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2004/12/06 CORPORATE SERVICES COMMITTEE AGENDA FIFTH MEETING Monday, December 6, 2004 Council Chambers - 5:30 p.m. PRAYER: Alderman Vince Kerrio NATIONAL ANTHEM 1. Minutes of the November 15, 2004 Meeting 2. Deputations Main and Ferry B.I.A. re Community Improvement Plan Niagara Falls Art Gallery re Outstanding Taxes Letter of support from the Arts & Culture Committee 3. Reports: Staff Contact CD-2004-25 - Supply and Services Policy Dean Iorfida F-2004-61 - General Purposes Budget (refer to budget binder) Ken Burden F-2004-62 - Capital Projects Budget (refer to budget binder) Ken Burden F-2004-63 - Municipal Utility Budget (refer to budget binder) Ken Burden 4. New Business 5. Adjournment MINUTES CITY OF NIAGARA FALLS CORPORATE SERVICES COMMITTEE FOURTH MEETING MONDAY, NOVEMBER 15, 2004 COUNCIL CHAMBERS 6:00 P.M. PRESENT: Mayor Ted Saici, Aldermen Wayne Campbell, Chair; Jim Diodati, Carolynn Ioannoni, Vinee Kerrio, Joyce Morocco, Victor Pietrangelo, Selina Volpatti and Janice Wing. STAFF: John MacDonald, Dean Iorfida, Adele Kon, Barney Ruddell, Alex Herlovitch, Ken Burden, Todd Harrison, Joanna Daniels PRESS: Corey Larocque, Niagara Falls Review 1. MINUTES: Alderman Morocco was incorrectly identified as "Mayor" in the November 1~t minutes. MOVED by Alderman Diodati, seconded by Alderman Morocco, that the minutes of the November 15, 2004 meeting be adopted as amended. Motion Carried Unanimously 2. ADOPTION OF AGENDA: MOVED by Alderman Pietrangelo, seconded by Alderman Ioannoni, that the order of the deputations be changed to have Doctor Dec as the first presenter. Motion Carried Unanimously 3. DEPUTATIONS: MOVED by Alderman toannoni, seeonded by Alderman Pietrangelo, that the 2005 Budget Request from Doctor Dec on behalf of Doctor Recruitment be referred to final budget deliberations. Motion Carried Unanimously MOVED by Alderman Volpatti, seconded by Mayor Salci, that the 2005 Budget Request from Opportunities Niagara be referred to final budget deliberations. Motion Carried Unanimously -2- MOVED by Mayor Salci, seconded by Alderman Morocco, that the 2005 Budget Request from Niagara Falls Transit be referred to final budget deliberations. Motion Carried Unanimouslg MO VED by Mayor Salci, seconded by Alderman Morocco, that the 2005 Budget Request from Niagara Falls Chair-A-Van be referred to final budget deliberations. Motion Carried UnanimouslF MOVED by Alderman Volpatti, seconded by Mayor Salci, that the 2005 Budget Request from the Niagara Falls Public Library be referred to final budget deliberations. Motion Carried UnanimouslF MOVED by Alderman Volpatti, seconded by Alderman Ioannoni, that the 2005 Budget Request from the Chippawa Volunteer Firefighters Association be referred to final budget deliberations. Motion Carried Unanimously MOVED by Alderman Ioannoni, seconded by Alderman Volpatti, that the Winter Festival of Lights be funded independently of Niagara Falls Tourism, and that the Winter Festival of Lights bring forward a separate budget for 2005 funding, to be referred to final budget deliberations. Motion Carried Unanimously Alderman Morocco declared a conflict as Niagara Falls Tourism is her contract place of employment MOVED by Alderman Volpatti, seconded by Alderman Ioannoni, that the Niagara Falls Tourism request for funding be referred to final budget deliberations pending the results of their organizational review. Motion Carried UnanimouslF Alderman Morocco declared a conflict as Niagara Falls Tourism is her contract place of employment MOVED by Mayor Salci, seconded by Alderman Kerrio, that a Committee be formed to work with the Boys & Girls Club and staff once they have their business plan prepared for the proposed new building. Motion Defeated MOVED by Alderman Ioannoni, seconded by Alderman Wing, that the request from the Boys and Girls Club of Niagara be referred to staff pending a business plan for the proposed new building. Motion Carried Unanimousl~ -3- MOVED by Mayor Salci, seconded by Alderman Morocco, that the request for funding from the Take-A-Peek Thrift Shop be received and filed. Motion Carried Unanimously 4. NEW BUSINESS: MOVED BY Alderman Ioannoni, seconded by Alderman Volpatti, that a resolution be sent to The Regional Municipality of Niagara stating emphatically that the City of Niagara Falls does not wish to participate in assessment pooling. Motion Carried Unanimously 5. ADJOURNMENT: MOVED by Alderman Volpatti, seconded by Alderman Kerrio, that the meeting adjourn at 8:35 p.m. Motion Carried Unanimousl_l: Corporate Services Department CD-2004-25 The City of Clerk's Division Dean Iorfida Niagara Fails 4310 Queen Street City Clerk P.O. Box 1023 Canada Niagara Falls, ON L2E 6X5 web site: www.city.niagarafalls.on.ca Tel.: (905) 356-7521 Fax: (905) 356-7404 E-maih dioffida@city.niagarafalls.on.ca December 6, 2004 Alderman Wayne Campbell, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario Members: Re: CD-2004-25 Supply and Services Policy RECOMMENDATION: That Council adopt the Supply and Services Policy. BACKGROUND: Section 271 (l) the MunicipalAct 2001 states that before January 1,2005, a municipality and a local board shall adopt policies with respect to its procurement of goods and services. Any public purchasing policy should provide transparency, integrity of process and the best results possible for the municipality. The proposed procurement policy for the City of Niagara Falls articulates the following goals: · To ensure the competitive bid process is fair and open to public scrutiny. · To ensure that the process for all competitive bids is fair and open to all interested bidders. · To provide a fair evaluation process for each competitive bid received. To ensure that the Municipality receives the right quality, quantity, price and total value for goods and services to meet its objectives. · To ensure that the Municipality receives the best possible and right quality, quantity, price and total value for goods and services to meet its objectives. · To provide a structured basis for negotiation that is consistent with established negotiations policies. Working Together to Serve Our Community Clerks · Finance Human Resources * Information Systems · Legal Planning & Development December 6, 2004 - 2 - CD-2004-25 The Policy before Council is the result of many months of work and revision. Supply and Services staff looked at existing internal policies and surveyed the policies and spending limits of other municipalities. Drafts of the policy were vetted through the appropriate City staff. The proposed Supply and Services policy will bring the municipality more in line with others around the Province. Currently, staff brings forward all tenders over $18,000 for Council approval. As the Tender and Spending Limit Survey - 2003-2004 indicates Niagara Falls has by far the lo,vest threshold. Whitby, Ottawa and the Region of Waterloo are next "lowest" at $50,000. The majority of municipalities go to Council for tender approval when the project is in excess of $100,000. Similarly, the C.A.O. currently has signing authority for amounts between $4,000 and $18,000. Most municipalities surveyed allow spending by their C.A.O. or General Manager in the six figure range. The proposed policy maintains proper controls. Quotations, proposals and tenders, on authorized forms issued by Supply and Services, are still required for purchases over $4,000. Tenders and tender results are available off of the City website and all tender openings occur in public. The new policy also strengthens the dispute resolution process (see Section 19.8). CONCLUSION: The Municipal Act 2001 requires a Procurement Policy by year end. Spending limits have been increased for appropriate staff. These limits are more in keeping with other municipalities of comparable sizes. The proposed policy provides transparency, integrity of process and benefits to the municipality. In addition, the review, audit and enforcement aspects of the policy have been strengthened. In 2005, Supply and Services staff will educate appropriate City staff on the policy (the do's, the don'ts, authority levels, requirements vis a vis quotes, proposals and tenders). Also, the Purchase Card policy will be reviewed. Finally, after any revisions, the policy will be adopted by by-law. Recommended by: Approved by: Dean Iorfida T. Ravenda City Clerk Executive Director of Corporate Services Policy Prepared by: Respectfully submitted: Ray Miller /., John MacDonald Manager of Supply and Services ~/ Chief Administrative Officer Tender and Spending Limit Survey - 2003-2004 Municipality Council Approval CAO & Director Tenders to be issued for Formal Quotations to be for amounts over .... for amounts up to .... amounts over ..... issued for amounts over.. City of Barrie None required if tender is Executive Management $500,000 $25,000 to $500,000 within budget and meets Team: unlimited Informal under $25,000 all criteria ie: low bid City of Brampton $100,000 CAO: $100,000 $100,000 $50,000 to $100,000 Informal under $50,000 City of Brantford Pre-approval for most Unlimited within budget $50,000 $10,000 to $50,000 tenders and capital for pre-approved tenders Informal under $10,000 expenditures Commissioners authority up to $50,000 City of Burlington $1 million City Mgr: up to $100,000 $20,000 to $100,000 when all tender criteria is $1 million when all Informal under $20,000 met tender criteria is met Dept Heads: $100,000 City of Cambridge $100,000 CAO: $100,000 $100,000 $20,000 to $100,000 Informal under $20,000 City of Guelph $500,000 -oper. budgets CAO: $100,000 $100,000 $25,000 to $100,000 $1.5 M -capital projects internal award memo for Informal under $25,000 $100,000 to $1.5M per budget type City of Hamilton None required i£tender is CityMgr: $250,000 $100,000 $50,000 to $100,000 within budget and meets Dept Heads: $100,000 Informal under $50,000 all criteria ie: low bid Municipality Council Approval CAO & Director Tenders to be issued for Formal Quotations to be for amounts over .... for amounts up to .... amounts over ..... issued for amounts over.. City of Kitchener $100,000 CAO: $100,000 $100,000 $20,000 to $100,000 Dept Heads have no Informal under $20,000 signing authority CityofLondon $100,000 Gen. Mgr: $100,000 $100,000 $50,000 to $100,000 Informal under $50,000 Town of Markham $350,000 CAO: $350,000 $50,000 $25,000 to $50,000 Commissioners $100,000 Informal under $25,000 City of Mississauga None required if tender is CAO & Commissioners: $50,000 Up to $50,000 within budget and meets $200,000 all criteria ie: low bid Town of Newmarket $100,000 CAO: $100,000 $100,000 $20,000 to $100,000 Informal under $20,000 Town of Oakville None requirediftender is CityMgr: $250,000 $150,000 $25,000 to $150,000 within budget and meets Dept Heads: $150,000 Informal under $25,000 all criteria ie: low bid City of Oshawa $250,000 CAO: $250,000 $50,000 $25,000 to $50,000 CAO reports monthly on Informal under $25,000 spending activity City of Ottawa $50,000 CAO: $50,000 $50,000 $10,000 to $50,000 Informal under $10,000 City of Picketing $75,000 CAO and Directors: $100,000 $25,000 to $100,000 $75,000 Informal under $25,000 Town o f Richmond Hill $100,000 CAO and Dept Heads: $100,000 $25,000 to $100,000 $100,000 Informal under $25,000 Municipality Council Approval CAO & Director Tenders to be issued for Formal Quotations to be for mounts over .... for amounts up to .... amounts over ..... issued for amounts over.. City of St. Cathafines $75,000 CAO: $75,000 $75,000 $25,000 to $75,000 Amounts under $75,000 Informal under $25,000 only if Iow bidder not recommended City of Waterloo $500,000 CAO and Directors: $100,000 $50,00 to $100,000 and any tenders that are up to $500,000 if tender Informal under $50,000 over budget by set % amt is within budget Town of Whitby $50,000 CAO and Directors: $50,000 $25,000 to $50,000 and any tenders that are $50,000 Informal under $25,000 over budget for any amt. City of Windsor $100,000 Gen Mgr: $100,000 $30,000 $1,200 to $30,000 Informal under $1,200 Region of Durham None required if tender is CAO: unlimited if $100,000 $20,000 to $I00,000 within budget and meets tender is within budget Informal under $20,000 all criteria ie: low bid and meets all criteria ie: but over $100,000 if not low bid low bid and all negotiated Dept Heads: $100,000 contracts over $50,000 Region of Halton None required if tender is CAO and $100,000 $25,000 to $100,000 ~ within budget and meets Commissioners: Informal under $25,000 all criteria ie: low bid $ 100,000 but over $100,000 if not low bid and all negotiated contracts over $100,000 Region of Niagara $1 million if tender is Corporate Management $50,000 i $25,000 to $50,000 in budget and meets all Team - up to $1 million Informal under $25,000 criteria ie: Iow bid Dept Heads up to $50,000 Municipality Council Approval CAO & Director Tenders to be issued for Formal Quotations to be for amounts over .... for amounts up to .... amounts over ..... issued for amounts over.. Region of Peel $250,000 CAO: $250,000 $100,000 $25,000 to $100,000 for tenders and RFP's Informal under $25,000 and all negotiations if any irregular results obtained Region of Waterloo $50,000 CAO: $50,000 $50,000 $20,000 to $50,000 Informal under $20,000 Region of York $250,000 CAO: $250,000 $100,000 $50,000 to $100,000 Informal under $50,000 Notes: 1. Signing authority limits for Commissioners, Department Heads, Managers and Supervisory Staff are set by each individual agency but do not exceed CAO limits listed above for each agency. 2. Informal Quotations are handled in a variety of ways throughout the province. Many agencies allow departmental staff to obtain informal quotes ( usually a minimum of three bids reqtfired) in writing (letter, e-mail, fax) and some verbally. Other agencies handle informal quotations more centrally through the purchasing section and usually require three written bids. Most purchasing sections will assist the departments with informal quotations upon request by the department. 3. Where council approval is not required for tenders and RFP's if all established criteria is met, a few agencies will report to council on spending activity for a set period, ie: monthly, quarterly or annually. The Corporation of the City of Niagara Fails Supply and Services Policy ,4 UTHORIT~ LEVELS Approval Levels for Expenditures Including all costs and taxes From $0 to $20,000. Executive Directors and Directors and if applicable, Divisional Managers upon approval of a Director From $20,000. to $100,000. Chief Administrative Officer Over $100,000. Approval of City Council required Bid Opportunities - Quotations, Proposals and Tenders Including all costs and taxes From $0 to $1,000. City Staffmay use the purchase card to obtain small $ value items and should obtain verbal quotes from bidders prior to the use of the purchase card. From $1,000 to $4,000. Departmental and Divisional Staffmay obtain written bids from bidders per the guidelines of the Supply and Services Policy. All such bids must be reviewed by the Manager of Supply and Services who will issue a purchase order to the recommenced bidder. (City Staff are not to commit to any purchase beyond the level of the Purchase Card or for any items or services not covered by a formal agreement or Blanket Order.) From $4,000. to $100,000. Quotations, Proposals or Tenders (if applicable) on the authorized Form shall be issued by the Supply and Services Section in accordance with the Supply and Services Policy Over $100,000. Tenders and Proposals (if applicable) on the authorized Form shall be issued by the Supply and Services Section and shall be advertised in a local daily newspaper and other media as appropriate. The Corporation of the City of Niagara Falls Supply and Services Policy December 2004 Policy Statement This policy sets out and establishes rules and procedures for the expenditure of public monies for purchasing goods and services by all employees and elected officials of The Corporation of the City of Niagara Falls. Goal of this Policy The goal of this policy is to ensure that the procurement of goods and services on behalf of The Corporatinn of the City of Niagara Falls shall be fair and open to public scrutiny and shall be conducted in the most efficient and effective manner to meet the present and future needs of the Corporation; The Corporation of the City of Niagara Falls Supply and Services Policy INDEX. SECTION PAGES 1. DEFINITIONS 2 - 3 2. GOALS OF THIS POLICY 4 3. AUTHORITY AND RESPONSIBILITIES 5 - 8 4. PAYMENT 8 - 9 5. LIMITATIONS 9 - 11 6. FORMS OF PURCHASE 11 7. TENDERING PROCEDURE 12 - 13 8. BLANKET ORDERS 13 - 14 9. PROPOSALS AND REQUEST FOR INFORMATION 14 10. EMERGENCY ORDERS 14 11. PURCHASE BY NEGOTIATION 15 12. PRICING 16 13. CONSTRUCTION CONTRACTS 16 14.. DETERMINING REQUIREMENTS 16 15. STANDARDIZATION 17 16. SPECIFICATIONS 17 17. DESIGN AND DEVELOPMENT SERVICE 17 18. AUDIT OF STORES ANNUAL INVENTORY 17 19. PURCHASE OF INVENTORY ITEMS 17 20. DISPOSAL OF SURPLUS ASSETS 18 21. RELATED ISSUES 18 - 20 APPENDICES "A" PURCHASE CARD POLICY -2- This policy covers Supply and Services procedures and regulations and defines the authority and responsibilities of the Manager of Supply and Services. 1. DEFINITIONS 1.1 "City" means The Corporation of the City of Niagara Falls. 1.2 "Council" means the elected Council of the Corporation of the City of Niagara Falls. 1.3 "Department" means either the Corporate Services Department or the Community Services Department and is further subdivided by divisions and sections. 1.4 "Chief Administrative Officer" means the chief appointed official for the Corporation of the City of Niagara Falls responsible directly to Council and is the senior management officer of the Corporation. 1.5 "Executive Director" means the Executive Director of Corporate Services or Executive Director of Community Services. 1.6 "Director" means the head of any division within the Corporate or Community Services Departments. 1.7 "Manager of Supply and Services" means the person who manages and supervises the Supply and Services Section of the Clerk's Division of the Corporate Services Department and who is under the direct supervision of the City Clerk. 1.8 "Contract" means any formal legal agreement for supplies, goods, services, equipment or construction. 1.9 "Goods and Services": Goods include all supplies, materials, or equipment and Services means those services supplied to the City that include a labour component. 1.10 "Procedure" means internal instructions or guidelines to departments, issued by the Manager of Supply and Services on supply and services management and/or procurement matters. 1.11 "Regulations" means regulations made pursuant to this policy by resolution of Council. 1.12 "Tender" means a written formal offer submitted on a formal City Tender Form by any company or member of the public, in response to an invitation to supply stipulated goods or services at a particular price. 1.13 "Quotation" means a written offer to sell or a "bid" obtained from selected sources of supply, to supply stipulated goods or services at a particular price which is received by the City on a formal City Request for Quotation form or on a vendor's quotation form. -3- Definitions....continued 1.14 "Proposal" means an offer to perform or provide a function, service, or product that cannot be fully defined or specified. 1.15 "Requisition" means a written or electronic request to purchase goods or services, or to invite tenders, quotations or proposals on an approved form. 1.16 "Lowest Ultimate Cost" is the cost, after all factors of price, quality, terms and conditions, service, warranty, residual costs, replacement and disposal costs are considered, that results in the lowest cost of purchase, ownership, or operation over the life of the product or service to the City. 1.17 "Purchase Commitment" means: 1.17.1 an offer to sell, on the appropriate form, which has been accepted by the City by way of the approved form of acceptance; and/or 1.17.2 an offer to purchase by the City, on a specified form, which has been accepted by the vendor. 1.18 "staff, city staff or authorized staff" means any City staff member who is authorized by a Executive Director or Director or other supervisor to obtain goods and services in agreement with this policy. 1.19 "escalation clause" means a clause in a document, approved by the municipality, that allows for an escalation in pricing during the term of an agreement, contract or purchase order due to circumstances outside of the control of the municipality or supplier and could include but not limited to factors such as legislated tax increases, industry wide price increases or international situations affecting raw or base material pricing. -4- 2. GOALS OF THIS POLICY The Goals to be achieved by using each type of procurement process shall be stated in accordance with section 271(1)(b) of the Municipal Act 2001, S.O. 2001 Chapter 25. 2.1 Types of Procurement Processes This policy establishes the two types of processes to be used in the acquisition of goods and services on behalf of the municipality: 2.1.1 Competitive Bids Competitive Bids shall be the preferred method or process of obtaining goods and services on behalf of the municipality. The procedures for obtaining competitive bids either issued by the municipality or on behalf of the municipality within a co- operative tendering format are contained in the individual sections of this policy. 2.1.2 Negotiation This policy also contains procedures for obtaining goods and services by negotiation when the competitive bidding process is not possible. 2.2 Goals of each Procurement Process 2.2.1 Goals of the Competitive Bid Process 2.2.1.1 To ensure the competitive bid process is fair and open to public scrutiny 2.2.1.2 To ensure that the process for all competitive bids is fair and open to all interested bidders 2.2.1.3 To provide a fair evaluation process for each competitive bid received 2.2.1.4 To ensure that the Municipality receives the right quality, quantity, price and total value for goods and services to meet its objectives 2.2.2 Goals for the Negotiation Process 2.2.2.1 To ensure that the Municipality receives the best possible and right quality, quantity, price and total value for goods and services to meet its objectives. 2.2.2.2 To provide a structured basis for negotiation that is consistent with established negotiations policies. -5- 3. AUTHORITY AND RESPONSIBILITIES 3.1 Authorization: The Procurement and Payment Process 3.1.1 Budget Process The beginning of the procurement and payment process starts with the establishment and approval by Council of all applicable budgets for The Corporation of the City of Niagara Falls. Upon approval of these budgets, departmental staff have the authority to request the acquisition of defined goods and services by means of an authorized written or electronic purchase requisition form which is sent to the Supply and Services Section of the Clerk's Division of the Corporate Services Department for processing. For goods and services which are deemed to be needed by a department or division but are not included in the approved budgets, the Director or Executive Director must first obtain Council approval prior to submitting a purchase requisition to the Supply and Services Section. 3.1.2 Adherence to Established Policies The staff of the Supply and Services Section are to adhere to all established City policies and procedures pertaining to the acquisition of goods and services in the processing of all purchase requisitions. Such policies and procedures include but are not limited to the obtaining of competitive bids by means of public tenders, quotations, requests for proposals, requests for information, expressions and letters of interest and by negotiation for all acquired goods and services. This policy and all related City policies are to be strictly followed by all departmental staff in the process of obtaining all goods and services required by the Corporation of the City of Niagara Falls. 3.1.3 Acquisition Process Upon the receipt of a properly authorized purchase requisition, the Supply and Services Section staff and other departmental staff per section 3.2.3 are to seek competitive bids by means of a tender, formal quotation, facsimile or quotation, written bids by suppliers, telephone solicited bids, negotiation or by other means as described in this policy including on-line electronic bids posted on the City's Web Site. Upon receipt of a firm and legal price offer by the above mentioned process, the Supply and Services staff will submit such price offers to the department requesting the goods or service for approval by means of a written memorandum. Departmental staff will be responsible for making the recommendation to purchase based upon the limitations established in this policy. A Council report will be prepared by departmental staff and presented for approval at the next meeting of Council for those awards that require Council approval. For acquisitions not needing Council approval, a signed memorandum will be returned to the Supply and Services Section authorizing the purchase of the needed goods and services. Following the receipt of the authorization memorandum, the Supply and Services staff will issue a purchase order to obtain the required goods or services. Awards requiring the City's Standard Form of Agreement shall be processed by the Legal Division of the Corporate Services Department. -6- 3.1.4 Acquisition of Low Dollar Value Goods and Services For goods or services of Iow value according to the limitations under section 5.4, departmental staff are authorized to obtain goods and services by means of a purchase requisition or purchase card. Competitive bids are to be obtained by departmental staff whenever possible for these Iow value goods or services. Departmental staff are to quote the purchase requisition to the vendor or supplier so that the purchase requisition number can be included on the invoice for payment processing. Following the delivery and or pick-up of such goods or services, departmental staff are to send such purchase requisition to the Supply and Services Section marked "Confirmation". The requisition will be signed by the Manager of Supply and Services or designate and forwarded to the Accounts Payable Section of the Finance Department. 3.1.5 Invoice Review Invoices are to be processed according to the Accounts Payable procedures established by the Director of Finance. The Director of Finance or designate shall review all invoices to ensure that all relevant City Policies regarding the payment for goods and services have been upheld. 3.1.6 Exclusions Payment for expenditures specifically including: by-laws, council resolutions, utilities, employee benefits, banking services, union contract and employment agreements, subscriptions, annual fees or dues, specified publications and manuals, travel expenses, conferences, seminars, tuition fees, and other defined goods and services are not governed by the issuance of a purchase order. An authorized request for payment form or purchase card must be used to process payments for these items. The above items must have been provided for in the applicable budgets of the department or division incurring the expense and shall be subject to all other limitations and conditions of this policy. -7- 3.2 Authority of the Manager of Supply and Services 3.2.1 The Manager of Supply and Services shall be under the direction of the City Clerk. 3.2.2 The Manager of Supply and Services is responsible for managing the acquisition of supply and services on behalf of the corporation and supervising the Supply and Services Section staff in the purchasing of all goods, supplies, equipment and contracted services, other than those contracted as a result of the tendering process by the Engineering division of the Municipal Works Department and those exclusions stated in section 3.1.6. 3.2.3 The obtaining of price quotations only for goods, equipment or services, except as mentioned in 3.2.2, may be undertaken by city staff up to a limit of $4,000.00 and after this amount formal quotations or other bid documents may only be issued by the Manager of Supply and Services or designate(s) upon authority of a resolution of Council and/or by a written and properly authorized requisition, within the limits and conditions as stated in this policy. 3.2.3.1 Following a review of price quotations, either received by city staff for Iow value goods or services or by means of a formal bid process as outlined in this policy and upon receipt of an authorized purchase requisition, the Manager of Supply and Services shall issue a purchase order to obtain the goods or services. City staff are not authorized to commit the corporation's funds other than those deemed Iow value as established in section 5.4. 3.2.4 The Manager of Supply and Services shall develop and recommend Supply and Services policies and regulations in consultation with other departments and divisions for approval by the City Clerk, Executive Director of Corporate Services and Chief Administrative Officer and recommendation to Council. 3.2.5 The Manager of Supply and Services shall monitor adherence to the regulations of this policy. Violations to this policy shall be reported to the City Clerk or other appropriate director. 3.2.6 The Manager of Supply and Services shall be responsible for maintaining good vendor relations and for the conduct of all negotiations with vendors for goods or services, except as stated for Iow value goods or services or for the exclusions stated in section 3.2.2. All inquiries regarding materials, prices, services, delivery, terms and conditions, adjustments, and so on, are to be conducted by or through the Manager of Supply and Services or designate(s). 3.2.7 The Manager of Supply and Services, upon approval from the City Clerk, or the Executive Director or the Chief Administrative Officer may participate with other governments or government agencies in co-operative purchasing plans and tendering when the best interests of the City would be served. -8- 3.2.7.1 The Manager of Supply and Services upon approval from the City Clerk or the Executive Director of Corporate Services or the Chief Administrative Officer shall co-operate with local Boards and Commissions or such other organizations performing services for or on behalf of the City with respect to co-operative purchasing of goods and services with respect to providing general advice, information or assistance pursuant to such requests. 3.2.7.2 Upon receipt of the Summary of Tenders issued by any co-operative participating agency, the completed purchase requisition shall be authorized by the Chief Administrative Officer for values including taxes and all costs up to $100,000.00. The purchase requisition shall specify the recommended bid as it directly pertains to the needs of the City. A report to Council shall be required if the recommended bid including taxes and all costs is over $100,000.00. 3.2.7.3 Any purchase order, contract or any other award resulting from the co- operative tendering process, shall be subject to all the conditions and limitations of this policy. 3.2.7.4 Upon approval and acceptance of any co-operative tender by the above mentioned process, the City will be responsible to place its own orders, receive its own shipment and pay its own accounts. 3.2.8 The Manager of Supply and Services or designate is authorized to sign Purchase orders, Blanket Orders, or Purchase Commitment agreements that are in accordance with this policy. 4. PAYMENT 4.1 The Director of Finance, shall honour and through established accounts payable procedures, make payment for all goods or services covered by purchase order or form thereof signed by the Manager of Supply and Services. Such payment shall be in accordance with the terms of payment shown on the invoice, provided that: 4.1.1 The terms of payment on the invoice agree with those on the purchase order. 4.1.2 The price(s) agree with those on the purchase order. 4.1.3 A delivery receipt form or packing list is received against the purchase order agreement that corresponds to the goods invoiced. 4.1.4 The delivery receipt forms or packing lists are signed by an authorized City stores personnel or an authorized City staff member. -9- 4.2 All invoices are to be sent to the Accounts Payable Section of the Finance Division for processing, verification and for payment according to established accounts payable procedures. 4.3 No invoice shall be processed for payment unless the appropriate purchase order or purchase requisition has been previously issued under the previsions contained in this policy. Any invoices received in the Accounts Payable Section that do not have the appropriate purchase order or purchase requisition required shall be sent to the Director of the appropriate Division and if required to the Executive Director or Chief Administrative Officer for signature, prior to the processing of the invoice for payment. 4.4 No prepayment of all or part of any goods, services, equipment, or contract shall be made unless provision for same is included in the original purchase order, tender, quotation or request for proposal or ag reed to per the negotiation process per section 11. 4.5 The previsions for payment as outlined above, shall not apply to expenditures covered under Section 4.6 4.6 Payment of invoices for goods and services obtained by a purchase card transaction shall be paid when received or within a stipulated time period. The process of the use of such purchase card shall be governed by the Purchase Card Policy being Appendix "A" of this policy. 5. LIMITATIONS 5.1 Competitive Bidding Except as otherwise stipulated in section 10, all purchases of goods or services or equipment shall be made on a competitive basis, in keeping with accepted public purchasing practices and procedures and in accordance with the applicable laws of the Province of Ontario, Government of Canada and regulations made pursuant to this policy. 5.2 Specifications Specifications shall not be designed or written to allow only one manufacturer, supplier, distributor, or bidder to tender a bid. Such specifications shall not limit the bidding to only one make and model for equipment or one type of service. 5.3 Signing Authority All requests for goods or services and requests for quotations, tenders and proposals are to be directed to the Manager of Supply and Services by means of an authorized purchase requisition. All requisitions are to have the signature of the requisitioner and are to be authorized by city staff on the following basis for goods or services having a total value of: The amounts listed below shall include all taxes. 5.3.1 below $20,000.00: by executive directors, directors and divisional supervisors or managers with signing authority levels up to $20,000.00 established by departmental and divisional and sectional guidelines as approved by the executive director or director. 5.3.2 from $20,000.00 to $100,000.00: by the Chief Administrative Officer. 5.3.3 over $100,000.00: Council approval must be obtained prior to any commitment of funds for any pumhase of goods or services. Following approval by Council, a purchase requisition, stating the Council Report Number, must be signed by the Chief Administrative Officer. 5.4 Low Value Purchases The acquisition of Iow dollar value goods and services can be made or authorized by approved departmental or divisional managers or supervisors providing the total amount of such goods or services does not exceed $1,000.00 including all taxes, for an individual order. If the Iow value goods or services are not covered by a blanket order or paid by means of a purchase card, a purchase requisition shall be completed per the procedures stated above. 5.5 Requirements from $1,000.00 to $4,000.00 For amounts from $1,000.00 to $4,000.00 which shall include all taxes, quotations or proposals only may be obtained by city staff or by the supply and services section staff in accordance with this policy by means of facsimile, e-mail or other electronic means or by written quotations on the vendor's or supplier's quotation form or letterhead or on the City's formal Quotation Request or Proposal Form if it is in the City's best interest. Refer to Section 3.2.3.1 above for processing and placement of orders. All quotations or proposals received shall be attached to a completed purchase requisition and sent to the supply and services section for review by the Manager of Supply and Services and processing by supply and services staff. City staff are authorized only to receive competitive bids per the above procedure but are not authorized to commit funds or place orders for these goods or services. 5.6 Requirements from $4,000.00 to $100,000.00 Quotations or proposals for goods and services shall be obtained from at least th ree bidders if possible notwithstanding section 10, for amounts from $4,000.00 to $100,000.00 which shall include all taxes. Quotations are to be issued and received only by the Manager of Supply and Services or designate(s) on the formal City Quotation Request Form either in paper or by facsimile or e-mail or other electronic means. Quotations received on vendor's letterhead for amounts covered under this section will only be accepted on an exceptional case basis and must receive authorization for acceptance by the Manager of Supply and Services, the appropriate Director or Executive Director, the Chief Administrative Officer and and where applicable from the City Solicitor. Proposals, however, are usually required to be received on the proponent's letterhead. Refer also to section 20.6 5.7 Requirements over $100,000.00 Tenders or proposals must be obtained for all requirements for goods or services exceeding $100,000.00 and have the recommendation of the Chief Administrative Officer before a report is issued to the City Council for approval. All tenders, proposals or any other bid forms exceeding $100,000.00 must first be approved by the City Council before any purchase by any form is undertaken. (Refer also to section 5.3.3) All bid opportunities that will exceed $100,000.00 must be advertised in a local newspaper and such advertisements must also be posted electronically in compliance with Federal and Provincial Trade Agreements. 5.8 Artificially Structuring of Amounts Prohibited Requisitions or purchase orders shall not be artificially structured to avoid the requirements as stated in sections 5.1 to 5.7 inclusive. 5.9 No Purchases for Personal Use No purchase orders, requisitions, purchase card transactions or any other order, verbal or written shall be issued for personal items for employees of the City, any member of Council, or the public. 5.10 Loaning of City Equipment or Assets All requests for the loan of City equipment or assets shall be approved by the appropriate Director or if required by the Executive Director except for existing reciprocal arrangements with other municipal, provincial or federal government agencies. 6. FORMS OF PURCHASF Every purchase of goods or services shall be authorized by the appropriate form of purchase order, blanket order, contract, agreement or other document as specified in the regulations contained in this policy. -12- 7. TENDERING PROCEDURE 7.1 Tender Limits All requirements for goods or services estimated to exceed $100,000.00 including ail taxes or of lesser amount when deemed to be in the best interests of the city shall be obtained by requesting sealed tenders and if appropriate, quotations or proposals bearing a stipulated time of closing. 7.2 Tender Preparation and Tender Opening Period The Supply and Services Section staff require at least two weeks to prepare and issue a tender document. All tenders shall be open for bid for a period of at least two weeks unless critical or exceptional time restraints require either an additional or a shorter time period. Any changes to this opening bid period shall be recommended to the Manager of Supply and Services by staff from the department or division or section issuing the purchase requisition and approved by the appropriate divisional director or Executive Director and by the City Clerk. 7.3 Advertising Advertisements of all tenders shall be made in a least one local daily newspaper. Invitations to tender, to quote or for request for proposals may also be sent directly to potential tenderers and shall be advertised by electronic media including the internet in addition to newspaper advertising as required under the terms of federal and provincial trade agreements, laws and regulations thereof. 7.4 Public Tender Opening 7.4.1 Every tender received within the time specified in the tender documents shall be opened at a public tender opening in full view of those attending and each tenderer's name and the total tendered amount read aloud by the Manager of Supply and Services or designate, and recorded by one of the witnesses. 7.4.2 All tenders shall be opened at a public meeting which shall be presided by the City Clerk or designate and with at least one other City staff member in attendance. 7.4.3 Any member of the public may attend if they so desire. Each tender shall speci~ that the tenders will be opened in City Hall at a specified time and date. All tenders shall be delivered to the City Clerk's Office by the closing date and time as clearly stated on all tender envelopes. Any tenders received after the time specified for the closing of tenders shall not be accepted by the City Clerk's Office -13- 7.4.4 Should the reading aloud of all prices be impractical due to a large number of individual prices and options orfor reasons where a total tendered price is not stated in the Form of Tender, only the names of the companies who have submitted tenders will be read out at the time of the tender opening. Price summaries of these tenders will be made available as soon as possible following the tender opening to all who request a written summary. 7.4.5 The Manager of Supply and Services shall submit the tender results to the appropriate Director or designate who shall make a recommendation to the Chief Administrative Officer as to which, if any tender, should be recommended to Council for acceptance. 7.5 Recommendation to Award Tender The criteria to recommend a particular tender shall be as follows: 7.5.1 Any recommendation to award will be in favour of a tenderer who has submitted the a tender which meets all conditions, terms and specifications of the tender document and provides the best value for the city regardless if this tenderer has submitted the lowest price or not. The determination of best value shall include factors such as total life cycle costs, quality, service, delivery, tendered price, experience of tenderer with similar projects and other criteria that shall be stipulated in the tender document. 7.5.2 Tenders requiring Council approval shall be accompanied by a report giving all pertinent information relative to the tender results for any tender being recommended. 7.6 Tender Bid Securities The Director of Finance or designate shall receive all tender bid securities received for all tenders. The bid securities of all higher bidders except the two lowest bidders may be released immediately after the tender opening. The bid securities of the two lowest bidders may be released only, upon written notification from the appropriate city staff administering the tender, that the contract has been signed. 8. BLANKET ORDERS 8.1 Blanket orders may be issued as necessary following the tendering or quotation process as set out in this policy. Where tenders or quotations are not practical prior to issuing a blanket order the limitations and conditions of Section 10 shall apply. -14- 8.2 Blanket orders, other than those which are issued only to set up an account with a vendor, shall be issued for a specific time period and all releases issued shall be subject to the terms and conditions of the original order. All payments, other than those made by means of the City's purchase card for such releases shall be processed upon receipt of an authorized vendor's invoice accompanied by a signed copy of a packing slip clearly marked as to blanket order number, release date, account number and an identifiable signature and name clearly printed by an authorized employee of the City verifying the receipt of any goods or services specifically recorded on or attached to the original Blanket Order. If a packing slip is not available, all of the above information must be stated on the original invoice including all authorized signatures and returned promptly to the Accounts Payable Section of the Finance Division of the Corporate Services Department after receipt of such invoice in the applicable City department, division or section. 9. PROPOSALS AND REQUESTS FOR INFORMATION Requests for proposals including expressions of interest may be called when the requirements or services cannot be definitely specified and where such proposals may result in specific offers by the bidders to fulfil the requirements, services or function at a particular price. Such proposals shall conform to all standard purchasing, tender and/or quotation procedures as published by the Purchasing Management Association of Canada or the Ontario Public Buyers Association or other Canadian Purchasing and Supply Chain Organizations. Requests for Information shall be issued to obtain information about goods or services prior to the issuance if necessary of tenders, quotations or proposals. 10. EMERGENCY ORDERS Orders can be placed by authorized city staff at the request of a director, executive director and/or the Chief Administrative Officer for goods or services needed to protect city property or for situations deemed to be a crisis event requiring immediate attention. Such orders shall be recorded on a purchase requisition and marked "confirmation" and shall be signed by the director, executive director or Chief Administrative Officer and shall be sent to the Supply and Services Section by the next business day following placement of such emergency order. If time permits, the Manager of Supply and Services shall be consulted to assist with such order. Goods and services identified in an appropriate budget or which were previously planned for acquisition are not deemed to be an emergency and are to be procured under all other provisions of this policy. -15- · 11. ' PURCHASE BY NEGOTIATION The Manager of Supply and Services, under the direction of the City Clerk, shall negotiate with one or more suppliers for the purposes of obtaining goods and services in accordance with the conditions set out under this section. The normal requirement for issuing tenders, quotations or proposals shall be waived in these circumstances. 11.1 When due to market conditions and in the judgment of the Manager of Supply and Services, goods or services are in short supply. 11.2 Where there is only one source of supply for the goods or services. 11.3 Where two or more identical lowest bids have been received, the Manager of Supply and Services shall negotiate with the two lowest bidders to obtain goods and services which shall provide the best value and be in the best interest of the city. 11.4 Where small dollar value purchases for goods and services are to be obtained by means of a blanket order from sole source vendors or suppliers or from retail or wholesale vendors where a quotation is impractical to issue. 11.5 Where identical bids have repeatedly been received and the same goods or services are again required. 11.6 Where the lowest bid meeting specifications is excessive in total cost and/or exceeds the estimated costs by at least 10%. 11.7 When all bids received fail to meet the specifications and/or tender terms and conditions and it is impractical to recall tenders or quotations. 11.8 Any resulting negotiated purchase contract exceeding $100,000.00 shall be approved by the Chief Administrative Officer and shall be recommended for approval by City Council at the next scheduled Council meeting. Negotiated amounts under $100,000.00 shall be approved in accordance with Section 5.3 Signing Authority. 11.9 The methods of negotiation shall be those accepted as standard negotiating procedures as published by the Purchasing Management Association of Canada, the Ontario Public Buyers Association or other Canadian Purchasing or Supply Chain Associations that employ fair and ethical practices. The information pertinent to and the results of all such negotiations shall be reported to the City Clerk and at the discretion of the Chief Administrative Officer shall be reported to Council. -16- 12. PRICING 12.1 All purchase orders or forms thereof, blanket orders as applicable, agreements and contracts shall show a firm unit price or lump sum price or both. 12.2 Where firm prices are not available, due to market or other conditions any form of applicable escalation shall be clearly defined. Where an escalation clause is applied there shall also be incorporated a de-escalation clause. Any escalation clause will be reviewed by the Manager of Supply and Services before a commitment to purchase is made. In cases where it is impractical to establish price(s) on the purchase order, an estimated maximum price shall be shown and clearly identified as such. 13. DETERMINING REQUIREMENTS Directors or designates shall provide or assist the Manager of Supply and Services in the preparation of estimates of requirements for future periods of time or specific works to enable the Manager of Supply and Services to consolidate and plan the purchase of such requirements. 14. STANDARDIZATION The Manager of Supply and Services shall conform to established materials management practices by simplifying and standardizing, wherever possible, like requirements for different departments, divisions and sections. Every effort will be made by the Manager of Supply and Services to reduce the types and kinds of goods used by the City to the smallest or most economical in number. All city staff involved in this process will co-operate and assist in achieving this objective by considering equivalents or any alternatives suggested. 15. SPECIFICATIONS City staff issuing a requisition requesting the acquisition of goods and services shall be responsible for the preparation of formal specifications when required and to provide same to the Manager of Supply and Services. Specifications shall be definitive as to quantity, quality and/or function. All specifications shall be approved by the director of the division or section concerned. The Manager of Supply and Services or designate shall review all specifications to determine if they are in the appropriate form, clear, indicate the minimum acceptable quality level, are commercially practical and in sufficient generic form to ensure competitive bidding. -17- 16. DESIGN AND DEVELOPMENT SERVICE Suppliers or potential suppliers shall not be requested to expend time, money or effort on design or in developing specifications or otherwise help define a requirement beyond the normal level of service expected from suppliers. Should such extraordinary services be required, the Manager of Supply and Services will be advised by staff from the issuing department, division or section. There being no alternative but to request such services, the company providing same shall be compensated at a pre-determined fee as negotiated by the Manager of Supply and Services. The resulting specifications shall become the property of the City for use in obtaining competitive bids. Suppliers or potential suppliers who have developed specifications in this manner shall not be excluded from bidding for the said goods or services. 17. PURCHASE AND REPLENISHMENT OF INVENTORY ITEMS All Items required to add to or replenish the inventory of the municipal stores shall be purchased in accordance with the procedures of the Supply and Services Policy. Such purchases, when in compliance with this policy, shall not require council approval and shall be approved by the director, executive director and the Chief Administrative Office as applicable. -18- 18. DISPOSAL OF SURPLUS ASSETS 18.1 Where any goods or equipment or salvage are surplus, obsolete or non-repairable, they shall be declared surplus on the prescribed form by the applicable director and sent to the Manager of Supply and Services. Notice of such surplus shall be issued to all divisions who shall have an opportunity to request the use of such surplus goods or equipment. The divisions requesting the acquisition of such surplus goods or equipment shall deal directly with the division holding the surplus items and shall mutually agree to the most equitable arrangement for the transfer of these items between divisions. 18.2 When no other use can be found for same by other city divisions or by those agencies supported by the city, they shall be added to the surplus list for disposal by auction or tender. Surplus lists will be approved by the Manager of Supply and Services prior to such the disposal of goods or equipment. Reports of monies received from such auction or tender shall be submitted to the Director of Finance for information purposes. This section shall not apply to goods or equipment traded in on new equipment or returned for credit to original sources of supply. 18.3 No city employee or city council member, may purchase surplus goods or equipment unless same are disposed of by public auction or tender. 19. RELATED ISSUES 19.1 Supply and Services Policy Review This policy shall be reviewed by the City Clerk, the Executive Director of Corporate Services and the Chief Administrative Officer. Such review shall be undertaken on a regular basis not exceeding five years between reviews. 19.2 Review of Supply and Services Staffing The staffing of the Supply and Services Section is to be reviewed on a timely basis by the City Clerk to maintain a sufficient complement to operationally give effect to this policy in accordance with established City policies. 19.3 Sales Taxes and Customs Regulations The Manager of Supply and Services shall keep informed of all Canadian customs regulations, Provincial and Federal Sales Tax regulations and ensure that such regulations are followed; that the City receives the benefit of any applicable exemptions and that proper rates of taxes are applied to all purchases of goods and services. 19.4 Purchase Analysis The Manager of Supply and Services shall keep informed of current developments in the purchasing and materials management fields, including market conditions, product developments and secure, for the benefit of the City, research results in these fields by other governmental jurisdictions or other suitable means including co- operation with other municipalities and participation in 3rofessional association activities in these fields. 19.5 Telecommunications and Computer Equipment and Services All requests and requisitions for telecommunications and computer products including hardware, equipment, accessories software and all related services are to be reviewed by the Information Services Division of the Corporate Services Department prior to being processed for purchase by the Supply and Services Section. Purchase of any product or service in this section shall not be processed by the city's pumhase card unless first authorized by the Director or Manager of Information Services. 19.6 Electronic Bids Quotations and proposals which do not require bid or performance securities may be accepted in an established electronic format including facsimile (fax), e-mail or computer disk provided that they are properly completed and signed and received by the stated closing date and time. The receipt of said electronic bids by the city must be in compliance with all provincial and federal laws and regulations covering electronic bid submissions. All bid opportunities issued by the Manager of Supply and Services or designate and by the Municipal Works Division shall be posted in an appropriate electronic file format on the City's Internet web site. Also, advertisements for these bid documents shall also be posted on other web sites as required by Federal or Provincial trade agreements, regulations, laws or statutes. 19.7 Internal Bids As required and/or deemed necessary, bids may be obtained from resource groups within the Municipal corporate structure in accordance with the Municipal Act, S.O. 2001, c.25 as revised. Such internal bids shall only be obtained upon written authority of the Chief Administrative Officer. Prior to obtaining internal bids, a policy for obtaining and processing these bids shall be written and added to the Supply and Services Policy. -20- 19.8 Dispute Resolution In the event any company or person who has been involved in the bidding or purchasing process as described in this policy identify a dispute in regards to this process, the following dispute resolution steps shall be followed. In each step the city shall keep the resolution process fair and transparent to all concerned. 19.8.1 The company or person identifying a dispute shall be required to state the nature of the dispute in writing giving full details and history of the events leading to the dispute claim and address the written dispute claim to the City Clerk. 19.8.2 Upon receipt of the written dispute claim, the City Clerk shall request a meeting with all persons named in the dispute claim to discuss the particulars of the dispute claim. 19.8.3 If those attending said meeting shall agree that the matter can best be handled by a written response only, the City Clerk or designate shall with the assistance of those named above prepare a written response and send it to the company or person who issued the dispute claim. 19.8.4 If those attending said meeting shall agree that the matter needs further clarification, such clarification may be requested by an additional written response from the originator of the dispute claim or by the calling of a meeting between those attending the meeting and the originator of the dispute claim. 19.8.5 At a meeting between those who have been named in the written dispute claim and the originator of the dispute claim, the City Clerk or designate shall chair such meeting and appoint a meeting recorder to record all pertinent conversation. If the dispute can be resolved at this meeting a written report of such resolution shall be sent by the City Clerk or designate to all who were in attendance at the meeting. 19.8.6 In the event a resolution could not be achieved at said meeting described in 19.8.5 above and the originator of the dispute claim requests to further prosecute the dispute claim, the City Clerk or designate shall request the originator of the dispute claim to contact the City Solicitor. The dispute claim shall then be handled by the City Solicitor in accordance with established procedures for processing such claims. APPENDIX "A" PURCHASE CARD POLICY AND PROCEDURES INDEX 1.0 Introduction Page 1 2.0 Policy Pages 2 - 3 3.0 Responsibilities Pages 3 - 5 4.0 Procedures Pages 5 - 10 5.0 Spending Authority Limits Page 10 6.0 Vendor Cards Page 10 7.0 Audit of Purchase Card Transactions Page 11 1.0 INTRODUCTION 1.1 Purpose and Scope To outline the policy and procedures for the use and control of the City of Niagara Falls purchase card program and the use of purchase cards by those who have been issued a city purchase card. 1.2 Authorization and Benefits to the City of Niagara Falls Departmentally approved employees are authorized to use the purchase card to purchase Iow-dollar-value goods and services in support of sound business practices and as payment for goods and services obtained by the competitive bidding process. In addition, benefits will accrue in the Accounts Payable Section of the Finance Division by reducing the number of invoices processed, resulting in fewer cheques being prepared, in Supply and Services by reducing the number of purchase requisitions, resulting in fewer Iow dollar purchase orders and for user departments by providing a simplified process and an increased level of service. 1.3 Authority This policy authorizes directors to empower approved employees within their divisions or areas of responsibility. 1.4 Forms Employee Acknowledgement of Responsibilities and Obligations Form (Appendix A). City of Niagara Falls Purchase Card Register (Appendix B) 1.5 Inquiries 1.5.1 Inquiries related to the accounting aspects of this policy should be addressed to the Director of Finance. 1.5.2 Inquiries related to the purchasing aspects of this policy should be addressed to the Manager of Supply and Services. -2- 2.0 POLICY 2.1 The Manager of Supply and Services is responsible for the purchase card co-ordination function for The Corporation of the City of Niagara Falls. 2.2 Each purchase card will have a unique number, and will be issued in the name of the City of Niagara Falls and the name of the employee who has been authorized to use that card. The card is not transferrable to any other employee, even if that other employee is also authorized to use a purchase card on behalf of the City of Niagara Falls. 2.3 Directors are authorized by this policy to have purchasing and approval signing authority for use of the purchase card for staff in their divisions. Executive Directors and/or the Chief Administrative Officer shall have purchasing and signing authority for use of the purchase card by directors. 2.4 The purchase card will be authorized by directors, Executive Directors and/or the Chief Administrative Officer for approved employees who occupy positions with delegated purchasing authority. 2.5 The dollar limit for individual transactions is specified in section 5.0 of this appendix. 2.6 The credit limit, which is the maximum amount chargeable to each purchase card, is restricted to the maximum dollar limit per month established by each director and approved by the Director of Finance, the Executive Director and/or the Chief Administrative Officer per section 5.0. 2.7 Purchase cards must not be used: 2.7.1 when the total purchase price exceeds the total dollar limits per transaction (including taxes and freight) per section 5.1. 2.7.2 when the goods are available from Central Stores. 2.7.3 when the goods are available from internal Printing. 2.7.4 when the cost of the goods or services would be significantly increased as a result of using the card and an alternative method of payment is available (i.e., a discount is provided by the vendor as a result of not using the card. 2.7.5 for personal vehicles. 2.7.6 for personal purchases. 2.7.7 to obtain cash advances. 2.8 No cardholder may accept cash or a cheque from a vendor who is making a refund pertaining to a transaction previously charged to a purchase card account. A credit voucher must be issued by the vendor in all cases. -3- '2.9 Every cardholder shall be informed in writing of their responsibilities and restrictions regarding the use of the purchase card and shall agree to them in writing (refer to 3.1 and Appendix A). Card holders will be held liable for any misuse or wilful disregard of policies or operating procedures which result in a loss of money, fraud or collusion. 2.10 To avoid the payment of interest, payments to the Bank issuing the purchase card shall be made in compliance with banking arrangements. 2.11 The liability for authorized charges on the purchase cards rests with The Corporation of the City of Niagara Falls, not the individual cardholder. 2.12 The maximum City liability for unauthorized use of the card following loss or theft of the card shall be in compliance with banking arrangements. Unauthorized use means a use that did not benefit the City and was made by someone other than the cardholder. The City is not liable for any unauthorized use of the card which occurs after notification of loss, theft, or cancellation has been received by the issuing Bank. However, if the loss or theft of a card is not reported immediately, the City may be liable for all unauthorized purchases charged to the account. 2.13 Fees, if any, for the use of the purchase card shall be in compliance with banking arrangements. 2.14 Purchases made by the purchase card outside Canada will be converted to Canadian funds at a rate established by the issuing Bank. 3.0 RESPONSIBILITIES 3.1 The cardholder is responsible for: 3.1.1 adhering to all conditions and restrictions imposed on the purchase card by the City of Niagara Falls and issuing bank; including the non-transfer nor loan of the card to another employee for any purpose whatsoever. 3.1.2 submitting the EmployeeAcknowledgement of Responsibilities and Obligations Form to the Manager of Supply and Services. (refer to Appendix A). 3.1.3 ensuring that the purchase card, monthly statements and other documents bearing the card number are kept in a secure location with controlled access for reconciliation, account verification and audit purposes. 3.1.4 immediately notifying the issuing bank, the director and the Manager of Supply and Services of any loss or theft of the card. 3.1.5 informing the Manager of Supply and Services of cancellation, changes in business address or area of responsibility, and/or telephone number, through the director. 3.1.6 returning the card to the Manager of Supply and Services for cancellation, as appropriate, through the director. -4- 3.1.7 maintaining a Purchase Card Register, on a monthly basis, for all purchase~ mad~ with the purchase card and submitting this register to the Accounts Payable Section of the Finance Division no later than 7 days following receipt of bank statement each month. (refer to Appendix B). 3.1.8 completing all required parts of the Purchase Card Register including all taxes and totals and grand totals; affixing by stapling to the Purchase Card Register the monthly bank statement and all receipts and vendor invoices and obtaining authorized signature(s) from the cardholder's supervisor. 3.1.9 resolving disputed charges with the vendor or bank as necessary. The assistance of the Manager of Supply and Services or designate in resolving disputes shall only be requested on a last resort basis. 3.1.10 obtaining the required MSDS's for all WHMIS controlled products purchased with the purchase card and immediately forward a copy to Municipal Stores where a central library of all MSDS documents is maintained. 3.1.11 reporting all items purchased with the purchase card which form part of asset and/or equipment Inventory. 3.2 The directors are responsible for: 3.2.1 assessing the need for purchase cards based on operational requirements. 3.2.2 identifying the employee(s) who will be authorized to make Iow-dollar-value purchases or payments of authorized goods and services through the use of a purchase card. 3.2.3 establishing the credit limits, transaction limit and monthly limit for each cardholder and as approved by the director, Director of Finance, Executive Director and/or Chief Administrative Officer. (Refer to section 5.0 and following) 3.2.4 specifying the types of items to be purchased with the card, as need be. 3.2.5 preparing and submitting the appropriate bank forms and other pertinent information to the Manager of Supply and Services for the issuance or cancellation of cards, increases or decreases to credit limits, change of address or change in department or area of responsibility. 3.2.6 ensuring that each cardholder is informed of their responsibilities regarding the use of the purchase card. 3.2.7 ensuring that the use of purchase cards conforms to all appropriate city policy and procedures. 3.2.8 monitoring and controlling the utilization of purchase cards within their department, division, section or other area of responsibility. -5- 3.2.9 reviewing and approving, on a monthly basis, the Purchase Card Registers for all purchases charged to the appropriate general ledger account. In the absence of the director, this responsibility can be delegated to another employee by the director. 3.3 The Manager of Supply and Services is responsible for: 3.3.1 authorizing the issuance or withdrawal of purchase cards with the issuing bank. 3.3.2 processing bank forms with respect to changes of address and changes of department or area of responsibility, as requested by directors. 3.3.3 compiling and reporting pertinent purchase card data to the Director of Finance or designate, directors, executive director and the Chief Administrative Officer as required. 3.3.4 providing co-ordination with respect to monitoring the overall utilization of purchase cards within the City of Niagara Falls. 4.0 PROCEDURES 4.1 Requests for Purchase Cards 4.1.1 An application form from the issuing bank must be completed and signed by each potential purchase card user, director and by the Manager of Supply and Services or designate. Personal credit information is not required as the card will be issued to the City. 4.1.2 The approved application form must be sent by the director to the Manager of Supply and Services or designates for transmittal to the issuing bank. 4.1.3 Purchase cards are expected to be issued in compliance with banking arrangements. The cards will be sent directly to the Manager of Supply and Services or designate for recording and review purposes prior to being issued to the cardholders 4.2 Issuance of Purchase Cards 4.2.1 Upon receipt of the cards from the issuing bank, the Manager of Supply and Services or designate must review the listing of enclosed cards for accuracy. Any inaccuracies are to be reported immediately to the issuing bank. 4.2.2 The director or designate must inform the cardholder of the responsibilities and restrictions regarding the use of the purchase card and obtain a written Employee Acknowledgement of Responsibilities and Obligations form from each cardholder before issuing the card (refer to Appendix A). The Acknowledgement of Responsibilities and Obligations form shall be forwarded to the Manager of Supply and Services for safekeeping. 4.2.3 The cardholder must sign the purchase card and store it in a secure place until used. -6- 4.3 Cancellation of Purchase Cards The cardholder and director or designate must complete the Change or Cancellation Form from the issuing bank. The card, which is to be cut in half and the Change or Cancellation Form is to be sent to the Manager of Supply and Services or designate for cancellation when: 4.3.1 specifically requested to return the card by the Manager of Supply and Services or the director. 4.3.2 upon transfer to another department or area of responsibility; or 4.3.3 upon termination of employment with the City. 4.4 Lost or Stolen Purchase Cards 4.4.1 The cardholder must immediately notify the issuing bank of any loss or theft of the card. Lost or stolen cards can be reported 24 hours a day. The cardholder must also advise the director or designate who shall confirm the loss or theft in writing by forwarding a change form to the Manager of Supply and Services. If the card is stolen, the director or designate may request that the police be contacted for further action and follow-up. 4.4.2 If the lost or stolen card should eventually be recovered or found, it must be cut in half and returned to the Manager of Supply and Services through the director or designate. 4.5 Change of Department, Division or Area of Responsibility 4.5.1 To change the department, division, or area of responsibility status for a cardholder, the director or designate must complete a Change Form from the issuing bank and forward it to the Manager of Supply and Services. 4.5.2 All such changes are expected to be made within a time frame that is in compliance with banking arrangements. 4.5.3 The card will be cancelled or appropriate change made when the form is received by the issuing bank. If another card is required related to the cardholders new department, division or area of responsibility, a new purchase card application form must be completed by the director or designate and sent to the Manager of Supply and Services. -7- '4.6 Modification of Credit Limit 4.6.1 To modify a credit limit, the director must complete a change form and forward it to the Manager of Supply and Services. (Refer to Section 3.2.3 and 5.0 and following) 4.6.2 The change to the credit limit is expected to be made within a time frame that is in compliance with banking arrangements. 4.7 Disputed Charges 4.7.1 Items charged on monthly statements of accounts that do not accurately reflect the transactions made by the cardholder (i.e., bank errors such as wrong amount, incorrect account number, multiple postings of the same item, etc.) are considered to be disputed items. 4.7.2 The cardholder must notify the Manager of Supply and Services or designate immediately by telephone when disputed items as stated under 4.7.1 are involved, as well as inform the director concerned. Disputed items reported by card holders will be credited on the individual statement in the following month (provided they are legitimate). The amount indicated on the statement is the amount which should be paid to the issuing bank. 4.7.3 The cardholder shall provide information and assistance to the issuing bank to settle the disputed items, as required. 4.7.4 If the disputed item is not a bank error (i.e., late delivery, defective goods, wrong price, quantity difference, returned goods, etc.), the matter must be settled directly with the vendor by the cardholder. Such matters must be drawn to the vendor's attention immediately so as to minimize the delay in obtaining a credit to the purchase card account. When the amount in dispute is of an insignificant dollar value, notices to vendors should be confirmed in writing even though settlement may be accomplished through telephone calls. Copies of the notices to vendors should be attached to the monthly Purchase Card Register. Disputes with vendors are not considered to be disputed items and must not be deducted from monthly statements of accounts. 4.8 Purchase of Goods and Services 4.8.1 All original records of purchases made with purchase cards will be kept in the Finance Division for aud it purposes and to facilitate reconciliation and account verification (i.e., Purchase Card Register, sales slips, credit vouchers, notices to vendors etc.). 4.8.2 The appropriate sales tax exemption numbedcertificate must be provided to the vendor to ensure exemption from the provincial sales tax where applicable. 4.8.$ The appropriate Provincial Sales Tax and Goods and Services Tax is to be paid where applicable. -8- 4.8.4 For over-the-counter transactions, the cardholder will certify that the goods have been received or the services have been rendered by signing the sales slip; when goods are shipped, the cardholder must ensure that the shipment matches the order or sales slip. 4.8.5 For telephone orders, the cardholder must request the vendor to submit a copy of the sales slip with the shipment. 4.9 Purchase Card Register 4.9.1 Completion and Authorization of the Purchase Card Register 4.9.1.1 Cardholder other than directors Cardholders other than directors shall complete the Purchase Card Register in accordance with section 3.1.7 and sign the register in the designated line. Directors shall also sign the register in the designated line prior to the register being forwarded to the Accounts Payable Section of the Finance Division. 4.9.1.2 Cardholders who are Senior Managers (directors and above) Cardholders who are senior managers must complete the Purchase Card Register in the same manner as stipulated above and must obtain the signature of their immediate supervisor prior to the register being forwarded to the Accounts Payable Section of the Finance Division. The register of Chief Administrative Officer shall be signed by the Executive Director of Corporate Services. 4.9.2 Directors or designates shall ensure that a Purchase Card Register is maintained (refer to Appendix B), on a monthly basis. The Purchase Card Register shall be used to: 4.9.2.1 facilitate the reconciliation of each item purchased during the month through the use of a purchase card (i.e., telephone orders and over- the-counter transactions) with the monthly statement received from the issuing Bank; 4.9.2.2 expedite the coding of transactions (i.e., the description of the item and the account coding are included on the register for each item purchased); 4.9.2.3 make it easier for directors or designates to review and approve expenditures charged to their budget through the use of purchase cards; 4.9.2.4 expedite the payment process by including, by stapling to the Purchase Card Register, supporting documents which are to be sent to the Accounts Payable Section of the Finance Division (i.e., the original copy of the Purchase Card Register including all original sales slips, credit notes, purchase orders or similar documentation, as applicable and the original monthly bank statement); -9- ~ 4.9.2.5 provide an appropriate monitoring tool for directors or designates with respect to expenditures incurred against approved budget accounts. 4.10 Payment of Monthly Statements 4.10.1 The master statement of account will be issued on the same day of each month by the issuing bank and will be sent directly to the Finance Department. The issuing bank will also send an itemized bank statement to each cardholder for all transactions made during this period. 4.10.2 Upon receipt of the statement for the current billing cycle, the Finance Department must ensure that the statement is date stamped immediately in order to establish the "receipt date". The due date is calculated in compliance · with banking arrangements. 4.11 Refunds from Vendors When merchandise is returned or other adjustments to accounts are necessary, credit vouchers will be issued by vendors. Such credits must be issued against the same purchase card that the original transaction was charged against. 4.12 Payment and Calculation of Interest 4.12.1 In accordance with any terms of the agreement between the issuing bank and the City of Niagara Falls, the payment of interest to the issuing bank of is based on a defined payment period. Where the City of Niagara Falls is responsible for any delay, interest will be automatically calculated and paid on overdue accounts. 4.12.2 Where interest is payable, it will be calculated as follows: From the date of the bank statement of account is received by the Corporation of the City of Niagara Falls until the date the payment is received by the issuing bank and is a corporate charge; 4.12.3 The rate of interest payable will be negotiated between the issuing bank and the City of Niagara Falls. Any changes to this rate of interest must be only upon thirty (30) days written notice from the issuing bank to the City of Niagara Falls. 4.13 Card Renewal Each purchase card is issued for a period of three (3) years starting with the month in which the card is issued. Cards will be automatically renewed unless the issuing bank is advised otherwise by the City of Niagara Falls. 4.14 Management Reports All requested management reports produced by the issuing Bank will be sent to the Manager of Supply and Services or designate on a monthly basis for monitoring purposes. -10- 5.0 SPENDING AUTHORITY LIMITS ~ 5.1 Individual Transaction Limits 5.1.1 The spending limit for individual transactions is to be determined by the Director of Finance and approved by Executive Director and/or the Chief Administrative Officer. 5.1.2 At no time for any purpose is the purchase card to be used to obtain goods and services that total over $4,000.00 for an individual transaction except for The Manager of Supply and Services or designate for purposes of responding to a crisis or emergency situation. 5.1.3 Most card holders will have a maximum transaction limit including taxes and all costs of $1,000.00. Upon request and approval by the director and the Director of Finance, individual transaction limits may exceed $1,000.00 but not at any time $4,000.00. 5.1.4 Requests for increased transaction limits for a director shall require the approval of the Executive Director and/or Chief Administrative Officer. 5.1.5 Cardholders are not to make repeat transactions to cover a single purchase in order to exceed the transactions limits stated above. 5.2 Total Monthly Transaction Limits 5.2.2 The total spending limits for each cardholder on a monthly basis is to be determined by the Director of Finance and approved by the Executive Director and/or the Chief Administrative Officer. Total card limits shall not exceed the limitations on spending per the Supply and Services Policy 5.2.2 Most cardholders shall have a total monthly transaction limit of $15,000.00 Employees needing to have a higher total monthly transaction limit shall require the approval of the director and the Director of Finance. Requests for increased total monthly transaction limits for a director shall require the approval of the Executive Director and/or Chief Administrative Officer. 6.0 VENDOR CARDS Vendor cards shall be used to streamline the payment process for those vendors who have a visa payment system compatible with the issuing bank. Such cards shall be issued to an approved vendor by the Manager of Supply and Services upon authorization of the Director of Finance. The ownership of the vendor card shall remain with the City. Monthly transaction statements from these vendors shall be approved by the Manager of Supply and Services and sent to the Accounts Payable Section of the Finance Division. Use of vendor cards shall be in compliance with the Supply and Services Policy and the Purchase Card Policy and Procedures affixed as "Appendix A" of the Supply and Services Policy. 7.0 AUDIT OF PURCHASE CARD TRANSACTIONS The Director of Finance or designate shall conduct an audit of all purchase card transactions on a timely basis to ensure cardholders are in compliance with the Purchase Card Policy and Procedures. As a result of this audit, the Director of Finance or designate may contact cardholders for the purposes of clarifying any transaction. Cardholders who make purchase card transactions that are not in compliance with this policy shall be subject to having their purchase card revoked or to other disciplinary actions as prescribed by the Executive Director of Corporate Services and/or the Chief Administrative Officer. APPENDIX "A" EMPLOYEE ACKNOWLEDGEMENT OF RESPONSIBILITIES AND OBLIGATIONS NAME: DEPT: DATE I, THE UNDERSIGNED, AGREE TO THE FOLLOWING TERMS AND CONDITIONS FOR USE OF THE CITY OF NIAGARA FALLS PURCHASE CARD: 1. THAT THE USE OF THE CARD WILL BE IN ACCORDANCE WITH THE GENERAL GUIDELINES SET OUT IN THE PURCHASE CARD POLICY AND THAT I HAVE BEEN MADE AWARE OF THESE GUIDELINES. 2. THAT THE CARD IS TO BE USED FOR PURCHASES ON BEHALF OF THE CITY OF NIAGARA FALLS ONLY, WITHIN THE DOLLAR LIMITS SPECIFIED ON MY CARD AGREEMENT, AND IS NOT TO BE USED FOR PERSONAL PURCHASES OF ANY KIND, FOR CASH ADVANCES, OR FOR ANY REASON OTHER THAN FOR LEGITIMATE PURCHASES ON BEHALF OF THE CITY OF' NIAGARA FALLS. 3. THAT I WILL NOT PERMIT THE USE OF THE CARD, OR THE CARD NUMBER BY ANY OTHER PERSON, INCLUDING ANY OTHER EMPLOYEES OF THE CITY OF NIAGARA FALLS. 4. I UNDERSTAND THAT FAILURE TO COMPLY WITH THESE GUIDELINES WILL RESULT IN CANCELLATION OF THE CARD AND MAY RESULT IN FURTHER DISCIPLINARY MEASURES. 5. I ALSO AGREE TO RETURN THE CARD TO THE PURCHASE CARD CO-ORDINATOR OR DESIGNATE WITHIN 1 WORKING DAY OF ANY REQUEST IN WRITING FOR ITS RETURN OR IMMEDIATELY UPON THE TERMINATION OF MY EMPLOYMENT WITH THE CITY OF NIAGARA FALLS FOR ANY REASON. SIGNATURE MANAGER OR SUPPLY & SERVICES (OR DESIGNATE) DATE OF ISSUE CARD NO. Corporate Services Department F-2004-61 Finance Kenneth E. Burden The City of 4310 Queen Street Director P.O. Box 1023 Niogoro Foils~ Niagara Falls, ON L2E 6X5 (---Conodo web site: www.city.niagarafalls.on.ca Tel: (905) 356-7521 Fax: (905) 356-2016 E-maik kburden@city.niagarafalls.0n.ca December 6, 2004 Alderman Wayne Campbell, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario Members: Re: F-2004-61 - 2005 General Purposes Budget RECOMMENDATION: That City Council approve the 2005 General Purposes Budget. BACKGROUND: Staff has prepared the 2005 General Purposes Budget in compliance with City Council's goal to provide accountable and quality services that promote a safe, healthy, prosperous and attractive community in which to live, work, play and visit. Schedule "A" is a summary of the major services for the 2005 General Purposes Budget. The major changes in these services include increased contributions to Committees, Boards and Commissions; increased financing costs; an increasing complement of fire fighter personnel; new operational costs for the Niagara Falls Community Centre; and new funding for the Downtown and City-Wide Community Improvement Plans. Staff has used a number of assumptions in preparing the 2005 Budget. Schedule "B" is a summary of the major kinds of revenues and expenses for the 2005 General Purposes Budget. This report provides information on the assumptions used for the Revenues and Expenses. Sections 2 to 7 of the 2005 Budget binder provide detail information for each of the services provided for in the 2005 General Purposes Budget. REVENUES TAXATION: ASSESSMENT AND TAXATION For 2005, the current value property assessment has not been re-assessed and is still based on a valuation date of June 30, 2003. Approximately $146 million ofnew property assessment was added to the assessment roll during 2005. The increase includes the re-valuation from property appeals for existing properties and new properties. Most of the assessment increase is occurring in the Commercial Class ($104 million) and in Residential ($49 million), and some decreases in other classes. Working Together to Serve Our Community Clerks Finance · Human Resources Information Systems Legal · Planning & Development December 6, 2004 - 2 - F-2004-61 Staff has prepared the taxation revenue using the preliminary assessment information for the 2005 taxation year. Staffhas used the 2004 Regional tax policy to calculate the 2005 total levy for both General and Urban Service Area taxation. The total taxation revenue for 2005 is $40,641,800, ($37,934,900 for 2004). The total increase of $2,706,900 includes $1,143,500 from new asses sment and $1,563,400 by increasing the 2004 tax rates by 4%. The following chart shows the increase in taxation revenues for each of the assessment property classes. Assessment 2005 2004 $ Variance % Variance Property Class Taxation Taxation More (Less) More (Less) Residential $22,250,050 $21,126,142 $1,123,908 5.3% Multi-Resi dential 2,155,338 2,101,519 53,819 3.0% Commercial 14,541,895 13,067,917 1,473,978 11.2% Industrial 1,094,669 1,064,184 30,485 2.9% Large Industrial 347,001 334,095 12,906 3.9% Pipeline 224,064 213,233 10,831 5.1% Farmlands 28,348 27,465 883 3.2% Managed Forests 435 345 90 2.6% Total $40,641,800 $37,934,900 $2,706,900 7.1% An average residential property with an assessment of $137,000 will pay approximately 4% or $30.00 more than 2004. WASTE MANAGEMENT Using the preliminary property assessmem information and the Regional cost estimate, Staff can indicate that the rate will decrease by approximately 4% or $4 for the average residential property. Farmlands will pay one-quarter of the tax rate for residential properties. Vacant properties will pay the reduced waste management tax rate applied to their property class. TAXATION: PENALTIES AND INTEREST Since July 1, 1998, the penalty and interest rate has been set at one and one-quarter percent (1-1/4%) per month. Staff has estimated an increase of $40,000 in this revenue. Staff will continue to place a high priority on collection of taxes with consideration for taxpayers in payment arrangements. PAYMENTS IN LIEU OF TAXATION Payments in Lieu (PIL's) are payments made to the City by other levels of government agencies or government bodies for property owned within the City of Niagara Falls. These properties are treated differently than other residential or commercial properties in the municipality and, as a result, the methodology of calculating the amount due can be different. Legislative authority determines the methodology of ascertaining the amounts due. The City's revenue has been conservatively calculated December 6, 2004 - 3 - F-2004-61 in accordance with legislation. As the new Casino opened in 2005, the anticipated increase in revenue has been included, however, ongoing consultation between the OLGC and MPAC may have a significant impact on this revenue. GRANTS AND SUBSIDIES Local Services Realignment included the allocation of the Community Reinvestment Fund (CRF), a provincial grant to assist mtmicipalities with the costs of transferred responsibilities. The City's allocation of $3,153,000 from the CRF is included for 2005, ($3,153,000 for 2004). The CRF grant is currently under review by the provincial government. Staff anticipates the successful award of a one-time grant from Ontario Power Generation Co. (formerly a part of Ontario Hydro). However, the grant may not be received this year. Staffhas not included the grant due to the uncertainty of the timing for its receipt. LICENCES, PERMITS, USER CHARGES, FEES, RENTALS Staff has investigated and prepared reports for the Council's consideration over the past several months. Where applicable, the approved increases to the Schedule of Fees for Services have been incorporated in the various revenue sources. For example, the increased rates for the 2004/2005 arenas' season are included. LAND SALES At the present time, Staffhas not included the proceeds of land sales during 2005. During the coming year, Staff will actively promote the sale of surplus lands. RESERVE FUNDS, RESERVES AND SURPLUS Staff has decreased the use o£special purpose reserves to $2.5 million for 2005. These contributions of reserves will offset specific expenses such as Sick Leave Liability, employee benefits and debt payments. Also, contributions from reserves will help offset the increase in expenditures; $200,000 from Building Pemfit Stabilization, $150,000 from POA surplus, and approximately $1.8 million from tax rate stabilization. SUNDRY REVENUE The City receives an annual compensatory grant of $2.6 million from Casino Niagara. The City also receives revenue from the Provincial Offences Act (POA) Inter-Municipal Agreement. The agreement, approved in May 2000, provides a sharing of net revenue with the Region and the other Niagara municipalities. The City's share for 2005 is approximately $210,000 o£ the POA revenues to be distributed. REVENUE SUMMARY Total Revenue has increased from the significant gains realized from positive economic factors and f"" the one-time use of reserves and reserve funds. Of the total increase of $4.4 million, $2.7 million will come from taxable assessment and another $3.5 million will come from payments in lieu of taxation. The reduced use of reserves and reserve funds will be offset partially by the expected increase in licences, permits, services charges and concessions. The total revenue increase of $4.3 million represents 6.1% more than the 2004 budget. December 6, 2004 - 4 - F-2004-61 EXPENSES WAGES AND BENEFITS Staffhas used the existing contractual salary/wage rates in the 2005 Budget. The CUPE contract expires December 31,2004, however, the additional costs of an anticipated wage adjustment have been included. The Niagara Fall Professional Fire Fighters Association contract provides for a salary adjustment in 2005. Staffhas also included the additional costs and has also included the additional fire fighters to start in December 2005. Staff has examined the costs for employee benefit plans and statutory contributions and has adjusted the costs in the 2005 Budget. Premium costs for benefit plans have increased effective September 1, 2004 for a one-year period. Canada Pension Plan contributions and Employment Insurance contributions have increased from rate increments and salary/wage adjustments. Staff estimates the total expenditure for salaries, wages and benefits to approximate $33.2 million, an increase of $1.8 million over 2004. MATERIALS, CONTRACTED SERVICES, RENTS AND FINANCIAL Staff has included a general inflation rate increase of 2.8% for the 2005 costs for materials and services. Energy expenses were significantly increased according to each of the relevant percent increases. The overall expenditure for Materials and Contracted Services is estimated to be $20.6 million, approximately $2.3 million more than 2004. Rents and Financial expenses have a significant increase of $722,000, mostly attributable to short-term financing costs. A schedule of Conferences, Conventions and Workshops anticipated for the year 2005 is attached for reference. CAPITAL CONTRIBUTION During 2005, Staff estimates a total operating contribution of $8,259,465 ($8,979,900 for 2004) to the Capital Fund. The following schedule shows the allocation of capital contribution for 2005. Administration $ 221,000 Short-Term Principal 3,268,465 Fire 300,000 Roads 2,010,000 Vehicles 1,010,000 Storm Sewer 1,150,000 Parks, Recreation, and Culture 360,000 Business Development 40,000 DEBT PAYMENTS During 2004, new long-term financing increased the total debenture debt outstanding to $11,962,118. During 2005, the contractual payment of $1,608,460 includes a reduction of$l, 109,290 in principal and an interest charge of $499,170. Staffhas included $150,000 contribution from reserve funds to help pay the annual payment which is $477,420 more than 2004. December 6, 2004 - 5 - F-2004-61 EXTERNAL TRANSFERS City Council has received requests from Agencies, Boards and Commissions for new and continued funding. Staff has included these requests in the 2005 Budget. Staff reminds the Comanittee that the requests (totalling $8.5 million), were previously referred to "final budget deliberations". These requests have been reviewed and reduced to $8.1 million; an increase of $550,930 over 2004. The attached Schedule "C" shows all of the requests from Agencies, Boards and Commissions. EXPENSE SUMMARY The total expenditure increase is $4.3 million or 6.1% more than the 2004 budget. Total Expense has increased from the realistic forecasts of wages and benefits ($1.8 million), materials and contracted services (1.4 million), debt payments ($477,420), and Municipal Grants ($550,930). CONCLUSION City Council's approval of the 2005 General Purposes Budget is appreciated. The 2005 tax rate calculation will be made when the 2004 Surplus from General Purposes is known, the final property assessment roll is received and the 2005 Regional tax policy is finalized. Recommended by: Respectfully submitted: ~ K.E. Burden (/: J._o..hn MacDonald Director of Finance ~ Chief Administrative Officer Approved by: T. Ravenda Executive Director of Corporate Services Corporate Services Department F-2004-62 T ..... ,~,~ Finance Division Kenneth E. Burden ne L, ITy O~' ~'J~l~ 4310 Queen Street Director Niagara Falls ~.~1~' P.O. Box 1023 Canada ~'Niagara Falls, ON L2E 6X5 ~~' web site: www.city.niagarafalls.on.ca Tel.: (905) 356-7521 Fax: (905) 356-2016 E-mail: kburden@city.niagarafalls.on.ca December 6, 2004 Alderman Wayne Campbell, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario Members: Re: F-2004-62 - 2005-2009 Capital Projects Budget RECOMMENDATION: 1. That City Council approve the 2005-2009 Capital Projects Budget. 2. That City Council authorize the use of debenture funding, as required, for the 2005-2009 capital projects. BACKGROUND: The purpose of the 2005-2009 Capital Projects Budget is to provide descriptive details of the capital expenditures. It also indicates the sources of funds from the General Purposes, Municipal Utility, other funding sources and new borrowing. Staff has prepared the 2005-2009 Capital Projects Budget in compliance with City Council's strategic priorities for the 2004-2006 Council term. Three of these strategic priorities directly relate to capital projects. · Infrastructure Rehabilitation · Transportation · Community Recreation Facilities Ci~'s Debt Management The City's debt management guideline states that the debt repayment limit is 15% of the City's own source revenues. Despite this conservative guideline, when compared to the provincial maximum of 25%, a recent study of municipalities showed that, on average, the debt repayment was approximately 4%. Working Together to Serve Our Community Clerks · Finance Human Resources Information Systems Legal Planning & Development December 6, 2004 - 2 - F-2004-62 During 2005, the City will be committed to the payment of $1.95 million for debt repayment. This amount equates to just less than 2% of the City's own source revenues. However, the 2005-2009 Capital Projects Budget will require debt financing. Over the next five years, capital projects may require up to $19.8 million of additional borrowing and, as a result, may increase the debt repayment percentage to 4%. Taking on this additional debt, the City will be committed to a payment of approximately $4.5 million armually until the debt is paid. Implications of taking on Additional Debt Debt repayment is a fixed expense in the City's general operations. A commitment to pay debt is a charge upon the City to collect sufficient amounts from rateable property to pay the principal and interest due. An increase in debt repayment must be matched by an increase in revenues~. Given that revenues must match this increasing expense and also given that such an expense is to be levied against rateable property, the additional debt may result in a tax levy increase in 2006. Capital Contribution The General Purposes and Municipal Utility Budgets annually contribute to funding capital projects. The following chart shows the contributions for 2005 General Purposes Administration $ 221,000 Rail R.O.W./Community Centre 3,168,465 Fire 300,000 Roads 2,010,000 Vehicles 1,010,000 Storm Sewer 1,150,000 Parks, Recreation and Culture 360,000 Business Development 40~000 $8~259,465 Munic(oal Utilit~ Budget Waterworks $4,717,000 Sanitary Sewer 2,612,000 $7,329,000 $15,588,465 Capital Project Budgets Summary: For the 2005-2009 Capital Projects Budget, Schedule A provides the overview for the project expenditures and the sources of funding. The five-year budget has a total expenditure of $152 million. The expenditure is funded from the General Purposes and Municipal Utility budgets, several reserves and reserve funds, community fund-raising and private contributions, provincial grants and regional funds, local improvement and development charges, and new borrowing. December 6, 2004 - 3 - F-2004-62 Annually, Staff reviews the list of capital projects. After the annual funding sources have been determined, project expenditures are planned into the year when funding will be available. The budget provides the Committee with the opportunity to review the yearly planning. The following sections provide information on each department's capital program. Fire Services Total projects of$11,547,000 have been included in the 2005-2009 Fire Services capital program. The program includes the purchase of vehicles, two new fire stations, replacement of fire equipment, and upgrading of existing fire station facilities. Some ofthe funding will come from annual budgets and other funds, however, some borrowing may be necessary to provide sufficient funding for immediate program items. Municipal Works The 2005 -2009 Municipal Works capital program includes $115 million of new projects and projects already in progress. The Municipal Works capital program includes expenditures for Roads ($34.2 mm), Storm Sewer ($19.7 mm) Sanitary Sewer ($9.1 mm), Water ($25.7 mm), and other ($26.3 mm). Some of the major projects include Montrose Road, Dorchester Road, Drummond Road, Portage Road, and Muddy Run reconstruction, Beaverdams Road, Kalar Road, and Garner Neighbourhood. Also included are the annual programs such as asphalt overlay, vehicle replacement, and sidewalk construction. Niagara Falls Public Library The 2005-2009 Niagara Falls Public Library capital program includes $1.3 million of project expenditures for hooks, materials and equipment for the new Community Centre branch, Stamford renovation, and Victoria branch computer upgrading. Niagara Falls Transit The 2005-2009 Niagara Falls Transit capital program purchases two buses each year for the years 2005 to 2007, and is funded from reserve funds, development charges, provincial grant and new borrowing. Each year's purchase will be presented to City Council for approval. Parks, Recreation and Culture The 2005-2009 Parks, Recreation and Culture capital program includes $20.2 million of in-progress and new projects. The major project is the Community Centre. However, other significant projects include the Skateboard facility, Kalar Road Girls Home for Soccer, Chippawa/Willoughby Memorial Community Park, Millennium Trail Phase 2, and beautification projects. Staff advises that the following projects are as yet unfunded: · Twinning Chippawa (a second ice surface at the existing site) · Mountain Road Nature Park · Mewhum Road Sports Park · Parking lot improvements at recreation facilities · Niagara Falls Arena roof and heating replacement December 6, 2004 - 4 - F-2004-62 Traffic and Parking Services The 2005-2009 Capital Projects for Traffic and Parking Services includes $1,775,000 expenditures, mostly funded by the Parking Reserve Fund. Projects include parking strategy studies and demand analysis, on-street parking equipment and parking lot reconstruction. The recommendation of the Capital Projects Budget to City Council by the Corporate Services committee would be appreciated. Recommended by: Respectfully submitted: K. E. Burden Director of Finance tive Officer Approved by: T. Ravenda Executive Director of Corporate Services CITY OF NIAGARA FALLS 2005-2009 Capital Projects Budget SCHEDULE 'A' //~-"~-L SERVICES 2005 2006 2007 2008 2009 2005-2009 Capital ProJects Capital Projects Capital Projects Capital Projects Capital ProJects Capital Projects Tota Total Total Total Tota Total EXPENDITURES Engineering Fees/Design/Studies 5t040,500 503,00C 715,000 765,000 115,000 7~138,500 Land/Building/Furniture/Equipment 4~626,650 3~170~500 3,867r50C 3~135~000 2~885~000 17~684~650 Construction 11 ~346,282 1 ~238,500 1 ~275,00C 50~000 0 13.909~787 Roads 5~742~745 9~065,500 10~612,75C 5,699~900 3,035r500 34,156~395 Storm Sewers 6,926,950 4,701,000 4,633,350 2,179r000 11266r000 19,706~300 Waterworks 4,557~250 6,100~360 4,143r50C 5,244,600 5,606,000 25~651~710 Sanitary Sewem 2~125~000 4~205~000 1 ~960~000 446~500 360r000 9~096r500 Sitawork/Landscaping 1,240~250 1,210,250 1 ~396,000 1 ~055~000 1 ~470~000 6,371 ~500 Contingency 149~250 123,750 150.000 185~000 608,000 Other 6,736~518 5,155~000 3~605~000 850~000 250r000 16,596~518 440,000 430~000 150~000 1,020,000 TOTAL EXPENDITURES 48~931,395 35~902,860 32,508.100 19r610,0001 14.987.500 151~939~855 ;eneral Purpose 2~255~000 2,142,500 2,797,040 2,579~760 2~569~000 12~343~300 Water Fund 3~096.308 5~771~360 4,123~000 5~230,600 5~602~000 23~823,268 Sewer Fund 2~722~627 1~427~500 3~021~000 2~639~000 2~665~000 12~4751127 From Reserve Fund 423,000 602~500 367,500 100,000 100,000 1,593~00C Roads 4,660,500 5,420~460 4,205,700 3.631~000 3.280,500 21,198.16C Storm Sewers 1,377,231 3,641,200 2,894,875 1 ~519,000 564,000 9,896~30e Special Purpose Reserve 316~500 125,000 150,000 55,000 25~000 67%50C Capital Hording 6,245~408 511,250 6~756~658 Development Charges 8~136,05~ 7,182~590 4~433r985 2,680,640 1,382,0001 23,815~27{~ Contributions from Extemal/Partne 641,00C 135,000 132,500 908,50(~ Provincial/Federal Subsidies & Gr~ 9,556~50(~ 1~754~500 169~500 11~480~500 Other 14,897r444 25,000 14,922,444 Community Fundraising 450~000 425~000 440~000 400,000 150~00(~ 1~865~000 Debentures 3~781~172 4,527~000 7~123,000 3,3751000 1~000,000 19~806,172 TOTAL FUNDING SOURCES 58,558,745 33,590,860 29,858,100 22,210.000 17,337,500 161,555,205 Corporate Services Department F-2004-63 Finance Division Kenneth E. Burden ' ~, 4310 Queen Street Director The City Of P.o. Box 023 Niagara Niagara Falls, ON L2E 6X5 ~onodo~~'~ web site: www.city.niag arafalls.o n .ca / Te,: (90s) 3s6-752 Fax: (905) 356-201 $ E-maik kburden@city.niagarafalls.on.ca December 6, 2004 Alderman Wayne Campbell, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario Members: Re: F-2004-63 - 2005 Municipal Utility Budget RECOMMENDATION: That City Council approve the 2005 Municipal Utility Budget, BACKGROUND: Staff has prepared the 2005 Municipal Utility Budget in compliance with City Council's goal to provide accountable and quality services. Staff has used a number of assumptions in preparing the 2005 Municipal Utility Budget. This report provides information on the assumptions used for the Revenues and Expenses. REVENUES CONSUMPTION RATES Staffhas reviewed the actual five-year flows for water purchases. The unaccounted-for water flows continue to decrease and the billable flows have increased to 79% of total flows. The 2005 water consumption rate would increase from $0.5140 per cubic meter to $0.5608, a 9.1% increase. This increase includes the anticipated 10% increase in the Region's 2005 uniform rate for water purchases. Staff has reviewed the corrected five-year flows for sanitary sewer treatment. The estimated flows have been reduced by 12.5% and billable sewer flows has increased to 65% of total flows. The 2005 sanitary sewer consumption rate would decrease from $0.8911 per cubic meter to $.8784, a 1.4% decrease. This decrease includes the anticipated 5% increase in the Region's 2005 uniform rate for wastewater treatment. Working Together to Serve Our Community Clerks Finance · Human Resources · Information Systems · Legal Planning & Development December 6, 2004 - 2 - F-2004-63 The 2005 combined consumption rates would increase from $1.4051 per cubic meter to $1.4392, a 2.4% increase. The residential ratepayer who regularly uses 26.7 cubic metres per month would pay an additional $0.91 per month or $10.93 per year. SERVICE RATES The service charges billed through the year are intended to raise adequate revenues to cover the costs incurred by the City to maintain, repair and improve the City's water and sanitary sewer distribution systems. Both Water and Sewer monthly service charges are calculated by dividing the total costs for each of the infrastructure systems by the number of water meters. The calculation also factors the meters according to their size, so that a larger meter has a greater monthly charge than a smaller meter. Staff has reviewed the monthly service charges for each of the water and sanitary sewer systems for 2005. The monthly water service charge would increase from $18.67 to $20.44, an increase of 9.5%. The sanitary sewer service charge would increase from $11.16 to $11.96, an increase of 7.1%. The combined monthly service charge would increase to $32.40. The residential ratepayer would pay an additional $2.56 per month or $30.75 per year. The most significant change causing the increase for 2005 is the additional contribution to capital of $955,950. Staffhas included the use of the reserves to supplement the 2005 Revenues which will reduce the 2005 monthly service charge. Staffhas included $390,000 for waterworks and $510,000 for sanitary sewer. EXPENDITURES WAGES AND BENEFITS Staff has reviewed the expenditure for labour to ensure that sufficient budget is included to maintain existing levels of service for both the water and sewer systems. Staff anticipates that wages and benefits will increase by approximately $90,000 or approximately 6%. DEBT PRINCIPAL AND INTEREST PAYMENTS During 2005, the payments of interest and principal will be maintained at $342,900. In the capital program, should any of the water and sanitary sewer projects require debt financing, the servicing of the new debt will begin in 2006. MATERIALS Staffhas reviewed the expenditure for the purchases o fsupplies, small equipment and services. Staff anticipates that there will be a general increase of 2.8% in this expense. December 6, 2004 - 3 - F-2004-63 CONTRACTED SERVICES f-"-- , Staff has reviewed the expenditure for purchases from external suppliers and contractors. The principal supplier is the Region of Niagara for water filtration and sewage treatment. Staffhas been advised that the Region's 2005 uniform rate for water purchases may increase by 10% and the uniform rate for wastewater treatment may also increase by 5%. The billing and receipting services, provided by Niagara Falls Hydro, will continue to be paid on a full cost recovery basis. In addition to existing contracted service costs, staff is anticipating increased expenditures for system inspections, leak detection, repairs and rehabilitation programs. RENTS AND FINANCIAL Staff has reviewed the expenditure for Audit Fees, Advertising, Uncollectible Accounts, and the Sewer Rebate Program. The approval of a Senior's rebate program is included in this type of expenditure. Ratepayers who are 65 or older and are receiving federal government assistance would be entitled to an annual rebate of $100.00 CAPITAL CONTRIBUTION Staff has reviewed the expenditure for Capital Contribution. These transfers provide funding for waterworks and sanitary sewer system infrastructure construction and maintenance. Staff has increased the mnount of transfers by 15% in consideration of City Council's strategy to increase the amount of expenditures for the rehabilitation of both water and sanitary sewer systems. SUMMARY This report is intended to advise Council of the various factors that will impact the 2005 Municipal Utility Budget. The attached final budget financial statements provide detail information for both water and sanitary sewer services. Staff recommends the approval o£the 2005 Municipal Utility Budget. The amending bylaw for water and sanitary sewer rates for consumption and monthly service charges will be presented for City Council's consideration in January 2005. Recommended by: Approved by: K.E. Burden T. Ravenda Director of Finance Executive Director of Corporate Services Recommended by: Respectfully submitted: /~/ E. Dujlovic, P Eng. John MacDonald ~ Director of Municipal Works Chief Administrative Officer Attach. MAIN & FERRY BUSINESS IMPROVEMENT AREA November 25, 2004 Alderman Wayne Campbell, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario Re: Community Improvement & Beautification Plans for the Main & Ferry Area, 2005 Budget Dear Alderman Campbell & Members of Corporate Services Committee: The Main & Ferry BIA members respectfully request to be placed on Council's Dec 6, 2004 Corporate Services meeting agenda. The purpose of this deputation is to reinforce our previous request for the City's 2005 budget consideration for a Community Improvement Plan for the Main & Ferry area. The increase in crime to the district has resulted in a direct economic decline for the well established businesses in the Main & Ferry area. Property values continue to decline for both commercial and residential properties in this district. Many of the area businesses are reconsidering their business options. There will be a further increase in vacancy rates, building deterioration if major improvements are not addressed in both short and long term planning for this area. On behalf of the members of the Main & Ferry Business Improvement Area I am respectively requesting to have the support of City Council and Staff to assist the business district to develop/implement a Community Improvement Plan and also support a streetscape beautification plan for 2005. In partnership we can work together to clean up our neighbourhood, establish community policing solutions in order to retain the business and residential investment in the Main & Ferry district. Critical land use planning for this important commercial district is essential to the City's long term economic planning. ,Ruth-Ann Nieuwesteeg Chair Main & Ferry Business Improvement Area 8058 Oakwood Drive - Niagara Fails, Ontario - Canada, L2E 6S5 905-356-1514 www,niagarafallsa~tgalleB/,ca 25 Years of COmmunity Service November 9, 2004 1979 - 2004 · Mr. T. Harrison City of Niagara Falls Canada Finance Division 4310 Queen Street P.O. Box 1023 Niagara Falls ON L2£ 6X5 Re: Property Taxes - 8058 Oakwood Drive Dear Mr. Harrison: Thank you for your letter of November 1, 2004. The Niagara Falls Art Gallery will be requesting to appear before City Council~to seek a remedy in regards to the back taxes for 8058 Oakwood Drive. This was initially recommended, by the Art Gallery's City Council Representative in 1994, when the property tax issue first arose. However, the Art Gallery was to wait, until the Olha Kolankiwsky Bequest was received, in seeking this remedy. Although the Niagara Falls Art Gallery sought to ask for City Council's assistance each year since 1994, the Art Gallery was told to, "Walt until the Estate is settled". The Kolankiwsky Bequest has now been settled and the property tax remedy will now be sought as directed. The Niagara Falls Art Gallery hopes that a positive resolution will be realized to allow it to continue to serve its primary clients, families and children. Regards, Brian Smyls~i"~'~-.. Director/Curator c: Executive Committee - Niagara Falls Art Gallery Mr. Kenneth Burden - City of Niagara Falls Ms. Adele Kon - City of Niagara Falls Community Services Department Parks, Recreation & Culture Cemeteries Section Inter-Department Memorandum TO: Mayor Ted Salci and Members of Council DATE: November 8, 2004 FROM: Adele Kon, Director Parks, Recreation & Culture Ext. 4507 RE: Niagara Falls Art Gallery Support The Arts & Culture Committee met on Thursday, October 28, 2004, for their regular monthly meeting. Brian Smylski of the Niagara Falls Art Gallery provided a deputation by giving the Committee a brief history of the Art Gallery. The following Motion was made: IT WAS MOVED by Winston Iteron, seconded by Barb Buetter that a letter be forwarded to Council advising that the Arts & Culture Committee support the continnance of the present Niagara Falls Art Gallery facility and that Council consider continuing support for the facility. The Motion was Carded with three Abstentions. SSArts & Culture Committee\CorrespondencekNov,04 memo to Council re NF Art Gallery.wpd