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 43 Minn. R. 8130.1200, subp. 3 D. Minnesota Department of Revenue Notice #17-10, December 4, 2017. • The city has appointed a purchasing agent. • When the purchasing agent delivers the materials to the city, the city becomes the owner of the materials. The city takes on the risk of loss with respect to such materials. • The city, and not the purchasing agent, shall have responsibility for all defective materials and supplies, including those incorporated into realty purchased in such manner. Minn. R. 8130.1200, subp. 3 D. State administrative rule also requires the designated purchasing agent to “furnish adequate notification” to all vendors and suppliers of the agency relationship with the city and to make it clear to the vendors and suppliers that the city is the one responsible for paying and not the contractor-agent. This must be included in the purchase order between the purchasing agent and the retail vendor. Minnesota Department of Revenue, Certificate of Exemption Form ST3. This is re-emphasized when the contractor checks the box on a completed Certificate of Exemption Form ST3, indicating it has been appointed as a purchasing agent. The contractor-agent should provide the completed form, along with the purchase order, to the seller before the sales tax- exempt transaction is completed. 2. Agreements for subcontractors A subcontractor can also make purchases tax-free as the city’s purchasing agent if the subcontractor has also provided separate bids on materials and labor, and at the time of sale, the subcontractor: Minnesota Department of Revenue, Certificate of Exemption FResearorm ST3. • Has a copy of the completed Certificate of Exemption Form ST3 showing the city is exempt from sales and use tax. • Has a document appointing the subcontractor as purchasing agent for the city. This is usually provided by the primary purchasing agent whom the city has authorized to appoint subagents. • Secures separate contracts for materials and labor (avoiding the lump- sum contract or similar guaranteed maximum contract for both materials and labor), or only obtains a materials contract. XII. Conflict of interest in contracts Minn. Stat. §§ 471.87-.89. LMC information memo, Official Conflict of Interest. City officials—elected or appointed—generally may not have a personal financial interest, directly or indirectly, in any contract the council makes. This prohibition applies whether or not the interested official votes on or otherwise attempts to influence the council in its decision-making process or any related matter. Again, some limited exceptions exist, but a city should seek the advice of the city attorney before entering into any contract where a councilmember or other city official will have a personal financial interest.