STAFF REPORT
Meeting Date:
September 23, 2025
STUDY SESSION
1 SUBJECT: OVERVIEW OF THE FINANCE DEPARTMENT UPDATES TO PURCHASING POLICY (ADMINISTRATIVE POLICY #I-9)
RECOMMENDATION: It is recommended that the City Council:
1. Receive a presentation from staff on the City’s draft Purchasing Ordinance and Purchasing Policy; and
2. Find that the action is not a project under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378.
Appropriation: $0 Fund: N/A
Submitted By: Michelle Bannigan Approved:
Michelle Bannigan, Finance
Director
Dave Kiff, City Manager
SUMMARY OF THE MATTER
This report provides an overview of the proposed updates to the City’s Purchasing Ordinance and Purchasing Policy (Administrative Policy #1-9). The Finance Department has completed a thorough review of the current Purchasing Policy and recommends Council review and direction policy updates. This Policy was last updated in 2020. Finance has identified the need to update language, procedures and approval thresholds to ensure the City’s purchasing standards reflect current best practices and current market valuations of commodities and services. The proposed policy in Attachment 1 would supersede the existing policy (Attachment 2) and help implement the draft Purchasing Ordinance (Attachment 3).
Staff plans to bring the proposed policy and first reading of proposed changes to the City’s Purchasing Ordinance (Laguna Beach Municipal Code Chapter 2.30) for consideration at the October 14, 2025, City Council meeting. There is no direct fiscal impact associated with this action
DISCUSSION
As a result of the City’s de-centralized purchasing model, Departments are responsible for procurement of goods and services for their respective departments and must rely on clear policy and procedures to support their efforts and ensure compliance with policy. Finance invited Departments to participate in the review and update process, and they provided relevant information and perspectives. In addition, Finance conducted a survey of comparable cities approval thresholds which supported the need for updates to the City’s bidding and approval thresholds. The Policy updates were also reviewed by City Attorney’s office
OVERVIEW OF THE FINANCE DEPARTMENT UPDATES TO PURCHASING POLICY (ADMINISTRATIVE POLICY #I-9)
September 23, 2025
to ensure compliance and consistency with the City’s Purchasing Ordinance. This policy is meant to implement and provide more detailed directive for the Purchasing Ordinance. In the event of any conflict, the Purchasing Ordinance shall govern. The objectives of the proposed updates include reducing ambiguity and providing City Departments clear direction and guidance; promoting fair, open competition; maintaining positive vendor relationships; managing vendor performance and compliance standards; ensure fiscal responsibility; maintain public trust through transparency and responsible stewardship of public funds; and ensure compliance with federal, state and local government laws related to government purchasing. Further, the draft Purchasing Ordinance and Purchasing Policy contain provisions adopting the Uniform Public Construction Cost Accounting Act – a law that law that allows the City an alternative, more flexible system of bidding and cost accounting for public works under a specified dollar threshold. In short, these provisions will provide the City some flexibility for lower dollar amount public works projects (under $220,000 and under $75,000). The hope being that for these smaller projects, less formal bidding step and more flexibility will result in quicker procurement and project completion.
The Purchasing System Ordinance and Purchasing Policy are still in draft forms and direction from City Council will help finalize final versions for formal consideration at a future meeting.
Staff is in the process of developing new administrative policies to address P-Card and petty cash transactions in separate policies. These policies will be communicated to the City Council at a future meeting.
FINANCIAL ANALYSIS
The approval of the new Purchasing Policy will not directly impact the City’s Budget. However, the updated Purchasing Policy is expected to improve procurement efficiency, safeguard public funds, and support acquisition of the highest quality of goods and services at competitive prices. The policy encourages the use of City Attorney approved contract templates, which help manage risk through consistent contract terms and insurance requirements.
ENVIRONMENTAL ANALYSIS
This action is not subject to the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15378, as it involves the approval of an internal administrative policy that does not commit the City to a specific development proposal or result in a physical change to the environment.
ATTACHMENTS
1. Purchasing Policy (Administrative Policy #I-9) – Updated Version (Pgs. 3-20)
2. Purchasing Policy (Administrative Policy #I-9) – Current Version (Pgs. 21-51)
3. Draft Purchasing System Ordinance (Pgs. XX-XX)
Report Prepared By: Coordinated With:
Christina Reyes
Procurement Consultant (Contract)
Shannon Espinoza, Finance Manager
Patrick Donegan, Assistant City Attorney