The URL can be used to link to this page

Home My WebLink About6.d. Purchasing Policy UpdateEXECUTIVE SUMMARY City Council Regular Meeting: January 16, 2018 AG ENDA ITEM: Purchasing Policy Update AGENDA SECTION: Consent PREPARED BY: Clarissa Hadler, City Clerk AGENDA NO. 6.d. ATTACHMENTS: Resolution, Draft Purchasing Policy APPROVED BY: RECOMMENDED ACTION: 1.Motion to approve Amended Purchasing Policy. 2.Motion to approve Resolution Delegating Authority for Paying Claims. SUMMARY Staff noted a couple of inconsistencies in the city’s Purchasing Policy, which led to a larger reanalysis of the policy. Staff has reviewed and edited the Purchasing Policy to reflect current practices and state statute. City Attorney Tietjen has reviewed and suggested changes, as well. In addition, staff reviewed the previously approved Resolution Delegating Authority for Paying Claims, which is referenced in the Purchasing Policy, and finds that the delegation of this duty to the City Clerk would be inappropriate in our organization and should be removed. Staff recommends approval of amended City of Rosemount Purchasing Policy and new Resolution Delegating Authority for Paying Claims. 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 ) AMENDED JANUARY 16, 2018 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 $5025,000 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 $5025,000 – 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. 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. All bids, quotations, RFP’s, specifications, contracts, and supporting documents shall be retained in accordance to the City’s Data Retention Policy. Currently, the retention periods are as follows; ADM 01400 Bids, Quotations & RFP’s – Accepted 10 years after completion of project ADM 01500 Bids, Specifications, RFP’s, & Supporting Papers – Not Accepted 6 years CON 00100 Bids & Specifications for Capital Improvement – Accepted Permanent CON 00200 Bids & Specifications for Services & Supplies – Accepted 10 years after paid/audit 1. In addition, the City has implemented the following practice:For amounts from $15,000 – 50,000, approval by the City Administrator and Department Head is required. 2. 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. In the event that this policy is not consistent with Minnesota law, such law will govern. 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. Commented [HC1]: Moved to approvals paragraph below. Commented [HC2]: Moved to approvals paragraph below. 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, MS 41271.271 law allows the City Council to delegate its authority to pay certain claims made against the city to a city administrative official. A list of all claims paid under the procedures established by the City Council shall be presented to the council for informational purposes only at the next regularly scheduled meeting after payment of the claim. delegate authority to an appointed official to pay claims prior to their approval. The City Council, by resolution (see attached Resolution 1996-94 2018-____), has delegated this authority to either the City Administrator or the Finance Director. or the City Clerk. The following approvals shall be required depending on the amount of the purchase; 1. For amounts over $50,000, approval is required by the City Administrator and the City Council before the purchases are made, except as listed in item 2. 2. For amounts over $50,000 that fall into any of the following categories; the payment of judgments, salaries and wages previously fixed by the council or by statute, principal and interest on obligations, rent and other fixed charges, the exact amount of which has been previously determined by contract authorized by the council, approval is required by the City Administrator. 3. For amounts from $15,000 – 50,000, approval by the Department Head and City Administrator is required. 4. For amounts under $15,000, approval by the Department Head is required. CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 2018 - ______ A RESOLUTION DELEGATING AUTHORITY FOR PAYING CLAIMS WHEREAS, the City Council of the City of Rosemount recognized the need to delegate a City official with the authority to pay claims without prior City Council approval; and WHEREAS, the City Council recognized the need to establish the internal accounting and administrative control procedures to ensure the proper disbursement of public funds with are establishing in the City’s Purchasing Policy; WHEREAS, the City Council recognizes the prior resolution delegating authority to not properly reflect the responsibilities of the City Clerk; NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Rosemount hereby repeals Resolution 1996-94, Resolution Delegating Authority for Paying Claims, and delegates the authority for paying claims prior to City Council approval to the City Administrator or the Finance Director of the City of Rosemount as set out in the City’s Purchasing Policy. ADOPTED this 16th day of January, 2018. ______________________________ William Droste, Mayor ATTEST: _________________________________ Clarissa Hadler, City Clerk