The legislation was authored by City Council members Jovanka Beckles and Ada Recinos.
"We want to make sure that these companies are not collaborating with ICE to give up names to deport people," Beckles said.
The proposal, known as the Sanctuary City Contracting and Investment Policy, would apply to vendors that renew contracts with the city and companies that develop new agreements. The city could give waivers to firms that do not abide by the new regulations if they determine that no other company can provide the same service.
The proposal would also bar Richmond from investing in companies that work to create registries and databases that identify immigrants by religion, national origin or ethnicity.
The measure's first reading passed 5-1. Mayor Tom Butt was the only member of the City Council to vote against it.
"The way it's written now, I think this is very sloppy," Butt said. "It's what I would call feel-good legislation. You feel like you're really doing something but you're not really doing anything tangible."
Butt emphasized that Richmond does not currently contract with firms involved in immigrant databases.
"You could write into the city code that no elephants are allowed on Macdonald Avenue just in case one shows up," Butt said. "I don't think that's good government to write things into ordinances that don't have any applicability."
But Hofer said that one of Richmond's contractors is Vigilant Solutions, a firm that has reportedly provided license plate recognition services to ICE.
Police officials tried to convince the council to postpone voting on the measure because they are still compiling a list of contractors they work with that would be affected.
"We would just like a little bit more time to look over our contracts and see how that would impact us," said Assistant Police Chief Bisa French.
Several members of the council said the Police Department could present new information when the measure is read a second time, most likely on June 5.
Councilman Jael Myrick said the city needed to act now.
"If we were sitting here in the 1980s and we were talking about divesting from South Africa, there probably would have been some pain involved in that process," Myrick said.
"If we were sitting here in the early 1800s and we were talking about divesting from businesses that had ties to slavery, there would definitely be some pain in that process," he said. "There are times when we need to be practical and compromise, and there are times when we need to draw a line in the sand. This is the latter."
Richmond would become the first city in California to have a sanctuary contracting policy, according to Hofer.
Eva Spiegel, a spokeswoman for the League of California Cities, said she and her colleagues were unaware of another city that had similar regulations.
A representative for ICE did not reply to a request for comment.
Correction: This story originally misstated the scope of the new Richmond sanctuary contracting ordinance. The measure does not address companies that may give federal immigration agencies information about their workers. KQED regrets the error.