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ITEM 3.4 Revised purchasing policyOtSTY F O MINNESOTA V DEPARTMENT INFORMATION Request for City Council Action ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE: Administration City Administrator/ Finance Director Flaherty August 28, 2017 PRESENTER(s) REVIEWED BY: ITEM #: Consent Item City Attorney MacArthur 3.4 AGENDA ITEM DETAILS RECOMMENDATION: City staff is recommending that the City Council adopt the revised purchasing policy. ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED? No No BACKGROUND/JUSTIFICATION: It is important that the City periodically review existing policies. The City's existing purchasing policy was approved by the City Council on April 23, 2012. Revisions to the purchasing policy are being recommended for the following reasons: 1) To ensure an emphasis is placed on the budgeting process. 2) To provide department heads with more operational authority. 3) To reduce the time involved with multiple presentations (budget, sub -committee, council). 4) To ensure the policy is aligned with: state statutes, best practices and existing procedures. The draft policy has been reformatted in comparison to the existing policy. For the most part, the content of the draft policy is very similar to the existing policy. The primary changes within the draft policy include: 1) Purchasing authorization amounts have been increased in the instances where the purchases have been specifically authorized in the budget. If purchases are not specifically outlined, they still need to be approved by the City Council for any amounts over $5,001. 2) The use of purchase orders has been relaxed; however, purchases that are not specifically budgeted or purchases that exceed $10,001 still require the use of purchase orders. 3) Narratives have been revised to more accurately reflect current procedures. 4) Statutory references have been revised and/or added where applicable to make authoritative references easy to find. This draft policy was presented and reviewed with the Administrative Sub -Committee on August 9, 2017. There was concurrence for the draft revised purchasing policy to be placed on the agenda for a future City Council meeting. SUPPORTING DOCUMENTS ATTACHED: • Existing Purchasing Policy—April 23, 2012 • Draft Revised Purchasing Policy • Resolution 2017-72 on42CIP1 = Rfir)TIr)M PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES: Motion to approve Resolution 2017-72 adopting the revised purchasing policy. RI Irl( -'1=T IAI11:r1RMAT1()N FUNDING: BUDGETED: N/A CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO. 2012-36 RESOLUTION APPROVING REVISED CITY pURCHA.SING POLICY WHEREAS, the City previously adopted a Purchasing Policy in April 23, 2007 and WHEREAS, the City has made certain revisions in the P olicy including the: following: 1. provisions for emergency purchasing under the Minnesota Emergency Management Act. 2. Increase in Purchasing Levels for Department Heads and City Administrator. 3. Expanded use of and additional restrictions on the Use of City Credit Cards. loyees and Supervisors sign an approved Credit Car 4. Requirement that emp User Agreement. NOW, THEREFORE the City Council of the City of Otsego, Wright County, Minnesota resolves as follows: 1 The City of Otsego Purchasing Policy as attached hereto is hereby adopted and is effective from h Offset o forward, r chasing Policy is no longer in 2, The previously adopted City g force and effect. ADOPTED this 23rd day of April, 2012, MOTION FOR. APPROVAL BY: CM HE'D' SECONDED BY: CM SCHARBER IN FAVOR: MAYOR 5TOCKAMP: COUNCILMmERS: HEIDNER, SCSARBER AND DARKENWALD OPPOSED: NONE CITY OF OTSEGO res ca Stockamp, MaYor Q� Tami Loff, City Clff 2 2— CITY OF OTSEGO . PURCHASING POLICY Section L P9008e ty The purpose of this policy is to establish the procedures dor purchasesmade only- it does not ehalf of tapp yhe � ' lies to employees and commission of Otsego. This policy app p & attorneys. This policy has the to contracted employees such as engineering, planning following objectives: 1, To ensure that purchases comply with all applicable laws; 2. To ensure that taxpayers receive the lowestpriceand the best value for their tax dollars when the City purchases goads and service , ent guidelines for authorized CATemployees/purchasers to 3. To provide clear and consist follow; A•. To limit the discretion of City officials and thus limit the possibility of fraud or favoritism. Section IT. Purchasing Oversi ht The Finance Director or designee is responsible for the overall purchasing function. Department ir Heads shall be responsible for purchasing items h�hC n h respective lbe signed by the Mayor bonds, and instruments of every kind to whichCity is and/or -the City Clerk on behalf of the City and shall be executed in the name of the City. City credit applications must be, approved by the City Clerk. Section M. Pura asin� x`evels . ses up to $2500 Depart went Heads shall have the authority to authorize and/or approve s� for shall have he based on appropriations contained in the City's Budget. ripe City d on appropriations contained authority to authorize and/or approve purchases up to $1000 and items specifically identified in the City's Budget. Purchases that are greater than $10, through the annual budget must be approved by the City Council prior to the commencement of the purchasing process. Section IV. Use of purchase Orders Purchase orders will be required for all purchases greater than $2,500 and maybe issued for at basis fi-om the lesser amounts if requested by the vendor. Certain t pitems rch s ude itemwiinssu h as bull fuel, same vendor do not require a purchase order. These or/contractor, etc. Before presentation of the purchase order to thvend Put Purchase order. The Depra ment head Finance Director, and City .Administrator must sign se complete the Purchase Order; the must specify the *souree of funding for the purchase and fully p Finance Director must ensure adequate funding is aor his/hex appioble from the vialas applicable, hasng source and the Administrator must provide assurance that City Council been obtained for the purchase. These procedures apply to the purchase of supplies, materials, equipment, or the rental thereof, or the construction, alteration, repair, or maintenance of zeal or personal property. All purchases City of Otsego Purchasing Policy Page Two annual budget. All telephone or verbal quotes must be must be consistent with the approved followed with written confirmation. Section. V, Purchasing Procedures Purchases may be made by the following methods: Regular purchasing procedures ® Price agreements Emergency purchasing a Cooperative purchasing o Establish use of charge accounts 1. Purchases of less th-an $2,500 . urchaser, The The purchase may be made a hepe emplloyee with the approval of the Departmental authorized purchaser may be y City encouraged to seep quotations from Supervisor. Authorized purchasers are strongly several vendors if the anticipated cost approaches t$21500. thein e department to begin thginal invoices, e slips or other dooumentation should be f payment approval process as soon as possible, 2, Purchases from $2,501 to $10,000 The purchase should be based on a minimum of two (2) written quotations. Quotations or ivery service, Or may be obtained by telephone a s written d to and timecpeod forlwhich they are valid, Internet, Quotations must havep .A11 quotations shall be kept on file ode ��� ounts of l°e quotations, and each suceessfuls ne (1) year and include of vendors providing the quotations, quotation signed and dated. Quotationion isles receivedethe reason for the devmaintained in the iation from. department. If no quotations or only one quotation standard policy guidelines should be documented in writing, such as sole source vendor, and be, attached to the invoice to be paid in the finance department. 3, Purchases from $10,001 to $100,000 the The proposed purchase MU sht benpreend to Council purchase may be made er approval ither via sealed commencement of the purchasing Process, bids or by obtaining iwo (2) or more written quotations, without advertising for bids or Quotations may otherwise complying with1he requirementsitteft ompettiv or in.zm via ibidding se vice, or Tntexne be obtained by telephone ( Quotations must have a specific date and time period for which they are valid. All quotations shall be kept on file for a minimum of one (1) year and include the names of City of Otsego Purchasing polioy page Three the vendors providing the quotations, the amounte obtained by phone, they mut be followed quotation signed and dated. Tf quotations a up with a signed quotation to be x selection end aid aid approval. This approval shall be tation. The quotations must be forwarded to the City Council for Bele pp accomplished by completion of a Requ�estpfort1Cz e councilust be completed. on form submittqot at a regularly scheduled Council meeting. 4. purchases exceeding $100,000 The proposed purchase must be presented to Council for approval before the commencement of the purchasing process: Purchases or contracts exceeding $100,000 require formal sealed bids solicited by public notice in accordance with Minnesota Statute 471.345, Subd.3, The City shall prepare or cause to be prepared, the specifications, the advertisement to solicit sealed bids, the opening and tabulation of bids, and any necessary investigation of the, bidbidsis the lowest, City's lresponsible b dated SThe City ive shall recommend to the City Council which Council shall determine the lowest responsible bidder and shall accept such bid: In. all cases, or reject any or all of the bids, and the City Council reserves the right to ac waive informalifies therein. The City has reasonable discretion in determining the lowest responsible bidder. Not only must a successful bidder submit the lowest bid price and y meet the eaand conditions of the specifications, the low bidder aEa ,responsible" terms and have the capacity to perform the proposed contract. %esponsib a li includes 1ci such considerations as the bidders' financial responsibility, integrity, ability, likelihood of providing faithful and satisfactory performance. There is more latitude in purchasing items of equipment not capable of exact specifications. In making such a purchase, the City Council may exercise reasonable discretion in determining the lowest responsible bidder. The City Council may consider, ins dndietiodnettot the bid price, the quality, suitability, and adaptability of the article for 5, Purchasing through Cooperative purchasing agreements 7n accordance with Minnesota Statutes Section 471.3 5, Subd. 15, a municipality may contract for the purchase of supplies, materials, or equipment without regard to the h a national competitive bidding requirements in ll ance or coopetatutes if rative ve created bypurchase is oagoint Powe s municipal association's purchasing a agreement that purchases items from more than one source on the basis of competitive bids or quotations. Under these programs, several governmental units can enter into an. agreement to authorize one party to solicit bids and provide for fine purchase at the option of each participating governmental unit. Once the governmental units agree on the specifications tise for bids on behalf of all the parties that participate in of the item, one party may adver the agreement. Rather Than specify a specific number o£ items, the advertising participant will advertise fora range of quantities estimated for the entire group. Each participating City of Otsego Purchasing Policy Page Four unit can make the final decision on whether to purchase the items from the successful bidder. ' The City currently participates in the Cooperative Purchasing Venture (CPV) administered by the Minnesota State Board of Administration. 6; Exclusions Brom Competitive Bidding Requirements It is not necessary to advertise for bids for: • Professional services such as those provided by engineers, lawyers, architects, planners, accountants, and other services requiring technical, scientific or professional training, • The purchase of real estate, or roducts patented or • The purchase of noncompetiti uspmeet sta u ory equirementsfor a sole, sourcce source and this circumstance m vendor. Traver All expenditures for Travel and training need prior approval for the DepartmeThe nt has a. he trate 1 request will then be forwarded to the City Administrator pp travel reimbursement policy detailing'thi.s process. Invoice Approval ces, whether All invoices received at the City offiat onsmaa king slips and other pshallurchase hase arded to the finance department, Original receipts, quotations, p documentation should also be forwarded to the documentation,idartme znlvotices will be reviewed to invoices will be matched with other supporting determine the invoices are mathematically correct- oeview and approval by the department the to -viewed invoices will be head separate folders in. the finance department for x Department Heads will be notified of any deficiencies in the doouxnentation accumulated. Department shall review all invoices for expenditures of their departments cod,invtoicesafter� e validity of the charges. Department Heads shall sig.es ascertaining that the goods or services have been deliveredlist or other. documentation. of receipt ishould d that the amounts charged axe correct. The packing hHead be, attached to the signed invoice. Certain invoices axe aexcluded d o Department based oniev,� and approval. These include monthly invoices which ,, life. insurance, dental insurance, employee costs or other factors, e.., health insurance efuse removal However, if 'unusual or non - retirement funds, utilities, telephoneDepartment head approval should be obtained F. recurring charges appear on any of these invoices, a mems fiom prior to processing. Payments will only be made from the original invoice; p y statements axe not allowed. Bmployee reimbursements must be submitted on the approved form and must be signed by the employee and the Department dead, All non mileage reimbursements must have the original receipts attached. ' City of Otsego Purchasing Policy Page Five invoice Approval - continued All purchases/payments shall be, el reviewed and ratified bmt the red to be released prioouncil at their r to a City and othe meeting before payments ular axe released, Some p s payr Council meeting. In those instances, items such laim� listlof the electronically will be listed for approval on the next city Council payments Bade price. Agreements Price agreements may be used to acquire items the elyd nt is a cily purchases ill small on tract between the City and asp i.e. gasoline, propane, and heating fuel. A pace agx vendor. Under it, the vendor agrees to supply all of the City's requirements far he specified commodity during the period of agreement. The price, mdite dely be ivexyed rx duce paperwork, and fixed variable,, such as a discount from market price, Such price agreements p eement shall be generally result in lower prices. The estimated annual cost of the price agr considered in: determining the appropriate purchasing procedure. Ec nergency Purchasing Under Minnesota's Emergency Management Act, cities are given the authority to enter into contracts during emergencies without foliaVere axe two types lly required of emergencies that may the, bidding requirements of state contract law. relevant on the local level; an "emergency" and a"public, healtha emergency". diat `acttiion. to ay�i is defined as an unforeseen combination of circa «disaster" is defined as a situation that prevent a "disaster" from developing or occurring, A creates an actual or imminent serious threat to t loss and 8 onmentafety of persons, or a iand for that has resulted or is likely to result in a catastrophe lproperty or the env of and assistance within the affected area are unable to repair oe which traditional sources of reli prevent the injury or loss. 11t threat of an illness or A "public health emergency" means an occurrence hat the, se of illness or health condition is condition in Minnesota where there is evidence bio -terrorism, or an airborne infectious agent or toxin expat os �e toman airborne infeess poses a ctious agent probability of a large number of deaths or disabilities or widespreadp that poses a significant risk to a large number of people, When an emergency occurs that may jeopardize public safety or the health and welfare of employees or citizens, the City Administrator ox appropriate department head may authorize a emergent uxchase. Department head emergency purchases and the reason for he necessary y p oiting documentation to the City purchase must be reported in writing including supp uncil as soon as Administrator within.24 hoursofthequotations n and reported to the City should be btained whenever possible as part of i possible. At least two compet tiv the purchasing process. exists per the, tions of the If there is any question about whether an emergency ncy Administrator ndhis/her designee Emergency Management Act, the City Co t3' n111f VIT +I fkA, rte Alfomavwhenever nxacticable. E, City of Otsego Purchasing Policy page Six Disaster Purchasing The Mayor may declare a local disaster or emergency-�uzT� The declaration constnt o%the Ci y Council Ag for a period in excess of three (3) days except lir disaster may result from fire, flood, tornado, blizzard, destructive winds, or other naiural causes, or from sabotage, hostile action, or from hazardous material mishaps or catastrophic measures, or emergencies that are technological in nature, During a declared emergency, the City may enter into contracts and incur obligations necessary g and providing to combat the disaster f s ch disasters, rs, T The mayx exercise such power a deemed necessary assistance to victims of such drsasto the performance without complying g with purchasing pxocedures prescribed by law pertaining of public work, entering into rental equipment agreements, purchase of supplies and materials, Iinnitations upon tax levies, and the appropriation expenditures for bids, provisions fan of personnel including, but not limited to, publication of resoluirons, publication laws and rules, provisions related to low bids, and requirement for budgets. -Use of City Credit Cards edit card In accordance with MIST Statute 471.3 82, the City o �e uncilmay on behalf ofta" or'zetheuseof e City The by any official or employee otherwise authorized t purchase City Administrator,, in consultation with the Pi d axcie Director nsdthat pertain t the individual determine which personnel will be assigned an yar directs a cardholder. Any official or employee l the tc City who able for rthe- amount of that purchase. akecAll that is not approved by the City Council is personally purchases by credit card must comply with the statutes, hment of all credit card acles and policies counts, ounts, The purchases. The City Council shall approve th finance department shall peep a xec Ordedit of rdall credit loyees authorized to use a City issued and the offlOial 01 employee card properly authorized to use a City cxedrt car P will receive and sign a credit card use agCOzm 1 tw° h the followings requiron ements: emense Finance Department. Credit card purchases must p Y The credit card will be issued in the emploYee's name and must not be used where the City has a store account. Claims presented to the City for payment s. Bilin lirngs from credit card companiesiting, itemized and submitted do the finance department within two busm y not contain the necessary detail to satisfy this requirement and therefor, ased by perred t cardholder must retain original invoices and receipts for all items p caxd. creit e The City will not use a credit card for carr neib e fox interesity will pay at charges and balances on a monthly basis. The City will ot be xespons accruing as a result of untimely submission of credit card receipts and payment requests. City of Otsego Purchasing Policy Page Seven ® No cash access (ATK is allowed, ex use of the credit card will result in disciplinary action up to and including Improper ersomet manual termination from employment as outlined in the City's p ent with the City terminates, the employee must When the cardholdex's employm immediately return the credit card to their Supervisor - 0 The Finance Department must be notified inunediately of any problems, issues or discrepancies an employee has with use of the credit card. 0 The credit card user agreement must be signed by the, employee cardholder and their supervisor. o ard user agreement are considered a part of the coedit card and The terms of the credit c purchasing policies. ! Date This policy becomes effective upon adoption by the City Council, APPROVED BY TOE C , ON APRIL 23, 2012. PURCHASING POLICY ADOPTED: DRAFT — Presented to City Council on August 28th, 2017 1. POLICY Assure that all City expenditures are lawful bysatisfyingthefollowing: A. Public Purpose: There must be a public purpose for the expenditure. B. Authority: There must be specific or implied authority for the expenditure in State Statute. C. Procedure: The expenditure must be properly approved by the City Council. 2. OBJECTIVES This policy has the following objectives: A. To ensure that all City expenditures are lawful, as outlined in Section 1 of this policy. B. To ensure that taxpayer dollars provide goods and services as economically as possible. C. To established uniform purchasing procedures for all City staff and across all departments. D. To ensure City expenditures are appropriately classified in the City's financial records. 3. PURCHASE ORDERS Purchase orders may be used for any purchase, but requirements for their use are more specifically outlined in Section 5 of this policy. In the instances where purchase orders are used, the following procedures are set forth: A. The vendor name, mailing address and contact information is required. B. A sufficient description and exact quantities of the respective purchase. C. A calculation of total cost, including applicable tax, shipping and handling charges. a. In the instance where exact costs are not known, an estimate is acceptable. b. In the instance where quotes were required, they should be attached. D. The source of funding and applicable expenditure code for the respective purchase. E. The purchase order shall be completed and signed prior to the respective purchase. 4. UNIFORM MUNICIPAL CONTRACTING LAW The City will follow procedures as set forth in Minnesota Statute §471.345. Purchases should not be separated into smaller components in order to eliminate an authorization threshold requirement. For the purchase of supplies, materials or equipment estimated to exceed $25,000, the City must consider the availability, price, and quality of the supplies, materials, or equipment available through the State of Minnesota's cooperative purchasing venture before purchasing through another source. Purchases of $25,000 or Less If the amount of the purchase is estimated to be $25,000 or less, the purchase may be made either upon quotation or in the open market, in the discretion of the governing body. If the purchase 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. Purchases Between $25,001 and $100,000 If the amount of the purchase is estimated to exceed $25,000 but not to exceed $100,000, the purchase may be made either upon sealed bids or by direct negotiation, by obtaining two or more quotations for the purchase 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 their receipt. Purchases of $3.00,001 or More If the amount of the purchase is estimated to exceed $100,000, sealed bids shall be solicited by public notice in the manner and subject to the requirements of the law governing purchases by the particular municipality. Exceptions The City may contract for the purchase of supplies, materials, or equipment without regard to the competitive bidding requirements of this section if the purchase is through the State of Minnesota's cooperative purchasing venture or a national municipal association's purchasing alliance or cooperative created by a joint powers agreement that purchases items from more than one source on the basis of competitive bids or competitive quotations. Other exceptions may include: professional services, insurance contracts, purchases from other government agencies, real estate, sole source vendors and others as defined by Minnesota Statute §471.345. 5. AUTHORIZATION The following thresholds have been established to provide efficient procedures while still retaining effective oversight. Purchases of $5,000 or Less Budgeted: If the respective purchase is specifically outlined in the department budget, the respective Department Head is authorized to make the purchase, and purchase orders are not required. Not Budgeted: If the respective purchase is not specifically outlined in the department budget, a purchase order is required, and needs to be signed by the Department Head making the purchase and the City Administrator. Purchases Between $5,001 and $10,000 Budgeted: If the respective purchase is specifically outlined in the department budget, the respective Department Head is authorized to make the purchase, and purchase orders are not required. . Not Budgeted: If the respective purchase is not specifically outlined in the department budget, the proposed purchase must be presented to the City Council for approval. A purchase order is required, and needs to be signed by the Department Head making the purchase and the City Administrator. Purchases Between $10,001and $25,000 Budgeted: If the respective purchase is specifically outlined in the department budget, a purchase order is required, and needs to be signed by the respective Department Head making the purchase and the City Administrator. Not Budgeted: If th e respective purchase is not specifically outlined in the department budget, the proposed purchase must be presented to the City Council for approval. A purchase order is required, and needs to be signed bythe Department Head making the purchase and the City Administrator. Purchases of $25,001 or More The proposed purchase must be presented to the City Council for approval. A purchase order is required, and needs to be signed bythe Department Head makingthe purchase and the City Administrator. 6. BILLING ADDRESS Vendors should invoice the City, and not an individual department or person. The billing address for the City is: City of Otsego Attn: Accounts Payable 1340090 th Street NE Otsego, MN 55330 Invoices may also be directly emailed to the Finance Department using accountspayable@ci.otsego.mn.us. 7. PAYMENT PROCEDURES In accordance with Minnesota Statute §471.425, the City has 35 days from receipt of the invoice to process payment. All invoices received shall be forwarded to the Finance Department. The Accountant will match invoices with other supporting documentation (Purchase Order, Quotations, Etc.) and distribute into separate folders for each Department Head. Department Heads are responsible for reviewing all aspects of the invoice and verifying the validity of the expenditure. The Department Head is also responsible for providing the budget account coding so that expenditures are appropriately classified in the City's financial records. The Department Head will authorize the expenditure for payment by including a date stamp and signature (or initials). Department Heads should notify the Finance Department of any invoices in dispute and the dispute should be documented on the invoice or with a memorandum accompanying the invoice. Certain routine transactions as defined by the Finance Director are excluded from Department Head review and approval. Such transactions may include, but are not limited to: payroll, employee benefits, workers compensation, and liability insurance and utility bills. All payments shall be summarized within a Claims List that will be presented to the City Council at their regularly scheduled meetings. The City Council will take action on the Claims List as part of the Consent Agenda. Once the Claims List has been approved by the City Council, the Finance Department will release payment to the vendor. In some instances, payments may need to be released prior to City Council approval. Such instances may include, but are not limited to: payroll, employee benefits, electronic funds transfer (eft), to receive early payment discounts or to avoid late penalties. Such payments will be authorized at the discretion of the Finance Director and will be presented to the City Council within the Claims List at the next scheduled regular City Council meeting. 8. TRAVEL All expenditures for travel will be in accordance with the City's travel reimbursement policy. 9. EXPENSE REIMBURSEMENT Employee expense reimbursements (i.e. mileage), are to be submitted on claim voucher forms with supporting documentation and should be provided to the Finance Department. The procedures set forth in Section 7 of this policy will be followed for approval and payment. 10. SALES TAX Most City purchases are exempt from sales tax. Vendors should be notified of this exemption when making a purchase and each vendor should be provided a Certificate of Exemption (ST3 Form) available by request from the Finance Department. 11. CONFLICTS OF INTEREST Employees are required to provide notice to the Finance Director of any conflicts of interest prior to entering into transactions on behalf of the City. No employee, officer, or agent must participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediately family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has financial or other interest in or a tangible personal benefit from a firm considered for a contract. The officers, employees, and agents of the City must neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. 12. EMERGENCY & DISASTER Under Minnesota's Emergency Management Act (Minnesota Statute §12.37), the City has the authority to make purchases or enter into contracts during emergencies without following many of the, otherwise, normally required procedures. The Emergency Management Act defines an "emergency" (Minnesota Statute §12.03 sub3) as an unforeseen combination of circumstances that calls for immediate action to prevent a "disaster" from developing or occurring. The Emergency Management Act defines a "disaster" (Minnesota Statute §12.03 sub2) as a situation that creates an actual or imminent serious threat to the health and safety of persons, or a situation that has resulted or is likely to result in catastrophic loss to property or the environment, and for which traditional sources of relief and assistance within the affected are unable to repair or prevent injury or loss. In the event of an emergency or disaster, the City will make declaration of a local emergency by following procedures as outlined in Minnesota Statute §12.29: A local emergency may be declared only by the Mayor. It may not be continued for a period in excess of three days except by or with the consent of the City Council. Any order or proclamation declaring, continuing, or terminating a local emergency must be given prompt and general publicity and filed promptly by the City Clerk. 13. SPECIAL EMERGENCY The City Attorney must be consulted with prior to making a purchase under this section. Under Minnesota Statute §365.37, Towns have the authority during a special emergency to make purchases without notice or competitive bidding. A special emergency is a situation requiring immediate action essential to the health, safety or welfare of the town. Although this exception is a Statute referring to Towns, Minnesota Statute §415.01, outlines that Cities have and may exercise within its limits any of the powers conferred to Towns. in the event a special emergency exists, the City Council has granted authority to the City Administrator to make the necessary special emergency purchase. At the next regular scheduled City Council meeting, the City Council will approve the respective purchase and will pass a resolution specifically referring to the special emergency and declaring the special emergency describing the reasons necessitating the immediate action for protection of the health, safety or welfare of its citizens. APPENDIX A: CREDIT CARD USE POLICY 1. USE OF CREDIT CARDS The City has authorized the use of credit cards under Minnesota Statute §471.382 by City employees to make purchases on behalf of the City. 2. AUTHORIZATION The City Administrator in consultation with the Finance Director will determine which personnel will be assigned a City credit card. The credit card will be issued in the employee's name. The authorized employees include: City Administrator City Clerk Finance Director Streets Operations Manager Parks and Recreation Director Public Utilities Manager Employees that are not authorized account holders as identified in this policy, shall not retain credit card information or make purchases using a City issued credit card without prior approval from an authorized account holder. The Finance Director shall be responsible for the maintenance of the City credit card, including account maintenance, setting purchase limits, issuing physical cards, etc. 3. USERS All employees authorized to use a City credit card are required to sign a credit card user agreement form, which will be retained on file by the Finance Director. The credit card user agreement also needs to be signed by the City Administrator. The terms of the credit card user agreement form are considered a part of this policy. Upon termination of employment with the City, the City issued credit card will be returned to the Finance Director on or before the employee's last day of employment. The Finance Department must be notified immediately of any problems, issues or discrepancies an employee has with the use of the City credit card. 4. PURCHASES Each card holder will be responsible for ensuring that purchases made with their card comply with Minnesota Statutes, the City's Purchasing Policy, and this Credit Card Use Policy. Personal use of the City issued credit card is prohibited. Improper use of the credit card may result in disciplinary action as outlined in the City's Personnel Policy. Purchases that do not comply with City policies, or that are not approved by the City Council, may become the personal responsibility of the card holder and/or purchaser. In any instance where a product or service purchased with a City issued credit card is returned or canceled the transaction must be refunded to the credit card account. This policy does not restrict the use of personal credit cards for purchases/payments eligible for reimbursement from the City in accordance with the City's Purchasing Policy. 5. DOCUMENTATION The billing statement from the credit card issuer does not contain sufficient information to document a purchase made. Appropriate documentation is required for all purchases to verify compliance with this policy and the City's Purchasing Policy. A copy of the invoice or receipt for payment must be included to verify the amount charged on the card. Receipts from vendors that only list the total charged are not considered sufficient documentation. The receipt must identify all products or services purchased, shipping charges, and sales tax. A printed confirmation of an internet purchase may be sufficient to comply with this requirement. If an invoice is not immediately available, the invoice must be forwarded to the Finance department when it becomes available and another form of documentation must accompany the original charge. The City will not be responsible for interest charges accruing as a result of untimely submission of credit card receipts. Department Heads are responsible for reviewing all aspects of the invoice and verifying the validity of the expenditure. The Department Head is also responsible for providing the budget account coding so that expenditures are appropriately classified in the City's financial records. The Department Head will authorize the expenditure for payment by including a date stamp and signature (or initials). 6. REVIEW AND PAYMENT All credit card statements will be reviewed by the Finance Department for compliance with this policy and to ensure all charges have been accounted for. Additional documentation may be requested from a card user to ensure compliance with this policy and the City's Purchasing Policy. The City will not use the credit card account for carrying debt, and payment of the entire outstanding balance of City issued credit cards will typically be made through the City's normal vendor payment process. The Finance Director reserves the right to pay the credit card bill outside the normal vendor payment process if necessary to avoid finance charges. 7. CASH WITHDRAWALS No employee of the City shall use the City credit card to access an ATM for cash withdrawals. 8. VENDOR CHARGE ACCOUNTS The City has established charge accounts with a handful of vendors to expedite the purchasing process with those respective vendors. These accounts may or may -not have physical cards accompanying them. All sections of this policy are also attributable to the respective vendor charge accounts. If an account has been established with a vendor, all purchases should be made through that process, unless extenuating circumstances exist. CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO: 2017-72 APPROVING REVISED PURCHASING POLICY WHEREAS, the City previously adopted a purchasing policy on April 23, 2012; and WHEREAS, the City has made certain revisions within the purchasing policy; and WHEREAS, the City Council has met to discuss and review the revised policy; and WHEREAS, the City Council has determined that the revised policy shall be in force and effect upon the date of adoption of this resolution. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA: That the revised Purchasing Policy as attached hereto is hereby adopted effective immediately. 2. That the Purchasing Policy previously adopted on April 23, 2012 is no longer in force and effect. ADOPTED by the Otsego City Council this 28th day of August, 2017. ATTEST: CITY OF OTSEGO Jessica Stockamp, Mayor Tami Loff, City Clerk MOTION made by Council Member and SECONDED by Council Member IN FAVOR: OPPOSED: