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Item No. 2 <br />Type of Business: WK <br />WK: Work Session; PH: Public Hearing; <br />CA: Consent Agenda; CB: Council Business <br />City of Mounds View Staff Report <br />To: Honorable Mayor and City Council <br />From: Charles Hansen, Finance Director <br />Item Title/Subject: Purchasing Policy <br />Date of Report: February 14, 2002 <br /> <br />Attached is the latest draft of the proposed purchasing policy. This incorporates input the <br />City Council provided at the January 22, 2002 work session and input from city staff. <br /> <br />The January 22 draft was incomplete with many sections that merely referenced examples <br />from the purchasing policies from the other cities that I thought would be good models. <br />These sections have been filled in to complete this draft. <br /> <br />There are a couple of provisions in the draft that I want to point out to the City Council. <br /> <br />Section 2.2 requires sealed bids for purchases that exceed $50,000. This matches state law <br />and is an increase from the current city policy that requires sealed bids for purchases that <br />exceed $25,000. My concern is that if Mounds View remains at $25,000 while surrounding <br />cities move to a $50,000 threshold, contractors may decline to bid on Mounds View projects <br />between $25,000 and $50,000 due to the extra work of sealed bids. The contractors most <br />likely to decline to bid will be the busiest ones, which may also be the best contractors. <br /> <br />Sections 4.1 and 4.2. The earlier draft anticipated writing these sections based upon <br />examples from the other cities’ purchasing policies. It was pointed out that the Mounds View <br />Personnel Manual already has such a section. In order to avoid having conflicting policies <br />dealing with the same matter, the Section 1.50 of the Personnel Manual is duplicated in the <br />draft purchasing policy. <br /> <br />One point to take note of is that the Personnel Manual Section 1.50 provision for Meals <br />references an IRS Guideline. The IRS Guideline allows a flat amount per day for meals and <br />incidental expenses, but the amount varies depending upon what state and locality an <br />employee is in when incurring the expenses. It may be desirable for simplicity sake to <br />specify a single dollar amount for use in all instances. The IRS Guideline for Minneapolis/St. <br />Paul is $46.00 per day. <br /> <br />This amount is reasonable for meals and tips for an employee who is traveling for the full <br />day. The City Council may wish to have a sub limit for local meals or partial day travel. <br /> <br />Respectfully Submitted, <br /> <br />Charles Hansen <br /> <br />