Revised Purchasing Policy

TOWN OF VIEW ROYAL COMMITTEE OF THE WHOLE REPORT

TO: Committee of the Whole DATE: September 7, 2018 FROM: D. Christenson, Director of Finance MEETING DATE: September 18, 2018

Revised Purchasing Policy

RECOMMENDATION:

THAT the Committee recommend to Council that Policy #1600-015 (Purchasing) be rescinded and replaced with Policy #1600-021 (Purchasing).

CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:

I concur with the recommendation.

DIRECTOR OF CORPORATE ADMINISTRATION’S COMMENTS:

I concur with the recommendation.

DIRECTOR OF DEVELOPMENT SERVICES’ COMMENTS:

I concur with the recommendation.

DIRECTOR OF ENGINEERING’S COMMENTS:

I concur with the recommendation.

DIRECTOR OF PROTECTIVE SERVICES’ COMMENTS:

I concur with the recommendation.

PURPOSE OF REPORT:

To consider a revised purchasing policy that balances efficiency with transparency and accountability, and aligns procurement activities with best practice, trade agreements, and recommendations of the Auditor General for Local Government.

BACKGROUND DISCUSSION:

Since the current purchasing policy was approved in 2004, several aspects that affect the procurement process have evolved. For example, thresholds for spending approval that made sense almost 15 years ago are no longer as appropriate. As a result, strict compliance with the policy results in less efficient operations.

In January of 2016, the Auditor General for Local Government (AGLG) issued a paper as a part of its Perspective Series on the topic of Achieving Value for Money in Operational Procurement. This document provides guidance and sets a very high standard for procurement policy and other aspects of the procurement process.

The attached policy was developed using the 2004 policy, the AGLG guidelines, and procurement policies from other local governments as a basis for understanding best practices for procurement. The CAO and senior management team also contributed to the development of the policy, and helped identify potential operational impacts implied by the recommended changes.

One of the themes that arose in our discussions was that of balancing the imperative for transparent procurement with the reality of efficient operations. This policy is important because it is Council’s acceptance that under specified dollar value thresholds the procurement process may not be completely “fair” since the cost and effort required to ensure perfect equitability exceeds the direct or imputed value of the procurement.

Appendix C (Key Differences between Purchasing Policies #1600-015 and #1600-021) attached describes the significant elements of procurement and compares the existing policy (#1600-015) with the proposed policy (#1600-021), with comments on the rationale for the change.

Implementation of the policy would begin following Council approval and communication with all spending authorities. There are minimal direct financial impacts anticipated in relation to the implementation of this policy; however, greater efficiencies are likely to be achieved that will result in greater productivity.

RECOMMENDATION:

THAT the Committee recommend to Council that Policy #1600-015 (Purchasing) be rescinded and replaced with Policy #1600-021 (Purchasing).

SUBMITTED BY:

D. Christenson, Director of Finance

REVIEWED BY:

K. Anema, Chief Administrative Officer

Attached:

• Appendix A: Policy # 1600-021 (Purchasing) PROPOSED
• Appendix B: Policy # 1600-015 (Purchasing) CURRENT
• Appendix C: Key Differences between Purchasing Policies #1600-015 and #1600-021