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 18 • After the city has received the item and confirmed it meets all specifications, the city may process and pay the bill. 2. Price agreements Cities use price agreements to acquire items they frequently purchase. For example, cities often buy gasoline and heating fuel with price agreements. A price agreement represents a contract between the city and a merchant. Under the agreement, the merchant agrees to supply the city the specified commodities for the term of the agreement. Price agreements often contain either a fixed price or a variable price that offers a set discount off the market price. The city usually estimates its probable needs, even though not obligated to purchase any definite quantity. Price agreements expedite delivery, reduce paper work, and generally result in lower prices. The city may then make purchases as the need arises. Depending on the commodity and the frequency of purchases, the council may or may not require separate requisition forms. The council should set some type of accounting system, however, to prevent the city (or any city department) from overspending its budgetary appropriation. 3. Inspection and testing Before the city pays for purchased items, someone should confirm that the items conform to the city’s specifications. Normally, the purchasing agency or an employee in the department receiving the item performs the check. Employees can easily test many products by counting, measuring or weighing. In other cases, the city may need to have an outside agency perform the tests. IV. Disposing of city property and equipment Cities often find themselves in possession of property or equipment they no longer require. Sometimes equipment being replaced or retired may still be in working condition and may have value to someone else. In those situations, cities often choose to sell the property. A. Salvage operations Cities often sell excess materials from construction jobs, excess inventories, obsolete or outgrown equipment, and even real property that does not fit the city’s current or future needs.