SUBJECT: GENERAL BUSINESS
Title
A Resolution of the Board of Trustees of the Town of Erie Amending and Updating the Town’s Purchasing Policy
Body
DEPARTMENT: Finance
PRESENTER: Stefanie Furman, Acting Finance Director
FISCAL SUMMARY:
Cost as Recommended: n/a
Balance Available: n/a
Budget Line Item Number: n/a
New Appropriation Required: n/a
STAFF RECOMMENDATION:
Recommendation
Approve the resolution amending and updating the Town’s purchasing policy.
End
SUMMARY AND BACKGROUND OF SUBJECT MATTER:
The proposed resolution updates and amends the Town’s purchasing policy, last updated in 2017. Objectives of the policy are to: procure goods and services at the lowest possible cost for the quality needed for effective use; avoid duplication, waste, and obsolescence with respect to the procurement of goods and services; provide adequate budgetary and fiscal control over all municipal expenditures; and minimize or eliminate disruptions in operations resulting from the lack of material, equipment, or supplies. The purchasing policy serves as a guideline for all purchasing activity and standardizes purchasing procedures.
This updated policy attempts to incorporate best practices based on a review of purchasing policies of several comparable municipalities, including Brighton, Firestone, Fountain, Golden, Lafayette, Littleton, Louisville, Montrose, Superior and Wheat Ridge; these are communities generally of a size similar to Erie. In addition, staff also reviewed policies of larger communities to identify potential improvements applicable in spite of any size difference.
Among the changes are revisions to spending authorization levels. In determining appropriate levels, the Town reviewed the communities referred to above. The following table reflects the Town’s current approval levels, the proposed levels and comparison levels for selected communities:
During the annual budget process the Board of Trustees considers the Town’s revenues and authorizes expenditures to support the Town’s numerous programs, services, capital projects, and policy objectives. The budget authorizes expenditures for specific purposes and projects. The Purchasing Policy establishes the process through which staff makes purchases or executes contracts for services funded in the annual budget approved by the Board.
The proposed new levels would give the Town Administrator authority to approve contracts and purchases up to $100,000 (and commensurate levels for division, director and Finance Director) only if the budget includes funding for that purpose. Currently contracts and purchases over $25,000 require Board approval. Given the amount of detail and time put into the annual budget process, it can be redundant and time consuming to bring these expenditures back to the Board for approval.
Currently, and to minimize the Board’s time spent considering smaller purchases, many contracts and purchases are put on the Board’s consent agenda for approval. However, even consent items require a significant amount of staff time to prepare the agenda item, have it reviewed by a department director, reviewed by the Town Administrator, included in the Board packet, and then approved by the Board. Additionally, all these steps add at least two weeks to as much as four weeks to a project that has already been approved in the budget process.
Some recent examples of projects or purchases the Board approved via the consent agenda that could have been approved by the Town Administrator if purchasing levels were changed include:
• 10/27 Emergency Purchase of COVID Testing Stations: $98,500
• 10/27 Expending a Portion of the Town’s CARES Act Funding for Residential Utility Bill Credits: $40,000
• 10/13 Services Agreement with Security Central, Inc. for Security Services, Equipment and Monitoring: $80,880
• 10/13 Purchase of Supplies from Scan Air Filter and Western Paper Disposal with CARES Act Funding $43,165
• 10/13 Professional Services Agreement with Wold Architects and Engineers for a Facilities Master Plan $89,000
• 10/13 Professional Services Agreement With Tischlerbise, Inc. For Completion of An Impact Fee Study: $67,000
• 8/25 Agreement with Solenis, LLC for the Delivery of Polymer Chemicals: $60,000
• 8/11 Purchase and Installation of a Transformer at the Erie Community Center: $34,307
• 8/11 Agreement with Iron Woman Construction & Environmental Services, LLC for Valve Repair or Removal at County Line Road and Vista Parkway: $29,613
Staff will continue to secure Board approval of all expenditures over $100,000 AND any project or purchase for which funding is not already approved in the annual budget.
Regardless of the approval level, all projects over $10,000 will continue to require a minimum of two quotes or bids, and documentation on the reason for the vendor selected. Additionally, a manager, director, or the Town Administrator can require a competitive bid process for any project if he/she determines it will get the best price for the project/purchase.
There are multiple steps in the purchase process including checks for both the proper approvals and to assure that there are sufficient funds budgeted prior to releasing a purchase requisition.
Board Priority(s) Addressed:
ü Prosperous Economy
ü Fiscally Responsible
ü Effective Governance
ATTACHMENTS:
1. Resolution
2. Purchasing Policy & Procedures