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'A- 4, s MEMO TO: Mayor & Council 'ROht: Finance Director - Treasurer Brager Clerk -Administrator Pauley i DATE: October 13, 1993 SUBJECT: Purchasing Policy During their last session the State Legislature raised the limit on the requirements of advertising to solicit the submission of sealed bids for purchases from $10,000 to $15,000. We have revised section 2.01 of the City's purchasing policy to reflect that change in state law. We also took the opportunity to review all of the purchasing Policy with department heads. Our review indicated that section .1.121 "Issuance of Purchase Order Forms to Department Heads", while performing its intended purpose of controlling and recording purchases, was inadvertantly causing inefficien- cies in City operations. Section 3.02 requires that prior to the purchases of goods or services, which are estimated to exceed $25.00, a purchase order be issued, signed by a department head, and countersigned by either the Clerk Administrator or Finance Director. On a weekly, and sometimes daily basis, circumstances arise under which adherence to this provision of the City's purchasing policy causes inefficiencies in the City operation. A few examples of what has actually occured in the past will illustrate this point. The mechanic is working on the front end loader. He determines that a hydraulic hose needs to be replaced. From past experience the mechanic knows that this hose costs approximately $65.00. The mechanic then contacts the Public Works Foreman, informs him of the need for a hydraulic hose, and requests the issuance of a purchase order. Then the Public Works Foreman requests the issuance of a purchase order from his department head, the Director of Public Works/Community Development, who in turn, issues a purchase order and requests it be countersigned by the Clerk -Administrator or Finance Director. All that time and effort to issue the purchase order was for an item that was included in the City budget. In the parks department the following occured. Several of the maintenance men are taking down boards which have been used for ballfield fencing and which will subsequenctly be used hockeyfor cracked or brokenand need sto bevreplacederal of theWe have boardbeen einformed that �—•., just one of these boards cost $23.00. Since several need to be replaced purchasing policy requires a purchase order be issued prior to their purchase. Thus, the procedure previously outlined for the issuance of a purchase order must be followed.