Isleton Municipal Code Ch. 2.48 Policies and Procedures for Purchasing of Supplies and Equipment

Footnotes:

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Editor's note— Ord. No. 2021-002, §§ 1—4, adopted May 25, 2021, repealed former ch. 2.48, § 2.48.010, in its entirety and enacted a new ch. 2.48, as set out herein. The former ch 2.48 pertained to dispersal of surplus property and derived from Ord. No. 2013-01, §§ 1—5, adopted June 26, 2013.

A. Establishment of written policies, regulations, controls and guidelines for the purchasing process.

B. Integration of budgeting and recordkeeping functions with purchasing processes.

(Ord. No. 2021-002, § 1, 5-25-2021)

All purchases must go through the formal request and approval process detailed in the following policy. Exceptions to the process include credit card purchases and emergency purchases which are detailed in the exceptions to the normal purchasing process section 2.48.060 of this policy.

A. Contracting with small and minority businesses, women's business enterprises, and labor surplus area.

1. The non-federal entity must take all necessary affirmative steps to assure that minority businesses, women's business enterprises, and labor surplus area firms are used when possible

2. Affirmative steps must include:

a. Placing qualified small and minority businesses and women's business enterprises on solicitation lists:

b. Assuring that small and minority businesses, and women's business enterprises;

c. Dividing total requirements, when economically feasible, into smaller tasks or quantities;

d. Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses, the women's business enterprises;

e. Using the services and assistance, as appropriate of such organizations as the Small Business Development Agency of the Department of Commerce, and;

f. Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in paragraphs 2.a. through f. of this section.

(Ord. No. 2021-002, § 2, 5-25-2021; Ord. No. 2021-008, § 2, 10-12-2021)

All purchases over $5,000.00 or more, three bids must go out to bid unless the city can take advantage of a state contract or a bid waiver is approved by the purchasing agent (see subsection C for waivers). Three bids for professional services in excess of $15,000.00 must be awarded by the city manager and city council.

All city purchases in excess of $5,000.00 which do not go out to bid or are not reoccurring service charges, must have a completed best value method source selection form (bid waiver) accompanying the purchase order. The form must be reviewed and signed by the city manager and finance director.

A. Competitive quotation process. Departments with purchases that are at least $5,000.00 but less than $15,000.00 must solicit offers from at least three vendors.

B. Competitive proposal process. A request for proposal (RFP) or request for qualification (RFQ) shall be written for all requests for professional services in excess of $5,000.00. The process used for solicitation of proposals shall assure that a reasonable and representative number of vendors are given an opportunity to compete. The city manager has the authority and responsibility to execute professional service contracts less than $15,000.00.

C. Waivers. To request a bidding, quotation or proposal process be waived, a requesting administrator must make a written request to the city manager to obtain a waiver. The processes may be waived for any of the following reasons:

1. Only one reasonable or qualified source can be identified. This shall include situations such as the purchase of copyrighted materials and textbooks.

2. The purchase is made using one of the State of California's contracts with a third party.

3. Time is a critical factor, and taking the time necessary to comply with the formal process would not be in the best interest of the city.

4. In the opinion of the city manager and/or finance director, an emergency requires the purchase of goods or services to avoid injury or damage to human life or property.

5. A special source, including but not limited to a sale, purchasing plan, government discount, or trade-in allowance, will supply a lower cost than that which would result from a bid process.

6. A formal process would result in substantially higher costs to the city and/or inefficient use of personnel, or cause substantial disruption of city operations.

7. Prices of goods or services are subject to specific federal or state competitive bidding requirements, including, but not limited to, "building projects" as defined in the California General Statutes.

8. Regional or cooperative purchases.

9. Information technology resources may be exempted by the city manager. Information technology resources, for the purpose of this section, means license, copyrighted or patented computer hardware, software or services; new computer equipment, products, peripherals, services and software where compatibility with existing equipment or products is desirable or necessary; proprietary or custom built software or information systems; technology services, consulting and maintenance contract; web-based software and software as service, platform as a service and infrastructure as a service applications or solutions.

10. Other exceptions to the policy will be determined on a case-by-case basis by the city manager which may follow the goods and services purchasing categories exempted by the State of California.

D. Maintenance contracts. For the award of contracts for the maintenance and repair of city and sewer/fire facilities, the following procedures shall be followed:

1. For contracts for which the estimated cost of services is $10,000.00 or more, a request for proposal shall be prepared and submitted to prospective bidders, bids shall be obtained from prospective bidders and reviewed, and the request for proposal, the qualifications and experience of the contractors and the amount of the price or prices included in the bids.

2. Contracts for which the estimated cost of services is less than $10,000.00 may be awarded without obtaining bids. Such contracts shall be awarded based on the qualifications and experience of the contractor and the amount of the contract prices.

3. Maintenance and repair contracts for which the cost of services is $25,000.00 or more, shall be awarded by the city council, and the city council may authorize the city manager or the purchasing officer to execute such contracts. Contracts in which the estimated cost of services is less than $25,000.00 may be awarded by and executed by the purchasing officer.

E. Disposal of surplus or obsolete property.

1. The head of any city department may declare supplies or equipment held by such department surplus. Such declaration shall be in writing and the written declaration shall be delivered to the purchasing officer who shall maintain a written inventory for circulation to and review by each department. If any department has use of such property, the department head may request reassignment of such property from the purchasing officer. The purchasing officer shall have the authority to assign the property to the department best able to make use of such property. If no department head makes a request for use of such property after the inventory has been circulated once, the property shall be deemed surplus.

2. The purchasing officer shall have the authority to exchange for or trade in on new supplies or equipment all supplies or equipment which have been deemed surplus.

3. The purchasing officer shall have the authority to dispose of surplus property or equipment by auction or sale or otherwise after receiving bids or proposals which, in his judgement, provide the best return to the city.

a. Sale on the open market. The purchasing officer shall cause to be published at least three days before the sale, in a locally adjudicated newspaper, a notice of sale setting forth a general description of the property to be sold, the day, time and location of the sale. The terms of all such sales shall be cash in the amount of the full purchase price.

b. Sale by sealed bid or auction. As an alternative to the sale on the open market, the purchasing officer may, when in his judgement, it is in the best interest of the city, sell surplus property by means of sealed bid or public auction. In the case of sale by sealed bid or public auction, the purchasing officer shall cause to be published at least three days before the sale, in a locally adjudicated newspaper, a notice setting forth a general description of the property to be sold, the day, time and location of the sale. The terms of all such sales shall be cash in the amount of the full purchase price.

In conducting an auction, the purchasing officer may contract with a professional auctioneer and allow a flat fee, hourly fee or percentage of the amount of the sale to be paid based upon that which is common and customary method and rate for such auctioneering services.

The purchasing officer may, when in his judgement, sale or auction of surplus property is infeasible or will result in minimal return to the city, recommend to the city council that such surplus property be donated to any non-profit corporation or school located within or serving the city, or sold to city employees at fair market value. Such surplus property shall only be donated or sold upon approval of the city council.

(Ord. No. 2021-002, § 3, 5-25-2021)

A. Department requests and approvals.

1. Submit purchase order requests to the city manager and finance department. Purchase order requests must be completed and include the following information:

a. Vendor name - Determined by the requesting department or from the FMS vendor list.

b. Ship-to code - Location of where goods or services will be received.

c. Account number - Account to be charged for the expense.

d. Department - Who is responsible for receiving the goods or services.

e. Items for purchase - Description should include sufficient detail including any part numbers or vendor information about the item(s).

f. Extended price - The total price of the purchase, including any freight charges should be calculated and included.

g. Total anticipated cost - The total value of the goods or services included on the purchase order.

h. Requestor ID (name) - The person responsible for addressing any issues regarding the request and the goods and/or services received per the purchase order.

2. Obtain appropriate approvals. The request must be approved by the requestor's department head. All approved purchase requests are then reviewed and approved by the city manager. The city manager and department head must approve all purchases in excess of $5,000.00 and less than $15,000.00. Over $15,000.00 require city council approval.

3. Payment approval. All purchases orders need to have proper approvals before the actual purchase can be made. Purchases conducted without the proper approvals made beforehand may result in non-payment.

4. Purchase order thresholds. The finance department will review vendors on file on an ongoing basis and implement a process to review purchase order thresholds. This process will help to identify users that may attempt to circumvent the PO process.

(Ord. No. 2021-002, § 4, 5-25-2021)

A. Preparation of the purchase order. Department heads and their staff use the purchase orders in file folder. The purchase orders are sent to the city manager then finance department for review and processing. From there, approved purchase orders are then emailed or mailed to vendors. Any relevant documentation (packing slips, delivery confirmation, etc.) received in connection with goods or services covered by a purchase order must be filed at the department. The department will confirm the receipt of the goods or services and the vendor will be paid according to standard accounts payable procedures. The finance director/department head or city manager must approve an appropriate allocation of funds before a vendor will be paid.

B. Purchase order cancellation. In the event a department decides to cancel a purchase order, they should promptly email the finance department with the subject "Cancelled Purchase Order for (insert department)." The purchase order number and date should be stated in the email. The email will act as approval from the department for cancellation of the purchase order. The finance department will archive all cancellation emails. It is the responsibility of the department to promptly notify the vendor that the order has been cancelled. The finance department will then delete the purchase order from the system.

C. Credit card and store charge cards. The city and the respective entities that they provide services to do possess or maintain entity based credit cards (e.g. Visa, MasterCard, American Express). Purchasing cards are available to department heads and other city employees on an as-needed basis. All purchases made by city credit cards are for city business only; personal expenditures are not allowed. Requests for credit cards must be directly approved by the city manager. On an annual basis, the finance department will compare the year's terminated employees against current cardholders to ensure all cardholders are active employees.

D. Credit Card policy agreement. All employees granted a credit card must sign the cardholder agreement form and purchasing card use policy. These policies outline purchasing ethics, general policies, the purchasing process, recordkeeping requirements and authorized account usage.

E. Spending limits. Cardholders are held to daily and monthly spending limits based on their job function. Individuals are granted either a $1,000.00 single-transaction and $5,000.00 monthly limit, or a $5,000.00 single-transaction and $15,000.00 monthly limit. On an annual basis, the finance department will review cardholder spending limits and adjust the limits at their discretion.

F. Credit card recordkeeping. Cardholders are responsible for entering their purchases online and applying them to the correct account codes and sending to accounts payable. All purchases must be entered by the fifteenth of each month or the finance department will freeze the individual credit card. Cardholders print their monthly expense report, attach supporting documentation and receipts, sign the report, have their department heads review and sign the report, and send it to the finance department for processing. The finance department performs monthly reviews of credit card expenditures to ensure there is no backlog of unprocessed purchases and that all purchases have appropriate documentation. All reviews must be signed and dated.

G. Store charge card policy agreement. The only authorized store credit cards for the city and its respective entities are Home Depot, Ramos Oil, Ace Hardware, and Oil Wells. All employees granted a store charge card must sign the cardholder agreement form and store charge card use policy. These policies outline purchasing ethics, general policies, the purchasing process, recordkeeping requirements and authorized account usage.

H. Spending limits. Cardholders and staff are held to spending limits based on the type of card in their possession. Card limits range from $100.00 to $5,000.00. The finance department will reconcile each card on a monthly basis. On an annual basis, the accounting manager/city manager will review cardholder and staffs spending limits and adjust the limits at their discretion.

I. Store charge card recordkeeping. Cardholders are responsible for entering their purchases online and applying them to the correct account codes. All purchases must be entered by the fifteenth of each month or the finance department will freeze the individual store charge card. Cardholders print their monthly expense report, attach supporting documentation and receipts, sign the report, have their department heads review and sign the report, and send it to the finance department for processing. The finance department performs monthly reviews of store charge expenditures to ensure there is no backlog of unprocessed purchases and that all purchases have appropriate documentation. All reviews must be signed and dated.

(Ord. No. 2021-002, § 5, 5-25-2021)

Under certain emergency conditions, defined below, it may be necessary to deviate from the formal requisitioning and purchasing process.

A. Definition of an emergency. An emergency exists when unforeseen circumstances beyond the city of Isleton control:

1. Present a real, immediate threat to the proper performance of essential functions, or;

2. May reasonably be expected to result in;

a. Material loss or damage to property,

b. Bodily injury or;

c. Loss of life, if immediate action is not taken.

B. Under $15,000. If an emergency determination is made that requires immediate action, the requestor will contact the city manager/finance department immediately and ask that the city manager/finance director approve the purchase. An additional email request must be sent to the finance director for record-keeping purposes. The purchase will be approved and the invoice will be submitted to the finance department within 24 hours. The invoice will be matched to the emergency purchase. The requisition will be entered into FMS after-the-fact and the purchase approved by the finance director or accounting manager in his/her absence.

C. $15,000 or more. If an emergency determination is made whereby the time required to go through the formal bidding process is not feasible, the vendor selected will need to be approved by the city manager and/or city council when $15,000.00 or more. The finance office will be informed promptly at any emergency declarations and provided the necessary direction to record contracted obligations.

A written contract shall be executed prior to commencing work. Where a purchase is made or work contracted without a prior written contract, a written contract shall be prepared and executed as early as possible. The contract shall contain such detail as is appropriate under the circumstances. At a minimum, the contract shall state the parties, the item to be purchased, the maximum amount, the basis for payment and require that the contractor comply with all statutory requirements. A copy of the contract shall be kept in the finance department files. Because an emergency situation may require immediate action without incorporating all of the usual and customary contract provisions, finance department staff and the vendor should consider the use of a short term contract with limited authority whenever possible. During this interim period, alternatives should be considered, such as competition (by sealed bids or otherwise) for the remaining purchases or work, or a more detailed contract which incorporates the usual and customary terms. Even where an emergency is determined to exist, the city shall obtain competition whenever practicable, as the best means to assure quality services and minimum cost.

D. Purchasing cards. Credit card holders are asked to use their cards for emergency situations. Card holders are asked to only use the exception process if the emergency purchase exceeds their daily or monthly spending limit.

(Ord. No. 2021-002, § 6, 5-25-2021)