The Seal Beach City Council on Monday, June 24, unanimously approved an increase to the Public Works Department director’s threshold for approving contracts. The new threshold is $40,840.
The council also adjusted the city manager’s threshold to make contracts to acquire equipment or services in the amount of $40,840.
“Since we’re in a financial situation this budget year, my feeling is that maybe the council needs to approve all contracts first, just so we can make sure we’re keeping in line with our budget,” said District Three Councilwoman Lisa Landau.
“If there’s an emergency contract, then at that point the mayor could approve that contract,” Landau said. “What are your thoughts on that?”
Landau appeared to be looking in the direction of Public Works Director Iris Lee.
“Thank you for the question, Mayor Pro Tem Landau,” Lee said. “We currently do have council approval for our budgetary expenditures which is going to be adopted in the budget,” Lee said.
She said there was nothing staff would be expending without the council’s blessing.
“What we’re doing tonight is adjusting our bidding threshold according to the ENG [Engineering News Record],” Lee said. She put the figure at 1.51%.
(Deputy Director of Public Works/City Engineer Kathryne Cho used the same figure in her written and verbal reports to the council.)
Lee put the adjustment at about $600.
“It is at council’s discretion whether you want to approve this or not,” Lee said.
Landau asked Lee if she thought it would be prudent, because of the city’s financial situation, to have all contracts without a threshold be approved by the council for just this year unless there was an emergency.
“That is a council policy decision,” Lee said.
In Seal Beach at this time, the city manager and city department heads have authority to approve contracts up to a certain amount. City Manager Jill Ingram currently issues quarterly reports of contracts that she approved. The city manager currently has authority to approve contracts up to $40,232. As previously reported, the Municipal Code allows the city manager to delegate her to the authority to the city’s department heads.
The City Charter regulates the threshold for contracts approved by the Public Works director.
The public hearing was brief. District Four Councilwoman/Mayor Schelly Sustarsic opened the hearing. No one spoke. Sustarsic closed the hearing.
Ultimately, the five council members voted in favor of changing the Public Works threshold.
Threshold background
“In March 2002, Section 1010 of the City Charter was amended to include a formal
procedure to calculate the bidding threshold for Public Works contracts,” according to the staff report by Deputy Director of Public Works/City Engineer Kathryne Cho.
“The bidding threshold is to be adjusted annually based upon ‘computing the percentage difference between the current Engineering News Record (ENR) Construction Cost Index (CCI) 20 City Average and the ENR for the previous June 1st’,” Cho wrote.
“The purpose of the adjustment is to allow the City to maintain its bidding threshold current with inflation. The City Charter specifies that the City Engineer shall calculate the required adjustment and the City Council shall confirm the calculation following a public hearing on the matter,” Cho wrote.
“In June 2013, the City Council adopted Resolution 6384 authorizing the City Manager to bind the City for the acquisition of equipment, materials, supplies, labor, services or other items included in the budget up to the amount for each acquisition equal to the bidding threshold amount for public works projects applicable under Section 1010 of the City Charter,” Cho wrote.
“Based on the June 2024 ENR publication, the CCI has increased 1.51 percent from 13345.00 to 13546.80,” Cho wrote.
“This increase includes one (1) year of adjustments to the bidding threshold. The 1.51 percent increase would increase the bidding threshold from $40,232 to $40,840,” Cho wrote.
“Adjusting the bidding threshold does not waive requirements of competitive bidding on projects. All projects over the proposed threshold of $40,840 would require formal bidding procedures and contracts per the City Charter and approval at a City Council meeting. Contracts for projects under the proposed threshold of $40,840 may be awarded pursuant to informal bidding procedures,” Cho wrote.
“The proposed adjustment to the Public Works bidding threshold would result in an increase in the City Manager’s threshold to bind the City, with or without a written contract, for the acquisition of equipment, materials, supplies, labor, services, or other items within the budget approved by City Council to $40,840 pursuant to Resolution 6384,” Cho wrote.
