Purchasing Administrative Policies

Purchasing Policy

TABLE OF CONTENTS

Section 1 – Purpose and Scope

Section 2 – Governing Principles

Section 3 – Contracting Authority

Purchasing Authority / Duties and Responsibilities

Contracting Authority

Section 4 – Dollar Limits

Public Contract Code

Purchases of Supplies, Services (excluding Professional Services) and Equipment

Purchases of Professional Services

Affirmative Action Penalties

Section 5 – Surplus Equipment and Supplies

Sale of Surplus Assets

Donating Surplus Assets

Section 6 – Vision / Professional Development Reimbursement

Section 7 – Procurement (Credit) Cards

Section 8 – City Council Expense Reimbursement Policy

Section 1 – Purpose and Scope

In accordance with Section 3.04.030 of the City’s Purchasing Ordinance, “The City Manager shall recommend and the City Council shall approve policies and procedures necessary in implementing a purchasing system … which will include the necessary assignment of duties in order to carry out those policies and procedures.” Accordingly, the City Manager has hereby created this set of policies that all departments shall use in letting public construction contracts, executing professional services agreements, and purchasing supplies, services and equipment.

Section 2 – Governing Principles

In accordance with Section 3.04.010 of the City’s Purchasing Ordinance, Purchasing Policies are created so that supplies, services and equipment are purchased or contracted for the City at the lowest cost commensurate with quality, and that apply positive financial controls that meet legal requirements and generally accepted accounting principles.

Section 3 – Contracting Authority

Purchasing Authority / Duties and Responsibilities

In accordance with Section 3.04.030 of the City’s Purchasing Ordinance, Department Heads or their designees shall be designated by the City Manager as Purchasing Authorities for the City, who are authorized and responsible for legally obligating the City in the purchase of supplies, services and equipment pursuant to the Purchasing Ordinance and this Purchasing Policy. A listing of such designated employees shall be maintained by the City Manager’s office or his/her designee, and shall be updated from time to time as business needs warrant. All such parties who are delegated authority under this Section are bound by the policies herein established. Failure to follow these policies are grounds for disciplinary action as provided in the City’s Personnel Rules and Regulations.

The duties of the Purchasing Authority are as follows:

A. Purchasing or contracting for supplies, services, equipment and public projects required by operating departments;

B. Negotiating and recommending execution of contracts for the purchase of supplies, services, equipment and public projects;

C. Acting to procure for the city the necessary quality in supplies, services, equipment and public projects at the lowest cost to the city;

D. Encouraging competitive bidding as set forth in the City’s Purchasing Ordinance and endeavoring to obtain as full and open competition as possible on all purchases;

E. Supervising the inspection of all supplies and equipment purchased to insure conformance with contract documents;

F. Maintaining a bidders' list of the vendors capable of supplying the various goods and services required by the City;

The Purchasing Authority is also responsible for maintaining adequate records of bids received and awarded for each purchase where a bidding process was used, or records of key decision made in implementing alternative purchasing methods used in accordance with Section 3.04.110 of the Purchasing Ordinance (“Authorized Purchasing Alternatives”).

The City Manager, at his/her discretion, may centralize or decentralize any or all of the aforementioned duties. However, in order to maintain adequate internal accounting controls over the purchasing function, the City Manager shall designate the Finance Director to oversee the following centralized duties:

A. Prescribing and maintaining such forms as necessary to the operation of Foster City Municipal Code Chapter 3.04 and other rules and regulations, including purchase requisitions, purchase orders, or other transactional forms;

B. Executing the provisions contained in Foster City Municipal Code Chapter 3.04 and providing administrative interpretation and advising on the provisions contained in chapter 3.04.

Contracting Authority

Department Heads are hereby authorized to execute various agreements in the normal course of business that may legally bind the City with a vendor or outside agency, except for those agreements which require approval by the City Manager or City Council per ordinance or Council resolution.

Department Heads, upon consultation with the City Manager, may delegate authority to their managers or supervisors to execute certain types of agreements such as recurring agreements or agreements where the amounts are considered de minimus (e.g., contracts with instructors for recreation classes). A delegate must be a full-time, permanent employee of the City of Foster City.

Section 4 – Dollar Limits

The following dollar limits and approving authority are established for procuring public contracts; supplies, services and equipment; and professional services. Subsequent changes to the dollar limits and/or approving authority are subject to City Council approval by resolution.

Public Contract Code

Purchases of Supplies, Services (excluding Professional Services) and Equipment

Purchases of Professional Services

Affirmative Action Penalties

Contractors in violation of Fair Employment Practices Act or other similar federal law; per person, per day, for each day the person was discriminated against:

$100 per person, per day

(updated 1980, Ordinance 202 § 1(part))

Section 5 – Surplus Equipment and Supplies

On occasion, the City may desire to sell used or surplus equipment and/or supplies. The concept is that the City will receive funds from the sale of said surplus assets to be recognized as revenues and deposited into reserves.

Sale of Surplus Assets

Departments must obtain prior written authorization from the City Manager (or his/her designee) to sell surplus assets in accordance with the City’s purchasing ordinance and this policy.

Surplus assets may be used as “trade-in” value with a vendor from whom replacement assets are purchased without the need for public sale of said assets. Otherwise, state and local law prohibit gifting of public funds to any individual or entity. Accordingly, the City shall use open methods in selling off surplus assets. Departments are authorized to use the following means of selling surplus assets in an open forum:

• Auctions – including City-run auctions, auction houses, online auctions (e.g., eBay)
• Sealed bids – sealed bids received and opened at a pre-specified time and place
• Sales offers – under limited circumstances, the City may entertain offers from sole buyers (including City employees) to purchase surplus assets only after other open methods of disposing said assets are exhausted.

Departments must ensure that sale of any such assets are publicly noticed. Public notice of online auctions can be achieved through publicizing City-authorized online auctions on the City’s web site in an easily found location that links users to the online auction web site.

All funds received from sale of surplus assets must be recognized as revenue to the City (not as an offset to an expenditure) unless the sale of those surplus assets were made as a “trade-in” with the company from whom the replacement asset was purchased. In such a case, the sale may be recognized as an exchange transaction and deposited as an offset to the expenditure account from which the new asset was purchased.

Donating Surplus Assets

Subject to City Council approval, surplus equipment and/or supplies may be donated to local organizations, including but not limited to: school districts, public or private schools, service organizations, and non-profit organizations. Unless expressly authorized by Council resolution, such assets shall have been determined to have little or no market value using open methods of public sale prior to being donated to local organizations. Organizations that provide services directly in or to Foster City residents or businesses shall have first priority.

Section 6 –Employee Reimbursement of Benefits-Related Expenses

Employees are eligible for reimbursements of a variety of employment-related benefits, including but not limited to: vision, professional development expenses, uniform reimbursements, job-related footwear, and other benefits which may be part of negotiated benefits packages in Memoranda of Understanding (MOU) with bargaining groups or compensation and benefits plans (C&B Plan) for unrepresented employees.

The employee shall submit a request for reimbursement of approved reimbursable expenses after those expenses are incurred by the employee. The request shall first be approved by the Department Head or his/her designee, then be approved by the Human Resources Department to ensure compliance with the provisions of the applicable MOU or C&B Plan.

Expenditures shall be accounted for as fringe benefits in the appropriate department budget.

Section 7 – Procurement (Credit) Cards

The City has created a Procurement (Credit) Card Program to assist departments in purchasing from vendors that either do not accept purchase orders, or otherwise to improve the efficiency of processing small dollar item purchases. A Credit Card Program policy has been issued and is attached hereto and incorporated herein by reference.

Section 8 – City Council Expense Reimbursement Policy

In accordance with California Government Code § 53232.1-.4, the City Council has adopted a City Council Expense Reimbursement Policy as of January 3, 2006. This Policy establishes guidelines regarding reimbursable expenses for City Councilmembers, and is required by law effective January 1, 2006.

The Policy is attached to this document and incorporated by reference herein. This Policy applies to the City Council as Community Development Agency Members, City Councilmembers, and Estero Municipal Improvement District Directors.

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James C. Hardy, City ManagerDate

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Purchasing Policy

Issuing Department: Financial Services

Effective Date: July 1, 2007