each year to the city council. �1
.16 Applicability of other laws.
(1) Nothing in tlus ordinance shall abrogate the obligation or rights of any
any terms or conditions of employment as provided for in any other ordins
191 (2) Nothing in this ordinance shall be construed to require compe
192 Chapter 82. Purchasing Procedtues; Public Contracts and Chapter
193 Bonds Checks of the Saint Paul Administrative Code.
194
195
Section II.
11us ordinance shall take effect and be in force thirty (30)
�✓to collectively bazgain
or other law.
all contracts authorized by
mg of Contracts, Deeds,
after its passage, approval and publication.
by Deparknent oE
�J
Ben anav
Blak
Bostrom
Colem
Harris
Lan try
Reiter
Adopted by Council:
Date
Adoption Certified by
B : ,P
Approved by M� or:
Date
B:
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Fomi Approved by City Attomey
$TA'►fbW,tl D' d f 2CRSOtLS Qll aSlf NA! 1 7U
sv: SecnM 3.v213) � Qd �i,Qt W�, �C'� l�i✓�-
Secretary
Approved by Mayor for Submission to Council
,
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CTI'Y OF SAINT PAUL 390 Ciry Ha[I Teleplwne: 651-266-8510
NormColemarz,Mayor ISWestKeiloggBoulevard Facsimite:651-266-8513
Sairst Paul, MN 55102
August 25, 1999
Council President Dan Bostrom and Members of the City Council
310 City Hall
Saint Paul, MN 55102
Dear Council President Bostrom and Members of the City Council:
In order for Saint Paul to continue to deliver high-quality City services for taxpayers, we must
inject competition irrto City government.
Competition doesn't save money by itself. The result of competition does.
Sun Country Airlines is saving travelers money today because it was willing to offer competition
to Northwest Airlines.
Nobody would expect Sun Country Airlines to wait two years to a11ow Northwest Airlines to
figure out if it wants to be competitive or not.
Yet, that is what the Saint Paul City Counci] and Saint Paul City Employee labor unions want
SainY Paul ta�cpayers to do.
W ait.
For two years.
Two years before there is competition.
Two years before tazpayers can see any savings in City government.
'I�vo years before taapayers can have any hope of seeing savings in City govemment
returned to them.
If we began to inject competition in City services today, we could begin seeing millions of dollars
of savings in short order.
�
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Council President Dan Bostrom and Members of the City CouncIl Q�'� `�
Page 2
August 25, 1999
Based upon the egperiences of other cities, we could see savings in our City's Water Utility
of between three and nine million dollars. In our fleet operations, we could see one million
dollars in savings.
Just in those two departments we could see savings of four to ten million dollars — and if we
saved just five percent on our entire City budget because of competition, we would save $20
million for Saint Paul taapayers.
And, a five percent savings is conservative. Other communities are saving 10%-15% and
even more.
The "Compete Saint Paul" initiative which I proposed several months ago remains one of the top
priorities of this Administration.
I firmly believe that we must aggressively pursue the opportunity to improve the delivery of City
services through competition. And, if competition succeeds in providing us cost savings, that
those savings should be returned to Saint Paul taa�payers.
Competition has worked in other cities across the country. In Charlotte, North Cazolina, where
the program was implemented in 1991, 34 services have been put out for bid in the past three
years. Twenty-four of those have been awarded to City workers. Some of the savings realized
there were $2.5 million over five years in residential garbage, trash, and recycling collection;
$180,000 annually in specialized transportation services; and $62,000 over a three-year contract
to read a quarter of the residential water meters.
In Phoenix, nearly 80 services have been subjected to the competitive bidding process, and nearly
half of the awards went to City workers. Savings there have exceeded $30 million.
In Indianapolis, 80 services haue been bid out since 1992 and the result has been two property taac
reductions and $419 million in actual and contractual savings. City employees have won
two-thirds of the awards involving unionized workers, and customer satisfaction is up.
Competition should not result in a reduction in the delivery or the quality of services. In
fact, I am fully prepared to work with labor to ensure that the same demands we have for
services delivered currenUy by City government are a condition of any RFP that is issued
for a competitive bid.
It is clear that Saint Paul City government must reform itself. We must change the way we
do business. We must be prepared to compete with others in the private and public sector.
Studies show Saint Paul employee salaries are consistently far above average. For instance,
mechanics who repair City cars are paid 41% more than mechanics who do the same work for
other cities.
Council President Dan Bostrom and Members of the City Council "{ "I '�� �
Page 3
August 25, 1999
Clerical employees at City Hall are paid nearly 38% more than clerical employees at the State
Capitol.
The average Saint Paul City worker is paid 20% more than the average for all employees in
the State of Minnesota.
I want to make the position of this Administration perfectly clear. We aze prepared to sit down
with labor leaders to address issues of concem to both labor and management. However, those
discussions must be frank and honest and cannot be conditioned upon what either party will or
will not support before they are prepazed to sit down and reason together.
I recenUy offered to meet with the head of the Saint Paul Trades and Labor Assembly.
This offer was rejected.
The counter to my offer was to sit down with 15 heads of different labor unions representing City
employees. While this may seem like a reasonable request, I do not believe it is lost on anyone
that the first step to a process of discussion is for the head of labor and management to sit down
and have a conversation.
I have met with all the union leadership. These kinds of ineetings do not produce the
one-to-one dialogue needed to resolve concerns and move this process forward.
This offer remains open. If the head of the Saint Paul Trades and Labor Assembly is
prepared to meet, I will be prepared to meet to discuss what I hope are our mutual interests
and concerns about protecting the rights of City employees and Saint Paul taxpayers.
If the goal of labor and the City Council is to kill competition, the Benanav ordinance before the
City Council accomplishes that goal.
If it is the goal of labor and the City Council to take away the tools of management from this
Administration through the passage of the Benanav ordinance, it is clear we have only two
options.
We can cut City services and raise property taxes on homeowners and small business — or
we can lay off City employees in order to balance our budget.
I will not raise property taxes on homeowners and small businesses.
Fundamentally, there are many items in the ordinance that this Administration is prepazed to
support. However, there are several conditions that, pure and simple, will destroy our ability to
effectively manage the operations of City government and provide millions of dollars of savings to
Saint Paui taxpayers.
Council President Dan Bostrom and Members of the City Council ��! "�� f
Page 4
August 25, 1999
Here aze my concerns about provisions in the ordinance that I believe kill comperition, and disable
our efforts to save taxpayers millions of dollars:
The requirement that a"Performance Plan" be implemented for a period of two years before
any competitive bid could be released outright stops competition. We don't have two years.
There cannot be any competition if we ue not engaged to compete with those outside of
City government. This "Performance Plan" concept has City employees competing with the
status qno — not with similar bodies in the public and private sector.
A mandaYe that outside contractors would have to hire qualified City employees who would
be displaced by contracting out a service. Clearly, it is my belief that any organization
would want to hire qualified employees to deliver services to its clients. However, if a
particular contractor does not need additional workers, it would be folly to require this of
them. There are many ways that can be explored to protect displaced workers
A requirement that all outside contractors performing City services pay their employees the
same or comparable wages and benefits as paid to City employees. Obviously, we support
paying employees a fair and competitive wage for quality services. However, where our
wages aze unreasonably higher to begin with, this is a requirement that is simply designed to
kill competition.
It would restrict the length of any outside contracts to two years, which would greatly
diminish the possibility of achieving significant savings. Many contracts are more
competitive and cost-effective based on the years of delivery of that service. I would
certainly support stringent quality control guidelines to address any quality service delivery
issues during the length of term of any outside contract.
It would require that any sauings resulting from competition be given only to City
employees and the departments they work for, not the tazpaying public who pays for the
services in the Srst place. Our taxpayers expect that any savings they receive from
competition be returned to them. If those savings can be invested in areas that aze critical to
the safety, quality, and affordability of our City, I will support those efforts. However, our
first goal should be to return to taafpayers any savings that aze realized as a result of cost
savings achieved through competition.
These requirements go too faz and sway the balance of interests in favor of public employee
unions without regard to the rights of taxpayers.
As I stated in the beginning of this letter. I am prepared to sit down with the head of the
Saint Paul Trades and Labor Assembly at any time. In fact, the sooner the better.
I azn prepared to sit down with the Council to discuss this ordinance and how it can be drafted in
a way that addresses concems about job security, management of outside contracts, and other
issues.
Council President Dan Bostrom and Members of the City Council
Page 5
August 25, 1999
However, this ordinance, if it passes in its current form, cannot be supported by this
Administrarion. Any future Administration will be unduly restrained by the requirements in this
ordinance which defeat any ability to achieve millions of dollars of cost savings for taxpayers.
Any future Administration will be prohibited from exploring in a timely fashion the ability to
deliver high quatity services to taspayers at a cost that taxpayers are willing to support.
This ordinance does not provide structure; it provides barriers to competition and savings for
Saint Paul taxpayers.
Let's work together to achieve the goals that I believe taxpayers want to see achieved. They
want real savings in City govemment. They want solid delivery of quality services for the taac
dollars we collect. And, they want to see competition be given a chance in City government.
Sun Country Airlines didn't wait for two years before it began offering savings to consumers.
Saint Paul City government shouldn't wait two years before it begins offering savings to its
taxpayers.
cerely,
1ZL---, l.�'1��it--
Norm Coleman
Mayor
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