HomeMy WebLinkAbout5H - City Mgr. Purchasing
16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
MEETING DATE:
AGENDA #:
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INTRODUCTION:
DISCUSSION:
H: \PURCHASE\AgendapurchaseIl.doc
STAFF AGENDA REPORT
JUNE 7, 2004
5H
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROV AL OF AN ORDINANCE AMENDING
PRIOR LAKE CITY CODE SECTION 106.500 REGARDING THE
CITY MANAGER'S PURCHASING AUTHORITY
The purpose for the proposed ordinance change is to amend the
purchasing authority of the City Manager to be consistent with
Minnesota Statute 412.691. This statute establishes the maximum
purchase amount that the City Manager is authorized to expend
without Council approval.
The bid threshold was increased by the legislature in 2000 from
$25,000 to $50,000 in response to inflationary increases.
Specifically any purchase of $50,000 or more is subject to bidding
procedures set forth by statute. If the amount of a contract is
estimated to exceed $10,000 but not to exceed $50,000 for
municipalities larger than 2,500 in population, the contract may be
made either upon sealed bids or by obtaining two or more
quotations.
Corresponding to this change in bid threshold, the City Council on
May 7, 2001 approved Resolution 01-52 whereby a formal
purchasing policy was adopted that incorporated this increase.
However, the City Manager's approval authority for purchase
contracts was also inadvertently changed to this level within Section
106500 (5) of the City Code that is inconsistent with Minnesota
Statute 412.691 that establishes the level at $20,000.
Under the proposed change in the attached ordinance, the City
Manager would have the authority to let purchase contracts for
routine service, equipment and supplies up to an amount less than
$20,000 instead of the $50,000. As required by Section (6) of Prior
Lake City Code 106.500 "The expenditure must be within the limits
established by the department budget". This is an important feature
to distinguish since the expenditure already takes place within the
parameters of a council approved operating budget. For all practical
purposes expenditures exceeding $20,000 typically have been
approved by the Council because they primarily occur within our
other major Funds outside the General Fund budget that require
council appropriation.
Also, the City's official Purchase Policy Guidelines would be
changed as well to reflect the correct $20,000 level of authority.
www.cityofpriorlake.com
Phone 952.447.4230 / Fax 952.447.4245
ISSUES:
RECOMMENDATION:
ACTION REQUIRED:
REVIEWED BY:
Attachments:
H: \PURCHASE\AgendapurchaseII.doc
Outlined below is our purchase policy guide index that indicates the
shaded proposed change.
1:::~ii!I~~~i11:::I:::~~iii~ififiilii1S::::I:~~1iij'i!~iil1!i'~::::1
j $1,000 to j P.O.lQuotes* 1 Dept Supervisor j
1:::..............~3.~.?.~g................L:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::1:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::1
~ ~ P.O.lQuotes* ~ City Manager 1
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:... .':'............................................................................................:.......................................................................:
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* Written quotes or a completed quote form is to be attached where there is
more than one feasible source.
Apparently a large number of Minnesota cities misinterpreted the
legislature's 2001 intent. In the case of Prior Lake, despite the
higher limit, I do not believe that any purchases were
inappropriately made as most significant purchases involve non-
general fund money that requires City Council authorization
regardless of the amount.
Staff would recommend adoption of An Ordinance Amending Prior
Lake City Code Section 106.500 Regarding The City Manager's
Purchasing Authority.
A motion to approve A,.p Ordinance Amending Prior Lake City Code
Sectio~ 106.500 R1.tarding The City Manager's Purchasing
Aut lty. ...",.. L....:
J .
1. An Or . ance Amending Prior Lake City Code Section 106.500
Regarding The City Manager's Purchasing Authority
16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
CITY OF PRIOR LAKE
ORDINANCE NO. 04.xx
AN ORDINANCE AMENDING SECTION 106.500 (5) OF THE
PRIOR LAKE CITY CODE REGARDING CITY MANAGER'S
PURCHASING AUTHORITY
The City Council of the City Council Prior Lake does hereby ordain that:
1. Section 105.600 of the Prior Lake City Code is hereby amended only as set forth below:
105.600:
(5) The City Manager shall have authority to make or let purchase contracts for routine service, equipment or
supplies for which the cost is less than Fifty Thousand Doll3FS ($50,000) Twenty Thousand Dollars ($20,000).
This ordinance shall become effective upon its passage and publication.
Passed by the City Council of the City of Prior Lake on June 7, 2004.
ATTEST:
City Manager
Mayor
Published in the Prior Lake American on June 19, 2004.
www.cityofpriorlake.com
Phone 952.447.4230 / Fax 952.447.4245