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HomeMy WebLinkAbout6.c. Amend Purchasing PermitCITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: April f7,2001 AGENDA ITEM: Amend Purchasing Policy AGENDA SECTION: Consent PREPARED BY: Jeff May, Finance Director AGEND 6 C ATTACHMENTS: Amended Purchasing Policy APPROVED BY: I 'A The Purchasing Policy before you this evening reflects the current State Statutes and the issues that were discussed at the March 14 Committee of the Whole meeting. The policy should now be current and up to date. Legal counsel has reviewed the document and feels that everything is in order. RECOMMENDED ACTION: Approve the City's Purchasing Policy as amended. COUNCIL ACTION: 5 . CITY OF ROSEMOUNT POLICY TITLE: PROPOSED BY: DATE APPROVED BY COUNCIL: PURCHASING POLICY FINANCE June 21, 1994 (Amended April 3, 2001) 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 - 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 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 contracts over $50,000 - 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. 2. For contracts from $10,000 to $50,000 - 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. Page 2 - Policy F -1 3. For contracts under $10,000 — the contract may be made upon quotation or in the open market, in the discretion of the City. If the contract is made upon quotation it shall be based, so far as practicable, on at least two quotations which shall be kept on file for a period of at least one year after their receipt. The provisions noted in this policy are not intended to be an exhaustive list of Minnesota bid laws. 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 between $25,000 - $50,000 before the purchases are made. 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. I -- 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.