Finance Committee - Regular Meeting

Alright. Good evening, everyone. We'll call the Tuesday, 08/12/2025 meeting of the finance committee to order. We do have a quorum this evening. Alderperson Molson is out on vacation. Please rise for the pledge of allegiance. I pledge allegiance to

the flag of The United States Of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

Item number three is public comment. Short of Denise, I don't think anyone else is here for public comment this evening. So we'll move on to item number 4A which is approval of minutes for the May 27. Any changes to the committee on those minutes? Alright, seeing none those minutes are approved through unanimous consent. That will move us into our business items for this evening. Item number 5A which is a review and act on the revised financial policy for the disposition of surplus property is on hold. Tony, you want to comment to that?

Yes, I would just request that the item be tabled until the next Finance Committee meeting on August 28.

All right. Very good. We'll just move that item to the '28. So that brings us to Item 5B, which is a review and act on a revised financial policy F-6.0, dot zero, purchasing and bidding as presented. Tony?

Thank you. So this policy, as far as we can tell the last time it was reviewed and revised comprehensively was likely in the mid nineties. So I think we're a little bit overdue to get this updated. Before I get into the policy, I'll just go over kind of the process we went through to get this draft to the finance committee here tonight. Working with the city attorney's office along with the finance department, we were able to put a draft together.

And then from there, the draft went to one of the strategic planning teams. So one of our strategic priorities is financial sustainability. Joe leads that group and he ran it past how many individuals are on there?

Six besides me. Yes. Five five besides me.

So five and it's from a variety of different departments at different levels within the organization. They reviewed it, gave him comments, modified it after that. From there, it went back to the city attorney's office for him to review it one final time before it got here this evening. So just going through the policy here, it has substantially been modified compared to the current one. I'll start off just by going through this in high level and then get into the thresholds because I think that's probably the most significant piece of the revisions that we did make.

So if you look at 6.4 roles and responsibilities, that kind of clearly lays out by position, what that individual does within the purchasing policy. Then 6.5 is definitions. So we put some clear definitions to different pieces related to purchasing. Then 6.6 is public construction. 6.7 is purchases not related to public construction.

Then 6.8 goes through procurement methods. So it identifies request for proposal, what that process is along with kind of a a general timetable and the steps that go along with it. Same format for RFQ along with RFI. And then I just want to go to page seven. There is a diagram on that page and it goes through the different purchasing types.

So for public construction that is guided by state statute. So you see the dollar thresholds there and the approval for public construction. The one comment I will make about that is there is a bill going through both houses at the state legislature. One has made it out of committee and on the senate side, it is still in committee and that would be to raise that dollar threshold for the greater than 25,000 to greater than 50,000. So if this is adopted, we may have to subsequently come back to the finance committee and council and seek your approval to modify that piece.

Regarding goods and services, we adjusted the 25,000 current threshold to $75,000 That's the point at which we would come before the council to seek approval. Anything between or greater than 10,000 and below 75,000, that could be approved at the mayor or city administrator level. And in doing that, we would be able to approve contracts as well. Also listed on there is people would have departments would have to go through a RFQ process at a minimum. But in some cases in speaking with the city attorney's office, finance or my office, we may request that they do something that is a little bit more substantial in terms of a process, a solicitation process.

So there may be a situation where it would be saying, no, you're going to have to go through a request for proposal. Anything less than or equal to $10,000 it really would be handled at the departmental level. Then for professional services, the only real difference there is that there would be no solicitation process that is mandatory as a part of this policy. So whether it's greater than $75,000 in between that greater than $10,000 less than 75,000 less than $10,000 there would not be that requirement to go to RFP or RFQ. The other thing I wanted to note before I turn it over to you all to ask any questions is on page number four.

There is a highlighted section. And the piece I just wanna note there is it should say if the fleet purchase is authorized because what we're trying to do is follow the common practice now. So once the council approves CIP projects including fleet, that largely is handled at a staff level in terms of moving forward with those vehicles. So we're hoping to just continue to maintain that process. And with that, I'm happy to answer any questions.

The City Attorney along with Finance Director and Denise, we're all here to try to provide you whatever type of answer you're looking for.

So, Tony, thank you and I want to thank everybody for the work on this because I know this been on some short list for quite some time and I'm glad we're taking a peek at it. So, I'm going come back to the committee, but I want to ask one question before I forget it. So Tony, in that six dot seven dot one in that yellow section, are you saying that it should say if the fleet purchase is authorized?

Correct.

Okay. So that's the change that you want to that needs to be made? Yep. So that doesn't so what you're saying is that that provision or that sentence only really applies to just fleet?

Exactly.

Okay. I just wanted to make sure that we all understood that. Questions for Tony and staff on this? Alderperson Lemke.

I read through I read through my packets at home. This draft here, where does it change from what it used to be? I mean, I I normally we get a highlighted red line.

Yeah. So there is in the packet as an attachment the current financial policy or excuse me, purchasing policy. And I I could try to go through the changes, but what I will say is the organization of the policy is completely different. And some of the items that are added is roles and responsibilities. The definition section is a little bit more robust.

We're separating out the types of purchases with public construction and then differentiating that between things that are not public construction, adding the procurement method and explaining those, that's all new. So there there is a good amount of this policy that is in and of itself wholly new.

Yes. I didn't have problems with the draft when I read through it. So I was just thank you.

Yes. And I think just the thing to note is this thing on?

Yes, you're on. Okay,

good. I believe that the original policy was definitely mirroring like states was mirroring state statute and its limits and wasn't as detailed in responsibilities and procedure. So we just we kind of made sure that was in this current edition.

Alderperson Halvinslavin?

Yeah. I have I have the previous policy pulled up because it was in the packet. So I was kind of comparing and it basically you can correct me if I'm wrong, it looks like you went back to the drawing board. It's not so much a red line as starting fresh.

I I'd say that's fair and we were just trying to make sure that we were being comprehensive because I think one of the things that we're trying to accomplish in this rewrite is to make it very clear to staff what the policy is and create expectations in terms of what things they have to do in fulfilling their role.

Other questions from the committee? Go ahead, Doreen.

So my question is related to the language of, when approval needs to be executed on behalf of the the city, either the mayor or the city administrator. Is there an order and what who has the approval order first? Is it city administrator first and then the mayor of the city administrator cannot? Or

I don't know that there's a order necessarily. I think it's a fact of availability. But what I will say is most of the time it will fall to the mayor because the mayor typically executes contracts.

Got it. Thank you.

Sure. Alderman Lemke.

So I just was looking at the goods and services greater than $75,000. That has to be approved by the common council and then executed by the mayor or the city administrator? Or is this basically saying that the mayor or the city administrator may authorize approval greater than 75,000, you know?

So for the goods and services, if you turn to page four. So the fleet purchase piece has to be authorized or would follow the same processes now, which is it's approved in the budget. If it doesn't exceed the budget, then it's approved at an administrative level. But if there is something that exceeds that type of project, fleet purchases, then it would end up coming back to the council for approval. Now if you guys are comfortable with us approving all of those at an administrative level, we're more than happy to do that.

Anything else?

I just wanted to say that it only has to come back to the common council if it exceeds the approved amount in the CIP. That's correct? Correct. Thank you.

I have a comment on that and it also relates to Doreen's question. My concern about the purchasing policy from a legal point of view more than a financial point of view is that all contracts that are going to be binding on the city have to be authorized by the common council. And that's either done by an explicit authorization contract by contract or by a blanket authorization saying that contracts that fall within this category are approved and can be executed by the administration without having to come back to the council. For years now, we've had individuals that have executed contracts on behalf of the city. These are generally smaller contracts, they're purchase orders for supplies and things like that.

As you will recall, you don't see those coming before the council for approval. Those are just done on an administrative level. But our former, soon to be former purchasing policy was silent on the issue of who could actually who has the authority to execute those on behalf of the city. So one of my main concerns that's addressed by this new policy is the authorization for execution of contracts without having to bring them to the council specifically for that approval. And the concept is that if it's an item that is under a certain dollar threshold and it's already been approved in the budget, so it has that amount of approval from the council.

If it meets those criteria, then the administration be executed administratively. The way this is drafted, it would either be the city administrator or the mayor is authorized to do that. So that addresses a key issue that I've had for a long time. That a lot of low level routine procurement items have not been specifically authorized for execution by the common council. This policy would address that.

And it would say that either the mayor or the city administrator has got to sign off on that. And I think that's an important control that all of those purchases are seen by somebody in the administration that's in a position to say, well this is in the budget or this is not in the budget and this is approved or this is not approved. I don't know if you're following everything I'm saying here. It probably draws some fine line distinctions, but the basic premise is that purchase orders are contracts and they should be authorized somehow by the council either specifically to that particular document or in a blanket level saying that if it's approved in the budget, go ahead and sign it. It'll be binding then on the city.

Brian, since you have the floor, did you

have any other comments for the committee on this?

I guess just a couple of things. Tony had mentioned how there's legislation coming up through now to increase the dollar amount. We could build in here that where it refers to public construction greater than $25,000, we could add in there $25,000 or such amount as currently is within section sixty two fifteen, something like that. So we would not have to come back and revise the policy when the legislature acts.

There being any objection to that from the committee?

One thing I do want to mention though and Brian brought this up internally and in general I agree with being able to be that fluid. The only thing that I would say is I probably would want to still bring it forward because I would want there to be one document internally that our departments could go to, to know what they needed to use for limits in purchasing. It still may not be a bad idea, but I would still say we would want to revise the policy for those limits.

I think that sounds fair.

And I guess that wouldn't necessarily require further council approval if we just insert whatever number is in there. You know?

Is that true?

If if it says such amount as is currently authorized by the legislature, we can just

Add 50 think what

we could do too is then just as a matter of report come back to council and finance committee and say, this has been adjusted because this piece of legislation has been approved.

I like that approach.

Should we just put that like the amounts in parentheses then? Is that would that be appropriate or does it not even have to be that?

Well considering that what we would really want to avoid here is having our own policy being lower than the state's policy. We want to make sure that we're not handcuffing and defeating the purpose of the change in the legislation. So by saying that whatever amount is authorized by the state in sixty two point one five and then it can just be adjusted again on an administrative level because that's what the state says.

Alright. Anything else Brian, for the committee?

No, I guess not. Okay.

I guess I have a couple of questions and then maybe some style points as well. So under 6.4, roles and responsibilities, and Brian touched on this a little bit, under the city attorney's office, Yeah. Is there something that we can put in there that says that there's a level of requirement that a contract has to go through the city attorney's office? Is that covered, spoken to in other parts of this?

I don't know if I follow

what you're saying Joe, what are you getting at?

Well I guess at the end of the day most if not all contracts go through your office, correct? Yes. So do we need to specify that that is the process or is that already understood in the city that contracts go through your office?

I mean, I I would say that's understood, but the other piece to keep in mind is this is the policy. Separately, what we'll end up doing is having a procedure document that will outline then kind of what is the process for So that would be something certainly that we would have included in there that the city attorney's office has to review contracts.

Okay. And then I guess my next couple of questions. Under on top of page two, under Department of Public Works Fleet Division, primary contact is the fleet manager. And I know that there's been some changes with that. I just want to make sure that all of us on the finance committee are aware that we now have a fleet manager. Tony, can you touch on that a little bit?

Yes, I certainly can. So through a process of Public Works and also Department of Parks, Rec and Forestry, we ended up combining what otherwise was two separate garages. So there was the PRF garage up at Aviation Building and that was a PRF employee. Now that is an employee that is within the fleet division along with a stock attendant that was a PRF employee that is now within the fleet division as well. And as a result of kind of that, a larger reorganization happened where there now is a lead mechanic and what is kind of the equivalent of a parts manager.

And then sitting on top of that is the fleet manager who supervises the whole division. And what this kind of does for us is it allows us to standardize a lot of equipment that we purchase and also have similar standards across the board too for different departments. So that's kind of what in a nutshell Alderman Piper is referring to.

So with that, I would really like to add something that says for any equipment or motor vehicle purchases across all city departments. I I don't want any ambiguity as it relates to this. So for the second bullet point, would

it be something like, at a minimum assist in the development of specifications for any equipment or motor vehicle greater than $10,000 for all city departments? That would be great.

And then on the so going to page three, six point six point five point two sole source. There's a separate sole source let me phrase this as a question. Is there a separate sole source policy or is there a separate sole source procedure? Or is that going to be is that all of that embodied in this document now?

So I'm not aware of there being a separate policy or procedure. It's handled internally. A lot of times like purchasing consortiums and state contract pricing was not specifically called out. This policy does that even though that's not specifically sole source because we wanted to make sure that we were able to use that as an option. But yes, we do not have a separate policy than what is put in here right now.

That's a point that when I first drafted a new purchasing policy nine years ago, I was very careful to include that in there because there was an attitude that purchasing consortiums are a sole source, and vice versa. So that to justify a purchase as a sole source, meaning not bid, They would say that well, we're buying this through the state contract or we're buying this through any of the other purchasing consortiums. That doesn't make it a sole source. You would still have to competitively bid to make sure that your purchasing consortium is actually going to be the cheapest place. So that's why that specifically spells out in here that purchasing consortia are not sole source.

And Brian, thank you. So I'm working off a bad memory because I I recall, and again I could be incorrect, a very long time ago that there was a time that if something went sole source, it had to come through the finance committee and council because it was there was a separate policy. I apparently am remembering either either we changed that and I don't remember changing it or I'm remembering that incorrectly. So that's why I brought up that's why I asked the question.

And I think what we're planning to do is also we talked about the procedural documentation in that including existing approved purchasing consortiums that the Finance Committee and Council have already done. So we'd have that in one spot. And then the same thing would go for sole sourcing as well.

Okay. And then another kind of I guess more of a style point. So the heading for 6.7 says purchases not related to public construction. So does that into is that to imply that those are purchases related to good services and professional services?

I would say that there is the accept professional services under each of these different dollar thresholds. So six point seven point one two three. They all say accept professional services.

Oh, I see that.

And then four actually gets to professional services.

Alright. Just The point of that

is that those are purchases that are not subject to $62.15.

Okay.

Right.

Yes.

Yep. Okay.

We talked about adding the fleet in the yellow. The other question I had is on 6.7.4 under professional services, one thing and again, minor style point is do we add something that says like recruitment? Because I know from a couple of things. Number one, we do recruitment in the city. Number two, there's basically a standing budget item in the budget for roughly $35,000 I think it is $35,000 for recruitment. So does that need to be added here?

I would say no because it's it's covered under consulting.

Okay. And it's not a purchase. We don't purchase employees.

But we purchase the process to find an employee. But I guess that could be included under consulting?

Yeah. I would say that's not appropriately within a purchasing policy.

Okay. That's why you guys are the experts. And then 6.84 I asked about and then I guess my last question is on the chart Yeah. It says in two different boxes purchasing authority. And I know we've talked about that, but I don't see purchasing authority explicitly defined in the document.

So I think what I should change that to good catch. Thank you. It should probably say, if you look at, page two, there's designating purchasing official. That's what it should say.

Okay. So that would define it a little bit better. Okay. I think that was all of the yeah, and then the other one under miscellaneous provisions and I see it's in here is just the ability so with emergencies, we've had situations where we've had failures at the clean water plant. Does this the 6.9 .four, does that give does that give everybody enough latitude in terms of dollar amounts to address an emergency?

Or is it just or do we keep it as is so we don't get into dollar amounts? Because I know when we had a challenge at the clean water plant a couple of years ago, that was it was a very expensive emergency that needed to be handled right away. So we're confident that we've got the dollar that we don't need any type of dollar thresholds in 6.9.four?

I don't think so. I don't know. I guess I'd look to Brian if there's any statutory related piece or anything that might be needed. But I know in the time that I've been here, we've had to make a couple of emergency purchases. In fact, this yesterday we had to for a sewer issue that it's probably going to be somewhere in the neighborhood of 50,000 to $100,000 So what we'll do is per the existing policy, Alex will mention that to the council as a matter of report at the upcoming council meeting.

All right.

Any other questions? Alderman Lemke.

When it comes to competitive bidding, do we have a policy that that makes the bid requirements so stringent that it really isn't a competitive bid? In other words, we want a Ford Explorer with power windows, power locks, this, this, this, this, then only the Ford Ford dealers can bid on it and not the Chevrolet dealer who has something comparable. I mean, it it it seems to be a way of we want a John Deere tractor rather than a Simplicity tractor. Simplicity is out of business, but I'm using it as an example. Yeah.

I know that most of those purchases are approved in, for example, our CIP budget. But do we have a policy so that you can structure the bid so that there really isn't any competitive bidding? That's my only question.

I would say no. RFPs are put together by what the project needs are and the scope of that work. Now, are there times where because of the work you're looking for, there's only one, two, or three firms that could bid on it because it's really specialty services? There's probably circumstances like that. But, yeah, I don't I don't think that we necessarily go out of our way to be what I would say is anti competitive. And it looks like mister Running has some thoughts as well. Well,

Rick, what you're saying here, there's no doubt that it occurs from time to time that where you really want a particular item, what you do is you create the specifications so that only that item will meet it, you know. And there's usually a justifiable reason for that because as we all know, you get what you pay for. And we've made purchases that we regretted that were the they went to the lowest responsible bidder but in 2020 hindsight, thought, oh boy, that was a mistake. And the reason it's a mistake is because it ends up being not a good deal for the tax payers because we end up spending money to correct the problem or whatever. So if experience tells us that yes, there's a cheaper one but this is really the one that you want all things considered, and with an eye towards maximizing value for tax payers, then yeah, specify exactly what you need so that only that particular item meets those specifications.

It's still being competitively bid, but you're narrowing the scope of it. Let's put it that way.

I haven't found that that's the case. I just wanted to know if most of that is handled in the RF in the CIP when we go through the garage. And we say and they and they say why they want this particular truck because it matches the standards of the garage and the mechanics and they're all working on the same type of vehicle. So so I'm okay with that because it it does go through, but I just wanted to make sure if if there was something

Yeah.

You know, when we're when bidding these out that we're we're being pretty reasonable in our requests.

I think you hit the nail on the head there. In the end, the key thing budget is still being complied with. Mhmm. You it's it's on the common council to do that careful analysis and decide what's needed, what should be spent and as long as the the budget is still met then that's really the key.

Very good. Anything else for staff this evening? Alright. Well I'm pretty excited to make a motion and recommend to council the revised financial policy f F dash six point zero purchasing and bidding as presented. Is there a second? Second by Oh, and I will say that with amendments discussed this evening. Yep. Thank you Rick. So we have a second by Aldeperson Halvind Slavin. Any further discussion? Alright, we'll do a voice vote. All those in favor sign aye. Aye. Anyone opposed? Alright, that item passes unanimously. Folks, thank you very much for all the work on this. Appreciate it.

Thank you.

Communications, Tony, Joe.

The only thing that I wanted to note is in two weeks we have our first budget meeting. The show and tell for capital items already been referenced tonight. So hope that anybody here obviously shows up as well as anybody any members of the public and you'll see a lot of department directors there as well. So that's

August 26, 06:00 at the City Garage on Century Drive. The best meeting of the year in my humble opinion.

And my birthday.

Happy birthday. Happy birthday. Alright. Alderman Lundke's notice that he will be on vacation for that meeting but Rick it will be taped so you can catch up. Thank you. Any further communications gentlemen? Any referrals from the committee? Any objections to adjourning? Seeing none, are adjourned. Thank you folks.

Thank you.