HomeMy WebLinkAboutFinance Committee 2025-04-16 Agenda Packet (Special)SAN RAFAEL CITY COUNCIL
FINANCE SUBCOMMITTEE MEETING
Wednesday, April 16, 2025 | 11:00 AM – 12:00 PM
THIRD FLOOR CONFERENCE ROOM
SAN RAFAEL CITY HALL
1400 FIFTH AVENUE, SAN RAFAEL, CALIFORNIA
Watch on Zoom Webinar: https://tinyurl.com/fin2025-04-16
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AGENDA
1. Call to Order
2. Open Time for Public Expression
The public is welcome to address the Subcommittee at this time on matters not on
the agenda that are within its jurisdiction. Please be advised that pursuant to
Government Code Section 54954.2, the subcommittee is not permitted to discuss
or take action on any matter not on the agenda unless it determines that an
emergency exists, or that there is a need to take immediate action which arose
following posting of the agenda. Comments may be no longer than two minutes
and should be respectful to the community.
3. Updates to City’s Purchasing Policy and Public Works Contracts Policy (Finance)
The Sub-committee will preview staff recommendations related to updates to the
City’s Purchasing and Public Works Contracts policies. This item is tentatively
scheduled for the City Council meeting of May 5, 2025.
4. Measure D / Library Parcel Tax Renewal (City Manager)
Staff will provide the Sub-Committee with preliminary recommendations related to
seeking voter approval for renewal of the existing Measure D Library Parcel Tax that
is scheduled to sunset June 30, 2026.
5. “Streetary” Fees (Public Works & Community and Economic Development)
Staff will provide the Sub-Committee with an update regarding preliminary compliance
and options related to Streetary fee modifications for outdoor dining on the parking stalls.
6. Future Agenda Planning
Agenda planning for the upcoming meetings of the Finance Sub-Committee.
7. Adjournment
Any records relating to an agenda item, received by a majority or more of the Council less than 72
hours before the meeting, shall be available for inspection in the City Clerk’s Office, Room 209, 1400
Fifth Avenue, and placed with other agenda-related materials on the table in front of the Council
Chamber prior to the meeting. Sign Language interpreters and assistive listening devices may be
requested by calling (415) 485-3066 (voice), emailing Lindsay.lara@cityofsanrafael.org or using the
California Telecommunications Relay Service by dialing “711”, at least 72 hours in advance of the
meeting. Copies of documents are available in accessible formats upon request. Public transportation
is available through Golden Gate Transit, Line 22 or 23. Paratransit is available by calling
Whistlestop. Wheels at (415) 454-0964. To allow individuals with environmental illness or multiple
chemical sensitivity to attend the meeting/hearing, individuals are requested to refrain from
wearing scented products.
To: City Council Finance Sub-Committee
FROM: Paul Navazio, Finance Director
DATE: April 16, 2025
SUBJECT: Purchasing Policy Update (SRMC Chapter 2.55)
Public Works Contract Policy Update (SRMC Chapter 11.50)
• Both would be ordinances amending the San Rafael Municipal Code (SRMC) and thus
require a first and second reading + 30 days to be effective:
o First Reading - targeting May 5th City Council meeting.
o Second Reading – May 19th City Council Meeting
o Effective Date: 30-days following 2nd reading (for new fiscal year starting July 1st).
• Updates would be limited to the following:
Purchasing Policy – SRMC Chapter 2.55:
o Increasing City Manager Contract authority from $75,000 to $100,000.
Contract authority was increased to $75,000 in 2018
o Clarifies that the application of the contract authority threshold to contract
amendments/change orders is based on original contract amount PLUS the
value of the amendment/change order.
This was clarified in our internal 7/1/24 "purchasing guidelines" update;
however, the proposed change codifies this in formal policy (attached).
o Modifies current language related to requirement for unencumbered budget
appropriation to clarify that for multi-year contracts or PO's (spanning fiscal
years) that the PO and/or contract shall be let "subject to future budget
appropriations."
Public Works Contract Policy – SRMC Chapter 11.50:
o Modifying language re Award authority to replace (PW) Director to now read "City
Manager or their designee."
Consistent with best practices, City Manager can delegate to PW
Director, but actual authority rests with the City Manager.
o Also includes modified language from above related requirement for
unencumbered appropriations, adding that for muti-year contracts where
funding is provided on an annual basis, contracts should be let contingent on
"future budget appropriations."
Delegation of City Manager’s Contract Authority (Administrative Policy)
o The City Manager has discretion to delegate their contract authority to
Department Directors, or other “designee.” This delegation of spending
Item 3
authority is outlined in the City’s Purchasing Guidelines, as published on the
City’s employee website https://employees.cityofsanrafael.org/purchasing/
o The purchasing guidelines were updated at the start of the current fiscal year, as
noted above, and consistent with best practices should be reviewed and
updated on an annual basis.
o Among the primary objectives of City’s implementation of the new Tyler/Munis
Enterprise Resource Planning (ERP) system is the strengthening of internal
controls and streamline the administration of City’s decentralized purchasing
processes. This is facilitated through design and configuration of the ERP’s
Purchasing and Contract management modules as well as establishing budget
appropriation controls within the financial system.
o As a component of implementing the new financial system to meet these
objectives, administrative policies will be updated to include a more formal
system of delegated spending authority across City departments.
o With updated tools to promote internal controls and consistent application of
the City’s Purchasing Policy and purchasing guidelines, the City Manager will be
evaluating increasing Department Director spending authority (from $10,000 to
$20,000).
o This threshold of spending authority significantly reduces the number of
Purchase Orders and Contracts requiring the City Manager’s administrative
approval, and thus helps streamline the procurement approval process.
From: Paul Navazio, Finance Director
To: Department Directors
Date: July 1, 2024
Subject: Clarification of City Purchasing Policy and Procedures Related to Contract
Authority and Purchase Orders
The purpose of this memorandum is to provide direction and guidelines related to the application
of the City’s Purchasing Policy and Purchasing Guidelines related to a) Contract Award
Authority, b) Appropriation Authority, and c) Purchase Order thresholds.
Background
The City’s Purchasing Policy is established through Section 2.55 of the San Rafael Municipal
Code. The City’s employee website further includes a Purchasing Overview section developed
to assist City employees with guidelines to ensure consistent application of, and compliance
with, the City’s Purchasing Policy.
Current purchasing guidelines do not provide for consistent application of thresholds whereby
Purchase Orders are required. This has been identified by the City’s External Auditor as a
potential internal control deficiency.
This memorandum serves to clarify application of Municipal Code Section 2.55.040 – Contract
Authority, as well as update guidelines related to requirements for Purchases of Goods and
Services, Professional Services Contracts and Public Works Contracts, as follows:
Contract Authority
Professional Services Contracts and Purchases (SRMC Section 2.55.040).
Section 2.55.040 (A) establishes that any purchase or contract that exceeds $75,000
shall be awarded by the City Council.
The City Manager has further delegated contract/purchasing authority of up to $10,000
to Department Directors
Section 2.55.040 (C) further provides that modifications to contracts or purchases which
represent no change in scope or character of material or services provided in the original
contract or purchase order may be approved by the City Manager or purchasing agent if
the dollar value of the modification is within their award authority.
Effective immediately, Section 2.55.040 (C) shall be interpreted to mean that the
dollar value for contract authority shall be based on the combined value of original
contract or purchase order plus the cumulative value of any and all contract
amendments, task orders or purchase orders.
Item 3.a
Example: Professional Services Contracts
Amount Contract Authority
Original Contract $60,000 City Manager
Contract Amendment $20,000
Amended Contract $80,000 City Council;
Since the contract amendment increased the cumulative total of the contract above the City
Manager’s signing authority of $75,000, the contract amendment is required to be approved by
the City Council.
Contract Authority – Public Works Contracts (SRMC Section 11.50)
Section 11.50.020 (H) establishes the definition of a Public Works Contract
Section 11.20.020 (F) establishes that a Major Public Works contract means any contract
let by the City for the performance of public works in an amount established from time
to time by resolution of the City Council.
Resolution 14416, approved by the City Council on January 17, 2023 established that
the dollar limit to define a Major Public Works Contract under SRMC 11.50.20(F) shall
be the amount specified by the State Public Contracts Code section 22032(c) – which is
currently in the amount of $200,000
Effective immediately, the dollar value for contract authority to award a major
public works contract shall be based on the combined value of original contract
plus the cumulative value of any and all contract amendments.
Example: Public Works Construction Contracts
Amount Contract Authority
Original Contract $160,000 – Maintenance
$160,000 – All Other
PW Director
City Manager
Contract Amendment $50,000
Amended Contract(s) $210,000 City Council
Appropriation Authority
For the purposes of complying with the City’s Purchasing Policy, no contract
shall be awarded or purchase order issued, unless there exists an underlying
budget appropriation in the fiscal year in which the contract or purchase order
is awarded or issued.
Contracts awarded in a fiscal year that are anticipated to extend into a subsequent
fiscal year may be awarded by the appropriate awarding authority but shall be subject
to future appropriation authority.
Purchase Orders
Used as authorization to proceed with a purchase, a purchase order (PO) is a valid contract used
for materials, supplies, services, and equipment where open accounts have been established with
vendors. Written contracts are typically accompanied by purchase orders, unless it is determined
by the authorized representative that a stand-alone PO can be issued.
As of July 1, 2024, unless otherwise specified by the Finance Director, purchase orders are
required for all City purchases, with the following limited exceptions :
Non-recurring purchases of goods under $10,000.
Payments to utility companies such as Pacific Gas and Electric, AT&T, etc.
Purchases made with city-issued procurement cards.
Goods or services obtained through agreements with other governmental entities.
Insurance such as medical, dental, vision, general liability, workers compensation, and
property.
Bond and note and related payments.
Investment management invoices and banking fees.
Employee membership dues, travel, conferences, professional certifications, and tuition
reimbursements.
Payments to employees through the petty cash reimbursement process.
Important Considerations to Ensure Policy and Procedural Compliance –
It is of utmost importance that all City employees responsible of procuring goods and services
understand the policy and procedural requirements described in the City’s Purchasing Policy,
Public Works Contract Policy, and Purchasing Guidelines for the following reasons:
To avoid making unauthorized purchases, for which the City is under no obligation to pay
and could result in reimbursing the City for the cost of the good or service.
To ensure that larger purchases are not split into smaller components to avoid competitive
bidding and/or contract award thresholds.
To limit modifications to smaller contracts by requesting incremental increases that must
be approved at a higher level of award authority, i.e., an initial contract approved under
delegated authority by a director must be amended to a higher amount that requires
approval by the City Manager or City Council.
To assure fair and open competition and public confidence in the integrity of the
procurement system.
Concurrent with the issuance of the direction and guidelines contained in this memorandum, the
Purchasing Guidelines published on the City’s employee intranet are being updated accordingly.
cc: City Manager’s Office
