HomeMy WebLinkAboutFin Purchasing Policy and Public Works Contracts Policy Updates____________________________________________________________________________________
FOR CITY CLERK ONLY
Council Meeting: 05/05/2025
Disposition: Introduced the Ordinances, waived further reading of the Ordinances, and refer to them
by title only. (Ordinance 2048 and Ordinance 2049)
Agenda Item No: 5.b
Meeting Date: May 5, 2025
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: Finance
Prepared by: Paul Navazio, Finance Director City Manager Approval: _________
TOPIC: PURCHASING POLICY AND PUBLIC WORKS CONTRACTS POLICY UPDATES
SUBJECT: 1) INTRODUCTION OF AN ORDINANCE AMENDING CHAPTER 2.55 OF THE SAN
RAFAEL MUNICIPAL CODE TITLED “PURCHASING POLICY;” CEQA
DETERMINATION: EXEMPT PURSUANT TO CEQA GUIDELINE 15061(b)(3)
2)INTRODUCTION OF AN ORDINANCE AMENDING CHAPTER 11.50 OF THE SAN
RAFAEL MUNICIPAL CODE, TITLED “PUBLIC WORKS CONTRACT POLICY; CEQA
DETERMINATION: EXEMPT PURSUANT TO CEQA GUIDELINE 15061(b)(3)
RECOMMENDATION:
Staff recommends that the City Council:
1)Waive further reading of the ordinance, refer to it by title only, and introduce an ordinance of the
San Rafael City Council amending Chapter 2.55 of the San Rafael Municipal Code, titled
“Purchasing Policy”; and
2)Waive further reading of the ordinance, refer to it by title only, and introduce an ordinance of the
San Rafael City Council amending Chapter 11.50 of the San Rafael Municipal Code, titled “Public
Works Contract Policy.”
BACKGROUND:
Purchasing Policy. The City of San Rafael’s Purchasing Policy is set forth in Chapter 2.55 of the San
Rafael Municipal Code (SRMC Ch. 2.55). The City adopted its current Purchasing Policy in 1994 and
added provisions relating to the procurement of professional services in 1997.
In 2018, the Purchasing Policy was updated to a) increase the City Manager’s award authority from
$35,000 to $75,000, b) permit the City Manager to delegate authority under the Purchasing Policy, and
c)require the City Manager to execute an administrative policy to provide procedural guidance relating
to the implementation of the Purchasing Policy, and d) update requirements relating to competitive
bidding procedures. The 2018 update significantly aligned the City’s Purchasing Policy with best practices
related to local government procurement of services, supplies, materials, and equipment.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
Public Works Contract Policy. The City’s Public Works Contract Policy is set forth in Chapter 11.50 of
the San Rafael Municipal Code (SRMC Ch. 11.50). The City codified the Public Works Contract Policy in
1994, and most recently amended it in 2023, largely to conform to, and adopt bidding procedures for
construction contracts, via separate resolution, consistent with requirements established by the Public
Construction Cost Accounting Act (UPCCAA).
State laws governing award and bidding requirements for municipal construction contracts are provided
in the Public Contracts Code (“PCC”). As a charter city, the City of San Rafael’s charter and ordinance
provisions govern relevant provisions of the PCC. Municipalities may also opt-in to the UPCCAA, a subset
of the PCC, which sets uniform and simplified bidding procedures for construction contracts. (PCC §
22001, et seq.). While the City has not opted into the UPCCAA, the City’s current Public Works Contract
policy and companion resolution set the dollar thresholds for awarding the City’s public works
(construction) contracts to match those under the UPCCAA.
The proposed updates to the City Purchasing Policy and Public Works Contract Policy were presented
and discussed at the Finance Sub-Committee meeting on April 16, 2025.
ANALYSIS:
Selected updates to the City’s current Purchasing and Public Works Contract policies are being proposed
to ensure alignment with best practices and support efficient and effective application of the policies in
the administration of the City’s procurement activities. The proposed policy updates also serve to inform
the design and configuration of appropriate internal control settings within the City’s new Tyler/Munis
Enterprise Resource Planning (ERP) financial system’s budgeting, purchasing, and contract
management modules, scheduled to “go-live” concurrent with the start of fiscal year (FY) 2025-26 (July
1, 2025).
Purchasing Policy. The first ordinance being proposed for introduction through this agenda item would
amend Chapter 2.55 of the San Rafael Municipal Code titled "Purchasing Policy" as follows:
Increase the City Manager’s award authority from $75,000 to $100,000. The City Manager’s award
authority was last updated in 2018 to $75,000 for services, supplies, equipment, and professional
services. This aligned the City Manager’s award authority with that of city managers in comparable cities
(all cities in the San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area with a population of
45,000 and above).
The recommendation to increase the City Manager’s award authority under the City’s Purchasing Policy
to $100,000 effectively implements an inflationary adjustment to the award authority, consistent with the
28% increase in the Bay Area, All-Urban Consumer Price Index since 2018. Increasing the City
Manager’s award authority to $100,000 would also maintain general alignment with City Managers’ award
authority across comparable Bay Area cities. Additionally, increasing the award authority would save
considerable time and staffing resources typically used with the City Council award process. It is
important to note that the City Council must appropriate the funds used for any purchase during the
annual budget process.
This adjustment to the City Manager’s award authority for supplies, services, equipment, and professional
services, along with the existing provision within the Purchasing Policy related to the delegation of the
City Manager’s award authority, will inform and greatly facilitate the design and configuration of internal
control setting within the City’s new Tyler/Munis financial system in the context of procurement
transaction approval workflows.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3
Clarifying the application of the award authority to change orders to contracts or purchase orders.
The existing Purchasing Policy includes a provision (Ch. 2.55.040 C) whereby “modifications to contracts
or purchase orders...may be approved by the city manager if the dollar value of the modification is within
their award authority.”
At the beginning of the current fiscal year (July 1, 2024) the City’s administrative policy and guidelines
were updated to clarify that, for application of this provision, award authority is to be determined based
on the total cost (original plus modification(s)) of the amended contract or purchase order. The
recommendation to reflect this clarification in the amended Purchasing Policy serves to codify the recent
change and current practice.
Clarifying the requirement of available unencumbered budget appropriations.
The existing Purchasing Policy includes a provision (Ch. 2.55.080) that states that “no purchase order or
any contract shall be approved for supplies, materials, equipment or services unless there exists an
unencumbered appropriation in the fund account against which said purchase or contract is to be
charged.”
Staff recommends adding language to this provision to clarify that for multi-year contracts where
appropriations are provided annually through the budget process, such contracts include a provision
whereby the City’s obligation to the contract is contingent on future Council-approved budget
appropriations. Language is also proposed to clarify that the requirement for unencumbered
appropriations applies to contract modifications and the original contract.
Updating the requirement for competitive bidding procedures.
The City’s current Purchasing Policy defines three types of competitive bidding procedures: Informal Bids
for purchases between $5,000 and $75,000, and Competitive Sealed Bids and Competitive Sealed
Proposals for purchases that exceed $75,000. The Informal Bids procedure requires the solicitation of
bids from at least three providers, whereas the Competitive Sealed Bids or Competitive Sealed Proposals
procedure (commonly referred to as “formal bidding”) requires, among other tasks, an Invitation for Bids,
a Notice Inviting Bids, a Bid Opening, and more. Formal bidding procedures are staff-intensive and are
typically used for purchases of a high-dollar value. Both informal and formal bidding procedures require
that a contract or purchase be awarded to the lowest responsive and responsible bidder. Awards of
contracts or purchases requiring formal bidding procedures are approved by the City Council.
Concurrent with the recommendation to increase the City Manager’s award authority from $75,000 to
$100,000, staff also recommends that the Purchasing Policy be amended to increase the dollar threshold
requiring ‘formal bidding” from $75,000 to $100,000. This recommendation results in the alignment of the
award authority and formal bidding requirements such that the City Council will award all purchases or
contracts requiring formal competitive bidding procedures. There are no proposed changes to the
Purchasing Policy related to transactions exempted from competitive bidding procedures (emergencies,
sole source procurement, professional services and use of cooperative purchasing programs) per SRMC
2.55.100.
All the revisions to the existing Purchasing Policy are included in the attached draft ordinance updating
the SRMC Ch 2.55- Purchasing Policy (Attachment 1).
Public Works Contract Policy. The second ordinance being proposed for introduction through this
agenda item would amend Chapter 11.50 of the San Rafael Municipal Code titled "Public Works Contract
Policy" as follows:
Clarifying the requirement of available unencumbered budget appropriations.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4
The existing Public Works Contract Policy includes a provision (Ch. 11.50.040) that states that “no
contract for public works shall be approved for supplies, materials, equipment or services unless there
exists an unencumbered appropriation in the fund account against which said contract is to be charged.”
Staff recommends that language be added to this provision to clarify that for multi-year maintenance
contracts where appropriations are provided annually through the budget process, such contracts include
a provision whereby the City’s obligation to the contract is contingent on future Council-approved budget
appropriations. Language is also proposed to clarify that the requirement for unencumbered
appropriations applies to contract modifications and the original contract.
Clarify that the Public Works Contract Award Authority rests with the City Manager or designee.
The existing Public Works Contract Policy provides the bids on “major projects”, as defined, shall be
awarded by the City Council, and that bids on “minor” contracts, as defined, may be awarded by the
(Public Works) Director (Ch. 11.50.110 C).
Staff recommends that this provision be updated so that the contract authority for “minor contracts” rests
with the City Manager or their designee. This recommendation supports the principle that the City
Manager is the formal authority to which City Council authority is delegated and further ensures that no
individual Director has contract award authority that exceeds that of the City Manager. As proposed, the
City Manager would, in turn, have the authority to delegate their authority as appropriate.
Revisions to the existing Public Works Contract Policy are included in the attached draft ordinance
updating the SRMC Ch 11.50- Public Works Contract Policy (Attachment 2).
FISCAL IMPACT:
There is no fiscal impact associated with this item.
ENVIRONMENTAL REVIEW:
Both ordinances are exempt from environmental review under the commonsense exemption under the
California Environmental Quality Act (“CEQA”) Guideline 15061(b)(3) because neither ordinance is likely
to impact the environment.
OPTIONS:
The City Council has the following options to consider on this matter:
1. Conduct a public hearing and pass the ordinances to print.
2. Conduct a public hearing and pass the ordinances to print with modifications.
3. Direct staff to return with more information.
4. Take no action.
RECOMMENDED ACTION:
Staff recommends that the City Council:
1) Waive further reading of the ordinance, refer to it by title only, and introduce an ordinance of the
San Rafael City Council amending Chapter 2.55 of the San Rafael Municipal Code, titled
“Purchasing Policy”; and
2) Waive further reading of the ordinance, refer to it by title only, and introduce an ordinance of the
San Rafael City Council amending Chapter 11.50 of the San Rafael Municipal Code, titled “Public
Works Contract Policy.”
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 5
ATTACHMENTS:
1. Ordinance amending SRMC Chapter 2.55 – Purchasing Policy
2. Ordinance amending SRMC Chapter 11.50 – Public Works Contract Policy
1
ORDINANCE NO. _____
AN ORDINANCE OF THE CITY OF SAN RAFAEL AMENDING CHAPTER
2.55 OF THE SAN RAFAEL MUNICIPAL CODE ENTITLED “PURCHASING
POLICY” TO UPDATE THE CITY OF SAN RAFAEL’S PURCHASING
POLICIES AND PROCEDURES
WHEREAS, in 1994, the San Rafael City Council adopted Ordinance No. 1661, adding
Chapter 2.55, Purchasing Policy, to the San Rafael Municipal Code; and
WHEREAS, in 1997, the San Rafael City Council adopted Ordinance No. 1707, adding
Chapter 2.60, Professional Services Agreements, to the San Rafael Municipal Code; and
WHEREAS, in 2018 the San Rafael City Council adopted Ordinance No.1975 amending
Chapters 2.55 and repealing Chapter 2.60 of the San Rafael Municipal Code to
consolidate the City of San Rafael’s purchasing policies and procedures for procurement
of supplies, materials, equipment and services; and
WHEREAS, the City of San Rafael’s purchasing policies and procedures require updates
periodically in order to reflect best practices in procurement and purchasing, as well as to
comply with evolving federal and state requirements; and
WHEREAS, the City Council desires to amend Chapter 2.55 of the San Rafael Municipal
Code in order to update the City’s purchasing policies and procedures in order to reflect
best practices in procurement and purchasing while also promoting efficiency and
effectiveness of exercise of the City’s procurement activities;
WHEREAS, the City’s purchasing policy established the City Manager’s award authority,
which was last adjusted in 2018, and the City Council desired to provide for inflationary
adjustment to increase the City Manager’s award authority from $75,000 to $100,000;
and
WHEREAS, the City purchasing policy establishes dollar thresholds and award authority
for informal and formal bidding procedures, and whereby the current policy establishes
that informal bids, defined as not exceeding $75,000, shall be awarded by the City
Manager, and formal bid awards, defined as exceeding $75,000 shall be awarded by the
City Council; and
WHEREA, the City Council desires to update the dollar threshold for distinguishing
between informal and formal bid requirements from $75,000 to $100,000; and
WHEREAS, the City’s purchasing policy provides that award authority for modifications
to contracts or purchase orders may be awarded by the City Manager if the dollar value
of the modification is within their award authority; and
2
WHEREAS, in July 2024 the City’s internal purchasing administrative procedures
developed to ensure compliance with the purchasing policy were updated to clarify that
for application of contract award authority, the value of a modification is determined by
the total value of the original contract or purchase order, plus the dollar amount of the
modification and the City Council desires to codify this clarification with the City’s formal
purchasing policy; and,
WHEREAS, City’s purchasing provides that no contract or purchase order shall be
awarded without sufficient available budget appropriations within the account to which the
contract is to be charged; and the City Council desires to amend the policy to include
requirements for multi-year contracts where funding is provided annually through the
budget process; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DOES
HEREBY ORDAIN AS FOLLOWS:
DIVISION 1:
Chapter 2.55 of the San Rafael Municipal Code entitled “Purchasing Policy” is
hereby amended as follows: Additions are shown in underline and deletions in
strikethrough.
CHAPTER 2.55 – PURCHASING POLICY
2.55.020 - Definitions.
As used in this chapter, the following terms are defined as follows:
G. "Purchasing agent" shall mean the city manager or theirhis or her designee.
2.55.040 - Award authority.
A. If the amount of any purchase or contract exceeds seventy-five one hundred
thousand dollars ($75,000.00$100,000), bids shall be awarded by the City
Council. Purchases or contracts equal to or less than seventy-five one hundred
thousand dollars ($75,000.00$100,000) shall be awarded by the city manager or
their designee.
B. No purchases made by any person, or in any manner other than as described
herein, shall be binding upon the City or constitute a lawful charge against any
City funds.
C. Modifications to contracts or purchase orders which represent no change in the
scope of the 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 original contract to purchase order plus the modification is within
their award authority.
2.55.080 - Encumbrance of funds.
3
Except in cases of emergency, no purchase order or any contract or any modification
thereto shall be approved for supplies, materials, equipment or services unless there
exists an unencumbered appropriation in the fund account against which said purchase
or contract is to be charged. Multi-year contracts where appropriations are provided on
an annual basis shall be awarded subject to future budget appropriations.
2.55.260 – Informal bids.
Any contract or purchase not exceeding seventy-five thousand one hundred
thousand dollars ($75,000.00$100,000) may be made in accordance with informal bidding
procedures; provided, however, that requirements shall not be artificially divided so as to
constitute a purchase under this section.
DIVISION 2:
This Ordinance is exempt from the California Environmental Quality Act (“CEQA”)
pursuant to the State CEQA Guidelines, since it can be seen with certainty that there is
no possibility that this Ordinance or its implementation would have a significant effect on
the environment (14 Cal. Code Regs. Section 15061(b)(3)).
DIVISION 3:
If any section, subsection, sentence, clause, or phrase of this Ordinance is for any
reason held to be invalid, such decision shall not affect the validity of the remaining
portions of this Ordinance. The City Council hereby declares that it would have adopted
the Ordinance and each section, subsection, sentence, clause, or phrase thereof,
irrespective of the fact that any one or more sections, subsections, sentences, clauses,
or phrases be declared invalid.
DIVISION 4:
A summary of this Ordinance shall be published and a certified copy of the full text
of this Ordinance shall be posted in the office of the City Clerk at least five (5) days prior
to the City Council meeting at which it is adopted.
This Ordinance shall be in full force and effect thirty (30) days after its final
passage, and the summary of this Ordinance shall be published within fifteen (15) days
after the adoption, together with the names of the Councilmembers voting for or against
same, in the Marin Independent Journal, a newspaper of general circulation published
and circulated in the City of San Rafael, County of Marin, State of California.
Within fifteen (15) days after adoption, the City Clerk shall also post in the office of
the City Clerk, a certified copy of the full text of this Ordinance along with the names of
those Councilmembers voting for and against the Ordinance.
4
THE FOREGOING ORDINANCE was first read and introduced at a regular meeting of
the City Council of the City of San Rafael on 5th day of May 2025, and was passed and
adopted at a regular meeting of the San Rafael City Council on the 19th of May 2025 by
the following vote, to wit:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
________________________________
Kate Colin, Mayor
ATTEST:
______________________
LINDSAY LARA, City Clerk
ORDINANCE NO. ______
AN ORDINANCE AMENDING CHAPTER 11.50 OF TITLE 11 OF THE SAN RAFAEL
MUNICIPAL CODE, TITLED PUBLIC WORKS CONTRACT POLICY
WHEREAS, Chapter 11.50 of the San Rafael Municipal Code (“SRMC”) sets forth the
City of San Rafael’s public works contract policy, which includes separate bidding and
award procedures for “minor contracts” and “major contracts”; and
WHEREAS, City’s public works contract policy, provides that no public works contract
shall be awarded without sufficient available budget appropriations within the account to
which the contract is to be charged; and the City Council desires to amend the policy to
include requirements for multi-year contracts where funding is provided annually through
the budget process; and
WHEREAS, under the City’s policy, “minor contracts” as defined, follow and informal
bidding procedure and may be awarded by the Director of Public Works, and do not
require City Council award; and
WHEREAS, the City Council desires to amend the policy’s contract award language to
provide that award authority for “minor contracts, as defined, rests with the City Manager
or their designee; and
WHEREAS, this Ordinance was introduced and read by title only at a duly-noticed public
meeting of the San Rafael City Council on the 5th day of May 2025.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DOES
ORDAIN AS FOLLOWS:
DIVISION 1. Chapter 11.50 of Title 11 of the Municipal Code of the City of San
Rafael is hereby amended as follows. Additions are shown in underline and
deletions in strikethrough.
Chapter 11.50 – PUBLIC WORKS CONTRACT POLICY
11.50.040 Encumbrance of funds.
No public works contract shall be approved for public works unless there exists
an unencumbered appropriation in the fund account against which said
contract is to be charged. Multi-year maintenance contracts where
appropriations are provided on an annual basis shall be awarded subject to
future budget appropriations.
11.50.110 Contract award.
C. Awarding Authority. Bids on major contracts shall be awarded by the
city council. Bids on minor contracts may be awarded by the director
city manager or their designee.
DIVISION 2.
All former ordinances or parts thereof conflicting or inconsistent with the
provisions of this Ordinance or the Codes hereby adopted are hereby repealed.
DIVISION 3.
If any section, subsection, sentence, clause or phrase of this Ordinance is
for any reason held to be invalid, such decision shall not affect the validity of the
remaining portion of this Ordinance. The City Council of the City of San Rafael
hereby declares that it would have adopted the Ordinance and each section,
subsection, sentence, clause or phrase thereof, irrespective of the fact that any
one or more sections, subsections, sentences, clauses or phrases shall be
declared invalid.
DIVISION 4.
The City Council finds that adoption of this Ordinance is exempt from the
California Environmental Quality Act (CEQA), pursuant to 14 CCR Section
15061(b)(3), since it can be seen with certainty that there is no possibility that the
adoption of this Ordinance may have a significant effect on the environment.
DIVISION 5.
This Ordinance shall be published once, in full or in summary form, before its
final passage, in a newspaper of general circulation, published and circulated in the
City of San Rafael and shall be in full force and effect 30 days after its adoption. If
published in summary form, the summary shall also be published within fifteen (15)
days after the adoption, together with the names of those Council members voting
for or against same, in a newspaper of general circulation published and circulated
in the City of San Rafael, County of Marin, State of California.
Within fifteen (15) days after adoption, the City Clerk shall also post in the
office of the City Clerk, a certified copy of the full text of this Ordinance along with
the names of those Councilmembers voting for and against the Ordinance.
THE FOREGOING ORDINANCE was first read and introduced at a regular meeting of
the San Rafael City Council on the 5th day of May 2025, and was passed and adopted at
a regular meeting of the San Rafael City Council on the 19th day of May 2025 by the
following vote, to wit:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
______________________________
Kate Colin, Mayor
Attest:
_____________________________
LINDSAY LARA, City Clerk