HomeMy WebLinkAboutItem 6 Approval of Letter of Understanding to join NMMA MemoMAYOR AND COUNCIL COMMUNICATION
DATE: 03/19/2013
CONSENT
ITEM #: 6
MOTION Consent Agenda
AGENDA ITEM: Approval of Letter of Understanding to join North Metro Mayors
Association as an Associate Member
SUBMITTED BY: Adam Bell, City Clerk
THROUGH: Dean A. Zuleger, City Administrator
SUMMARY AND ACTION REQUESTED:
As part of the Consent Agenda the City Council is requested to consider approval of Letter of
Understanding to join North Metro Mayors Association as an Associate Member. The approval
will allow the City of Lake Elmo to participate in the North American Joint Purchasing Program.
Participation in the NAJPP will afford the City to realize on average an almost twenty-percent
savings on over 700 office supplies the City currently purchases.
BACKGROUND & STAFF REPORT:
In 2009, the North Metro Mayors Association amended its Joint Powers organizational document
to permit the establishment of a central purchasing program called the North American Joint
Purchasing Program. The primary objective was to achieve the best competitive price in the
marketplace on select products and/or services for its members and/or participating community
partners. Since its inauguration NAJPP has initiated three public bids for the following products:
1) office supplies, janitorial cleaning supplies and office furniture, 2) water treatment chemicals
and 3) field marking paint.
NMMA has appointed a management committee comprised of six City managers/Administrators
with program oversight and decision making authority. At a recent session the committee
identified several additional products or services it will consider adding to the program in the
future; e.g., credit card services, engineering, fertilizer, surveying, bulk oil, street sweeping, and
ice arena products and services.
In June, 2010, S&T Office Products, as lowest responsible bidder, was awarded a two year
contract to provide office supply, janitorial cleaning supply and office furniture programs to
NMMA members and participating community partners. Since that date, S&T has adjusted its
winning bid product price schedule a number of times to meet or beat changing marketplace
pricing. S&T has initiated an aggressive marketing strategy to expand the program to include
new public sector members. As a result, we are pleased to include the Cities of Hanover, Isanti,
and Isanti County as NMMA associate members. In addition, the program has been structured to
offer current and future private sector Community Partners best bid pricing from S&T Office
Products.
A key component of the S&T Office Product, Inc. bid was its willingness to include an annual
5% dividend payment to participating members and community partners based on their
respective quantity purchases. Based on sales in 2010, S & T paid $3,264.89 as an earned
dividend to NMMA for distribution. This is a win-win situation: delivering best market pricing
and dividend returns based on quantity purchases.
In early 2011, NAJPP received two competitive bids on providing field marking paint products.
Hirshfield’s Paint Company was the successful lowest responsible bidder and NMMA awarded a
one year contract through December 31, 2011 with the option to renew for an additional year. In
addition, Hirshfield’s included a 1% Dividend Program based on quantity purchases that will be
distributed annually during the term of the contract.
City Staff currently uses S&T Office Product, Inc. for ordering various supplies, but will be able
to realize an additional average savings of almost twenty-percent by participating in the NAJPP.
By joining with NMMA, the City will receive best public bid pricing for program products and
services; participate in an annual NAJPP dividend distribution program based on members’
quantity purchases, minus program expenses on a pro-rate basis; and have the opportunity to
customize purchase and buying patterns based on requirements that best fit and benefit the City.
There is no obligation to purchase any products or services as an Associate Partner. The City
may elect, in its sole discretion, to participate, in any program for products and/or services
offered under NMMA’s NAJPP, so long as the City remains a current associate. The City may
withdraw participation at any time by giving written notice. Under the program, no participation
fee will be charged, and the only potential cost will be a pro-rata share of program expenses, if
any, and such charge may only be assessed against and deducted from earned Program dividends
payable to the undersigned based on its purchases of products and/or services under the NAJPP
RECOMMENDATION:
Staff recommends the City Council approve the Letter of Understanding to join North Metro
Mayors Association as an Associate Member. As part of the Consent Agenda, no specific motion
is required.
ATTACHMENT:
1. Letter of Understanding to join North Metro Mayors Association as an Associate
Member