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Item No. 7A Type of Business: CA WK: Work Session; PH: Public Hearing; CA: Consent Agenda; CB: Council Business City of Mounds View Staff Report To: Honorable Mayor and City Council From: Charles Hansen, Finance Director Item Title/Subject: Just and Correct Claims List of December 19, 2001 Date of Report: January 2, 2002 At the December 10, 2001 City Council meeting, I asked for authorization to do a claims list prior to the next City Council meeting on January 7, 2002. I explained that there is a state law that requires the city to pay invoices within 30 days or vendors may impose a late payment penalty. The City Council replied that since January 7th would be within 30 days, the claims list could wait and be approved at the meeting. What I failed to adequately explain is that there frequently are delays which result in invoices being two to four weeks old when they reach the Finance Department. Also, some vendors have due dates that are less than 30 days from the invoice date. If we waited four weeks between claims lists, many invoices would be past the due date and subject to penalty. Some vendors explicitly state that they will impose penalties. Others don’t threaten the penalty, but could impose one under state law if we exceed the 30-day limit. Not all vendors would impose a penalty, but it is hard to predict which ones would. In order to minimize the city’s exposure to penalties, I reviewed the invoices and selected those that would be over 30 days old or past their due date by January 7th and which I thought were routine in nature and wouldn’t be likely to generate a question from the City Council. These are in the Claims List dated December 19, 2001 and the checks were released. The Xcel Energy check is an example of these. It was issued on December 10th, is due December 27, 2001, totals $16,298.20, and would be subject to a 1.5% penalty ($244.47) if paid late. There were a few invoices that I thought had a greater chance of being questioned and these were held for the January 7, 2002 City Council meeting. Checks from the Just and Correct Claims Lists dated December 31, 2001 and January 7, 2002 will be released after approval by the City Council. I hope this solution is acceptable to the City Council. Respectfully Submitted, Charles Hansen