Castlegar council expected to consider fivefold increase in purchasing threshold

Castlegar council is expected to consider a procurement policy Sept. 8 that would allow senior administrators to approve budgeted purchases worth up to $250,000.

Boundary Sentinel file photo

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Castlegar council is expected to consider a new procurement policy Sept. 8 that would allow senior administrators to approve budgeted purchases worth up to $250,000 without returning to council for a separate vote.

The proposed limit is five times the $50,000 threshold in the city’s current financial administration and procurement policy.

The Committee of the Whole reviewed the proposed Procurement Policy 3-1 on Aug. 10 and recommended that it move forward. The city subsequently said the recommendation would return for consideration at the Sept. 8 regular council meeting.

City staff say the changes would reduce delays involving purchases already authorized through the financial plan. The existing policy, last amended in 2017, requires council to approve every purchase exceeding $50,000 before the city issues a purchase order or enters into a contract, including expenditures previously approved through the annual budget.

Under the proposed policy, council’s approval of the financial plan would provide conditional authorization for staff to proceed with purchases included in the plan.

The chief administrative officer, director of finance and technology or corporate officer could authorize purchases from $75,001 to $250,000. City directors would have authority for purchases up to $75,000.

Council would continue to approve all awards exceeding $250,000, along with unbudgeted purchases and expenditures that exceed the delegated budget authorities.

For purchases subject to the standard procurement process, goods and services valued from $25,001 to $75,000 would require formal written quotations or bids. The same requirement would apply to construction contracts from $25,001 to $200,000, while higher-value contracts would generally proceed through public competition.

The draft contains an inconsistency at one boundary in the competition table. One goods-and-services category ends at $75,000, while the public-competition category is labelled “Over $75,001,” leaving the treatment of a purchase worth exactly $75,001 unclear.

The policy would continue to permit direct awards in specified circumstances. Direct awards above $75,000 for goods or services and above $200,000 for construction would require council approval. The city would also issue a notice of intent before making direct awards above those amounts.

The chief administrative officer or finance director could authorize a limited budget overrun when money is available from an approved funding source. The authority would apply when the overrun is no more than 10 per cent of the overall budget or $10,000, whichever is greater. Larger overruns would return to council.

Contract values would be calculated over the full anticipated commitment, including optional renewal periods and excluding GST. Purchases could not be divided into smaller contracts to avoid approval limits or competition requirements.

The draft attached to the Aug. 10 agenda calls for council to receive reports twice a year on awards between $75,000 and $250,000. The city’s subsequent council highlights say council directed staff to provide those reports quarterly. A revised policy incorporating that direction had not been published as of Sept. 2.

Castlegar’s current procurement policy took effect in 1986 and has been amended several times. According to the staff report, the city began working with procurement specialists in 2022 to modernize its purchasing authority and meet current procurement obligations.

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