The Los Angeles City Council gave tentative approval Wednesday to an ordinance that would require written contracts for amounts over $25,000 instead of the current $5,000.
The council approved a first consideration of the ordinance in a 12-0 vote. Council members Imelda Padilla, Curren Price and Monica Rodriguez were absent during the vote.
The amendment was initiated under a motion that was introduced by Councilmen Paul Krekorian and Marqueece Harris-Dawson in January.
The current law requiring a written contract for amounts over $5,000 was last updated in 1999. The motion seeks to streamline the city’s entire contracting process, increasing efficiency and reducing staff time for the city and the agencies receiving city funds.
“It is appropriate to consider raising this contracting limit to $25,000 for all city departments and agencies, including if applicable, the proprietary departments,” the motion reads.
Prior to the vote, a few members of the public criticized the ordinance, saying it could further encourage corruption at City Hall.
In 2023, requiring a business to go through the city’s process for drafting a written contract for every expenditure over $5,000 “shuts a lot of small mom-and-pop firms out of doing business with the city,” according to a statement from Council President Krekorian’s office.
“Raising the threshold for requiring a written contract enables the city to do more business with small enterprises, many of which are minority-owned, and not just with large companies that have the resources to draft the elaborate contracts the city requires to comply with other regulations,” the statement read.
The ordinance requires a second consideration by the council before it can be enacted, and approval by the mayor.