04-10-2019 Council Packet - Laserfiche WebLink

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RELEVANT LINKS: League of Minnesota Cities Handbook for Minnesota Cities 10/15/2018 Expenditures, Purchasing, and Contracts Chapter 22 | Page 9 LMC information memo, Meetings of City Councils. Without such detail, it can be difficult to determine whether the council approved a specific claim when the council had approved multiple claims and had allowed some, but not others. D. Issuance of order Minn. Stat. § 412.271, subds. 1, 3. Minn. Stat. § 471.425, subd. 4. After completing the previous steps, the clerk may issue to the treasurer an order for payment. The treasurer may not disburse funds without such an order. If the treasurer receives a payment order and the city does not have sufficient funds to pay it, the treasurer must mark the order “not paid for want of funds” and pay it in the sequence received, with interest from the date of presentation at the rate of 5 percent. The council, prior to issuance of the order, may set a lower interest rate. The council may not set this lower rate below 1.5 percent. Minn. Stat. § 412.271, subd. 1. This order-check requirement applies to all city funds, including disbursements from municipal liquor store funds. Minn. Stat. § 412.271, subd. 3. The form of the order should provide that, when the treasurer signs the order, it becomes a check on the city depository. 1. Form of claim payment Minn. Stat. § 412.271, subds. 2 and 5. Two separate statutes apply to how cities can pay claims. One section states that a city may not disburse city funds except through an order drawn by the mayor and clerk upon the treasurer, except where cash makes more sense. An “order” represents a numbered document in the form of a check signed by the mayor and city clerk. When an order is presented to and signed by the treasurer, it becomes an order check. An order check constitutes the written instrument that authorizes the bank to disburse city funds to the party and in the amount indicated on the order check. Minn. Stat. § 471.38. Minn. Stat. § 645.26, subd. 4. In the 2017 legislative session, the Legislature passed a law that allows payment of claims and obligations of any city by warrant, check or any form of electronic or wire funds transfer. Cities should work with their city attorneys to resolve any conflict between these two statutes if one arises, however, the newer law likely prevails regarding forms of payment, with the older statute setting forth the specific process for payment of claims. Minn. Stat. § 471.38. For example, cities now have specific authority to make electronic fund transfers for certain claims, including: • For a claim for a payment from an imprest payroll bank account or investment of excess money. • For a payment of tax or aid anticipation certificates. • For a payment of contributions to pension or retirement fund. • For vendor payments.