G-1049 - 05/26/2015 - CONTRACT - Ordinances Supporting Documents ITEM 6.D.10
PGA
OF 0Ake9
v , 0
v 0
G f Q
AGENDA ITEM
Regular Board of Trustees Meeting
of
May 26, 2015
SUBJECT: Construction Contract Bond Amount Increase
FROM: Rania Serences, Senior Purchasing Assistant
BUDGET SOURCE/BUDGET IMPACT: NA
RECOMMENDED MOTIONS: I move that the Village Board approve Ordinance 2025-
CNSTRCT-BND-G-1049, An Ordinance Amending Section 4, of Chapter 7, of Titlel
(Administration) of the Village Code of the Village of Oak Brook Relating to Construction
Contract Bonds that allows the necessary revisions to the Village's Code to raise the
construction contract bond requirement to$20,000.00.
Background/History:
Currently the Village Code states that payment and performance bonds are required for public
works projects that cost $5,000,00 or more. This provision discourages contractors from bidding
on small projects and increases the costs of these projects. Staff is recommending amending the
code requirement of payment and performance bonds from contractors for projects that cost
$20,000.00 and over. This will result in cost savings and greater contractor interest in small
projects. Also, the Village code will still be more stringent than the Illinois Public Construction
Bond Act, which requires payment and performance bonds from contractors for public works
projects costing over $50,000.00. The section of the Village Ordinance to be amended is Section
1-7-4: Commodities, Services and Construction Contracts Exceeding Twenty Thousand Dollars.
Recommendation:
That the Village Board approve the attached ordinance that allows the necessary revisions to the
Village's Code to raise the construction contract bond requirement to $20,000.00.
r �
ORDINANCE 2015-CNSTRCT-BND-G-1049
AN ORDINANCE AMENDING SECTION 4, OF CHAPTER 7, OF TITLE 1 (ADMINISTRATION)
OF THE VILLAGE CODE OF THE VILLAGE OF OAK BROOK
RELATING TO CONSTRUCTION CONTRACT BONDS
WHEREAS, Section 1-7-4G of "The Village Code of the Village of Oak Brook," as amended
("Village Code"), provides, in part, that contractors performing construction activities on behalf of the
Village, the value of which activities exceeds $5,000.00, must provide the Village with a performance
and payment bond ("Village Bond Requirement'; and
WHEREAS, the Illinois Public Construction Bond Act, 30 ILCS 550/0.01 et seq., requires the
Village to obtain a bond from contractors only when engaged in contracts for public works costing over
$50,000.00 ("State Bond Requirement"); and
WHEREAS, the Village Bond Requirement is far more stringent than the State Bond
Requirement; and
WHEREAS, contractors forced to follow the Village Bond Requirement pass on the costs of
obtaining a bond to the Village; and
WHEREAS, the Village Bond Requirement is costly to administer for small construction contracts;
and
WHEREAS, the Village President and Village Board have determined that it will serve and be in
the best interest of the Village to amend Section 1-7-4G of the Village Code to raise the Village Bond
Requirement to $20,000.00;
NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS as follows:
Section 1: Recitals. The foregoing recitals are hereby incorporated into, and made a part
of, this Ordinance as the findings of the President and Board of Trustees of the Village of Oak Brook.
Section 2: Amendment to Section 1-7-4. Section 1-7-4, entitled "Commodities, Services
and Construction Contracts Exceeding Twenty Thousand Dollars," of Chapter 7, entitled "Purchases and
Contracts" of Title 1, entitled "Administration,"of the Village Code, shall be amended to read as follows:
"1-7-4: COMMODITIES, SERVICES AND CONSTRUCTION CONTRACTS
EXCEEDING TWENTY THOUSAND DOLLARS:
G. Contract Bond: Contractors performing construction activities, the value of which
exceeds $20,000.00, shall provide the village with a
performance and payment bond. Certain other nonconstruction contractors, in cases
where the village might be put at risk, may also be required to submit a contract bond
to the village, as determined by the village manager. Contract bonds shall be issued
by a surety company which is listed and approved by the U.S. department of the
treasury, and which shall guarantee the performance of the work by the contractor,
the payment at the prevailing rate of hourly wages and the payment for all labor,
materials, apparatus, fixtures and machinery necessary to complete the project.
When other than motor fuel tax funds, federal aid funds or other funds received from
the state are used, the village may allow bidders to provide a nondiminishing
Additions are bold and double-underlined;deletions are stmek through.
Ordinance 2015-CBSTRCT-BND-G-1049
Amending Section 4,Chapter 7 of Title 1 re:Construction Bonds
Page 2 of 2
irrevocable bank letter of credit, in lieu of the bond on contracts under one hundred
thousand dollars ($100,000.00), provided that any such bank letter of credit shall
contain all of the provisions required for bonds as set forth in section 1 of the public
construction bond act.
Section 3: Severability. If any provision of this Ordinance or part thereof is held invalid by a
court of competent jurisdiction, the remaining provisions of this Ordinance shall remain in full force and
effect, and shall be interpreted, applied, and enforced so as to achieve, as near as may be, the purpose
and intent of this Ordinance to the greatest extent permitted by applicable law.
Section 4: Effective Date. This Ordinance shall be in full force and effect from and after its
passage, approval, and publication in the manner provided by law.
APPROVED THIS 26" day of May, 2015
Gopal G. Lalmalani
PASSED THIS 26`" day of May, 2015
Ayes:
Nays:
Absent:
ATTEST:
Charlotte K. Pruss
Village Clerk