Title
Introduction of Ordinance Amending the Alameda Municipal Code by Amending Section 2-59.3 (Authorization of Contracts) of Chapter II (Administration) to Increase the City Manager, City Attorney, and City Clerk’s Contract Authorization Authority; and
Recommendation to Reaffirm and Adopt a Revised City of Alameda Purchasing Policy Consistent with the Amendment to the Ordinance. (Finance 10024501)
Body
To: Honorable Mayor and Members of the City Council
From: Gerry Beaudin, City Manager
EXECUTIVE SUMMARY
The Purchasing Procedures Manual (Policy) outlines the procedures for procuring goods and services for the City of Alameda (City). This policy was adopted by the City Council to ensure the proper use and stewardship of City funds, provide standard guidelines for City employees to purchase goods and services for the City, specify procedures for approving City purchases, and comply with California state law regarding contracts.
The proposed changes increase contract authorization authority for the City Manager, City Attorney, City Clerk, and other management positions to more closely align with the original purchasing power granted in 1990.
BACKGROUND
Alameda Municipal Code (AMC) Section 2-59.3 details the City's powers and limitations to enter into contracts, specifically the value thresholds at which a given contract must be approved by the City Council (i.e., contract authorization authority). These thresholds are reiterated in the City of Alameda Purchasing Policy (Policy).
The Policy outlines the procedures for procuring goods and services for the City and has been adopted to:
1. Ensure the appropriate use of City funds,
2. Provide standardized guidelines for all City employees to purchase goods and services on behalf of the City, including inviting participation from City-based vendors,
3. Specify procedures for approval of City purchases, and
4. Comply with California State law, including the California Public Contracts Code.
Since 1990, the purchasing thresholds have remained unchanged despite significant inflationary increases in the cost of goods and services. Consumer Price Index (CPI) data for the San Francisco-Oakland-Hayward region show that the annual average CPI rose from 132.0 in 1990 to 356.6 in 2025, a cumulative increase of about 170% over that period. In practical terms, a $75,000 contract authorization authority established in 1990 would need to be about $203,000 today to maintain the same purchasing power.
DISCUSSION
Staff seeks to update these contract authorization authority thresholds to account for inflationary impacts on purchasing power and to streamline the purchasing of general goods and professional services. Specifically, staff proposes amending the thresholds detailed in AMC 2-59.3 and in the Policy as follows:
|
Position |
Current Threshold |
Proposed Threshold |
|
City Manager/City Attorney/City Clerk (General Goods & Services & Professional Services) |
$75,000 |
$150,000 |
|
Assistant City Manager |
$25,000 |
$50,000 |
|
Department Heads |
$25,000 |
$50,000 |
|
Division Managers |
$10,000 |
$20,000 |
|
Supervisors |
$5,000 |
$10,000 |
These proposed changes will increase operational efficiencies in the procurement of goods and services. Each year, staff prepares approximately 20 contracts in the $75,000 to $150,000 range. By increasing the contract authorization authority thresholds for the City Manager, City Attorney, and City Clerk, these items will no longer require City Council review and approval, thereby reducing the administrative overhead associated with drafting staff reports and accelerating project timelines, thereby speeding the delivery of City services.
These current thresholds have not been adjusted since 1990. Inflation in goods, services, and construction costs has now made routine purchases regularly exceed the existing contract authorization authority thresholds originally established by the prior City Council. Increasing these thresholds to $150,000 will restore purchasing power relative to inflation, since the thresholds were initially set 36 years ago.
Along the same lines, staff recommends a commensurate increase from $75,000 to $150,000 in the City Attorney's and City Manager’s authority to enter into settlement agreements, as detailed in AMC 2-59.3(e), to maintain parity with the original policy's design.
The proposed ordinance and policy amendment do not reduce oversight or weaken internal controls. All procurements will continue to comply with established competitive bidding requirements, documentation standards, and financial controls. Contracts exceeding $150,000 will continue to require City Council approval, ensuring appropriate governance of larger expenditures.
Benchmarking and Best Practices
A review of comparable agencies shows that many cities have increased the contract authorization authority threshold for their City Managers (and other appointed staff) to $100,000 or more, with some jurisdictions setting thresholds as high as $200,000. The proposed increase aligns the City with industry standards and modern procurement practices. Here is a list of comparable cities and their threshold amounts:
|
City |
Current Thresholds |
|
Fremont |
$100,000 |
|
Dublin |
$100,000 |
|
Livermore |
$200,000 |
|
Pleasanton |
$200,000 |
|
Walnut Creek |
$85,000 |
|
Concord |
$100,000 |
|
San Leandro |
$100,000 |
ALTERNATIVES
• Take no action and maintain the current $75,000 threshold. This alternative would preserve the existing level of City Council review over contracts between $75,000 and $150,000, but would forgo the administrative efficiencies described in this report and would not address the threshold's diminished purchasing power since 1990.
• Propose an amendment to an Ordinance with an alternative threshold amount. The City Council could direct staff to return with an amended threshold other than $150,000, such as the approximate inflation-adjusted equivalent of $203,000, or a more conservative increase.
FINANCIAL IMPACT
There is no direct fiscal impact associated with this policy change. The proposed amendment does not increase expenditure; it merely streamlines the administrative burden for contracts under $150,000.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
Amending Alameda Municipal Code Section 2-59.3 to increase purchasing authority thresholds from $75,000 to $150,000. The Purchasing Policy supports the City Strategic Plan Priority to Practice Fiscally Responsible, Equitable, and Inclusive Governance.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Introduce an Ordinance amending Alameda Municipal Code Section 2-59.3 (Authorization of Contracts) of Chapter II (Administration) to increase the City Manager, City Attorney, and City Clerk’s contract authorization authority; and Reaffirm and Adopt a Revised City of Alameda Purchasing Policy consistent with the amendment to the Ordinance.
Respectfully submitted,
Ross McCarthy, Finance Director
By,
Carlos Figueroa, Senior Financial Analyst
Exhibits:
1. Redlined Adopted March 2025 Purchasing Policy
2. Proposed City of Alameda Purchasing Policy