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 6 II. Procedure for paying claims Minn. Stat. § 412.271. LMC information memo, Procedures for Paying City Claims. Standard Plan and Plan A cities follow the same procedure to pay city bills, including the officials involved. The process for Plan B statutory cities varies slightly. When the city owes money to a particular individual or business, that person or business has a “claim” against the city depository (the bank account in which the city deposits its money). LMC information memo, Procedures for Paying City Claims. Generally, cities follow three steps when paying any claim. This process can vary slightly depending on the nature of the claim and the authorization required for issuing the order. For example, some types of claims may require prior council approval, and, in some instances, council may delegate authority to pay certain types of claims. Generally, however, the following basic process applies: • Filing the claim. The claim or bill must go to the clerk for filing. • Approval of claim. The council must audit the claim or bill. • Issuance of order. City officials sign and issue the check or order. After the approval or disapproval of the claim by the council, the clerk shall endorse on each claim the word "disallowed" (if that is the case), or "allowed in the sum of $..........," if approved in whole or in part, specifying in the latter case the items rejected. The mayor or the clerk can submit approved claims, called an order, to the treasurer. Once signed by the treasurer, that order becomes a check on the city depository. This process does not apply to payment of judgments, salaries, and wages previously fixed by the council or by statute; principal and interest on obligations, rent and other fixed charges (the exact amount of which has been previously determined by contract authorized by the council); and for other instances provided by state law. Minn. Stat. § 412.691. LMC information memo, Procedures for Paying City Claims. As mentioned above, Standard Plan and Plan A statutory cities follow this basic process. For a Plan B statutory city, the city manager acts as the chief purchasing agent and may exercise some purchasing independence, subject to any procedural requirements established by the council. For example, city managers can make contracts for purchases in the amount of $20,000 or less. Minn. Stat. § 471.38. Minn. Stat. § 471.391, subd. 2. Minn. Stat. § 410.33. LMC information memo, Procedures for Paying City Claims. Home rule charter cities may have different procedures for paying claims outlined in their charters. In addition to the charter, Minnesota statutes specifies certain requirements for second, third, and fourth-class home rule charter cities apply. These requirements mirror the requirements for statutory cities. Additionally, a charter city also may choose to generally apply the procedures and exercise authority found in the statutory city code if their charter does not address situations that arise.