Business Agenda Item 5a
STAFF REPORT
City Council Business Item
DATE: October 6, 2025
TO: Honorable Mayor and Council Members
FROM: Aaron Felmlee, Finance Director
THROUGH: Amy Nilsen, City Manager
SUBJECT: Second Reading and Adoption of Ordinance 2025-777, Amending Chapter 2.50 of the Fortuna Municipal Code to Provide for Revised Purchasing Systems STAFF RECOMMENDATION:
Consider conducting a second reading and adopt, by title only, Ordinance 2025-777, which proposes revisions to the City’s existing Purchasing System.
EXECUTIVE SUMMARY:
The City’s current purchasing regulations, which were last wholistically revised in 1997, are contained in Chapter 2.50 of the Fortuna Municipal Code (FMC). Staff contracted with Clare Gibson who specializes in contract and procurement law. She has identified portions of the City’s purchasing regulation that better align with existing law as applicable to charter cities. The attached Ordinance also endeavors to more clearly delineate between the requirements for the procurement of goods and services.
The proposed ordinance, if adopted, revises the purchasing system to make the following changes:
• Procurement of Goods – Contracts for goods (supplies and equipment) are governed by Government Code section 54202. This Government Code section does not require formal bidding for procuring goods. Likewise, there is no such formal bidding requirement for goods in the City Charter. For this reason, the procurement of goods has been separated from Public Works contracts and services to no longer require formal bidding. The method of informal bidding (requesting quotes) will be more efficient for securing the lowest price for goods. The limit for informal quotes will be anything greater than $5,000. • Public Works Contracts - Public Works contracts are defined in Public Contract Code section 1101. The proposed Ordinance will align that definition with Chapter 2.50 of the FMC. Additionally, the Ordinance will index the thresholds for formal bidding, informal bidding, and negotiated public works contracts to the values used in the California Uniform Public Construction Cost Accounting Act, Public Contract Code section 22000 et seq. (“CUPCCAA”). The CUPCCAA bid thresholds are updated about every five years which will allow for automatic increases to bidding thresholds without having to routinely adopt revised Ordinances. Currently, the thresholds are as shown below. o Contracts under $75,000 to be purchased by force account o Contracts between $75,000 and $220,000 to be purchased through informal bid procedure
Business Agenda Item 5a
o Contracts above $220,000 to be purchased through formal bid procedure According to information available on State Controller’s Office website, as of May 2, 2025, currently 1665 local agencies have elected to be subject to CUPCCAA, and 62% of all California cities (including some charter cities) have elected to be subject to CUPCCAA. • Professional Services and General Services – In order to align with applicable Government Code provisions, the procedures for professional services have been split into two main subsections. Subsection A addresses “architectural and engineering services” subject to Government Code section 4529.10 et seq., and subsection B addresses “all other services” for which the City has broad discretion under the terms of the Charter and pursuant to Government Code section 37103. Subsection A must always go through the RFP/RFQ process no matter what the cost per Government Code. The limits for all other Professional Services and General Services would be revised to anything under $75,000 be purchased through direct negotiation and quotes and anything over would need to be through an RFP/RFQ process.
Staff recommends that the City Council introduce and conduct a first reading on Ordinance No. 2025-777. Staff would bring the ordinance back for a second reading and adoption on October 20.
FISCAL IMPACT
Streamlining the City’s Purchasing System will result in increased efficiency in Department operations through reduced impacts on staff time to procure goods and services. Increasing the thresholds for formal bidding will also reduce costs associated with advertising costs that have to occur in a local publication.
RECOMMENDED COUNCIL ACTION:
1. Receive staff report and review questions with staff;
2. Open Public Comment
3. Close Public Comment
4. Motion to conduct a second reading and adopt Ordinance No. 2025-777 and read by title only. Roll Call vote
ATTACHMENTS:
Attachment A: Ordinance No. 2025-777 – An Ordinance of City Council of the City of Fortuna California, Amending Title 2 – Administrative and Personnel of the City of Fortuna Municipal Code by Revising Chapter 2.50 – Purchase of Supplies, Equipment, and Contractual Services and Determining the Ordinance Exempt from CEQA