Payson Town Council Work Study: Procurement and Financial Policy Revisions, October 9, 2024
Payson Town Council Work Study: Procurement and Financial Policy Revisions - October 9, 2024
The Payson Town Council met in a work study session on October 9, 2024, immediately following the regular council meeting in the Town Hall Council Chambers, 303 N Beeline Highway, Payson, Arizona. Mayor Chris Higgins called the meeting to order at approximately 4:43 p.m.; it adjourned at approximately 4:58 p.m. Council Members Jolynn Schinstock and Susan 'Suzy' Tubbs were absent. The purpose of the work study was to discuss proposed revisions to the Town's Procurement Policy and Financial Policy. As a work study, no formal action was taken and public comment was not taken. Dana Ohanesian, Finance Director, presented both items and sought council input.
Discussion Items
Procurement Policy Revisions
- Dana Ohanesian presented a PowerPoint on the Town's Procurement Policy, last updated in September 2021, noting that costs had risen significantly and that new technology provided opportunities to improve procurement efficiencies.
- Recommended changes included:
- Clarifying grant funding language so purchases follow the granting agency's guidelines or, in the absence of such guidelines, this policy.
- Increasing fixed asset and competitive bid thresholds from $5,000 to $10,000; keeping department head authorization up to just under $20,000; and increasing Town Manager authorization from $20,000 to just under $100,000.
- Replacing newspaper advertising requirements with Town website advertising, while allowing newspaper advertising when beneficial.
- Using the new e-procurement system (OpenGov) to maintain a vendor list and enable digital solicitations, submittals, and selections.
- Adding a 'Qualified Vendor's List' so the Town can maintain pre-qualified, on-call vendors and avoid repeated solicitations.
- Removing the right-to-inspect-plant and right-to-audit-records clauses from the policy and adding them to specific vendor contracts when necessary.
- Council Member Joel Mona commended the bid solicitation updates, stating that digital submittals are the modern way most organizations use and can help avoid limiting the number of proposals received.
Financial Policy Revisions
- Dana Ohanesian presented a PowerPoint on the Town's Financial Policy, last updated in May 2009, noting the need to reflect current practices, update outdated names and reports, and align language with Arizona Revised Statutes.
- Recommended changes included:
- Requiring Town Council approval for new ongoing operational increases and one-time requests in the budget.
- Replacing 'zero-based budget' with 'prior-year base budget.'
- Changing the Capital Improvement Plan from a 5-year to a 10-year plan.
- Maintaining the Council Contingency Fund at $250,000 plus prior-year encumbrances; adding a reference to the $1,000,000 Operational Contingency line item in the general fund.
- Requiring all funds to be reconciled at year-end so no negative balances remain.
- Replacing the term 'CAFR' with 'ACFR' in accordance with current accounting terminology.
- Changing 'annual business plan' to 'corporate strategic plan'; adding an annual bond indebtedness report; clarifying the water department indirect fee calculation; and removing the revenue handbook reference.
- Council Member Scott Nossek asked why language allowing Council to expend from the Council Contingency Fund was removed. Mr. Ohanesian replied that approval language already existed elsewhere in the policy for reserve funds and that the language could be added back if desired.
Key Outcomes
- No formal votes or decisions were made during the work study, as expected for a work session.
- Council members expressed general support for the proposed updates and offered specific comments from Council Members Mona and Nossek.
- Staff planned to incorporate council comments and return with resolutions approving the revised policies. Sheila DeSchaaf, Acting Town Manager, stated that a clean copy of the Financial Policy would be presented with a resolution on the Consent Agenda at the next Council meeting.
Meeting Transcript
Next meeting. Yes. Thank you. All right. Call to order this work study meeting. And Michelle, can we get a roll call? Let the record show that all council members are present except for council members to abstention. Nice. Purpose of this meeting is a presentation regarding the procurement policy revisions. Dana Hennessean Finance Director, take it away. Thank you, Mayor. Council member. Just a couple of housekeeping items today. Like you mentioned, the first one is procurement policy. And the purpose is to kind of give you a update on the proposed updates to the uh to the current uh procurement policy. Um why are we updating this? This policy hasn't been updated since uh September 21. Parts of it haven't been updated for 15 years before that. So we went through the entire policy and um uh made some uh updates and corrections and suggestions on some of the uh some of the policies. Uh certain uh language and process need to be updated to provide clarity. Uh also costs have risen significantly since the last time the policy was updated, and so um we're proposing to uh increase some of the uh purchasing thresholds. Also, uh new technology is available that would help improve our efficiencies and procurement activities. Um of the things we purchased recently was an e-procurement system, which is allows us to do online um uh if it's basically an online platform that allows us to uh reach out to vendors uh through the internet. It also allows us to accept bids electronically, um select bids, and then um uh maintain a list of everybody that actually went to the bid, retrieved a bid, submitted a bid. So it does a number of things for us that we used to do manually that we don't have to do manually now. Um consequently, it'll save staff quite a bit of time. Um also we made some changes to uh grant funding references. Um we're recommending to replace uh the current language with uh this language that says when utilizing grant funding purchases shall follow the procurement guidelines of the granting agency, or in the absence of granting guidelines this policy as appropriate. And reason why we're changing this is there's a number of uh grants that we uh apply for, some are federal, some are state, some are other organizations, and they have different policies, and then rather to have to update those policies each time their granting standards change. We put this language in and leave it up to the staff member to follow the the guidelines of the actual uh granting agency. Again, other language has been modified to clarify um procedures for staff. I mentioned that we're um proposing to change some of the threshold limits. Um here's some of the threshold limits that we're proposing to change. The fixed asset threshold we're proposing to increase from 5,000 to 10,000. Um almost everything we purchase that's a significant item assets are over 10,000. And so at this point, we would require uh departments to get um uh three bids for anything at 10,000 above. Um same thing, the the competitive bid and fixed asset bid is the same thing, it's rising from five to ten thousand. Uh we're not increasing the department head authorization, they've got authorization from a zero dollars up to nine nineteen uh just under 20,000. Um, that is actually staying the same. Uh however, we're um increasing the town manager's authorization. Uh, previously it was 20,000 to just under 50,000. Now we're suggesting that it be increased from 20,000 to uh just under 100,000. Give him a little bit more flexibility on all these contracts that we're entering into. Um we're also um changing the uh requirement to advertise in the newspaper to advertise on the town website. Uh we will still advertise in the newspaper when it's beneficial for the town to do that, or if that's a suggestion, but uh we're gonna require all advertising be on the town website. Uh vendor list and information for procurement again will be maintained by the uh e-procurement system. Um like I said, that's a very uh dynamic system and it keeps track of everything for us. Also, we'll change the language in there for requests for bids, requests for proposals, and requests for qualification. Um, all that will be updated to allow for digital solicitation submittals and sub selections with our uh e-procurement system. Um we added a new section called qualified qualified vendors list, um, and this is being proposed, which will allow the town to maintain a list of on-call vendors.
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