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CCR2011126-Purchasing Policy COMMON COUNCIL - CITY OF MUSKEGO RESOLUTION NO. 126042-200611 PURCHASING POLICY CITY OF MUSKEGO WHEREAS, the Common Council has the authority for the management and control of the City’s finances and thus all expenditures of City funds in accordance with Wisconsin State Statute 62.11(5), and WHEREAS, the Common Council desires to expend City resources as efficiently and responsibly as possible with a purchasing policy that works toward obtaining goods and services that are of high quality at the lowest cost, and WHEREAS, the Common Council desires to establish guidelines and procedures for City Departments for purchasing items and services, NOW, THEREFORE, BE IT RESOLVED, the Common Council hereby establishes the following purchasing policy. 1. This purchasing policy applies to all City expenditures and includes contracts for service, labor, materials, supplies and equipment when said policy does not conflict with another applicable law, rule, ordinance, contract, policy or similar requirement. Items within an approved budget are not considered exempt from this policy. 2. Each Department Head shall be responsible for authorizing day-to-day purchases for their respective departments. This authority may be delegated to other employees within the department however ultimate responsibility for purchasing rests with the Department Head. 3. It is the responsibility of the Finance Department Department Heads to monitor compliance with the City’s purchasing policies and procedures. Department Heads verify that the documentation is complete, applicable bidding requirements have been met (if applicable), budget authority exists, account number to be charged is appropriate, and there is a need for the purchase. Review of this is evidenced by name and date on the voucher approval form to the City Council and/or Committee. 4. Purchases shall be requested only when adequate funds remain in the approved department budgeted expenditure category or fund to cover the cost of such purchases except in unusual or unforeseen circumstances. 5. For purchases exceeding $1500, whenever possible three price quotes shall be obtained (and attached to the written order, if applicable) Whenever practicable, three (3) informal bids shall be obtained for non-customary and non-routine purchases at the discretion of the Department Head. and Tthe Department Head requesting the expenditure shall state his/her recommendation for which quote to accept, why and identify the line item of their department budget from which the funds will be drawn when the City is invoiced for the purchase. Resolution #126042-200611 Page 2 6. For materials/supplies that are purchased on an on-going basis (such as vehicle fuel, certain office supplies), proposals (based on estimated quantities needed for the year) should be obtained and forwarded for approval by the appropriate authority depending on the amount. Once approved, this then shall serve as authorization for purchases of that material/supply through the course of the year. 7. Purchasing shall be done when possible with written orders. Written orders shall be signed or initialed by the Department Head prior to the order being placed/expenditure being made. Use of purchase order forms is recommended. 8. In cases where it is not practical to use a written (purchase) order (i.e. small materials or supplies needs on a day to day basis), items may be charged by authorized personnel within the Department. Use of City issued business credit cards shall be in accordance with the City’s policy on the use of City issued business credit cards. 9. Bills/invoices/statements shall be initialed by the Department Head of the department responsible for the purchase prior to the bill/invoice being processed for payment by the Finance & Administration Department to ensure satisfaction and that items were received as ordered and invoiced. 10. All contracts for professional services and public works contracts as defined by Wisconsin State Statute 62.15 (12) shall be specifically reviewed by the City Attorney as a condition of approval and prior to execution. Maintenance agreements shall be reviewed by staff prior to renewal and in consultation with the Mayor to ensure costs are being reviewed and controlled in the best interests of the City. a. Selection of vendors for professional services and construction contracts should take into consideration the overall value of such contracts including: 1. Continuity of the various phases of a project. 2. Operational efficiencies 3. Level of expertise in related services. 4. Scope of services. b. Individual change orders on construction or similar contracts will be subject to the following thresholds for approval of contracts for services: 1. Under $10,000 – Department Head 2. $10,000 - $25,000 – Department Head and Finance & Admin. Director 3. $25,000 - $50,000– Department Head, Finance & Admin. Director and Mayor 4. Over $50,000 – Applicable Committee/Board/Commission c. Due to the cost-benefit to the City, it is understood the use of the same vendors for professional services and contracts including those for attorney, engineering, financial advisors, information technology, assessment maintenance and insurance carriers may carry over from year to year without seeking competitive bids when it is deemed to be in the public interest. 11. It is hereby noted, in regard to public construction projects, public bidding law shall be followed as required in Wisconsin State Statute 62.15. 2 Resolution #126042-200611 Page 3 12. It is hereby noted, certain Public Service Commission rules and Administrative Codes shall be followed that require Public Utility Committee approval of expenditures from segregated utility accounts. 13. Approval authority for purchasing shall be as follows: a. For items/services (purchases) that were included in the Common Council approved budget for the fiscal year - 1. Purchases up to $15,000 the public bidding requirements (currently $25,000) shall be approved by the Department Head. 2. Purchases exceeding $1525,000 but that are less than $25,000 shall be approved by the Mayor prior to the order being placed or expenditure being made. The Department Head desiring to make the purchase shall make a recommendation concerning such purchase to the Mayor. 3. Should the purchase amount exceed the original budgeted amount, the change will be subject to the thresholds listed in 10 (b) above.Purchase that exceed $25,000 shall be approved by the Finance Committee and City Council prior to the order being placed or expenditure being made. Such purchasing requests shall include a recommendation from the Department Head desiring to make the purchase as well as the Mayor. 4. Purchases included in the approved budget may carry over into future years due to timing issues or unforseen events. b. For items/services (purchases) that exceed the authorized departmental expenditure budget or budget category,were not included in the Common Council approved budget for the fiscal year -–the following thresholds for approval are to be used: 1. Purchases up to $1,5000 shall be approved by the Department Head. 2. Proposed purchases exceeding $1,5000 and up to $21,500 shall be approved by the Mayor based on a recommendation from the Department desiring to make the purchase prior to the order being placed or expenditure being made. 3. Proposed purchases exceeding $21,500 and up to $5,000 shall be approved by the Finance Committee based on a recommendation from the Department Head and the Mayor prior to the order being placed or expenditure being made. 4. Proposed purchases exceeding $5,000 shall be approved by the Finance Committee and the Common Council prior to the order being placed or expenditure being made. Such proposed purchase must be based on a recommendation by the Department Head desiring to make the purchase and the Mayor. Ordinary budget amendment procedures must be followed for non-budgeted purchases which exceed the General Operating expenditure category in its entirety. 3 Resolution #126042-200611 Page 4 14. 14. In the case of an emergency or where a mechanical failure or vehicle repair occurs, Department Heads may proceed with the expenditure or change order without prior approval of the Finance Committee but with the approval of the Mayor unless this policy is in conflict with another applicable law, rule, ordinance, contract, policy or similar requirement. Should the Mayor be unavailable, verbal notification shall be made to the Council President as soon as is practical. This purchasing policy shall take effect upon adoption of this resolution by the Common Council. DATED THIS 14th DAY OF March , 200611. SPONSORED BY: FINANCE COMMITTEE Ald. Bob Melcher Neome Schaumberg Ald. Nancy Salentine Keith Werner Ald. Eileen Madden Noah Fiedler This is to certify that this is a true and accurate copy of Resolution #042-200611 which was adopted by the Common Council of the City of Muskego. _________________________ Clerk Treasurer Adopted by the Common Council March 14, 200611 4