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HomeMy WebLinkAbout2.c. Draft Purchasing Policy 4 ROSEMOUNT EXECUTIVE SUMMARY CITY COUNCIL City Council Special Work Session: July 9, 2008 AGENDA ITEM: Draft Purchasing Policy AGENDA SECTION: Discussion PREPARED BY: Emmy Foster, Assistant City AGENDA NO. 2. C Administrator ATTACHMENTS: Revised Draft Purchasing Policy APPROVED BY: RECOMMENDED ACTION: Discussion and provide direction to Staff. SUMMARY On June 17, City Council approved revisions to the Purchasing Policy to reflect changes in State Statutes. Since then, a few other questions have surfaced. The purpose of this discussion is to address any concerns or desired modifications to the latest draft Purchasing Policy that is attached for your review. Formatted: Left: 0.8 Right: 0.8 1 Top: 0.8 Bottom: 0.8" I CITY OF ROSEMOUNT DRAFT J Formatted No underline Formatted: Font: 16 pt, Font color: POLICY TITLE: PURCHASING POLICY 'Red PROPOSED BY: ADMINSTRATION Deleted: FINANCE DATE APPROVED BY COUNCIL: June 21, 1994 (Amended June 17, 2008) July 9, 2008 draft discussion f Formatted: Indent: Left: 1.5 First line: 0.5" 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 1 City officials obtain maximum benefit from each dollar of public funds. CONTRACTING PURCHASING Deleted: BID Laws 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 1 property must abide by the statutes relating to contracting and bidding. ,Minnesota Statute Deleted: 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 Deleted: contracts 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 Deleted: contracts obtaining two or more quotations for the purchase or sale when possible, and without Deleted: 2 j 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, Deleted: Deleted: Section Break (Continuous} 3. Forpmounts under $,50,000 the contract may be made upon quotation oret the Deleted: open market, in the discretion of the City. If the contract is made upon quotation it Pa ge z Purchasing Pony¶ shall be based, so far as practical, on at least two quotations which shall be kept on Deleted s file for a period of at least one year after their receipt. In addition. the City has Deleted z implemented the following practice: Deleted in a. For amounts from $15,000 50,000. approval by the City Administrator and Formatted: Indent: Left: 0.5", First Department Head is required. line: 0 ,Tabs: 0.75 Left b. For amounts under $15.000 approval by the Department Head is required. Formatted: Bullets and Numbering Deleted: contracts On all purchases that require obtaining bids or quotes, the "State Bids" obtained through the Deleted: practicable state's cooperative purchasing program and the prices obtained through the U.S. General Deleted:¶ Services Administration (GSA) are considered to have met this requirement. For purchases not requiring the bidding process, whenever it is reasonably practical and cost efficient, the purchases will be made from locally owned and operated vendors. Deleted: CITY POLICY¶ 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 $0,000 before the purchases are made. Deleted: 25 The provisions noted in this policy are not intended to be an exhaustive list of Minnesota bid Taws Deleted: INTERNAL CONTROLS Deleted: ......._.._..._...............J 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 1 either the City Administrator or the City Clerk, l Deleted: