Los Angeles Municipal Code Art. III Finance, Budget and Contracts

Section

Office of Finance

300 Director of Finance; Powers and Duties of Office. 301 Treasury; Treasurer. 302 Funds. 303 Investments.

General Budget

310 Fiscal Year. 311 Budget Estimates to Mayor; Statement of Budget Priorities. 312 Mayor’s Proposed Budget. 313 Council Consideration of Budget. 314 Mayor’s Veto. 315 Council Consideration of Mayor’s Veto Message; Final Adopted Budget.

Expenditures

320 Expenditure Programs.

Debt

325 Debt Impact Statements.

Taxation

330 Use of County System of Assessment and Taxation. 331 Tax Levy. 332 Tax Levy – Alternate Method.

Transfers

340 Transfers Between Funds; Temporary Transfers. 341 Transfers from Reserve Fund; Appropriations from Unappropriated Balance. 342 Transfers of Appropriated Funds. 343 Intra-departmental Transfer. 344 Transfer of Surplus to Reserve Fund.

Claims

350 Claims Against City.

Miscellaneous Finance

360 Payment into Treasury. 361 Law Governing Bonded Indebtedness. 362 Annual Audit.

Contracts

370 Contracts Required to Be in Writing and Signed. 371 Competitive Bidding; Competitive Sealed Proposals. 372 Competitive Proposals Preferred. 373 Long Term Contracts; Approval by Council. 374 Contract or Direct Employment. 375 Prequalification of Bidders. 376 Change Orders. 377 Prevailing Wage. 378 Living Wage.

Purchases

380 Purchases.

Sales

385 Sale of City Property.

Franchises

390 Franchises.

OFFICE OF FINANCE

Sec. 300. Director of Finance; Powers and Duties of Office.

The chief administrative officer of the Office of Finance shall be the Director of Finance, who shall be appointed and removed as provided in Section 508. The Office of Finance shall have the power and duty to:

(a) develop and implement the City’s revenue policy consistent with the Charter and ordinance, and develop guidelines for the

collection of outstanding receivables;

(b) collect revenues and issue those licenses, permits and tax registration certificates not issued by the City officers or departments;

and

(c) make recommendations to the Mayor and Council concerning the efficient organization of the revenue collection functions

performed by City offices and departments.

Sec. 301. Treasury; Treasurer.

The official depository of the City shall be known as the City Treasury, which shall be under the direction and control of the Treasurer who shall be appointed and removed by the Mayor, subject in both appointment and removal to confirmation by the Council.

The Treasurer shall have the following powers and duties:

(a) The Treasurer shall be the custodian of all money deposited in the City Treasury. Money in the Treasury shall only be paid out

upon the presentation of warrants or other forms of communication prescribed by the Controller, after demands for payment have been approved by the Controller in the manner provided elsewhere in the Charter or by ordinance, except that no warrants shall be required for payment of the principal and interest of bonds or other evidence of indebtedness payable by the City when due.

(b) When warrants presented to the Treasurer have all the signatures required by law, and are countersigned by the Controller,

those signatures shall be prima facie evidence of the legality of the warrants. The Treasurer may, in the event of the authenticity of any warrant being questioned, fully investigate and satisfy himself or herself regarding the authenticity before paying.

(c) The Treasurer shall transmit to the Controller, at the end of each business day, a detailed statement showing the receipts and

disbursements credited or debited to each fund or account.

(d) The Treasurer shall, at the end of each fiscal year, submit to the Mayor and Council a detailed statement of the receipts,

disbursements and balances of the Treasury.

(e) The Treasurer shall be the custodian of all securities bought by the City. Upon sale of any bonds by the City, the Treasurer shall

deliver the bonds, receive and credit the proceeds to the proper fund or accounts, and report the action to the Council.

(f) The Treasurer shall assist any officer of the City who is authorized by the Charter or ordinance to inspect the records and

deposits in the Office of the Treasurer to make an inspection.

(g) The Treasurer shall perform those duties imposed upon City treasurers by any law of the state applicable to the City, and shall

furnish a bond for the faithful performance of duties.

(h) The Treasurer shall assist the Controller and outside auditors as requested in the audits of the City’s finances.

Sec. 302. Funds.

All money paid into the City Treasury shall be credited to and kept in separate funds in accordance with the provisions of the Charter, ordinance or other applicable law. In addition to funds established elsewhere in the Charter for departments controlling their own funds, the following funds are hereby established: General Fund, Reserve Fund, and bond funds, interest funds, sinking funds, trust funds and other funds as may be required by law or ordinance.

(a) The General Fund is established as a medium of control of and accounting for municipal activities other than activities

authorized or contemplated by special funds. All revenues and receipts which are not by law or Charter pledged or encumbered for special purposes shall be credited to the General Fund.

(b) The Reserve Fund shall include funding for unanticipated expenditures and revenue shortfalls in the City's General Fund. It shall include two accounts within the fund, the Contingency Reserve Account and the Emergency Reserve Account.

(1) Contingency Reserve Account: The Contingency Reserve Account shall include all monies in the Reserve Fund over and

above the amount required to be allocated to the Emergency Reserve Account pursuant to subsection (b)(2) of this Section.

(2) Emergency Reserve Account Allocation: The City Council shall annually allocate an amount to the Emergency Reserve

Account of the Reserve Fund that shall bring the balance in that account to not less than two and three-fourths (2 3/4) percent of all General Fund receipts anticipated for that fiscal year in the adopted budget.

(3) Accessing Reserve Fund:

(i) The Contingency Reserve Account will be the source of additional funding needed as a result of unanticipated

expenditures and revenue shortfalls. The City Council shall, by ordinance, establish policies for the use of the

Contingency Reserve Account.

(ii) Transfers from the Emergency Reserve Account of the Reserve Fund shall require approval by a two-thirds vote

of the City Council with the concurrence of the Mayor, or, in the event of a Mayoral veto, by a three-fourths vote of the City Council. Concurrent with the transfer, the City Council shall make a finding of urgent economic necessity. The basis on which a finding of urgent economic necessity may be made includes, but shall not be limited to, a significant

economic downturn after the budget is adopted, a natural disaster, such as an earthquake, civil unrest, or other significant unanticipated events requiring the expenditure of General Fund resources.

(4) Restoration of Emergency Reserve Account: Except as provided in subsection (b)(5), whenever the City utilizes monies in the Emergency Reserve Account pursuant to subsection (b)(3)(ii) of this Section, the City shall, in the subsequent fiscal year, restore to the Emergency Reserve Account the amount expended therefrom as part of the annual allocation required by this Section to bring the balance in that account to not less than two and three-fourths (2 3/4) percent of all General Fund

receipts anticipated for that fiscal year in the adopted budget.

(5) Suspension of Emergency Reserve Account Restoration: In the event of a catastrophic event which requires use of the

Emergency Reserve Account spanning more than one fiscal year, the City Council may, by a two-thirds vote with the concurrence of the Mayor or, in the event of a Mayoral veto, by a three-quarters vote, temporarily suspend the requirements of subsection (b)(4) herein; provided, however, that concurrent with the action of the City Council to suspend the requirement, the City Council adopts findings detailing the necessity for continued access to the Emergency Reserve Account and setting forth a date on which the requirements of Section (b)(4) shall be reinstated. Transfers of funds from the Emergency Reserve Account during the time to which the suspension of the requirement to restore such monies applies shall not be required to be restored.

(6) Temporary Transfers: Nothing herein shall prohibit temporary transfers of funds from the Contingency Reserve

Account or Emergency Reserve Account as otherwise authorized by City Charter Section 340.

(7) Nothing herein shall be construed as applying to, or limiting, the provisions of Charter Section 231(i) or any other

provisions of this Charter, State statute or City ordinance relative to Emergency Declarations.

(c) A Budget Stabilization Fund shall be established by ordinance within the City Treasury. Requirements for funding and transfers or expenditures to be made therefrom shall be established by ordinance.

SECTION HISTORY

Amended by: Charter Amendment P § 1, approved March 8, 2011, effective April 8, 2011.

Sec. 303. Investments.

(a) The Treasurer may deposit the money held in the Treasury in the institutions and upon terms provided by law.

(b) Notwithstanding other provisions of the Charter, the boards of the Proprietary Departments, and of the Departments of Recreation and Parks and Library may grant to the Treasurer the authority to combine money in funds under their respective control with other City money for the purpose of investment. Earnings from the investment of the money of these departments shall be paid by the Treasurer to the department fund from which the money was derived in proportion to the share of the total investment supplied by that fund. The computation of the proportionate shares shall be by a method proposed by the Treasurer, subject to the approval of each of the above boards.

GENERAL BUDGET

Sec. 310. Fiscal Year.

The fiscal year of the City shall begin on July 1 of each year and shall end on June 30 of the following year.

Sec. 311. Budget Estimates to Mayor; Statement of Budget Priorities.

(a) At the time the Mayor prescribes, but not later than January 1 of each year, each board or officer at the head of any department or office, or other City governmental activity, other than those departments having control of their own funds, shall submit to the Mayor, with copies to the Council and the City Administrative Officer, on forms and in the manner prescribed by the Mayor, a detailed estimate of the money required for the next fiscal year for the proper operation of their departments and offices. These estimates shall contain uniform budget classifications and shall clearly set forth the functions performed and the items and services required for such performance. Summaries, schedules and supporting data shall be attached to the estimates. Any department head or officer requesting an increase over the prior year’s appropriation shall indicate which classifications need the increase and rank the order of immediate need for each classification. After consultation with an officer or head of a department, the Mayor may refer the estimate back with instructions to prepare a revised estimate on the basis of a maximum sum for the department, office or activity, that maximum sum to be fixed by the Mayor, or with further qualification as the Mayor shall determine. The officer or head of department shall present the revised estimate to the Mayor, with a duplicate to the Council and to the City Administrative Officer, at a date fixed by the Mayor.

(b) On or before February 1, the Mayor shall publish his or her budget priorities for the next fiscal year in order to facilitate public comment.

(c) On or before March 1 of each year the Controller shall submit to the Mayor, with a duplicate to the Council and to the City Administrative Officer, a detailed statement of the money that the Controller estimates will be required for the interest and sinking funds and for all outstanding bonded indebtedness and other lawful obligations of the City or of special districts and an estimate of the revenue to be derived from fines, licenses and other sources.

SECTION HISTORY

Amended by: Subsecs. (a) and (c), Charter Amendment II, approved November 5, 2024, effective January 8, 2025.

Sec. 312. Mayor’s Proposed Budget.

On or before April 20 of each year, the Mayor shall submit to the Council a budget for the next ensuing fiscal year setting forth in summary and in detail:

(a) estimates of the expenditures and appropriations necessary for the support of the required work programs of the City
government for the ensuing fiscal year, including interest and sinking funds or payments of principal on the bonded indebtedness of
the City and of special districts;

(b) detailed estimates of the receipts of the City during the ensuing fiscal year, under laws existing at the time the budget is
transmitted, and also under the revenue proposals, if any, contained in the budget;

(c) the expenditures and receipts of the City government during the last completed fiscal year;

(d) estimates of the expenditures and receipts of the City government during the fiscal year in progress;

(e) the amount of annual, permanent or other appropriations, including balances of appropriations for prior fiscal years, available
for expenditure during the fiscal year in progress, as of June 30 of such year;

(f) balanced statements of:

(1) the condition of the Treasury at the end of the last completed fiscal year;

(2) the estimated condition of the Treasury at the end of the fiscal year in progress; and

(3) the estimated condition of the Treasury at the end of the ensuing fiscal year in case the financial proposals contained in
the budget are adopted.

(g) all essential facts regarding the bonds, notes and other lawful obligations of the City;

(h) other financial statements and data necessary or desirable in order to make known in all practical detail the financial condition
of the City government;

(i) an Unappropriated Balance, which shall be available for appropriations later in the ensuing fiscal year to meet contingencies as
they arise; and

(j) a statement of resources of the Reserve Fund which shall be carried over to the next ensuing fiscal year to meet the cash
requirements of the City for the portion of the next ensuing fiscal year prior to the receipt of taxes, or for appropriations to the
Unappropriated Balance as provided in the Charter.

Sec. 313. Council Consideration of Budget.

After receiving the budget submitted by the Mayor, and prior to taking action on the budget, the Council shall hold a noticed public hearing. On or before June 1, the Council shall:

(a) approve the budget as submitted by the Mayor; or

(b) modify the budget by disapproving in whole or in part any items, or by increasing or decreasing any item, or by adding new items, and return the budget as modified by the Council to the Mayor. Any action taken by the Council under this section shall be taken by a majority vote of its members.

Upon failure of the Council to return the budget to the Mayor as provided in this section, the budget as submitted by the Mayor to the Council shall be signed by the City Clerk and thereupon become the general City budget for the ensuing fiscal year.

Sec. 314. Mayor’s Veto.

The budget as adopted by the Council shall not be held for reconsideration but shall be promptly transmitted by the City Clerk to the Mayor upon whose approval and signature it shall become effective. If the Mayor shall fail to act upon the budget within five days, excluding Saturdays, Sundays and legal holidays, after its adoption by the Council, it shall be signed by the City Clerk and shall thereupon become effective. If the Mayor disapproves of any increase, decrease, omission or insertion of any item of the budget by the Council, the Mayor may veto, restore or otherwise change any item to the amount originally proposed by the Mayor or to any amount between that originally proposed by the Mayor and that adopted by the Council. The Mayor, however, shall have no power to change any description or limitation made applicable to an item by the Council, except to veto the change or to restore the description or limitation to the condition originally proposed by the Mayor. Upon completion of these changes, the Mayor shall within the five day period return the budget to the Council with a statement of action taken.

Sec. 315. Council Consideration of Mayor’s Veto Message; Final Adopted Budget.

Upon receipt by the Council of the budget veto message from the Mayor, the Council shall have five days, excluding Saturdays, Sundays and legal holidays, within which to overcome the action of the Mayor relative to any item or items of the budget. Any item or items of the budget which shall have been vetoed, or otherwise changed by the Mayor, and which shall not be, by a two-thirds vote of all of the members of the Council, either readopted notwithstanding the objections of the Mayor or changed to an amount between that as originally adopted by the Council and that as changed by the Mayor, shall remain as modified by the Mayor.

Where the Mayor has changed any description or limitation applicable to an item, the Council, in its action pursuant to this section, shall have no power to alter the description or limitation other than to restore it to the condition in which it was originally adopted by the Council.

Upon the expiration of the Council’s five day period, or sooner if the Council by majority vote so directs, the budget as returned by the Mayor, and to the extent modified thereafter by the Council, shall become the general City budget for the ensuing fiscal year and shall not be

held for reconsideration but shall be promptly transmitted to the City Clerk, signed by the City Clerk and filed in the office of the Controller.

EXPENDITURES

Sec. 320. Expenditure Programs.

Each office and department provided for in the general City budget, and the Departments of Library and Recreation and Parks to the extent that they are assisted by appropriations from the General Fund, shall have authority to expend, in the manner provided by other provisions of the Charter, ordinance, and other applicable law, the funds appropriated for its support during the ensuing fiscal year, but only in accordance with a program of planned expenditures which shall be prepared, filed and modified from time to time, as provided by law. No department, bureau, or office of the City government shall make expenditures or incur liabilities in excess of the amount appropriated therefor.

SECTION HISTORY

Amended by: Charter Amendment II, approved November 5, 2024, effective January 8, 2025.

DEBT

Sec. 325. Debt Impact Statements.

Prior to the adoption of any ordinance or resolution authorizing the incurring of any indebtedness by the City or the placing of any debt authorization on the ballot, the Mayor and Council shall have prepared a debt impact statement. The debt impact statement shall analyze the effect of the new debt on the City’s finances and indicate the amount of additional funds required to be budgeted for debt service.

TAXATION

Sec. 330. Use of County System of Assessment and Taxation.

Until otherwise provided by ordinance, the City shall continue to use, for purposes of municipal taxation, the county system of assessment and tax collection. Should the City resume the work of assessment and tax collection, the procedure shall be fixed by ordinance and, so far as applicable, shall be substantially the same as provided at the time by law for county taxes in the County of Los Angeles.

Sec. 331. Tax Levy.

Not earlier than the month of June, but not later than the last day of the month in which the statement of property valuations within the City as required by law is received, the Council shall adopt an ordinance levying upon the assessed valuation of the property in the City, in accordance with the provisions of law, a rate of taxation upon each one hundred dollars ($100) of valuation, which, with the amounts, if any, transferred from the Reserve Fund in or for the current fiscal year subsequent to the adoption of the annual budget and the amount estimated to be received from fines, licenses and other sources of revenue, will be sufficient to raise the amount appropriated in the annual budget.

Sec. 332. Tax Levy – Alternate Method.

If the Council fails to levy a rate of taxation at the time and in the manner provided by the Charter, the Controller shall add to the budget the amount required to meet maturing portions of principal and interest on the bonded indebtedness of the City and of special districts in the City, and any special taxes lawfully imposed, and shall calculate a rate of taxation as provided in Section 331, not exceeding the limit provided by law. The Controller shall give public notice of the rate of taxation by publication in a newspaper of general circulation in the City or by other means provided by ordinance, and the tax rate calculated by the Controller shall be the rate of taxation of the City. The Controller is hereby vested with all necessary legislative power to carry out the provisions of this section.

TRANSFERS

Sec. 340. Transfers Between Funds; Temporary Transfers.

(a) It shall not be lawful to transfer money from one fund to another or to use the money in one fund in payment of demands upon another fund, except in the case of the Unappropriated Balance and the Reserve Fund, or except as specifically provided in the Charter.

(b) Notwithstanding subsection (a), the Treasurer and the Controller, when authorized and directed by the Council by resolution, shall make temporary transfers, in accordance with procedures established by law, from the funds of the City as may be necessary to provide funds for meeting obligations of the City. The amount of any temporary transfers shall not at any one time exceed 85% of the ad valorem property taxes accruing to the City, shall not be made after the last Monday in April of the current fiscal year, and shall be replaced from the taxes accruing to the City before any other obligation of the City is met from those taxes.

Sec. 341. Transfers from Reserve Fund; Appropriations from Unappropriated Balance.

Transfers may be made from the Reserve Fund after adoption of the annual budget to meet in whole or in part any appropriated item of the annual budget, or may be made to the General Fund or the Unappropriated Balance. These transfers and any appropriations from the Unappropriated Balance may be made after adoption of the budget, as follows:

(a) upon recommendation of the Mayor, approved by a majority vote of the Council;

(b) upon a majority vote of the Council, subject to the approval of the Mayor, or passage by the Council over the Mayor’s veto by a

two-thirds vote.

If any order making a transfer or appropriation is not returned to the City Clerk by the Mayor for presentation to the Council, with

objections in writing, within ten days after it has been presented, it shall become effective and be as valid as if the Mayor had approved and signed it.

Sec. 342. Transfers of Appropriated Funds.

Funds appropriated in the general City budget or thereafter by the Council for expenditure by any officer, board or department may be transferred to the Reserve Fund or the Unappropriated Balance, or appropriated for the same or other purposes by other authorized officers, boards or departments and the budget or other spending authority amended accordingly:

(a) for transfers not in excess of an amount established by ordinance, on the approval of the Mayor, provided that the Mayor shall

give notice of such transfer at the time it is made to the City Clerk who shall notify the President of the Council, the Controller and the City Administrative Officer of the transfer;

(b) for transfers in excess of an amount established by ordinance, on the approval of the Mayor and a majority vote of the Council;

or

(c) for transfers in excess of an amount established by ordinance, on the majority vote of the Council, subject to the approval of the

Mayor, or passage by the Council over the Mayor’s veto by a two-thirds vote.

If any order making a transfer is not returned to the City Clerk by the Mayor, for presentation to the Council, with objections in writing, within ten days after it has been presented, it shall become effective and be as valid as if the Mayor had approved and signed it.

SECTION HISTORY

Amended by: Subsec. (a), Charter Amendment II, approved November 5, 2024, effective January 8, 2025.

Sec. 343. Intra-Departmental Transfer.

(a) Departments Not Controlling Their Own Funds. The head of any department not having control of its own funds may make

application in writing to the Mayor for a transfer of amounts from one appropriated item to another in the budget allowance of the department or to a new item created after adoption of the annual budget. On the approval of the Mayor, the Controller shall make the transfer, but no transfer of an amount exceeding either thirty-five thousand dollars ($35,000) or other amount established by ordinance shall be made unless approved by a majority vote of the Council. Notwithstanding the above, for transfers within the Council’s budget, the President of the Council shall be authorized to approve transfers.

(b) Departments Controlling Their Own Funds. The general manager of any department having control of its own funds may make application in writing to the board having control and management over the department for a transfer of amounts from one budget item to another in the annual budget of the department, or to a new item created after adoption of the annual budget. On the approval of the board, the Controller shall make the transfer, but no transfer of an amount exceeding thirty-five thousand dollars ($35,000) or other amount established by ordinance shall be made unless approved in writing by the Mayor.

(c) Increase in Limit. The monetary limitations of thirty-five thousand dollars ($35,000) in subsections (a) and (b) above shall commence at the beginning of the City’s 1999-2000 fiscal year and shall be subject in subsequent fiscal years to an annual adjustment at the beginning of the fiscal year based upon the Consumer Price Index for all urban consumers for the Los Angeles area published by the United States Department of Labor, Bureau of Labor Statistics.

(d) Notice. At the time any transfer of funds pursuant to this section is made, the authority approving the transfer shall give notice to the City Clerk, who shall notify the President of the Council, the Controller and the City Administrative Officer of the transfer.

SECTION HISTORY

Amended by: Subsec. (d), Charter Amendment II, approved November 5, 2024, effective January 8, 2025.

Sec. 344. Transfer of Surplus to Reserve Fund.

(a) At the close of each fiscal year, the Controller and Treasurer shall transfer all surplus money remaining in each fund over and above the amount of outstanding demands and liabilities payable out of the fund to the Reserve Fund, except surplus money in the several bond funds, interest and sinking funds, trust funds, pension and retirement funds, Harbor Revenue Fund, Library Fund, Recreation and Parks Fund, Power Revenue Fund, Water Revenue Fund, Airport Revenue Fund and other funds as provided by the Charter or ordinance. The Council may, by ordinance, direct that surplus money in the Harbor Revenue Fund, the Power Revenue Fund or the Water Revenue Fund be transferred to the Reserve Fund with the consent of the board in charge of the fund, but not otherwise. Surplus money may be transferred from the Airport Revenue Fund only as provided in Section 635.

(b) The Council may, by ordinance, direct that a transfer be made to the Reserve Fund from surplus money in the Water Revenue Fund or Power Revenue Fund with the consent of the Board of Water and Power Commissioners (the "Board"), as provided in this section.

(1) For purposes of this section, surplus in the Water Revenue Fund or Power Revenue Fund shall be defined as the amount

remaining in the Water Revenue Fund or Power Revenue Fund, less outstanding demands and liabilities payable out of the fund, at the end of the fiscal year prior to the fiscal year in which the transfer is to be made, as shown by audited financial statements.

(2) Through the process provided in this section, the Board may withhold its consent to make the transfer in whole or in part if,

despite the existence of a surplus as defined herein, it finds that making the transfer would have a material negative impact on the Department's financial condition in the year in which the transfer is to be made.

(3) By no later than November 30 of each year, the Board shall be presented with audited financial statements for the prior fiscal

year. Based upon the audited financial statements for the prior fiscal year and budget status information for the current fiscal year, the Board shall, by December 31 of each year notify the Council and Mayor that the Board has (i) approved that the transfer be made in full, (ii) approved that the transfer be made in part, or (iii) decided that the transfer not be made in whole or in part. In the event that no approval of the transfer in full has been made by the date of notification, the Board shall provide the City Council and Mayor with (i) a detailed explanation of the basis therefor and all supporting financial information, and (ii) a preliminary assessment on the feasibility of making the transfer or the remaining portion of the transfer, as the case may be, by the end of the current fiscal year, which preliminary assessment shall be accompanied by a detailed explanation of its basis and all supporting financial information.

(4) In the event that the Board notifies the City that it will be unable to make the transfer in whole or in part because it will have a

material negative impact on the Department's financial condition in the year in which the transfer is made, the City Administrative Officer shall verify the Department's findings and report to the Mayor and City Council concurrently, by no later than February 28, with that office's findings and recommendations. The Board shall after receiving the report from the City Administrative Officer and consultation with the Council and Mayor, act to either amend or uphold the Board's preliminary findings.

(5) Any transfer made shall be consistent with any applicable contractual obligations.

SECTION HISTORY

Amended by: Charter Amendment J § 2, approved March 8, 2011, effective April 8, 2011.

CLAIMS

Sec. 350. Claims Against City.

(a) Claim Required. No suit shall be brought on any claim for money or damages against the City, or any officer or board of the City, until a claim has been filed with the City Clerk, and rejected in whole or in part. If rejected in part, suit may be brought to recover the whole. Claim procedures and requirements shall be governed by state law or ordinance not inconsistent with state law. Except in those cases where a shorter period of time is otherwise provided by state law, all claims for damages against the City must be presented within six months for personal injury and within one year for property damage after the occurrence from which the damages arose, or after the last item of the account or claim accrued.

(b) Action on Claim. In all cases, the claim shall be approved or rejected in writing and the date given. Failure to act upon any claim within 45 days from the date the claim is filed with the City Clerk or, if amended, within 45 days after the amended claim is filed with the City Clerk, or within any greater period provided by state law, shall be deemed to be a rejection.

(c) Applicability. The requirements of this section shall not apply to claims for payment upon presentation and surrender of any bonds, notes or other evidences of indebtedness authorized by the Charter or state law and payable solely from any revenue fund or other special fund.

MISCELLANEOUS FINANCE

Sec. 360. Payment into Treasury.

Except as provided by ordinance, all public money collected by any officer, employee of the City or other person shall immediately be paid into the City Treasury, without any deduction on account of any claim for fees, commissions or any other cause.

Sec. 361. Law Governing Bonded Indebtedness.

Except for revenue bonds issued pursuant to Section 609 or related ordinance or other bonded indebtedness issued pursuant to other procedural ordinance, the laws of the State of California establishing the procedure for the creation of bonded indebtedness in force at the time any bonded indebtedness is created by the City shall, so far as applicable, be followed.

Sec. 362. Annual Audit.

At the end of each fiscal year, the Council shall require the income and expenditures of each department and office of the City to be audited by one or more certified public accountants, who are not connected with the department to be audited. The accountants shall make their report directly to the Council and send copies to the Mayor and Controller. The Council shall determine the extent of the audit as to each of the departments, and may provide for the taking of the audit by resolution.

CONTRACTS

Sec. 370. Contracts Required to be in Writing and Signed.

Every contract involving consideration reasonably valued at more than an amount specified by ordinance shall, except in cases of urgent necessity for the preservation of life, health or property as provided in Section 371(e)(5), be made in writing, or other manner as provided by ordinance. The draft of the contract shall be approved by the board, officer or employee authorized to make the contract. Every contract must be approved by the City Attorney as to form, except for contracts or classes of contracts involving consideration reasonably valued at less than an amount set by ordinance.

The contract shall be signed on behalf of the City by:

(a) the Mayor; or

(b) the board, officer or employee authorized to enter into the contract; or

(c) in the case of a contract authorized by Council, the person authorized by the Council.

The City shall not be, and is not, bound by any contract unless it complies with the requirements of this section and all other applicable requirements of the Charter.

Sec. 371. Competitive Bidding; Competitive Sealed Proposals.

(a) Competitive Bidding. Except as provided in subsection (e) below, the City shall not be, and is not, bound by any contract unless the officer, board or employee authorized to contract has complied with the procedure for competitive bidding or submission of proposals established by this section and ordinance.

Contracts shall be let to the lowest responsive and responsible bidder furnishing satisfactory security for performance. This determination may be made on the basis of the lowest ultimate cost of the items in place and use. Where the items are to constitute a part of a larger project or undertaking, consideration may be given to the effect on the aggregate ultimate cost of the project or undertaking. Notwithstanding the provision of this subsection requiring award to the lowest responsive and responsible bidder, a bid preference can be allowed in the letting of contracts for California, Los Angeles County, or City of Los Angeles firms, and the bid specifications can provide for a domestic content and recycled content requirement. The extent and nature of the bid preference, domestic content and recycled content requirement and any standards, definitions and policies for their implementation shall be provided by ordinance.

(b) Competitive Sealed Proposals. As an alternative to an award pursuant to open and competitive bidding, a contract can be let pursuant to a competitive sealed proposal method, in accordance with criteria established by ordinance adopted by at least a two-thirds vote of the Council. The competitive sealed bid proposal system may permit negotiations after proposals have been opened to allow clarification and changes in the proposal. Adequate precautions shall be taken to treat each proposer fairly. No award may be made pursuant to this alternative method to a proposer whose final proposal is higher as to the ultimate cost to the City, as above defined, than any other responsive proposal submitted. The contracting authority, in order to utilize this alternative method, must make a written finding supported by a written statement of facts that adherence to the rule that the award be made to the lowest responsive and responsible bidder is not practicable or advantageous and shall also state in writing the reason for the particular award.

Consistent with competitive bidding requirements, design-build or other appropriate project delivery systems may be used when justified by the type of project and approved by the contracting authority.

(c) Right to Reject. The City shall reserve the right to reject any and all bids or proposals and to waive any informality in the bid or

proposal when to do so would be to the advantage of the City. The City may also reject the bid or proposal of any bidder or proposer who has previously failed to timely and satisfactorily perform any contract with the City.

(d) Notice. The Council, board, officer or employee authorized to contract shall cause notice inviting bids or proposals to be published at least once in a daily newspaper circulated in the City, or to be given by other method prescribed by ordinance, inviting bids or proposals. All bids and proposals shall comply with additional requirements provided by ordinance, including, but not limited to, the furnishing of a bid bond, performance bond and affidavit of non-collusion. Further procedures for competitive bidding shall be prescribed by ordinance.

(e) Exceptions. The restrictions of this section shall not apply to:

(1) Contracts involving consideration reasonably valued at less than an amount specified by ordinance.

(2) Contracts, as determined by the contracting authority, for the performance of professional, scientific, expert, technical, or other special services of a temporary and occasional character for which the contracting authority finds that competitive bidding is not practicable or advantageous.

(3) Contracts for the furnishing of articles covered by letters patent granted by the government of the United States.

(4) Contracts for leasing as lessee or purchasing real property when approved by majority vote of the Council.

(5) Contracts for repairs, alterations, work or improvements declared in writing by the contracting officer or board, or its designee,
to be of urgent necessity for the preservation of life, health or property. The declaration shall give the reasons for the urgent necessity
and must be approved by the Council or its designee. Approval may be conditioned upon compliance with one or more of the
requirements of this section.

(6) Contracts entered into during time of war or national, state or local emergency declared in accordance with federal, state or local
law, where the Council, by resolution adopted by two-thirds vote and approved by the Mayor, suspends any or all of the restrictions of
this section or their applicability to specific boards, officers or employees.

(7) Contracts for equipment repairs or parts obtained from the manufacturer of the equipment or its exclusive agent.

(8) Contracts for cooperative arrangement with other governmental agencies for the utilization of the purchasing contracts and
professional, scientific, expert or technical services contracts of those agencies and any implementing agreements, even though the
contracts and implementing agreements were not entered into through a competitive bid process.

(9) New, long-term concession agreements with the existing merchants as of the Adoption Date of the Charter on Olvera Street
negotiated by the City department responsible for administering the El Pueblo de Los Angeles Historical Monument.

(10) Subject to the requirements of Section 1022, contracts (including without limitation those, as determined by the contracting
authority, for the performance of professional, scientific, expert, technical or other special services), where the contracting authority
finds that the use of competitive bidding would be undesirable, impractical or impossible or where the common law otherwise excuses
compliance with competitive bidding requirements.

SECTION HISTORY

Amended by: Charter Amendment BB, approved June 7, 2022, effective August 22, 2022.

Sec. 372. Competitive Proposals Preferred.

Except as otherwise provided by ordinance, in all cases where bids are not required by the Charter, competitive proposals or bids shall be obtained as far as reasonably practicable and compatible with the City’s interests. In all cases, a public record of these proposals and agreements shall be kept. The right to reject any and all proposals or bids shall be reserved in all cases.

Sec. 373. Long Term Contracts; Approval by Council.

Except as otherwise provided in the Charter, no board, officer or employee shall make any type of contract, as specified by ordinance, obligating the City or any department to make or receive payments of money or other valuable consideration for a period longer than such period as provided by ordinance, unless such contract shall have been first approved by the Council. The ordinance shall set a time period for review by the Council, and may further define what constitutes a term of more than the specified period. If the Council does not approve the contract, the Council shall not modify the contract, but shall return it to the contracting authority for reconsideration and resubmission to Council. This section shall not apply to contracts entered into with the United States government, or other governmental agencies, or as specifically authorized in Sections 605 through 607.

Sec. 374. Contract or Direct Employment.

Whenever any board, officer or employee is given authority in the Charter to construct any public work or improvement, that authority shall include the right to proceed either by contract or by the direct employment of labor and purchase of materials, in accordance with the Charter.

Sec. 375. Prequalification of Bidders.

Nothing in this Article shall prevent the prequalification of bidders in accordance with criteria provided by ordinance if the process is clearly described in the bid specifications or request for proposals, and the contracting authority makes a written finding that utilization of such process would benefit the City.

Sec. 376. Change Orders.

Upon the award of any contract, the contracting authority may delegate the approval of change orders to a department employee, but that delegation shall specify the dollar amount that can be approved without further authorization by the contracting authority.

Sec. 377. Prevailing Wage.

The provisions of California Labor Code Section 1770 et. seq. regarding prevailing wages on public works and related regulations, as now existing and as may be amended, are accepted and made applicable to the City, its departments, boards, officers, agents and employees.

Sec. 378. Living Wage.

The City shall require that a living wage be provided to the employees of those doing business with the City in a manner to be prescribed by ordinance.

PURCHASES

Sec. 380. Purchases.

The City shall prescribe by ordinance the process for purchases of materials and supplies, equipment and equipment rental, repair and maintenance, consistent with the requirements of the Charter.

SALES

Sec. 385. Sale of City Property.

Any real or personal property owned by the City that is no longer needed may, subject to the limitations elsewhere prescribed in the Charter, be sold under terms and conditions prescribed by ordinance. However, any real or personal property under the control of any board authorized by the Charter or by law to acquire, hold or control the property shall not be sold without the approval of the board or officer having the management of the department. Except as otherwise provided by law, the proceeds of the sale shall be paid into the City Treasury and placed in the fund of the department having control of the property.

FRANCHISES

Sec. 390. Franchises.

(a) Granting of Franchises. The City may grant franchises for fixed terms, permits or privileges (Franchises) for the construction and operation of plants or works necessary or convenient for furnishing the City and its inhabitants with transportation, communication, terminal facilities, water, light, heat, power, refrigeration, storage, or any other public utility or service (Public Utility Service). The Council may prescribe the terms and conditions of the grant, and shall prescribe by ordinance the procedure for making these grants, subject to the

limitations provided in the Charter and applicable law.

(b) Award of Franchise. Before granting any Franchise, the Council shall advertise its intention to grant the Franchise and shall award the Franchise to the highest responsible and responsive bidder after competitive bidding, in accordance with the procedures prescribed by ordinance governing the granting of Franchises.

(c) Term of Franchises. No Franchise for the construction and operation of plants or works necessary or convenient for the furnishing of the City and its inhabitants with Public Utility Service shall be made for a period exceeding 21 years, except Franchises for the construction and operation of subways, elevated railways and grade separated railways, which shall be granted for a period not exceeding 40 years for the original Franchise. No grant for the extension of facilities of an existing utility operating under a Franchise granted by the City or county shall be made for a period beyond the expiration date of the Franchise under which the utility, or the portion of the utility with which the extension is to be connected, is operated.

The City may, by ordinance, five years or less prior to the expiration of any Franchise, grant to the holder of the Franchise a new Franchise to replace the expiring Franchise. The term of the replacement Franchise shall not exceed ten years from the date of expiration of the Franchise it replaces, except that any replacement cable television Franchise may be granted for a period not to exceed 15 years. Each replacement Franchise shall comply with the ordinances governing the granting of Franchises in force at the time the replacement Franchise is granted, and shall carry all the conditions required in the original Franchise.

(d) Terms and Conditions of Franchises.

(1) Power to Order Extensions of Facilities. Every Franchise shall provide that the board designated by ordinance to have such authority shall have the power to order extensions of the facilities authorized in the Franchise, after a hearing as provided by ordinance.

(2) Right to Purchase. Except as otherwise provided in the Charter, every Franchise shall reserve to the City the right to purchase

the property of the Public Utility Service, or find a purchaser therefor, upon one year’s written notice, either at an agreed price or a price to be determined in a manner prescribed in the grant.

(3) Price for Purchase. In fixing in any Franchise the price to be paid by the City for any utility, no allowance shall be made for

Franchise value, good will, going concern, earning power, increased cost of reproduction, severance damage or increased value of right of way.

(4) Assumption of Bonds. Every Franchise shall provide that when purchasing the property of the grantee, the City, if and when

permitted by the California Constitution, may assume the obligations of the grantee for the payment of the bonds then outstanding against the property, not exceeding in aggregate par value the valuation of the property purchased, as determined in accordance with this section. In this case, the par value of the bonds shall be deducted from the valuation of the property, and the excess, if any, of the valuation of the property over the par value of the bonds assumed shall be the net purchase price to be paid to the grantee.

(5) Consolidated or Annexed Territory. Every Franchise shall provide that in case of consolidation with or annexation to the City of

any territory not now included in the City, any Franchise to operate the Public Utility Service or any part thereof, held or claimed by the holder of the Franchise in or for any portion of territory consolidated or annexed to the City shall automatically be surrendered to the City, and the rights and obligations of the Franchise shall automatically extend to the additional territory.

(e) Resettlement Franchises. A resettlement Franchise may be granted to a public utility operating in the City under more than one

Franchise issued for different periods, and for different expiration dates for different parts of its system, which resettlement Franchise shall be in lieu of all other Franchises held by the grantee within the City.

(f) Applicability. Nothing in this section shall apply to the granting of Franchises by the Departments of Harbor and Airports.