4.j) Staff Report-Changes to Purchasing Policy c' , �
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SCANDIA
Staff Renort
Date of Meeting: February 12, 2013
To: City Council
From: Kristina Handt,Administrator
Re: Changes to Purchasing Policy
Agenda Item#: 4 j)
Background:
A copy of the City's Purchasing Policy is included in your packet. The policy was last updated by the
Council in October 2012. I emailed the Council, Park and Rec members and staffon January 11,
2013 to remind them of the provisions in the policy.
On February 4`h, I attempted to have a discussion with Council member Swanson about her making
purchases for Vinterfest and indicated I didn't feel she had gotten staff authorization as is required in
the purchasing policy. She responded by indicating it had been talked about at the Parks and Rec
Committee and that it had always been done this way. I pointed out that committees do not have
authorization to approve expenditures in the City's purchasing policy and also reminded her that I
was not at the Jan. 7, 2013 PRC meeting as the Planning Commission was meeting that same night. I
suggested if she wanted to change the policy to allow Council members or committee members to
make purchases without staff approval that we could bring it up at a meeting. Council member
Swanson requested this issue be placed on the agenda for the February 12`�work session.
Issue:
Should the Purchasing Policy be changed to allow authorization of purchases to be made by
individual Council members or committees?
Proposal Details:
Council member Swanson can present her proposal to the Council at the meeting. The Council can
choose to change the policy to allow people other than staff to authorize purchases. However, if the
Council chooses to do this they should also consider changing the job descriptions for the
Administrator, Maintenance Superintendent, and Fire Chief because there is specific language in
each of those job descriptions related to administering and implementing budgets.
Options:
1) Amend the purchasing policy as requested by Council member Swanson
2) Make no changes to the purchasing policy.
Resolution No.: 10-16-12-OS
City of Scandia
Purchasing Policy
Approved by the City Council October 16, 2012
I. INTRODUCTION & OBJECTIVES
The purchasing policy for the City of Scandia is established by the City Council to
provide guidance to staff involved in the purchasing process. Council grants staff the
authority to purchase materials, equipment and services,within the budget previously
approved by the Council, consistent with this policy. The objectives of the policy are:
a) To obtain supplies, equipment, and services as economically as possible.
b) To ensure that all purchases are best suited to the specific needs of the city.
c) To ensure adherence to the budget approved by the City Council.
d) To provide for the most efficient use of staff and City Council time and resources.
e) To ensure compliance with all applicable policies, statutes, and regulations of the
City, the State, and the Federal Government.
fl To ensure that qualified and responsible bidders are selected for city projects.
II. PURCHASING STANDARDS AND METHODS
a) Small Purchases Less than $2,000
Purchase of budgeted items or services costing less than $2,000 may be
authorized by the City Administrator or department head (Fire Chief and
Maintenance Supervisor.) Such small items may be charged on account, on a
city-authorized credit card or purchased with petty cash as may be appropriate or
most convenient for the particular purchase. The staff inember making the
purchase shall endeavor to obtain the best prices available on the open market.
b) Purchases Greater than $2,000 and less than $5,000
Purchase of items or services costing more than$2,000 and less than$5,000 may
be authorized by the City Administrator. The Administrator may require the
department to obtain two or more quotes to ensure that the price is competitive.
Quotes will not be required if the purchase is available from a single source. Prior
review of the purchase by the City Council is required in the following cases:
1) if the purchase would cause an individual line item in the departtnental budget
to be exceeded by$1,000, or cause the departmental budget to be exceeded by
any amount for that year; or
2) if the purchase is budgeted within the Capital Improvement, Equipment
Replacement or Park Capital Improvement Fund budgets.
c) Purchases Greater than $5,000 and less than $50,000
All purchases costing more than $5,000 and less than $50,000 must be pre-
authorized by the City Council. At least two quotes shall be obtained and
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Resolution No.: 10-16-12-OS
reviewed by the City Administrator prior to submission to the City Council. The
quotes shall be kept on file for one year.
d) Purchases greater than $50,000
Sealed bids shall be solicited when and in the manner provided by state law for all
purchases over$50,000. Prior to solicitation of bids,the departrnent shall prepare
specifications to be reviewed by the City Administrator and approved by the City
Council. The specifications shall reserve the city's right to reject any and all bids
and waive informalities or irregularities. After bids are received and tabulated,
the successful bid will be presented to the City Council for approval by resolution.
The bid will be awarded to the lowest responsible bidder whose bid, conforming
to all the material terms and conditions of the invitation for bids,represents the
best combination of quality, service and price. The determination of whether or
not the bidder is responsible will be made by the City Council based on Section
IX of this policy.
e) Consultants and Professional Services
The city hires a variety of consultants and purchases professional services on an
on-going basis (such as City Engineer, City Planner, City Attorney, etc.) as well
as on a project-by-project basis. Competitive bidding is not required for
professional services. For new on-going services, and for projects or assignments
exceeding $2,000 in cost, the City Council shall review and approve a request for
proposals prior to its issuance. The Council shall also determine the procedure to
be used to select the consultant or contractor.
III.EMERGENCY PURCHASES
Emergency purchases not meeting the requirements of this policy may be made by
staff where an immediate purchase is necessary to correct a situation which would
adversely affect the life,the health and safety of people,personnel and/or to protect
the environment. To the greatest extent possible, this policy should be followed, and
every effort shall be made to notify the department head and City Administrator as
soon as possible when the need for an emergency purchase arises. Such emergency
purchase shall be explained to the City Administrator on the next working day, and to
the City Council at their next regular meeting.
IV.COOPERATIVE PURCHASING
Where a purchase contract has been awarded in compliance with applicable state
statutes, and where it is legally permissible for the city to participate in that contract,
the City Administrator or appropriate Department Head may purchase supplies named
in that contract, without obtaining quotes or fulfilling the competitive bidding
requirements.
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Resolution No.: 10-16-12-OS
V. CITY CREDIT CARD ACCOUNTS
The City Council authorizes city credit cards to be issued in the names of the City
Administrator, Treasurer, Fire Chief and Maintenance Supervisor. Credit cards may
be used for small purchases less than $2,000 as authorized by this policy. No cash
advances or checks for transfers shall be permitted. Any purchase directed by or
made by an employee using a city credit card that is not approved by the Council
shall be the responsibility of the employee.
VI.DOCUMENTATION OF PURCHASES
As soon as practical following any purchase,the responsible staff person shall submit
documentation including receipts and quotes to the department head,who shall initial
them signifying approval before forwarding them to the City Administrator's office.
Credit card statements alone will not qualify as adequate documentation. The City
Administrator shall ensure that proper documentation has been provided before
submitting claims to the City Council for approval. All receipts and quotes shall be
retained as required by the city's retention policy.
VII. PAYMENT OF CLAIMS
The City Administrator/Clerk shall present a list of all claims to be paid to the City
Council for approval at its regular monthly meeting. The Council delegates authority
to staff to pay the following type of claims prior to Council approval:
a) Payroll and related expenses(such as taxes, employee benefits, etc.)
b) Principal and interest payments on obligations of the city.
c) Claims that would result in payment of late charges or interest if payrnent is
deferred until the next regular Council meeting.
d) Electronic funds transfers to the State of Minnesota for permit surcharges.
e) Payments for postage to the U.S. Post Office or for refilling a postage meter, if
credit card payments are not accepted or timely Council approval is not practical.
VIII. DISPOSITION OF SURPLUS PROPERTY
Surplus, salvage, obsolete and unneeded materials or equipment belonging to the city
may be disposed of by the City Administrator, or by a department head upon the
approval of the Administrator. Disposal of any item valued at $100 or more shall
require prior authorization by the City Council. The method of disposition shall be
appropriate to the type of item and shall be approved by the Council at the time they
determine that the item may be disposed of. The method of disposal shall comply
with all requirements of state law, including all restrictions on the sale of city-owned
property to a city officer or employee.
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Resolution No.: 10-16-12-OS
IX.RESPONSIBLE BIDDER POLICY
The City Council will review the qualifications and experiences of bidders for
construction, alteration, repair, or maintenance of real or personal property after bids
are opened and before a contract is awarded, to determine if the bidder is
"responsible". A"responsible"bidder is a bidder qualified to do the work. This will
be determined by assessing the bidder's skill, resources, experience, successful
performance or similar contracts (on time and on budget), and all other matters
bearing upon the likelihood that the contract will be successfully completed. In all
cases where a bidder is unknown or where there are any questions about the
qualifications of the bidder,the following information will be required of the
apparent low bidder in the form of a questionnaire, as follows:
You are required to complete and return this questionnaire before the Scandia
City Council considers awarding you the contract.
1. Identify all similar public projects in which you were the contractor. If you
have had more than five such contracts, list only the last five contracts, and as
to each contract identified provide the following information:
Project Description:
Date:
Contact Person at City/County/State:
Were change orders in excess of 5%requested? If yes, explain the
circumstances.
Were liquidated damages assessed? If yes, explain the circumstances.
Was the project completed on schedule? If no, explain the circumstances.
2. Describe all construction arbitration claims and any construction or project
litigation in which you have been a party in the last five years.
3. Identify all public projects you have had with the City of Scandia or New
Scandia Township in the last 5 years.
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Resolution No.: 10-16-12-OS
4. In the last five years has a bonding company ever refused to issue you a
performance bond? If yes, explain the circumstances.
5. In the last five years have any claims been filed against a performance or
payment bond that you have provided a public entity? If yes, explain the
circumstances.
6. In the last five years,has your firm or any of its owners or employees been
fined by a federal or state agency for a contract or workplace matter(such as
wage or hour or safety violations),or debarred under Part 29, Title 49 CFR or
any other law from submitting bids on public projects? If yes, explain the
circumstances.
7. In the last five years,has your firm or any of its owners or employees been
charged or convicted of a crime involving the awarding,bidding or
performance of a government contract? If yes,provide full details.
8. Are any of the owners or employees of your firm an elected official or
employee of the City of Scandia?
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