STAFF REPORT
Meeting Date:
June 23, 2026
CONSENT
16 SUBJECT: APPROVAL OF AN AMENDED PURCHASING POLICY AND PROCEDURES (CITY COUNCIL POLICY NO. 4.2)
RECOMMENDATION: It is recommended that the City Council:
1. Rescind Administrative Policy No. 1-9, Purchasing Policy and Procedures;
2. Adopt City Council Policy No. 4.2, Purchasing Policy and Procedures, to be included in the City Council Policy and Procedures Manual; and
3. Find that the recommended action is not a project under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378.
SUMMARY OF THE MATTER
The City’s Purchasing Policy, Administrative Policy No. 1-9, was adopted by the City Council on October 14, 2025 and became effective on November 28, 2025, concurrently with the City's updated Purchasing Ordinance. Since implementation of that Policy under the new Ordinance, staff have identified opportunities to improve clarity, align contract requirements with procurement risk, and reduce administrative burden for routine purchases. Accordingly, staff recommends Council adopt the revised Purchasing Policy to reflect these identified efficiencies.
Staff further recommends moving the Purchasing Policy from the Administrative Policy Manual to the City Council Policy and Procedure Manual. This recommendation is consistent with the City's ongoing effort to establish a clear and comprehensive City Council Policy and Procedures Manual, including by distinguishing between policies that establish legislative direction that require City Council approval (and are therefore included in the City Council Policy and Procedures Manual), and administrative policies that govern the day-to-day management and operation of City functions that are appropriately adopted by the City Manager (and therefore included in the City’s Administrative Policy Manual).1 Adoption of the proposed City Council Policy No. 4.2 will supersede and replace Administrative Policy No. 1-9 and enshrine the policy in the formal City Council Policies.
DISCUSSION
Since adoption of the Purchasing Policy last fall, staff has worked with departments across the City to administer the policy and identify opportunities for improvement. The proposed revisions to that policy clarify requirements, improve efficiency, and maintain existing procurement controls. 1 Historically, certain policies contained within the Administrative Policy Manual have been adopted by the City Council, while others have been adopted administratively through the City Manager's Office. This has created uncertainty regarding the authority required to amend particular policies and has made it difficult to determine from the face of a policy whether City Council approval is required. Reclassifying policies as either City Council Policies or Administrative Policies promotes consistency, clarifies administrative authority, and improves the City's ability to efficiently maintain and update procedures.
APPROVAL OF THE UPDATED PURCHASING POLICY AND PROCEDURES (CITY COUNCIL POLICY NO. 4.2)
June 23, 2026
A key revision involves contract requirements. The current policy requires a written contract for all purchases exceeding $10,000, regardless of purchase type. Staff has found this creates unnecessary administrative processing for routine purchases of standard/run-of-the-mill goods and commodities that are adequately documented through a City-issued Purchase Order.
To better align contract requirements with procurement risk, Finance Department staff recommends increasing the mandatory contract threshold for goods and commodities from $10,000 to $30,000. This does not preclude use of the City’s template agreement; rather, it just provides more flexibility for standard purchases. A review of procurement practices among local agencies (see Attachment 3) found that contract requirements are commonly based on procurement risk, purchase type, and delegated purchasing authority rather than a blanket dollar threshold. Routine purchases of goods and commodities are typically managed through purchase orders and standard terms and conditions, while formal contracts are reserved for higherrisk procurements, professional services, construction-related services, and purchases requiring formal solicitation procedures.
The proposed threshold aligns with the existing approval authority granted to Department Directors for purchases up to $30,000 and allows staff to focus contract administration efforts on procurements that present greater operational, legal, or financial risk. An updated Purchasing Policy is attached as Attachment 1; a redlined version of the existing policy is attached as Attachment 2.
Under the proposed policy:
• Goods and Commodity purchases (supplies, materials, tools, minor equipment, off-the-shelf, catalog, or stock items) would require a written contract only when the purchase exceeds $30,000.
Purchases at or below $30,000 may be completed using a City-issued Purchase Order containing the City's standard terms and conditions. This proposal does not preclude use of the City’s template agreement – just provides the option to rely upon the City-issued Purchase Order should the situation call for it. For purchases below $30,000 where the City’s template agreement is not used, a City-issued Purchase Order with standard terms and conditions will serve as the binding agreement. While the City’s template agreement has more formal protections, the flexibility proposed by this proposed modification may allow the City to more efficiently procure certain items. However, this is ultimately a judgment/policy decision for the City Council. • All other purchase types would continue to follow the existing $10,000 contract threshold requirements contained in the current policy.
The proposed revisions also formalize existing exemptions for certain expenditure categories, including memberships and professional dues, outside legal services, employee benefits, utilities, postage, permits, licenses, and government fees. These expenditures generally involve fixed pricing, statutory obligations, or limited-source providers and do not typically benefit from competitive procurement.
Finally, staff recommends transitioning the Purchasing Policy to a City Council Policy, proposed to be adopted as City Council Policy No. 4.2, in lieu of an Administrative Policy, because this policy establishes
APPROVAL OF THE UPDATED PURCHASING POLICY AND PROCEDURES (CITY COUNCIL POLICY NO. 4.2)
June 23, 2026
procurement procedures and approval authorities applicable to all City departments and relates to expenditure of City funds. As noted above, as part of this action, it is also recommended that the City Council rescind Administrative Policy No. 1-9, which is the previously adopted Purchasing Policy.
FINANCIAL ANALYSIS
The recommended action has no financial impact to the budget.
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 purchasing policy, update to the City’s Purchasing System ordinance, and resolution to formally become subject to the Uniform Public Construction Cost Accounting Act. None of these actions commit the City to a specific development proposal or result in a physical change to the environment.
ATTACHMENTS
1. Purchasing Policy (Council Policy No. 4.2) - updated version (Pgs. 4-21)
2. Purchasing Policy (Administrative Policy No. 1-9) – redlined version (Pgs. 22-42)
3. Purchase Order and Contract Authority - Orange County Data (Pg. 43) Submitted By: .Michelle Bannigan Approved: .David A Kiff Michelle Bannigan, Director of
Administrative Services
Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Eva Pierce, Procurement Officer Patrick Donegan, Assistant City Attorney