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Purchasing Tools While the City utilizes a number of purchasing tools, the two most common methods include: 1) Purchasing on'store credit' 2) Purchasing cards Approximately 80% of all city purchases are on'store credit'. In this case, a vendor allows the City to make a purchase or acquire services, based on the City's promise to pay at a later date. Once the goods and/or services are received, the City then issues a check or makes an electronic transfer of funds as payment. Typically the payment is made within 30 days of purchase. This purchasing method, while being the dominant method for decades, has its limitations. With the emergence of purchasing technologies, the City has greatly emphasized the use of City Purchasing Cards over the last 10 years. Purchasing cards work similar to an individual's credit card, with one distinct advantage — better purchasing control. Unlike most credit cards, purchasing cards can be issued in such a manner that restricts: a) Which vendor a purchase is made with b) What type of supply or material is purchased c) The daily, weekly, monthly amount of purchases With purchasing cards, the City can issue cards that are departmental-specific or employee- specific. For example, a purchasing card could be issued to a park maintenance employee with the restriction that the card can only be used at a local hardware or lumber store, and only for purchases up to $200. This ensures that the employee only receives authorization to make purchases that are directly related to his/her function, and can only make purchases up to a pre- set amount. In practice, the City has established monthly credit limits of $200 -$5,000 depending on the employee and the types of purchases they make. Of the City's 155 full-time employees, 55 have been issued a purchasing card and are authorized to make purchases on behalf of the City, under the guidance of the Department Heads. It is worth noting that these individuals are the same individuals authorized to make purchases on'store credit'. In addition to having greater purchasing controls, the use of purchasing cards also produce a secondary advantage — it's more cost effective than paying with cash or by check With purchasing card transactions, the payment is made automatically, sparing the City the resources needed to generate a check and mail it. Final Comments The City's purchasing function has evolved over several decades. The current system, while imperfect on some fronts, is designed to a11ow the City to maintain internal controls while preserving flexibility and efficiency. This ensures that city resources are optimized for the purchases themselves, rather than the associated bookkeeping costs. �