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HomeMy WebLinkAboutPacket - 06/04/2018 - Finance and Personnel Committee (2)M6 RT O MV20 Finance and Personnel Committee June 4, 2018 5:30 PM McHenry Municipal Center- Police Training Room 333 S Green Street McHenry, IL 60050 AGENDA 1. Call to Order. 2. Roll Call. 3. Public Comment: Persons wishing to address the Committee will be asked to identify themselves for the record and will be asked but are not required to provide their address. Public comment may be restricted to three -minutes for each individual speaker. Order and decorum shall be maintained at public meetings. 4. Motion to approve the May 7, 2018 Finance and Personnel Committee meeting report. 5. Consideration of an update regarding Purchasing Policy and Procedures. 6. Staff Reports. 7. Any Other Business. 8. Motion to adjourn the meeting. Next special meeting is scheduled for July 10, 2018 The City of McHenry is dedicated to providing its ci/izens, businesses, and visitors with the highest quality of progra►ns and services in acustomer-oriented, efficient, and fiscally respo►rsible manner. FINANCE AND PERSONNEL COMMITTEE Monday, May 7, 2018 Municipal Center Classroom, 5:30 PM 1. Call to Order: The meeting was called to order at 5:30 pm. 2. Roll Call: Chairman Alderman Curry, Alderman Schaefer, and Alderman Mihevc. Also in attendance Director of Finance Lynch, Director of Public Works Schmitt, Project Engineer Strange, Director of Economic Development Martin, and Deputy Clerk Meadows. 3. Public Comment: None. 4. Motion to approve the April 2, 2018 Finance and Personnel Committee meeting report. A Motion was made by Alderman Schaefer, seconded by Alderman Mihevc to approve the meeting report as presented. Roll call: Vote: 3-ayes: Alderman Schaefer, Alderman Mihevc, Alderman Curry. O--nays, 0-abstained. Motion carried. 5. Review, discussion and consideration of a Revolving Loan Fund application for the amount of $24,530.00 submitted by Love Bugs Day Care located at 2214 Route 120, and motion to place this item on the next available City Council meeting agenda. Director Martin provided the Committee Members with an overview regarding the Revolving Loan Fund application from Love Bugs, LLC. He reported Love Bugs, LLC is requesting funds to update the existing rental space including electrical, plumbing, painting, equipment, signage as well as employee training. Director Martin went on to report, that Staff has been working with Bill Busse from First National Bank of McHenry, who conducted the underwriting services for the proposed application. The analysis has been completed by Mr. Busse and been emailed to the committee due to the fact that some of the information contained in the report is confidential. Director Martin reported that Mr. Busse has recommended approval of the loan application at the current prime rate of 4.75%. Director Martin stated that the Revolving Loan Fund Committee is being asked to consider the application submitted by Love Bugs, LLC for Revolving Loan funding the improvements and employee training at 2214 W. Illinois Route 120, Should the Committee choose to award the funding. Staff is recommending a loan in the amount of $24,530, along with the following conditions: • A blanket security interest in the business assets (equipment, inventory, accounts, receivable, intangibles, ect.) of Love Bugs, LLC; • An unconditional personal guarantee by Jacqueline Jezierski of the amount borrowed; • A requirement for submittal of a personal financial statement & business financial statements from Love Bugs; LLC after the close of each fiscal year beginning in FY2018; Finance and Personnel Committee Page 2 May 7, 2018 • Loan to be repayable monthly over a five year term; 4.75% fixed rate (current prime) with no prepayment penalty; • City to buy back (we would assign) loan kby debit offset to demand deposit account) should payments become more than 60 days delinquent; • Request is subject to full City Council approval; • Loan documents must be fully executed within 30 days of City Council approval. The Committee Members discussed in length the risk associated with the approval of the loan application. In addition, they commented on the cost associated with complying with the Illinois Department of Children and Family Service's regulations. Director Martin reported that Love Bugs, LLC currently receives State subsidies. The Committee Members questioned how frequently and timely does the State pay the subsidies due to Love Bugs, LLC. The Committee Members discussed increasing the interest rate to offset some of the risk. The Committee Members concurred that the rate should be 1 % over prime. A Motion was made by Alderman Schaefer and seconded by Alderman Mihevc to approve the Love Bugs, LLC Revolving Loan Fund application with conditions as noted. Roll call: Vote: 3-ayes: Alderman Curry, Alderman Schaefer and Alderman Mihevc. 0-nays, 0-abstained. Motion carried. This matter will be placed on an upcoming Council Meeting agenda. Discussion on procedures for Project Change Orders The Committee Members along with Staff discussed the current project change order procedures. Staff noted that there currently is no policy in place with respect to change orders. Director Schmitt noted that in his opinion if each change order had to be approved by the Administrator and Council the City would experience delays with respect to improvement and construction projects. A lengthy discussion ensued with respect to reasonable change order approval limits. Staff suggested the Committee Members consider amending the purchase policy to include a "Change Order" section that authorizes Staff to approve changes orders that are less than 10% of the original contracts previously approved by the City Council and any other change orders of more than 10% of the original contract price would require prior approval of the City Administrator along with the consent of the City Council. Finance Director Lynch will draft language reflecting the discussion and bring the amended Purchasing Policy back for Committee review. Staff Reports Staff Members offered no reports at this time. Any other Business There were no additional topics discussed. Finance and Personnel Committee Page 3 May 7, 2018 Motion to adjourn the meeting A Motion was made by Alderman Mihevc and seconded by Alderman Schaefer to adiourn from the public meetinst at 6:48 p.m. Roll call: Vote: 3-ayes by unanimous voice vote.0-nays, 0-abstained. Motion carried. Reviewed and approved this day of 2018 Alderman Scott Curry, Chairman City of McHenry 333 Green Street McHenry, Illinois 60050 Phone: (815) 363-2100 Fax: (815) 363-2119 www.ci.mchenry.il.us FINANCE AND PERSONNEL COMMITTEE SUPPLEMENT TO: Chairman Curry Members of the Finance and Personnel Committee FOR: June 4, 2018 Finance and Personal Committee FROM: Carolyn Lynch, Finance Director Jon Schmitt, Director of Public Works RE: Consideration of an updated Purchasing Policy and Procedures ATT: 1. Purchasing Policy Approved 8/15/16 with Amendments AGENDA ITEM SUMMARY: The Finance and Personnel Committee is being asked to consider an amendment to the purchasing policy to include change order procedures. BACKGROUND: The existing City of McHenry Purchasing Policy and Procedures Manual, upon Council approval, became effective August 15, 2016 and did not include a policy on change orders. At the Finance and Personnel Meeting on May 7, 2018 a discussion ensued on how the best way to handle change orders to contracts that are approved by the City Council. ANALYSIS: Staff researched purchasing policies at other municipalities and took into consideration discussions at the meeting and drafted the attached revised Purchasing Policy for the Committees review. A change order section was added stating that any change orders made to original contracts approved by the City Council of more than 10% of the original contract price will require the prior approval of the City Administrator and the City Council. RECOMMENDATION: Therefore, if the Finance and Personnel Committee concurs, it is recommended that a motion be made to forward the revised Purchasing Policy and Procedures be forwarded to the City Council for consideration. CITY Or MCHENRY PURCHASING POLICY AND PROCEDURES General RUles, Regulations and Ethics • Purchasing activities for the City of McHenry shall be in accordance with this Purchasing Policy, City Ordinances and applicable Statues of the State of Illinois. • Items procured will represent the maximum economical benefit for each dollar spent. • Procurement shall be made of commodities and services of high quality and continued availability. • Whenever possible, purchases shall be based on obtaining cost comparisons, quotations or competitive bids. In the case that it is not possible to obtain cost comparisons, quotations or competitive bids, this will be identified in the approval and review process. • Purchases shall be based on obtaining better knowledge of methods and of commodities required to operate cost effectively. • Local participation will be encouraged in the procurement process. • Consideration should be given to participate in cooperative purchasing efforts with other local government entities and in the State of Illinois Joint Purchasing Program whenever possible. • All personnel involved in the purchasing process shall conduct themselves with fairness and impartiality, and demand the same of all vendors. • Negotiations and discussions involving purchasing shall be conducted incompliance with the Code of Ethics and Rules of Conduct in the City's Personnel Handbook. • The purchasing process will promote professionalism and be committed to the efficiencies of centralized purchasing. Approval Requirements & Delegations of Authority • The purpose of this procedure is to outline the required approvals for all purchase commitments and transactions, and secondly, to define City personnel by classification who are authorized to initiate purchases at various monetary levels for materials, equipment, supplies and services. • All designated personnel shall obtain the required approvals) prior to final commitment. If one or more person's approval is required who is not available, the approval must be obtained from the next highest level of authority of approval level. • Prior to approval for payment by the City Council, Department Directors and the City Administrator must approve all purchase invoices for those transactions and commitments of authorized supervisors and employees. • The following table establishes the required levels of approval based on the dollar amount of the purchase: Authorized Employees City Mayor and Amount & Department Administrator Mayor or City City Directors or Finance Administrator Supervisors/Managers Council Director $750 or less X X X $751 to X X $3,500 $3,501 to X $6,500 $6,501 to X $10,000 More than X $10,000 • The following table lists those position classifications authorized to initiate purchases in relationship to the prescribed dollar amounts (from above). Those position classifications not shown below are strictly prohibited from purchasing unless otherwise authorized by the City Administrator or Finance Director. Dollar Amounts Authorized Position(s) More than $10,000 Mayor and City Council in accordance with "Budgeted Items — Cost Comparisons, Quotations and Competitive Bidding" section of this policy* $6,501- $10,000 Budgeted Items with the authorization of the Mayor or City Administrator in accordance with "Budgeted Items — Cost Comparisons, Quotations and Competitive Bidding" section of this policy* $3,501- $6,500 Budgeted Items with authorization of the Finance Director or City Administrator in accordance with "Budgeted Items — Cost Comparisons, Quotations and Competitive Bidding" section of this policy* $751 - $3,500 Budgeted Items with authorization of the Department Director in accordance with "Budgeted Items — Cost Comparisons, Quotations and Competitive Bidding" section of this policy* $750 or less Budgeted Items by Employees authorized by their immediate Superintendent, Manager, or Department Director in accordance with "Budgeted Items — Cost Comparisons, Quotations and Competitive Bidding" section of this policy* * For items not identified as "Budgeted Items", budget amendment requests will be brought before the City Council for consideration/approval for items over $6,500 unless the action is considered emergency in nature. Should this be the case, Council will be notified of the purchase/acquisition and the item will be presented for approval at the next regular meeting of the City Council. • Definitions of authorized positions: Authorized Dollar Authorized Position Amount $750 or less Authorized Employees: (must have prior approval of their immediate Supervisor, Manager, or Department Director) • Executive Assistant/Deputy City Clerk • Administrative Assistants (all departments) • Public Works Maintenance Worker • Public Works Operator • Public Works Mechanic • Parks & Recreation Maintenance Worker • Public Works Project Engineer • Community Development Plumbing Inspector • Community Development Code Enforcement Officer • Community Development Permit Technician Supervisors/Managers: • Public Works Water Division Superintendent • Public Works Wastewater Division Superintendent • Public Works Street Division Superintendent • Public Works Wastewater Division Assistant Superintendent • Public Works Utility Division Superintendent • Public Works Forestry Division Superintendent • Community Development Superintendent of Residential Inspections • Community Development Superintendent of Commercial Inspections • Parks & Recreation Parks Division Superintendent • Parks & Recreation Parks Division Assistant Superintendent • Parks & Recreation Recreation Center Manager • Recreation Superintendent of Programs • Recreation Superintendent of Athletics & Aquatics • Police Deputy Chief • Police Commander of Operations • Police Commander of Support Services • Police Sergeants • Police Dispatch Supervisor • Information Technology Manager $751 - $3,500 Department Directors • Deputy City Administrator/Director of Parks & Recreation • Director of Economic Development • Director of Community Development • Director of Finance • Director of Public Works • Chief of Police $3,501- $6,500 City Administrator or Finance Director $6,501- $10,000 Mayor or City Administrator More than $10,000 Mayor and City Council Budgeted Items —Cost Comparison, quotations and Competitive Bidding • For budgeted items under $6,500 authorized positions shall obtain, where possible, three (3) cost comparisons prior to the purchase of goods and/or services. • For budgeted items between $6,501 and $10,000 authorized positions shall obtain, where possible, three (3) cost comparisons or three (3) written quotations prior to the purchase of goods and/or services. • For budgeted items over $10,000, but less than $20,000, staff shall obtain, where possible, three (3) written quotations for the purchase of goods and/or services for consideration and approval by the City Council. • For budgeted items over $20,000, the purchase of goods and/or services shall follow a formal competitive bidding process whereby staff develops bid specifications, Council approves a request to advertise for bids, bids are received and evaluated, and a recommendation is forwarded to the City Council for award/approval. Change Orders to Existing Purchase Orders and Contracts • After a purchase order is completed, it may become necessary to change it to include additional quantities, or other unforeseen circumstances not known when the purchase order was originated. When this occurs, the employee who completed the original requisition will process another requisition requiring the same approvals detailed above. • Any change orders made to original contracts approved by the City Council of more than 107o of the original contract price will require the prior approval of the City Administrator and the Council.