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HomeMy WebLinkAbout6.c. Electronic Funds Transfer Policy City Council Regular Meeting: August 2, 2021 EXECUTIVE SUMMARY AGENDA ITEM: Electronic Funds Transfer Policy AGENDA SECTION: Consent PREPARED BY: Teah Malecha, Finance Director AGENDA NO. 6.c. ATTACHMENTS: Draft Electronic Funds Transfer Policy & Electronic Funds Transfer Authorization Form APPROVED BY: LJM RECOMMENDED ACTION: Motion to approve Electronic Funds Transfer Policy BACKGROUND The City relies on technology for making electronic payments of payroll. As the City continues to create efficiencies, the ability to make electronic payments will expand. It is recommended to adopt an Electronic Funds Transfer Policy in accordance with Minnesota State Statute §471.38. It allows local governments to complete electronic funds transfers, rather than sending paper checks, for the following: • A claim for a payment from an imprest payroll bank account or investment of excess money; • A payment of tax or aid anticipation certificates; • A payment of contributions to pension or retirement funds; • Payments to vendors; and • Payment of bond principle, bond interest and a fiscal agent service charge from a debt redemption fund. The City will also provide our current financial institutions with an Electronic Funds Transfer Authorization Form stating employees who are authorized to make electronic payment, bank wires, etc. This form will be updated annually and issued to the City’s financial institutions. RECOMMENDATION Staff recommends approval of the Electronic Funds Transfer Policy and annual Electronic Funds Transfer Authorization Form. ELECTRONIC FUNDS TRANSFER AUTHORIZATION FORM The City of Rosemount has adopted an Electronic Funds Transfer Policy for 2021 as required by Minnesota Statute 471.38. City council hereby authorizes the City Administrator, Finance Director, and Payroll Specialist to make electronic funds transfers. These transfers can occur via bank wire or online banking. The city will maintain documentation of the electronic funds transfer according to retention practices. ADOPTED this 2nd day of August, 2021, by the City Council of the City of Rosemount. William H. Droste, Mayor ATTEST: Erin Fasbender, City Clerk CITY OF ROSEMOUNT POLICY TITLE: ELECTRONIC FUNDS TRANSFER POLICY EFFECTIVE DATE: AUGUST 2, 2021 PROPOSED BY: FINANCE DATE APPROVED BY COUNCIL: AUGUST 2, 2021 PURPOSE The purpose of this policy is to set forth the circumstances in which the City of Rosemount may make electronic funds transfers. POLICY It is the policy of the City of Rosemount to abide by Minnesota Statute §471.38 when making an electronic funds transfer. TRANSFERS ALLOWED FOR CERTAIN PURPOSES The City of Rosemount is allowed to make an electronic funds transfer for the following: 1. For a claim of a payment from an imprest payroll bank account or investment of excess money; 2. For a payment of tax aid anticipation certificates; 3. For a payment of contributions to pension or retirement funds; 4. For vendor payments; and 5. For payment of bond principle, bond interest, and a fiscal agent service charge from the debt redemption fund. POLICY CONTROLS The City of Rosemount will only make payments via electronic funds if the following policy controls are met: 1. The City Council shall annually delegate the authority to make electronic funds transfers to the City Administrator, Finance Director, and Payroll Specialist; 2. The disbursing bank shall keep on file a certified copy of the delegation of authority; 3. The initiator of the electronic transfer shall be identified; 4. The initiator shall document the request and obtain an approval from the City Administrator, Finance Director, or Payroll Specialist before initiating the transfer; 5. A written confirmation of the transaction shall be made within one business day after the transaction and shall be used in lieu of a check required to support the transaction; 6. A list of all transactions made by electronic funds transfer shall be submitted to the City Council at the next regular meeting after the transaction. DELEGATION OF AUTHORITY The City Administrator is designated as the business administrator of the City and is responsible for electronic funds transfers and activities under the direction of this policy. The City Administrator may delegate certain duties to appropriate staff but shall remain responsible for the operation of the transfer program. LEGAL REFERENCE Minnesota Statute §471.38, subds. 3 and 3a