5.i) Staff Report-Purchasing Policy Update ;� � ���
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SC1�►NDIA
Staf Renort
Date of Meeting: February l 9, 2013
To: City Council
From: Kristina Handt, City Administrator
Re: Purchasing Policy Update
Agenda Item #: S.i)
Background:
The City approved a purchasing policy in July 2008 and updated it in October 2012. The policy
provides guidance for employees to make purchases of goods and services for the City. At the
February work session,the Council discussed making additional changes.
Issue:
Should the Purchasing Policy be amended to include a purchase order?
Proposal Details:
The following language would be added to section II, a):
"The City Administrator, Fire Chief or Maintenance Superintendent may require a purchase order
prior to the expenditure of any funds."
A copy of the purchase order form that will be kept on file in the city offlces and provided to staffat
our upcoming regular monthly staff ineeting is included in your packet for your information.
Fiscal Impact:
NA
Options:
1) Approve Resolution 02-19-13-02
2) Amend and then Approve Resolution 02-19-13-02
3) Make no changes to the Purchasing Policy
Recommendation:
Option 1.
CITY OF SCANDIA
RESOLUTION NO.: 02-19-13-02
RESOLUTION UPDATING PURCHASING POLICIES
WHEREAS, the Scandia City Council has determined that a purchasing policy is
necessary to provide guidance to staff involved in the purchasing of materials, equipment
and services; and
WHEREAS,the objectives of the policy are:
■ To obtain supplies, equipment, and services as economically as possible.
■ To ensure that all purchases are best suited to the specific needs of the city.
■ To ensure adherence to the budget approved by the City Council.
■ To provide for the most efficient use of staff and City Council time and resources.
■ To ensure compliance with all applicable policies, statutes, and regulations of the
City, the State, and the Federal Government.
■ To ensure that qualified and responsible bidders are selected for city projects.
WHEREAS, the Scandia City Council has determined that the Purchasing Policy
adopted on July 15, 2008 and amended October 16, 2012 needs to be updated.
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY
COUNCIL OF THE CITY OF SCANDIA, WASHINGTON COUNTY,
MINNESOTA, that it should and hereby does adopt the attached "Purchasing Policy",
said policy taking precedence over any other policy that may have been established in the
past that may be in conflict.
Adopted by the Scandia City Council this 19th day of February, 2013.
Randall Simonson, Mayor
ATTEST:
Administrator/City Clerk
Resolution No.: 02-19-13-02
City of Scandia
Purchasing Policy
Approved by the City Council February 19, 2013
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.
� 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.) The City Administrator, Fire Chief or Maintenance
Superintendent may require a purchase order prior to the expenditure of any
funds. 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 be included on the purchasing order 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 departmental 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.
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Resolution No.: 02-19-13-02
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
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 department 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 ar
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
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Resolution No.: 02-19-13-02
requirements.
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 payment 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 o£ 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.: 02-19-13-02
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.:02-19-13-02
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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SCANDIA
PURCHASE ORDER
DATE:
REQUESTED BY:
DESCRIPTION OF ITEM OR SERVICE NEEDED:
FOR PURCHASES OF $2,000 OR MORE:
QUOTE # 1:
QUOTE #2:
QUOTE #3:
AMOUNT TO BE CHARGED:
CITY ACCOUNT TO BE CHARGED:
DEPARTMENT HEAD RECOMMENDATION:
REASON LOWEST BID NOT RECOMMENDED (IF APPLICABLE):
CITY ADMINISTRATOR/DEPARTMENT HEAD AUTHORIZATION:
DATE AUTHORIZED: