HomeMy WebLinkAboutResolution 2012-26 Adopting Purchase PolicyCITY OF ; (O
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WHEREAS, purchase of goods, services and commodities by municipalities is controlled
by State Statute; and
WHEREAS, practical application of statutes require some degree of clarification; and
WHEREAS, it is not only desirable but imperative that the City of Lake Elmo have a
clear, written policy on procurement activities to ensure the city is abiding by all state, local and
federal requirements in addition to utilizing cooperative purchasing opportunities whenever
possible; and
WHEREAS, the City of Lake Elmo is committed to fiscal responsibility this policy will
provide for a uniform and systematic method in order to ensure the best balance of quantity,
quality and price for the city's expenditures.
NOW; THEREFORE, BE IT RESOLVED, that the attached Purchasing Policy dated June fifth
2012 is hereby adopted.
Adopted by the City Council of the City of Lake Elmo on this fifth day of June 2012.
CITY AIDE
By.
Dean A. Johnston
Mayor
I hereby certify that the foregoing Resolution is a true and correct copy of a resolution
presented to and adopted by the Council of the City of Lake Elmo at a duly authorized meeting
thereof held on the 5th day of June 2012, as shown by the minutes of said meeting in my
possession.
(Seal)
Resolution 2012 26
SII hone
City Clerk
It is the purpose of this purchasing policy and purchasing procedures to provide a uniform
and systematic method in the procurement of goods and services required by the city in
order to secure the best balance of quantity, quality and price. These policies and
procedures will define the responsibilities and the authorities of the purchasing
requirements and limitations imposed by local, state and federal law.
1.2 POLICY
Considerable authority has been delegated to departments and employees to make
purchasing decisions. This requires that employees involved at every step of the
purchasing process take full responsibility for understanding the city's policies and
procedures regarding purchasing and vendor relations. Purchasing decisions are business
decisions made on behalf of the city and therefore should be made with the utmost
consideration for what is in the best interest of the city. The city should purchase and use
materials, products and services that are economically responsible and reduce resource
consumption and waste within federal, state and local laws. Beyond the conventional
purchasing decision-making process, this policy identifies the need to include
economic, environmental and social factors. These are all components that may be
included to determine what the best value is for the city. Purchases should reflect the
general impact on the environment and economic factors: best value, leveraging our
buying power, staff time/labor and technological advances.
This policy applies to all purchasing activities within the city. This policy and the
procedures associated with it apply to all city departments, employees and authorized
users and encompass all purchases using city funds providing for the limitations,
exceptions and exemptions described herein.
Purchasing authority is granted to the employee or authorized user and is subject to
all city purchasing policies and procedures and must be made in accordance with all
federal, state and local laws. For the purpose of this policy the individual delegated to
make purchases on behalf of the city will be referred to as the `purchasing agent.' The
purchasing agent has the authority to make most purchases pursuant to the requirements
and limitations of the policy and take advantage of savings through bulk purchasing,
systematic procedures, and effective expenditure controls. The purchasing agent is
responsible for ensuring that city purchasing is in compliance with all
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City of Lake Elmo Purchasing Policy
Adopted Jude 5, 2012
procurement laws, rules, policies and procedures.
Purchasing authority is granted to the individual and the delegation may be rescinded at
any time. Failure to comply with these policies and procedures could result in
discipline up to and including termination.
1.5.1 New Versus Used
Prior to making a purchase of new products determine if a used, recycled, repaired,
refurbished or remanufactured product would fulfill the needs of the city.
1.5.2 Cooperative Venture
If the item or service to be purchased is new determine whether the item or service is
currently available through the process of cooperative purchasing. For purchases
estimated to exceed $25,000, the purchasing agent on the behalf of the city must
consider the availability, price, and quality of supplies, materials, or equipment
available through the state cooperative venture before buying through another source. See
Section: 1.6 Cooperative Purchasing
1.6.1 Cooperative Purchases
In efforts for the city to increase savings the purchasing agent is encouraged to make
purchases jointly with one or more government units through cooperative purchasing.
The city and its purchasing agents are encouraged to be involved in the joint -powers
agreement to profit from these programs.
1.6.2 State Cooperative Purchasing Venture
The city and its purchasing agents are not only encouraged but mandated in some
instances to consider purchasing a variety of equipment, supplies and services through
the state contracts. For all purchases not exceeding $.25,000, in addition to following all
procurement laws, rules, policies and procedures, the purchasing agent is encouraged to
consider the availability, price, and quality of supplies, materials, services or equipment
available through the state CPV (Cooperative Purchasing Venture) before buying through
another source. For purchases estimated to exceed $25,000, the purchasing agent must
consider the availability, price, and quality of supplies, materials, or equipment available
through the state cooperative venture before buying through another source. For
purchases in excess of $25,000 the findings must be documented on the purchase
requisition.
1.6.3 Cooperative Purchasing Agreement versus Competitive Bidding
Competitive quotes and bidding requirements may be waived where the other
government entity has performed the ground work except in the event that the contract
is estimated to cost in excess of $50,000 in which case the city will follow the
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City of Lake Elmo Purchasing Policy
Adopted June 5; 2012
guidelines set forth in the uniform municipal contracting law (competitive
bidding law) and utilize the competitive bidding process for certain contracts. See section:
1.8 Competitive Bidding Requirements
1.7.1 General Purchasing Requirements
Whether or not competitive bids are necessary, all normal purchasing (except purchasing
with other price agreements or purchasing that comes out of petty cash funds) will adhere
to the following requirements: Purchasing requirements allow council to audit all bills for
materials, supplies, and services.
107.2 Obtaining Quotes
A previous quote may be used if the purchase requisition meets the following
criteria: The total dollar value does not exceed the purchase agent's delegated authority,
the re -order is within six months of the original purchase requisition order date, the city
need is for the exact same items and quantities, shipping costs remain the same, terms
and conditions remain the same as the original purchase requisition and the prices
remain the same, or lower, than the original purchase requisition. The purchasing agent
may contact the vendor to request pricing, terms and conditions. if agreed upon, the
purchasing agent may issue a purchase requisition without obtaining additional quotes.
This reordering option may occur once in relation to an original order. The original
requisition number should be referenced on the reorder.
1.7.3 Emergencies
Under Minnesota's Emergency Management Act, the city is given authority to enter into
contracts without following normally required procedures. The governing body may
waive compliance with the time-consuming procedures that concern: the performance of
public work, contracting, incurring obligations, employing temporary workers, renting
equipment, purchasing supplies and materials, limitations on tax levies and the
appropriation and expenditure of public funds (uniform municipal contracting law).
1.7.4 Preparing a Purchase Requisition
The department or person needing the item should prepare a purchase requisition form.
The form should include a description of the product, quantity, applicable specifications,
and any similar information. The form should include the verification of funds. The
form should include the quotes specified in the format designated by the purchasing
requirement outlined below.
1.7.5 Verification of Funds
After submission of the purchase requisition for approval, the delegated department
representative is responsible for verifying whether the budget has authorized the purchase
and if sufficient fonds are available.
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City of Lake Elmo Purchasing Policy
Adopted June 55 2012
1. 7.6 Cancelling the Purchase Requisition
The delegated department representative
if the budget does not allow the purchase
should cancel the purchase requisition
or if funds are not available.
1.7.7 Fill Approval Process
After completing these steps proceed to acquire the requested item or service. The council
and/or city administrator must approve unless the person has the proper authority to
make the purchase on behalf of the city council pursuant to city and state laws and
policies.
1.7.5 PURCHASING AT OR BELOW $2,500.00
A minimum of one price quote is required and can be obtained via telephone, facsimile, in
writing, e-mail, and website or at the transaction in a retail store. Purchasing agent or end
user must obtain a price prior to issuing an order. All purchases at or below $2,500.00
will include verification that the budget has authorized the purchase and/or sufficient
funds are available. All purchases at or below $2,500.00 will include a purchase
requisition signed by the department representative authorizing the purchase. In the event
the purchase was not authorized in the budget and./or the funds are not available the
department representative will cancel the purchase requisition. Otherwise the purchase
requisition will include the quotes, the verification of funds and documentation of
consideration for any of the following that apply: cooperative purchasing, used versus
new, made in the USA, economic, environmental and social factors.
1.7.9 PURCHASING BETWEEN $2,500.01 AND $5,000.00
A minimum of two price quotes are required and can be obtained via telephone, facsimile,
e-mail, website or in writing. Purchasing agent must obtain a firm price prior to submitting
for approval. The responses must be documented on the purchase requisition. Purchases
between $2,500.01 and $5,000.00 will include verification that the budget has authorized
the purchase and/or sufficient funds are available. All purchases between $2,500.01 and
$5,000.00 will include a purchase requisition signed by the department representative
authorizing the purchase. In the event the purchase was not authorized in the budget
and/or the funds are not available the department representative will cancel the purchase
requisition. Otherwise, the purchase requisition will include the quotes, the verification of
funds and documentation of consideration for any of the following that apply: cooperative
purchasing, used versus new, made in the USA, economic, environmental and social
factors. The department representative will submit the signed purchase requisition, the
quotations, the verification of funds and the considerations to the city administrator for
signature and approval.
1.7.10 PURCHASING BETWEEN $5,000.01 AND $25,000.00
If the contract is expected to be $25,000.00 or less, the council has discretion to make the
contract by obtaining quotes or it may simply buy or sell the item on the open market. If
the council chooses to obtain quotes, it must obtain at least two quotes and keep them
on file for at least one year. A minimum of two price quotes are required and
should be obtained in writing.
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City of Lake Elmo Purchasing Policy
Adopted June 5, 2012
The purchasing agent must obtain a firm price prior to submitting for approval. The
responses must be documented on the purchase requisition. Purchases between
$5,000.01 and $25,000.00 will include verification that the budget has authorized the
purchase and/or sufficient funds are available. All purchases between $5,000.01 and
$25,000.00 will include a purchase requisition signed by the department representative
authorizing the purchase.
In the event the purchase was not authorized in the budget and/or the funds are not
available the department representative will cancel the purchase requisition. Otherwise,
the purchase requisition will include the quotes, the verification of funds and
documentation of consideration for any of the following; cooperative purchasing, used
versus new, made in the USA, economic, environmental and social factors. The
department representative will submit the signed purchase requisition, the quotations, the
verification of funds and the considerations to the city administrator. The city
administrator will submit the purchase recommendation to the city council. Upon
approval of the city council, the city administrator will sign the purchase requisition.
1..7.11 PURCHASING BETNVEEN $25,000.01 AND $50,000.00
If the contract cost is expected to exceed $25,000.00 but not to exceed
$50,000.00, the city can choose to use either the competitive bidding process or make the
contract by direct negotiation. If direct negotiation is used, the city must get at least two
quotations and keep them on file for at least one year. For purchases estimated to exceed
$25,000.00 the city is mandated by law to consider the availability, price, and quality of
supplies, materials, or equipment available through the state cooperative purchasing
venture before buying through another source. A minimum of two price quotes are
required if the state cooperative purchasing venture cannot be utilized. The price
quotations should be obtained in writing. The purchasing agent must obtain a firm price
prior to submitting for approval. The responses must be included and be documented on
the purchase requisition. Purchases between $25,000.01 and $50,000.00 will include
verification that the budget has authorized the purchase and/or sufficient funds are
available. All purchases between $25,000.01 and $50,000.00 will include a purchase
requisition signed by the department representative authorizing the purchase. In the event
the purchase was not authorized in the budget and/or the funds are not available the
department representative will cancel the purchase requisition. Otherwise, the purchase
requisition will include the quotes, the verification of funds and documentation of
consideration for any of the following; cooperative purchasing, used versus new,
economic, environmental and social factors. The department representative will submit
the signed purchase requisition, the quotations, the verification of funds and the
considerations to the city administrator. The city administrator will submit the purchase
recommendation to the city council. Upon approval of the city council, the city
administrator will sign the purchase requisition.
1.7.12 PURCHASING EXCEEDING $50,000.00
The city will use the competitive bidding process in compliance with the uniform
municipal contracting law for certain contracts estimated to cost over $50,000.00.
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City of Lake Elmo Purchasing Policy
Adopted .Tune 5, 2012
The competitive bidding law applies to: contracts for sale, purchase, or rental of supplies,
materials, or equipment, contracts for the construction, alteration, repair, or maintenance
of real or personal property.
The city administrator along with the department representative(s) will be responsible for
preparing the necessary °specifications. The city administrator win present them to the city
council for review and approval. The council should seep competitive bids. Council will
set a date and time for bid results to be opened and a date for council consideration. The
results will be tabulated, presented to council with a recommendation for bid award. Upon
award by the council the city administrator will sign the purchase requisition.
1.8 COMTETITVE BIDDING REQUIREMMNTS
The uniform municipal contracting law (competitive bidding law) guidelines will be
followed and the competitive bidding process utilized for certain contracts estimated to
cost over $50,000.00. The competitive bidding law applies to: contracts for the sale,
purchase, or rental of supplies, materials, or equipment, contracts for the construction,
alteration, repair, or maintenance of real or personal property. The city administrator
along with the department representative(s) will be responsible for preparing the necessary
specifications. The city administrator will present them to the council for review and
approval. The council should seek competitive bids. Council will set a date and time for
bid results to be opened and a date for council consideration. The results will be tabulated,
presented to council with a recommendation for bid award. Upon award by the council
the city administrator will sign the purchase requisition. Please refer to Competitive Bidding
Procedures.
In the absence of a statutory requirement, it is not necessary for the city to advertise for
bids. The city may choose to advertise for bids, however, even if the law does not require
them to do so. The city is not required by statute to follow the competitive bidding
process for the following contracts.
1. Professional services: The city is not required to follow the competitive bidding process
when contracting for professional services, such as those of doctors, engineers, lawyers,
architects, and accountants as well as other services requiring technical, scientific or
professional training.
2. Insurance contracts: The city is not required to follow the competitive bidding process
for insurance contracts. The city must, however, seek requests for proposals for group
insurance for 25 or more employees.
3. Electronic reverse -auction procedure: The city is not required to follow the competitive
bidding process for the electronic purchase of supplies, materials, or equipment. Electronic
reverse auctions differ from a traditional auction in that vendors bid against each other to
offer the lowest selling price for a particular contract in an open and interactive electronic
environment.
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City of Lake Elmo Purchasing Policy
Adopted June 5, 2012
The city is prohibited from using a reverse -auction procedure to contract for professional
or technical services.
4. Purchases from other government agencies: The city does not need to comply with
competitive bidding requirements when purchasing property or equipment from the
national government, the state, or any political subdivision of the state. The council may,
by resolution, authorize any of its officers or employees to enter a bid for the city at any
sale of equipment, supplies, materials, or other property. The council may authorize an
officer or employee to make a down payment or a payment in full, if necessary, in
connection with the bidding.
5. Real estate: The city is not required to follow the competitive bidding process for the
purchase, lease, or sale of real estate.
The city may use price agreements to acquire items frequently purchased in small
quantities. For example, gasoline, office supplies and auto parts price agreements. A
price agreement is a contract between the city and a merchant. Under the agreement, the
merchant agrees to supply all the city's requirements for the specified commodities during
the period of the agreement. The price may be fixed or variable, such as a set discount off
of the market price. The city usually estimates its probable needs even though it is 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. Although the purchasing requirements
may be circumvented the approvals and verification of funds are still a requirement for
price agreements.
City council may authorize the use of a credit card by any city officer or employee
otherwise authorized to make a purchase on behalf of the city. A purchase by credit
card must comply with all statutes, rules, and city policies applicable to city purchases. If a
city employee makes or directs a purchase by credit card that is not approved by the.
council, the employee is personally liable for the amount of the purchase and may be
subject to discipline.
1. 12.1 Conffict of Interest - Employee
No employee will participate directly or indirectly in a procurement when the employee
knows that the employee or any member of the employee's immediate family has a
financial interest to the procurement; when a business or organization in which
the employee; or any member of the employee's immediate family, has a financial interest
pertaining to the procurement; or when any other person, business or organization with
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City of Lake Elmo Purchasing Policy
Adopted. ,Tune 5, 2012
whom the employee or any member of the employee's immediate family is negotiating or
has an arrangement concerning prospective employment is involved in the procurement.
Upon discovery of an actual or potential conflict of interest, an employee shall promptly
file a written statement of disqualification and shall withdraw from any further
participation in the transaction involved.
1. 12.2 Conflict of Interest - City Official
No city official, elected or appointed, will participate directly or indirectly in any contract
that the council makes. City officials elected or appointed, may not have a personal
financial interest in a contract or procurement. This prohibition applies whether the
official actually votes on a contract or not. There are limited exceptions to this prohibition.
City council should seek advice from the city attorney before entering into any contract in
which a council member or any other city official will have a financial interest. A public
officer who violates the conflict of interest Iaw is guilty of a gross misdemeanor and
can be fined up to $3,000 and imprisoned up to one year. In addition, the other members
of the council who knowingly authorized the unlawful contract may also be subject to
criminal penalties. Furthermore, contracts that violate these statutes are generally void.
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City of Lake Elmo Purchasing Policy
Adopted June 5, 2012
FIT
WHEREAS, purchase of goods, services and commodities by municipalities is controlled
by State Statute; and
WHEREAS, practical application of statutes require some degree of clarification; and
WHEREAS, it is not only desirable but imperative that the City of Lake Elmo have a
clear, written policy on procurement activities to ensure the city is abiding by all state, local and
federal requirements in addition to utilizing cooperative purchasing opportunities whenever
possible; and
WHEREAS, the City of Lake Elmo is committed to fiscal responsibility this policy will
provide for a uniforin and systematic method in order to ensure the best balance of quantity,
quality and price for the city's expenditures.
NOW, THEREFORE, BE IT RESOLVED, that the attached Purchasing Policy dated Julie fifth
2012 is hereby adopted.
Adopted by the City Council of the City of Lake Elmo on this fifth day of June 2012,
ATTEST:
Dean Zuleger
City Administrator
CITY OF LADE ELMO
I:
Dean A. Johnston
Mayor
I hereby certify that the foregoing Resolution is a true and correct copy of a resolution
presented to and adopted by the Council of the City of Lake Elmo at a duly authorized meeting
thereof held on the 5th day of JLine 2012, as shown by the minutes of said meeting in my
possession.
Sandie Thone
City Clerk
(Seal)
Resolution 2012- 26