HomeMy WebLinkAbout6.d. Puchasing Policy RESEN4IIJNT
EXECUTIVE SUMMARY
CITY COUNCIL
City Council Regular Meeting: July 15, 2008
AGENDA ITEM: Purchasing Policy AGENDA SECTION:
Consent
PREPARED BY: Emmy Foster, Assistant City AGENDA NO.
Administrator
ATTACHMENTS: Revised Purchasing Policy APPROVED BY: o,/
RECOMMENDED ACTION: Motion to Approve the City's Revised Purchasing Policy.
ISSUE
The issue before the City Council is the approval of the modifications to the City's current Purchasing
Policy.
BACKGROUND
On June 17, City Council approved other revisions to the Purchasing Policy to reflect changes in State
Statutes. This item is on the agenda this evening to bring forth modifications to the City's Purchasing
Policy. Modifications include required authorizations for set purchase amounts and clarifying language
addressing local purchasing. The changes are a reflection of the discussion that was held at the Council
work session on July 9th.
SUMMARY
Recommend the above motion to approve the revised Purchasing Policy for the City of Rosemount.
CITY OF ROSEMOUNT
POLICY TITLE: PURCHASING POLICY
EFFECTIVE DATE: JUNE 21, 1994
PROPOSED BY: ADMINISTRATION
DATE APPROVED
BY COUNCIL: JUNE 21, 1994 (AMENDED JULY 15, 2008
PURPOSE
The purpose of this policy is to establish specific guidelines for the purchase of goods and
services by employees of the City of Rosemount.
The use of public funds requires diligent scrutiny and careful regulation. The controls
necessary are in two areas. First, the statutory law, which clearly details procedures for the
purchase of goods and services by City employees. Second, the controls not required by
statute, but that are important to a good system of internal control and a sound management
program.
This policy will outline the laws governing contracts and bids and describe the basis for a
good internal control system. Following the law and the City's purchase system should help
City officials obtain maximum benefit from each dollar of public funds.
CONTRACTING PURCHASING
A City entering into an agreement for the sale or purchase of supplies, materials, equipment
or the rental thereof, or the construction, alteration, repair or maintenance of real or personal
property must abide by the statutes relating to contracting and bidding. Minnesota Statute
471.345 was established to provide dollar limits for all cities upon contracts which shall or
may be entered into on the basis of competitive bids, quotations or purchase or sale in the
open market. This statute puts the following basic requirements on cities (based on the
estimated contract amount):
1. For amounts over $100,000 sealed bids shall be solicited by public notice in the
manner and subject to the particular requirements of the City. The sealed bids shall
be solicited by public notice and be kept on file. Approval is required by the City
Council and City Administrator.
2. For amounts from $50,000 to $100,000 sealed bids or by direct negotiation, by
obtaining two or more quotations for the purchase or sale when possible, and without
advertising for bids or otherwise complying with the requirements of competitive
bidding. All quotations obtained shall be kept on file for a period of at least one year
after receipt thereof. Approval is required by the City Council and City Administrator.
3. For amounts under $50,000 the contract may be made upon quotation or at the
open market, in the discretion of the City. If the contract is made upon quotation it
shall be based, so far as practical, on at least two quotations which shall be kept on
file for a period of at least one year after their receipt. In addition, the City has
implemented the following practice:
a. For amounts from $15,000 50,000, approval by the City Administrator and
Department Head is required.
b. For amounts under $15,000, approval by the Department Head is required.
On all purchases that require obtaining bids or quotes, the "State Bids" obtained through the
state's cooperative purchasing program and the prices obtained through the U.S. General
Services Administration (GSA) are considered to have met this requirement.
When sealed bids are not required or used, and whenever it is reasonably practical and cost
efficient, purchases will be made from Rosemount businesses.
It is the policy of the City of Rosemount that we follow State statutory guidelines in
purchasing matters. However, we additionally require City Council approval on all
expenditures over $50,000 before the purchases are made.
The provisions noted in this policy are not intended to be an exhaustive list of Minnesota bid
laws.
INTERNAL CONTROLS
The primary basis for the City's system of internal control is the City's annual budget. The
budget, as adopted by the City Council, serves as the basis for the City's spending for that
year. The appropriate level of responsible official must approve any expenditure over
budget. Also, any expenditure that would utilize money budgeted from one area of a
department budget for another purpose must be communicated by that department head to
the City Administrator for his /her verbal approval.
In addition, all purchase orders and invoices presented for payment must be approved by the
appropriate department head or supervisor and reviewed for reasonableness and proper
account coding by the Finance Department.
In order to expedite payments to vendors in a timely fashion, law allows the City Council to
delegate authority to an appointed official to pay claims prior to their approval. The City
Council, by resolution (see attached Resolution 1996 -94), has delegated this authority to
either the City Administrator or the City Clerk.