08-22-1988 - Agenda Packet City Council - regular meeting

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Expenditures, Purchasing and Contracts Home Rule Charter Cities Procedure for Paying Claims In home rule charter cities, the charter will govern the method of payment of claims. If the charter is silent on this, most charters permit the council to establish an appropriate procedure by ordinance. C. General Purchasing Requirements Except for bidding procedures, there are no Ic�al requirements governing city purchasing. Procedures only need to secure the best balance between quantity, quality, and price. Central Purchasing Because purchasing is complex, it usually takes place in a single, separate department that a trained purchasing agent heads. While most cities do not have a persor, who acts only as purchasing agent, oftentimes the chief administrative officer, clerk, deputy clerk, administrator, administrative assistant, or manager has the responsibility of making all purchases, to*.ing advantage of savings through bulk purcha• ing, sy�tcmatic procedure, and effective expenditure controls. Authority for Purchasing Because only the council may approve actual purchases, the purchasing agent should always ob- tain council approval before taking any final action. In Plan B cities, however, the manager has author- ity to make purchases and negotiate contracts for amounts of less than 11,000. Even in this case, the council must audit all [Als for materials, sup- plies, and services. Charters often give some pur- chasing authority to the manager. Cooperative Purchas` tg Cities may increase savings from bulk disrounts by making purchases jointly with one r,r r•;,rc other governmental units. The joint i,owers law authorizes cooperative purchasing. 38 Under these programs, several governmental units purchase, in i single transaction, sufficient commodities for all . ( ommunitics have found it profitable to purchase items such as fire hoses, street signs, paint, coal, oil, soap, office supplies, and police cars in this manner. Standards and Specifications For all except minor purchases, the city should have standards of quality. These should be brief, clear descriptions of minimum requirements. Specifications must be broad enough t3include all competitive supplies and equipment . The department requiring the item, the city en- gineer or architect in the case of major items, and the purchasing agent should jointly develop the specifications. Standard specifications arc avail- able for manv items. Other sources of help arc neighboring cities and various departments of the state government . Specifications that private con- ccrns develop may intentionally favor the products of a particular company. When two or more departments use items similar in nature, the city should develop standard specifications meeting the needs of all depart- ments. Such specifications reduce purchasing costs. Establishing Needs One key to increased savings is anticipating fu- ture needs for supplies, materials, and .,, --ipmcnt . Such anticipation can permit purchasli;g gems in larger quantities and purchasing needed items when price conditions are most favorable. Many necessary items vai y in price from season to season and cities can save if they anticipate pur- chasing needs in advance. Departmental lists of estimated needs should go to the purchasing agent annually after the council has approved the budget. D. Making Purchases Cities generally take bids when making sizable purchases. Under ttrc uniform municipal contract- ing law, a city must bid out all purchases in excess of 515,000. 4 For purchases of less than 515,(X)O, the council should still use this process to ne-otiate "price agreements" for items such as gasoline. The municipal eorIracting law also requires cities to scch at least iwo quotations if the amount is less than S15,()W. 41 A city may abandon all regular purchasing procedures, however, in emergency situations. Page 356 Handbook for Minnesota Cities