HomeMy WebLinkAboutVIII-04 Authorize Fund Closures and Revise Purchasing Policy
To: Mayor Fasbender & City Councilmembers
From: Chris Eitemiller, Finance Manager & Ashley Bertrand, Assistant Finance Manager
Date: October 3, 2022
Item: Fund Closures and Revise Purchasing Policy
Council Action Requested:
Council is asked to approve Fund closures and a revision to the Purchasing Policy. All of
these items will have an effective date of October 1, 2022.
Background Information:
Fund Closures:
Request authorization to close the following funds:
Cable Security Deposit
Escrow-Letter of Credit
Any residual amounts in these funds will be transferred to our Debt Redemption fund.
Purchasing Policy Revision:
It has come to our attention that we do not have a formal policy in regards to employee
reimbursements. This revision will outline the steps needed for employees to be reimbursed, and also
establish a reimbursement deadline.
Financial Impact:
None.
Advisory Commission Discussion:
None.
Council Committee Discussion:
None.
Attachments:
• 2022 Fund Closure Resolution
City Council Memor and u m
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WHEREAS, any residual dollars from the following funds will be transferred to the
debt redemption fund for future council direction;
NOW THEREFORE LET IT BE RESOLVED THAT, the funds are closed as
follows with an effective date of October 1, 2022:
Fund Closures
Cable Security Deposit
Escrow-Letter of Credit
Adopted this 3rd day of October 2022,
Mary Fasbender, Mayor
Attest:
Kelly Murtaugh, City Clerk
CITY OF HASTINGS
DAKOTA COUNTY, MINNESOTA
RESOLUTION 10 - - 22
A RESOLUTION CLOSING FUNDS AND ASSOCIATED TRANSFERS
WHEREAS, the Mayor and City Council adopted the 2022 budget on December 6,
2021; and
WHEREAS, there is a need to close funds;
WHEREAS, there is also the need to transfer any residual monies from funds closing;
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City of Hastings 101 Fourth Street East Hastings, MN 55033-1944 Phone: 651-480-2350 www.hastingsmn.gov
PURCHASING POLICY
Purpose
To comply with Minnesota Statue 471.345 and to establish specific guidelines for the purchase of
goods and services by the employees of the City of Hastings.
Policy
It is the policy of the city to acquire goods and services through a competitive process whenever
practical that results in supply arrangements at the most effective net cost, in the correct quantities, of
the appropriate quality, and from the most responsive and responsible source. Purchasing and supply
management functions at the city are delegated to the department directors, requiring diligent attention
to the governing laws and rules.
Purchasing goods and services using a purchasing card is covered under the Purchasing Card Policy.
All federal grant expenditures will be in compliance with OMB 2CFR200 (Uniform Guidance). All
federal grant expenditures must be reasonable, necessary, and adequately documented. All federal
grant expenditures must be deemed to be allowable under specific grant agreements and in accordance
with 2CFR200, subpart E.
Cooperative Purchasing Agreements
When possible, every effort should be used to take advantage of cooperative purchasing agreements as
a cost savings measure. The city shall maintain its membership with the State Cooperative Purchasing
Program. By using the State’s plan, bidding requirements are already fulfilled.
Governing Laws Contracting Bid State Laws
A city entering into an agreement for the sale or purchase of supplies, materials, equipment or the
rental thereof, or the construction, alteration, repair or maintenance of real or personal property must
abide by the statutes relating to contracting and bidding. Minnesota Statute 471.345 was established to
provide dollar limits for all cities upon contracts that shall or may be entered into on the basis of
competitive bids, quotations or purchase or sale in the open market. This statute puts the following
basic requirements on cities (based on the estimated contract amount):
• For contracts over $175,000 – sealed bids shall be solicited by public notice in the manner and
subject to the particular requirements of the city. The sealed bids shall be solicited by public notice
and be kept on file. City Council will approve these contracts during a regularly scheduled meeting.
• For contracts exceeding $25,000 but not $175,000 – sealed bids or by direct negotiation, by
obtaining two or more quotations for the purchase or sale when possible, and without advertising for
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City of Hastings 101 Fourth Street East Hastings, MN 55033-1944 Phone: 651-480-2350 www.hastingsmn.gov
bids or otherwise complying with the requirements of competitive bidding. All quotations obtained
shall be kept on file for a period of at least one year after receipt thereof.
• For contracts $25,000 or less – the contract may be made upon quotation or in the open market, at
the discretion of the city. If the contract is made upon quotation it shall be based, so far as
practicable, on at least two quotations which shall be kept on file for a period of at least one year
after their receipt.
Extra care should be exercised when using sole source vendors. The City Administrator and Finance
Manager must approve such purchases in advance. Procurements will not be split to avoid competition
or council action.
Federal Purchases
Under uniform grant guidance (2 CFR 200.317–326) there are additional procurement requirements that
need to be considered when making purchases related to a federal program. Five procurement methods
are identified including: micro-purchase (<$10,000), small purchase procedures (<$250,000), sealed bid
(>$175,000), competitive proposal (>$175,000), and noncompetitive proposal (>$3,500). The general
purchasing policy addresses many of these requirements and the City will also consider the full
requirements in relation to each method as described in 2 CFR. The micro-purchase threshold which is
set by Federal Acquisition Regulation at 48 CFR Subpart 2.1 is subject to change with inflation. The
City will follow changes to thresholds as modifications occur. When practicable, micro-purchasing will
be distributed among qualified suppliers.
The city will review the excluded parties list (https://www.sam.gov), to ensure than no tentative parties,
suspended and/or debarred contractors are contract with using federal dollars. When using federal
funding and making purchases in excess of $2,000 for construction dollars are subject to the Davis-
Bacon Act. Also, the city will avoid unnecessary/duplicate purchases, encourage use of excess Federal
surplus property, documenting rationale for procurement method used for purchases, and documentation
of selection of contract type maintained in the files. In addition, the city will consider intergovernmental
agreements where appropriate for procurement or use of common or shared goods and services.
Director/Manager Responsibilities
Department Directors/Managers and other persons authorized to purchase are responsible for certain
functions related to purchasing and payment for goods and services received. The responsibilities are:
• Purchasing done on a competitive basis and consistent with the approved annual budget.
• Control of purchased goods and services to ensure only authorized use.
• No reimbursement for use of personal gift cards or store rebates.
• All terms and conditions (including pricing) of the purchase as specified in the purchase order and
applicable contract are attained prior to the payment of the claim.
• Providing the Finance Department with approved invoices and supporting written documentation in
a timely manner.
• Employee expense reimbursements, as outlined in Chapter 13 of the Employee Handbook, must be
submitted no later than the last day in March of the year following the year in which the expense was
incurred. Expenses submitted outside of this time frame will not be reimbursed.
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City of Hastings 101 Fourth Street East Hastings, MN 55033-1944 Phone: 651-480-2350 www.hastingsmn.gov
• Immediate notification to the Finance Department of any circumstances affecting acceptability,
performance, or any other reason which may lead to withholding of payment.
• Cooperation with the Finance Department in resolving disputes with vendors regarding terms,
quantity, or any questions of performance.
• Designating budget coding of all invoices.
• House documents showing multiple bids or state bid pricing.
Finance Department Responsibilities
The Finance Department personnel are responsible for the following:
• Assistance in seeking vendors to provide the best price availability.
• Reasonable audit tests to determine fund availability, legality and validity of obligations for
payment.
• Pay authorized bills that meet procedural requirements.
Competitive Price Quote/Bids
Competitive price quote/bids require the following:
• Purchaser must obtain competitive price quotes/bids for services or commodities as outlined in
Contracting Bid Law Section of this policy.
• Purchaser will prepare a purchase order or documented invoice and submit to the Department
Director/Manager and the Finance Department for approval.
• A documented invoice allows all necessary information and approvals to be placed directly on the
invoice. This would apply to emergency purchases of goods and services and to routine items such
as utility bills.
Purchases
Purchases under $5,000 are approved by department directors/managers when in the budget.
Unbudgeted expense under $5,000 must have City Administrator sign off.
Purchases from $5,000 to $175,000 will have approval from department directors/managers and the City
Administrator when in the budget. Unbudgeted expense over $5,000 must be approved by City Council.
Purchases over $175,000 will be approved by City Council during a City Council meeting.
Expense Vouchers
Expense vouchers must have the following:
• Tabulation of quotes/bids where appropriate;
• Account number and project information if applicable;
• Budget appropriation for item or service requisitioned;
• Department Director/Manager approval;
• Date ordered and approximate date to be received;
• Full vendor name/address – no abbreviations;
• All items purchased must be listed separately with respective costs;
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City of Hastings 101 Fourth Street East Hastings, MN 55033-1944 Phone: 651-480-2350 www.hastingsmn.gov
Additional Provisions/Resources
The provisions noted in this policy are not intended to be an exhaustive list of Minnesota laws. Additional
resources on purchasing include:
•Handbook for Minnesota Cities, published by the League of Minnesota Cities
•Emergency Contracts, published by the League of Minnesota Cities
•City of Hastings Finance Department
Authority for Implementation and Enforcement
All employees are responsible for adhering to this policy when purchasing goods or services. Managers
are responsible for monitoring performance within their areas of jurisdiction. The City Administrator is
the chief purchasing officer of the city. Responsibility for administering established Purchasing Policies
and Procedures has been delegated to the Finance Department.
Updated September 2022
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