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HomeMy WebLinkAboutCS 35/01 REPORT TO COUNCIL FROM: Gillis A. Paterson Director, Corporate Services & Treasurer DATE: October 16,2001 REPORT NUMBER: CS 35-01 SUBJECT: Purchasing By-Law, Policy and Procedures RECOMMENDATION: 1. It is recommended that Report CS 35-01 of the Director, Corporate Services & Treasurer be adopted by Council; and that: 2. the Purchasing Policies and Procedures adopted by Council in March 1989 under Resolution # 35/89 and any subsequent amendments, policies or procedures adopted by Council in this regard be repealed; 3. the attached Purchasing By-Law (Attachment #1) be read three times and approved; 4. a copy of this Report and the attached By-Law, Policy and Procedures be forwarded to the Pickering Public Library Board for their information and, if necessary, approval; and, 5. the appropriate authorities of the City of Pickering be given authority to give effect thereto. - ORIGIN: Director, Corporate Services & Treasurer AUTHORITY: Municipal Act, R.S.O. 1990, as amended FINANCIAL IMPLICATIONS: Approval of the above Recommendations will provide Council and staff with consolidated, updated and expanded policies and procedures regarding the acquisition of goods and services. It also provides the authority for the Chief Administrative Officer to approve revisions and updates to these procedures to improve efficiencies. This should result in cost effective improvements in the provision of good and services. The adoption of this report and the attached By-Laws will provide elected and appointed officials with the first consolidated rules governing the acquisition of goods and services. This should result in much improved purchasing, financial and budgetary control across the Corporation. EXECUTIVE SUMMARY: - This By-Law is an amalgam of former Pickering policies, those of various Regional Governments and Cities across Ontario and that recently approved by Durham Region Council. As the By-Law, Policy and Procedures go "hand in hand" it is felt they should be presented to Council at the same time. Report to Council CS 35-01 Date: October 16, 2001 Subject: Purchasing By-Law Policy and Proocedures Page 2 - BACKGROUND: In March 1989, Council approved a document entitled Purchasing Policies and Procedures. In May, 1997 Council also approved Report 14/97 from the Clerk regarding Review of Tenders and Contracts. In addition, a document entitled "Procurement Policies and Procedures" dated 1996 as an update to the 1989 Policy was developed and utililized as operational guidelines. The current Treasurer commenced employment with the then Town in late 1997 and around mid 1998 the first draft of this By-Law was provided to staff and Councillors for comment. Due to the colour of its cover it became known as the "Redbook". Since that time extensive meetings have been held with senior management, the Audit Committee, the external Auditors and the Chief Administrative Officer to review, comment and improve the document. Extensive reviews of internal process and procedures also had to be undertaken. . Staff limitations in the then Finance Department, a large backlog of internal problems and matters that had to be addressed, the implementation of a complete new financial system software (purchased prior to the hiring of the new Treasurer) prohibited timely progress on these matters. Moreover, Provincial "Downloading", the implementation of Current Value Assessment (C.V.A.) and hundreds of pieces of Provincial Legislation and Regulations regarding property taxation dictated that staffs attention be directed to these matters. Furthermore a new tax system and tax billing software had to be implemented in 1998 and 1999, and changes are still being developed and implemented. During this time several more drafts of the "Redbook" were produced. At various briefings Councillors were advised of the status and comment and input was sought. .- In 1999 it became evident that the current Payroll System was failing and had to be replaced. In late 1999 Council approved the replacement of the Payroll and time recording (eTime) systems and their integration with the HR System. These exercises demanded a great deal of the Finance staffing time diverting us from the "Redbook". While the new Payroll System produced the first cheques in August, 2000, work on the remaining phases continues. Around mid 2000, as part of the Corporate reorganization undertaken by the c.A.O., the responsibility for the Supply and Services Division was transferred to the Treasurer. This paved the way for a more comprehensive and consolidated review of purchasing and its relationships to the accounting and accounts payable functions. For the first time all the pieces were in the right place to enable completion of the exercise. In late 2000 yet another review of existing policies and procedures together with the lastest draft of the "Redbook" was undertaken by the Treasurer. In early 2001 another draft was produced, reviewed over the spring and summer, subjected to review and change and finally put in final form. While the Interdepartmental Procedures are still subject to review as to style and form it is not anticipated the content will change. Purchasine Policies and Procedures The 1989 document, referred to above, approved by Council is proposed to be repealed and replaced with a Purchasing By-Law. This By-Law will consolidate previous Council approvals in one document that, it is hoped, will clearly and concisely capture Council's directions in this regard. The first step is for Council to clearly state the rules governing the acquisition of goods and services to allow staff to establish policies, processes and procedures thereunder. This allows staff to conduct the operations of the Corporation and to pay for same, as, in the end, these matters must be subject to the financial rules and safeguards established by the Treasurer. Therefore, the intent of the old Purchasing Policies and Procedures will now, will not be incorporated into the By-Law, under which staff may establish practices and procedures subject to change from time to time by the Treasurer. This By-Law is the result of extensive reviews of the old Policy and has been greatly updated and expanded to include fmancial or accounting needs and considerations important to any Treasurer and Corporation. - The 1989 Purchasing Policy & Procedures approved by Council and the Purchasing Guideline 1994 draft versions set out spending limits as well as administrative procedures. Both the spending limits and procedures required adjustment to operate efficiently and in keeping with proper purchasing activity of the times. For improved efficiency, the administrative procedures have been extracted, greatly expanded and developed into the City's Corporate format, to be utilized in conjunction with the By-Law. Report to Council CS 35-01 Date: October 16,2001 Subject: Purchasing By-Law Policy and Proocedures Page 3 The notable changes within the expenditure limits since the 1989 policy are: . 1989 Policy - up to $5,000 - obtain up to 3 prices; $5,000 to $20,000 - quotation; $20,000 and up - tender . 1994 draft versions/subsequent approvals - up to $25,000 - obtain up to 3 prices; $25,000 to $75,000 - quotation; $75,000 and up -tender . Revised Purchasing By-Law - up to $500 - direct purchase; $500 to $25,000 obtain up to three prices; $25,000 to $100,000 quotation; $100,000 and up - tender The expenditure approval limits as well as the RFP (Request for Proposal) process has become more clearly defined in the revised Purchasing By-Law. - At the Audit Committee meeting of September 25, 2001, Report CS 30-01 regarding Request for Proposal was presented and discussed by the Committee. Attached to this Report was a Draft of the Purchasing By-Law and an extract from the staff Procedures on Request for Proposals. This report, together with the comments of the Committee, was referred to the Finance Committee. One point raised was clarification of Appendix "A"-Exemptions. This Appendix lists those expenditures deemed not necessary to be covered by a Purchase Order, eg utilities, professional services, Councillor/employee expense reimbursement, training and education etc., as these types of expenditures are normally covered by other means dictated by the provider such as registration forms, subscription order forms, agreement by contract, and utility services provided by another government or monopoly. It is virtually unchanged from that approved by Council in 1989. It was also requested that a comparison of limits with those of other municipalities be included. This information can be found in Attachment #3. Considering all of the foregoing which are important to any large corporation, it is important that Council also allow, through the adoption of this report, the Treasurer the authority to make any interpretations of the By-Law, make rulings that will allow the conduct of business to proceed and to take any actions necessary to this effect. It is our intention to provide all involved in the purchase of goods and services with access on our internal computer network to this Report, the Purchasing By-Law, Policy and Procedures. Elements of the By-Law may also be included on our Website for external viewers. The forthcoming Financial Control By-Law, Policy and Procedures will be treated in a similar manner. Information sessions will also be held to introduce and explain, to the appropriate staff, the policy and procedures. ,~ Report to Council CS 35-01 Date: October 16, 2001 Subject: Purchasing By-Law Policy and Proocedures Page 4 - ATTACHMENTS: 1. By-Law No. 5900101 2. Purchasing Procedures 3. Comparison of Dollar Limits Prepare By: Approved 1 Endorsed By: Vera Fe1g acher Jeffrey Manager, Supply & Services ~~t?-~ Gillis A. Paterson Director, Corporate Services & Treasurer Prepared By: ~w~ s me Semor Manager, Accounting Services - GAP:vw Attachments Copy: Chief Administrative Officer Director, Operations & Emergency Services Director, Planning & Development City Solicitor Manager, Supply & Services Manager, Accounting Services Recommended for the consideration of Pickering City Council , , - ,,,\-' 'rACHMENT#--L.IC t\t.;JORT 35-'Dl .-- THE CORPORATION OF THE CITY OF PICKERING BY-LAW NO. 5900/01 Being a By-Law for establishing policies govemmg the purchase and disposal of goods and services. (Hereinafter called the Purchasing By-Law) WHEREAS the Council of the Corporation of the City of Pickering (hereinafter the City) has sole authority to allocate funds through its adoption of budgets for approved corporate programs and objectives; AND WHEREAS the City recognizes the need for sound and effective purchasing policies for the commitment of public funds in the acquisition of goods and services; AND WHEREAS this By-Law establishes the authority and responsibilities governing the purchase and disposal of goods and services subject to certain exceptions; AND WHEREAS in the interests of administrative efficiency and the elimination of unnecessary duplication of service, the Library has historically adopted the purchasing policies and procedures of the City; ,... AND WHEREAS this By-Law anticipates the continuation of the cooperative arrangements between the City and the Library; AND WHEREAS the Council of the Corporation has by Resolution adopted on March 20, 1989 authorized the enactment of this By-Law and the repeal of Resolution #35/89 and any other By- Laws or resolutions formerly governing the subject matter of this By-Law; NOW THEREFORE, notwithstanding any other By-Law or policy, the Council of the Corporation enacts the following Purchasing Policy as detailed in Attachment 1: BY-LAW read a first, second and third time and finally passed this 5th day of November, 2001. Wayne Arthurs, Mayor Bruce Taylor, Clerk ,.