Chapter 4.04

CONTRACT AUTHORITY*

Sections:

• 4.04.010 Scope of contract authority. 4.04.020 Contract authority of the city manager.

• 4.04.025 Acceptance of property.

• 4.04.030 Contract authority of the city attorney.

• 4.04.040 Contract authority of the city clerk.

• 4.04.045 Contract authority of the independent police auditor.

• 4.04.050 Contract authority of the city auditor.

• 4.04.055 Contract amendment authority of council appointees.

*Charter reference— For Charter provisions on the city manager, see Charter Art. VII.

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§ 4.04.010

• 4.04.070 Limitations on contract authority.

• 4.04.075 Authorization otherwise conferred.

• 4.04.080 Quarterly reports.

• 4.04.085 Periodic automatic adjustments to contract authority limitations and related figures.

• A. The term "contract," for the purpose of this chapter, shall include, but not be limited to:

  1. Agreements for the construction of public works projects;

  2. Agreements for the lease or purchase of supplies, materials and equipment;

  3. Leases, licenses and other agreements for the use of real property;

  4. Agreements for professional services;

  5. Agreements for personal services, including agreements with independent contractors and employees;

  6. Agreements relating to the grant of funds by the city and to the city;

  7. Agreements to sponsor a city event, activity or public facility where the sponsor provides financial support to the city, which may be in the form of money, goods, personal property, or in-kind services and in exchange, the sponsor receives more substantial recognition from the city than a nominal acknowledgement of the financial support;

  8. Agreements for the purchase of real property; and

  9. Temporary construction easements.

• B. The term "contract," for the purpose of this chapter, except as provided in Section 4.04.025, shall not include:

  1. Unless specifically authorized under Section 4.04.020, agreements for the transfer of title to or substantial permanent interest in real property, including:

     • a. Grant deeds;

     • b. Quit claim deeds; and

     • c. Easements.

  2. Agreements for the donation of personal property by the city.

• C. The term "having a maximum value of" means the contract obligations involve the transfer to or from the city of money, goods, tangible or intangible personal property or an interest in real property having a dollar value in the amount stated.

(Prior code § 2917.1; Ords. 19626, 20708, 22229, 24418, 25063, 26386, 27103, 27980, 28185, 29245.)

• A. The City Manager is authorized to enter into and execute for and on behalf of the City of San José, without the prior approval of the City Council, any contract, for which:

  1. Moneys have been appropriated; and

  2. There is an unexpended and unencumbered balance of such appropriation sufficient to pay the expense of the contract; and

  3. The total monetary value expended or received by the City does not exceed the amount listed below with respect to the type of contract:

     • a. Emergency purchases pursuant to Section 4.12.220 regardless of the amount expended;

     • b. Agreements for the lease or purchase of supplies, materials and equipment including services incidental to such lease or purchase, having a maximum value of one million, four-hundred thirty thousand dollars ($1,430,000) (as adjusted pursuant to Section 4.04.085, starting on July 1, 2025), provided that the value of services incidental to such lease or purchase shall not exceed twenty-five percent (25%) of the total contract value unless those incidental services are general services;

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§ 4.04.020

  - c. Agreements for professional consulting services having a maximum value of three hundred fifty thousand dollars ($350,000) (as adjusted pursuant to Section 4.04.085, starting on July 1, 2025); 

  - d. Agreements for general services having a maximum value of one million four hundred thirty thousand dollars ($1,430,000) (as adjusted pursuant to Section 4.04.085, starting on July 1, 2025); 

  - e. Agreements relating to the grant of funds to or from the City and agreements for the acquisition of public artwork having a maximum value of two hundred fifty thousand dollars ($250,000) (as adjusted pursuant to Section 4.04.085); 

  - f. Sponsorship Agreements (as described in Section 4.04.010A.7.) having a maximum value of two hundred fifty thousand dollars ($250,000) (as adjusted pursuant to Section 4.04.085), each with a term not exceeding three (3) years, and which otherwise comply with City Council policy; and 

  - g. All other types of contracts having a maximum value of three hundred fifty thousand dollars ($350,000) (as adjusted pursuant to Section 4.04.085, starting on July 1, 2025). 

• B. In addition, the City Manager is authorized to enter into and execute for and on behalf of the City of San José, without the prior approval of the City Council the following:

  1. Any contract for the payment of fees imposed on the developer of a residential project pursuant to Chapter 14.25 or Chapter 19.38 of this Code;

  2. Leases, licenses or other agreements for use of property where the City is a lessee/ user or lessor/grantor, where the rental payments or other fixed consideration

do/does not exceed a cumulative total of two hundred fifty thousand dollars ($250,000) (as adjusted pursuant to Section 4.04.085);

3. One or more amendments to a lease, where City is a lessee or lessor, for the purpose of undertaking a cumulative total of no more than one hundred thousand dollars ($100,000) (as adjusted pursuant to Section 4.04.085) in improvements to the leased property over the term of the lease, including option periods;

4. Tenant estoppel certificates on behalf of the City, where City is a landlord, tenant or subtenant under an existing lease;

5. Agreements for the purchase or donation of fee interests in real property or for the grant of easements to the City, and all documents necessary to complete the purchase, where:

   • a. The real property or the easement is being acquired in order to implement a project approved by the City Council; and

   • b. The grant of easement or acquisition of real property has been determined to present no significant toxics liability; and

   • c. The compensation to the seller of the real property or grantor of the easement for the interest to be conveyed does not exceed two hundred fifty thousand dollars ($250,000) (as adjusted pursuant to Section 4.04.085) and all costs of purchase and additional costs of escrow and closing are lawfully available in accordance with Subsections 4.04.020A.1. and 2. above.

6. Temporary construction easements for terms not exceeding two (2) years where the City is grantor or grantee and the compensation for the temporary construction easement rights does not exceed two

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§ 4.04.020

hundred fifty thousand dollars ($250,000) (as adjusted pursuant to Section 4.04.085); and

7. Agreements for the sale of fee interests in real property where:

   • a. The real property has been declared surplus to the needs of the City by the City Council as provided in Chapter 4.20 or the disposition otherwise conforms to the Surplus Land Act (Cal. Gov. Code § 54220 et seq.), as may be amended from time to time; and

   • b. The process for conducting the sale was a competitive process or otherwise complies with the provisions of Chapter 4.20; and

   • c. The real property is not independently developable (as defined in Chapter 4.20); and

   • d. The sales price is less than six hundred thousand dollars ($600,000) (as adjusted pursuant to Section 4.04.085), and such sales price is not less than the estimated fair market value of the real property; and

   • e. Any reservation of easements or other rights to the City is limited to those reasonably necessary to support present or future public infrastructure, including, without limitation, rights-of-way and utilities.

8. Agreements for the granting of easements in real property where:

   • a. The value of the grant of easement(s) is less than six hundred thousand dollars ($600,000) (as adjusted pursuant to Section 4.04.085), and such value is not less than the estimated fair market value of the easement; and

   • b. The purpose of the easement(s) is limited to those reasonably necessary to support present or future

public infrastructure, including, without limitation, rights-of-way and private or public utilities.

• C. No provision of this Chapter is intended to limit the authority of the City Manager or any Council appointee from seeking approval of a specific action by the City Council, nor is it intended to limit the authority of the City Council to place limitations on the City Manager's or other Council appointee's authority with respect to entering into specific contracts.

• (Prior code §§ 2917.1, 4.04.010; Ords. 19626, 20708, 22229, 24382, 24418, 25063, 25619, 26386, 27103, 27980, 28185, 28359, 28802, 28803, 28897, 29245, 30848, 31227.)

The city manager is authorized to execute for and on behalf of the city a certificate of acceptance of an instrument conveying to the city any interest in real property, where such conveyance is:

• A. Of real property, or an interest therein, to be used for a public purpose; and

• B. Required as a condition of:

  1. A parcel map or tentative subdivision map approved pursuant to Title 19; or

  2. A development permit approved pursuant to Title 20; and

• C. The real property has been determined to present no significant toxics liability.

• (Ord. 25063.)

In addition to the authority specifically granted pursuant to Chapter 4.24 of this title, the city attorney is hereby authorized to enter into and execute for and on behalf of the city, without the prior approval of the city council, any contract:

• A. Whose object or purpose is related to the activities or functions of the office of city attorney; and

• B. Which is not required by any applicable law to be let to the lowest responsible bidder; and

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• C. Which provides for payment of money by the city; and

• D. Which has a maximum value of two hundred fifty thousand dollars (as adjusted pursuant to Section 4.04.085); and

• E. For which moneys have been appropriated and for which there is an unexpended and unencumbered balance of such appropriation sufficient to pay the expense of the contract.

(Prior code §§ 2917.1, 4.04.010; Ords. 19626, 20708, 22229, 24382, 26386, 27980, 28802.)

The city clerk is hereby authorized to enter into and execute for and on behalf of the city, without the prior approval of the city council, any contract:

• A. Whose object or purpose is related to the activities or functions of the office of city clerk; and

• B. Which is not required by any applicable law to be let to the lowest responsible bidder; and

• C. Which provides for payment of money by the city; and

• D. Which has a maximum value of two hundred fifty thousand dollars (as adjusted pursuant to Section 4.04.085); and

• E. For which moneys have been appropriated and for which there is an unexpended and unencumbered balance of such appropriation sufficient to pay the expense of the contract.

(Prior code §§ 2917.1, 4.04.010; Ords. 19626, 20708, 22229, 24382, 26386, 27980, 28802.)

The Independent Police Auditor is hereby authorized to enter into and execute for and on behalf of the City, without the prior approval of the City Council, any contract:

• A. Whose object or purpose is related to the activities or functions of the Office of the Independent Police Auditor; and

• B. Which is not required by any applicable law to be let to the lowest responsible bidder; and

• C. Which provides for payment of money by the City; and

• D. Which has a maximum value of three hundred and twenty thousand dollars ($320,000) (as adjusted pursuant to Section 4.04.085); and

• E. For which moneys have been appropriated and for which there is an unexpended and unencumbered balance of such appropriation sufficient to pay the expense of the contract.

(Ord. 30510.)

The city auditor is hereby authorized to enter into and execute for and on behalf of the city, without the prior approval of the city council, any contract:

• A. Whose object or purpose is related to the activities or functions of the office of city auditor; and

• B. Which is not required by any applicable law to be let to the lowest responsible bidder; and

• C. Which provides for payment of money by the city; and

• D. Which has a maximum value of two hundred fifty thousand dollars (as adjusted pursuant to Section 4.04.085); and

• E. For which moneys have been appropriated and for which there is an unexpended and unencumbered balance of such appropriation sufficient to pay the expense of the contract.

(Prior code §§ 2917.1, 4.04.010; Ords. 19626, 20708, 22229, 24382, 26386, 27980, 28802.)

• A. The City Manager, the City Attorney, City Clerk, Independent Police Auditor, and City Auditor are authorized to enter into and exe-

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§ 4.04.055

cute for and on behalf of the City of San José, without the prior approval of the City Council, any amendment to a contract which does not increase the compensation for the contract to accomplish the following:

• B. May expose the city to an extraordinary risk which the city council has not authorized.

(Prior code §§ 2917.1, 4.04.010; Ords. 19626, 20708, 22229, 25063.)

1. To extend the term of the contract; or

2. To make minor revisions to the scope of services; or

3. To make clerical corrections.

• B. In addition, the City Manager, the City Attorney, City Clerk, Independent Police Auditor, and City Auditor are authorized to approve assignments to contracts previously approved by the City Council when he or she has determined that the proposed assignee is at least as responsible and capable of performing the agreement as the original contractor.

• (Ords. 26398, 30510, 31227.)

• A. All contracts, except for authorized purchases through use of a city credit card, having a maximum value of five hundred dollars ($500.00) shall be in writing;

• B. All contracts which are required to be in writing shall be approved as to form by the city attorney prior to execution by the city.

• C. Upon execution of any contract entered into pursuant to this chapter, an executed original of the contract shall be filed with the city clerk's office.

(Prior code §§ 2917.1, 4.04.010; Ords. 19626, 20708, 22229, 22663, 24418, 25063, 26386, 27980.)

This chapter shall not authorize any city officer or official to enter into and execute any contract which:

• A. Such officer or official is otherwise prohibited from entering into and executing under the provisions of the city charter, this municipal code, or any other applicable law, or by any resolution or action of the city council; or

This chapter shall not limit the authority conferred by the city council:

• A. Through other previously enacted provisions of this Code which authorize the city manager or a department head to enter into certain specified types of contracts; or

• B. Through resolutions delegating authority to a city officer or official to negotiate and execute contracts on the city council's behalf without the further approval of the city council.

• (Ord. 25063.)

• A. The City Manager shall prepare a quarterly report which describes all contracts having a value greater than or equal to the Informal Procurement Threshold, as defined in Section 4.12.028 of this Code, that were entered into and executed by the City Manager, City Attorney, City Clerk, Independent Police Auditor, and City Auditor, in the preceding calendar quarter. The report shall identify the subject matter of the contract, the person(s) or entity(ies) with whom the contract was made and the amounts, if any, payable by or to the City under each contract.

• B. The City Attorney, City Clerk, Independent Police Auditor, and City Auditor shall provide to the City Manager the information necessary to enable the preparation of quarterly reports. Such quarterly reports will be posted on the City's web site on a web page designated for such postings.

(Prior code §§ 2917.1, 4.04.010; Ords. 19626, 20708, 22229, 22663, 27980, 28802, 30510, 30955.)

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§ 4.04.085

• A. For the purposes of this Section, "CPI" shall mean the Consumer Price Index, All Urban Consumers, published by the U.S. Department of Labor, Bureau of Labor Statistics for the San Francisco-Oakland-San José area, with all items included. In the event the CPI is no longer published, the Director shall use another index published by either the State of

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California or a federal department or agency that is charged with the responsibility of measuring the cost of living in the geographical area that includes the City of San José.

• B. For the purposes of this Section, "Applicable Monetary Amounts" shall mean those monetary amounts set forth in Sections 4.04.020, 4.04.030, 4.04.040, 4.04.045, 4.04.050, 4.16.240 A., 4.20.010 and 4.20.040.

• C. Commencing on July 1, 2013, and continuing every three (3) years thereafter on July 1st, the Applicable Monetary Amounts shall increase based on the percentage increase from the CPI which is published most immediately preceding the July 1st as of which the immediate past calculation occurred (or, for the purposes of the first calculation, July 1, 2010) to the CPI which is published most immediately preceding the July 1st as of which the new calculation shall occur. The Applicable Monetary Amounts thus adjusted shall thereafter be rounded to the nearest ten thousand, which rounded amounts shall be the Applicable Monetary Amounts for the next three (3) years. If there is no increase in the CPI, then the Applicable Monetary Amounts shall remain unchanged.

  1. Notwithstanding the foregoing, the first calculation for Applicable Monetary Amounts in Sections 4.04.020 B.7, 4.20.010 and 4.20.040 shall be July 1, 2016, with any increase based on the percentage increase from the CPI which is published most immediately preceding July 1, 2013.

  2. Notwithstanding the foregoing, the first calculation for Applicable Monetary Amount in Section 4.04.045 shall be July 1, 2022, with any increase based on the percentage increase from the CPI which is published most immediately preceding July 1, 2019.

• D. The foregoing calculations shall be made by the Director, as defined in Section 4.12.020 of this Code, and the effective Applicable Mone-

tary Amounts shall be posted on the City's web site on a web page designated for such postings.

(Ords. 28802, 29245, 30510, 30955.)