HomeMy WebLinkAboutPACKET Town Board Study Session 2016-01-26
Tuesday, January 26, 2016
TOWN BOARD 4:30 p.m. – 6:40 p.m.
STUDY SESSION Rooms 202/203
4:30 p.m. Fund Balance Policy.
(Finance Officer McFarland)
5:00 p.m. Purchasing Policy.
(Finance Officer McFarland)
5:30 p.m. Dinner Served.
5:45 p.m. Building Code Local Amendments for Vacation Rentals with
Occupancy Over Eight (8).
(Chief Building Official Birchfield)
6:15 p.m. Trustee & Administrator Comments & Questions.
6:25 p.m. Future Study Session Agenda Items.
(Board Discussion)
6:40 p.m. Adjourn for Town Board Meeting.
“Informal discussion among Trustees concerning agenda items or other Town matters may occur before this
meeting at approximately 4:15 p.m.”
AGENDA
FINANCE DEPARTMENT
Memo
To: Honorable Mayor Pinkham
Board of Trustees
Town Administrator Lancaster
From: Steve McFarland, Finance Officer
Date: January 26, 2016
RE: Fund Balance Policy
Objective:
To familiarize Board with the Fund Balance policy with the intent of adopting the Draft
Policy at a future Board meeting.
Present Situation:
The attached Draft Fund Balance Policy attempts to clarify fund balance policy for each
Town Fund. Staff will discuss the highlights of the attached Draft Policy. Special attention
will be given to the yellowed portions of the document, where Board feedback is
encouraged. This is the portion of the document that discusses specific Fund balance
recommendations.
Proposal:
Staff requests input from the Town Board for the purpose of establishing a set policy for
fund balances within each Fund type. The resulting document would be adopted at a
future Board session.
Advantages:
Established fund balance thresholds within Funds will help the Town during creation of
Budget documents, and will also provide long-term financial continuity/stability. A Fund
Balance Policy would allow fund balance targets to drive the Budget process and other
financial decisions, rather than vice versa.
Disadvantages:
Without set guidelines, trending and prevailing events will continue to affect Fund
balances. Lack of set policy will allow for interpretation/opinion as to what level Funds
may be spent.
Action Recommended:
Acknowledgement that the Fund Balance Policy will be delivered to Town Board for
adoption at a future Town Board session.
Attachments:
Fund Balance Policy
Document Title Draft 1 1/22/16
Revisions: 0 Town of Estes Park, Finance Page 1 of 8
Effective Period:
Review Schedule:
Effective Date:
References:
FINANCE
6XX
Fund Balance Policy
1. PURPOSE
The purpose of this policy is to establish appropriate levels of reserves (fund balance) for
each fund within the Town’s operations, recognizing the unique needs and differing
situations for the various funds.
2. POLICY
1. Definitions:
a. Fund balance is the net position of a governmental fund (difference between
assets, liabilities, deferred outflows of resources, and deferred inflows of
resources), 2012 GAAFR, p1066. Fund balance is the cumulative
difference over time of all revenues and expenditures. Fund balance is
accumulated when revenues exceed expenditures and decreased when
revenues are less than expenditures. It serves as a measure of financial
resources available for current operations. Available fund balance can be
dramatically affected by levels of restriction on a fund (see Supplementary
Information section of policy).
b. Fund balance percentage is defined as “unassigned fund balance divided
by total expenditures”. TABOR reserves may be used as part of the
calculation (added to numerator).
2. Specific Fund Balance policies
a. Governmental Fund Types
i. General Fund – Town Board has established that fund balance
percentage should not fall below 20%. This provides a minimum of
3% as the Tabor reserve and 17% for economic downturns and other
financial emergencies that may result from unanticipated disasters.
General Fund fund balance percentage can be dramatically affected
by timing resulting from grant-related incomes and expenditures.
Grant income/expenditures may be taken into account when
internally calculating fund balance percentage.
ii. Capital Fund (Community Reinvestment) – In general, no minimum
reserve requirement. Funds can be spent to zero balance annually.
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Revisions: 0 Town of Estes Park, Finance Page 2 of 8
Fund balance should never be less than the total of funds collected,
but not yet spent, that are restricted for a specific purpose (bond
proceeds, grants, donations).
iii. Special Revenue Funds (Conservation Trust, Open Space,
Emergency Response, Community Center, Trails, Streets) – In
general, no minimum reserve requirement. Funds can be spent to a
zero balance annually. Fund balance should never be less than the
total of funds collected, but not yet spent, that are restricted for a
specific purpose.
b. Proprietary Fund Types – Enterprise
i. Light and Power Fund –
1. The L&P Fund has bond reserve requirements (restricted
funds) of 1.25 ((total revenues – total expenditures + capital +
future vehicle replacement + capital-related engineering
costs)/debt service). The Town also seeks to maintain a self-
imposed 90-day operating coverage ratio of > 1.00, as defined
by ((fund balance / ((total expenditures – capital – future
vehicle replacement – capital-related engineering costs) x
.25).
2. The L&P Fund seeks to maintain and replace its
infrastructure, through rate studies/implementation, at a pace
that at least matches asset depreciation rates.
ii. Water Fund –
1. The Water Fund has operations and maintenance (O&M)
requirements (restricted funds) as defined by the Water Loan
covenants. The Town also seeks to maintain a self-imposed
debt coverage ratio of 1.10 (same definition as in L&P Fund).
2. The Water Fund seeks to maintain and replace its
infrastructure, through rate studies/implementation, at a pace
that at least matches asset depreciation rates.
c. Proprietary Fund Types – Internal Service
i. Medical Insurance Fund – This fund is designed to cover premiums,
claims and other operating expenses related to the Town’s self-
funded plan to provide employees medical and dental insurance.
Employees and user departments are charged appropriately to cover
these costs. Reserves shall be maintained at between 30%-40% of
the 3-year rolling average of annual claims.
ii. Fleet Fund – This fund is designed to provide for ongoing
maintenance and repair of the Town (and other contracted) fleet of
vehicles. The fund is designed to cover its operating and capital
costs annually through charges for services to the user departments.
Due to potential fluctuations in operating costs for fuel and
unexpected repairs, etc., the Fleet Fund shall maintain an operating
reserve of at least 10%. The Fleet Fund should also maintain a
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capital replacement program commensurate with the rate of
depreciation within the Fund.
iii. IT Fund – The IT fund is designed to provide ongoing upgrades and
maintenance to the Town’s IT infrastructure and operating systems.
The fund is designed to cover its operating and capital costs annually
through charges for services to the user departments. Reserves
shall be maintained between $100,000-$200,000 to allow for
emergencies or unanticipated technology needs. Additional funds
may be reserved in recognition of reserved/restricted broadband
monies received. The IT Fund should also maintain a capital
replacement program commensurate with the estimated
replacement costs of existing equipment.
iv. Vehicle Replacement Fund – This fund is designed to provide
replacement vehicles to appropriate user departments. Funds are
accumulated at depreciation rates equal to 3% per yr / 25%
maximum for life of vehicle, of purchase price of the vehicle.
Reserves will fluctuate based on the replacement schedule, but the
unrestricted reserve balance should maintain a balance of at least
15% of the fleet replacement value.
d. Fiduciary Fund (Theater Fund) – These funds are held by the Town in a
fiduciary capacity and are available for the purpose of the construction of a
performing arts facility.
Supplementary information:
3. Fund Balance Classifications: The appropriate fund balance classifications
shall be included in each governmental fund as necessary or required by GAAP.
In the CAFR, all governmental funds report various fund classifications that
comprise a hierarchy primarily based on the extent to which the Town is bound to
honor constraints on the specific purposes for which amounts in those funds can
be spent. The Town may or may not report all fund balance types in any given
reporting period, based on actual circumstances and activity. It is not expected or
required that all funds report all possible fund balance classifications. Provisions
of GASB 54 need not be applied to immaterial items. Policy cannot consider every
situation that could occur; therefore, the Finance Director or designee shall have
discretion to deviate should circumstances warrant. However, the following
descriptions are a guideline of what can be expected to be appropriate in each
fund balance classification. The categories within each classification will be
reported in alphabetical order and not listed in any other order of significance.
a. Non-spendable Fund Balance – The portion of fund balance that cannot be
spent because it is either not in a spendable form (not expected to be
converted to cash) or is legally or contractually required to be maintained
Document Title Draft 1 1/22/16
Revisions: 0 Town of Estes Park, Finance Page 4 of 8
intact (corpus or principal of a permanent fund). Non-spendable amounts
should not be reported in a fund if the proceeds from the collection,
conversion or sale of the asset are restricted, committed, or assigned. In
such a situation, they should be included in the appropriate fund balance
classification (restricted, committed or assigned) rather than as non-
spendable.
i. Advances to Other Town Funds – The amount any Town fund owes
the General Fund since the payments back to the General Fund will
be available for immediate appropriation by the Board for any
purpose.
ii. Inventories – The value of inventories that are not expected to be
converted into cash.
iii. Long-term Receivables – Long-term receivables for loans and notes,
if not setup with an offsetting liability.
iv. Prepaid Items – The value of prepaid assets.
v. Property Acquired for Resale – The value of property acquired for
resale.
b. Restricted Fund Balance – The portion of fund balance constrained for a
specific purpose by external parties (creditors-debt covenants, grantors,
contributors, or laws and regulations of other governments), constitutional
provisions, or enabling legislation. Effectively, restrictions on fund balance
may only be changed or lifted with the consent of the resource providers.
i. Capital Projects – Any amounts restricted by federal, state, or local
governments or by enabling legislation for capital projects.
ii. Citizen Initiatives – Any amounts restricted by citizens through
enabling legislation.
iii. Debt Service – Any amounts required to be held according to creditor
requirements.
iv. Intergovernmental Agreements - Unspent intergovernmental
grant/allocation/contract funding that must be used for specific
programs as stipulated by the agreement. This includes any
matching funds needed to spend the funds. If a deferred revenue
amount has been recorded for any unearned revenue, this would
result in no fund balance to report.
v. Legislative Restrictions – Any amounts restricted by federal, state, or
local governments or by enabling legislation other than citizen
initiatives or restrictions for capital projects.
vi. TABOR Reserves – As set forth in the Town’s Budget Preparation
and Management Policies 180.1D, Section III (reference B),
Amendment One to the state constitution (Article X, Section 20
Taxpayer’s Bill of Rights), passed by voters in 1992, requires that
reserves equal to 3% of the fiscal year spending be established for
declared emergencies.
Document Title Draft 1 1/22/16
Revisions: 0 Town of Estes Park, Finance Page 5 of 8
c. Committed Fund Balance – The portion of fund balance that can only be
used for specific purposes according to limitations imposed by the Town
Board by majority vote at a public meeting prior to the end of the fiscal year.
The Board’s commitment will therefore constitute “committed funds,” a
designation which will follow the funds even when transferred to another
special revenue fund. If the actual amount of the commitment is not
available by the end of the fiscal year, the actual amount should be
calculated as soon as information is available but no later than March 1st of
the subsequent year. The constraint may be removed or changed only by
the same formal action of the Town Board. The restricted or committed
proceeds of specific revenue sources should be expected to continue to
comprise a substantial portion of the inflows reported in the fund. Other
resources (eg. investment earnings, transfers in) also may be reported in
the fund if those resources are restricted, committed, or assigned to the
specified purpose of the fund. The Town should discontinue reporting a
special revenue fund, and instead report the fund’s remaining resources in
the General Fund, if the Town no longer expects that a substantial portion
of the inflows will derive from restricted or committed revenue sources.
i. Capital Projects - Any unspent funds for a Board approved ongoing
capital project that remain at fiscal year-end. This does not
necessarily mean the assets will be capitalized.
ii. Other Commitments – Any other funds approved by the Board using
fund balance reserves. These will be reported by functions: general
government, health and human services, judicial and public safety,
recreation, or streets and highways.
d. Assigned Fund Balance – The portion of fund balance set aside for planned
or intended actions. The intended use may be expressed by the Board of
Town Trustees or other individuals delegated by the Board (Town Manager,
Budget Manager, or Financial Services Director) to assign funds to be used
for a specific purpose. Fund balance may be assigned after the end of the
reporting period any time prior to March 1st of the subsequent year. In
governmental funds other than the general fund, assigned fund balance
represents the amount that is not non-spendable, restricted, or committed.
This indicates that resources in these funds are, at a minimum, intended to
be used for the purpose of that fund. Assigned funds cannot cause a deficit
in the unassigned fund balance.
i. Advances to Other Town Funds – The amount any Town fund owes
another Town fund besides the General Fund for an advance.
Advances to other Town funds should be reported as Assigned since
the payments back to those funds will be used for the purpose of that
fund.
ii. Capital Projects – The estimated cost of planned or desired, but not
approved, specific projects as requested by the Board of Town
Document Title Draft 1 1/22/16
Revisions: 0 Town of Estes Park, Finance Page 6 of 8
Trustees or other authorized individuals. This does not necessarily
mean the assets will be capitalized
iii. Subsequent Year Expenditures – Appropriation of existing fund
balance to eliminate a projected budgetary deficit in the subsequent
year’s budget. This includes any carry-over funds which are
intended to be used for a specific purpose.
iv. The adopted budget resolution generally authorizes a government to
spend budgeted revenues and other financing sources and,
therefore, does not impose constraints on the use of existing
resources. However, if a portion of existing fund balance is included
as a budgetary resource in the subsequent year’s budget to eliminate
a projected excess of expected expenditures over expected
revenues, then that portion of fund balance (in an amount no greater
than is necessary to eliminate the excess) should be classified as
assigned. The amount should not be classified as committed
because the Board of Town Trustees does not have to take formal
action to remove or modify that specific use – the purpose of the
assignment expires with the appropriation.
e. Unassigned Fund Balance – This is the residual portion of General Fund
balance that does not meet any of the above criteria. It represents
resources available for immediate appropriation by the Board for any
purpose. The Town will only report a positive unassigned fund balance in
the General Fund. Although there is generally no set spending plan for the
unassigned portion, there is a need to maintain a certain funding level to
cover unexpected expenditures and revenue shortfalls. In other funds, the
unassigned classification should be used only to report a deficit balance.
4. Order of Fund Balance Use - When multiple categories of fund balance are
available for expenditure, the Town will start with the most restricted category and
spend those funds first before moving down to the next category with available
funds. Therefore, fund balance is generally depleted in the order of restricted,
committed, assigned, and unassigned. For example, if a construction project was
being funded by bond proceeds and assigned fund balance, the Town would first
use the bond proceeds to pay expenditures since use of bond proceeds is more
restrictive than use of assigned fund balance. One exception is if the restricted
funds have legal requirements that disallow it being spent first.
Document Title Draft 1 1/22/16
Revisions: 0 Town of Estes Park, Finance Page 7 of 8
3. PROCEDURE
Funds are reviewed annually for policy compliance following production of the CAFR.
Fund balance policy compliance is a required component of the annual Budget process.
_____________________________
Bill Pinkham, Mayor
_____________
Date
Document Title Draft 1 1/22/16
Revisions: 0 Town of Estes Park, Finance Page 8 of 8
APPENDIX 1 - FORMS
a. Form 1
FUND BALANCE POLICYSTEVE MCFARLAND – FINANCE OFFICER
GOALS•Identify reasonable fund balance and fund balance % goals for each Fund/Fund Type.
GENERAL FUND WALK THROUGH(page 31 –2016 BUDGET book)2014 + Beginning Fund Balance $4,695,303 Revenue 13,420,749 Transfers in 1,706,891 +Total Revenues $15,127,640 Expenditures 12,558,760 Transfers out 2,965,000 ‐Total Expenditures $15,523,760 Net increase/decrease (396,120)=Total Ending Fund Balance $4,299,183
GENERAL FUND WALK THROUGH(page 31 –2016 BUDGET book)GASB 54 Implementation2014 + Beginning Fund Balance $4,695,303 Revenue 13,420,749 Transfers in 1,706,891 +Total Revenues $15,127,640 Expenditures 12,558,760 Transfers out 2,965,000 ‐Total Expenditures $15,523,760 Net increase/decrease (396,120)=Total Ending Fund Balance $4,299,183 ‐Restricted (TABOR) (443,437)‐Nonspendable (Prepaid) (103,454)‐Assigned (Next yr Bdgt deficit) (715,775)= Unrestricted, unassigned FB $3,036,517
GENERAL FUND WALK THROUGH(page 31 –2016 BUDGET book)GASB 54 Implementation, Fund Balance and Fund Balance %2014 Beginning Fund Balance $4,695,303 Revenue 13,420,749 Transfers in 1,706,891 Total Revenues $15,127,640 Expenditures 12,558,760 Transfers out 2,965,000 Total Expenditures$15,523,760 Net increase/decrease (396,120)Total Ending Fund Balance$4,299,183 28%Restricted (TABOR) (443,437)Nonspendable (Prepaid) (103,454)Assigned (Next yr Bdgt deficit) (715,775)Unrestricted, unassigned FB$3,036,517 20%
GENERAL FUND WALK THROUGH(page 31 –2016 BUDGET book)GASB 54 Implementation, Fund Balance and Fund Balance %Addback TABOR2014 + Beginning Fund Balance $4,695,303 Revenue 13,420,749 Transfers in 1,706,891 +Total Revenues $15,127,640 Expenditures 12,558,760 Transfers out 2,965,000 ‐Total Expenditures $15,523,760 Net increase/decrease (396,120)=Total Ending Fund Balance $4,299,183 28%‐Restricted (TABOR) (443,437)‐Nonspendable (Prepaid) (103,454)‐Assigned (Next yr Bdgt deficit) (715,775)=Unrestricted, unassigned FB $3,036,517 20%Addback TABOR 3,479,954 22%
GENERAL FUND WALK THROUGH(page 31 –2016 BUDGET book)GASB 54 Implementation, Fund Balance and Fund Balance %Addback TABORNo FloodRevised Rev/Exp Budget2014 2015 2015 2016 Beginning Fund Balance $4,695,303 $4,299,183 $4,299,183 $3,982,241 Revenue 13,420,749 18,852,798 12,727,807 13,781,513 Transfers in 1,706,891 1,587,290 1,587,290 1,575,761 Total Revenues $15,127,640 $20,440,088 $14,315,097 $15,357,274 Expenditures 12,558,760 19,492,030 13,807,942 15,081,065 Transfers out 2,965,000 1,265,000 1,265,000 955,000 Total Expenditures $15,523,760 $20,757,030 $15,072,942 $16,036,065 Net increase/decrease (396,120) (316,942) (757,845) (678,791)Total Ending Fund Balance $4,299,183 28% $3,982,241 19% $3,541,338 23% $3,303,450 21%Restricted (TABOR) (443,437) (443,437) (443,437) (443,437)Nonspendable (Prepaid) (103,454) (103,454) (103,454) (103,454)Assigned (Next yr Bdgt deficit) (715,775) (678,791) (678,791) 0 Unrestricted, unassigned FB $3,036,517 20% $2,756,559 13% $2,315,656 15% $2,756,559 17%Addback TABOR 3,479,954 22% 3,199,996 15% 2,759,093 18% 3,199,996 20%
GOALS – OTHER FUNDSNAME DETAILS/TARGETSGENERAL 20% fund balanceCommunity Reinvest noneSPECIAL REVENUE noneConservation Trust, Open Space, Emergency Response, Community Center, Trails, StreetsENTERPRISELight & Power bond reserve coverage requirements (1.25x)90‐day coverage ratioreplace infrastructure (not counting large projects)Water loan reserve coverage requirements (1.10x)90‐day coverage ratioreplace infrastructure (not counting large projects)INTERNAL SERVICEMedical 30‐40% of 3‐yr avg of claims (~$400,000)Fleet 10%, capital replacementIT $100‐200k, reserves for braodband, capital replacementVehicle Replacement 15% of replacement value of FleetFIDUCIARY Maintain fund balance. Expenditures ok only within prescribed parameters
FINANCE DEPARTMENT
Memo
To: Honorable Mayor Pinkham
Board of Trustees
Town Administrator Lancaster
From: Steve McFarland, Finance Officer
Date: January 26, 2016
RE: Purchasing Policy(ies)
Objective:
The objective of the purchasing policies being brought forward are to 1) designate
spending authority and limits, and to 2) identify financial preference parameters for local
contractors.
Present Situation:
The Town currently follows the Finance Policies and Procedures Manual last officially
updated on March 22, 2011. Many aspects of the existing policy are inadequate and/or
outdated. With the recent, pronounced increase in grants for Federal and State funded
projects, the Town has been made aware of purchasing requirements that need to be
delineated in procedural manuals and sometimes in the policies themselves.
Staff is making every effort employ Policy Governance concepts to separate Board-level
policies from Administrative policies/procedural manuals. The revision of the March 2011
Finance Policies and Procedures Manual is an excellent illustration of this strategy. The
2011 version is 35 pages long. The currently proposed purchasing-related policies and
manuals are themselves over 12,000 words. It is not practical to have the Board approve
every change that may occur in these documents. Therefore, Staff has attempted to
separate the high level of directives into Board-approved policies.
The two relevant policies that rise to the Board level are attached:
1. Purchasing Policy – Spending Authority and Limits. This policy specifies levels of
spending appropriate to staff position. The policy is used in conjunction with the Draft
Finance Manual – Purchasing Procedures - Administrative (pp 9-11), and outlines types
of, and required documentation for, each level of expenditure. The Board approves
Budgets at the Fund Level (total expenditures). The Board currently then again approves
many expenditures over $30,000 (vehicles, capital), duplicating effort and taking up
Committee and Board time. The new policy does not change the Board’s fund-level
expenditure approval, but delegates pre-approved Budgeted expenditures under
$100,000 to the Town Administrator, with step down levels of authority as listed.
2. Purchasing Policy – Local Preference. The current policy allows for a 2% local preference
discount when selecting vendors. That is, local vendors (all else being equal) are
selectable when their bids are within 2% of out-of-town bids. Because this is largely a
policy more of Board – preference than of Statute or Financial Best Practice, Staff is
seeking to move this into a separate policy. A cursory review of historical bids shows that
5% may be a more material level of discount.
Proposal:
Staff requests input from the Town Board for the purpose of establishing set policies for
specific areas of the Purchasing Policies: 1) spending authority and limits, and 2) local
preference.
Advantages:
Implementation of these policies will delegate set levels of spending authority and
responsibilities throughout Staff, while allowing Town Board to maintain high levels of
authority and review of expenditures. Implementation will also provide for preference for
local contractors and vendors.
Disadvantages:
The disadvantage will be continued use of outdated and unclear (in some areas) policies.
Action Recommended:
Acknowledgement that the attached policies will be delivered to the Town Board at a
future study session.
Attachments:
Purchasing Policy – Local Preference
Purchasing Policy – Spending Authority & Limits
Finance Manual – Purchasing Policies & Procedures - Administrative
Document Title Draft 1 01/14/2016
Revisions: 0 Town of Estes Park, Finance Page 1 of 1
Effective Period: Until superceded
Review Schedule: Annually
Effective Date: 02/01/2016
References: Financial Policies Manual 6xx
FINANCE
6xx
Purchasing Policy – Local Preference
1. PURPOSE
To support local, the Town offers local vendors an advantage in public contracting.
2. POLICY
The Town of Estes Park Board of Trustees authorizes a local business (geographical) preference.
3. PROCEDURE
a. “Local” is defined as a business headquartered within the boundaries of the Light & Power
service area.
b. Quotes for purchases less than $50,000: When the quote is within 5% of the lowest quote,
Department Directors may use their discretion in deciding if the written quote should be
awarded locally.
c. Proposals and bids for purchases between $50,000 and $100,000: When the proposal or bid
price is within 5% of the lowest bid, the Town Administrator may use his/her discretion in
deciding if the expenditure should be awarded locally.
d. Proposals and bids for purchases over $100,000: When the proposal or bid price is within
5% of the lowest bid, the Town Board may use their discretion in deciding if the expenditure
should be awarded locally.
e. Federal and State grants prohibit geographical preferences. Confirm this when using grant
funds.
f. Prior project/work history with the Town will be considered.
Approved:
Mayor, Town of Estes Park
Date
Document Title Draft 1 01/14/2016
Revisions: 0 Town of Estes Park, Finance Page 1 of 3
Effective Period: Until superceded
Review Schedule: Annually
Effective Date: 02/01/2016
References: Financial Policies Manual 6xx
FINANCE
6xx
Purchasing Policy – Spending Authority & Limits
1. PURPOSE
a. Ensure that the best values for goods and services are obtained when using Town Funds.
b. Efficiently delegate spending authority/responsibilities to Town Staff so that Purpose “a” can
be achieved.
2. POLICY
The Town of Estes Park Board of Trustees authorizes the Town Administrator, Department
Directors, Managers and Supervisors with purchasing limits as set forth in this policy (Table 1).
Exceptions to spending limits include expenditures approved by the Board through the annual
budget process for insurance claims and premiums, debt obligations, utility supply payments, and
other Board approved expenditures.
3. PROCEDURE
Administrative procedural guides shall outline processes for Town purchases. These are outlined
under the Purchasing Policies, which are approved under the authority of the Town Administrator.
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Revisions: 0 Town of Estes Park, Finance Page 2 of 3
Table 1: Purchasing Authority by Title & Amounts
Department Town Job Title/Role Purchasing Limit
Admin Town Administrator $100,000
Admin Assistant Town Administrator $50,000
Admin Public Information Officer $5,000
Admin Serv Administrative Services Director $50,000
Comm Dev Community Development Director $50,000
Comm Dev Chief Building Official $5,000
Comm Serv Community Services Director $50,000
Comm Serv Visitor Services Manager $5,000
Comm Serv Events Maintenance Supervisor $5,000
Comm Serv Sales & Marketing Manager $5,000
Cultural Serv Museum Director $5,000
Cultural Serv Senior Center Manager $5,000
Finance Finance Officer $50,000
Finance Assistant Finance Officer $5,000
Police Chief of Police $50,000
Police Police Commander $30,000
Police Police Sergeant $5,000
Public Works Public Works Director $50,000
Public Works Facilities Manager $30,000
Public Works Public Work Engineering Manager $30,000
Public Works Public Works Operations Manager $30,000
Public Works Civil Engineer I (EIT) $5,000
Public Works Civil Engineer II (PE) $5,000
Public Works Fleet Supervisor $5,000
Public Works Parks Maintenance Supervisor $5,000
Public Works Streets Supervisor $5,000
Utilities Utilities Director $50,000
Utilities IT Manager $30,000
Utilities Line Superintendent $30,000
Utilities Water Superintendent $30,000
Utilities Laboratory & Water Quality Supervisor $10,000
Utilities Line Crew Chief $10,000
Utilities Water Distribution Supervisor $10,000
Utilities Water Plant Supervisor $10,000
Utilities Utilities Engineer $5,000
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Revisions: 0 Town of Estes Park, Finance Page 3 of 3
Approved:
Mayor, Town of Estes Park
Date
DRAFT DRAFT DRAFT
1
FINANCE MANUAL
6XX
Purchasing Policies & Procedures – Administrative
General Information
(Application to all purchases)
Table of contents
1. Introduction
2. Purpose
3. Initials, acronyms and definitions
4. Code of ethics
5. Responsibilities by departments
6. Purchasing procedures
Table 1 new vendor set up
7. Purchasing limits, procedures and documentation
Table 2 purchase type material, supplies, equipment and construction
Table 3 purchase type professional services
Table 4 exceptions
Table Purchasing authority & amounts by position titles (with policy)
8. Purchase orders
9. Processing invoices
10. Noncompetitive purchases
11. Cost and price reasonableness and analysis
12. Insurance and bonding
13. Blanket purchase agreements and prequalifying vendors
14. Year-end purchases
15. PERA
16. Alcoholic beverages
17. Tax exemption
18. Related Town policies and reference documents
DRAFT DRAFT DRAFT
2
Effective Period:
Review Schedule:
Effective Date:
References:
FINANCE MANUAL
6XX
Purchasing Procedures – General Information
(Application to all purchases)
1. Introduction
It is not the intent of these procedures to cover every possible situation; rather it is to give
Town employees enough information so they are in a better position to make reasonable
purchasing decisions that best serve the Town and its citizens. Purchases are associated with
risks, especially large purchases for construction, professional services, and equipment and
materials depending on their use. Town employees with purchasing authority are expected to
make decisions in the best interest of the Town and to limit risks. There are many purchases
with very low risk (office supplies and materials in small amounts and used routinely and
frequently) in which the process is as simple as obtaining an invoices that is approved and
processed. Other purchases may require significant processes to ensure full and open
competition.
Purchases and/or payments may be placed on hold if the purchasing policies are not
followed. Town employees that do not follow the Purchasing Policies may be subject to
disciplinary action.
2. Purpose
The purpose of these procedures is to provide Town employees with instructions and
guidelines on how to purchase goods and services in a responsible manner.
To ensure that the best values for goods and services are obtained when using Town funds.
To achieve this goal, the Town shall employ efficient, effective and consistent purchasing
procedures.
3. Initials, acronyms, definitions
Capital outlay (also known as Fixed Assets): Includes Personal Property and Real
Property that has a useful life greater than one year and costs $5,000.00 or more per item.
Contracts are promises enforceable by law. Required if using State funds. Written
contracts are always best in any event as it is often difficult to prove the provisions of
oral agreements. Contracts include the Town templates, vendor-generated (such as for
copier leases, utilities services, vehicle purchases and rentals). Not all purchases require a
contract. Construction and professional services require a contract; materials and supplies
may not depending on the amount. Purchase Orders (POs) are not considered contracts.
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Cost analysis – conducted to perform an opinion on the degree to which the proposed
cost, including profit, represents what the performance of the contract ‘should cost’,
assuming reasonable economy and efficiency. This is conducted when full and open
competition is not conducted and the Town must ensure that costs are fair and reasonable;
that the Town is getting the best deal possible when there was no competition. To prove
costs are fair and reasonable costs are evaluated by comparing price lists, previous
invoices, or POs for the same or similar goods or services, or costs other municipalities
paid for the same or similar goods and services. A cost analysis is conducted whenever a
price analysis cannot be performed.
Cost reasonableness – a method of evaluating that costs are fair and not out of line. This
is accomplished through a full and open competition. If a full and open competition was
not conducted then other assessments include price lists, previous invoices or POs for the
same or similar supplies or services or costs other municipalities paid for the same or
similar goods and services.
Invitation for bids (IFB) – formal solicitation process for fulfilling a need for specific
product or service; requires receiving and evaluating contractor responses, often used for
construction projects
Liquidated damages – a specific sum provided for in contracts which are agreed upon to
be a fair and reasonable estimation of actual damages which would be incurred in the
event of contractual breach by the Town or the vendor. Liquidated damages replace
actual damages when it is too difficult to determine the amount of actual damages.
Contracts that include liquidated damage clause must establish the actions or omissions
that constitute a breach.
Payment bond – bonds which assure payment to all persons supplying labor or material
for the completion of a project under a contract. A bond executed in connection with a
contract secures the payment requirements of a vendor. It is a written promise to pay if
certain circumstances occur or certain time elapses. The bond is given by a Surety to
cover any amounts that are not paid to subs or suppliers.
Performance bond – are executed subsequent to award by successful bidder to protect the
Town from loss due to bidders inability to complete the project as agreed. Secures
fulfillment of the contractual obligations and ranges from 2%-5% of the value of the
performance secured.
Purchase Order – are used to encumber funds. Are not considered contracts.
Price analysis – examination of a proposal by comparing with outside criteria such as
internal estimates, other proposals prices or established market prices and does not
evaluate separate cost elements. Conducted following a competitive. An evaluation of the
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offeror’s price relative to the prices being offered by other contractors and being paid by
the general public for the same or similar goods or services.
Request for proposals (RFP) – formal solicitation process for fulfilling a need for specific
product or service; requires receiving and evaluating contractor responses
Request for qualifications (RFQ) – formal solicitation process for fulfilling a need for
specific product or service; requires receiving and evaluating contractor responses;
focuses on qualification and price if often negotiated following selection based on
qualifications
Responsive bidder – bids are determined to be in substantial conformance with the
conditions, completion or delivery requirements
Responsible bidder – a bidder who has the capability to fully perform all contract
requirements, and has the experience, integrity, capacity, facilities, equipment and credit
assuring good faith performance. Past performance, financial capabilities and business
management are included in the criteria for determining if a bidder is capable of
satisfying the contract requirements.
Quotes – informal solicitation process for fulfilling a need for a specific product or
service; requires receiving and evaluating responses from contractors
Vendor, supplier and contractor – may be used interchangeably; the new OMB Federal
Grant Guide eliminated the term vendor and only uses contractor.
4. Code of Ethics related to purchasing
Employees with purchasing authority are held to a high degree of trust and shall be bound
to the Code of Ethics as follows:
A. Avoid the intent and appearance of unethical or compromising practice in
relationships, actions and communications.
B. Demonstrate loyalty to the Town of Estes Park by diligently following policies and
procedures while using professional judgment, reasonable care and exercising only
the authority granted.
C. Conduct all purchase activities in accordance with applicable laws and Town policies
and procedures.
D. Refrain from any private or professional activity that would create a conflict of
interest or the appearance of a conflict between personal interest and the best interest
of the Town.
E. Gifts, entertainment, or favors from present and potential contractors to Town
employees are subject to Colorado State Constitution Amendment 41.
F. Promote positive contractor relationships through impartiality.
G. Display integrity in all public and professional relationships in order to merit respect
and confidence of the Town and the public served.
H. Provide an environment where all businesses, including small and minority owned
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and operated businesses, are afforded an equal opportunity to compete.
I. Offer equal assistance to all contractors and suppliers.
J. Ensure that the contract follows what was stated in the invitation to bid or request for
proposals.
K. Do not favor certain contractors and suppliers over others without appropriate
justification.
5. Responsibilities
A. Finance and Accounting
1) Instruct employees on procurement policies and procedures
2) Instruct employees on purchase order (PO) processing
3) Provide assistance to employees making purchases
4) Maintain files, including but not limited to, POs, contracts, invoices, contractor
payment, proof of payment, and grant documentation as required
5) Maintain all grant files
6) Provide guidance on purchasing process during declared emergencies
7) Guide purchasing activities to ensure federal and state compliance
8) Monitor credit card activity as described in credit card policy
9) Template management – suggested edits to the standard clauses shall be
submitted to Finance. Finance is responsible for presenting suggested edits to the
Town attorney.
B. Administrative Services
10) Maintain official documents pertaining to purchases including but not limited to
fully executed contracts, change orders and solicitation supporting documents (bid
packet, RFP).
C. Departments (making purchases)
11) Department directors are required to ensure that employees are properly trained
on purchasing processes.
12) Plan for procurement in advance to allow for adequate time properly complete
purchasing requirements.
13) Before making purchases of goods and services, check existing inventory, current
Town vendor accounts, and existing contractors and consultants to avoid
duplication of purchases and unnecessary purchasing efforts.
14) Make every effort to ensure quotes, invitation for bids (IFB), request for
qualifications (RFQ) and request for proposals (RFP) meet the legal and ethical
standards required to protect the Town, and ensure full and open competition that
is free from bias.
15) The Town participates in the Rocky Mountain e-Purchasing online system to
advertise and manage solicitations. Using this system is required for bids and
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proposals ≥ $50,000; and employees are encouraged to use this for quotes (˂
$50,000).
16) Fully participate in the selection of contractors. The Town is responsible for the
selection of contractors and reserves the right to engage citizens in an advisory
capacity during the review of proposals and bids.
17) Facilitate proposal and bid evaluation processes to ensure compliance with this
policy and any required regulations that lead to a justifiable decision.
18) Document procurement selection processes; include reasons for the selection of
one vendor over others; reference criteria used to evaluate responders.
19) Notify contractors following evaluation process of the selection decision; issue
notice of award as appropriate.
20) Work with the Town attorney to develop, review and implement contracts as
indicated. Utilize Town templates.
21) Submit fully executed copies of contracts and change orders to Administrative
Services with solicitation support documentation for RFPs and IFBs (≥ $50,000).
22) If contracting with a vendor new to the Town, work with accounting on new
vendor set up.
23) Notify Finance in case of substitute signatory authority (i.e., department directors
on vacation).
24) Initiate the purchase order process for all purchases in accordance with this
policy. Issue appropriate purchase orders before invoices are received
25) Maintain complete and accurate purchasing files.
26) Maintain good contractor relations and address contractor and subcontractor
complaints, including protests, in a timely manner.
27) Work with contractors to ensure that invoices are sufficiently detailed and include
itemized list of goods or services (description), service or delivery date, invoice
date, PO number, location, quantities, contractor identification and contact
information.
28) Submit invoices according to the vendor check run dates which are provided to
departments from accounting annually.
29) Process and submit invoices to Finance……reference Colorado Revised Statute
6. Purchasing procedures
In accordance with the Tables 2 & 3, purchase transactions shall be conducted in a
manner providing full and open competition to be good stewards of public funds.
A. Purchases shall not be subdivided or split using multiple invoices to avoid purchasing
limits set forth in these procedures. This includes dividing orders, splitting
requirements for a job or project, and repetitive purchases of the same or similar
items.
B. Careful consideration must be used before using an existing contractor for work that
is outside the contract scope and would generally require a competitive purchasing
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process (for example, if there is a contract for engineering and design, and
construction management is needed, this service should go through a purchase
process).
C. Exception to purchasing processes may be made during declared emergencies, as
outlined under the Emergency Purchasing Procedures, and under appropriate
governance policies.
D. Three (3) quotes, proposals or bids are standard practice to ensure cost
reasonableness.
E. Document vendors or contractors interested but decided not the respond.
F. Avoid acquisition of unnecessary or duplicative items.
G. Participate in intergovernmental agreements when appropriate.
H. Those with purchasing authority must be aware of possible conflicts of interest such
as contractors who develop or draft specifications, requirements, statements of work,
and invitations for bids or requests for proposals. These contractors might have an
unfair advantage over other contractors when it comes to responding to purchasing
opportunities.
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Table 1: New Vendor Set-up Process
√ Tasks Responsible File
1 Purchasing documentation Department Department
2 Signed contracts as required Department
Department
Admin Services-original for
formal bids & proposals
Finance-copy
3 Vendor number Department obtain from
HTE On HTE
4 W-9 & PERA verification Department Accounting
5 Purchase order Department generate
prior to 1st invoice Accounting
6 Town business license Department refer vendor
to Town Clerk Admin Services
7. Purchasing Limits, Procedures and Documentation
The purchasing type tables (2 & 3)included in this policy outlines purchase type, amount
limits, procedures and required documentation. Supervisors, managers and their
equivalent have purchasing authority as designated by the department director.
Employees with purchasing authority are listed by position title (Table).
Department Directors are authorized to adjust purchasing limits by position staying
within the designated purchasing limits as per Table Purchasing Authority & Limits by
Position Titles.
Signatory authority mirrors purchasing authority, and follows the purchasing limits.
If both purchasing type tables apply (example: design-build project), the most stringent
requirements must be followed.
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Table 2: Purchase type: Materials, Supplies, Equipment, Construction
Purchasing authority by position title see table with policy
Amount Procedures Procedures Detail Documentation
≤ $5,000 Discretionary
Discretionary use of cost conscious
practices; distribute equitably among
qualified suppliers; with or without
soliciting quotes, as long as prices are
reasonable
Detailed invoices
> $5,000 -
$30,000
Written quotes
required
Minimum of 3 quotes from qualified
sources
Document quotes (email)
Document selection process
Town contract (exceptions
may include supplies,
materials & services)
PO
Detailed invoices
e-Purchasing option
> $30,000 -
$50,000
Written quotes
required
Minimum of 3 written quotes from
qualified sources. Document non-
responses.
Witten quotes from vendors
Document selection process
Town Contract
PO
Detailed invoices
e-Purchasing option
> $50,000 -
$100,000
Formal bid
process
Minimum of 3 bids from qualified sources.
Lowest responsive and responsible bid that
meets qualifications and/or criteria. Use
this process for construction projects.
Document non-responses.
Document bid process
Advertise, e-Purchasing
Document selection process
Bid tabulation
Town Contract
Construction bonds
PO
Detailed invoices
Document no bid responses
> $100,000 Formal bid
process
Minimum of 3 bids from qualified sources.
Lowest responsive and responsible bid that
meets qualifications and/or criteria. Use
this process for construction projects.
Document non-responses.
Document bid process
Advertise, e-Purchasing
Document selection process
Bid tabulation
Town Contract
Construction bonds
PO
Detailed invoices
Document no bid responses
Note exceptions listed in Table 4.
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Table 3: Purchase Type: Professional Services (Architecture, Engineering, Other)
Purchasing authority by position title see table with policy
Amount Procedures Procedures Detail Documentation
≤ $5,000 Discretionary Discretionary use of cost conscious
practices Detailed invoices
>$5,000 -
$30,000
Written quotes
required
Minimum of 3 quotes from qualified
sources
Document quotes
Itemized scope of work
Statement of qualifications
Town professional services contract
PO
Detailed invoices
>$30,000 -
$50,000
Written quotes
required
Minimum of 3 written quotes from
qualified sources
Itemized scope of work
Written quotes from vendors
Statement of qualifications
Document selection process
Town professional services contract
PO
Detailed invoices
e-Purchasing option
Document non-responses
>$50,000 -
$100,000
Advertised
Request for
Proposals
(RFP)
required
Minimum of 3 proposals from
qualified sources (qualification
based). Price negotiated with best
responsive and responsible proposer.
Itemized scope of work
Statement of qualifications
Document solicitation process
Advertise, e-Purchasing
Document selection process
Document responsive & responsible
proposal
Town professional services contract
PO
Detailed invoices
Document no proposals received
>$100,000
Advertised
Request for
Proposal
(RFP)
required
Minimum of 3 proposals from
qualified sources (qualification
based). Price negotiated with best
responsive and responsible proposer.
Itemized scope of work
Statement of qualifications
Document solicitation process
Advertise, e-Purchasing
Document selection process
Document responsive & responsible
proposal
Proposal review & tabulation
Town professional services contract
PO
Detailed invoices
Document no proposal received
Note exceptions listed in Table 4.
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8. Purchase orders
1) Purchase orders are required for purchases in the amount of $5,000 and greater.
2) No employee shall make purchases without verifying that funding is allocated in the
Board adopted budget.
3) Purchase orders shall be issued at the time of purchase or contract execution.
4) Purchase order creation and entry is the responsibility of the department that incurs
the expenditure.
5) Purchase orders shall be written in a manner to be clear, concise and contain
sufficient detail so as to prevent unnecessary misunderstandings. Consult with the
Finance Department for assistance in itemizing purchase orders and understanding
appropriate line items to be used.
6) Purchase orders involving multiple departments may be issued by the Finance
Department.
7) PO numbers should be shared with the vendor so this number is included on invoices.
8) Departments issuing purchase orders are responsible for communicating purchase orders
(numbers) to vendors, so that the vendor may include the purchase order number on their
invoices.
9) Purchase orders must be signed and returned to the Finance Department prior to
receipt of the first invoice.
Table 4: Purchase Order Exception and Alternative Purchasing Process
Purchase Orders not required Alternative Purchasing Process Allowed (see
Finance Dept. for allowed processes)
Bond payments
Collection services
Community Service Grants
Escrow payments
Land, water rights, right of ways & easements
Insurance claims such as for property damage
Insurance premiums
Legal services (Town attorney)
Medical services
Mileage and meal allowances, employee travel
Utilities
Utility deposit refunds
Subsidies
Hardware maintenance
Insurance claims such as for property damage
Insurance premiums
Land, water rights, right of ways & easements
Legal services
Marketing surveys
Medical services, prescriptions
Membership dues
Mileage and meal allowances, employee travel
Platte River Power Authority
Postage
Purchases required by regulatory statutes
Software maintenance
Utilities (paid by Town)
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9. Processing Invoices
The following outlines the process for approving and paying invoices.
A. Purchase orders (POs) are produced at the time of purchase and before invoices are
received.
B. Invoices are sent directly to or routed to the Town department responsible for the
purchase.
C. Invoices must be sufficiently detailed including itemized list of goods or services
(description), service or delivery date, invoice date, PO number, location, quantities,
vendor/ contractor identification and contact information.
D. Purchases shall not be subdivided or split using multiple invoices to avoid any purchasing
limits in the Town’s Purchasing Policy including dividing orders, splitting requirement
for a job or project, and repetitive purchases of the same or similar items.
E. Invoices must be reviewed employees responsible and/or knowledgeable about the
purchase.
F. Invoices must be approved by employees who have purchasing authority for their respect
level. Approval is indicated by signatures.
G. Approved and signed invoices must include the following information:
1) Project code as appropriate (used for tracking grants and/or projects)
2) Accounting number
3) Signature or initial
H. Approved and signed invoices are routed to accounts payable.
I. Invoices are entered into the Town’s accounting system.
J. Payments are scheduled to coincide with the Town Board meeting (twice monthly).
K. Checks require two (2) signatures. The Mayor’s signature is preprinted and the Finance
Officer signs each check.
L. Payments are mailed to (or held) for vendors/ contractors following the Town board
meeting after the Board approves expenditures.
10. Noncompetitive Purchases
Single (or sole) source purchases are a request for a purchase exempted from the Town’s
purchasing procedures. The Town provides for and prefers full and open competition
when soliciting bids and proposals.
Full and open competition provides for cost reasonableness which serves as a risk
management tool for the Town to ensure value purchasing. However, the Town
acknowledges that under certain circumstances, purchases may be made without a full
and open competition.
Non-competitive purchasing requires that at least one of the following:
A. After adequate solicitation processes are followed and only one bid or proposal is
received, the Town may determine the competition to be adequate. A cost
analysis must be performed and documented.
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B. When the Town requires supplies or services available from only one responsible
source, and no other supplies or services will satisfy the requirements.
C. If the Town requires a contractor to make an extensive, significant, or cumulative
change to the scope of an existing contract, the Town has made a sole source
award that must be justified.
D. Patent or data rights restrictions
Non-competitive purchases may be subject to cost analysis and must be approved by
the Town Administrator.
11. Cost and Price Reasonableness and Analysis
A. Cost reasonableness should be performed on all purchases made that did not follow this
policy and its procedures. The method and degree of analysis is dependent on the
particular procurement situation and a starting point is the Town must make independent
estimates before receiving bids or proposals.
B. In certain circumstances, the Town may use design-build projects or other construction
methods in which it must negotiate profit as a separate element (line item).
C. To establish a fair and reasonable profit the following must be considered:
1) Complexity of the work to be performed
2) Risk borne by the contractor
3) Contractor’s investment
4) Amount/ percent of subcontracting
5) Quality of its record of past performance
6) Industry profit rates in the surrounding geographical area for similar work
Determining reasonableness can be as simple as reviewing past invoices or comparing
pricing/scope with other vendors. Rocky Mountain e-Purchasing is a resource for this.
Departments are responsible for estimating costs
12. Insurance and Bonding
Successful bidders requiring insurance will submit evidence of insurance documents in
writing to the attention of the Town Administration Department attention Assistance
Town Administrator. Types and levels of insurance coverage are necessitated by the size
and scope of the project being bid, changes to relevant laws, etc. No work shall
commence on any Town project until all such proof of insurance has been submitted to
the Town. All construction projects require the Town to be named as an additional
insured. Amount of required insurance may be commensurate with the scope and value
of the project, and shall be determined by the Town prior to beginning the project.
A. Bonding requirements
Minimum bonding requirements are as follows:
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1) A bid guarantee from each bidder equivalent to five percent of the bid price. The
‘‘bid guarantee’’ must consist of a firm commitment such as a bid bond, certified
check, or other negotiable instrument accompanying a bid as assurance that the
bidder will, upon acceptance of the bid, execute such contractual documents as
may be required within the time specified.
2) A performance bond on the part of the contractor for 100 percent of the contract
price. A ‘‘performance bond’’ is one executed in connection with a contract to
secure fulfillment of all the contractor’s obligations under such contract.
3) A payment bond on the part of the contractor for 100 percent of the contract price.
A ‘‘payment bond’’ is one executed in connection with a contract to assure
payment as required by law of all persons supplying labor and material in the
execution of the work provided for in the contract.
13. Blanket purchase agreements and prequalifying vendors
The Town has the option of participating in the creation of blanket purchase agreements
(BPAs). The advantages include:
a) Simplify meeting recurring needs for supplies, materials and services, while
leveraging buying power and taking advantage of quantity discounts, saving
administrative time, reducing paperwork, and stabilizing a source of supply
b) Especially useful during emergencies when short-term notices are needed
Process for blanket purchase contracts
c) Contractors and suppliers must have been procured following the Town purchasing
policies and procedures
d) The Town must not preclude potential bidders from qualifying during the full and
open solicitation period
e) Contracts are renewed each year on or before the contract expiration date
f) Contract renewals shall not exceed five (5) years
Departments should evaluate particular categories of goods or services that would be
most advantageous from a BPA.
g) Encouraged for repetitive services and supplies; not for one-time purchases
h) Some factors that may determine the need for blanket purchase agreements include
reoccurring orders, long lead time, high volume usage, custom items, indefinite
delivery and quantity
i) An existing contract may be renewed if the vendor was properly procured, goods and
services delivered are satisfactory and the department is renewing for the same goods
and service. May discuss with Town Administrator.
Prequalifying vendors – another efficient and effective purchasing method is to pre-
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qualified vendors. The process is similar to the BPA; however, rather than contracting
with only one (1) vendor, a department may have several vendors available that can be
contracted for goods and services. For substantial purchases, the Town may open a
bidding or proposal process to only these prequalified vendors. Failure of a contractor to
perform will eliminate the contractor from the list of pre-qualified contractors. The Town
must ensure that all prequalified lists of persons, firms, or products which are used in
acquiring goods and services are current and include enough qualified sources to ensure
maximum open and full competition
14. Year End Information
a) All appropriations lapse at the end of each fiscal year.
b) If the goods or services were received by December 31, an encumbrance can be
liquidated if the invoice for the goods or services has been received and paid. The
month of January is for processing all invoices still related to the prior year. The
intent is to roll over encumbrances for projects are for multiple years. Town can
liquidate encumbrances any time prior to the rollover of purchase orders which is
presented to the board in February.
c) Expenses budgeted in the current year and a purchase order produced, the
encumbrance may be rolled over at the discretion of the Finance Officer to be used to
pay for those services or goods once received or delivered. Otherwise, the
expenditure will be paid for out of the next fiscal year's expenditures, budgeted or
not.
d) All purchase orders outstanding at the end of December should be reviewed by
departments to determine which, if any, should be closed. Contact the Purchasing
Department to get your purchase order closed.
e) Nothing contained herein is intended to restrict the timely procurement of operational and
emergency requirements for which funds have been appropriated.
15. PERA
For all PERA retirees performing services as an independent contractor or as an employee
performing work for a Town contractor, the Town will remit the working retiree
contributions in the same manner as is currently done for members. For all PERA
retirees performing services as an independent contractor or a PERA retiree working for a
Town contractor, the Town is responsible for notifying PERA of such arrangements and
PERA will offset the retiree’s retirement benefit to collect the working retiree
contributions.
The Town will conform to IRS definitions for status/determination of employee versus
independent contractors.
16. Alcoholic beverages
The Town will neither pay for, nor reimburse, employees for monies expended on
alcoholic beverages.
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17. Tax exemption
The Town is exempt from paying Colorado sales tax. The Finance Department will provide
appropriate purchasers (employees, approved contractors) with Federal and State exemption
certificates or numbers.
Contractors using the Town exemption status shall make every effort to have sales tax
excluded from purchases by completing a DR0172 form.
18. Related Town policies and reference documents
Other Town policies that should be referenced when making purchases include the
following. (review which Town polices, procedures and other docs should be referenced
here)
1) Policy governance – Town Clerk
2) Conflicts of interest, HR policy – Administration Services
3) Nondiscrimination – adopted by Administration for grant management
4) Credit card use – Finance
5) Charge accounts with local vendors?
6) Invoice processing document – Finance
7) Document retention – Administration Services
8) Petty cash – Finance
9) Purchase orders – Finance - separate from this purchasing policy?
10) Tax exemption – Finance
11) Town logo – Administration
12) Record request – Administration Services
13) Travel – Finance
Administrative Policy & Procedures
Frank Lancaster, Town Administrator
Date
PURCHASING‐RELATED POLICIESSTEVE MCFARLAND – FINANCE OFFICER
POLICY GOALS•Designate spending authority and limits•Identify local preference parameters
PURCHASING ISSUES•Current Policy is from March 2011. When issued, the Town lackedexperience dealing with Federal and State purchasingrequirements. Town has since gone through 2 disasters, and hashired a Grants Manager. Wee ahrsmartur now!•Purchasing Policies/Manuals tend to become complicated andlengthy. The existing Policy is 35 pages. Staff has been working onrevisions that are now up to 12,000 words, and only cover a smallportion of the existing Policy. It has therefore become essential todelineate between Board‐level and Administrative‐level policies,and procedures. Policy Governance is great for this situation.
•BOARD•Board‐level policies (ex: Fund Balance, Debt Issuance,Investments, Spending Authorityand Limits, Local Preferences)•ADMINISTRATIVE•Administrative‐level policies (ex: Petty Cash, Credit/PurchasingCards, Travel)•Procedures for purchasing (ex: purchase orders, processing invoices,noncompetitive purchasing, cost reasonableness analysis, RFP process)
TODAY…•Spending Authority and Limits•Attachment lists spending limits by job title•Pages 9‐11 of Draft Finance Manual shows required steps for expending funds at certainlevels.•These two charts cover spending by individual, by expense level, and by type ofexpense.•Local Purchasing Preference•Current policy: 2%‐this doesn’t reallyseem to makea material difference•Proposed policy: 5%‐thiswould translate into $30,000 on a $1,000,000 project.•Some grants do not allow for local purchasing preference. Those instances wouldsupersede policy.
COMMUNITY DEVELOPMENT Report
To: Honorable Mayor Pinkham
Board of Trustees
Town Administrator Lancaster
From: Will Birchfield, Chief Building Official
Philip Kleisler, Planner II
Date: January 26, 2016
RE: Building Code Local Amendments for Vacation Rentals with Occupancy
Over Eight (8)
Objective:
This agenda item is a follow up to the Board’s discussion on January 12 regarding
potential options for regulating vacation homes through the International Building or
Residential Code.
Present Situation:
A major component of the vacation home project is the concept of permitting vacation
homes marketed to parties greater than eight (8), which is the current limit. The Town
has received input that vacation homes, particularly larger homes, need to be providing
a safe environment for guests. The Board discussed various options at the January 12
study session in regards to applying either the International Building Code (IBC) or the
International Residential Code (IRC) to vacation homes. The three options discussed
included:
1. No Change (i.e. regulate to IRC): Staff would continue to license vacation homes,
regardless of size or occupancy, with no inspections or additional safety
requirements.
2. Regulate to the IBC: This would trigger, at a minimum, sprinkler and accessibility
requirements. This option provides the greatest amount of protection to renters
and nearby properties, but will likely impose a sizable cost to the vacation home
owner.
3. Adopt a Hybrid Approach (recommended): This approach allows the Board to
tailor requirements to address the most critical needs of the community. This
could include aspects such as life safety surveys conducted concurrently with the
business license review, addressing any unpermitted work conducted on the
property, verifying proper egress, checking CO and smoke alarms, inspecting
existing gas appliances, etc.
The Board appeared to be in agreement to move forward with Option #3 above
(compromised approach). Staff is now bringing draft code language to the Board for
comment.
Proposal:
The Town may implement Option #3 in one of two ways:
1. Dwelling Life Safety Checks Only
This closely aligns with the Board’s direction during the previous work session.
This involves amending the International Residential Code to require safety
checks on all vacation homes, regardless of the number of occupants. Staff
would likely schedule and perform inspections on all vacation homes within the
Town of Estes Park this year. Each inspection would require at least a $200
permit fee. The fee will ultimately be commensurate with necessary staff time.
The inspection standards are included on Page 6 of attachment #2 (section
104.2), which includes the following:
1. Approved address identification
2. Evidence of unpermitted work
3. Obvious structural concerns (hot tubs on decks not originally designed for hot
tubs, etc.)
4. Emergency escape and rescue openings in all spaces used for sleeping
purposes
5. Approved window wells at emergency escape and rescue openings
6. Approved smoke alarms at all required locations
7. Approved CO detectors at all required locations
8. Gas-fired appliances
a. Location
b. Space
c. Clearances
d. Combustion air
e. Vent system
f. Temperature and relief valve
g. Condensate disposal
h. Fire-blocking
9. House/garage separation (including attic access)
10. Dryer duct and exhaust fans terminations
11. Handrails and guards
12. Anti-tip device on cook stove
This approach allows the Town to certify that critical safety issues are addressed
with limited cost to the property owner. A disadvantage is the additional staff
resources needed for such inspections. These inspections also stray from the
Town’s historical approach to regulating single family homes (thus would be a
major policy change).
2. Fully align with Larimer County
Similar to the Town, Larimer County is in the process of adopting new building
and residential codes. Initial conversations with the County indicate a potential to
regulate vacation homes with an occupancy allowance of more than eight (8)
through the International Building Code. This would likely require sprinkler
systems, accessibility requirements, etc. (similar to hotel/motel requirements).
An advantage of implementing this policy is valley-wide alignment on land use
matters. A disadvantage to the property owner is that relatively substantial
investment could be required to offer a vacation home to parties greater than
eight (8). These inspections also stray from the Town’s historical approach to
regulating single family homes (thus would be a major policy change).
Advantages:
N/A
Disadvantages:
N/A
Action Recommended:
Staff will provide a short presentation on these topics at the study session and be
available for any questions.
Budget:
N/A
Level of Public Interest:
High. Public meetings have attracted many more people than anticipated. Staff is also
receiving consistent written public comments on the topic.
Attachment:
1. Previous Town Board Report (as background)
2. International Property Maintenance Code Excerpt
COMMUNITY DEVELOPMENT Report
To: Honorable Mayor Pinkham
Board of Trustees
Town Administrator Lancaster
From: Alison Chilcott, Director
Will Birchfield, Chief Building Official
Philip Kleisler, Planner II
Linda Hardin, Code Compliance Officer
Date: January 12, 2015
RE: Vacation Home Fees, Code Enforcement & Building Code
Objective:
The purpose of this agenda item is to update the Board about staff’s ongoing efforts to
evaluate vacation home license fees, code enforcement efforts and options for
regulating larger vacation homes through the International Building or Residential Code.
Present Situation:
The Town began a project in mid-2015 to reevaluate local ordinances and processes
relating to vacation homes in the Estes Valley. Since this time the Town and County
have hosted three public forums, numerous small group meetings and regular updates
to the Planning Commission, Town Board and County Commissioners. More recently,
the Board of County Commissioners directed Larimer County staff to coordinate two (2)
public hearings in Estes Park to gain additional public input (particularly from county
residents). The first meeting hosted by Larimer County was on Saturday, December 12,
and attracted roughly 100 people. The second meeting is scheduled for January 25 in
the Town Board Room and will generally consist of public comments directed to the
County Commissioners (with a limited staff role).
Following the January 25 hearing staff recommends that the Board of County
Commissioners, Town Board and Planning Commission hold a final joint meeting to
provide staff direction on the proposed changes.
Proposal:
Vacation Home License Fee Structure
Town staff recommends increasing the licensing fees for Vacation Homes to cover all
costs related to administrative overhead and proactive code enforcement. The Board of
County Commissioners directed staff to delay bringing any changes to licensing fees
until the final ordinance is being considered (likely in April/May). Given the need for
additional code enforcement, staff requests that the Town Board consider an ordinance
on January 26 to increase Business License fees for vacation homes within the Town of
Estes Park.
Attachment 1
January 26, 2016
Staff has concluded a fee structure analysis and is recommending a tiered fee structure.
The analysis included a review of the CAST Report, benchmarking with Steamboat
Springs and Breckenridge, and code enforcement modeling. The fee would be
structured as follows:
Table 1: Current and proposed annual Business License fee for vacation homes.
Current Fee Proposed Fee Current Fee Collections
(Town Only)
Proposed Fee Collections
(Town only)
$150
$150 Base Fee
$50 for each bedroom,
not to exceed $500
$27,300 (approx.) $52,350 (estimate)
Town staff analyzed the proposed fee structure to ensure that adequate funding is
projected to cover code enforcement costs. As with other new business processes,
procedure steps were outlined for administrative overhead and code enforcement to
limit redundancy and estimate operating costs.
Staff anticipates that a seasonal, full time code enforcement officer will close
approximately 200 cases. The enforcement cost for 200 cases is estimated to be
$23,000 (including limited Town Attorney fees). Combined with administrative overhead
costs ($14,000), the above fee structure will adequately cover all proactive enforcement
in the town, with additional funding reserved for outreach and education. Staff will
provide a brief presentation about this analysis and recommends that the Board
schedule this fee structure amendment for January 26, 2016. This new fee structure
would then apply to all Town licenses for 2016.
Code Enforcement
Code enforcement has surfaced as a primary concern throughout our public
engagement process. As an example, staff released a survey prior to the second public
forum requesting input on the topics to be discussed. Respondents of this survey listed
code enforcement as their top choice (Figure 1).
Per the Intergovernmental Agreement between the Town of Estes Park and Larimer
County, Town staff is responsible for vacation home enforcement throughout the Estes
Valley. Current code enforcement efforts are a mix of proactive and reactive (i.e.
complaint-based) enforcement. The general enforcement process includes the
following steps:
1. Case Initiation: staff identifies or receives a complaint about an alleged violation.
2. Notification: generally staff notifies the property owner and/or property manager
of the complaint and if necessary, visits the site to collect evidence. The Estes
Valley Development Code (EVDC) requires that the Town to allow 15 days for
the violation to the remedied.
Attachment 1
January 26, 2016
3. Public Hearings: violations not remedied within that 15-day window are either
referred to Municipal Court (for town properties) or for a public hearing with the
Board of County Commissioners (for properties within the unincorporated valley).
Staff has recently identified upwards of 400 properties operating as a vacation home in
the Estes Valley; this required roughly 70 hours of investigation time. We can now
report the following characteristics about these 394 listings in the Estes Valley:
Properties are evenly divided between the town and county (205 in town, 189 in
unincorporated valley);
The valley-wide license compliance rate of 77% is higher than expected;
License compliance is greater in the town than in the county. 82% of vacation
homes in the town are licensed and 71% in the County are permitted; and
Violations to our occupancy limit are still an issue. 12% of listings are advertising
that they can accommodate more than 8 occupants, of which 9% are Town
properties and 15% are in the County.
On a broader level, the Town adopted a Code Compliance Policy on 2014 that details
our processes and prioritization for all cases. This project has prompted staff to
reevaluate these processes to determine if changes need to be made to more
effectively enforce our development regulations. Staff has identified a number of
improvements relating to enforcement:
Figure 1: Recent survey conducted in preparation for a public forum on vacation homes.
Attachment 1
January 26, 2016
The Police dispatch often receives complaints relating to noise or other
disturbances in the evening or weekends. Community Development and Police
staff are working together to track these complaints to determine if a vacation
rental is involved. An analysis of six months of data from 2015 found that
vacation homes accounted for about 5% of the 123 calls to dispatch about
“noise”. The Code Compliance Officer position funded through increased license
fees may work some evening and weekend hours in an effort to be available
when such violations occur.
Any proposed regulations should include a clear provision giving the Town the
ability to cite renters, the property owner or both.
The current enforcement procedure in the EVDC (15-day notice) does not work
well with some violations, as the violation has often stopped occurring by the end
of the 15-day window. As such, staff is exploring the possibility of a Penalty
Assessment Ticket for certain violations; this would give staff the ability to cite
vacation home renters for certain zoning violations (such as too many vehicles).
Building Code Issues
A major component of the vacation home project is the concept of permitting vacation
homes to parties greater than eight (8), which is the current limit. At your study session
on November 9, 2015 the Board showed interest in potentially regulating these larger
rentals as a commercial operation as it relates to building standards. Staff has since
discussed options with the Town and County Chief Building Officials.
There are two primary interpretations of the international codes regarding the use of
single-family dwellings as vacation rentals. One interpretation is to regulate single-
family dwellings by how they are designed regardless of how they are used. This
interpretation regulates said buildings by the International Residential Code (IRC).
Conversely, the second interpretation is to regulate single-family dwellings by how they
are used regardless of how they are designed. This interpretation regulates said
buildings by the International Building Code (IBC). In other words, single family homes
built in Estes Park have always been built to IRC standards, whereas traditional hotels
have been built to IBC standards. The IBC requirements generally require modifications
such as a sprinkler system and accessibility standards.
The interpretation of the Town’s Chief Building Official is to regulate single-family
dwellings by how they are designed, using the IRC. A draft local amendment to the
2009 IRC, R101.2 clarifies this interpretation, which the staff believes is the intent of the
code. If the Board chooses to regulate vacation homes as commercial properties, said
properties will be regulated by how they are used, using the IBC. This will be different
than the current interpretation.
Staff has identified three regulatory options for the Board to consider with this
discussion. These options would generally be applied to vacation homes with an
occupancy allowance higher than the current limit of eight:
Attachment 1
January 26, 2016
1. No Change (i.e. regulate to IRC): Staff would continue to license vacation homes,
regardless of size or occupancy, with no inspections or additional safety
requirements.
2. Regulate to the IBC: This would trigger, at a minimum, sprinkler and accessibility
requirements. This option provides the greatest amount of protection to renters
and nearby properties, but will likely impose a sizable cost to the vacation home
owner.
3. Adopt a Compromised Approach (recommended): This approach allows the
Board to tailor requirements to address the most critical needs of the community.
This could include aspects such as life safety inspections with the business
license review, addressing any unpermitted work in the house, verifying proper
egress, checking CO and smoke alarms, and inspecting existing gas appliances.
Discussions with numerous building officials, including those in mountain communities
such as Aspen and Vail, suggests that communities choose any one of these options
dependent on local considerations. Therefore, staff views this as a policy decision
needing consideration by the Board.
Task Force
During a work session on December 21 on an unrelated topic, a Larimer County
Commissioner show interest in forming a citizen task force to provide a
recommendation about the vacation home code amendment. Per the Commissioner’s
request, staff is forwarding this comment to the Board for consideration.
Advantages:
N/A
Disadvantages:
N/A
Action Recommended:
Staff will provide a short presentation on these topics at the study session and be
available for any questions.
Budget:
N/A
Level of Public Interest
High. Public meetings have attracted many more people than anticipated. Staff is also
receiving consistent written public comments on the topic.
Attachment 1
January 26, 2016
Attachment #2
January 26, 2016
1
SIGNIFICANT CHANGE
[A] 104.2 Inspections.
The code official shall make all of the required inspections, or shall accept reports of inspection
by approved agencies or individuals. Reports of such inspections shall be in writing and be
certified by a responsible officer of such approved agency or by the responsible individual. The
code building official is authorized to engage such expert opinion as deemed necessary to report
upon unusual technical issues that arise, subject to the approval of the appointing authority. All
dwelling units used as short term rentals shall be subject to an initial life safety survey and
subsequent surveys as determined by the Chief Building Official. At minimum, the life-safety
survey shall include, but may not be limited to the following:
Dwelling Life-Safety Survey
1. Approved address identification
2. Evidence of unpermitted work
3. Obvious structural concerns (hot tubs on decks not originally designed for hot tubs, etc.)
4. Emergency escape and rescue openings in all spaces used for sleeping purposes
Attachment #2
January 26, 2016
2
5. Approved window wells at emergency escape and rescue openings
6. Approved smoke alarms at all required locations
7. Approved CO detectors at all required locations
8. Gas-fired appliances
a. Location
b. Space
c. Clearances
d. Combustion air
e. Vent system
f. Temperature and relief valve
g. Condensate disposal
h. Fire-blocking
9. House/garage separation (including attic access)
10. Dryer duct and exhaust fans terminations
11. Handrails and guards
12. Anti-tip device on cook stove
February 9, 2016
Discussion of Noise Ordinance
Update on 2015 Icode Adoption and
Local Amendments, Including Property
Maintenance Code
February 23, 2016
Policy on Naming of Town Facilities
Update on Consideration of Transit
Going Year Round in Order to Qualify
for Federal Funding
Updated Long Range Pavement
Improvement Program
Items Approved – Unscheduled:
(Items are not in order of priority)
Update on the Relationship of All
Upcoming Construction Schedules for
Major Projects
Discussion of Impact Fees and Other
Funding Options to Support Housing
Goals
Fish Hatchery Property Discussion
Discuss the Role of Town Government
in Economic Development as it
Relates to the Estes Valley EDC and
Other Organizations
Briefing on Storm Drainage and Flood
Management Issues and Management
Options. Discussion of Storm Water
Utility.
Update on Environmental Assessment
NEPA Process Draft Concerning the
Loop
Items Approved – Unscheduled
Continued:
How the Board Handles Off Cycle
Requests for Funding From Outside
Organizations
Follow Up on Broadband Issues
Study Session Items for Board
Consideration:
Special Study Session: Vacation
Rentals – Joint Meeting with Board of
County Commissioners, Planning
Commission and Town Board
(Proposed February 2, 2016)
Special Study Session: Final Joint
Study Session on Vacation Rentals
with Board of County Commissioners,
Planning Commission and Town
Board (Proposed March 1, 2016)
Review of Custom Questions for
Biennial Survey (Proposed March 8,
2016)
Discussion of Utility Metering
Infrastructure (Proposed March 8,
2016)
Status Report on Capital Improvement
Plan Process (Proposed March 22,
2016)
Discussion of Annexation Philosophy
Work Plan for Code Changes
Discussion of Sister Cities Program
Special Session – New Board
Orientation
Schedule for Personnel Policies
Future Town Board Study Session Agenda Items
January 26, 2016