TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager/Chief Executive Officer
SUBJECT: Changing Payment Terms for SBE/LBE/DBE Firms
BRIEFING ITEM
AGENDA PLANNING REQUEST: ?
RECOMMENDED ACTION(S):
Title
Consider receiving a report on the possible actions District staff can take to expedite payment to small, local and disadvantaged businesses. [Requested by President Ortiz - 9/14/2022]
Staff Contact:
Chris Andrichak, Chief Financial Officer
Lynette Little, Director of Civil Rights & Compliance
Body
STRATEGIC IMPORTANCE:
Goal - Prioritize Diversity, Equity, Inclusion and Accessibility
Initiative - Internal and External Diversity, Equity, Inclusion and Accessibility Programs and Priorities
Expediting payments to the District's small, local and disadvantaged businesses will help strengthen the community of businesses that provide equitable and relevant service to the public.
BUDGETARY/FISCAL IMPACT:
No immediate fiscal impact is associated with this report. However, additional resources and staff time will be required based on what strategies are pursued.
BACKGROUND/RATIONALE:
At the September 14, 2022, Board of Directors Regular Meeting, President Ortiz requested "a report on changing the default payment terms on purchase orders from the standard net 30 (payment 30 days after approval of invoice) to net 15 (payment 15 days after approval of invoice) for small, local, disadvantaged business enterprises". Staff reviewed this request and examined several possible strategies to achieve an expedited payment to this business community.
Following is a brief overview of the invoice processing procedure at AC Transit to provide background on possible areas of improvement. Once an invoice is received from a vendor, Accounts Payable (AP) staff ensures there is a purchase order and/or contract in place, then the invoice is reviewed and approved (or denied) by the Project Manager. After approval of the invoice, the document is sent ...
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