Purchasing policy under review

City of Powell River Council will contemplate increases to the amounts of funds that staff members can spend without council ratification.

At a finance committee meeting held late June, Shehzad Somji, the city’s chief financial officer, highlighted a report that calls for, in most cases, at least a doubling of the limits that can be expended by supervisory staff members.

In his report, Somji stated there is no tangible financial impact from the increases. However, the intangible savings could be significant. The reduction in time spent writing reports and following up for signatures on agreements will free up staff time to focus on other projects. Putting a cost to this increased efficiency is difficult.

Somji said the purchasing policy initiative was added to council’s action list in November 2014. A review was conducted and it was evident a revamp was required.

The biggest change was for the purchasing authority limit. Somji said it was proposed that the chief administrative officer’s (CAO) limit be increased from $100,000 to $200,000. He said that even within the proposed increase, it was less than one per cent of the city’s annual operating budget, so it was “not a big number, percentage wise.”

“Nothing can be spent without you approving the financial plan, anyway,” he said. “Really, the increase in spending limits has more to do with operational efficiency than giving the CAO the ability to spend the money. You approve the capital budget each year. That is what is going to get spent.”

Increasing the limits for city senior staff members and supervisors means that they do not have to go back to the CAO for a signature on some invoices once the purchase order has been approved. With bigger projects, council is going to see the contract and so will approve the actual expenditure on the project, according to Somji.

Somji said in preparing the revised purchasing policy, an additional section was added, entitled environmental and ethical considerations. The city has looked at purchasing policies in other larger cities and incorporated environmental and ethical considerations into Powell River’s policy.

A supplier code of conduct has also been added. It spells out what the city is looking for in suppliers, including social standards, environmental standards, management standards and compliance and implementation framework.

“We tried to incorporate it all into one document,” Somji said. “It’s simple for us to operate and for you to approve, instead of having to jump back and forth between two or three different documents or policies.”

Councillor Jim Palm said the policy was well written and he is all for streamlining city hall. The purchasing policy is a step in the right direction, he said.

Councillor Rob Southcott asked if there is any prerogative to give preference to local business, and business from British Columbia.

Somji said that is the mandate and it is not going to change under a revised policy.

“We want to do as much as we can locally,” he said. It has to meet the city’s parameters, however.

Somji said the city is already approaching local businesses to get jobs done and uses more than 100 local suppliers.

Mayor Dave Formosa said there had been discussion in the past for local businesses and suppliers in a new purchasing bylaw to receive credits for being local. He said one big issue with projects is bonding ability and that’s where a lot of local people have trouble competing, especially in construction. However, if a large contractor bidding on a big job uses local contractors, then credits could be given for that commitment. “If there was a way to entice the people with deeper pockets to get a leg up by hiring local contractors, I would be in favour.”

Formosa said he had a conversation with the CAO about why the spending limit increases in the purchasing policy are a good idea and he is comfortable with the initiative.

Councillor CaroleAnn Leishman asked who would be providing the oversight to ensure the procedures under the ethical purchasing policy were being followed. “How do we know this is happening?”

Somji said what he is envisioning is whoever puts out the request for proposals will have a checklist or matrix to ensure the proper credentials are in place.

The finance committee agreed to send the purchasing policy to city council for discussion and adoption.