Borough tightens up regs: Sole source contracts over $20,000 will need Assembly resolution

Posted: Thursday, February 04, 2010

The Kenai Peninsula Borough Assembly stiffened regulations surrounding sole source contracts, which are awarded without a competitive bidding process.

Borough code allows the borough to administer contracts without holding an open bid, but an ordinance passed unanimously at Tuesday's assembly meeting now requires almost every sole source contract exceeding $20,000 to first be approved by the assembly through a resolution. Exceptions can be made in emergency instances.

Assembly President Pete Sprague, who introduced the ordinance, said the change was needed, especially after a paperwork error involving a sole source contract for $18,000 between the borough and the mayor's chief of staff brought the issue of transparency into public discussion.

"I wanted to tighten the restrictions," Sprague said Wednesday. "This does make the process more cumbersome, but we're talking about public dollars and the public should have the chance to weigh in."

Borough code allows for a contract to be awarded without a bidding competition when the purchasing officer or department head reasonably limit the deal to a sole source. Such a circumstance could arise when only one business specializes in manufacturing the desired piece of equipment or in providing the desired service. Code also permits a sole source contract when compatibility is an issue. For instance, the borough would not buy an Apple computer when the rest of a building's system operates on Microsoft.

Even before Tuesday's decision, the borough ordinarily requires competitive bidding for contracts exceeding $15,000, but exceptions can be made. The less expensive the project, the less stringent the bidding requirements tend to be.

Kalifornsky Assemblyman Gary Knopp, whose company, G and H Construction, has done $194,325.25 in business with the borough since 2006, said he had some concerns with Sprague's ordinance.

"I can see some problems with it. In some cases there is just no good reason to go to the public process," Knopp said. "My concern is that we will spend a lot of dollars going out to the public process when we only have one bidder."

In other business Tuesday, the assembly postponed a decision to transfer 10 acres of land to Soldotna to be used to develop a city cemetery. The borough assessed the land at $413,800, but the assembly is considering selling the land to Soldotna for $55,000.

The assembly will have to decide if the public benefit of a Soldotna cemetery warrants giving such a bargain to Soldotna.

"We're simply asking the borough to partner with us to provide a small share of land," Soldotna Mayor Peter Micciche said. "There are families that have waited a long time to be buried in Soldotna. They don't have an option to be buried at home. We are asking for your help to make that a reality." Soldotna will bear the costs of developing and maintaining the facility.

The issue has spurred something of a philosophical debate regarding how the assembly should spend the borough's money. One side expressed resistance to spending money that will not benefit a significant portion of the borough at once. The other side subscribes to the notion that if one child needs a new pair of shoes, there is no reason to put off buying the shoes until the child's brother and sister also have worn-out sneakers.

Mako Haggerty, South Peninsula assemblyman, proposed an amendment that would have offered to sell the land to Soldotna for $1, but the amendment failed.

"It's up to the borough to work with cities to provide the lands that they need for their communities and to assist with the transfer of lands for a clear public purpose," Haggerty said. "This is the right thing to do for not just the city of Soldotna but for the borough."

On the other side, Knopp expressed hesitancy toward striking a bargain with one faction of the borough constituency, saying it fails to benefit the entire peninsula.

"Is it the right thing to do?" Knopp asked. "We're charged with doing what's in the public's best interest. Giving this parcel at $1 is not in the best interest of the public."

Assemblyman Bill Smith, Homer, said the borough should spend money when it stands to help the public, even if it only benefits a portion of the public. Eventually, Smith suggested, most constituents will benefit from a project if the borough is willing to continually offer appropriate financial assistance.

"It's not a city hall or neighborhood park, it's building a cemetery. It's a facility that will be there hopefully for 200 to 300 years," Smith said. "We can do things for specific areas where it makes sense."

The assembly is scheduled to hold another public hearing on the cemetery matter at the Feb. 16 meeting.

Andrew Waite can be reached at

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