HomeMy WebLinkAbout5B - Library/Resource Center Prj.
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G DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
FISCAL IMPACT:
CITY COUNCIL AGENDA REPORT
CONSIDER APPROVAL OF A MOTION APPOINTING
FULCO AS THE CITY'S PURCHASING AGENT FOR THE
LIBRARY/RESOURCE CENTER PROJECT.
Historv
The City Council has directed that, the staff should work to maximize
sales tax exemption for the Library/Resource Center Project.
Accordingly, the City Attorney and Director of Parks and Recreation
have worked closely with Mr. Greg Heck of the Minnesota
Department of Revenue. Attached is a letter from Mr. Heck providing
clarification about how the City can take advantage of sales tax
exemptions.
Current Circumstances
The bid for the Library Resource Center Project has been awarded to
Fulco. We anticipate that contract documents will be executed within
the week. It is appropriate to designate Fulco as the City's purchasing
agent for this project in order to take advantage ofthe sales tax
exemption.
Issues
Thanks to the Mayor and City Council direction, Prior Lake is
breaking new ground to save taxpayer dollars. Accordingly, we are
working closely with the State Department of Revenue so we can take
advantage of sales tax exemptions. I have been contacted by a person
who will be constructing two libraries in Dakota County and wants to
know how Prior Lake is taking advantage of sales tax exemptions. So
we are not only helping Prior Lake taxpayers but also those in Dakota
County.
.Conclusion
It is appropriate and necessary to declare Fulco the City's purchasing
agent with respect to the Library / Resource Center Project.
Taking advantage of sales tax exemption will allow the City to
maximize referendum dollars dedicated to the construction project. We
hope to save $40,000 by this effort.
162~:~CIL~IoN'kfs~lof8ml!:Emct&s~~e~5372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
ALTERNATIVES:
A motion declaring Fulco as the City's purchasing agent for the
Library/Resource Center project as part of the Consent Agenda.
RECOMMENDED MOTION:
Alternative 1.
I:\COUNCIL\AGNRPTS\1098FUL.DOCKirsten Oden
"IT--:-:--
08/03/~!J, .....M~~ t.4.:...t.~ f.A!..l!.U- 4?t...5~~~ ___ ____CAMPBELL
MiNNESOTA Depa...lu..ent of Revenue
APpeals, Legal Services and
Criminal Investigation Diyiaion
l41003
Mail Station ~220
'Phone (612) :~96~0K44
St Paul, MN 55146-2220
Fax (612) 296-&'2.29
August 03,199&
Suesan Lea P*ee, Attome)'
Campben Knutson
317 E31eancJale Office Center
1380 Cc)rpol'ate Center' Curve
EaCIID. Mjnn~otR 55121
Re: Prior Lake Library Project
Dear Ms. Pace:
The purpose of this letter is to confirm cs:rtaiD information I provided to you
during various telephone conversations and wheD we met on July 22, 1998, to
di:u:uss the Prior LAke Library project. Based upon tbl: information YOII
provided to me, IllndE:rstand that Prior Lake is ansious to take advantage of
certain .al~ tax exemption, !bat may apply to materials purchased as part of II
library construdioJl projcct- D'Uring our meeting, you e,;plained how the City
intended to pro~eed aDd SOllght iD.pu~ advice and recommend:atioD5 from me in
order to: (1) make c::ertain that the City pOlSinoDl itself properly to take
.dvantage of every pos.ible sales ta:l es.emption opportunity, where practical to
do so; and (2) ..,are the that the: City complies with appliOlble statutes andRIe!l
of the Department. 1D reapon!le, the fol1owin~ (l~h fOl'th the departmeJ)t's
position-
The ex.emption for !lales of tmgibh: personal prope1"ty to exempt cntities, su~h as
a public libraJ)'. does not e:dend to baiJdmg material5 purcbased by a contrador
or !Jubc:ollh'actor all part of a lump-sum eontrad or similar type of contrad
coyerinc; both Jabor and materiab. To nurchase the l:ol'llltruction m.teri2111 ,
e-,cemDI from 8al~ tax the librnrv ,ould JJu.rch:ue tbe material.!! directly or it could
allthorize a contractor or .ubcontradol' to ad as its 'Du.rl:hasine: ae:ellt. The
library could appoint II contractor Dr subcontractor 8..'1 its purchaling agent only
if:
1. The librlllry advertises for separate bids for materials and labor;
1. The obtaiDing of one contract if not contingent on obtaining both; and
3_ A 5~p~""ate laboJ'-ouly contract is entered into.
If these conditioDs are met, the contrlldor OJ" subcoJ1trsu:tor awarded the labor
contract may be designated as purchasing agent forlthe library. This is true e...-en
wheD the same c:ontrador is awarded both the matefial and labor contracts.
08/03/98 MON 14:18 FAX 612 452 5550
.. I L.J~- _ ~_Il.-. -,..-- . -.. --- --..
CAMPBELL
l4J 004
Suaan Let Pace, Attorney
Page 2
The department will recopize tbe designatiog of a party as a plll"&:ba.$ing agetd
:r>>rovided the following conditions as !Det: .
1. That there is a II.. :.:ten ngreement establishing the principal-.ccnt
relatinn~hip and IJ"BDtiDg the agent tbe ability to blad the library to
l'ay for the pl.lr.:llases made by the agent;
2. That rhe agent doe. Dot pUl"cbase the materials in its own nam.,:;
3. That all cODtrlicts or pllrdla.e orders ~ntned into by the agent
cont. a Itatement tbat the purulUe is beine madc pursuant to an
Ilg~Dey relationship and that e)ae library i. obligated to pay for the
materials puo:haullcd;
4. That DaDe ot the materialIC pureha,ed under the qency agreement are
used by the ageut for its I,)wn use or are required to be supplied or
pJ"ovidcd to the librnry Ullder a a.parate agreement;
S. That title to aU materirds pllrclaased UDder the agency agreement
would ...ed immediately ill the library ad the poiDt of deU...e.-y; and
6. That the rislu of ownenhip with raped to the Materialsl'urchalllcd
under the agency ag;rceJnc:nt are with the library.
The depa.. !"""',ent ha.! reviewed a draft of the bid form faxed to the department on
July 24, 1998, and We flnd the bid fonn which pro'Videa for a sepJlrate bid pricc
fOJ" Jabal' and materiallil on scveD items to comply with the positioa previously ,et
forth ill thb l.tter. Payment. for materials purcband by a purchpiDg agent lDay
be made dire&;tly from th.e agent to its supplier pJ"ovided that the: agent ultimately
ru:couDts to the principal for the puX'a;:ha.e..
Hyou bave further questions rel:arding this mfttter-, please CODtnct me at 215-
5942.
Sincerely ,
~~L~
Gregory J. Heck, Attorney
Legal Services Unit
(651) 215-5942
A,. 12<1'1/11 DppC1l'I_iIJl.mpl~,
1"D/): (~J 2) 297-2 J 96
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