SOUTH GATE CITY COUNCIL
REGULAR MEETING AGENDA
Tuesday, October 13, 2026 at 6:30 p.m.
SOUTH GATE COUNCIL CHAMBERS
8650 CALIFORNIA AVE
SOUTH GATE, CA 90280
DIAL-IN NUMBER 1 (213) 338-8477
MEETING ID: 816 5452 0415
VIEW MEETING LIVE ONLINE AT:
HTTPS://YOUTUBE.COM/@SOUTHGATECA90280
City Officials
MAYOR, Joshua Barron CITY CLERK, Yodit Glaze
VICE MAYOR, Al Rios CITY TREASURER, Jose De La Paz
COUNCIL MEMBER, Maria del Pilar Avalos CITY MANAGER, Rob Houston COUNCIL MEMBER, Maria Davila CITY ATTORNEY, Raúl F. Salinas COUNCIL MEMBER, Gil Hurtado
If you would like to participate in this meeting, you can participate via the following options:
1. VIEW THE MEETING LIVE ONLINE VIA YouTube: South Gate, CA - YouTube Please allow up to 24 hours after the meeting for the archive to be available.
2. LISTEN TO THE MEETING ONLINE VIA ZOOM:
https://us06web.zoom.us/j/81654520415
To address the City Council press *9 to raise your hand and *6 to unmute yourself when instructed.
3. PARTICIPATE BEFORE THE MEETING by emailing the City Clerk at:
[email protected] no later than 4:00 p.m. on the day of the meeting. Please write "Public Comment" in the subject line.
4. ATTEND THE MEETING IN PERSON
1 *The disruption in service of any alternative method does not prelude the City Council or other legislative body from taking further action and moving forward on the agenda.
Meeting Schedule
The regular meetings of the City Council are held on the second and fourth Tuesday of each month, closed session business will usually commence at 5:30 p.m., when scheduled, and general business session will commence at 6:30 p.m.
Brown Act
Agendas are drafted to accurately state what the legislative body is being asked to consider. The legislative body can take action on "all items" listed on the agenda and be in compliance with the open meeting laws. Under the Brown Act, no action may be taken on a matter unless it is listed on the agenda, or unless certain emergency or special circumstances exist. The governing body may direct staff to investigate and/or schedule certain matters for consideration at a future meeting.
City's Vision Statement
We envision a thriving, safe and inclusive community where everyone has the opportunity to access exceptional services, education and support to be resilient and live full, vibrant lives.
Public Communications
Public Comments on agenda items are limited to three (3) minutes. All comments are to be addressed directly to the Agency Members not to the members of the public.
Emails for public comment received prior to 4:00 pm on the day of the Council Meeting will be summarized by the City Clerk, not read in its entirety. A copy of the email will be provided to the City Council and will also be available at the City Clerk's Office for public review. A copy of each email will be recorded for public record and noted on the official minutes of tonight's meeting.
Call to Order/Roll Call With Invocation & Pledge
CALL TO ORDER: Joshua Barron, Mayor
INVOCATION: Tina De La Rosa, Director of Parks & Recreation PLEDGE OF ALLEGIANCE:
ROLL CALL: Yodit Glaze, City Clerk
Public Hearings
1. Substantial Amendments to Fiscal Year (FY) 2024-2025, 2025-2026, AND 2026- 2027 Annual Action Plan (AAP) for the Community Development Block Grant (CDBG) Funding
The City Council will consider: (CD)
a. Adopting a Resolution approving Substantial Amendment No.3 to the Fiscal Year 2024- 2025 Annual Action Plan; Substantial Amendment No. 2 to the Fiscal Year 2025-2026 2 Annual Action Plan; and Substantial Amendment No. 1 to the Fiscal Year 2026-2027 Annual Action Plan Reprogramming Community Development Block Grant (CDBG); b. Authorize the City Manager or the Community Development Director to initiate appropriate action necessary to implement projects and programs as noted in the FY 2026-2027 Annual Action Plan.
c. Reallocate $667,500 in Community Development Block Grant (CDBG) funds from current activity allocations to the proposed budget amendments within each respective fund.
Documents:
Item 1 10132026.pdf
Reports And Presentations
2. Presentation by East Los Angeles College (ELAC) Regarding the Status of the Campus
-
3. Ad Hoc Community Finance Committee Report and Summary of Committee Member Feedback
The City Council will consider: (AS)
a. Receive and file the report of the Ad Hoc Community Finance Committee and the summary of committee member feedback.
Documents:
Item 3 10132026.pdf
4. South Gate Street Infrastructure: A 10-Year Review
-
Comments From The Audience - Non-Agenda Items
During this time, members of the public may address the City Council regarding any items not listed on the agenda and within the subject matter jurisdiction of the City Council and not on this agenda. Comments from the audience will be limited to three (3) minutes per speaker; unless authorized by the Mayor, the time limit may not be extended by utilizing another member's time. There will be no debate or action on items not listed on the agenda unless authorized by law. The collective initial period of time for comments from the audience shall be limited to 45 minutes. Any speaker that did not get a chance to speak during this segment due to the 45-minute limitations will be able to speak at the end of the meeting prior to adjournment.
Note: The City Council desires to provide all members of the public with the opportunity to address the Council. Nevertheless, obscene language, comments intended to 3 disrupt/interfere, other actions which disrupt the progress of the meeting or slanderous comments will not be tolerated and may result in ejection and/or may constitute a violation of South Gate Municipal Code Section1.04.110.
Reports And Comments From City Officials
During this time, members of the City Council will report on matters pertaining to their service on various intergovernmental boards and commissions as a representative of the City pursuant to Assembly Bill 1234. City Council Members will also have an opportunity to comment on matters not on the agenda.
Consent Calendar Items
Agenda Items 5, 6, 7, 8, 9, 10, 11, 12 , 13, 14, 15 and 16 are Consent Calendar Items. All items including Ordinances, Resolutions and Contracts, may be approved by adoption of the Consent Calendar, individually and collectively by one (1) motion. There will be no separate discussion of these items unless Members of the City Council, the public, or staff request that specific items be removed from the Consent Calendar for separate discussion and action.
Members of the public are permitted to speak on any item listed but their time period is limited to three (3) minutes in total.
Any motion to introduce or adopt an Ordinance on the Consent Calendar shall be: (1) a motion to waive the reading of the Ordinance and introduce the Ordinance or (2) a motion to waive the reading of the Ordinance and adopt the Ordinance, as appropriate.
5. Second Reading of an Ordinance of the City Council of the City of South Gate Amending Chapter 1.54 (Purchasing System and Bidding Rules) of the South Gate Municipal Code to Modernize Procurement Procedures, Align with State and Federal Law, and Improve Operational Efficiency
The City Council will consider: (AS)
a. Adoption of the proposed Ordinance amending Chapter 1.54 of the South Gate Municipal Code by reading title only.
Documents:
Item 5 10132026.pdf
6. Second Reading and Adoption of an Ordinance Adding a New Chapter to the South Gate Municipal Code, to be Known as the South Gate Values Act, Establishing Procedures for the Protection of Sensitive Information and Use of City Resources
The City Council will consider: (CM)
a. Introduce for second reading, by title only and with further reading waived, an Ordinance of the City Council of the City of South Gate adding a new chapter to the South Gate Municipal Code, to be known as the South Gate Values Act, establishing procedures for the protection of sensitive information and the use of City resources (Attachment A);
4 b. Adoption of an ordinance of the City Council of the City of South Gate adding a new chapter to the South Gate Municipal Code, to be known as the South Gate Values Act.
Documents:
Item 6 10132026.pdf
7. Resolution Directing Staff to Amend the City's Consolidated Pay Schedule to Update Certain Hourly Position Wages to Conform to the California Minimum Wage Law Effective January 1, 2027
The City Council will consider: (HR)
a. Adopting a Resolution directing staff to amend the City’s consolidated pay schedule to update the hourly pay rates for certain hourly positions to conform to California’s minimum wage law effective January 1, 2027.
Documents:
Item 7 10132026.pdf
8. Resolution to Approve the Reclassification of the Full-Time Fleet and General Services Maintenance Superintendent Position to the Full-Time Street, Sewer & Fleet Superintendent Position, the Elimination of the Full-Time Street & Sewer Superintendent Position, the Retitling of the Full-Time Journey Electrician Position to the Full-Time Senior Electrician Position, the retitling of the Full-Time Electrician II Position to the Full-Time Electrician Position, the Elimination of the Full-Time Electrician I Position and to Update the Consolidated Salary Schedule for these Positions in the Public Works Department
The City Council will consider adopting a Resolution to approve:: (HR) a. The reclassification of the full-time Fleet and General Services Maintenance Superintendent position to the full-time Street, Sewer & Fleet Superintendent; b. The elimination of the full-time Street & Sewer Superintendent position, and reallocating $47,600 from the salary savings for consultant services to support the transition;
c. The retitling of the full-time Journey Electrician position to the full-time Senior Electrician position,
d. The retitling of the full-time Electrician II position to the full-time Electrician position, e. The elimination of the full-time Electrician I position, and f. The update to the Consolidated Salary Schedule for these positions in the Public Works Department.
Documents:
Item 8 10132026.pdf
5 9. Amendment No. 6 to Contract No. 2020-19-CC with RSG, INC., to Continue Providing General On-Call Services for the Community Development Department The City Council will consider: (CD)
a. Approving Amendment No. 6 to Contract No. 2020-19-CC with RSG, Inc., to continue providing as-needed services to the Community Development Department effective July 1, 2026, through June 30, 2027, for a one-year extension in an amount not to exceed $15,460; and
b. Authorizing the Mayor to execute Amendment No. 6 in a form acceptable to the City Attorney.
c. Transfer $7,006 from 100-603-41-5101 (Planning), $5,762 from 100-604-29-5101 (Code Enforcement), and $2,692 from 100-602-42-6730 (Software Maintenance) to 100- 601-42-6101 (Professional Services) to fund the amendment.
Documents:
Item 9 10132026.pdf
10. Agreement with waterTALENT LLC for As-Needed Temporary Certified Water Utility Operators
The City Council will consider: (PW)
a. Approving a three-year agreement with waterTALENT LLC to provide temporary certified water utility operators to the Water Division on an as-needed basis while recruitment for vacant positions is completed, in an amount not to exceed $150,000 per year and $450,000 over the three-year term;
b. Appropriating $150,000 in Water Funds to Account No. 411-731-71-6101 to fully fund contract services in Fiscal Year 2026/27;
c. Authorizing the City Manager to approve and execute amendments to the Agreement up to a cumulative amount of $100,000; and
d. Authorizing the Mayor to execute the agreement in a form acceptable to the City Attorney.
Documents:
Item 10 10132026.pdf
11. Agreement with Capital Industrial Coating LLC. for the Construction of the West Side Reservoirs Rehabilitation, City Project No.742-WTR The City Council will consider: (PW)
a. Approving Agreement with Capital Industrial Coating LLC for the construction of the West Side Reservoirs Rehabilitation, City Project No. 742-WTR, in an amount not-toexceed $2,682,352; 6 b. Appropriating $1,200,617 in Water Funds to Account No. 411-731-71-9925 to fully fund the construction of West Side Reservoirs Rehabilitation Project; c. Authorizing the City Manager to approve contract change orders up to a cumulative amount of $268,265 in budgeted Water Funds;
d. Approving the Notice of Exemption for West Side Reservoirs Rehabilitation, City Project No. 742-WTR; and
e. Authorizing the Mayor to execute the Agreement in a form acceptable to the City Attorney.
Documents:
Item 11 10132026.pdf
12. Agreement with Fountainhead Consulting Corporation for Construction Management and Construction Inspection Services for Phase V of the Citywide Residential Resurfacing, City Project No. 727-ST
The City Council will consider: (PW)
a. Approving an Agreement with Fountainhead Consulting Corporation to provide construction management and inspection services for the construction of Phase V of the Citywide Residential Resurfacing, City Project No. 727-ST, in an amount not-to-exceed $224,784;
b. Authorizing the City Manager to approve amendments to the proposed Agreement up to a cumulative amount of $75,000 to avoid delaying services during construction; and c. Authorizing the Mayor to execute the Agreement in a form acceptable to the City Attorney.
Documents:
Item 12 10132026.pdf
13. Grant Deed of Right-of Way Dedication at 9313 RAYO Avenue for Street Purposes from Fubar Properties LLC
The City Council will consider: (PW)
a. Accepting a Grant Deed from Fubar Properties LLC., to secure right-of-way for street purposes as a part of the development located at 9313 Rayo Avenue, at no cost to the City; and
b. Authorizing the Mayor to execute the Grant Deed in a form acceptable to the City Attorney and requesting the City Clerk cause the same to be recorded with the Los Angeles County Registrar-Recorder/County Clerk.
Documents:
7 Item 13 10132026.pdf
14. Proposed Use of the State of California Office of Traffic Safety (OTS) 2026-2027 Selective Traffic Enforcement Program Grant Funds (STEP) The City Council will consider: (PD)
a. Authorizing utilization of the 2025-2026 Selective Traffic Enforcement Program (“STEP”) Grant Funds in the amount of $126,400 for overtime, equipment, and training expenses;
b. Amending the Fiscal Year 2026/27 Law Enforcement Grants Fund Budget by appropriating $110,787 for overtime salaries, $3,000 for equipment, $9,860 for software licensing and $2,753 for training expenses; and
c. Authorizing the Chief of Police to execute the STEP Grant Agreement in a form acceptable to the City Attorney.
Documents:
Item 14 10132026.pdf
15. Proposed Use of FY 2025/26 Edward Byrne Memorial Justice Assistance Gant Funds
The City Council will consider: (PD)
a. Accepting two FY 2025/26 Edward Byrne Memorial Justice Assistance Grant awards:
$39,150 under Grant Award No. 15PBJA-25-GG-03182-JAGX and $38,741 under Grant Award No. 15PBJA-25-GG-03174-JAGX; and b. Appropriating the funds in the amount of $77,891 for body-worn camera equipment, licenses and related program costs.
Documents:
Item 15 10132026.pdf
16. Fiscal Year 2025-26 Year-End Budget Performance Report and Final Budget Adjustments
The City Council will consider:(AS)
a. Receive and file the Fiscal Year 2025-26 Year-End Budget Performance Report; and b. Adopt a Resolution approving the Fiscal Year 2025-26 budget amendments, appropriation reallocations, and interfund transfers summarized in this Agenda Bill.
Documents:
Item 16 10132026.pdf
Recommendations And Requests
17. Warrant Register for October 13, 2026
8 The City Council will consider: (AS)
a. Approving the Warrant Register for October 13, 2026.
Total of Checks: $2,445,949.28
Less: Employee Payroll Deductions (376,347.16)
Grand Total: $2,069,602.12
Cancellations: None
Documents:
Item 17 10132026.pdf
Adjournment
I, Yodit Glaze, City Clerk, certify that a true and correct copy of the foregoing Meeting Agenda was posted on October 8, 2026, at 8:10 p.m., as required by law.
Yodit Glaze
City Clerk
GENERAL NOTICE TO THE PUBLIC
The City Council adopted new rules relating to the conduct of the public meetings, proceedings, and business in the City of South Gate on July 12, 2022, (Resolution 2022-38-CC) and go into effect on August 1, 2022. Resolution #2022-38-CC is available at the City Clerk’s Office.
MEETING SCHEDULE
Regular meetings of the City Council are held on the second and fourth Tuesday of each month, closed session meetings will commence at 5:30 p.m. unless posted otherwise on its agenda. The regular City Council meetings will commence at 6:30 p.m. Agendas are available at the following locations: City Clerk Office, Public Notice Boards at City Hall, and on the City’s web page at https://www.cityofsouthgate.org The Public can sign up to receive automatic notices of postings of agendas for the City Council or any other Commission or Board of the City of South Gate. Visit the City webpage and click on the Agenda & Minutes icon. That will take you the page where an individual can enter their email in the “Email Updates” box to register.
PUBLIC COMMENT/PARTICIPATION
Any person may request to address a legislative body during a public meeting. The Presiding Officer will call upon those present in the Council Chambers.
Speakers are limited to three (3) minutes on any item listed on the agenda, including public hearings.
Under Comments from the Audience portion, speakers are also limited to a single three (3) minutes time limit. Comments from the Audience is initially limited to 45 minutes at each meeting. Any speaker still 9 wishing to speak, that did not speak, will have an addition Comments from the Audience opportunity after the last business item is finished. The Presiding Officer may extend the time limit as long as there is no objection from the City Council as a body.
To ensure that the public is able to participate, the City provides the opportunity to submit their comments in person, email, mail. Methods of participation may be subject to change during other such times when a State of Emergency, Health Order or State Executive Order limits in-person participation.
CURFEW
In absence of a motion duly adopted by majority vote of the City Council, the Presiding Officer may adjourn the City Council meetings at 10:30 p.m. The Presiding Officer may ask the City Council if any agenda items listed should be continued or dealt with during the meeting. For those items to be continued, the City Council can direct the item be placed on the next City Council agenda or the current meeting may be adjourned to a time certain at which time the meeting shall be reconvened as an Adjourned Regular Meeting of the City Council and action upon the published agenda continued.
STAFF REPORTS
As a general rule, staff reports. or other written documentation are prepared/organized with respect to each item of business listed on the agenda. Meeting agendas and staff reports are available at least 72- hours prior to the scheduled regular City Council meeting and a minimum of 24-hours prior to a Special City Council meeting. There are times when the City Council receives written material. revised material after the posting of agendas, these materials are become a public record and will be available for public view within 72-hours after the meeting in which they were received. Those materials and any other public document can be inspected in the City Clerk's Office located at 8650 California Avenue, South Gate.
SERVICES TO FACILITATE ACCESS TO PUBLIC MEETINGS
In compliance with the American with Disabilities Act, if you need special assistance to participate in the City Council Meetings, please contact the Office of the City Clerk. Notification 48 hours prior to the City Council Meeting will enable the City to make reasonable arrangements to assure accessibility. For further information, please contact the Office of the City Clerk at (323) 563-9510 or via email at [email protected].
10 Office of the
South Gate City Clerk
OCT 8 2026 Item No. 1
FILED
dal;3t" Cig of South Gate
CITY COUNCIL
AGENDA BJ[LL
Forthe RegularMeeting of: October 13, 2026
Originating Department: Community Development
Ciffl Manager:
GabrielPerez RobHous Rob Houston
SUBJECT: SUBSTANTIAL AMENDMENTS TO FISCAL YEAR (FY) 2024-2025, 2025-2026, AND 2026-2027 ANNUAL ACTION PLAN (AAP) FOR THE CO'MMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) FUNDING
P{JRPOSE: To consider approving Substantial Amendments to the FY 2024-2025 (No, 3), 2025- 2026 (No. 2), and 2026-2027 (No. 1) Annual Action PJaris to reprogram CDBG funds.
RECOMMENDED ACTIONS: Following the concIusion of the Public Hearing, the City Council will consider:
a, Adopting a Resolution approving Substantial Amendment No.3 to the Fiscal Year 2024-2025 Annual Action Plan; Substantial Amendment No, 2 to the Fiscal Year 2025-2026 Annual Action Plan; and Substantial Amendment No. 1 to the Fiscal Year 2026-2027 Annual Action Plan Reprogramming Comn'iunity Development Block Grarit (CDBG); b. Authorize the City Manager or the Community Development Director to initiate appropriate action necessary to implement projects and programs as noted in the FY 2026-2027 Annual Action Plan,
c, Reallocate $667,500 in Community Development Block Grant (CDBG) funds from current activity allocations to the proposed budget amendments within each respective fund, FISCAL IMPACT: There is no fiscal impact to the General Fund, NOTICING REQUIREMENT: Advertising and notification of the Public Hearing was conducted in compliance with Municipal Code Section 11.50.020 (Public Hearing Notification) and was published in The South Gate Press newspaper on September 7, 2026. The notice noted a 30-day comment period. Additionally, the Notice was posted on the City's website.
ALIGNMENT WJTH COUNCIL GOALS: The FY 2026-2027 Annual Action Plan supports the City Council goals of creating and protecting strong and sustainable rxeighborhoods by supporting projects and progratns that benefit low-and moderate-income residents of South Gate.
ANALYSIS: In accordance withthe City's Citizens ParticipationPlan, whenprocessing a substantial amendment, the City is required to hold a 30-day public comment period and publish a public notice specifying the date, time, and location of a public heaig, 1 11
Substantial AmendmentNo. 3 to the Fiscal Year 2024-2025 Annual Action Plan reduces the allocation of the South Gate Park Improvements - Shade Structure so that the funds may be reprogrammed to the Pickleball Courts Project and the Street Improvement Project, as noted in the table below.
Substantial ArnendmentNo. 2 to the Fiscal Year 2025-2026 Annual Action Plan reduces the allocation of the California Latino Leadership Institute (CLLI) and the Demolition and Clearance Project so that the funds may be reprogrammed to the Street Improvement Project, as noted in the table below.
Substantial Amendment No. 1 to the Fiscal Year 2026-2027 Annual Action Plan removes and reprograms funds allocated to the South Gate Park Improvements - Shade Structure and the California Latino Leadership Institute (CLLI) and programs available funds to the Street Improvement Project, as noted in the table below.
Furthermore, the Citizens Advisory Committee reviewed the matter and was invited to provide public comment:
FISCAL
11AR
PROPOSED
SUBSTk'%Tl4L ACTl%lff :'GA'kjE
al?RLlT
.icrmn
PROPOSED
BUDGET NIT CHANGE
FL'L% +-IAIIAI)AlkTh l M?. ALLOUAIIU:% -'tluAUAu:% l
a)BG
24-25 3
SG Park Xmyovebems -
.Shade:3tztures S @)eAKM).1(KlS S (m,ooo.oo)
25-26 1 CLu s n':',soo.oo S S (17,500.00)
2)-26
Demolitionand'Clearance
Proiect
S 225,#0_00 'S 275-000_00 S (50,(X)0.00)
14 I al 'ffl ei+aaaaaa@'ff*eeaajl e 'N)<OIAinA '(: 0 ?a iaa= e .44;j 10iM !(l-! i' 11 aueel '4?lauali J )OJ,i)!alJ.'lA! J t))7jllV.l_tl'll ) 4J),11).1_W 2& 2 7ii u Pmk!eballCourtsPr§ect S S zui,:ini.oo S 214,313.00 yoy-qr s n,=zg3zo_oo S n!28,320.00 s
CDBG: Street Improvement - $453,187 proposed increase
The Street Improvement Project will provide sidewalks and street pavement rehabilitation for local streets within the City's HUD-CDBG target areas.
CDBG: Pickleball Courts Proiect - $214,313 proposed increase The Pickleball Courts Project provides residents with accessible recreational space that directly benefits low-and moderate-income residents by providing a safe, healthy, and community-oriented activity area.
Reprogramming these fiinds supports the City Council's goal of creating and sustainable neighborhoods by investing in public facilities that promote wellness, social connection, and longterm cotnmunity use. Staff propose reprogramming the remaining CLLI funds ($17,500), the Demolition and Clearance Project ($50,000), and the South Gate Park Improvement - Shade Structure ($600,000) to the Pickleball Courts Project and the Street Improvement Project to assist in meeting the City's timeliness goal.
2 12
BACKGROTJND: The City of South Gate (City), as an entitlement city, receives Community Development Block Grant (CDBG) funds on an annual basis from the U.S. Department of Housing and Urban Development (HUD) to carry out a wide range of community development activities to benefit low-income residents. CDBG funds support a variety of programs and projects that primarily benefit low- and moderate-income individuals.
Per HUD regulations, the development of Annual Action Plans requires citizen participation and public review process, including a public hearing before submitting any substantial amendments.
The proposed substantial amendment was presented to the Citizens Advisory Committee (CAC) on September 9, 2026, where the CAC reviewed the proposal and provided fiinding recommendations, as outlined in the table above.
ATT ACHMENTS:
A. Resolution Approving Substantial Amendment No.3 to the Fiscal Year 2024-2025 Annual Action Plan; Substantial Amendment No. 2 to the Fiscal Year 2025-2026 Annual Action Plan; and Substantial Amendment No. 1 to the Fiscal Year 2026-2027 Annual Action Plan; B. Proof of Publication - Public Hearing Notices
3 13
Attachment A
Agenda Bill 10/13/26
RESOLUTION N0. 2026
CITY OF SOUTH GATE
LOS ANGELES COUNTY, CALIFORNIA
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SOUTH GATE,
CALIFORNIA, APPROVING THE SUBSTANTIAL AMENDMENTS TO FISCAL YEAR 2024-2025, 2025-2026, AND 2026-2027 ANNUAL ACTION PLANS FOR THE COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS.
WHEREAS, the City participates in the U.S. Department of Housing and Urban Development ("HUD") Consolidated Plan process and receives both Community Development Block Grant ("CDBG") and HOME Investment Partnerships ("HOME") funds; Agencies that receive funds from HUD are required to prepare and submit an Annual Action Plan that identifies the projects to be funded; and
WHEREAS, the City of South Gate ("City") prepared and adopted a Five-Year Consolidated Plan for the City covering the period of July 1, 2025, to June 30, 2030, the City Council meeting of July 8, 2025.
WHEREAS, the purpose of the Consolidated Plan and the Annual Action Plan is to identify housing and cornrnunity development needs and to develop specific goals and objectives to address those needs over a five-year period and is a requirement of the U.S. Department of Housing and Urban Development (HUD) that the City must meet in order for the City to continue to receive federal housing and community development funds; and
WHEREAS, the City Council approved the aforementioned Annual Action Plans for expenditure of the entitlement grants from HUD, including CDBG programs; and WHEREAS, the City Council has determined that the FY 2024-2025, 2025-2026, & 2026- 2027 Annual Action Plans need to be amended in accordance with HUD regulations through a Substantial Amendment to reflect the changing needs of the community; and WHEREAS, City staff published a public notice announcing the proposed substantial amendments in the September 7, 2026, edition of The South Gate Press newspaper. The thirty (30) day public review and comment period scheduled to end on October 6, 2026; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SOUTH GATE DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The City Council does hereby declare that the above recitals are true and correct and are incorporated herein by reference.
SECTION 2. The City Council of the City of South Gate does hereby adopt Substantial Amendment No. 3 to the Fiscal Year 2024-2025 Annual Action Plan; Substantial Amendment No. 2 to the Fiscal Year 2025-2026 Annual Action Plan, and Substantial Amendment No. l to the Fiscal Year 2026-2027 Annual Action Plan.
Pagelof2
14 SECTION 3. The City Manager, and/or their designee, is authorized to make all conforming modifications and edits and to execute all implementation documents required by HUD to implement the Substantial Amendments.
SECTION 4. The City Manager and/or their designee is hereby directed to file a copy of said Substantial Amendments to HUD.
SECTION 5. The City Manager is hereby authorized to enter into agreements with eligible sub- recipients, in a form acceptable to the City Attorney.
SECTION 6. The City Clerk shall certify the adoption of this Resolution which shall be effective upon its adoption.
PASSED, APPROVED, and ADOPTED on this 13th day of October 2026.
CITY OF SOUTH GATE:
By:
Joshua Barron, Mayor
ATTEST:
B7:
Yodit Glaze, Deputy City Clerk
(SEAL)
APPROVED AS TO FORM:
5 Page2of2
15 ,., Attachment B
Agenda Bill 10/13/26
SOUTH GATE PRESS
Tlils i;p:tce lot flllng iilainp only
Ok;sh d Uaa
SOumaate(,ityalm*
1007 N SEPULVEDA BLVD STE l357, M/)J'lHATTAN BEACH, CA 90266 'rclephone (323) 556-5720 / Fax (213) 834-0584 SEP$7 i
FiLED
Yodit Glaze, City Clerk
CITY OF SOUTH GATE /CITY CLERK
8650 CALIFORNIA AVE
SOUTH GATE, CA - 90280
WWA#:4077542
PROOF OF PUBLICATION
(2015.5 c.c.p.)
Slate or Callfori'iia
Counly or LOS ANGELES
Notlr:e Type: HRG - NOTICE OF HEARING
Ad Dcscrlptlon:
26-27 SG CDBG Sub. Amend NoticeEngiish
I am a citizen of the United States arid a resident of the State of Califomia; I am over the age of eighteen years, and not a parly koor Interes(ed in tlie above entitled mat(er. I am the principal clerk of the printer and publisher or the SOLITH GATE PRESS, a newspaper publislied in the English language in tlie cily orSOUTH GATE, coun(y 6f LOS.ANGELES, and adjtldged.a newspaper of general circulation ss defined by the laws of tlie 8tatp of Califomia by lhe Superior Court of )he County of LOS ANGELES, Slate of California, under date 04/19/1929, Case No. 273415. That the notice, of whk:h the ahnexsd is a printed copy, has been published in eaclt regular elnd emirs Issue of said newspaper arid not In any supplement thareof on llie followli'ig daies, to-wit:
09/"10/2028
['X(=culed 011:g9/1 o/2026
Al Los Angeles, California
I cerlil (rir declare) under penally of perjury that )he roregoli'igIs Irue ai'i(l correct.
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii::'f:ii:iiiiiiiiiiiiiiii Ennail
16 17
a:mit!';\';:'ilt-'(:' i'iu'E:isi I
PUBLIC NOTICE AND 30-DAY COMMENT PERIOD
CITY OF SOUTH GATE
CITY COUNCIL
SFP0 8 7026
FILED
NOTICE OF PUBLIC HEARING AND 30-DAY COMMENT PERIOD FOR THE SUBSTANTIAL AMENDMENT TO THE FISCAL YEAR 24-25, 25-26, AND 26-27 ANNUAL ACTION PLAN The City of South Gate (City) hereby notifies the public of a public hearing on October 13, 2026, to receive public comment on the Community Development Block Grant (CDBG) Substantial Amendment for the Fiscal Year 2024-2025, 2025-2026, and 2026-2027 Annual Action Plans.
Hearing Date: Tuesday, October 13, 2026
Time: 6:30 p.m. or as soon thereafter as the matter may be heard Place: City Hall Council Chambers at 8650 California Ave, South Gate, CA 90280 The proposed amendments to the Fiscal Year 2024-2025, 2025-2026, and 2026-2027 Annual Action Plans are noted in the table below.
The City Council will hold a public hearing to consider the activity modifications of adding, increasing, reducing, or eliminating funding levels for the following programs. flSCAL
ITAR
PJ.'t%!
PROPOSED
S[iaBST.t%TLAl
AX[!%JME!%T NO.
ACT[1'lTY NANfE
atWhT
ACnllTY
AIU)CATfON
PROPOSFj)
BliTaGEr
A!UL'%NAEff
NIT CH;gGE
CDBG
_1. 425 3
SGPar'kHmprovemmts -
ShadeStmtuvs
S 6#Qe.# s .5 (600,000€ )
25-26 I CLli s xi,m.s s S (17J(X)!(M))
25-M )
Detnolitionatid Clearance
Project
S 225.OM.(10 S a75;ffl).# S (50,(KK).0[))
26,ill n Street'knprovemene S 395!120.00 S 839a#?:00 S 453-R87.00 26-.)7 n P*k!ebaliCourtsPmiect S S 214,3!3.00 S 214,313.# ror-at S i,22!i,3'0.# S i,228,320-(N) s
Public Review and Comment Period: The draft CDBG Substantial Amendment to the Fiscal Year 2024- 2025, 2025-2026, and 2026-2027 Annual Action Plans will be available for a thirty-day public review and comment period commencing on September 07, 2026, through October 6, 2026. The draft CDBG Substantial Amendment will be made available for public review at the City's Community Development Department and online at the City's website at
https://[email protected]/Government/Departments/Community-Development Additional information may be obtained from the Community Development Department, Monday through Thursday, 10:00 AM to 2:00 PM, or by telephoning (323) 563-9535.
Invitation tO be heard: All interested persons are inVited tO the PubliC Hearing tO be heard. In addition, written comments may be submitted to the City Council priorto the hearing. Comments may be 18 submitted in writing by mailing comments to City of South Gate, Community Development Department, Attn: Carol Averell, Housing Manager, 8650 California Avenue, South Gate, CA 90280, via email at [email protected] or by calling in during the meeting.
Those desiring a copy of the staff report or further information related to this project should contact:
Contact: Carol Averell, Housing Manager
Phone: (562) 563-9535
E-mail: [email protected]
Mailing Address: Community Development Department
City of South Gate
8650 California Avenue
South Gate, CA 90280-3075
Accessibility: It is the intention of the City of South Gate to comply with the Americans with Disabilities Act (ADA) in all respects. The City of South Gate will attempt to accommodate attendees in every reasonable manner. Please contact at least 72 hours prior to the above scheduled public hearing to establish need and to determine if additional accommodation is feasible.
ESPANOL
lnformaci6n en espafiol acerca de esta junta puede ser obtenida Ilamando al (323) 563-9535 Published: September 10, 2026
19 SOUTH GATE PRESS TlilSSp!ICGIOtfill+i0a.ilalTlDOnlV
1007 N SEPULVEDA BLVD 8TE '1357, MANHATTAN BEACH, CA 90266 Telephone (323) 556-5720 / Fay (213) 834-0584
SEP17 8
FI LED
Yodit Glaze, City Clerk
CITY OF SOUTH GATE /CITY CLERK
8650 CALIFORNIA AVE
SOUTH GATE, CA - 90280
WWA#: 4077545
PROOF OF PUBLICATION
(2015.5 C.C.P.)
Stale of California
Courtly d LDS ANGELES
NOll[:Cl1V))e: HRG - NOTICE OF I-IEARING
7d Doscrilillon:
26-27 SG CDBG Sub. Amend Notice-Spanisli
I am a citizen of the United States and a resident of tlie State of California; I am over tlie age ol eigh}een years, and not a party 10 or interested in llie above entitled matter. I am the print,ipaJ clerk of the printer and publisher of the SOUTH GATE PRESS, a newspaper publislied in (he Englisli tanguage in the city of SOUTH GATE, county of LOS ANGELES, and adludgad a newspaper of general circulalion as denned by lt'ie laws or tl'ie State of Calffomia by Lhe Superior Court of the County or LOS ANGELES, Slate of Califamia, under dale 04/'19/192Gl, Case No. 2734j5. That the notice, ofwh{oh the annexed is a printed copy, has been published ii'i each reguig and entire issue of said newspaper and not in any s*ippleinenl Ihersof on ihe followiiig dates, to-wit:
09/10/2026
Execcilc'd on, @gll@lz0zB
At Los Angeles, (.:allfornla
I certify (or declare) untler penalty of perltiiy lhm Ihciforegoing is true ai'id (;orrecl.
Emsil
20 21
AVISO PLIBLICO Y PERIODO DE COMENTARIOS DE 30 r>ras aiFl-j li 8 Xi2(1
CIUDAD DE SOUTH GATE
AYUNTAMIENTO FILED
AVISO DE AUDIENCIA POBLICA Y PERIODO DE COMENTARIOS DE 30 DfAS PARA LA ENMIENDA SUSTANCIAL AL PLAN DE ACCIC)N ANUAL DE LOS ANOS FISCALES 24-25, 25-26 Y 26-27 La Ciudad de South Gate (Ciudad) notifica al publico de una audiencia publica el 13 de octubre de 2026 para recibir comentarios publicos sobre la Enmienda Sustancial de la Subvenci6n Bloqueada de Desarrollo Comunitario (CDBG) para los Planes de Acci6n Anuales del Afio Fiscal 2024-2025, 2025-2026 y 2026-2027.
Fecha de la audiencia: martes, 13 de octubre de 2026
Hora: 18:30 o tan pronto como pueda escucharse el asunto Lugar: Sala del Ayuntamiento en 8650 California Ave, South Gate, CA 90280 Las enmiendas propuestas a los Planes de Acci6n Anuales 2024-2025, 2025-2026 y 2026-2027 se indican en la tabla siguiente.
EIAyuntamiento celebrara una audiencia publica para considerar las modificaciones de la actividad de afiadir, aumentar, reducir o eliminarlos niveles de financiaci6n para los siguientes programas.
PL-lpNDEL
A!7rO
mc..u.
Eh'AI[NTaA
SUSTtNCL'lL
PROPUESTAF
NO'lfl3RE DI L4
ACT[llDAD
ASaAC'mN
ACTUALDE
ACnlmADES
EN!l[lNDA
PROPUE43TAAL
PREStt?tilSTO
CAMBIO NETO
CDBG
24-25 3
SG Parklmprovements -
Shade$tmhxes
S m,ooo-oo s S (600,000.00)
25-26 2 CLL[ s 17,500.00 s S (17,500.00)
25-26 )
Demolitionand'Clearance
%ecl
S 2:!5,000-00 S 175,000.00 ! (50,(XX).00)
26-27 1 StreetImprovanmit S 385J20.00 S 839,007.O0 S 453,187-00 26-2aa)' 1 Pick!eballOoudsProjed s S 214,313.W S 214,313.0* 'ror-ar S i,228,320.00 .5 1,228,320.00 s
Periodo de Revisi6n y Comentarios Publicos: El borrador de la Enmienda Sustancial de CDBG a los Planes de Acci6n Anuales 2024-2025, 2025-2026 y 2026-2027 estara disponible para un periodo de revisi6n publica y comentarios de treinta dias que comenzara el7 de septiembre de 2026 hasta el 6 de octubre de 2026. El borrador de la Enmienda Sustancial de CDBG estara disponible para revisi6n publica en el Departamento de Desarrollo Comunitario de la Ciudad y en linea en la p;igina web de la Ciudad en https://www.cityofsouthzate.or@/Government/Departments/Community-Development Se puede obtener informaci6n adicional en el Departamento de Desarrollo Comunitario, de lunes a jueves, de 10:00 a 14:00, o Ilamando al (323) 563-9535. 22 lnvitaci6n a ser escuchada: Todas las personas interesadas est5n invitadas a la Audiencia Publica para ser escuchadas. Ademas, se pueden presentar comentarios por escrito al Ayuntamiento antes de la Budiencia. Los comentarios pueden enviarse por escrito enviando los comentarios por correo a la Ciudad de South Gate, Departamento de Desarrollo Comunitario, Atenci6n: Carol Averell, Gerente de Vivienda, 8650 California Avenue, South Gate, CA 90280, por correo electr6nico en [email protected] o llamando durante la reuni6n.
Quienes deseen una copia del informe del personal o mis informaci6n relacionada con este proyecto deben contactar con:
Contacto: Carol Averell, Gerente de Vivienda
Tel6fono: (562) 563-9535
Correo electr6nico: caverell2@[email protected]
Direcci6n postal: Departamento de Desarrollo Comunitario Ciudad de South Gate
8650 California Avenue
South Gate, CA 90280-3075
Accesibilidad: La intenci6n de la ciudad de South Gate es cumplir con la Ley de Estadounidenses con Discapacidades (ADA) en todos los aspectos. La ciudad de South Gate intentara acomodar a los asistentes de todas las formas razonables. Por favor, contacte al menos 72 horas antes de la audiencia piyblica programada para determinar la necesidad y determinar si es factible una adaptaci6n adicional. cspaNoi
lnformaci6n en Espariol acerca de esta junta puede ser obtenida llamando al (323) 563-9535 Publicado: 10 de septiembre de 2026
23 Office of thti
South Gate City Cler[
OCT 8 2026 Item No. 3
FILED
l ','1(,,0!Y) Ciffl of South Gate
CITY COUNCIL
AGE[A BI[LL
For the Regular Meeting of: October 13, 2026
Originating Department: Administrative Semces
j)epartmentHead:
I)rr"" Q)
C%Manager: ehl'&l'
far Luis Frmsto Rob Houston
SUBJF,CT: AD HOC COMMUNITY FINANCE COMMITTEE REPORT AND
SUMMARY OF COMMITI'EE MEMBER IFF,EDBACK
PURPOSE: To report to the City Council on the work of the Ad Hoc Community Finance Committee, includingthe committee's charge, the information and materials provided duringthree sessioris, and a summary of the written observations and feedback submitted by comnnittee members at the conclusion of the process, The comrnittee5s own report to the City Council is provided as an attachment.
RECOMMENDED ACTIONS: The City Council will consider:
a. ReceiveandfilethereportoftheAdHocCommunityFinanceCommitteeandthesumtnary of comtnittee member feedback.
SUMMARY: Following City Council direction to form a budget teview committee, the City Manager established theAdHoc Community Finance Committee as a short-term, administratively appointed group of residents. The committee was asked to review information concerning the City's financial condition and to report back to the City Council, in the members' own words, on their observations and perspectives. The committee was not a budget oversight body and was not asked to review individual line items, evaluate personnel or contracts, or make recomnnendations on any policy question.
The committee met three times, on August 17, August 31, and September 14, 2026, for approximately four and one-half hours of presentation, discussion, and member questions.
Membets received 52 slides across the three sessions, using information drawn from the Fiscal Year 2026-27 Adopted Budget and the audited Annual Comprehensive Financial Report for the year ended June 30, 2025. Staff prepared the presentation and reference materials and responded to member questions during and between sessions,
The tbree sessions addressed municipal finance fundamentals, the City's recent financial history, and the range of budget-balancing tools available to a city, Session 1 covered fund accounting, restricted and unrestricted resources, the City's revenue sources and their litnits, where General Fundmoney is spent, personnel andretirement cost stnucture, reserves, andthe difference between a balanced budget and a structurally baIanced one, Session 2 reviewed the development of the 1 24
structural deficit, Council actions between spring 2025 and April 2026, the $933 million in departmental reductions, and associated service-level effects. Session 3 reviewed the general mechanisms available to address a budget gap, including expenditure reductions, recurring revenue, one-time resources, and combinations of those approaches, together with their respective trade-offs.
All five members submitted written reflections. The Analysis below summarizes recurring themes in those submissions, which are attached in full. The views expressed belong to the individual committee members. Staff's role in this report is limited to describing the process and accurately surnmarizing the feedback received; the report does not attribute those views to the City Manager or staff and does not recommend a position on any matter before the voters.
ANALYSIS:
Committee Formation and Charge
The City Council directed the formation of a budget review committee. After reviewing several structural options, the City Manager established the committee administatively as the Ad Hoc Community Finance Committee. The committee's purpose was informational and advisory to the City Manager. Because it was created administratively, advised only the City Manager, and did not deliberate on or recommend City policy, staff determined, in consultation with the City Attorney, that it would not typically constitute a legislative body under the Ralph M. Brown Act.
The committee's charge, as set at the outset and restated at the first session, was to:
* Learn how the City's budget is structured, including General Fund revenues and expenditures;
* Review information concerning the City's structural deficit and major cost drivers; @ Review the categories of budget reduction and revenue options available to the City; and @ Prepare and present a plain-language summary to the City Council reflecting members' observations and perspectives on the City's financial situation.
Membership
The City Manager selected members from community volunteers. No Council appointment or confirmation was required, and the selection favored a range of community perspectives rather than technical financial expertise. None of the members work in municipal finance. The committee consisted of CynthiaReyes, RobinLogan, Elio Marroquin, Barry McKinley, andMichelle Montes.
The Director of Administrative Services served as staff liaison and single point of contact, and the City Manager participated in the sessions.
Scope Limitations
The following subjects were outside the committee's scope and were identified as such at the first session: budget detail below the department level; individual employee salaries or personnel data; active or pending labor negotiation matters; vendor contracts and procurement decisions; independent analysis or recalculation of City revenue projections; and policy recommendations on specific programs, positions, or funding levels. Administrative Services prepared the meeting materials, and the Director of Administrative Services served as the staff liaison for member questions and follow-up requests.
2 25
Session Structure and Materials
Each session was scheduled for 90 minutes. Materials were intended to provide sufficient background for members with varying levels of familiarity with municipal finance to understand the topics being discussed. Technical terms were defined in plain language, and financial figures were drawn from adopted or audited City documents.
Session 1, City Finance 101. The first session reviewed the structure of municipal finance. Topics included fund accounting and the five 'fund types the City maintains; restricted and unrestricted resources; General Fund revenue sources and applicable legal limits; the allocation of property tax among local taxing entities; local sales taxes and the statutory rate ceiling; General Fund expenditures by department; the cost structure of a budgeted position, including retirement; grants and the Single Audit; capital planning and restricted funding; the aru'iual budget process; reserve and fund balance policy; the distinction between a balanced budget and a structurally balanced budget; and the ethical framework governing stewardship of public funds. The session also included a hypothetical exercise in which members considered whether different funding sources could legally be used for a sample expenditure.
Session 2, How We Got Here. The second session reviewed the City's recent financial history. It presented six-year cost and revenue trends, the Council decision timeline from the first forecast in spring 2025 through the April 2026 direction, the $9.33 million in departmental reductions, changes in budgeted positions, and identified service-level effects across Police, Public Works, Parks and Recreation, Community Development, and administrative services. The session also included the projected shortfall for Fiscal Year 2027-28.
Session 3, The Choices Ahead. The third session reviewed general mechanisms available to a city to address a budget gap, including expenditure reductions, recurring revenue, one-time resources, and combinations of those approaches. Materials also described the legal framework governing new revenue, including voter-approval requirements, seven potential revenue sources with estimated annual amounts, remaining one-time resources, and trade-offs associated with the various approaches. No option was presented as a staff recommendation. The second half of the session was reserved for member discussion and written responses to six common prompts. Those responses are the basis for the feedback summarized below.
A member-facing reference sheet surnmarizing the vocabulary and the core figures was provided so that members could return to the material between sessions and after the committee concluded.
Financial Condition Presented to the Committee
The figures included in the sessions were drawn from the Fiscal Year 2026-27 Adopted Budget and the Fiscal Year 2024-25 audited financial statements. Staff presented the figures without asking members to adopt a particular characterization or policy conclusion.
Committee Feedback: Common Themes
All five members submitted written reflections responding to a cornrnon set of prompts. The following six themes recur across multiple submissions. They are presented as a summary of individual member feedback, not as formal findings or recommendations adopted by the committee.
3 26
A. Members commented on the extent of legal restrictions on City funds.
All five written submissions commented on restrictions affecting the use of City funds.
Several described that information as different from what they had previously understood about the City Council's discretion over available resources. One member wrote that the level of oversight, legal mandate, audit requirement, and accountability was "an eyeopener" and that "the City's hands are tied far more than most people realize." Another member wrote that the information about oversight, auditing requirements, legal restrictions, and internal controls affected their prior view of the City's financial management, while also emphasizing that residents should continue to ask questions and expect accountability.
B. Members identified gaps in public understanding of municipal finance.
Several members distinguished between disagreement with the City's financial decisions and lack of familiarity with how municipal revenues and restrictions work. One member wrote: "I don't think residents misunderstand but instead they just don't understand." Topics identified as potentially useful for public explanation included the share of property and sales tax that reaches the City, grant funding, and the distinction between restricted and unrestricted resources.
C. Members discussed the relationship between cost growth and revenue growth.
Several members described the City's structural budget issue in terms of operating costs growing faster than recurring revenues. One wrote that the cost of delivering basic services has risen sharply since 2020 while revenue "crawls in at a slow, predictable rate that simply hasn't matched those rising operational costs." Another observed that service reductions may balance a budget in the short temi without addressing an ongoing mismatch between recurring revenues and expenditures
D. Members addressed whether expenditure reductions alone can resolve the structural deficit.
All five written submissions included the view that additional recurring revenue is necessary to sustain current service levels. One member wrote that the City "cannot simply cut our way out of this deficit," and a second member expressly agreed with that statement.
Members who expressed support for additional recurring revenue also acknowledged the cost to residents and the need to weigh that cost against 'further service reductions.
Members differed on the source and amount of any additional revenue and on what should accompany it, as described under Differences in Member Feedback below.
E. Members identified public safety and previously reduced services as difficult tradeoffs.
Members identified reductions to police services as the most difficult trade-off, citing response capacity and neighborhood security. The crossing guard reductions and subsequent partial restoration were raised by two members as an instructive example. One member supported the safety objective but disagreed with funding the restoration from reserves, noting a concern that doing so sets an expectation for future service restoration requests. Another used the same example to make a structural point: restoring a service 4 27
does not resolve the underlying financial problem, and absent new revenue the funding must come from a reduction elsewhere or add to the deficit.
F. Members encouraged continued direct communication with residents.
Four of the five members used one of the prompts to emphasize the importance of direct, plain-language communication from the City to residents. Members asked for explanations using specific figures and examples rather than general statements about the City's financial needs. One member supplied examples concerning the portion of property and sales tax that returns to the City and wrote: "Don't just tell residents that the City needs additional revenue. Show us the math." Members also suggested explaining service costs, cost trends, legal restrictions, alternatives considered, and the consequences associated with different budget scenarios.
Areas of Similarity in Member Feedback
Two points appeared in all five written submissions: that at least some of the City's financial constraints are structural or outside local control, and that additional recurring revenue is necessary to sustain current service levels. Four of the five submissions asked the City to communicate its financial position to residents more directly and with specific figures; the fifth emphasized communicating a plan for change rather than repeating financial explanations. These are recurring themes in individual written submissions and should not be read as a formal committee vote or recommendation.
Differences in Member Feedback
Members did not express a uniform position on the revenue measure before the voters at the November 3, 2026 General Municipal Election. Several members wrote that they viewed the measure as one available path to sustain core services. Other members remained uncertain or conditioned any support on additional information concerning the City Council's plans, future budget monitoring, and other potential revenue opportunities.
One member wrote that they were "still not fully on board with the utility tax, not until I hear from City Council and what they plan to do," and characterized the measure as "not a solve all but more so a band aid." Another asked how the budget would be monitored if the measure passed and what other revenue-generating opportunities may be available in the near term. A third observed that residents may believe other solutions exist and may want information about approaches that do not fall directly on household budgets.
These statements are summarized from the members' written submissions and are incIuded to reflect the range of views expressed. This Agenda Bill does not recommend how the City Council, committee members, or the public should view or vote on the measure.
Longer-Term Expectations Raised by Members
Three of the five submissions raised issues beyond the committee's immediate budget-review charge and encouraged a longer-term discussion about the City's future. One member described this as "South Gate 2.0" and wrote that balancing the budget "should not be the destination," but rather a foundation for a broader conversation about business attraction, investment, community gathering places, Tweedy Mile, and Hollydale. Another member wrote that residents "WANT a better South Gate, not the same South Gate," and emphasized accountability for delivering visible 5 28
change. These comments are reported as member perspectives and were not developed into committee recommendations.
Specific Suggestions Offered by Members
Members offered several concrete suggestions for 'future consideration. Listing them below does not constitute staff endorsement or a commitment to implement them absent appropriate administrative or City Council direction:
Suggestion Staff Comment
Publish a one-page explanation of where City revenue
comes from and what share of propeity and sales tax
returns to the City.
May be considered through regular City
public information, subject to administrative
direction and applicable election-related
requirements.
Publish a one-page summary of projects funded by
grants rather than General Fund money, using Tweedy
Mile as an example, with an explatiation of how grant
funding works and what it may and may not pay for.
May be considered tl'irough regular City
public information, subject to administrative
direction and applicable election-related
requirements.
Review the resident and non-resident fee structure for
recreation programs, which members noted is
currently the same for both.
Within the scope of the Cost Allocation Plan
and User Fee Study already underway.
Review'the City's property tax allocation factor,
which members understand was set when the City's
assessed value profile differed substantially from
today.
Allocation factors are set by state law and
county formula and are not locally adjustable.
Staff can explain how the factor was
established and any available avenues.
Communicate liow the budget will be monitored and
repoited going forward, and what near-teim revenue
opportunities exist.
Could be addressed through the City's regular
budget reporting cycle and five-year financial
forecast.
Administrative Notes on the Process
The cornrnittee process generated five written member submissions and a record of the materials presented. The submissions include both supportive and critical comments concerning the City's financial condition, potential responses, public communication, and the pace of visible change in the City. Staff has summarized the comments while preserving differences among members. The members' written submissions and the committee's own report are attached in full so that the City Council may review the members' views directly rather than only as summarized here.
FISCAL IMPACT: There is no fiscal impact associated with receiving and filing this report. The committee operated without a budget, member compensation, or consultant support. Costs were limited to staff time for preparation, facilitation, and materials, which was absorbed within the Administrative Services adopted budget.
ATTACHMENTS: A. Ad Hoc Community Finance Committee Report to the City Council B. Committee Member Written Feedback (submitted September 17, 2026) C. Session Presentations (August 17, August 31, and September 14, 2026) 6 29
Attachment A
Agenda Bill 10/13/26
C ITY OF SOUTH GATE
Ad Hoc Finance Community Finance Committee
Budget Review Committee Report
DATE: October 13, 2026
TO: Honorable Mayor and Members of the City Council
FROM: City of South Gate Budget Review Committee - 2026 MEMBERS: Robin Logan, Elio Marroquin, Barry McKinley, Michelle Montes, Cynthia Reyes
SUBJECT: Budget Review Committee Report on the City of South Gate Budget Deficit and Fiscal Year 2026-27 Adopted Budget
1. Purpose
This report summarizes the Budget Review Committee members' written feedback following the Committee's review of the City's budget condition, the Fiscal Year 2026-27 Adopted Budget, and related budget choices. At the Committee's request, City staff prepared this draft by organizing and condensing the members' written submissions for presentation to the City Council. The views summarized below are those expressed by Committee members.
The written feedback provided for this report does not document formal votes on these themes.
Accordingly, this report distinguishes between views expressed by one member, several members, and members more generally rather than treating every theme as a formal Committee position.
2. Review Process
The Committee met with the City Manager and the Administrative Services Director during three budget review sessions, held on August 17, August 31, and September 14, 2026. Members received information about how City funds are structured and restricted, the causes and effects of the ongoing budget deficit, the FY 2026-27 budget, service reductions, and the options available to address future budget gaps.
After the sessions, each member was invited to provide written reflections. Staff supplied six prompts to help members organize their thoughts, but members were free to address other issues and express their own conclusions. The written feedback is the source for the summary below.
3. Key Themes From Member Feedback
A. City finances are more constrained than many residents may realize.
All five members wrote that the sessions gave them a clearer understanding of the legal restrictions, fixed obligations, audit requirements, pension costs, grant conditions, and other limits that govern how City money may be used. Several wrote that this differed from what they had assumed about the City Council's discretion over available funds. One member cautioned that understanding these constraints does not reduce the obligation of residents to ask questions and to expect accountability for individual spending decisions.
B. Rising costs and slow revenue gromh create difficult service choices.
Members described a basic imbalance: the cost of providing services has risen while recurring revenue has not kept pace. All five submissions reflected the view that additional recurring revenue is necessary if the City is to sustain current service levels, and several wrote that the City cannot close the gap through reductions alone. Members also recognized that additional revenue carries a cost to residents and that every available option has consequences.
30 City of South Gate l Budget Review Committee Report
C. The most difficult trade-offs involve services residents see and rely on.
Members cited public safety, City staffing, parks and youth programs, and crossing guards as examples. The common concern was that reducing spending also reduces services, while restoring a service without an ongoing funding source moves the budget pressure elsewhere. One member took a different position, writing that the City should not have reached the point of having to make these tradeoffs at all.
D. Members want clearer public communication about City finances.
Four of the five members asked for simpler public explanation of where City revenue comes from, how much of common taxes actually reaches the City, which funds are legally restricted, how grant funds may be used, what services cost, and what happens under different budget scenarios. One member summarized the request as: "Show us the math." The fifth member took a different view, writing that repeating the same explanation of the tax breakdown is not what residents are asking for, and that residents want to see action and change rather than further explanation.
E. Members want the budget discussion connected to a longer-term vision for South Gate.
Several members asked City leadership to look beyond balancing a single year's budget and to explain how financial stability connects to a broader vision for the community. Ideas raised included business attraction and investment, neighborhood improvements, Tweedy Mile, Hollydale, community gathering places, and better use of underutilized spaces. Members were direct on this point. One member wrote that there is a sense of complacency in the City and asked that the City Council hold itself accountable for delivering visible change rather than maintaining the status quo.
4. Views on the Proposed Utility Users Tax
Member views on the proposed Utility Users Tax (UUT) were not uniform, and the written feedback does not reflect a formal Committee position on the measure. The written feedback reflects a range of VieWS:
* One member described a majority of the group as leaning toward the UUT as a realistic way to support core services.
* Another member wrote that other members of the group were leaning toward voting against the measure, and said they wanted to see how the City Council would use and track new revenue before reaching a conclusion.
@ One member wrote that the review process changed the member's understanding of the City's financial condition and reframed the issue as a broader question about revenues, expenditures, and service levels.
* Another member said they were not fully supportive of the UUT until hearing more from the City Council about how new revenue would be used, monitored, and connected to a larger plan for the City.
* Members also expressed interest in other revenue opportunities and in showing residents what alternatives have been considered.
Taken together, the feedback shows agreement that the City faces a recurring financial challenge, but differing views about the UUT itself and about what should accompany any new revenue.
5. What Members Want the City Council to Hear
* Explain the numbers plainly. Use real examples to show what residents pay, what portion reaches the City, what services cost, and which costs cannot simply be eliminated. * Explain the choices and consequences. Show what can realistically be reduced, what additional revenue options exist, and what happens to services under each scenario, including if no additional action is taken.
CityCouncilMeetingofOctober13,2026 i Page2
31 City of South Gatel BudgetReviewCommitteeReport
* Be transparent about the plan. Members asked how the budget will be monitored, how any new revenue would be used, and what steps are being taken to prevent the deficit from becoming a recurring cycle.
* Pair financial stability with visible progress. Members want the City to explain how a balanced and sustainable budget will support a better South Gate over the long term, not simply maintain the status quo.
One member put the broader question to the City Council this way: "How does the City Council plan on making South Gate a better South Gate?"
6. Specific Suggestions Raised by Members
* Provide a one-page public explanation of major City revenue sources and the City's share of property and sales taxes.
* Explain which projects are grant-funded and what grant funds may and may not pay for. @ Review the resident and non-resident fee structure for recreation programs. * Explain how the City's property tax allocation was established. One member believes the allocation no longer reflects current conditions and should be reviewed. * Use regular budget reporting and long-range forecasts to show progress, risks, and future revenue opportunities.
7. Conclusion
The written feedback reflects a clearer understanding among members of the restrictions and obligations that shape the City budget, concern about the effect of further service reductions on residents, and a consistent request for clearer communication and long-term planning. All five members indicated that the City's financial condition requires action and that additional recurring revenue is necessary if current service levels are to be sustained, while their views on the proposed Utility Users Tax varied and in several cases remained conditional on hearing more from the City Council. The Committee's feedback emphasizes transparency, accountability, understandable financial information, and a broader vision for the future of South Gate.
CityCouncilMeetingof October13,2026 i Page3
32 Attachment B
Agenda Bill 10/13/26
Budget Review Committee - Member Written Feedback
BARRY
What surprised you most across the three sessions?
To be completely honest, I had no idea just how heavily regulated and watched city finances really are. Walking into this, it's easy to assume local leaders have a lot of room to maneuver, but seeing the intense level of oversight-the relentless legal mandates, strict state laws, constant audits, and tight accountability checks-was an eye-opener. The City's hands are tied far more than most people realize.
Sitting through the recent budget reviews and submissions, Ihad an idea of how our finances were in jeopardy, as a good chunk of the debit is being passed down from obligations that our City did not have complete, nor do they still have control over the obligations that are owed; i.e. pensions via CALPERs. (R Logan)
What do you now think most residents misunderstand about the City's finances? Just how little of the total budget the City Council actually has direct, day-to-day control over. Most people assume the Council can simply shift money around at will, but the reality is that so much of it is already spoken for by law or fixed obligations.
On top of that, there's a serious gap in understanding inflation:
The cost of doing business: Everything required to deliver basic City services has skyrocketed since COVID-parts, fuel, labor, and materials cost significantly more.
The revenue side: City revenue crawls in at a slow, predictable rate that simply hasn't matched those rising operational costs.
At the end of the day, simple arithmetic rules: we either have to cut our municipal services down to match our revenue, or we have to raise the revenue to keep the services we rely on.
Robin Logan
I believe that my fellow residents believe that the City's budget can be maintained like their own household budget. The problem is the obligations of pensions and insurance that are tied to S&P 500 and other means of retirement investments, which the City cannot just stop paying or moving said retirement investments to another source. It is imperative that the residents realize that their shopping habits help keep what little revenue we do receive offset some of the debt. Without the little sales tax we can receive, we are going to keep losing money and get further behind.
What would you want the City Council to hear from residents? I'd actually flip that question around: What do our residents need to hear from the City Council? We need some straight talk. This budget deficit isn't just an abstract accounting glitch-it's the cumulative result of all of us expecting (and rightfully wanting) quality services, good parks, and clean streets. Over the years, we've taken the suburban lifestyle we enjoy here in South Gate for granted. We see neighboring cities modernizing and expanding, and we expect South Gate to do the same without it costing us another dime.
That simply isn't sustainable anymore. Everything costs more, plain and simple. If we want to be a mature, forward-looking community, we have to look for real, working solutions instead of just complaining when the bill comes due.
Submitted September 17, 2026 i Page 1
33 lagree with flipping this question to the residents and giving them the facts in a page of where the revenue goes, and how much (%) of our taxes, sales and property, comes back to our city. Iwould also have a page of what projects were funded by grants, and not money from our budget, i.e.
Tweedy Mile. Iknow that a lot of people didn't understand, and still don't understand, how a grant works. (R Logan)
What trade-off did you find hardest?
Any discussion around cutting our citywide safety services, especially cuts to the South Gate Police Department. Having fewer boots on the ground and reduced patrol resources directly impacts the peace of mind on our residential streets. That's a tough pill to swallow for any homeowner who cares about their neighborhood.
Having to lose services that ourresidents need, and the people who's job it was to do those services. We saw this recently with the loss of the crossing guards, and we had to take money out of ourreserve forthis. Whilelunderstand the need forsafety, Ido not agree with funding it as fast using the reserves. The schools knew that this was going to be the reality, the residents didn't figure this out or didn't believe that this was truly going to happen. This was a mistake for future negotiations for any need the residents might feel they need. (R Logan) Where did the group agree, and where did it not agree?
Where we agreed: Almost everyone in the room arrived at the same hard truth-we cannot simply cut our way out of this deficit. South Gate urgently needs new, dependable revenue to protect the basic services we depend on. (I agree with everything stated. R Logan) Where there was debate: The discussion naturally turned to how to generate that money, but the clear majority consensus leaned toward the Utility Users Tax (UUT) on this November's ballot. Most of us felt it is the fairest, most realistic path to get our core services back up to standard and give our city a real foundation to build on for the future.
Here is wherellistened to those in the group that were leaning on voting no to the UU 7; andlagree that we need to see where the Council are going to take us, if the UUT were to pass. The residents need to hearhow close the budget will be tracked, orhow many upcoming revenue potential projects we could have within the veryr near future. It will show that in 2027, the idea of increasing our taxes again could be a moot point. While it isn't a full guarantee, but showing us the potential positive outlook rather than a negative one. (R Logan)
Elio
What did you understand about the City's finances before this started? Before participating in this process, I thought I had a fairly good understanding of how citiesespecially our city-managed their finances. My perception was simple: residents are taxed, those funds are mismanaged, and when the money runs short, residents are asked to pay more taxes.
That was also the lens through which I initially viewed the proposed Utility Users Tax (UUT).
From a mile-high view, with all the noise we hear through the media, news outlets, and social media, I think it is easy to understand how residents can come to that conclusion.
However, looking at the City's finances from a 1 0-foot view changed my understanding considerably.
When you have the opportunity to ask difficult questions, receive direct answers, propose alternatives, and hear factual explanations about why something can or cannot be implemented your perspective changes.
I also learned that City spending is not simply something that can be changed at the whim of elected officials. There are federal and state laws, contractual obligations, and other requirements that Submitted September 47, 2026 i Page 2
34 cannot simply be overridden by what elected officials-or even residents-may want at a particular moment.
One of the most important things I took away from these meetings was the human element behind what can otherwise feel like an abstract government bureaucracy. The people involved in developing and administering the budget are professionals dealing with reai-world financial constraints and consequences.
In many ways, the challenge is similar to what families and businesses experience: What happens when there is too much month left at the end of the money? Which "nice-to-haves" must be reduced or eliminated in order to preserve the "must-haves"?
Ultimately, revenue must be sufficient to cover expenses. When it is not, something has to change:
revenue must increase, expenses must decrease, or some combination of the two must occur.
Those choices become difficult because every program affects someone. I have children, so parks and youth programs are extremely important to my family. At the same time, services such as police and fire protection are essential to the entire community. The City also has financial obligations that cannot simply be eliminated, and many of those costs increase from year to year while revenues do not necessarily increase at the same rate.
That was probably the biggest change in my understanding: a municipal budget is not simply numbers on a spreadsheet. Every decision ultimately has a real-world consequence for residents.
What surprised you most across the three sessions?
What surprised me most was how limited some of the City's choices actually are.
If residents want to maintain-or eventually improve-the level of services and quality of life we currently enjoy, the City must have sufficient revenue to pay for them. The alternative is to reduce expenses and services to match available revenue.
The problem is that cutting services may balance the budget in the short term, but it does not necessarily address the underlying structural problem. If costs and financial obligations continue increasing the following year without comparable revenue growth, the City can find itself facing another deficit and another round of cuts.
That creates a cycle that is difficult to sustain.
The clearest lesson for me was that choices have outcomes. Increasing revenue can provide resources to sustain services and potentially make future improvements. Reducing spending can balance expenses with available revenue, but it can also mean reducing services residents currently reCelVe.
The question, therefore, is not simply whether residents want to pay more or whether the City should spend less. The more meaningful question is: What level of City services and quality of life do we want, what does it actually cost to provide them, and how do we sustainably pay for them? What do you now think most residents misunderstand?
Before participating in this process, I believed-as I think many residents may believe-that financial mismanagement was the primary reason the City was facing its current budget situation.
After participating in the budget review process, I have a much better understanding of the oversight, auditing requirements, legal restrictions, internal controls, and checks and balances surrounding municipal finances.
That does not mean residents should stop asking questions or holding government accountable. We absolutely should. Nor does it mean that every spending decision will be one that every resident agrees with.
Submitted September 17, 2026 l Page 3
35 What changed for me was understanding the difference between questioning an individual spending decision and assuming that the City's overall financial challenges are simply the result of money being mismanaged.
Residents deserve transparency and accountability, but we also need to understand the financial structure and constraints before reaching conclusions about why the City is facing a deficit.
Which trade-off did you find hardest, and why?
Every budget decision has a cause and an effect, which is what makes these trade-offs so difficult.
What is essential to one resident may be less important to another. Because I have children, youth programs and parks are especially important to my family. Our family uses those programs, and I see firsthand how community organizations rely on City facilities and parks to serve children and families.
For a resident without children, those same programs may not feel as personally important. Yet that resident's property taxes and sales taxes still help support them. The same is true for many City services: each of us helps fund services that we may not personally use today-or perhaps ever use-because collectively they contribute to the community in which we live.
The recent discussion regarding crossing guards is a good example of how difficult these choices become. Crossing guard funding was reduced as part of broader efforts to address the deficit. There was significant public concern about that decision, and funding was subsequently reconsidered.
The important point is that restoring a service does not mean the underlying financial problem disappears. If revenue does not increase, restoring funding in one area generally means the money must come from somewhere else, another expense must eventually be reduced, or the deficit InCreaSeS.
That experience reinforced something important for me: there are no painless budget decisions when expenses exceed revenue. Every decision has a consequence somewhere.
Where did the group agree, and where did it not?
I believe there was broad agreement that the City faces difficult financial choices and that simply continuing the status quo is not a long-term solution.
Speaking personally, over the last three or four election cycles, I have consistently opposed tax increases. Before participating in this budget review process, I would have approached the proposed UUT from that same perspective.
The committee process changed my understanding because I was able to examine the City's financial situation in considerably greater detail and better understand the consequences associated with the available options. I now see the decision not simply as a question about a tax, but as a larger question about revenues, expenditures, City services, and the level of service residents expect the City to provide.
Where there was more discussion and differing emphasis was on what should happen beyond balancing the immediate budget.
Several members expressed a strong desire for City leadership to develop and communicate a much broader long-term vision for South Gate. The goal should not simply be to balance next year's budget. There should also be a conversation about what we want South Gate to become over the next 10, 20, or even 30 years.
That could include attracting businesses and investment, creating cultural and community gathering places, encouraging innovation, improving City services, reclaiming or revitalizing underutilized spaces, improving Tweedy Mile, investing in Hollydale, and developing thoughtful plans for the many diverse areas of our city.
Submitted September 17, 2026 l Page 4
36 I have friends who serve on committees in neighboring cities, and some of the conversations taking place there are not simply about maintaining existing services. They are discussing long-term goals such as increasing property values, attracting investment, improving neighborhoods, and intentionally shaping what their cities will look like in the future.
Those are conversations I would like South Gate to have as well.
Balancing the budget should not be the destination. It should provide the stable foundation from which we can have a much larger conversation about South Gate 2.0-what we want our city to become and how we intend to get there.
What would you want the City Council to hear from residents? I would actually flip the question. I would like our City leaders to speak plainly to residents and explain the City's finances using real-world numbers that everyone can understand.
For example, property taxes: If you buy a home in South Gate today for $1 million and pay approximately 1.39% in property taxes, that equals approximately $13,900 per year. Of that $13,900, the City of South Gate receives approximately 6%, or $834 per year.
Think about that for a moment: a homeowner could write checks totaling approximately $13,900 in property taxes, but South Gate's share would be approximately $834.
Now consider sales tax. If you went out today and purchased a 2027 Ford Expedition Platinum MAX for $92,500, at a sales-tax rate of 10.75%, you would pay approximately $9,943.75 in sales tax. Of that amount, South Gate's share would be approximately $198.87.
Put simply:
Property tax on a $1 million home:
Total estimated property tax: $13,900 per year
South Gate's estimated share: $834
Sales tax on a $92,500 vehicle:
Total estimated sales tax: $9,943.75
South Gate's estimated share: $198.87
Now consider the proposed Utility Users Tax (UUT). If a household's applicable utility bills totaled $5,000 per year, an 8% ULIT would equal approximately $400 per year, or about $33 per month.
These examples are important because residents hear terms like "property tax," "sales tax," and "utility tax," but many of us do not necessarily know how much of the money we already pay actually reaches the City of South Gate.
That is what I would like the City Council to communicate more clearly.
Don't just tell residents that the City needs additional revenue. Show us the math.
Show residents how much we pay. Show us how much of that money actually stays in South Gate.
Show us what it costs to provide police, fire, parks, youth programs, crossing guards, street maintenance, and the other services we expect. Show us which costs are increasing and which expenses the City cannot simply eliminate.
Then show us the choices.
What does the City receive today? \/Vhat does it cost to provide our current services? What costs are expected to increase? What can legally or realistically be reduced? \/Vhat additional revenue is being proposed? And what happens to City services under each scenario? Residents should not simply be to(d that the City needs more money. They should be shown why it needs additional revenue, where our existing tax dollars actually go, what alternatives were considered, and what happens if revenues and expenses continue moving in opposite directions.
Submitted September 17, 2026 l Page 5
37 If we expect residents to make an important decision about the future of South Gate, then we should give them the information necessary to understand not only the cost of that decision, but also the cost of doing nothing.
Michelle Montes
What did you understand about the City's finances before this started? I had an overall general knowledge in that there are finance restrictions on how/where they are spent. I enjoyed the more in-depth learning of exactly what the restrictions are but it was also eye opening to learn that it hasn't been questions and/or acted upon to review the restrictions and question if they still apply or if there's something that can be done to change it.
Examples:
The fee for park membership is the same for resident and non-resident.
The percentage received from property taxes is much less compared to other cities due to the determination done many years ago when South Gate had greater income from General Motors.
Understand this might be a tough one to change, nonetheless, we need to try. It's not being calculated correctly and merits review.
What surprised you most across the three sessions?
There is much to be done and questioned, not necessarily in a bad way but in a think outside the box type way. We can't continue to accept that's how it is or that's how it's been and not do anything. There seems to be a lot of complacency.
What do you now think most residents misunderstand?
I don't think residents misunderstand but instead they just don't understand. Many are quick to judge and point fingers without really understanding how City finances work. Is it our job to educate them, maybe however, I definitely do not think it makes sense to continuously recite the same spiel of the tax breakdown, how much the city receives, etc.
More than thinking the residents misunderstand, the real question to ask is why are the residents upset. The residents are upset because the City of South Gate has had very little to no progress.
Costs continue to increase however, so does income and expectations. The residents want a better South Gate, they don't want the same South Gate, they've been asking for a better South Gate for many years.
Which trade-off did you find hardest, and why?
I didn't necessarily find a specific trade-off the hardest, it shouldn't have to come to a trade-off.
Where did the group agree, and where did it not?
The group agreed that the residents want a better South Gate and the utility tax is not a solve all but more so a band aid. We need change, we need revenue and we need action.
What would you want the City Council to hear from residents? City Council needs to hear that the residents WANT a better South Gate, not the same South Gate.
Shall the utility tax pass, it should not be an end all and continue with complacency. Residents want to see ACTION, want to see CHANGE. I believe the residents are tired of hearing the same thing over and over and seeing nothing change. Residents want City Council to really question themselves if they're up for the challenge to making a better South Gate and for City Council to tell the residents how they plan to do so. Accountability is also a major factor, City Council needs to hold themselves accountable to making a better South Gate, not the same South Gate. 1, myself, often question if there should be a term limit for City Council. This is not because I dislike anyone Submitted September 17, 2026 l Page 6
38 but because there's a time when someone reaches their limit of what they can offer, what they can visualize and the knowledge/will to act upon it. Could it be that this City Council is at it's limit and that's all they can offer/do?
I'm still not fully on board with the utility tax, not until I hear from City Council and what they plan to do. We cannot continue to be complacent or think that South Gate residents are mainly all lowincome, on paper it may show such however, spending wise does not.
How does the City Council plan on making South Gate a better South Gate? Cynthia Reyes
What did you understand about the City's finances before this started? My understanding of the city's finances before this session was that there is very little revenue coming in and a lot of the general budget is tied up on salaries and pensions for city employees.
What surprised you most across the three sessions?
What surprised me the most about the first session was that the city's finances are also supported by a great sum of grant funding.
What do you now think most residents misunderstand?
What I think most residents misunderstand is that the total monies the city has can be used any way decided by city council but the reaiity is that a large portion of the monies are already assigned to a specific expense.
Which trade-off did you find hardest, and why?
The hardest trade-off would be letting go of city employees to save money but that would only hurt the city and its residents because there wou(d be less pub(ic services available.
Where did the group agree, and where did it not?
For the session I attended the group agreed that the city needs to work on bringing in more revenue to help add to the general budget.
What would you want the City Council to hear from residents? I believe city council has done enough hearing, and it is the residents that need to be hearing from city council. If city employees know that residents are misunderstanding information and that residents have questions about the deficit, then why has the city not acted on that opportunity to educate its community on what is happening and bring in the community into the conversation by being fully transparent about what plans are in p(ace to correct the deficit and ensure it does not become a looming cyclical issue. Residents are feeling inflamed by the proposed utility tax because they may believe there are other solutions. Perhaps residents want to hear about other efforts to correct the deficit that will not hurt their pockets for as long as they reside in the City of South Gate.
Submitted September 17, 2026 l Page 7
39 40
About This Committee 6
The Council asked this committee to look closely - and to say what you see.
You were appointed so that residents can understand the City's finances well enough to describe them to the CounciLin plain language. How this sounds to you is exactly what the Council wants to hear.
Your charge
Get to know how the budget
works, what is driving the shortfall,
and the choices in front of the
Council.
What stays with the Council
Programs, positions, contracts,
salaries, and Labor negotiations
remain the Council's decisions.
What you will share
A short written summary, in your
own words, of what you Learned
- community context for the
Council's deliberations.
How the time is set
Three Monday sessions - August 17, August 31, and September 14 - followed by your report to the Council.
Why the Council chose you
Your perspective is the point:
how the City's finances sound to
a resident hearing them in
depth.
41 Core Mental Model
Every dollar has a source, a purpose, and a
restriction level
Before asking how much money the City has ask what that money aslegally allowed to pay for The two questions have very different answers @Sourceaa-a>g Fund-a->
Where did it Where is it
come from? recorded?
Use -4
What may it
come from? pay for?
Control
Who approves it?
42 South Gate's Service Model
South Gate is a full-service city.
The City runs its own police department, its own parks and recreation programs, and its own water, sewer, and refuse utilities. Many cities of similar size do not.
Police A City police department, not a
Sheriff contract. The largest
single commitment in the
budget.
Parks and
Recreation
City-run parks, pools, sports,
and youth and senior programs.
Some cities provide almost
none of this.
Water, sewer,
and refuse
City-run utilities, paid for by
customer rates rather than by
taxes. Elsewhere these are
private Or COunty-run.
Everything
else
Streets, engineering, building and
safety, code enforcement,
planning, and administration.
Two cities with similar populations can look nothing aLike financiaLLy. Before comparing South Gate to a neighbor, ask whether that city runs its own police department and its own utilities. 43 Fund Structure
Fund accounting separates money by purpose.
Funds are separate Ledgers, not bank accounts. They keep money collected for one purpose from paying For another.
General Fund
The main operatfngfund. Pays for core
services when no Legal restriction
applies. This is the money the Council
decides how to spend.
:J S'[email protected] Funds
M6rieyth:@tarrives with str'ings attache
Enterprise Funds
Services paid for bythe customers who
use them, such as water, sewer,.and
refuse. Rates cover the cost of that
service only.
Capital Projects Funds
Major construction: streets, parks,
buildings. Usually paid forwith grants,
bonds, developerfees, ortransfers.
Debt Service Funds
Tracks repayment of money the City has
borrowed, principal and interest.
44 General vs. Restricted Resources
Which South Gate dollars are actually flexible?
Unrestricted resources
Can be used for any lawful public purpose,
subject to Council budget approval. This is the
money the Council actually al(ocates each year.
Examples
Property tax
Bradley-Burns sales tax
Measure P sales tax
Business license tax
Franchise fees
Hotel tax
Investment earnings
The charges the City makes to its own utilities
for administrative support and building
Leases.
Restricted resources
Limited by law or contract to a specific purpose,
service, project, or group of payers. The Council
cannot redirect these dollars.
Examples
Gas tax and road maintenance funds
Measure R and Measure M transportation
Propositions A and C transit
Measure W stormwater and Measure A parks
Street Lighting and landscaping assessments
asset forfeiture
Federal and state grants
Water, sewer, and refuse rates
Developer impact fees
Bond proceeds
45 Where the Money Comes From 6
South Gate's revenue is concentrated in two places.
About seven of every ten General Fund dollars come from just two taxes - 68.8% of the FY 2026-27 adopted budget.
General Fund revenue: $68.2M
. Sales tax $27.5M a 40% aSaLestax iPropertytax aEverythingelse Two separate one-percenttaxes: $13.6M Bradley-Burns and $14.OM Measure P.
Propertytax $19.4M-28%
RoughLythree-quarters arrives as a state paymentthat replaced vehicle license fees. The City keeps only about 6$ of every basic propertytax dollar.
Everything else $21.3M - 31%
Business license tax, franchise fees, hotel tax, permits, fines, rents and internal charges.
Two taxes fund 68.8% of the budget. Sales tax is the first revenue to faLLin a recession. That concentration is the City's single largest revenue risk.
46 General Fund and Other Revenue Sources 6
South Gate's 26-27 adopted revenue by fund.
TOT AL ADOPTED REVENUE
$171.7M
all funds, FY 2026-27
General Fund
Revenue by fund type ($ millions)
Special Revenue
$68.2M
$58.5M
GENERAL FUND
$68.2M
39.7% - flexible dollars
Enterprise8 $22.8M
InternalService § $t4.2M
HousingAuthority § $7.OM
DebtServiceI $0.9M
CapitalProjects $0.1M
$OM $20M $40M $60M
OTHER FUNDS
$103.5M
60.3% - restricted use
General Fund - $68.2M
The City's largest and most flexible
revenue source. Sales taxes supply
40.4% and property taxes 28.4%; the rest
comes from franchise taxes, permits,
fines and fees.
$80M
Other Funds - $103.5M
Restricted by law or purpose to specific
services and projects. Special Revenue
Funds are the largest share, followed by
Enterprise, Internal Service and Housing
Authority funds.
47 9 Property Tax Breakdown
Of every property tax dollar, the City keeps 6.15 cents.
On the County's allocation the City appears as "Tax District #1." Shares below are of$l.OO of propertytax collected in South Gate. 6 $0.0615
-of every proper'ty tax doltar stays with the City
of South Gate.
Why this matters
Rising property values move the City's
share only about six cents on the dollar.
The other 94 cents funds the County,
schools, and special districts - the City
cannot redirect it.
Every $1.00 of property tax
$1.00 of property tax
H Los Angeles County $0.2658
@ LosAngelesUnifiedSchool
District $0.2058
N LA Consolidated Fire District $0.1624
@ Educationalugmentation
funds $0.2154
H Communitycollege,library,
other districts $0.0891
48 Property Tax Basics 6
Property tax is stable, but cities receive only a slice of the 1 % levy.
Proposition 131imits the general property tax rate to 1 % of assessed value plus voter-approved debt rates, and generally caps annual assessed value growth at 2o/o until change in ownership or new construction.
Assessed
value x
1%
base levy
Voter debt
rates
City share is limited
City shares vary widely; many cities
receive only a slice of the I % basic
levy, and no/low-property-tax cities
may receive far less. Check your city's
actual share.
ERAF affects allocations
The Educational Revenue
Augmentation Fund shifted local
property tax to schools, reducing state
school funding obligations.
VLF in-lieu matters
The VLF swap replaced reduced
vehicle license fees with property tax
in-lieu revenues that grow with
assessed value.
Total property appreciation and City property tax growth are related, but they are not the same thing. 49 VLF ln-Lieu, Explained 6
VLF in-lieu is property tax that replaced a car tax.
In 2004 the State cut the vehicle license fee and made cities whole with property tax instead. That payment continues today and grows on its own formula.
x
Citywide assessed
value growth %
Why it exists
Before 2004 the State charged a 2%
vehicle license fee and shared it with
cities. It cut the rate to O.65o/o and
replaced the lost city revenue with
propertytax.
Not our 1o/o share
It iS paid in addition tO Our regular
property tax apportionment. Our share
of the 1 % Levy does not affect the
amount, and redevelopment does not
reduce it.
Why it matters
It is one of our largest and steadiest
revenues. Because it follows citywide
assessed value, growth anywhere in
the city lifts it.
VLF in-lieu grows with citywide assessed value - not with our share of the 1% levy. 50 South Gate's Two Sales Taxes 6
South Gate collects two one-percent local sales taxes.
The chart shows the statewide 7.25% base rate. District transactions and use taxes sit on top of it, including South Gate's Measure P, bringing the combined rate to 1 0.75%. @ StateGeneralFund3.9375%
§ Realignment 1.5625%
§ Propl72 0.50%
N Bradley-Burns County Transport
0.25%
§ Bradley-Burnslocal 1.OO%
NOte: the chart ShOWS he 7.25% staeWide babe Onl7. DiStTiCt aXeS, including Measure P, are additional. Amounts are FY 2028-27 adopted.
Bradley-Burns local I.OO% $13.6 million
Goes to the city where the sale happens:
the store, the deaLership, the warehouse.
If a retailer closes or moves out of South
Gate, this revenue leaves with it.
MeasurePTaxl%(2008) $l4.0million
Voter-approved and tied to the delivery
address. OnLine purchases delivered to a
South Gate address generally @enerate
Measure P revenue even when the seller is
somewhere else.
At 10.75%, South Gate is at the maximum combined sales tax rate state lawallows in Los Angeles County. There is no room to add sales tax to close a General Fund gap.
51 Revenue Restriction Exercise 6
Scenario: Can the City use these dollars?
A resident asks why the City cannot use "extra water money" to pay for parks or police patrols.
Which of these five sources could legally pay for general police overtime or a park program? Yes No
€ €
@ Unassigned General Fund € €
€ €
@ Specialpublicsafetyparceltax € €
€ -LJ
Two minutes with the person next to you - mark each Yes or No, then we'll compare. 52 Revenue Restriction Exercise 6
Answer key: the restriction travels with the dollar.
Same five sources, same order. The reason matters more than the verdict.
Which of these could legally pay for general police overtime or a park program? Source Verdict Why
@ Unassigned Gneral Fund yes Yes, subject to Council budget authority.
Restricted to eligible transportation projects.
o
Specialpublicsafetyparceltax yB3 Police overtime Likely; park only if allowed.
General hotel tax (TO T) yes GeneraLtaxes mayfund any Lawl'uL purpose.
Debrief: howwould you explain this to a neighbor? Plain-language version -"some public dollars are legally tagged for the people who paid for that specific senrice."
53 Where the Money Goes 6
Four service areas account for most of the budget.
Adopted FY 2026-27 General Fund:$72.1 M of operating spending, $74.9M includingtransfers. Shares are of $74.9M.
General Fund spending by department, $ millions
H Adopted FY 2026-27
Police 56% $41.9M
Parks and Recreation 14% § $10.7M
Everythingelse 14% 8 $10.6M
PublicWorks 8% § $6.2M
Community Development 7% § $5.5M
Police, $41.9M - patrol, dispatch,investigations,
and jail.
Parks and Recreation, $10.7M - down from
$12.5M the prioryear.
Water, sewer, and refuse are paid for by rates, not
bythis budget.
Staffing runs through all of it
These are departments, not costtypes. Pay and benefits are the largest expense in every one of them.
What this means
A gap of several million dollars cannot be closed with
supplies and travel. It reaches services and the people who provide them.
54 Personnel Costs 6
Staffing is the largest cost and the slowest to change.
Salary is only the first layer of what one position costs.
Salary Benef ts
Base pay, step
increases, and
overtime. 0
Health, dental, life,
disability, and
allowances. 0
Retirement
Current-year
pension cost, the
catch-up payment
On pant promises,
and retiree health.
Leave & risk
0 Workers'
compensation,
accrued leave,
disability, and
covering shifts when
someone is out.
The full cost of one position - and it is committed for years. p,qyand bezefits are set through multi-year agreements with labor grocips. The City cannot ahanBe these aopti mid-yihr the W!17 It Oaf'l7&m i pklFlZQ9i If IIQIQI Q pr*Jg*l,
55 Retirement Costs 6
Retirement costs are promises made years ago.
The City pays two very different retirement bills each year. Only one is about current employees.
Moves w-th the workforce
Current payroll
What the City pays today's employees in salary and active benefits.
Normal cost
The retirement benefit current employees earn this year. Fewer positions, smaller normal cost.
Locked in by past promises
Catch-up payment
A mortgage payment on benefits already promised but not fully funded. It does not shrink when the City hires fewer people.
Retiree health
Health coverage promised to retirees, separate from the pension itself.
Why costs rise while the City shrinks
The catch-up payment is set by past promises, not by headcount. $6.OM-)$11.1M (+85%)
Catch-up payment since FY 2019-20
348 -) 3j2
Budgeted positions from FY 2024-25 to FY 2026-27
56 Grants and the Single Audit 6
Grants are a bigger share of South Gate's money.
FY 2024-25 audited statements: grant revenue now outpaces both major tax sources. 44% Grants 23% Salestax 15o/o Propertytax
Eligibility
Grant dollars pay only for costs eligible under that specific award - set by the grant agreement, not by Local need.
Matching and maintenance of effort
Many awards require a local match or a commitment to
sustain existing spending. Both consume General Fund
capacity for years.
Procurement
Federal awards impose their own procurement standards.
Local purchasing compliance is not automatically federal compliance.
Single Audit
$19.1 M in federal awards expended in Pf 2024-25 - a federal compliance audit is an annual certainty, not a contingency.
The threshoLd is $I M beginning FY 2025-26.
Before accepting a grant, ark: What dOeS it require US tO spend, far hOW tang, and What happens tO the program and the Staff when it ends?
57 Capital Planning 6
Most construction is paid for with money that cannot
be spent on anything else.
What problem are we
solving?
What is being built,
and how long will it
last?
Almost always grants
and restricted funds.
The FY2026-27program is
$1 9. 7 million across 32
projects, of which only
$378,000 comes directly
from the General Fund.
Who builds it, and
what could go wrong?
Can the City afford to
operate and maintain
it after it opens?
58 The Budget Process 6
The strongest budgets are built before the adoption night.
Policy direction
Council priorities, service
levels, and the assumptions
everything else is built on.
Department requests
Personnel, contracts,
operations, and capital
improvement (CIP) needs.
Finance review
Revenue forecast, fund
balance, restrictions, and risk
are tested.
t
Monitoring
Quarterly reviews,
amendments, and forecasts -
which shape next year's
direction.
Adoption
Council sets appropriations,
staffing, transfers, and fees.
I
Public hearings
Trade-offs made visible:
alternatives, scenarios, and
community input.
The cycle restarts - monitoring feeds next year's policy direction. 59 Structural Balance 6
A budget can be balanced and still be unsustainable.
Balanced on paper
The budget closes using reserves, unfiLled
positions, property sales, one-time grants, or
deferred maintenance. It is Legal, and
sometimes it is the right call.
The risk
One-time money runs out. If ongoing costs are
still higher than ongoing revenue next year, the
same gap reappears and is usually larger.
Built to last
Money that arrives every year pays for costs
that occur every year: operations, debt
payments, and maintenance.
Signal
The City can keep services running without
needing a new one-time fix each year.
Plain rule: use one-time moneyfor one-time needs, unless there is a credible plan to replace it before the ongoing cost continues.
60 Structural Balance in South Gate 6
South Gate's budget is balanced. It is not structurally balanced.
Recurring revenues
Property tax, Bradley-Burns sales tax, Measure
P, business license tax, franchise fees, hotel
tax, and charges for service. This money
arrives again next year.
The test
Take the one-time items out of both sides and
compare what is Left. If ongoing costs are
higher, the gap returns and compounds.
One-time resources
$34.5 million in federal pandemic relief, more
than $18 million of which paid for ongoing
operating costs, plus draws on reserves. That
money is now essentially spent.
What FY 2026-27 did
General Fund revenue of $68.2 million against
$72.1 million in spending. An $11.3 million gap
was closed with $9.3 million in reductions
over two years, incLuding 36 net position
eliminations, plus $2.25 million from reserves.
Looking forward: without further action the City projects a recurring shortfall of $4 million to $5 million in FY 2027-28. A 2005 police pension bond is paid off that year, freeing about $2.O million annually, but rising pension, insurance, and labor costs are expected to absorb most of it. 61 How We Got Here 6
Costs grew faster than revenue, for six years running.
None ofwhat follows is about waste or a single bad decision. These are cost increases the City does not set and cannot decline to pay.
Annual cost, FY 2019-20 vs FY 2026-27
Federal relief ran out
a FY 2019-20 a FY 2026-27
$1 2M
$9M
$6M
$3M
$OM
$11.1M
$6.OM
$7.1M
$5.OM
$2.OM
$5.8M
Retirement +85% Health benefits 4-42% Insurance +190%
$34.5 million in pandemic relief carried
operating costs for several years. That
money is spent-the costs it covered did
not go away.
What has already been cut
$9.3 million in reductions overtwo budget
years, decreasing budgeted positions from
348 to 312. $2.25 million of reserves was
used to close FY 2026-27.
62 South Gate Reserves & Fund Balance 6
How much does the City have in reserve, and for how long? A reserve is savings for emergencies and revenue shocks. The Council's adopted policy defines it in a specific way, and measuring it any other way leads to the wrong conclusion.
Reserve as a share of operating spending
40%
30%
20%
1 0%
0%
--Target25o/o ---PolicyfLoor17%
June 30, 2025 audited June 30, 2027 projected
POliC7 flOOr 17%, iargeT 25%
Council policy sets a minimum of 1 7% of yearly
operating spending - roughly two months of
operating costs - and a target of 25%.
Total balance is not the reserve
The audit shows a $37.1 million total ba(ance,
but most is committed to specific purposes. As
policy defines it, the reserve was $22.4 million.
If it falls below 1 7oA
Council policy then requires a written three-year
plan to rebuild it.
If the City uses reserves this year, what specific plan puts them back, and what ongoing cost has actually been solved? 63 Ethics of Safeguarding Public Resources 6
The ethical duty is broader than avoiding personal gain.
No personal or political use
Public money, stafftime, equipment, and
City facilities serve public purposes - not
campaigns, not favors, not convenience.
m
is
No gifts of public funds
Every payment must deliver a genuine
public benefit and rest on clear legal
authority.
Conflicts and disclosure
Gov. Code 1090, Form 700, the Levine Act,
open meetings, and public records exist to
keep decisions visible.
"I"
Fair process
Competitive bidding, unbiased evaluation,
due process, and consistent standards -
applied every time, to everyone.
The test: could you explain this decision, in public, to the residents who paid for it? 64 You now have the vocabulary. The rest is applying it.
Three things to carry forward:
Follow the dollar Balanced # sustainable Say it in your own words Every dollar has a source, a
purpose, and a limit on what it
can payfor.
A budget can be balanced this
year and stiLL be unsustainab(e
neXt Year.
Understand the City's position
well enough to describe it
yourself.
%i
65 "I@
la
@-l .@ -@,,-@II@-
Aii ..-,**---*-a,*-sag as-*
-s-*- I@-@,1.1'
66 J-!,. an
67 Tonight 6
Six things to work through together.
A short recap of what we covered on August
17 What drove the City's costs up over six years
Why revenue did not keep pace
How the City Council got to the April 2026
decision
Where the reductions landed and what
changed o
What is still unresolved going into next year
We will stop for questions at each point. Nothing tonight is too basic to ask about. 68 Where We Left Off 6
Five things from August 17 worth carrying into tonight.
If any of these are fuzzy, say so now. The rest of the evening builds directly on them.
Not all City money is City money
Two taxes carry the General Fund
Most spending is people
Balanced is not the same as
sustainable
South Gate is in that position now
The City MANAGES about $228 million in total appropriations, but only about $72 million is General Fund. The rest is legally restricted.
Sales tax and property tax together are about 69o* of General Fund revenue. Sales tax falls first in a downturn.
Police alone is about 56% of General Fund spending. Across every department, pay and benefits are the largest cost.
A budget can close using reserves and one-time money and still leave the same gap waiting neXtYear.
The FY 2026-27 budget is balanced. It is not structurally balanced. Tonight is about why.
10nesentencetoholdonto:theCitydidnotoverspen
69 What Drove Costs Up 6
Roughly $11.5 million of new annual cost in six years.
Comparing FY 2019-20 to FY 2026-27. None of these increases were set by the City, and none can be declined.
Retirement
Health benefits
Insurance and claims
Federal relief ran out
The total
What it means
What it does not mean
The catch-up payment on past pension promises rose from $6.0 million to $11.1 million, an increase of 85%.
Employee health and related benefits rose from $5.0 million to $7.1 million, an increase of 42o/o.
Workers' compensation and liability insurance rose from $2.0 million to $5.8 million, up 1 90% - a statewide trend affecting nearly every California city. $34.5 million in pandemic relief came to South Gate. More than $18 million of it paid for ongoing operating costs. That money is now spent.
About $11.5 million of added recurring annual cost, of which $4.1 million is new in the current year alone.
When temporary money pays for permanent costs, the bill arrives the year the money stops. That year was this one.
None of this is waste, fraud, or a single bad decision. These are contractual and market costs the City is obligated to pay.
70 Revenue and Cost 6
Costs grew faster than revenue. That difference is the gap.
Ongoing revenue
$68.2 million
Adopted for fiscal year 2026-27, down about 1.O% from
the prior year. Property tax, sales tax, Measure P,
business license tax, franchise fees, and charges for
service.
Ongoing cost
$72.1 million
In General Fund operating spending. About $11.5
million or new annual cost was added over six years,
$4.1 million of itin the current year alone.
THE TEST
Take the one-time money out of both sides and
compare what is left. If ongoing cost is higher, the gap returns every year until something changes.
THE RESULT
Recurring cost exceeds recurring revenue. That is the
structural gap, and it does not close on its own or
shrinkwith time.
71 How the Decision Was Made 6
The Council did not arrive at this in one meeting.
Spring2025 @
June2025 @
October2025 @
Jan-Feb2026 @
February2026 @
April2026 @
The first forecast showed a gap opening
CounciL chose one-time bridge funding over reductions
The updated forecast put the gap at $9.4 million
Fiscal emergency presentations to Council
The fiscal emergency motion failed, 4 to 1
Council directed about $9.4 million in reductions
The reductions teak effeCt Jul7 1, 2026, the Start Of the currentfiscal Years What residents are experiencing nOW began then.
72 April 2026 6
What the Council directed, and how the budget was closed.
What the Council directed
Reduce General Fund spending by about $9.4
million
Effective July 1, 2026
Every department included, none exempt
a Spread over two years: $2.0 million and $7.3
million
How the budget was closed
a $9.3 million in reductions delivered
$2.25 million from the Budget Stabilization
Reserve
a Afunherdrawdownofunassignedfund
balance
Result: balanced, but not structurally
balanced
The $13.0 million Emergency Reserve was not touched and remains compliant with Council policy. 73 Where the Reductions Landed 6
Every department contributed.
Department Reduction
Police S3.44M
Parks and Recreation 52.31M
Public Works S1.27M
Community Development 91.16M
Administrative Services 90.42M
Human Resources S0.27M
Administration and other S0.46M
Citywide total S9.33M
What this means
No department was held harmless. Reductions are proportionally largestin the smaller support departments, because the large service departments could not absorb the same percentage without closing programs.
74 The Workforce 6
Twenty-three fewer budgeted positions.
How the reductions reached staffing.
335to3l2
eludg*t*d poameris
across the Clty, a net
reduction of 23
Separations
A voluntary separation
incentive program Let
some staff Leave by
choice rather than by
layoff
Vacancies
Positions Left unfilled
after retirements and
resignations rather than
recruited
Part-time
Part-time and seasonal
hours reduced across
departments
Most ofthe reduction came from positions that were already empty or from staff who chose to leave. That limited layoffs, and it also means the remainingwork is spread across fewer people. 75 Resident Impact Highlights 6
Service-level impacts across all departments.
Public Safety & Infrastructure
Police Department
Emergency response time rises from 4:35 to over 6
minutes; officerwaittimes exceed 1 hour
Nuisance and quality-of-Life calls no longer
answered; investigations take longer
Crossing guards eliminated at 37 sites; crime
prevention program ends; Records Bureau hours
cut
Public Works
a Graffiti removal ends Fridays and weekends;
response extends from 24 hours to one week
a Streettreetrimmingcycleextendsfrom4to5
years; streetlight crew reduced to five
a Enhanced park maintenance program eliminated;
CIP projects delayed
Community & City Services
Parks & Recreation
Pool open 8 months instead of year-round; golf
course closed Mondays and Tuesdays
Cultural Arts Division eliminated; excursions cut
from 9 to 6; park Lighting dark Nov 20 - Mar 31
Community Development
a Permitprocessingslowsfrom30-60daysto90-150
days; large projects to 18 months
o Code enforcement response slows from 3 days to
10 days
City Manager's Office & Human Resources
a Front counter and passport services eliminated;
no state or federal representation
Community events reduced; Risk Manager
position eliminated
76 What Is Not Solved 6
The gap narrows next year. It does not close.
Working in the City's favor
A pension bond issued in 2005 for the Police
Department is paid offin fiscal year 2027-28. That
frees about $2.0 million a year that is currently
going to debt service.
Working against it
Retirement, insurance, and Labor costs are
expected to keep rising and to absorb most or all of
that $2.0 million. Reserves are lower than they were
a year ago.
THE PROJECTION
Without further action, the City projects a recurring
shortfaLl of $4 million to $5 million in fiscal year
2027-28.
WHAT IS LEFT
The Budget Stabilization Reserve stands at $1.52
million, down from $3.77 million. It cannot close
another gap of this size.
This is the question waitingfor September 14: with reductions already made and resenres largely used, what combination of choices closes a gap of $4 million to $5 million? 77 Questions, and what comes next.
Session 3: Monday, September 14, 5:30 to 7:00 p.m.
@ Wewillwalkthrough thechoices available toclosea$4millionto$5milliongap. @ YouwillhavetimetoaskanythingLeftoverfromtonightorfromA @ Wewillstartshaping what youwant totelltheCityCouncil inSeptember.
I
78 79
Tonight 6
Two halves: the choices, then your report.
A short recap of August 17 and August 31 The gap the City still faces next year The four ways any city closes a budget gap
What each option would reach, and what it
costs
What your report is, and what it is not Working time to start drafting it together The second half of tonight belongs to you. Staff will answer questions and take notes rather than present. 80 Where We Stand 6
What the first two sessions established.
NOthing here iS neW. It iS the ground ttie reft Of tonight StandS On.
The money is not all flexible
Costs rose faster than revenue
Reductions have already
happened
One-time money closed the rest
The gap reopens next year
Only about $72 million of roughly $228 million in total appropriations is General Fund. The rest is legally restricted.
About $11.5 million of new annual cost over six years, driven by retirement, health benefits, and insurance. Revenue is roughlyflat.
$9.33 million cut across two budget years. Service effects are being felt now, from response times to permit processing.
$2.25 million from the Budget Stabilization Reserve, leaving $1.52 million. That account cannot do this again at the same scale.
A recurring shortfaLL of $4 million to $5 million is projected for fiscal year 2027-28 without further action.
ITchoestqoufeesatciohn tonight isnot whether something hastochange. Itiswhich combination ofchanges, andwhobears the 81 The Gap Ahead 6
A recurring gap of $4 to $5 million in fiscal year 2027-28.
What helps
About $2.O million
A pension bond issued in 2005 for the Police
Department is paid off in fiscal year 2027-28, freeing
about $2.0 million a year that currently goes to debt
service.
What hurts
$4 to $5 million
Retirement, insurance, and negotiated labor costs are
projected to keep rising and to absorb most or all of
that $2.0 million. Reserves are lowerthan a year ago.
WHATTHATMEANS
The starting point is not zero. Roughly $2.0 million of relief arrives on its own, which narrows the gap but
does not close it.
THE SCALE
Closing $4 million to $5 million is roughly [X]% of General Fund operating spending. For comparison, the entire
Human Resources General Fund budget is about $1.9
million.
82 Four Ways to Close a Gap
Every city has the same four levers.
Most solutions use more than one. None of them is painless.
Spend less
Reduce services
stafflng programi or
hours
Bring in more
Raise a tax or fee, or
grow the local economy
Use savings
Draw on reserves or
one-time moneyto buy
time
6 Shift the cost
Move eligible costs to
funds that legally
supportthem
83 Option: Spend Less 6
What further reductions would actually reach.
The easier reductions were made in 2025 and 2026. What remains is closer to service. Amounts in brackets are being developedlAlready done IRemainingdministrative
IService hours andprograms
lAdditional positions
IPoli--
$9.33 million over two years: vacancies held open, a voluntary separation program, reduced part-time hours, supplies, consulting, and administrative costs.
Further reductions to supplies, contracts, training, and non-personnel costs. Small relative to the gap.
Reduced facility hours, recreation programming, or seasonal staffing. Visible to residents immediately.
Eliminating filled positions rather than vacancies. This is where layoffs enter the conversation.
Police is about 56% of General Fund spending, so a reduction of this size is difficult to reach without it. The Council has not directed this. 84 Option: Bring In More 6
What raising revenue involves, and what it requires.
The tools a California city has
General taxes fund any Lawful purpose. Special
taxes are restricted to one named purpose. Fees
and charges are limited by law to the reasonable
cost of providing the service.
What each one requires
Any new or increased tax requires a vote of the
people. The Council cannot enact one on its own. A
general tax needs a simple majority. A special tax
needs two-thirds.
THE SALES TAX CEILING
South Gate is at 10.75%, the maximum combined
rate allowed in Los Angeles County. No capacity
remains there.
WHAT DOES NOT NEED A VOTE
Fees, which also cannot exceed the cost of the
service they fund. Economic development grows
revenue over years, not in a single budget cycle.
85 Other Revenue Options 6
Seven other revenue ideas the City is looking at.
Only the Utility Users Tax is Large enough to close the gap on its own. Three options need voter approval; four do not.
OPTION ANNUAL CEILING WHAT IT TAKES
Requires voter approval
StreetlightingandlandscapingUpto$1.6M
district
Transient occupancy tax $75Kper1%
No vote required
IFees,fines,andcostofservice $100K-$200K
IDevelopment impact fees Tobedetermined
lEconomic development$90Kpersite
IStreet sweeping fees Stops aloss
Resets the rate to what the service costs, plus annuaL CPI. Ends the General Fund subsidy; adds no flexible money.
The hotel tax is 8%, Lower than most cities, so the realistic range is small.
A study would reset permit, service, recreation, and citation charges against what each service costs.
Traffic and park-in-lieu charges on new development. Restricted to specific uses, not the General Fund.
Slow. One quick-service restaurant of the In-N-Out or Chick-fil-A type generates roughly $go,ooo a year.
The service costs more than the fee brings in. Raising it prevents a loss rather than creating new money.
86 Option: Use Savings 6
What one-time money is still available.
One-time money buys a year. It does not close a recurring gap. $1 52
million
ludgetStal;it Izatlon
Q*i*rv* downfrom
$3 77 milliop a year
hzo e5cilltfore:xactly
this, arid nearby used
up
$13.O million
Emergency Reserve,
held for disasters and
major revenue shocks.
Not an operating
account.
About $3.1 million
Unassigned fund
balance after this year's
actions. Available, and
thinner than it was.
The 17%floor
If the reserve falls
below it, Council policy
requires a written threeyear plan to rebuild it.
Rating agencies watch reserve levels. Thinner reserves can raise the cost of borrowingfor streets, facilities, and equipment, which residents eventually pay.
87 Trade-Offs Side by Side 6
Every option costs someone.
Same gap, five different answers. Notice which trade-offs you are most and least willing to accept.
ICutservices andhours
ICutpositions
IRaise revenue
lUsereserves
IDefer maintenance
Permanent. Residents lose access to programs and facilities. Falls hardest on people with the fewest alternatives.
Permanent. Slower response and longerwaits. Remaining staff absorb the work, which has its own limit.
Permanent. Requires voter approval. Households and businesses pay more, and services stayin place.
Temporary. Nothing changes this year. Less protection against emergencies, and the gap returns next year.
Temporary. Invisible now, more expensive later. Streets and buildings deteriorate faster than they are repaired.
IWobhsiecrhvaotfltohnetsheewco,uyldcyoouuncfi.Inldne
88 Your Report 6
What you are being asked to produce.
What it is
A short, plain-language account of what you
learned, what surprised you, and what you think
residents should understand about the City's
finances.
What it is not
Not a recommendation on programs, positions,
contracts, or a ballot measure. The committee was
not asked to decide, and the Council is not asking
you to.
WHO WRITES IT
You do. Staff will type, format, and answer factual
questions. The words and the judgments are yours.
DISAGREEMENT IS ALLOWED
If you do not all see it the same way, say so. A report that records where you agreed and where you did
not is more usefuLthan a manufactured consensus.
89 A Structure to Work From 6
Six prompts. Answer them in your own words.
What did you understand about the City's
finances before this started?
What surprised you most across the three
sessions?
What do you now think most residents
misunderstand?
Which trade-off did you find hardest, and
why?
Where did the group agree, and where did it
net? o
What would you want the City Council to
hear from residents?
Use the rest of tonight on these. Talkthem through out loud. Staffwill capture what you say and send it back as a draft for you to edit.
90 Thank you. What happens from here.
Three evenings of your time, and it producer something the Council dces net otherwise get.
Staff sends you a draft of tonight's discussion within [X] days for your edits.
You finalize the wording. It is your report, not the City's.
It is presented to the City Council on [date], and the committee's work is complete. 91 69
92 Office of thti
South Gate City Clptl
OCT 8 2026 Item No. 5
FILED
':l.u('/") Ciffl of South Gate
CITY COUNCIL
AGENDA B"J[LL
For the Regular Meeting of: October 13, 2026
0riBirmtinB Del-imfmerifa Aidniiniatralivac Services
DepartmetxtHead:
for Lugs Frausto Rob Houston
SUBJECT: SF,COND READING OF AN ORDINANCJ OF THF, CITY COUNCIL OF THE CITY OF SOUTH GATF, AMF,NDING CHAPTER 1.54 (PURCHASING SYSTEM
AND BIDDING RULES) OF THE SOUTH GATE MUNICIPAL CODE TO MODERNIZE
PROCUREME,NT PROCEDURES, ALIGN WITH ST ATE AND FEDF,RAL LAW, AND
IMPROVE OPERATIONAL EFFICIENCY
PURPOSE: To ask the City Council to hold a second reading and adopt an Ordinance comprehensively amending Chapter 1.54 of the South Gate Municipal Code (Purchasing System and Bidding Rules). The current Chapter was last comprehensively updated in 2005 and contains provisions that have fallen out of step with cutrent state and federal law. The proposed Ordinance modernizes procurement procedures, brings the chapter into compliance with current statute, and itnproves operational efficiency. The Ordinance expands administrative award, change order, and surplus dispositionauthority inseveral respects, as identified arid quantified intheAnalysis section below, and the ptoposed levels are within the range adopted by comparable California general law cities.
RECOMMENDED ACTTONS: Adoption ofthis Ordinance requires afour-fifths vote ofthe City Council, because Section 1.54.370(B) of the amended Chapter delegates emergency contracting authority to the City Manager and Public Contract Code Section 22050(b)(1) requires that such a delegation be made by a four-fifths vote, The City Council will consider:
a. Adoption of the proposed Ordinance amending Chapter 1.54 of the South Gate Municipal Code by reading title only,
STJMMARY: Chapterl.54 governs howthe City buys goods, contracts forservices, awards public works projects, and disposes of surplus property. The current Chapter was last comprehensively updated in 2005 arid shows its age in four respects,
First, several provisions no longertrack current state and federal law. Tlie current Chapter requires payment bonds on public works contracts only above $100,000, while California Civil Code Section 9550 mandates payment bonds on all California local public works conttacts above $25,000. The current Chapter does not address the Public Contract Code Section 22050(c)(2) timing for Council review and ratification of emergency procurements. The current Chapter cites Article XJ Section 8 of the California Constitution for intergovernmental contracts, where the controlling authority is the JointExercise of Powers Act at Government Code Section 6500 et seq, I
93 Second, dollar thresholds set in 2005 are now, in some cases, too low to reflect current operational reality and, in other cases, create unnecessary Council touches on routine transactions. The open market threshold of $2,000 has not been adjusted in over 20 years, creating a paperwork burden for routine purchases. The administrative disposition limit for surplus property of $1,000 sends low-value items to the Council for individual approval.
Third, the current Chapter is silent on procurement methods that have become standard in California municipal practice, including design-build and progressive design-build delivery for public works (authorized under Public Contract Code Section 22160 et seq. and Section 22170 et seq. respectively, for the categories of agency and project those chapters cover), on-call and master service agreements with task-order structures, cooperative and piggyback purchasing under proper certification, and e-procurement portal-based notice and award.
Fourth, the current Chapter does not address how procurement procedures change during a proclaimed local, state, or federal emergency. South Gate's experience during the COVID-19 response, the 2020 windstorm, and other recent emergencies confirmed that the City needs a codified emergency procurement framework with clear delegation tiers, ratification procedures, and operational mechanisms
The proposed Ordinance addresses all four concerns. It brings the four critical legal compliance provisions into alignment with the current statute. It rationalizes dollar thresholds where the 2005 figures have become operationally burdensome, while preserving the existing $50,000 formal bidding threshold. It introduces modern procurement methods that California municipal practice has adopted. It establishes a comprehensive emergency procurement framework. And it adds new internal-control provisions, including an anti-splitting prohibition (Section 1.54.165), a funding eligibility certification at the department level (Section 1.54.140(B)), and an annual inflation adjustment mechanism subject to Council resolution (Section 1.54.030(B)).
The proposed Ordinance has undergone extensive legal review by the City Attorney's Office, including a final review by outside counsel retained by the City Attorney. All material legal compliance items have been addressed, and the City Attorney's Office concurs with the first and second readings.
FISCAL IMPACT: Adoption of the proposed Ordinance has no direct fiscal impact on the fiscal year 2026-27 General Fund or any other fund. The Ordinance changes how the City procures, not whether it procures. Ongoing operational efficiencies are expected from reduced paperwork burden on routine purchases and faster processing of administrative-tier transactions, but these efficiencies are not quantifiable in advance with sufficient confidence to book as savings.
Two indirect fiscal implications are worth noting. First, aligning the payment bond threshold with Civil Code Section 9550, which currently requires a payment bond on public works contracts in excess of $25,000 rather than the $100,000 threshold in the current Chapter, brings the City into compliance and reduces exposure on small public works contracts by giving unpaid subcontractors and suppliers recourse against the bond, which is the remedy the Civil Code contemplates, rather than leaving the City to manage stop payment notices and withheld funds. Second, the 'funding eligibility certification at Section 1.54.140(B) is designed to protect the General Fund from inadvertent commingling of restricted 'funds by placing primary responsibility for funding-source compliance on the requesting department rather than Finance staff verification at the requisition 2 94
stage. This is an internal control improvement that may reduce the risk of external Single Audit findings in future years.
ANALYSIS: The proposed Ordinance is organized into the same subject areas as the current Chapter, but the substantive content has been comprehensively rewritten. The Change Map (Attachment 3) walks through the principal substantive differences between the current Chapter and the proposed Ordinance, organized by topic. The following sections describe the four functional areas of the rewrite at a level appropriate for Council consideration.
Modernization and Competition
The proposed Ordinance retains the existing $50,000 formal bidding threshold, which Council has held at this Ievel since 2005. Below that threshold, the Ordinance restructures the informal procurement framework. The open-market threshold (where documented price reasonableness, rather than three written quotes, is sufficient) increases from $2,000 to $3,000. The internal approval band for the Director of Administrative Services to sign off on an award (in addition to the department manager requisition) increases from $5,000 to $25,000. The $50,000 formal bidding threshold, above which Council award is required, is unchanged. Raising the internal band does mean that purchases between $5,000 and $25,000 no longer require Director-level sign-off before award, which is a real change in internal routing rather than a change in the level at which Council acts.
The Ordinance also adds an anti-splitting prohibition at Section 1.54.165, which is standard in California municipal procurement codes adopted in the last decade. The prohibition aggregates substantially similar fiscal-year needs for threshold determination purposes, while permitting unbundling where doing so would expand small business, minority business enterprise, women's business enterprise, labor surplus area firm, or qualified South Gate business participation, consistent with 2 CFR Section 200.321(b)(3).
Notice and award procedures shi'ft from newspaper publication as the primary method to the City's e-procurement portal. Newspaper notice is retained where required by law (Public Contract Code Section 22037 publication for formal public works bidding, for example) or where the Purchasing Officer determines newspaper publication is advantageous to the City. This change reflects how vendors actually find solicitations in 2026 and reduces the cost of solicitation advertising.
Public Works and CIP Delivery
The Ordinance retains the City's existing election to be subject to the Uniform Public Construction Cost Accounting Act (UPCCAA) at Public Contract Code Section 22000 et seq. Rather than restating the UPCCAA dollar figures, the proposed Ordinance refers to the state thresholds directly, so the Chapter follows fiiture state adjustments without fiirther Council action. The thresholds currently in effect under Public Contract Code Section 22032, as amended effective January 1, 2025, are force account or negotiated contract up to $75,000, informal bidding up to $220,000, and formal bidding above $220,000.
The Ordinance also adds, for the first time in South Gate's Municipal Code, authority for designbuild and progressive design-build delivery on public works projects (Section 1.54.467), authority for the Public Works Director to pre-qualify bidders on larger projects (Section 1.54.430(C)), and a maintenance contract framework for work that is not a public project under Public Contract Code 3 95
Section 22002 (Section 1.54.486). All three are authorized under California statute. Design-build and progressive design-build are available only for the categories of project the enabling chapters cover, are subject to statutory cost floors, project-count limits, worldorce requirements, and reporting duties, and are subject to statutory expiration dates. There are two separate progressive design-build pathways. Public Contract Code Section 22170 et seq. reaches water and wastewater projects and expires January 1, 2029. Public Contract Code Section 22185 et seq., added by Senate Bill 706 in 2023, reaches public works generally, is capped at ten projects in excess of $5,000,000 each, carries a skilled and trained workforce requirement, and expires January 1, 2030. Section
1.54.467 authorizes both pathways and leaves the choice between them to the project-level eligibility determination. Section 1.54.467 therefore authorizes these methods only for projects that are eligible under state law, requires written confirmation of eligibility in consultation with the City Attorney before a solicitation is issued, and leaves the current eligibility criteria and thresholds to the Administrative Purchasing Policies and Procedures so they can be updated as state law changes. Adding the authority to the Municipal Code does not by itself make any particular City project eligible.
Internal Controls and Compliance
The Ordinance addresses the four critical legal compliance items identified earlier: the Civil Code Section 9550 payment bond threshold (now $25,000, matching state law); the Public Contract Code Section 22050(c)(2) emergency review and ratification timing (now explicitly tracked in Section 1.54.370(B)(2)); the Labor Code Section 1771 prevailing wage requirement for public works above $1,000 and the Labor Code Section 1771.1 contractor and subcontractor DIR registration requirements (Section 1.54.495); and the Government Code Section 6500 et seq. citation for intergovernrnental contracts (Section 1.54.510(I)).
The Ordinance also addresses federal grant compliance comprehensively at Section 1.54.050(B), which incorporates 2 CFR Sections 200.317 through 200.327 by reference and addresses DavisBacon prevailing wage on federally funded construction prime contracts above $2,000 where the federal program legislation or award terms impose it, the socioeconomic affirmative steps encouraged by 2 CFR Section 200.321 for small, minority, women, veteran-owned, and labor surplus area businesses, conflict of interest standards, and full and open competition requirements.
Consistent with the 2024 revisions to the Uniform Guidance, those steps are stated in the Chapter as encouraged rather than required, so that the City is not held to a standard more restrictive than federal law imposes. The funding eligibility certification at Section 1.54.140(B) places responsibility for confirming funding-source eligibility on the requesting department, the project manager, and the department head, with Finance verifying the available appropriation. This division of responsibility better matches actual program knowledge to the certification fiinction and protects Finance's internal controls during Single Audit and grantor monitoring.
Bond and insurance requirements at Section 1.54.490 conform to state law. Payment bonds are mandatory at 100% of the contract amount for public works contracts exceeding the threshold set by Civil Code Section 9550, which is currently $25,000. The Ordinance refers to the statutory threshold rather than restating the figure, so the requirement tracks any 'future change in state law.
Performance bonds are mandatory at 100% for public works contracts of $100,000 or greater (a City policy choice unchanged from the current Chapter) and discretionary for contracts below that amount.
4 96
Emergency Procurement Framework
The Ordinance establishes a comprehensive emergency procurement framework at Section
1.54.370 for use during a proclaimed local, state, or federal emergency. Under Section
1.54.370(B), the City Council delegates the Public Contract Code Section 22050 emergency contracting authority to the City Manager, which state law permits only by a four-fi:tths vote.
Sectionl.54.370(C) does not itself delegate statutory authority. It sets the internal routing by which the City Manager's delegated authority is exercised within the organization: a Department Director may approve up to $25,000 per procurement, the Director of Administrative Services up to $100,000, and the City Manager up to $500,000, with matters above $500,000 going to the City Council except where the City Manager makes a written determination that the emergency does not permit delay for Council action. The City Manager remains accountable to the Council for all action taken under the delegation. The delegated officer reports the reasons for the action as required by Public Contract Code Section 22050(b)(3), and the City Council conducts the initial and continuing review required by Section 22050(c)(2). Section 1.54.370(B)(5) states that emergency purchases outside the scope of Section 22050, such as sheltering, mass care, and continuity of operations, rest on the City's general purchasing authority rather than on Section 22050, and are reported to Council on the same schedule.
The framework also authorizes operational mechanisms during emergencies (Section
1.54.370(D)): elevated P-card limits, advance payments to vendors, pre-screened cooperative purchasing with abbreviated certification (full certification within 30 days), after-hours and electronic-signature execution, and other necessary operational mechanisms the Director of Administrative Services determines consistent with applicable law and fiinding-source requirements. These mechanisms reflect lessons learned from the City's response during the COVID-19 emergency and other declared emergencies.
Changes in Delegated Authority
The Ordinance expands administrative authority in six respects. The City Manager may award professional services contracts up to $100,000, where the current Chapter leaves professional services award authority to a separate administrative instruction (Section 1.54.350(D)(1)). Task orders up to $250,000 may be issued administratively against a Council-approved master service agreement, within the aggregate cap the Council approved at award (Section 1.54.355(D)(2)). The Public Works Director may approve change orders up to the lesser of 10 percent of the original contract amount or $250,000 cumulatively, where the current Chapter uses a 20 percent test with a $50,000 or $100,000 ceiling (Section 1.54.610(B)). The Director of Administrative Services may approve modifications to informally awarded supply and service contracts on a comparable basis (Sectionl.54.610(C)). The administrative limit for disposing of surplus property rises from $1,000 to $10,000 (Section 1.54.810(C)). The Public Works Director may award informal UPCCAA public works contracts up to the state informal bidding threshold, currently $220,000, which Public Contract Code Section 22034(c) expressly permits a governing body to delegate (Section
1.54.450(C)).
5 97
Legal Review
The City Attorney's Office reviewed the proposed Ordinance over the past year of drafting, and all legal compliance items identified during that review were incorporated into the version transmitted with this report. The City Attorney's Office concurs with first reading.
CEQA Determination
The proposed Ordinance is not a project under the California Environmental Quality Act (CEQA) because it consists of administrative and procedural changes to the City's purchasing code and does not have the potential to result in either a direct physical change or a reasonably foreseeable indirect physical change in the environment (CEQA Guidelines Section 15378(b)(2) and (b)(5)).
To the extent the Ordinance authorizes specific 'future public works projects (for example, by adding design-build authority), each such fiiture project will be subject to its own CEQA review at the time it is considered for approval.
Implementation and Effective Date
The Ordinance becomes effective 30 days after second reading and adoption on October 13, 2026, with an effective date of November 12, 2026. Section 6 of the Ordinance sets a separate operative date of January 10, 2027, tmee months after adoption. Chapter 1.54, as it reads today, continues to govern procurement until the operative date. The purpose of the delay is to give the City time to issue the implementing Administrative Purchasing Policies and Procedures (APPP) and to complete department training before the new rules apply, rather than putting departments under a new Chapter that has not yet been trained. The amended Chapter, therefore, becomes operative during the third quarter of fiscal year 2026-27, leaving roughly six months under the new Chapter before the close of the fiscal year.
Staff training on the new Chapter is planned, covering the new approval authorities and the funding eligibility certification process, as well as department-analyst training on operational procedures and forms. Both training waves are scheduled to conclude before January 10, 2027, the operative date, and the APPP will be issued in advance of the first training wave.
Procedural Considerations
This Ordinance was brought to Council for first reading on September 8, 2026, and second reading and adoption on October 13, 2026. Government Code Section 36934 provides that an ordinance may not be passed within five days of its introduction, and not at other than a regular or adjourned regular meeting. It also provides that an ordinance must be read in full at introduction or passage unless further reading is waived by regular motion adopted by majority vote, or unless the title appears on the published agenda and the full text is available to the public online and in print at the meeting. The thirty five days between the two meetings satisfies the five-day requirement. If the Ordinance is altered after introduction, Section 36934 requires that it be passed at a meeting held at least five days after the alteration; corrections of typographical or clerical errors are not alterations for this purpose. Following adoption, the City Clerk will publish the Ordinance as required by Governrnent Code Section 36933. Because the amended Chapter is lengthy, the City Clerk published a summary under Section 36933(c)(1) and posted a certified copy of the full text in the City Clerk's office not less than five days before the October 13, 2026, adoption meeting. 6 98
The Ordinance becomes effective 30 days after adoption, on November 12, 2026, and becomes operative on January 10, 2027.
ATTACHMENTS: A. Proposed Ordinance amending SGMC Chapter 1.54 B. Exhibit A to the Ordinance, full text of amended SGMC Chapter 1.54 C. Change Map, current Chapter 1.54 compared to proposed Chapter 1.54 7 99
Attachment A
Agenda Bill 10/13/26
ORDINANCE NO.
CITY OF SOUTH GATE
LOS ANGELES COUNTY, CALIFORNIA
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SOUTH GATE AMENDING CHAPTER 1.54 (PURCHASING SYSTEM AND BIDDING RULES)
OF THE SOUTH GATE MUNICIPAL CODE
WHEREAS, the City of South Gate ("City") is a California general law city organized and operating under the laws of the State of California, with authority to adopt municipal ordinances goveming its purchasing and contracting activities pursuant to Government Code Sections 37100 through 37103, Government Code Sections 54201 through 54205 (which require every local agency to adopt policies and procedures, including bidding regulations, governing the purchase of supplies and equipment), the Uniform Public Construction Cost Accounting Act at Public Contract Code Sections 22000 et seq., including the informal bidding ordinance required by Public Contract Code Section 22034, and other applicable statutes;
WHEREAS, Chapter 1.54 of the South Gate Municipal Code (Purchasing System and Bidding Rules) governs the City's procurement of supplies, equipment, services, and professional services, and the award of public works contracts and disposition of surplus property; WHEREAS, the current Chapter 1.54 was last comprehensively amended in 2005, and several provisions of the current Chapter no longer track current state and federal law, including without limitation the payment bond threshold required by Civil Code Section 9550, the emergency procurement review and ratification timing under Public Contract Code Section 22050(c), and the proper statutory authority for intergovernmental cooperative purchasing under Government Code Sections 6500 et seq. (Joint Exercise of Powers Act);
WHEREAS, dollar thresholds set in 2005 have, in some cases, become operationally awkward, creating unnecessary paperwork burden on routine purchases and unnecessary Council action on low-value transactions, while the existing $50,000 formal bidding threshold remains appropriate and is preserved in the amended Chapter;
100
WHEREAS, the current Chapterl.54 is silent on procurement methods that have become standard in California municipal practice, including design-build and progressive design-build delivery for public works under Public Contract Code Sections 22160 et seq., 22170 et seq., and 22185 et seq., in each case only for projects eligible under, and subject to the project-type, cost, project-count, workforce, reporting, and sunset Iirnitations of, those chapters, on-call and master service agreement frameworks with task-order structures, cooperative and piggyback purchasing under proper certification, and electronic procurement portal-based notice and award; WHEREAS, the current Chapter 1.54 does not include a comprehensive emergency procurement framework, and the City's experience during the COVID-19 emergency response and other declared emergencies has confirmed the need for clear delegation tiers, ratification procedures, and operational mechanisms during proclaimed local, state, or federal emergencies; WHEREAS, Section 1.54.370(B) of the amended Chapter 1.54 delegates to the City Manager the authority to order emergency action under Public Contract Code Section 22050(a)(1), and Public Contract Code Section 22050(b)(1) requires that such a delegation be made by a four-fifths vote of the governing body; and the City Council intends by its adoption of this Ordinance to make that delegation by a four-fi'fths vote; and the City Council further finds that emergency procurement of goods and services outside the scope of Public Contract Code Section 22050 is authorized by the City's general purchasing authority and is addressed separately in Section 1.54.370(B)(5) of the amended Chapter;
WHEREAS, the amended Chapter 1.54 also adds new internal-control provisions, including without limitation an anti-splitting prohibition (Section 1.54.165), a department-side fiinding eligibility certification (Section 1.54.140(B)), a conflict of interest framework supplementing the Political Reform Act and other applicable law (Section 1.54.055), and an annual irfflation adjustment mechanism subject to Council resolution (Section 1.54.030(B)); WHEREAS, the City Attorney's Office, including outside counsel retained by the City Attorney, has reviewed the amended Chapter 1.54 and concurs with its adoption; WHEREAS, the City Council has determined that the adoption of this Ordinance is not a project under the California Environmental Quality Act (CEQA) because it consists of administrative and 9
101
procedural changes to the City's purchasing code and does not have the potential to result in either a direct physical change or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guidelines Sections 15378(b)(2) and 15378(b)(5); and WHEREAS, the City Council has duly considered all information presented to it, including the staff report and supporting materials, public testimony, and the recornrnendations of staff and the City Attorney's Office.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SOUTH GATE, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS.
SECTION 1. Chapter 1.54 (Purchasing System and Bidding Rules) of Title 1 (General Provisions) of the South Gate Municipal Code is hereby repealed in its entirety and replaced with a new Chapter 1.54 (Purchasing System and Bidding Rules), the full text of which is attached hereto as Exhibit A and incorporated by reference as though fully set forth herein.
SECTION 2. This Ordinance is not a project subject to the California Environmental Quality Act (Pub. Resources Code § 21000 et seq.) ("CEQA"). The City Council finds and detertnines that this Ordinance consists of administrative and procedural changes to the City's purchasing code and does not have the potential to result in either a direct physical change or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guidelines Sections 15378(b)(2) and I 5378(b)(5). To the extent the amended Chapter 1.54 authorizes specific future public works projects, each such future project shall be subject to its own CEQA review at the time it is considered for approval.
SECTION 3. The amended Chapter 1.54 shall apply to all procurement actions initiated on or after the operative date established in Section 6 of this Ordinance. Procurement actions initiated before the operative date shall be governed by the Chapter 1.54 provisions in effect at the time the action was initiated, except that contract amendments, change orders, and renewals executed on or after the operative date shall be governed by the amended Chapter 1.54. For purposes of this Section, a procurement action is initiated when the requisition is approved, when the solicitation is issued, or when the City otherwise takes a binding step in the procurement process, whichever occurs first.
10
102
SECTION 4. If any section, subsection, sentence, clause, phrase, or word of this Ordinance, or any part of the amended Chapter 1.54 enacted hereby, is for any reason held to be invalid or unconstitutional by a court of competent jurisdiction, such holding shall not affect the validity or enforceability of the remaining portions of this Ordinance or the amended Chapter 1.54. The City Council declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase, and word of the amended Chapter 1.54 irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or words might be declared invalid or unconstitutional.
SECTION 5. Headings and section captions used in the amended Chapter 1.54 are for convenience only and shall not be construed to limit or extend the meaning of any provision.
References in the amended Chapter 1.54 to specific statutes, regulations, or external standards include any successor provisions, amendments, or replacements thereof. Where a provision of the amended Chapter 1.54 conflicts with a specific provision of state or federal law that controls the City's procurement activities, the controlling provision of state or federal law shall apply, and the City Manager or designee shall document the controlling authority in the procurement file.
SECTION 6. This Ordinance shall take effect thirty (30) days after its adoption, in accordance with Government Code Section 36937. The amended Chapter 1.54 set forth in Exhibit A shall become operative three (3) months after adoption, on January 10, 2027, in order to allow the City to issue the implementing Administrative Purchasing Policies and Procedures and to complete department training before the amended Chapter applies. Chapter 1.54 as it read imtnediately before the effective date of this Ordinance shall continue to govern the City's procurement actions until the operative date.
SECTION 7. The City Clerk shall certi:[y to the passage and adoption of this Ordinance and shall cause the same to be published or posted as required by law, in accordance with Governrnent Code Section 36933, including, at the City Clerk's election under Government Code Section 36933(c)(1), publication of a summary of this Ordinance together with posting of a certified copy of the :tull text in the office of the City Clerk not less than five (5) days before the meeting at which this Ordinance is to be adopted.
103
PASSED, APPROVED and ADOPTED this 13th day of October 2026.
INTRODUCED at a regular meeting of the City Council held on September 8, 2026.
ADOPTED at a regular meeting of the City Council held on October 13, 2026, by not less than a four-fifths vote of the City Council, as required by Public Contract Code Section 22050(b)(1) for the delegation made in Section 1.54.370(B) of the amended Chapter 1.54.
CITY OF SOUTH GATE:
B7:
Joshua Barron, Mayor
ATTEST:
B7:
Yodit Glaze, City Clerk
(SEAL)
APPROVED AS TO FORM:
By=: DRAFi o'9
Raul F. Salinas, City Attorney
12
104
EXHIBIT A
CHAPTER 1.54
PURCHASING SYSTEM AND BIDDING RULES
Thefull text of the amendedChapter1.54 is attached as
the continuation of this document,beginning with Section1.54.010 and continuirig through Section 1.54.990.
13
105
Attachment B
Agenda Bill 10/13/26
Chapter 1.54 Purchasing System and Bidding Rules
Sections:
1.54.010
1.54.020
1.54.030
1.54.040
Purpose and organization of this chapter.
Definitions.
1.54.050
1.54.055
1.54.056
1.54.057
1.54.110
1.54.120
Changes to dollar limits.
Matters pertaining to housing authority, successor agency, utility authority, public financing authority, or other City bodies.
Conflicts with state and federal law; federal grant procurement compliance.
Standards of Conduct; Conflicts of Interest; Gratuities.
Non-Discrimination.
Insurance, Bonds, and Risk Transfer.
Appointment, authority, and duties of Purchasing Officer.
Requests (requisitions) to the Purchasing Officer by city departments and personnel that the city purchase supplies, equipment, and services.
Centralized purchasing: all city purchases of supplies, equipment, and services must be made by the Purchasing Officer.
Funding of purchases.
Anti-splitting.
Exceptions from centralized purchasing for certain recurring expenses, maintenance expenses, real estate expenses, and minor one-time expenses.
Exemptions from centralized purchasing for purchases of professional services.
Exemptions from centralized purchasing for contracts for public projects, maintenance work, or other construction.
Other exemptions from centralized purchasing.
Formal bidding procedures for city purchases of supplies, equipment, and general services exceeding fifty thousand dollars.
Best-value awards and reverse auctions.
1.54.130
1.54.140
1.54.165
1.54.210
1 .54.220
1 .54.230
1 .54.240
1.54.310
1.54.315
1.54.320 Informal bidding procedures for city purchases of supplies, equipment, and general services exceeding three thousand dollars up to and including fiffy thousand dollars.
1.54.330 0pen market purchases without formal or informal bidding for amounts of three thousand dollars or less.
1.54.340 Local business credit.
1.54.345 Local subcontracting on larger contracts.
1.54.350 Procedures for professional services.
1.54.355 0n-call and master service agreements for professional services.
1.54.365 Bid Protests.
1 .54.370
1.54.410
1 .54.420
1 .54.430
Procurement During a Proclaimed Emergency or Disaster.
Adoption of Uniform Construction Cost Accounting Act's accounting procedures.
Duties and responsibilities of Public Works Director.
Lists of qualified contractors and construction trade journals.
106
1.54.440 Formal bidding procedures for contracts in excess of the state informal bidding threshold pertaining to public projects and certain other construction-related activities.
1.54.450 Informal bidding procedures for contracts at or below the state informal bidding threshold pertaining to public projects and certain other construction-related activities.
1.54.460 Performance of contracts at or below the state force-accounUnegotiated threshold pertaining to public projects and certain other construction-related activities.
1.54.467 Design-build and progressive design-build delivery.
1.54.470 Exceptions to bidding requirements for public projects, maintenance work, and similar construction-related activities in case of emergencies.
1.54.475 Rejection of bids.
1.54.480 Tie bids.
1.54.485 Performance of public projects and maintenance work when no bids are received.
1.54.486 Procedures for entering into maintenance contracts where no public bidding is required.
1.54.490 Bid bonds, performance bonds, and payment bonds.
1.54.495 Prevailing wage; DIR registration; labor compliance.
1.54.510 Exemptions from formal and informal bidding procedures.
1.54.610 Approval of modifications and change orders.
1.54.710 Purpose of environmentally preferable purchasing policy.
1.54.720 Definitions used in environmentally preferable purchasing policy.
1.54.730 City department responsibility relative to environmentally preferable purchasing.
1.54.740 Waste prevention practices.
1.54.750 Exemptions and administrative updates to environmentally preferable purchasing standards.
1.54.810 Disposition of obsolete and surplus property.
1.54.990 Severability.
"Prior ordinance history: Ords. 1568, 1618, 1667, 1708, 1891, 2019, 2063, 2170, 2191 and 2302
1.54.010 Purpose and organization of this chapter.
This Chapter establishes the rules under which the City of South Gate purchases supplies, equipment, and services; the competitive bidding procedures that apply to those purchases; and a separate bidding system for public projects and maintenance work. It also sets the standards of conduct that apply to every City procurement, authorizes a local business credit, governs contract modifications and change orders, adopts an environmentally preferable purchasing policy, and establishes procedures for disposition of surplus City property.
The Chapter is organized as follows:
§§ 1 .54.010-1 .54.057 General provisions and standards of conduct §§ 1 .54.110-1 .54.165 Centralized purchasing and anti-splitting §§ 1.54.210-1.54.240 Exceptions from centralized purchasing
107
§§ 1.54.310-1 .54.365 Bidding for supplies, equipment, and services § 1 .54.370 Emergency and disaster procurement
§§ 1.54.410-1 .54.495 Public projects and maintenance work (UPCCAA) § 1.54.510 Exemptions from bidding requirements
§ 1.54.610 Modifications and change orders
§§ 1.54.710-1.54.750 Environmentally preferable purchasing policy § 1.54.810 Disposition of surplus property
§ 1 .54.990 Severability
Details of the procedures summarized here are developed in the Administrative Purchasing Policies and Procedures issued by the Director of Administrative Services under Section
1.54.110.
Quick reference for departments:
If your need is... Start at...
A purchase of $3,000 or less § 1.54.330
A purchase over $3,000 and up to $50,000 § 1.54.320
A purchase over $50,000 § 1.54.310
A professional services contract § 1.54.220 and § 1.54.350 Public works or maintenance work §§ 1 .54.410-1 .54.495 Maintenance work, no public project § 1 .54.486
An emergency purchase § 1 .54.370
A modification or change order § 1.54.610
Cooperative or piggyback purchase § 1.54.510
A sole-source purchase § 1.54.510
A bid protest § 1.54.365
1.54.020 Definitions.
Terms used in this Chapter but not defined herein shall have the meanings assigned by other provisions of the South Gate Municipal Code, the California Public Contract Code, or applicable state and federal law, in that order of precedence unless otherwise stated.
Unless the context otherwise clearly indicates, the following definitions apply:
"Administrative instructions for contracting professional services" means the professional services provisions of the Administrative Purchasing Policies and Procedures issued under Section 1.54.110(F), as amended from time to time, establishing the procedures by which the City selects and contracts for professional services.
"Best value" means the procurement method that provides the greatest overall benefit to the City considering price, total cost of ownership, quality, reliability, delivery, experience, past performance, and other factors stated in the solicitation. Best value is not a lowest-price-only determination.
108
"Bidders' list" means a list of suppliers and vendors maintained by the Purchasing Division of the Department of Administrative Services, and a list of qua(ified contractors identified by category of work maintained by the Public Works Director pursuant to Public Contract Code § 22034 and criteria of the California Uniform Construction Cost Accounting Commission. "California Uniform Construction Cost Accounting Commission" means the commission established by Public Contract Code §§ 22010 through 22020. "City council" means the City of South Gate City Council, except as otherwise specified in Section 1.54.040.
"Contract" means a written agreement between the City and a vendor or contractor, including a purchase order issued to a vendor or contractor.
"Cooperative purchasing" means purchasing that consists of combining the needs of multiple customers and/or other governmental agencies into a single solicitation of bids. "Cooperative purchasing agreement" means an agreement by which the City purchases supplies, equipment, or services using the competitively awarded contract of another public agency or of a cooperative purchasing organization whose contracts have been competitively awarded on behalf of participating public agencies.
"Customer" means any office, department, bureau, commission, board, or other agency of the City using supplies, equipment, or services.
"Director of Administrative Services" means the director of the City's Department of Administrative Services (also referred to interchangeably as the Finance Department).
References in this Chapter to "Director of Finance" or "Finance Director" shall be read as the Director of Administrative Services.
"E-procurement system" means the City-approved electronic platform used to issue solicitations, receive bids and proposals, distribute addenda, and maintain records of procurement activity. "Electronic sealed bid" means a bid or proposal submitted, time-stamped, encrypted, and stored through a city-approved e-procurement system that provides an auditable record functionally equivalent to a sealed, time-stamped paper submission.
"Facility" means any plant, building, structure, ground facility, sewer, storm drain, or other publicly owned infrastructure (including without limitation items identified in Public Contract Code § 22002(c)(3)); real property; streets and highways; or other public works improvement. "Force account" means the accounting procedure for accurate recording of work performed on public projects and maintenance work using internal resources of the City, including labor, equipment, materials, supplies, and subcontracts.
"Local business" means a business entity with fixed offices or distribution points located within the boundaries of the City and listed in the business license tax files with a City of South Gate business address. For retail businesses that designate a point of sale for sales tax purposes, the business shall designate the City of South Gate as the point of sale for sales tax purposes. "Maintenance work" means (1 ) routine, recurring, and usual work for the preservation or protection of any publicly owned or operated facility for its intended purposes; (2) minor repainting; (3) resurfacing of streets and highways at less than one inch; (4) landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems; and (5) work performed to keep, operate, and
109
maintain publicly owned water, power, or waste disposal systems, including dams, reservoirs, power plants, and electrical transmission lines of two hundred thirty thousand volts and higher. "Negotiated contract" means a letter of agreement, vendor agreement, contract, professional services agreement, maintenance services agreement, public project agreement, or other written documentation setting forth the terms and conditions of the purchase and services. "Other services" or "general services" means non-professional services that are not performed in conjunction with the purchase of an item (such as installation, repair, or activation labor) and that are not professional services as defined in this Chapter. General services include, without limitation, janitorial services, security services, equipment rental, courier services, and similar non-professional services.
"Piggyback contract" means a contract entered into by means of placing a purchase order against an existing contract of another public agency.
"Professional services" means any service generally characterized as a "profession" rather than a "business," "industry," "occupation," or "trade" under California law, including accounting, architecture, auditing, business appraisal or valuation, construction project management, construction management and inspection, engineering, environmental, financial planning, insurance, land surveying, landscape architecture, landscape engineering, legal, medical, municipal planning, public housing, real estate appraisal, and real estate brokerage or sales.
Consulting services with respect to any of the foregoing are also professional services for purposes of this Chapter.
"Public project" has the meaning given in Public Contract Code § 22002(c), and general(y means (a) construction, reconstruction, erection, alteration, renovation, improvement, demolition, and repair work involving any publicly owned, leased, or operated facility; (b) painting or repainting of any publicly owned, leased, or operated facility; and (c) in the case of a publicly owned utility system, only the construction, erection, improvement, or repair of dams, reservoirs, power plants, and electrical transmission lines of 230,000 volts and higher. Work that does not meet that definition is maintenance work or is otherwise procured under this Chapter. "Publicly owned infrastructure" means (including without limitation) items defined in Public Contract Code § 22002(c)(3); real property; streets and highways; sewer; water; street lights; or other public work improvement.
"Public Works Director" means the director of the City's Department of Public Works. "Purchasing Officer" means the Director of Administrative Services or his or her designee. All references in this Chapter to "Purchasing Supervisor" shall be read as references to the Purchasing Officer. Where this Chapter requires the approval of the Director of Administrative Services in addition to action by the Purchasing Officer, that approval shall be given by the Director personally or by a designee other than the person who authorized the purchase. "Purchase order" includes: (a) a standard written purchase order; (b) a "blanket purchase order," meaning a written authorization with a vendor for releases on an as-needed basis under a fiscal-year cap; and (c) a "field purchase order" for low-dollar purchases completed within a short timeframe. Dollar thresholds, fiscal-year caps, and procedural requirements for each type are specified in the Administrative Purchasing Policies and Procedures issued under Section
1.54.110.
"Reverse auction" means a competitive online procurement event in which pre-qualified bidders submit successively lower bids for specified commodities over a defined period, with award
110
made to the lowest responsive and responsible bidder or on a best-value basis as stated in the solicitation.
"Risk Manager" means the employee designated by the City Manager to administer the City's risk management and insurance program, or that person's designee. "Sole source" means a procurement from the only known source capable of providing the required supplies, equipment, or services, documented by a written justification approved in accordance with Section 1.54.510.
"Uniform Public Construction Cost Accounting Act" or "UPCCAA" means the Act set forth at Public Contract Code §§ 22000 through 22045.
1.54.030 Changes to dollar fimits.
A. State-Law Threshold Updates. State-law dollar thresholds expressly incorporated by reference in this Chapter (including those in the Uniform Public Construction Cost Accounting Act and elsewhere) shall be applied as amended from time to time, without further Council action.
B. Annual Inflation Adjustment. As part of the annual budget process, the Director of Administrative Services shall calculate an inflation adjustment equal to the percentage change in the GDP Implicit Price Deflator for State and Local Government Consumption Expenditures (BEA NIPA Table 1. 1.9) for the four quarters ending December 31 of the prior calendar year, not less than zero percent (0%) and not more than three percent (3%), and shall present it to the City Council. If the City Council adopts the adjustment by resolution, it applies to every dollar amount stated in this Chapter, rounded to the nearest one thousand dollars ($1,000), except (1 ) the fifty thousand dollar ($50,000) formal bidding threshold in Sections 1.54.310, 1.54.320, and
1.54.486, which may be changed only by ordinance, and (2) amounts set by state or federal law, which are governed by subsection (A). Amounts remain unchanged in any year the City Council does not adopt a resolution. The Director of Administrative Services shall publish the amounts then in effect in the Administrative Purchasing Policies and Procedures.
1.54.040 Matters pertaining to housing authority, successor agency, utility authority, public financing authority, or other City bodies.
References to "City Council" include the governing board of the applicable City body when that body is acting on matters within this Chapter, including the Successor Agency to the former Community Development Commission/Redevelopment Agency, the South Gate Housing Authority, the South Gate Public Financing Authority, the South Gate utility Authority, and any other commission, agency, or board established by the City Council.
1.54.050 Conflicts with state and federal law; federal grant procurement compliance.
A. To the extent any provision of this chapter conflicts with State or Federal law, the State or Federal law shall control. Conflicting provisions shall be interpreted, if reasonably possible, to avoid conflict. Severability applies to all provisions.
B. Federal grant procurement compliance. When expending funds from federal awards, the City shall comply with the procurement standards of 2 CFR §§ 200.317 through 200.327 (Uniform Administrative Requirements), awarding-agency-specific regulations, and any grant-specific terms. Without limiting the foregoing, the City shall observe:
111
1. The federal methods of procurement (micro-purchase, small purchase, sealed bid, competitive proposals, and noncompetitive) and the applicable federal thresholds, which supersede the thresholds in this Chapter when they are more restrictive;
2. Full and open competition, including any federal or funding-source restriction on local or geographic preferences and the requirements of 2 CFR § 200.319 (which identifies practices that may restrict competition), which may require the Purchasing Officer to suspend the local business credit under Section 1.54.340 for federally funded procurements;
3. Required contract clauses identified in 2 CFR 200 Appendix II (including, where applicable, Equal Employment Opportunity, Davis-Bacon, Copeland Anti-Kickback, Contract Work Hours and Safety Standards, Byrd Anti-Lobbying, debarment and suspension certifications, and domestic preference certifications under Build America, Buy America where applicable);
4. Documentation of the procurement history and cost or price analysis sufficient to support federal audit; and
5. Any awarding-agency requirements that are more restrictive than this Chapter, which shall control.
6. When the procurement method or threshold required by this Chapter is more restrictive than the federal method or threshold, this Chapter controls. When the federal method or threshold is more restrictive, the federal requirement controls. The Administrative Purchasing Policies and Procedures shall include a method-mapping reference identifying the corresponding federal procurement method for each procurement method authorized by this Chapter.
When required by applicable federal program legislation, the terms of the federal award, or awarding-agency requirements, prime contracts in excess of $2,000 for the construction alteration, or repair of public buildings or public works shall comply with the Davis-Bacon Act (40 u.s.c. §§ 3141 through 3144, 3146, and 3147) and implementing regulations, and shall include the contract clause required by 2 CFR 200 Appendix 11(D), irrespective of any higher threshold otherwise applicable under this Chapter. Davis-Bacon does not apply to every federally funded construction contract; applicability shall be confirmed against the award terms and documented in the procurement file.
7. Affirmative steps for small, minority, women, veteran-owned, and labor surplus area businesses. For federally funded procurements above the federal micro-purchase threshold, the City should take the socioeconomic affirmative steps encouraged by 2 CFR § 200.321 to consider small businesses, minority business enterprises, women's business enterprises veteran-owned businesses, and labor surplus area firms when possible. Nothing in this paragraph imposes a requirement more restrictive than the applicable federal standard.
8. Conflicts of interest. For federally funded procurements, the City shall maintain and apply written standards of conduct addressing conflicts of interest in the selection, award, and administration of contracts, consistent with 2 CFR § 200.31 8(c) and Section 1.54.055 of this Chapter.
1.54.055 Standards of Conduct; Conflicts of Interest; Gratuities.
This Section supplements, and does not replace, the conflict-of-interest and ethics requirements imposed by Government Code § 1090, the Political Reform Act (Government Code §§ 8'l 000 et seq.), the regulations of the Fair Political Practices Commission, the common law conflict-ofPage 7 of 29 112
interest doctrine, the City's conflict-of-interest code adopted under the Political Reform Act, and applicable federal requirements including 2 CFR § 200.318(c).
A. City elected officials, appointed officials, board and commission members, officers, employees, and agents involved in the selection, award, or administration of contracts (including federally funded contracts subject to 2 CFR § 200.31 8(c)) shall avoid any real or apparent conflicts of interest. No person covered by this subsection shall participate in the selection, award, or administration of a contract supported by City or federal funds if a real or apparent conflict of interest would be involved. Such a conflict arises when an employee, officer, official, or board or commission member, or any member of their immediate family, has a financial or other interest in, or receives a tangible personal benefit from, a firm considered for a contract.
For purposes of this Section, "immediate family" means spouse or registered domestic partner, parent, child, sibling, parent-in-law, child-in-law, or sibling-in-law, whether biological, adoptive, or by marriage.
B. City elected officials, appointed officials, board and commission members, officers, employees, and agents shall not solicit or accept gratuities, favors, or anything of monetary value from present or prospective contractors or subcontractors that could reasonably be perceived to influence a procurement decision.
C. Violations of this Section are subject to disciplinary action and may result in remedies up to and including contract termination, disqualification, or debarment consistent with applicable law.
D. Organizational Conflicts of Interest (OCI). A person or firm that prepares specifications, statements of work, or solicitation documents for a particular procurement shall not compete for that procurement, unless the City determines in writing that adequate safeguards have been implemented to neutralize or mitigate the conflict consistent with applicable law and fundingsource requirements. The Administrative Purchasing Policies and Procedures shall include the standard organizational conflict-of-interest guidelines required of local agencies using designbuild or progressive design-build delivery under Public Contract Code §§ 22160 et seq., 22'l70 et seq., and 22185 et seq.
E. Debarment and Suspension. The City may debar or suspend a vendor, contractor, or consultant for cause, including, but not limited to, fraud, collusion, a criminal offense in connection with obtaining or peforming a public contract, significant or repeated performance failures, or serious ethical violations. The procedures, notice, and appeal rights for debarment or suspension shall be established by administrative policy consistent with applicable law.
1.54.056 Non-Discrimination.
All City contracts shall include non-discrimination requirements consistent with Federal and State law and City policy, prohibiting unlawful discrimination in employment and in performance under the contract. The Purchasing Officer shall include standard contract language to implement this section.
1.54.057 Insurance, Bonds, and Risk Transfer.
A. Administrative policy. Minimum insurance, bonding, indemnity, and other risk transfer requirements shall be established by administrative policy issued by the City Manager or designee. The policy may establish tiered requirements based on the type of work, activity, or exposure presented, and may be updated administratively to reflect current standards, including guidance from the City's joint powers insurance authority and its risk program advisors.
113
B. App!ication. The policy applies to any contract, purchase order, professional services agreement, master service agreement, task order, construction contract, lease, license, permit, facility use agreement, special event authorization, or other agreement under which a person or entity provides goods or services to the City, performs work on the City's behalf, or uses or occupies City property. The policy may provide risk-based exemptions for low-risk or de minimis transactions.
C. Higher requirements. A department may require limits or coverages higher than the policy minimums based on the risk presented.
D. Condition precedent. No agreement subject to the policy shall be executed, no notice to proceed issued, and no work commenced or goods or services delivered, until the required insurance, endorsements, bonds, and other security have been submitted and verified as provided by the policy.
E. Waiver. A reduction, modification, or waiver of a requirement established by the policy is effective only if approved in writing by the City Manager, the Director of Administrative Services, or the City's Risk Manager, and retained in the file. A Department Director may not waive an insurance requirement.
F. Indemnity. Indemnity and defense provisions shall be drafted consistent with applicable law, including Civil Code §§ 2782 and 2782.8, and with the standard forms issued under the policy.
G. Bonds and other security. Bond requirements for public works contracts are governed by Section 1.54.490 and applicable state law. For all other agreements, the Purchasing Officer or the Risk Manager may require bonds, letters of credit, or other security based on the risk presented, as provided by the policy.
H. Administration. The City may use a third-party administrator to receive, review, and monitor certificates of insurance and related documentation. Use of an administrator does not transfer the City's approval or waiver authority.
I. Continuing compliance. Required coverage shall be maintained for the full term of the agreement and for any applicable completed operations or extended reporting period. A lapse is a material breach, and the City may withhold payment, suspend work, or terminate.
1.54.'l10 Appointment, authority, and duties of Purchasing Officer.
A. Appointment. The Director of Administrative Services (Finance Director) is the City's Purchasing Officer and may delegate this authority.
B. Authority and duties. The Purchasing Officer shall: (1) purchase and contract for all supplies, equipment, and services required by any customer, in accordance with this chapter, approved administrative instructions, and other rules set by the Director of Administrative Services or City Manager; (2) negotiate and execute purchase orders and contracts, subject to required approvals; (3) utilize electronic solicitation and receipt of bids and proposals through the cityapproved e-procurement system; (4) seek best value without sacrificing necessary quality; (5) discourage collusive practices and encourage competition; (6) maintain required records and forms; (7) perform inspections and testing as needed; (8) recommend transfers and disposition of surplus; (9) maintain bidders' lists (except as provided in Section 1.54.430); and (10) perform other assigned duties. Approval routing by dollar level is governed by Sections 1.54.310 through
1.54.330, 1.54.350, 1.54.355, 1.54.370, 1.54.440through 1.54.495, 1.54.610, and 1.54.810.
114
C. Public Notice; Electronic Methods. The City's website or designated e-procurement portal shall be the default method for issuing notices inviting bids, requests for proposals or qualifications, and for receiving electronic sealed bids or proposals, except where print publication or additional methods are required by law or determined by the Purchasing Officer to be advantageous to the City.
D. Electronic Signatures. The Purchasing Officer may execute contracts, purchase orders, and related procurement documents using electronic signatures with the same legal effect as handwritten signatures, consistent with the California uniform Electronic Transactions Act (Civil Code § 1633. 1 et seq.) and applicable federal law.
E. Acting authority. In the Purchasing Officer's absence, these duties may be exercised by the City Manager or a duly appointed designee.
F. Administrative Purchasing Policies and Procedures. The Director of Administrative Services may issue and update Administrative Purchasing Policies and Procedures implementing this Chapter, including solicitation templates, electronic procurement, emergency purchasing practices, documentation standards, bid protests, debarment and suspension procedures, cooperative purchasing certifications, and procedures for verifying insurance and bonds. Where those procedures and the policy issued under Section 1.54.057 differ as to required coverages limits, endorsements, or indemnity terms, the Section 1.54.057 policy controls.
1.54.120 Requests (requisitions) to the Purchasing Officer by city departments and personnel that the city purchase supplies, equipment, and services.
Requisitions shall follow the procedures established in the Administrative Purchasing Policies and Procedures issued under Section 1.54.110, which may be electronic. The Purchasing Division may revise operational procedures for requisitions within the limits of this Chapter, with concurrence of the requesting customer.
1.54.130 Centralized purchasing: all city purchases of supplies, equipment, and services must be made by the Purchasing Officer.
The City maintains a centralized purchasing program within the Administrative Services Department for the procurement of supplies, equipment, and services, except as otherwise provided in this Chapter or by law.
All purchases shall be made through a written contract executed by the Purchasing Officer, unless explicitly exempted under Sections 1.54.210-1.54.240. Written contract forms include purchase orders (including electronic forms), field purchase orders, and blanket purchase orders.
1.54.140 Funding of purchases.
A. Budget appropriation required. No purchase order or contract shall be issued under this Chapter unless there is a sufficient unencumbered appropriation in the budget fund account against which the purchase is to be charged. The Purchasing Officer shall not authorize or issue a contract that exceeds available appropriations.
B. Department certification of funding eligibility. Where a purchase is to be charged in whole or in part to a restricted funding source - including federal awards, state awards, grant funds, capital improvement project funds, bond proceeds, enterprise fund revenues, or any other revenue or appropriation subject to use restrictions - the requesting department shall, before the
115
requisition is approved, certify in writing that the purchase complies with the eligibility, allowable cost, scope, and use restrictions of the applicable funding source. Verification of available budget appropriation by the Purchasing Officer, the Department of Administrative Services, or Finance staff is limited to the existence of sufficient unencumbered appropriation under subsection (A) and does not constitute a determination of program eligibility, cost allowability under applicable federal cost principles (including 2 CFR Part 200 Subpart E), grant-specific allowable use, or compliance with bond covenants or other funding-source restrictions.
Responsibility for those determinations rests with the requesting department, the project manager, and the department head approving the requisition. The Administrative Purchasing Policies and Procedures shall implement this subsection, including the certification form, list of funding sources that trigger the requirement, escalation procedure for concerns identified by Finance staff, and record retention consistent with applicable federal, state, and grant-specific retention requirements.
1.54.165 Anti-splitting.
Purchases and contracts shall not be split, separated, or otherwise structured to evade the competitive thresholds, approval requirements, or any other provision of this Chapter.
Aggregated needs for substantially similar goods or services within a fiscal year shall be considered in determining the applicable method of procurement.
Notwithstanding the foregoing, the Purchasing Officer (or the Public Works Director for public works) may divide a procurement into separate lots or scopes when doing so is economically feasible and would expand competition or participation by small businesses, minority business enterprises, women's business enterprises, labor surplus area firms, or qualified South Gate businesses, consistent with 2 CFR § 200.321 (b)(3). Documentation of the rationale shall be included in the procurement file.
1.54.210 Exceptions from centralized purchasing for certain recurring expenses, maintenance expenses, real estate expenses, and minor one-time expenses.
The following recurring and one-time payments are exempt from centralized purchasing under this Chapter:
A. Utility payments (water, electricity, gas, telecommunications, internet, refuse).
B. Lease and rental payment installments under existing lease or rental agreements.
C. Subscription fees (publications, software-as-a-service, online services, professional databases).
D. Insurance premium payments.
E. Maintenance contract installment payments under existing maintenance agreements.
F. Real property acquisitions and dispositions handled under separate authority.
G. Memberships in professional associations and intergovernmental organizations.
H. Training and conference registration fees.
1. Travel reimbursements consistent with City travel policy.
J. Intergovernmental service payments and inter-agency reimbursements.
116
K. Procurement-card commodity purchases approved under standards set by the Director of Administrative Services.
L. Court-ordered payments, judgments, settlements, and statutory fees.
M. Minor one-time expenses at or below the open-market threshold under Section 1.54.330.
The exemption applies to payments under an existing contract that was competitively procured or otherwise authorized. A new contract, a renewal that creates a new term beyond the original contract, or a material increase in price or scope shall be procured under the applicable provisions of this Chapter.
1.54.220 Exemptions from centralized purchasing for purchases of professional SerViCeS.
A. Professional services are procured through decentralized procedures by the customer, subject to the Administrative Purchasing Policies and Procedures issued under Section
1.54.11 0(F) and this chapter.
B. Qualifications-based selection applies where required by state law.
C. Except where an authorized exemption applies, professional services with an expected total cost exceeding fifty thousand dollars shall be competitively solicited (e.g., RFQ/RFP) using criteria appropriate to the service type; selection shall be based on qualifications, experience, and best value, including price where appropriate.
D. When federal or other restricted funds are used, the competitive method prescribed by the funding rules shall govern.
1.54.230 Exemptions from centralized purchasing for contracts for public projects, maintenance work, or other construction.
Public works, maintenance, and construction contracts continue to be procured by the Public Works Director under Sections 1.54.410-1.54.495. Subsequent purchase orders are issued by the Purchasing Officer unless otherwise exempt.
1.54.240 0ther exemptions from centralized purchasing.
With Director of Administrative Services approval, the Purchasing Officer may authorize a customer to purchase specified items independently, subject to this chapter and periodic reporting.
1.54.310 Formal bidding procedures for city purchases of supplies, equipment, and general services exceeding fifty thousand dollars.
All purchases of supplies, equipment, and general services with a purchase price or estimated value exceeding $50,000 (other than professional services governed by Section 1.54.350, or those governed by Sections 1.54.410 through 1.54.495 or otherwise exempt from bidding under this Chapter) shall be made using the formal bidding procedures below. Awards shall be made to the lowest responsive and responsible bidder unless best-value award is authorized under Section 1.54.315.
117
A. Notice inviting bids. The Purchasing Officer (or authorized customer) shall prepare a notice inviting sea(ed bids (including electronic sealed bids), describing the purchase, where documents are obtained, and the time and place (physical or electronic) for opening.
B. Publication and posting. The notice shall be posted at least once, not less than fourteen (14) calendar days before bid opening, on the city's website or e-procurement portal, which is the primary method of notice under Section 1.54. 11 0(C). The Purchasing Officer may additionally publish the notice in a newspaper of general circulation within the City where required by law or where the Purchasing Officer determines that publication is advantageous to the City.
Direct notice shall also be provided to vendors on the bidders' list and others who request it.
C. Submission of sealed bids. Bids shall be submitted to the City Clerk (or as specified) either (1 ) in sealed envelopes clearly identified, or (2) electronically through the city's e-procurement system. Late or misdelivered bids shall be returned or rejected unopened; electronic submissions shall follow system time-stamp controls.
D. Public opening and tabulation. Bids shall be opened publicly at the noticed time and place. A tabulation shall be made available for public inspection for not less than thirty calendar days.
E. Award. The City Council shall award to the lowest responsive and responsible bidder or as otherwise authorized by this chapter. Bid security, performance, and payment bonds may be required as specified.
F. Tie bids; rejection; other procedures. As provided elsewhere in this chapter.
1.54.315 Best-value awards and reverse auctions.
A. Best-value awards. For purchases of supplies, equipment, or general services under Sections 1.54.310 or 1.54.320, the Purchasing Officer may recommend award on a best-value basis rather than to the lowest responsive and responsible bidder, provided that:
1. The solicitation clearly states that award will be made on a best-value basis and identifies the evaluation criteria and their relative weights;
2. The evaluation criteria may include unit cost, total cost of ownership, operating efficiency, quality and warranty, compatibility with existing City systems, maintenance costs, past performance, contractor experience and responsibility, delivery schedule, and other factors reasonably related to the City's interests;
3. Price or cost shall be a weighted evaluation factor; and
4. The Purchasing Officer prepares and retains a written evaluation summary documenting the basis for the award recommendation.
B. Reverse auctions. The Purchasing Officer may conduct a reverse auction for commodities or other items suitable for such a method, provided that:
1. All participants are pre-qualified under a publicly issued solicitation;
2. The auction is conducted through the City's e-procurement system or an approved thirdparty platform with a documented audit trail; and
3. Award is made to the lowest responsive and responsible bidder at close of the auction, or on a best-value basis consistent with subsection (A) if so stated in the solicitation.
118
C. Reverse auctions shall not be used for public projects, professional services, or any procurement where prohibited by the terms of the funding source.
D. This Section does not apply to Public Works procurements governed by Sections 1.54.410 through 1.54.495.
E. Best-value award methods shall not be used where State law, Federal law, or the terms of the funding source require award to the lowest responsive and responsible bidder. For federally funded sealed bidding under 2 CFR § 200.320, award shall be to the lowest responsive and responsible bidder unless competitive proposals are used.
1.54.320 Informal bidding procedures for city purchases of supplies, equipment, and general services exceeding three thousand dollars up to and including fifty thousand dollars.
Purchases under this Section are subject to Section 1.54.165 (Anti-splitting).
Purchases of supplies, equipment, and general services with a purchase price or estimated value greater than $3,000 and up to and including $50,000 (other than professional services governed by Section 1.54.350, or those governed by Sections 1.54.410 through 1.54.495) may be made using the informal bidding procedures of this Section in lieu of the formal bidding procedures of Section 1.54.310.
A. Approvals. A department manager's approved requisition authorizes use of the informal procedures for any purchase over $3,000 up to and including $25,000. For purchases greater than $25,000 and up to $50,000, the written approval of the Director of Administrative Services is also required prior to award.
B. Quotations. The Purchasing Officer shall obtain at least three written quotations (email quotes acceptable) from vendors in the open market. Where reasonable, at least one quote should be solicited from a local business. Records shall be kept for not less than three (3) years after final payment, grant closeout, or project closeout, or longer as required by the City's records retention schedule or a funding source.
C. Award. Subject to Section 1.54.315, award shall be to the vendor offering best value to the city considering price, quality, durability, delivery, service, standardization, and other relevant factors. Where state law, federal law, or the terms of the funding source requires award to the lowest responsive and responsible bidder, award shall be made on that basis.
1.54.330 0pen market purchases without formal or informal bidding for amounts of three thousand dollars or less.
Purchases of $3,000 or less are exempt from formal and informal bidding. The Purchasing Officer or requesting department shall seek reasonable pricing commensurate with the purchase. At a minimum, the Purchasing Officer or requesting department shall make a documented price check or obtain informal quotes where practicable, and shall retain documentation in the procurement file consistent with administrative policy and the City's records retention schedule.
1.54.340 Local business credit.
A. Rule. In determining the lowest responsive and responsible bidder under Section 1.54.310 or the most advantageous vendor under Section 1.54.320, a bid evaluation credit of five percent (5%) of the bid price or quotation shall be applied to a local business that meets the eligibility
119
requirements of this Section, provided that the solicitation expressly states the credit is available. The credit shall be applied for purposes of evaluation only and shalJ not reduce the contract price payable to the awarded local business. The City Council may, by resolution, set a lower fixed percentage applicable to all subsequent solicitations.
B. Cap. The local business credit shall not apply to purchases or projects with a total estimated value exceeding $250,000. The credit, when applied, shall not exceed five percent (5%) of the bid price or quotation.
C. Exclusions. The local business credit shall not apply:
1. To public works as defined by state law;
2. To procurements funded in whole or in part by any source where the funding source restricts geographic preferences, including federal awards governed by 2 CFR § 200.319, or where application of the credit would be inconsistent with the socioeconomic affirmative steps described in 2 CFR § 200.321 ; or
3. To any other category identified by administrative policy issued under Section 1.54. 110.
D. Certification. A bidder seeking the credit shall complete the City-provided Local Business Certification form. The Purchasing Officer may verify certifications against the City's business license records.
E. Small & Local Business Program. The City Council may by resolution adopt a race- and gender-neutral Small & Local Business Program establishing detailed bid preferences, evaluation points, participation goals, or reporting requirements consistent with applicable law.
Such program shall be implemented by administrative policy.
1.54.345 Local subcontracting on larger contracts.
On contracts with an estimated total value of $500,000 or more, the City strongly encourages prime contractors and proposers to make good-faith efforts to subcontract with qualified South Gate businesses where feasible and consistent with the scope of work. Solicitations subject to this Section shall invite proposers to submit a Local Business Participation Plan describing anticipated local subcontracting, outreach to local subcontractors, and unbundling of scopes where appropriate. The Local Business Participation Plan is encouraged but not required, and failure to submit one shalJ not, by itself, render a bid or proposal nonresponsive. This Section shall not be applied in a manner inconsistent with federal grant requirements or 2 CFR §§ 200.319 and 200.321 and applicable grant terms.
1.54.350 Procedures for professional services.
Selection of architectural and engineering services shall be on demonstrated competence and qualifications; other consultants may be selected on a best-value basis.
Architectural, engineering, environmental, and construction-related professional services for public projects shall not be retained through cooperative procurement contracts. For other professional services, cooperative purchasing or piggybacking under Section 1.54.51 0(C) is permitted, subject to the certifications required by that Section. The City may establish on-call or master service agreements for recurring professional services needs in accordance with Section
1.54.355.
A. The procedures of Sections 1.54.310 through 1.54.330 do not apply to professional services.
The Director of Administrative Services shall maintain, within the Administrative Purchasing
120
Policies and Procedures issued under Section 1.54.110(F), the procedures governing professional services contracts, including thresholds, solicitation methods, evaluation criteria, approval routing, standard contract forms, and negotiation authority. The standard contract forms and the Contract Negotiation Authority Matrix are issued under this subsection.
B. Qualifications-based selection shall be used as required by state law. For professional services not subject to qualifications-based selection, competitive proposals should be used where practicable, especially above the threshold in Section 1.54.220(C) ($50,000). Sole-source awards require written justification consistent with Section 1.54.510(B).
C. For funded projects subject to outside procurement rules, those rules govern in addition to this chapter.
D. Award authority for professional services contracts.
1. Professional services contracts with a total expected value of $'l 00,000 or less may be awarded by the City Manager (or designee) following the qualifications-based or best-value selection process in the Administrative Purchasing Policies and Procedures.
2. Professional services contracts with a total expected value greater than $100,000 shall be awarded by the City Council upon recommendation of the City Manager.
3. Notwithstanding subsection (D)(1 ), any professional services contract or task order for design or construction management of a public project funded in whole or in part from sources requiring Council action shall be awarded or authorized by the City Council regardless of dollar amount, including a task order issued under Section 1.54.355.
E. Execution. Professional services contracts, task orders, and amendments authorized under this Section shall be executed by the City Manager or designee.
Purchases under this Section are subject to Section 1.54.165 (Anti-splitting).
1.54.355 0n-call and master service agreements for professional services.
A. Authority. The City may enter into on-call or master service agreements with one or more professional services providers for recurring or anticipated needs that cannot be precisely scoped at the time of award. Each such agreement shall be procured through the qualificationsbased or competitive process required for professional services under Section 1.54.220 and Section 1.54.350, using a publicly issued solicitation that identifies the scope categories, the agreement term, and the aggregate cap. Master service agreements with an aggregate cap exceeding $100,000 shall be awarded by the City Council under Section 1.54.350(D)(2); master service agreements with an aggregate cap of $100,000 or less may be awarded by the City Manager (or designee) under Section 1.54.350(D)(1).
B. Term. The initial term of an on-call or master service agreement shall not exceed three (3) years, with up to two (2) one-year extensions exercisable by the City Manager based on performance.
C. Aggregate cap. The solicitation shall state an aggregate cap representing the maximum cumulative value of task orders that may be issued under the agreement. The aggregate cap shall be set forth in the solicitation and approved at award in accordance with subsection (A) and may not be increased without further approval consistent with subsection (A).
D. Task orders. Individual task orders issued against the agreement are issued on the task order form prescribed by the Administrative Purchasing Policies and Procedures, incorporate
121
the terms of the master agreement, shall be authorized in writing, shall identify the scope, schedule, and not-to-exceed price, shall be tracked cumulatively against the approved aggregate cap, and shall be approved as follows:
1. Task orders may be authorized by the City Manager (or designee) up to the remaining approved aggregate cap, subject to paragraphs (2) and (3).
2. No individual task order with a not-to-exceed price greater than $250,000 may be issued without City Council approval.
3. No task order may be issued that would cause the cumulative value of all task orders to exceed the approved aggregate cap. Increases to the aggregate cap require approval under subsection (A): if the increased aggregate cap exceeds $1 oo,ooo, City Council approval is required; if the increased aggregate cap remains at or below $100,000, the City Manager (or designee) may approve the increase.
E. Multiple providers. Where more than one provider is awarded, the City shall use a documented method (rotation, qualifications-based mini-competition, or other reasonable method) to allocate task orders among providers.
1.54.365 Bid Protests.
A bidder or proposer may submit a written protest of an award or intended award in the manner and within the timeframes set forth in the Administrative Purchasing Policies and Procedures issued by the Director of Administrative Services under Section 1.54. 11 0(F). At a minimum, the protest shall identify the solicitation or award at issue, state the specific grounds for protest, and include all supporting facts and documentation. Protests shall be directed to the Purchasing Officer (or designee) for an initial determination. A protestor may appeal an adverse determination to the City Manager, whose decision shall constitute the City's final administrative action. Nothing in this section creates a private right of action or limits the City's discretion where permitted by law.
1.54.370 Procurement During a Proclaimed Emergency or Disaster.
A. Purpose. To provide expedited, compliant procurement during a proclaimed local, state, or federal emergency, or when a public exigency or emergency will not permit delay from competitive procedures. For purposes of this Section, "proclaimed emergency or disaster" means a local emergency proclaimed pursuant to California Government Code § 8630 and Chapter 7.14 of this Code, a state of emergency proclaimed by the Governor pursuant to Government Code § 8625, or a federal disaster or emergency declared by the President pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The operational mechanisms in subsection (D) are available only during a proclaimed emergency or disaster, and that authority is coextensive with the duration of the proclamation or declaration and terminates upon its expiration or rescission. The remaining subsections of this Section apply both during a proclaimed emergency or disaster and where a public exigency or emergency will not permit the delay resulting from competitive solicitation. Before a proclamation is issued, the City Manager may exercise the authority delegated in subsection (B) subject to the written findings required by subsection (B)(1 ) and the reporting required by subsection (B)(2), and a Department Director or the Director of Administrative Services may authorize a procurement within the limits of subsection (C) only with the prior concurrence of the City Manager.
122
B. Statutory Authority and Council Delegation. This Section is enacted pursuant to Public Contract Code § 22050. By adoption of this Chapter by a four-fifths vote, as required by Public Contract Code § 22050(b)(1 ), the City Council delegates to the City Manager the authority to order any action specified in Public Contract Code § 22050(a)(1 ), including the repair or replacement of public facilities, the procurement of equipment, services, and supplies necessary to respond to an emergency, and any directly related and immediate action required by that emergency, without giving notice for bids to let contracts.
1. Findings Required. Before exercising authority under this subsection, the City Manager (or designee) shall make a written finding, supported by substantial evidence, that the emergency will not permit a delay resulting from a competitive solicitation for bids, and that the action is necessary to respond to the emergency.
2. Initial Council Review. The City Manager shall report the emergency action to the City Council not later than seven (7) days after the action, or at the next regularly scheduled City Council meeting if that meeting will occur not later than fourteen (14) days after the action, as required by Public Contract Code § 22050(c)(2). The report shall state the reasons justifying why the emergency would not permit a delay from competitive solicitation and why the action was necessary.
3. Continuing Council Review. After the initial review under paragraph (2), the City Council shall review the emergency action at each subsequent regularly scheduled meeting until the action is terminated, and shall determine by a four-fifths vote whether there is a need to continue the action. If the City Council meets weekly, it may, after the initial review, review the emergency action every fourteen (14) days as authorized by Public Contract Code § 22050(c)(2).
4. Termination. The City Manager may terminate emergency action under this subsection at any time. Consistent with Public Contract Code § 22050(c)(2), no further Council review under paragraph (3) is required with respect to an action terminated before the City Council has reviewed that action and made a determination on the need to continue it.
5. Scope of the statutory delegation; other emergency purchasing. The delegation made by this subsection is the authority described in Public Contract Code § 22050(a)(1 ), which reaches the repair or replacement of a public facility, action directly related to and immediately required by the emergency, and the equipment, services, and supplies necessary for those purposes. Procurement of other goods and services needed to respond to an emergency, including sheltering, mass care, food and water, transportation, communications, and continuity of City operations, is not made under Public Contract Code § 22050. That procurement is authorized by the City's general purchasing authority under Government Code §§ 37100 through 37103 and 54201 through 54205 and by the City's emergency organization provisions, is exempt from formal and informal bidding under Section 1.54.510(D), and is subject to the routing in subsection (C) and the competition, documentation, and reporting requirements of subsections (E) and (F). The findings requirement in paragraph (1 ) and the four-fifihs review requirements in paragraphs (2) and (3) apply only to action taken under Public Contract Code § 22050.
C. Approval Authority During Emergencies. This subsection does not delegate authority under Public Contract Code § 22050. It establishes the internal approval routing by which the authority delegated to the City Manager under subsection (B) is exercised within the organization, and the City Manager remains accountable to the City Council for all action taken under that delegated authority. Subject to the foregoing, during a proclaimed emergency or disaster, or where a public exigency or emergency will not permit delay, procurement decisions under
123
subsection (B) and under the general emergency purchasing authority described in subsection (B)(5) are routed as follows, notwithstanding the dollar thresholds otherwise applicable under this Chapter:
1. Department Director or designee: up to and including $25,000 per procurement;
2. Director of Administrative Services or designee: up to and including $"l 00,000 per procurement;
3. City Manager or designee: up to and including $500,000 per procurement; and
4. City Council: any procurement greater than $500,000, except where the City Manager makes a written determination that the emergency does not permit delay for Council action, in which case the City Manager may proceed under subsection (B) and report to Council pursuant to subsection (B)(2).
All procurements made under this subsection shall be reported and, where applicable, ratified by the City Council within the time required by subsection (B)(2) and Public Contract Code § 22050(c)(2), and otherwise at the next regularly scheduled meeting affer the procurement is made. Notwithstanding Section 1.54.140(A), a procurement authorized under this Section may be made without a sufficient unencumbered appropriation where the emergency or exigency does not permit delay, provided that the Director of Administrative Services identifies the intended funding source and presents a budget amendment to the City Council at the meeting at which the procurement is reported.
D. Operational Mechanisms During Emergencies. During a proclaimed emergency or disaster, and notwithstanding any other provision of this Chapter, the Director of Administrative Services may authorize the following operational mechanisms to expedite procurement:
1. Elevated procurement card transaction and monthly limits for designated cardholders, subject to the Administrative Purchasing Policies and Procedures.
2. Advance payments to vendors where required to secure necessary equipment, services, or supplies, subject to written documentation of the circumstances and reasonableness.
3. Use of pre-screened cooperative purchasing agreements with abbreviated certification under Section 1.54.510(C), provided that full certification is completed within thirty (30) days affer the procurement.
4. After-hours and electronic-signature execution of contracts and purchase orders, with the same legal effect as in-person execution during business hours.
5. Such other operational mechanisms as the Director of Administrative Services determines are necessary to expedite procurement, consistent with applicable law and funding-source requirements.
E, Competition to the Maximum Extent Practicable. When time allows, the City will seek at least three (3) quotes or proposals using electronic means. When not practicable, the Purchasing Officer shall document the circumstances and the basis for the selection and price reasonableness.
F. Documentation & Posting. The Purchasing Officer shall ensure documentation of the emergency circumstances, vendor selection, price reasonableness, and any noncompetitive justification. Emergency awards shall be presented to the City Council on the schedule required by subsection (B)(2), and posted to the City's website as soon as practicable.
124
G. Federal Requirements. For federally funded procurements, the City shall follow 2 CFR 200, applicable agency guidance, and any grant-specific terms, including domestic preferences, contract clauses, and debarment checks.
H. Duration. Emergency procedures are limited to the period reasonably necessary to address the emergency. Routine or long-term needs shall transition back to standard competitive methods.
1. Labor Costs and FEMA Reimbursement. Procurement of supplies, equipment, and services under this Section is distinct from authorization of City personnel labor costs (including overtime, premium pay, and compensatory time) incurred during an emergency response. Eligibility of labor costs for reimbursement under the FEMA Public Assistance Program or other federal disaster assistance programs depends on the City's pre-disaster written labor policy, which is established outside this Chapter. Departments incurring labor costs that may be subject to federal reimbursement shall coordinate with the Director of Administrative Services and the Director of Human Resources to ensure documentation and timekeeping practices support reimbursement.
1.54.410 Adoption of Uniform Construction CostAccounting Act's accounting procedures.
Public Works procurements shall follow Sections 1.54.410 through 1.54.495; the general purchasing procedures in Sections 1.54.310 through 1.54.330 apply only where expressly referenced in Sections 1.54.410 through 1.54.495.
The City reaffirms its election to utilize the alternative bidding methods authorized by the Uniform Public Construction Cost Accounting Act (UPCCAA) for public projects as defined in Public Contract Code § 22002, including use of informal bidding under PCC § 22032 and force account/negotiated contracts under PCC § 22032(a). Maintenance contracts that are not public projects within the meaning of Public Contract Code § 22002 are procured under Section
1.54.486 of this Chapter.
1.54.420 Duties and responsibilities of Public Works Director.
The Public Works Director is authorized to prepare plans and specifications, invite bids, manage bidding, recommend/award within authority, secure required contractor documents, and delegate duties. Electronic advertising and receipt of bids may be used where authorized.
1.54.430 Lists of qualified contractors and construction trade journals.
A. The Public Works Director shall maintain, and keep current:
1. Alist of qualified contractors eligible to submit bids on informal contracts, organized by category of work and consistent with criteria established by the California Uniform Construction Cost Accounting Commission under Public Contract Code § 22034; and
2. A current list of construction trade journals identified by that Commission under Public Contract Code § 22036.
B. Notices of formal and informal bidding under Sections 1.54.440 and 1.54.450 shall be distributed using these lists as required by state law.
C. Pre-qualification under PCC § 20101. Public Contract Code § 20101 authorizes prequalification of prospective bidders but does not itself establish a dollar floor. As a matter of City
125
policy, for public works projects expected to exceed $1,000,000, the Public Works Director may require pre-qualification of bidders pursuant to Public Contract Code § 201 0'l prior to bid opening. Pre-qualification may also be required on projects below that amount where the Public Works Director determines it is warranted by project complexity or risk. Pre-qualification shall use a uniform questionnaire and rating system adopted by the City and shall provide a process for appeal of disqualification consistent with state law. Only pre-qualified bidders shall be permitted to submit bids on the project.
1.54.440 Formal bidding procedures for contracts in excess of the state informal bidding threshold pertaining to public projects and certain other constructionrelated activities.
A. Notice inviting bids shall: (f ) be published in a newspaper of general circu(ation at least fourteen (14) calendar days before the date of bid opening; (2) be sent by mail or electronically (fax or email) to all construction trade journals identified by the California Uniform Construction Cost Accounting Commission under Public Contract Code § 22036 at least fifteen (15) calendar days before the date of bid opening; (3) be sent to all contractors on the qualified contractors list for the category of work to be bid (Section 1.54.430(A)(1)); and (4) may also be posted on the City's website or e-procurement portal. If state law modifies required notice periods or methods, state law controls.
B. Bids shall be opened publicly by the city clerk at the noticed time and place (physical or electronic). Unless all bids are rejected, award shall be recommended to the lowest responsive and responsible bidder for City Council action.
C. Contracts shall be executed by authority delegated by the City Council.
1.54.450 Informal bidding procedures for contracts at or below the state informal bidding threshold pertaining to public projects and certain other constructionrelated activities.
A. Notice. The Public Works Director shall provide notice inviting informal bids not less than ten (10) calendar days before bids are due, mailed or emailed to all contractors on the qualified contractors list for the category of work to be bid (Section 1.54.430(A)(1 )) and to the construction trade journals designated by the California Uniform Construction Cost Accounting Commission for Los Angeles County (Section f.54.430(A)(2)). Notices shall also be posted on the City website or e-procurement portal.
B. Notice Content. The notice shall describe the project in general terms, indicate where more detailed information may be obtained, and state the time and place for submission of bids.
C. Award. The Public Works Director (or designee) may award contracts to the lowest responsive and responsible bidder. Execution shall be by the City Manager or designee.
D. Award When All Bids Exceed Threshold. If all bids received exceed the state informal bidding threshold under Public Contract Code § 22032(b), the City Council may, by adoption of a resolution by a four-fifths vote, award the contract at no more than $235,000 (or such other amount as is set by Public Contract Code § 22034(d) as it may be amended) to the lowest responsive and responsible bidder, provided the Council determines the cost estimate was reasonable.
E. Re-bid; Rejection. The Public Works Director may reject all bids and re-solicit, or use the formal procedures of Section 1.54.440, when in the City's best interest.
126
Informal bids shall use the City's current contractor list(s) and trade journals consistent with Public Contract Code §22034 and City policy.
1,54,460 Performance of contracts at or below the state force-account/negotiated threshold pertaining to public projects and certain other construction-related activities.
The Public Works Director may perform eligible work by force account, by purchase order under Sections 1.54. 110-1.54.230, or by negotiated contract executed by the City Manager or designee.
1.54.467 Design-build and progressive design-build delivery.
A. Authority. The Public Works Director, with City Council approval, may procure public projects using design-build delivery in accordance with Public Contract Code § 22160 et seq., or progressive design-build delivery in accordance with Public Contract Code § 22170 et seq. or § 22185 et seq., in each case only for projects that are eligible under the applicable chapter and only while that authority remains in effect. Eligibility is determined by state law, which limits each delivery method by the type of local agency, the type of project, the project cost, the number of projects, and the term of the authorization, and which imposes reporting obligations on agencies that use these methods. The Administrative Purchasing Policies and Procedures shall state the eligibility criteria, cost thresholds, project limits, reporting obligations, and expiration dates then in effect under state law, and shall be updated as state law changes. No solicitation shall be issued under this Section until the Public Works Director, in consultation with the City Attorney, has confirmed in writing that the project is eligible under the applicable chapter.
B. Findings. Prior to issuing a solicitation under this Section, the Public Works Director shall prepare written findings supporting use of the alternative delivery method, including consideration of project complexity, schedule constraints, opportunities for design innovation, and total cost. The findings shall be presented to the City Council for approval prior to issuance of the solicitation. The City Council approval required by subsection (A) is given by approving the findings under this subsection, and a further approvai is required at award under subsection (D).
C. Procurement procedures. Solicitations under this Section shall follow the procedures of Public Contract Code § 22160 et seq., § 22170 et seq., or § 22185 et seq., as applicable, including best-value or qualifications-based selection as applicable, public notice, prequalification of design-build entities, the standard organizational conflict-of-interest guidelines required by those chapters, any skilled and trained workforce requirement imposed by the applicable chapter, and statutory reporting. Where more than one chapter would authorize the project, the Administrative Purchasing Policies and Procedures shall identify the pathway selected and the reason for the selection. Sections 1.54.440 and 1.54.450 do not apply to design-build procurements under this Section, and Section 1.54.475 applies only as to the City's authority to reject any and all bids.
D. Council award. Award shall be recommended by the Public Works Director to the City Council for approval. The contract shall be executed by the City Manager or designee.
E. Federal funding. Where federal funds are used, design-build and progressive design-build procurements shall additionally comply with 2 CFR 200 and any awarding-agency requirements.
127
1.54.470 Exceptions to bidding requirements for public projects, maintenance work, and similar construction-related activities in case of emergencies.
Emergency public works contracting is governed by Public Contract Code § 22050 and shall be conducted in accordance with all provisions of Section 1.54.370 (Procurement During a Proclaimed Emergency or Disaster), including the statutory authority and Council delegation, approval thresholds, operational mechanisms, documentation, ratification, and federal grant compliance provisions of that Section. Sections 1.54.440, 1.54.450, 1.54.460, and 1.54.467 do not apply to emergency public works contracts entered into under this Section.
1.54.475 Rejection of bids.
The City may reject any and all bids. If, prior to rejecting all bids and declaring that the project can be more economically performed by employees of the City, the City intends to declare the project can be performed by force account, the City shall furnish written notice to the apparent low bidder of its intention to reject the bid, mailed at least two (2) business days before the hearing at which the City intends to reject the bid, as required by Public Contract Code § 22038.
After re-evaluating its cost estimates, the City may: (1) abandon the project or re-advertise for bids; or (2) by passage of a four-fiffhs vote of the City Council, declare that the project can be performed more economically by City employees and have the project done by force account.
1.54.480 Tie bids.
Tie-bid procedures shall be as authorized by state law.
1.54.485 Peformance of public projects and maintenance work when no bids are received.
If no bids are received under formal or informa( procedures, the City may perform the work by force account or by negotiated contract consistent with this chapter. 1,54.486 Procedures for entering into maintenance contracts where no public bidding is required.
Where the City proposes to enter into a contract for maintenance work within the meaning of Public Contract Code § 22002(d) that does not constitute a public project under Public Contract Code § 22002(c), the Public Works Director shall use one of the following procedures:
A. Contracts of $3,000 or less. The Public Works Director or designee may procure the work directly from a qualified provider with documented price reasonableness and without competitive bidding. Documentation shall be retained in the procurement file consistent with administrative policy and the City's records retention schedule.
B. Contracts greater than $3,000 and up to $50,000. The Public Works Director or designee shall contact at least three (3) qualified maintenance providers in person, by telephone, by electronic mail, or through the City's e-procurement portal, and obtain qualifications and pricing information. Award shall be on a best-value basis considering qualifications, price, and other relevant criteria.
C. Contracts greater than $50,000. The Public Works Director or designee shall issue a formal Request for Proposals describing the scope, qualification requirements, and proposal submission instructions. The RFP shall be posted to the City's website or e-procurement portal at least fourteen (14) calendar days before the proposal due date, and may also be published or
128
distributed by other means reasonably likely to produce an adequate response. Award shall be recommended to the City Council, which may accept or reject any proposal.
D. Alternative bidding. The Public Works Director may elect to procure maintenance work using the formal or informal bidding procedures of Sections 1.54.440 or 1.54.450. An election under this subsection changes the solicitation method only and does not change the approval authority established by subsections (A) through (C).
1.54.490 Bid bonds, performance bonds, and payment bonds.
The thresholds in this Section apply to public works contracts under Sections 1.54.410 through
1.54.486 and are independent of the general purchasing thresholds in Sections 1.54.310 through 1.54.330.
A. Bid security may be required by the Public Works Director as specified in the notice inviting bids for any contract under Sections 1.54.440 or 1.54.450. Bid security shall be returned to unsuccessful bidders; a successful bidder who fails or refuses to execute the awarded contract within twenty (20) days after notice of award shall forfeit its bid security, unless the delay is attributable to the City.
B. Payment Bond. As required by California Civil Code § 9550, the Public Works Director shall require a payment bond for any public works contract exceeding the threshold set by that statute, in an amount equal to one hundred percent (1 00%) of the contract amount. The City's call for bids shall state this requirement.
C. Performance Bond. For contracts equal to or greater than $1 oo,ooo, the Public Works Director shall require a performance bond in an amount equal to one hundred percent (1 00%) of the contract amount. For contracts less than $1 oo,ooo, the Public Works Director may require a performance bond in such amount as he or she determines reasonably necessary to protect the City's interests.
1.54.495 Prevailing wage; DIR registration; labor compliance.
All public works and applicable maintenance contracts under this Chapter shall comply with California Labor Code §§ 1720 et seq. and implementing regulations of the California Department of Industrial Relations (DIR), including the following:
A. Prevailing Wage. Pursuant to Labor Code § 1771, all workers employed on public works projects subject to that section, including covered maintenance work performed under contract, shall be paid not less than the general prevailing rate of per diem wages established by the Director of the DIR. The Public Works Director shall include the applicable prevailing wage determinations in the solicitation and contract documents for each covered project.
B. DIR Registration. Pursuant to Labor Code § 1771.1, all contractors and subcontractors bidding on, being listed in a bid proposal for, awarded, or performing work on public works projects shall be currently registered with the DIR and qualified to perform public work, except as exempted by Labor Code §§ 1725.5 and 1771.1 (n).
C. Project Registration. The Public Works Director shall register each applicable public works project with the DIR within thirty (30) days of contract award, but in no event later than the first day workers are employed on the project, as required by Labor Code § 1773.3.
D. Certified Payroll. Contractors and subcontractors shall furnish certified payroll records to the Labor Commissioner as required by Labor Code § 1776 and § 1 77"l.4.
129
E. Notice. The City's call for bids and contract documents shall include notice that the project is subject to compliance monitoring and enforcement by the DIR.
1.54.510 Exemptions from formal and informal bidding procedures.
A. General. Use of any exemption under this Section shall be documented in writing in the procurement file. For purchases funded by restricted sources, exemptions shall be applied only to the extent permitted by those sources. Available exemptions are listed below.
B. Sole source. A procurement from the only known source capable of providing the required supplies, equipment, or services. The procurement file shall include a written sole-source justification approved by the Purchasing Officer.
C. Cooperative purchasing and piggyback. Prior to utilizing a cooperative purchasing agreement or piggybacking on another public agency's contract, the Purchasing Officer shall certify in writing:
(1 ) that use of the agreement is in the best interests of the City; (2) that it is economically advantageous; and
(3) that the original contract was competitively awarded using procedures materially consistent with this Chapter.
The procurement file shall also document price reasonableness, scope and term alignment, and funding-source compatibility. During a proclaimed emergency or disaster, certification under this subsection may be abbreviated as provided in Section 1 .54.370(D)(3).
D. Emergency. Procurements made under Section 1.54.370 or Section 1.54.470 are exempt from formal and informal bidding to the extent provided in those Sections.
E. Lack of effective competition. Where the procurement involves supplies, equipment, or services for which there are no reasonably available alternatives in the marketplace (for example, fees for membership in professional organizations, registration for meetings or conventions, public utilities, advertising in identified publications, and proprietary items available only from original-equipment manufacturers or their authorized exclusive distributors). The procurement file shall include a written finding by the Purchasing Officer documenting the lack of effective competition.
F. Impracticability of formal bidding. Where the Director of Administrative Services, with the concurrence of the City Manager, makes a written finding that, given the nature of the supplies, equipment, or services, formal bidding is not likely to result in the lowest cost to the City. The finding shall be retained in the procurement file.
G. Recent competitive pricing. Where the same vendor has, within the preceding twelve (12) months, offered to provide the same supplies, equipment, or services on the same terms, conditions, and prices and that prior offer was the result of a competitive process. The procurement file shall document the prior competitive process and confirm that pricing has not increased.
H. Repair or compatibility components. Where the purchase is for a component for a system or equipment previously acquired by the City and is necessary to repair, maintain, or improve the City's utilization of that system or equipment. The procurement file shall document the existing system or equipment and the need for compatibility.
130
1. Intergovernmental contracts. Where the purchase of goods or services is made pursuant to a contract with another local, state, or federal governmental entity under authority granted by Government Code §§ 6500 et seq. (Joint Exercise of Powers Act), Government Code §§ 54981 et seq., or other applicable law.
J. Public Project Limitation. This Section does not exempt public projects from bidding requirements under Sections 1.54.410 through 1.54.495 unless an exemption is expressly authorized by state law.
K. Approval Authority. Use of any exemption under this Section shall follow the dollar-level approval routing applicable to the procurement under Sections 1.54.310 through 1.54.330,
1.54.350, 1.54.355, and '1.54.440 through 1.54.495, as provided in Section 1.54.110(B).
Procurements exempt under subsection (D) follow the routing in Section 1.54.370(C) instead.
1.54.610 Approval of modifications and change orders.
For purposes of this Section: (a) "cumulative modification value" refers to the aggregate dollar amount of all modifications and change orders to a contract, individually and together; and (b) "revised contract value" refers to the original contract amount plus the cumulative modification value.
A. Contracts may be modified by change order or amendment to add, delete, or revise items, subject to approval routing. Modifications to purchases made under Section 1.54.330 and to maintenance contracts awarded under Section 1.54.486 are approved at the level that would apply to the revised contract value under the Section that governed the original award, and this Section applies to those modifications only as provided in subsections (D) and (F).
B. For public works contracts originally approved under Sections 1.54.440, 1.54.450, 1.54.460, or 1.54.467, the Public Works Director (or designee) may approve change orders, individually or cumulatively, up to the lesser of (i) ten percent (10%) of the original contract amount, or (ii) two hundred fifty thousand dollars ($250,000). Change orders that would cause the cumulative value to exceed those limits require City Council approval, except as provided in subsection (D).
1. Any single change order in excess of fifty thousand dollars ($50,000) shall require the written approval of the Public Works Director, even if within delegated cumulative authority.
2. Cumulative tracking shall be maintained in the procurement file. Each change order shall identify the original contract amount, the cumulative value of prior approved changes, the new change amount, and the resulting revised total.
C. For contracts originally approved under informal purchasing authority (Section 1.54.320), cumulative modifications may be approved by the Director of Administrative Services if the total revised contract value does not exceed the $50,000 upper limit of the informal purchasing range in Section 1.54.320, as that limit may be adjusted under Section 1.54.030(B). Modifications that would cause the total revised contract value to exceed that limit require City Council approval, except as provided in subsection (D). For purchases of supplies, equipment, and general services originally awarded under Section 1.54.310 (formal bidding), modifications follow the same delegated authority structure as subsection (B): the Director of Administrative Services may approve cumulative modifications up to the lesser of ten percent (1 0o/o) of the original contract amount or $250,000; any single modification exceeding $50,000 requires the written approval of the Director.
D. Emergency and urgency modifications. The City Manager may approve a modification or change order without prior City Council action when delay would threaten public health or
131
safety, essential City operations, City property, or compliance with applicable law, subject to written findings supporting the urgency and a report to the City Council at its next regular meeting. Public works emergency modifications shall additionally comply with Section 1.54.370 and Public Contract Code § 22050.
E. Professional services amendments. Amendments to professionai services contracts awarded under Section 1.54.350 and task-order amendments under master service agreements awarded under Section 1.54.355 follow the award authority of the underlying contract or task order:
1. Amendments that do not cause the revised contract value or task-order value to exceed the City Manager's award authority under Section 1.54.350(D)(1 ) or the task-order ceiling under Section 1.54.355(D)(2) may be approved by the City Manager (or designee).
2. Amendments that cause the revised value to exceed those limits, or that increase an approved aggregate cap above $100,000, require City Council approval.
3. For professional services contracts originally awarded by the City Council under Section
1.54.350(D)(2), the City Manager (or designee) may approve cumulative amendments up to the lesser of ten percent (1 0%) of the original contract amount or $1 00,000; cumulative amendments exceeding those limits require City Council approval.
F. Insurance and bonds. No modification or change order is effective until required insurance and bonds have been confirmed current and, where the modification increases the contract value or extends the term, conformed to the revised value and term as required by the policy issued under Section 1.54.057.
1.54.710 Purpose of environmentally preferable purchasing policy.
The purpose of Sections 1.54.710 through 1.54.750 is to promote purchase of recycled and environmentally preferable products, minimize environmental impacts of city operations, and support markets for recycled and sustainable products.
1.54.720 Definitions used in environmentally preferable purchasing policy.
A. "Environmentally preferable products" means products that have a lesser or reduced effect on human health and the environment when compared with competing products serving the same purpose, considering raw materials acquisition, production, manufacturing, packaging, distribution, use, reuse, operation, maintenance, and disposal.
B. "Recycled product" means a product containing post-consumer waste, manufacturing scrap, or other recovered materials in amounts meeting or exceeding the minimum content standards adopted by the City Council or by administrative policy.
C. "Practicable" means sufficient in performance and available at a reasonably competitive price compared to non-environmentally preferable alternatives, considering total cost of ownership over the useful life of the product.
D. "Waste prevention" means source reduction practices that reduce the volume or toxicity of products consumed or discarded.
Additional definitions may be adopted by administrative policy.
132
1.54.730 City department responsibility relative to environmentally preferable purchasing.
All departments shall prioritize EPP, encourage waste prevention and recycling through contracts and purchasing practices, consider lifecycle impacts, specify recycled/environmentally preferable products where practicable, and solicit such products in procurement documents where appropriate.
1.54.740 Waste prevention practices.
City staff are encouraged to reduce resource consumption by considering durability and repairability, performing routine maintenance, duplex printing, electronic information management, and record-retention practices that support this section.
1.54.750 Exemptions and administrative updates to environmentally preferable purchasing standards.
A. Administrative Updates to Environmentally Preferable Purchasing Standards.
The Director of Administrative Services may, by administrative policy, update and expand environmentally preferable purchasing standards, product categories, and specifications to reflect current best practices, market availability, and total-cost-of-ownership considerations, provided such updates remain consistent with this Chapter and applicable law.
B. Exemptions. Nothing in Sections 1.54.710 through 1.54.750 requires purchase of products that fail to perform for their intended use, exclude adequate competition, or are not available at reasonable prices, terms, or within a reasonable time.
1.54.810 Disposition of obsolete and surplus property.
A. Departments shall submit at least annually a report identifying surplus/obsolete/unserviceable property.
B. With City Manager approval, the Purchasing Officer may sell or exchange such property for best obtainable return (including public auction, trade-in, or competitive sale) or dispose of items with no salvage value.
C. Items with an estimated market value of $10,000 or less may be disposed of administratively under subsection (B). Prior to the disposition of any item with an estimated market value greater than $1 o,ooo, the Purchasing Officer shall report to the City Council describing the property and the proposed method and terms of disposition, and shall obtain City Council approval.
D. Grant-funded equipment. Disposition of equipment acquired with federal or state grant funds shall comply with the disposition requirements of the grant source (including 2 CFR § 200.31 3(e) for federal grants), notwithstanding any provision of this Section to the contrary.
E. Information technology equipment. Before disposition, all information technology equipment (including computers, mobile devices, servers, storage media, and any equipment that has stored City data) shall be subject to data sanitization or destruction in accordance with administrative policy and applicable data-protection standards.
F. Vehicles. Disposition of City vehicles shall include transfer of title through the California Department of Motor Vehicles consistent with applicable law.
133
G. Public-safety-sensitive items. Items with public-safety sensitivity (including but not limited to police uniforms with City insignia, badges, body armor, weapons, evidence-handling equipment, and similar items) shall not be sold to the general public. The Chief of Police shall determine the appropriate disposition method.
H. Restriction on employee purchases. No City elected official, appointed official, board or commission member, officer, employee, or member of their immediate family (as defined in Section 1.54.055) may purchase surplus property of the City except through a public auction or competitive sale that is open to the general public on the same terms.
1. Items sold shall be paid for in cash, certified check, electronic payment, or other immediately available funds payable to the City. Proceeds shall be deposited and recorded as provided by administrative policy.
J. The Purchasing Officer is authorized, with the approval of the City Manager, to execute bills of sale and other documents evidencing transfer of title.
1.54.990 Severability.
If any provision of this Chapter is held invalid, the remainder shall remain in full force and effect.
134
Attachment C
Agenda Bill 10/13/26
Change Map SGMC Chapter 1.54
Current Ordinance vs. Proposed Ordinance
What Changed and What It Means
This change map summarizes how the revised Chapter 1.54 differs from the existing ordinance. It is a summary and not a substitute for the ordinance text. Attachment 2 (Exhibit A) controls, and all section references are to that draft.
Rows are grouped into four functional areas for readability: Modernization and Competition; Public Works, CIP Delivery, and Professional Services; Emergency and Disaster Procurement; and Execution, Standards, and Roles.
Two points apply throughout. Because the Ordinance delegates emergency contracting authority to the City Manager under Public Contract Code § 22050(b)(1), adoption requires a four-fifths vote of the City Council.
Modernization and Competition
l ff
lil
a
aliii ailii 1 i _@Jl; 1P l
ih
I I J(! ffi] a
mm iiiili I iii t*I IgiI I IiiIII II igIIgtg iiim
Thresholds:
goods and
general
services
Open market under
52,000; informal
bidding S2,000 to
S50,000
(department
manager to 55,000,
Director of Finance
above that); formal
bidding above
S50,000.
Open-market ceiling raised to
S3,000 (§ 1.54.330). Informal range
becomes S3,000 to S50,000, with
department manager authority to
S25,000 and written Director of
Administrative Services approval
required prior to award from
525,000 to 550,000 (§ 1.54.320).
The S50,000 formal-bid threshold is
unchanged and may be changed
only by ordinance.
Less paperwork at the
bottom tier. Director
approval at award rather
than at requisition may
shorten processing on
S25,000 tO !>50,000
purchases.
Best-value
awards and
reverse
auctions
Award generally to
the lowest
responsible bidder
or vendor. Reverse
auctions not
addressed.
New § 1.54.315 authorizes bestvalue award for supplies, equipment, and general services,
subject to disclosed criteria and
weights, price as a weighted factor,
and a written evaluation summary.
Reverse auctions are permitted for
suitable commodities. Neither
applies to public works, and best
value is unavailable where state
law, federal law, or the funding
source requires award to the lowest
responsible bidder.
A defensible best-value
path with guardrails. Price
cannot be dropped from
the evaluation, and federal
sealed bidding is
protected.
43 Page1 of 14
135
Page
2 of 14
136
Page
3 of 14
137
I
ali Wmf I- i i J I I [fi iin li } I U-i' i
i
ffi ri1
iii I188 € ii I*IIggIiii I *ii ii tv gigt mii s ii im
threshold stood
since 2005.
Government Consumption
Expenditures, with a zero percent
floor and a three percent cap. If
adopted, it applies to every dollar
amount in the Chapter, rounded to
the nearest !>1,000, except the
550,000 formal bidding threshold in
§§ 1.54.310, 1.54.320, and
1.54.486, which requires an
ordinance, and amounts set by
state or federal law (§ 1.54.030(A)).
maintenance tier stay
aligned automatically.
Thresholds never decrease
and stay flat in years the
Council does not act.
Defined terms
and contract
forms
Shorter definitions
section; contractform types not
defined. The chapter
refers to the
"Purchasing
Supervisor" and the
"Director of
Finance."
§ 1.54.020 adds defined terms
including best value, e-procurement
system, electronic sealed bid,
reverse auction, sole source, and
three purchase order types, and
maps the legacy titles forward.
Where DirectorofAdministrative
Services approval is required in
addition to Purchasing Officer
action, it must come from the
Director personally or from a
designee other than the person
who authorized the purchase.
Legacy title references
resolve without a separate
amendment. The separatedesignee rule is a
segregation-of-duties
control that auditors look
for.
Public Works, CIP Delivery, and Professional Services
I I
I
ali IiI im 1
-@ {T .1 I
I:j i_n ! fi a i
*
l 1 ]
my i il
T r ' i -'
gv Ill gII18811 I*i ii ii I IIg IIJIII iiixi
Public works
and UPCCAA
thresholds
§§ 1.54.440 through
1.54.460 codify the
March 2013 UPCCAA
figures of 545,000
and 5175,000.
These sections now refer to the
state informal bidding and forceaccount thresholds rather than fixed figures, applied automatically
under § 1.54.030(A) as the
Legislature amends them. §
1.54.410 confirms that
maintenance work that is not a
public project is procured under §
1.54.486.
No ordinance amendment
is needed when the state
changes thresholds, and
the chapter no longer
prints figures that go stale.
Staff apply the lJPCCAA
thresholds then in effect,
which the Administrative
Purchasing Policies and
Procedures publish.
46
138
r x
ali Ii iai i?'-; - ' -1.'7 i# I 'j iN *
._i l@TI P) l
im l !;'E ' .rTl I
I111111I1511iiII1881 €I iIIIIll III gtI ii iiiii IiiI z Public works
formal bidding
notice
§ 1.54.440 requires
newspaper
publication and
follows UPCCAA
procedures
generally.
§ 1.54.440(A) codifies the PCC §
22037 timing: newspaper
publication at least 14 calendar
days before bid opening, trade
journals at least 15 calendar days
before, and direct notice to the
qualified contractors list. State law
controls if it modifies the timing.
Deadlines are on the page
rather than by crossreference, and the section
stays compliant if the
statute changes.
Public works
informal
bidding rules
§ 1.54.450
references UPCCAA
generally; no
codified procedural
detail.
§ 1.54.450 adds the core PCC §
22034 rules: 10-day notice to the
qualified contractors list and trade
journals, award by the Public Works
Director to the lowest responsible
bidder, rebid and rejection
authority, and the four-fifths
Council option to award above the
informal threshold, up to the ceiling
set by PCC § 22034(d), when all
informal bids exceed that threshold
and the cost estimate was
reasonable.
Departments can run
informal UPCCAA bidding
from the chapter without
referencing state law.
Design-build
and
progressive
design-build
(new)
Not authorized. New § 1.54.467 authorizes designbuild (PCC § 22160 et seq.) and progressive design-build (PCC §§
22170 and 22185 et seq.) for
eligible public projects. The Chapter
does not restate the statutory cost
floors, project caps, reporting
duties, or sunset dates; the
Administrative Purchasing Policies
and Procedures carry them. The
Public Works Director must confirm
eligibility in writing with the City
Attorney before solicitation, and
the Council approves both the
findings and the award.
State law limits each
pathway by agency type,
project type, cost floor,
project count, and sunset
date, and the limits differ
across the three chapters,
so eligibility is confirmed
project by project. The
authority lapses
automatically if state law
sunsets. Running design
and construction
concurrently may
compress delivery
timelines.
Prequalification
§ 1.54.430 covers
the qualified
§ 1.54.430(C) adds PCC § 20101
pre-qualification and states
The Sl,000,000 figure is a
City policy trigger, not a
47 139
Page
6 of 14
140
_ _ _ . ax i
ffii ii anFi
-' ffi
iii Ii iiii iii
-* I a J (i -l! iI
il
Il :-illii 1 >
IIiIIIIiII t*I IIII i I lllim ii Ixi
'-Professional
services
award
authority
(new)
§ 1.54.350 refers
award authority to a
separate
administrative
instruction; the
chapter codifies no
thresholds.
§ 1.54.3SU(D) sets award authority
at 5100,000 or less to the City
Manager and above 5100,000 to
the Council. Any contract or task
order for design or construction
management of a public project
funded from sources requiring
Council action goes to the Council
regardless of amount. Architectural,
engineering, environmental, and
construction-related services for
public projects may not be procured
cooperatively.
Routine specialty
consulting on CIP projects
can be approved
administratively rather
than waiting for a Council
cycle. Grant and bondfunded design work still
goes to the Council, and
cooperative contracts are
not available for public
project design services.
Professional
services
solicitation
threshold
§ 1.54.220 exempts
professional services
from centralized
purchasing; no
codified solicitation
threshold.
§ 1.54.220(C) requires competitive
solicitation of professional services
expected to exceed 550,000, with
selection on qualifications,
experience, and best value.
Funding-source rules govern where
restricted funds are used.
The two figures do
different work: S50,000 is
the solicitation trigger and
5100,000 the awardauthority trigger, so a
contract between them is
competitively solicited but
awarded administratively.
On-call and
master seniice
agreements
(new)
Not addressed; each
engagement
procured separately.
New § 1.54.355 authorizes on-call
and master service agreements
with a three-year initial term, up to
two one-year extensions, an
aggregate cap stated in the
solicitation and tiered to Ei
1.54.350(D), and task orders
tracked cumulatively against that
cap. Task orders above 5250,000
require Council approval. Multipleaward agreements require a documented allocation method.
Recurring specialty
consultants can be placed
on master agreements
during blue-sky periods,
and task orders process
faster than separate
procurements. The
cumulative cap and
allocation method are
what make the
arrangement defensible in
audit.
Change-order
authority
§ 1.54.610 delegates
change-order
authority by role and
contract size, with a
§ 1.54.610 restructures the rule by
contract category. Public works: the
Public Works Director may approve
change orders up to the lesser of
10% of original or S250,000
A tighter percentage cap,
10% rather than 20%, but a
higher absolute ceiling of
!>250,000. The rules now
cover the City's principal
49 141
_ _ ffl_ r
l
ffii
il
iiii iffi&i lid Br I -II 'l il '.; i f _@I I a
I
I
l! I
Irziii *IrirIIiIgiiiu I iIIII *IiI IIIIim ii iiiili iiiva 209'O or :5b0,000 test
on larger contracts.
cumulative, with single change
orders above S50,000 requiring
written Director approval and
cumulative tracking in the file.
Formal-bid goods and services
follow a parallel cap, and informal
contracts may be modified
administratively within the 550,000
range. The City Manager may
approve urgency modifications on
written findings with a nextmeeting report. Professional services amendments follow the
underlying award authority. No
modification is effective until
insurance and bonds are conformed
to the revised value and term.
contract categories rather
than pubiic works alone,
and the insurance
conformance gate belongs
in the amendment routing.
Maintenance
contracts (not
public
projects)
§ 1.54.486 tiers at
S5,000 and S25,000,
with newspaper
notice and Council
award above
S25,000.
Tiers realign to the goods and
services thresholds: S3,000 or less
direct with documented price
reasonableness, over 53,000 to
S50,000 by three quotes on a bestvalue basis, and over 550,000 by formal RFP posted to the portal
with Council award. § 1.54.486(D)
now states that electing UPCCAA
procedures changes the solicitation
method only, not the approval
authority.
Less RFP burden in the
S25,000 to S50,000 range.
Subsection (D) closes a gap
where a UPCCAA election
could have been read to
shift award authority away
from the Council.
Emergency and Disaster Procurement
142
i
'_ _ ffi.s lm-liir Z d; iTh(
iffii 14ii
:s) Y€Ji l@ (iaiThl )
m
ih)u a * j
iII axi IgI gi* ****II I*Igitg 81€ gegii
purchasing without
§ 22050 procedural
hooks.
days, continuing four-fifths review
until termination, and City
Manager authority to terminate.
Because the delegation is made by
this Ordinance, adoption requires a
four-fifths vote of the City Council.
adoption requirement
belongs in the agenda
report and the motion.
Scope of the
PCC * 22050
delegation
(new)
Emergency
purchasing authority
is not separated by
statutory source.
§1.54.370(B)(5) separates PCC Ei
22050 action, which reaches
facility repair and directly related
immediate needs, from general
emergency purchasing such as
she!tering, mass care,
transportation, and continuity of
operations. The latter rests on
Government Code §§ 37100 and
54201 et seq., is exempt from
bidding under § 1.54.510(D), and
still follows the routing,
competition, and documentation
rules. Findings and four-fifths
review apply only to § 22050
action.
The distinction matters in
an after-action audit. Staff
should tag each
emergency procurement
to its authority when it is
made rather than
reconstructing it later.
Definition of
proclaimed
emergency
(new)
The phrase
"emergency" is used
but not defined.
§ 1.54.370(A) defines a proclaimed
emergency by reference to
Government Code §§ 8630 and
8625, SGMC Chapter 7.14, and the
Stafford Act, and ends the
authority with the proclamation.
The operational mechanisms in
subsection (D) require an actual
proclamation; the other
subsections also cover a public
exigency that will not permit delay.
Before a proclamation issues,
department-level authority
requires the City Manager's prior
concurrence.
Staff know what triggers
the authority and when it
ends. The preproclamation window is
the practical gap in most
events, and it is now
covered.
51 143
144
_y t t I
ali I!JjJuj (p _l7 (! l t r l
ii
I
(!) t: * 1€ 0 1 %V[
II liifflllll ii t*It*iI t*g* g*IgII*gg miiffi iir xi
depenas on a pre-aisaster written
labor policy established outside
this Chapter, with departments
coordinating with Administrative
Services and Human Resources on
documentation.
reimbursable no matter
how well the procurement
side is documented.
Emergency
public works
§ 1.54.470
references PCC §
22050 procedures,
limited to public
projects.
§ 1.54.470 becomes a clean crossreference to all of § 1.54.370, and 55 1.54.440, 1.54.450, 1.54.460,
and 1.54.467 do not apply during
emergencies.
One framework citywide,
with the ordinary bidding
and design-build sections
switched off.
Execution, Standards, and Roles
aii E
pv_ ! ( 6 J
ih :1i. f J I Nij l! I
IrIxai Iii IIg11gIi It*i miiii ii ii iiiiimii ixi
Standards of
conduct, ethics,
and
organizational
conflicts
Not addressed in the
chapter; ethics rules
sit in the Personnel
Rules and the
Government Code.
No organizational
conflict of interest
or debarment
language.
§ 1.54.055 codifies conflict-ofinterest, gratuity, and disciplinary rules across officials, employees,
and agents, and defines
"immediate family." Subsection (D)
bars a firm that wrote the
specifications from bidding that
procurement absent written
mitigation. Subsection (E)
authorizes debarment and
suspension. The Section
supplements rather than replaces
Government Code § 1090, the
Political Reform Act, FPPC rules,
and 2 CFR § 200.318(C).
Conflicts are screened up
front and debarment is
formalized, alongside the
existing legal regime
rather than in place of it.
Nondiscrimination
Not addressed in the
chapter.
New § 1.54.056 requires nondiscrimination language in all City contracts, implemented through
standard contract language issued
by the Purchasing Officer.
Carried in the templates.
Departments using vendor
paper should confirm the
clause is present.
Funding
eligibility
Not addressed.
Finance approval of
§ 1.54.140(B) requires the
requesting department to certify in
Finance internal controls
are protected in audit
53
145
146
I
i I
.iu !-i I J
* 6 r l
ihI
(i7if {0 -,l i i )i1 I
Ir ii ii ii I giI **zii Ii rt*i I m
Insurance,
bonds, and risk
§ 'i.54.490 governs
public works bonds.
No general
insurance or
indemnity section.
New § 1.54.057 places insurance,
bonding, indemnity, and risk
transfer under an administrative
policy that can be updated as joint
powers authority guidance
evolves. On the face of the code:
no execution, notice to proceed, or
work before verification; waivers
only by the City Manager, the
Director of Administrative Services,
or the Risk Manager, never a
department director; third-party
administration permitted without
transferring approval authority;
and a coverage lapse is a material
breach. Public works bonds remain
in Ei1.54.490.
Two provisions change
daily practice: department
directors can no longer
waive insurance, and
verification must occur
before notice to proceed.
The third-party
administrator language
supports the certificate
management program
already underway.
Roles and
administrative
policy
Role titled
"Purchasing
Supervisor,"
appointed by the
Director of Finance;
procedures split
between the
chapter and City
Manager
instructions.
The role becomes "Purchasing
Officer," held by the Director of
Administrative Services, who
issues the Administrative
Purchasing Policies and Procedures
implementing the Chapter (§
1.54.110(F)). Acting authority is
cleaned up to remove the circular
fallback, and electronic signatures
are expressly authorized.
Procurement leadership
moves to department
head level, and the code
stays high-level so
procedure can be updated
without an ordinance
amendment. Because so
much detail moves to the
manual, it must issue and
staff be trained before the
operative date.
Quick reference
for departments
(new)
§ 1.54.010 has a
section-range
outline but no
navigation aid
oriented to common
department
questions.
Eg1.54.010 adds a quick-reference
table mapping common
department needs to the
governing section, from a 53,000
purchase through a bid protest.
Analysts can find the right
section without reading
the chapter through. A
usability change rather
than a substantive one.
Environmentally
preferable
purchasing
§§ 1.54.710 through
1.54.750 fix
environmentally
New § 1.54.750(A) lets the
Director of Administrative Services
update standards, product
Standards can be
refreshed as markets
55 147
I
i
iar -li A I I _@r
I J i Ihffi_ in (! f L! ri ffi j l
I I186 I11151€i*III IIBill II*Ifi vi iIll i iI milmimii iM prejerable
purchasing
standards in the
code text.
categories, and specifications by
administrative policy. "Practicable"
is defined to consider total cost of
ownership, and the performance
and availability exemption is
preserved.
change rather than by
ordinance amendment.
Disposition of
surplus
property
§ 1.54.810 sets a
Sl,000
administrative
threshold and limits
payment to cash,
certified check, or
money order.
The administrative threshold rises
to SI0,000, with a Council report
and approval required above that.
Electronic payment is accepted.
New safeguards cover grantfunded equipment (2 CFR §
200.313(e)1 IT data sanitization,
DMV title transfer, public-safetysensitive items, and purchases by officials, employees, and their
immediate family.
Routine items clear
administratively, with real
safeguards on the
sensitive categories. The IT
sanitization requirement
needs a documented
procedure before the
operative date.
Page14 of 14
56 148
Officp. of the
South Gatp City Clerk
OCT- 8 2026 Item No. 6
FILED
I',q(, (i-i City of South Gate
CITY COUNCIL
AGENDA BULL
For the Regular Meeting of October 13, 2026
Originating Department: City Manager's Office
C4 Manager: '2'2e&try(j(y( (AyMariager: '7b;r(F5{pirs;(jgi( Rob Houston Rob Ilouston
SUBJECT: SECOND READING AND ADOPTION OF AN ORDINANCE ADDING A NEW
CHAPTF,R TO THE SOUTH GATE MUNICIPAL CODE, TO BE KNOWN AS THE SOUTH
GATE VALUES ACT, ESTABLISHING PROCF,DURES FOR THF, PROTECTION OF
SENSITIVE INFORMATION AND THH, USE OF CITY RESOURCES
PURPOSE: To present the South Gate Values Act ordinance to the City Council for the second reading, and adoption as directed by the City Council on September 8, 2026,.
RECOMMENDED ACTIONS: The City Council will consider:
a. Introduce for second reading, by title only and with further reading waived, an Ordinance of the City Council of the City of South Gate adding a new chapter to the South Gate Municipal Code, to be lcnown as the South Gate Values Act, establishing procedures for the protection of sensitive information and the use of City resources (Attachment A); b, AdoptionofanordinanceoftheCityCounciloftheCityofSouthGateaddinganewchapter to the South Gate Municipal Code, to be known as the South Gate Values Act, FISCAL IMPACT: Staff estimates the cost of implementu'xg and administering the ordinance at approximately $45,000 inthe firstyear andapproximately $35,000 in eachyearthereafl:er. First-year costs consist mainly of one-time setup: updating contract and solicitation templates, preparing the contractor certification, establishing the complaint and meet-and-confer procedure, developing the employee reporting mles for Council approval, and building the online reporting page, together with City Attorney review of each. Ongoing costs consist mainly of the reporting cycles the ordinance requires: semi-annual department logs and monitoring reports, quarterly waiver reports, the annual vendor data-sharing review, and the annual compliance report, spread across the City Manager's Office, Administrative Services, and the City Clerk's Office. The first-year cost will be absorbed within existing Fiscal Year 2026-27 departmental budgets, and no additional appropriation is requested at this time. Future budget requests yill include ongoing costs. The number of contracts tequiring the added provisions is expected to be limited, and the ordinance limits relief against the City to orders directing future compliance, so it does not create monetary liability exposure for the City. The cost of investigating and resolving any individual complaint under the enforcement provision, including City Attorney time, is event-driven and cannot be estimated in advance; staff will report any such costs to the City Council through the annual compliance report.
1 149
ANALYSIS: The City Council has made clear that South Gate supports its immigrant community and that the City does not use its resources or personnel to assist federal immigration enforcement. The September 8, 2026, report on the City's compliance with the California Values Act (SB 54) confirmed that the South Gate Police Department does not honor ICE detainer requests, does nottransfer individuals to immigration authorities for civil immigration violations, and does not inquire into immigration status for enforcement purposes. The South Gate Values Act builds on that foundation by placing the City's commitments in the Municipal Code and extending them to City departments, City data, and City contractors.
Collaboration on the Ordinance
Staff's review of the Lynwood model ordinance identified several provisions that, as written, would have been difficult for a city of South Gate's size and resources to administer, particularly in the areas of contracting, waivers, and reporting. Rather than set the model aside, staff worked closely with the California Immigrant Policy Center (CIPC), which drafted the model language, and with SEIU-United Healthcare Workers West (SEIU-UHW) to develop alternate language that preserves the protections of the model ordinance while allowing the City to implement it effectively. The ordinance presented tonight reflects that collaboration, and staff appreciates both organizations' partnership in bringing it forward for Council consideration.
Summary of the Ordinance
The ordinance adds a new chapter to the South Gate Municipal Code, to be known as the South Gate Values Act. Its principal provisions are summarized below. @ Purpose and findings. The ordinance states the City's commitment to its irnrnigrant residents and its intent, to the extent permitted by law, to keep City resources out of federal immigration enforcement.
* Confidentiality of sensitive information. The City will not request or collect sensitive personal information and will not disclose it to irnrnigration authorities to :[urther an immigration enforcement action, except as required by law or as needed to provide City services. City departments will review their confidentiality policies annually, and vendors under covered contracts that collect information on the City's behalf will disclose their data-sharing practices for an annual City review.
* Use of City resources. City funds, facilities, equipment, and personnel may not be used to assist an immigration enforcement action, consistent with SB 54. The City will continue to comply with judicial warrants, subpoenas, and other court orders. * Contracting. The City will not enter into contracts with companies that provide data broker or extreme vetting services to immigration authorities. Contracts covered by the ordinance will include protective clauses and a contractor certification, and the City's solicitations will give notice of these requirements. The contracting provisions apply, regardless of contract value, to 2 150
contracts under which the contractor handles sensitive information for the City or collects it from the public. They do not apply to agreements with other public agencies, joint powers authorities, or funding agencies under grant agreements, to cooperative or piggyback purchases, utility service, or products sold on industry-standard license or subscription terms, and they apply only to contracts entered into after the ordinance becomes operative. * Waiver. The City Manager may grant a written waiver of the contracting requirements where there is an operational or financial need, with quarterly reporting to the City Council, and the City Council may grant standing waivers for defined categories of contracts by resolution. * Investigation, reporting, and public records. The City Manager, or a designee, will review compliance, receive and investigate complaints through the process described under Enforcement below, and submit an annual compliance report to the City Council. City departments will document requests for assistance from irnrnigration authorities and report them semi-annually, and the City will publish the aggregated information online. * Enforcement. An individual whose sensitive information was shared with immigration authorities and who was detained or placed in removal proceedings as a result may file a written complaint with the City Clerk's Office. The City Manager, or a designee, will acknowledge the complaint, convene a meet-and-confer with the complainant and any contractor involved, and allow a cure period of up to 180 days before issuing a written deternnination. A civil action may be filed only after that process is complete. Relief against the City is limited to an order directing future compliance, with no monetary damages or penalties; aprevailing complainant may recover compensatory damages from a contractor, including civil penalties of up to $5,000. Claims must be brought within two years.
Next Steps
Tonight's action introduces the ordinance for second reading. Under State law, an ordinance may not be adopted sooner than five days after its introduction, so the ordinance now returns to the City Council at the next regular meeting for second reading and adoption. If the Council directs substantive revisions tonight, staff will incorporate them and the revised ordinance will be reintroduced before adoption. The ordinance will be published as required by law and will take effect thirty (30) days after adoption. As drafted, the contracting provisions would become operative ninety (90) days after the effective date, which gives staff time to update contract templates and solicitation documents, prepare the contractor certification form, and establish the reporting and online publication procedures the ordinance requires.
BACKGROUND: On September 8, 2026, the City Council received and filed a report on the City's compliance with the California Values Act (SB 54), codified at Governrnent Code sections 7284 through 7284.12, which limits the use of state and local resources for federal immigration enforcement. At that meeting, the City Council directed staff to prepare a local ordinance, to be known as the South Gate Values Act, and to return it to the Council for consideration on September 22, 2026. 3 151
SEIU-UHW and the Immigration Coalition provided the City with the ordinance adopted by the City of Lynwood as a model and asked South Gate to adopt the same language. Staff reviewed the Lynwood ordinance with the City Attorney and met with CIPC and SEIU-UHW on September 16, 2026, to work through the City's concerns. Additional discussions took place on September 17, 2026. The attached ordinance resulted from that meeting.
ATT ACHMENT:
A. Ordinance: South Gate Values Act
4 152
Attachment A
Agenda Bill 10/13/26
ORDINANCE NO.
CITY OF SOUTH GATE
LOS ANGELES COUNTY, CALIFORNIA
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SOUTH GATE ADDING CHAPTER 1.35 (SOUTH GATE VALUES ACT) TO TITLE 1
(ADMINISTRATION AND PERSONNEL) OF THE SOUTH GATE MUNICIPAL CODE
EST ABLISHING PROCEDURES FOR THE PROTECTION OF SENSITIVE
INFORMATION AND THE USE OF CITY RESOURCES
WHEREAS, the City of South Gate ("City") is a California general law city organized and operating under the laws of the State of California, with authority under Governrnent Code Section 37100 to adopt ordinances and regulations not in conflict with the Constitution and laws of the State or of the United States;
WHEREAS, the California Values Act (Senate Bill 54), codified at Government Code Sections 7284 through 7284.12, took effect on January 1, 2018 and limits the use of state and local law enforcement resources for federal immigration enforcement, and the City complies with the California Values Act, as reported to the City Council on September 8, 2026; WHEREAS, the City is home to a large irnmigrant population whose members contribute to the economic, civic, and social life of the City, and the City Council finds that tnist, respect, and open cornrnunication between City officials and all residents, regardless of immigration status, are essential to community safety and to the delivery of City services; WHEREAS, on September 8, 2026, the City Council directed staff to prepare a local ordinance, to be known as the South Gate Values Act, placing the City's commitments in the South Gate Municipal Code and extending them to City departments, City data, and City contractors; WHEREAS, staff and the City Attorney developed the ordinance in consultation with community and labor organizations, and the ordinance preserves the protections of the model language while allowing the City to administer, procure under, and enforce it effectively; WHEREAS, the City Council has determined that the adoption of this Ordinance is not a project under the California Enviroru'nental Quality Act ("CEQA") because it consists of Page l of 14
153
administrative and procedural provisions governing City information practices and contracting and does not have the potential to result in either a direct physical change or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guidelines Sections 15378(b)(2) and 15378(b)(5); and
WHEREAS, the City Council has duly considered all information presented to it, including the staff report and supporting materials, public testimony, and the recommendations of staff and the City Attorney.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SOUTH GATE, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS.
SECTION 1. Chapter 1.35 (South Gate Values Act) is hereby added to Title I (Administration and Personnel) of the South Gate Municipal Code to read as follows:
CHAPTER 1.35
SOUTH GATE VALUES ACT
PROCEDURES FOR THE PROTECTION OF SENSITIVE INFORMATION AND USE
OF CITY RESOURCES
1.35.010 PURPOSE.
The City of South Gate has long embraced and welcomed individuals of diverse racial, ethnic, religious, and national backgrounds, including a large immigrant population. The City has long derived its strength and prosperity from its diverse community, and welcomes, honors, and respects the contributions of all its residents, regardless of their immigration status. The City is home to immigrants and their families, and it is here where they form and maintain bonds of family, friendship, and love.
Immigrants and their families in the City contribute to the economic and social fabric of the City by establishing and patronizing businesses, participating in the arts and culture, and achieving significant educational accomplishments.
Through the City's commitment to the equal, respectful, and dignified treatment of all people, one ofthe City's most important objectives is to enhance its relationship with all its residents, including immigrants. The cooperation of the City's immigrant community members is essential to
154
advancing the City's mission, vision, and guiding principles, including community safety, support for youth and education, economic development, and financial stability.
The City is safest when all people feel they can participate in civic and public life. Fostering a relationship of trust, respect, and open communication between City officials and residents is essential to the City's mission of delivering efficient public services in partnership with our cornrnunity, which ensures a prosperous economic environment, opportunities for youth, and a high quality of life for all residents.
Accordingly, the City seeks to continue to foster trust between City officials and residents; to encourage cooperation between residents and City officials; and to ensure public safety and due process for all.
In 2018, the California Values Act (SB 54) went into effect. SB 54 prevents state and local law enforcement resources from being commandeered by the federal government and diverted to tear families apart and violate due process rights. In that spirit, the City also refuses to use limited City resources to assist with the detention and deportation of mothers and fathers, children, neighbors, co-workers, and friends-except as required by federal law. Instead, the City chooses to stand with its residents, including all immigrant community members.
Due to the City's limited resources, the complexity of federal civil immigration laws, the need to promote trust and cooperation from the public, including irnrnigrants, and to attain the City's objectives, the City Council finds thatthere is a needto clarify the communication and enforcement relationship between the City and the federal government.
The purpose of this Chapter is to establish the City's procedures concerning sensitive information and enforcement of federal immigration laws. This Chapter establishes safeguards and procedures, to the extent permissible by law, to prohibit any City resources, including property and personnel, from being utilized for any federal immigration enforcement. Further, to the extent permissible by law, the City will not enter into new, amended, or extended contracts or agreements with any person or entity that provides Immigration Authorities with any data sharing, data broker, datamining, or Extreme Vetting services connected to federal immigration enforcement, unless a waiver is granted.
1.35.020 DEFINITIONS.
The following definitions shall apply to this Chapter:
A. "Awarding Authority" means a subordinate or component entity or person of the City, such as a City department or a related agency, that has the authority to enter into a Contract or agreement for the provision of goods or services on behalf of the City.