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HomeMy WebLinkAbout819_Amend_Part 7 Ch 1_Purchasing Ord_Amened See Ord 842Tulsa County Clerk - EARLENE WILSON Doc# 2005083001 Pgs 17 Receipt # 807694 0 7 / 18 / 05 13:57:38 Fee 45.00 000807694005 CITY OF OWASSO, OKLAHOMA ORDINANCE NUMBER 819 AN ORDINANCE RELATING TO PART SEVEN, FINANCE AND TAXATION, CHAPTER 1, FINANCE AND BUDGET ADMINISTRATION, OF THE CODE OF ORDINANCES OF THE CITY OF OWASSO, OKLAHOMA, AMENDING SAME BY PROVIDING FOR PROCESSING METHODS AND INTERNAL CONTROLS OVER MUNICIPAL PURCHASES AND CASH DISBURSEMENTS, AMENDING COMPETITIVE BIDDING PROVISIONS BY PROVIDING FOR AN ELECTRONIC BIDDING PROCESS, REPEALING AS DUPLICATIVE OF OTHER LAWS PROVISIONS RELATING TO MAINTENANCE BONDS, DIRECTING CODIFICATION AND DECLARING AN EFFECTIVE DATE. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF OWASSO, OKLAHOMA, THAT, TO -WIT: SECTION ONE (1)o Part Seven, Finance and Taxation, Chapter 1, Finance and Budget Administration, of the Code of Ordinances of the City of Owasso, Oklahoma, shall be amended by providing and codifying as follows: SECTION 7 -101 DEPOSITORIES DESIGNATED FUNDS TO BE DEPOSITED All banks, trust companies and savings and loan associations within this city which are incorporated under federal or state law are hereby designated as depositories for the funds of the city. The city treasurer shall deposit daily all public funds received by him in such banks, trust companies or savings and loan associations. Such institutions where such funds arc deposited shall be required to meet the requirements of state law as dcpositories for public funds and such deposits shah be secured as set forth in Title 62 OS Sections 517.1 et seq "Security for Local Public Deposits Act" (Prior Code, See. 7 -27; Ord. loo. 323, 10/5/82) (a) The City designates department directors as purchasing officers empowered to purchase or contract against budget appropriation accounts. (b) For all purchases of goods, services or capital (all purchases or disbursements other than payroll and debt service related) over $5,000, requisition forms, purchase orders or contracts shall be prepared and approved, in writing, by a designated purchasing officer prior to the time the purchase commitment is made. (c) For all purchases or contracts for goods, services or capital over $25,000, governing body approval shall be obtained prior to the time the commitment is made, and such approval shall be recorded in the minutes of the governing body. (d) For all purchases of goods, services or capital over $5,000 the approved requisition, purchase order or contract shall be forwarded to an officer or employee charged with keeping the appropriation and expenditure records (encumbering clerk) who shall determine that there exists available unencumbered appropriation in the accounts to be charged. Upon such determination, the encumbering clerk shall attest to that fact in writing. If appropriation is not available for the proposed purchase or commitment, the purchase or commitment shall not proceed until budget amendments are authorized to provide sufficient appropriation. Upon approval of the purchasing officer and encumbering clerk, an encumbrance shall be recorded in the appropriation and expenditure records in the amount or estimated amount of the commitment. These encumbering requirements shall not apply to the following type of purchases or commitments: - Payroll and Personal Services - Utility and Telephone Services (Governed by State Corporation Commission) - Insurance (Governed by contract) - Debt Service (c) After satisfactory delivery of the merchandise or completion of contract provisions, an invoice or claim form shall be obtained adequately documenting request for payment. The officer or employee receiving satisfactory delivery of merchandise or contract service shall acknowledge such fact by signing the invoice, claim form, delivery ticket or receiving advice. The invoice or claims form, along with the written acknowledgment of reccipt, shall be forwarded to the officer or employee responsible for processing accounts payable who shall review the invoice for accuracy and propriety, including comparison to the authorized requisition, purchase order or contract, if applicable. Upon completion of the accounts payable officer review, an invoice or claims listing shall be submitted to the governing body for approval during the next regular or special meeting. (f) Upon approval of the invoices or claims for payment, checks or other payment documents as authorized by State law (II O.S., Section 17 -102) shall be prepared and submitted to the City Treasurer, along with a copy of the approved invoice or claims listing. 2 The Treasurer shall compare the checks or other payment documents to the invoice or claims listing and verify their accuracy. Upon verification, the Treasurer shall sign the checks or other documents and prepare them for distribution. In addition, the Treasurer shall prepare or caused to be prepared a check register. (g) The City Treasurer shall record or cause to be recorded in the appropriate j ouinals and ledgers the purchases and cash disbursements incurred and paid. A. Every contract for, or purchase of, supplies, materials, equipment or contractual services for more than Twenty Five Thousand Dollars ($25,000.00) shall require the prior approval of the City Council; provided, however, the foregoing provisions shall not be applicable to payments for medical services and supplies arising from claims against the Workers Compensation Self Insurance Fund or medical, dental and optical services and supplies as well as administrative costs relating thereto arising from claims against the Health Care Self Insurance Fund. B. The City Council hereby designates the City Treasurer and the City Manager, or his Designee, as purchasing officers empowered to purchase or contract against the budgeted Health Care Self hnsurance Fund in accordance with the procedures set forth below. After satisfactory delivery of merchandise or completion of contract provisions, an invoice or claim shall be obtained adequately documenting the request for payment. The officer or employee receiving satisfactory delivery of merchandise or contract service shall acknowledge such fact by signing the invoice, claim form, delivery ticket or receiving advice. Further, such officer or employee shall make certain that sufficient funds are available in the appropriation for the proposed expenditure. If sufficient funds are not available at such time, then, in such event, the payment shall not proceed. Otherwise, the supportive documentation shall be submitted to the City Manager or the City Manager's designee for consideration and approval ofpayment, which shall be approved in writing by the City Manager or the City Manager's designee. 2. Upon approval of the invoices or claims for payment, a warrant, check, wire transfer or other payment document as authorized by State law [11 O.S. 17 -102 (A)] shall be prepared and, along with a copy of the approved invoice or claims listing, submitted to the City Treasurer for execution and issuance. 3. The City Treasurer shall record or cause to be recorded in the appropriate journals and ledgers the purchases and cash disbursements incurred and paid. 4. Copies of the approved invoice or claims list and /or check (warrant or other payment instrument) shall be provided to the City Council for informational purposes at its next regular meeting; however, the City Council approval is not 3 required prior to payment of the invoices or claims if incurred and paid in accordance with the provisions above. SECTION 7 -104 COMPETITIVE BIDDING (a) The City shall adhere to the provisions of Oklahoma Statutes (1991), Title 61, Sections 101 et seq. when determining when competitive bidding is required and the manner in which competitive bids will be obtained. (b) If the City Charter provides for additional competitive bidding requirements, such additional requirements shall be met. (c) In addition to the requirements of (a) above, public trusts created pursuant to O.S. Title 60, Section 176, of which the City is beneficiary, shall also follow the competitive bidding provisions of Section 176(g) of Title 60. (d) The City is authorized to employ, implement and utilize auction electronic bidding in accordance with the provisions of 11 O.S. § 17 -115 as adopted by Enrolled House Bill No. 2353, effective November 1, 2004. The Administration of the City is hereby authorized to promulgate policies and procedures for implementation of the auction electronic bidding as authorized by state law to the fullest extent thereof. The following may be purchased without giving an opportunity for competitive bidding: 1. Supplies, materials, equipment or contractual services whose cost does not exceed Twenty Five Thousand Dollars ($25,000.00) in a single transaction; (Ord. No. 712, 6/18/02) 2. Supplies, materials, equipment or contractual services which can be furnished only by a single dealer, or which have a uniform price wherever bought; 3. Supplies, materials, equipment or contractual services purchased from another unit of government at a price deemed below that obtainable from private dealers, including war surplus; 4. Equipment to replace existing equipment which has become inoperable when the council declares the purchase an emergency; 5. Contractual services, including but not limited to gas, electricity, telephone service, purchased from a public utility at a price or rate determined by the State Corporation Commission or other government authority; 4 6. Supplies, materials, equipment or contractual services when purchased at a price not exceeding a price set therefore by the State purchasing agency or any other state agency hereafter authorized to regulate prices for things purchased by the State, or any county purchasing agency or city purchasing agency wherein such county or city has a population equal to or in excess of 50,000 persons, and, (Ord. No. 455, 1/5/93; Ord. No. 520, 3/5/96). 7. Contractual services of a professional nature, such as engineering, architectural and medical services. (Prior Code, Sec. 7 -33) (a) For all employees and officers of the City, a documented record shall be maintained in a personnel file of the authorized rate of pay or salary for each employee or officer. (b) For each pay period, a documented record of time worked and leave taken shall be prepared, in the form of time sheets, cards or logs, for each employee and officer to be paid. For employees exempt from the overtime provisions of the Fair Labor Standards Act, the record may exclude time worked. Such record of time worked and leave taken shall be verified as to its accuracy in writing by the employee or officer, supervisor or department director if applicable. (c) Upon verification of the work record, a payroll statement or register, including the amount of gross pay, authorized deductions and net pay, shall be prepared and submitted to the City Manager or designee for review and written approval. (d) Upon approval of the payroll statement or register, the net payroll checks shall be prepared along with checks for payment of related payroll taxes and other payroll benefits, required by law or contract. (e) The checks shall be presented to the City Treasurer along with the approved payroll statement or register. The Treasurer shall compare the checks to the payroll statement or register and verify their accuracy. Upon verification, the Treasurer shall sign the checks and prepare them for distribution. In addition, the Treasurer shall prepare or caused to be prepared a check register. (f) No payroll related encumbrances are required to be recorded in the budgetary accounting records as long as the payroll costs are recorded as expenditures at the time they become due and payable. However, no payroll costs may be incurred or paid if they exceed the available appropriation for the accounts to be charged at the legal level of control. (g) The City Treasurer shall record or cause to be recorded in the appropriate journals and ledgers the payroll costs incurred and /or paid for the pay period. (h) A copy of the payroll statement, register or payroll check register shall be provided to the governing body for informational puiposes; however, governing body approval is not required prior to the payment of payroll related costs if incurred and paid in accordance with the provisions above. (a) All long -term indebtedness, in the form of bonds, notes or lease purchase obligations, shall only be incurred in the manner provided by law. (b) Once lawfully incurred, payments of principal and interest on the bonds or notes and payments on the lease purchase obligations shall be paid in accordance with the terms as specified in the bond indenture, note agreement or lease purchase contract by the City Treasurer without further approval of the governing body. (c) The manner of payment shall be consistent with the manner used for the payment of purchases of goods, services or capital as described in Section 7 -102 (f) above. (d) The City Treasurer shall record or cause to be recorded in the appropriate journals and ledgers the debt service payments and maintain current records of the remaining amount of indebtedness. (a) All transfers of resources between funds (both operating and residual equity transfers) shall only be made in accordance with governing body appropriations. Such appropriations shall be contained in the original or amended budget of the municipality. (b) Once lawfully appropriated, interfund transfer payments may be made by the City Treasurer without further governing body approval. Such transfers, however, may not exceed the amount lawfully appropriated. (c) The manner of payment shall be consistent with the manner used for the payment of purchases of goods, services and capital as described in Section 7 -102 (f) above. (d) The City Treasurer shall record or cause to be recorded in the appropriate journals and ledgers these interfund transfers. SECTION 7 -109 PETTY CASH (a) As provided for in 11 O.S., Section 17 -102 (D) of the Oklahoma State Statutes, the municipality may have petty cash accounts for use in making certain small payments for costs incurred in operating the municipality. (b) Each petty cash account established shall require governing body approval, including the amount of the petty cash imprest balance. However, in no case, should the imprest balance exceed $9,000. (c) The petty cash accounts shall be reimbursed by utilizing properly itemized invoices or petty cash voucher slips and by then processing the reimbursement in the manner used for payment of purchases of goods, services and capital as described in Section 7 -102. (a) The City Treasurer shall prepare a monthly budget status report. The report shall be placed on the Agenda for governing body acknowledgment at the first meeting following the close of the previous month. SECTION 7-111 SALES, COUNCIL TO DECLARE SURPLUS OR OBSOLETE; CQM- PETITIVE BIDDING No surplus or obsolete supplies, materials or equipment of a value of more than Five Hundred Dollars ($500.00) may be sold until the council shall have declared them obsolete or surplus. Before the city manager sells any surplus or obsolete supplies, materials or equipment, except as otherwise provided below, he shall advertise them for sale in a newspaper of general circulation in the city or give notice in such other manner as he deems necessary adequately to reach prospective buyers to give them opportunity to make bids. All bids shall be sealed and shall be opened in public at a designated time and place, except when the sale is by auction. The city manager may repeatedly reject all bids and advertise or give notice again. He shall sell such supplies, materials or equipment to the highest responsible bidder for cash. In case of a tie, he may sell to either of the bidders tying, or may divide the sale among two (2) or more tying, always selling to the highest responsible bidder or bidders for cash. (Prior Code, Sec. 7 -34) The city manager may sell the following without giving an opportunity for competitive bidding: 1. Surplus or obsolete supplies, materials or equipment whose total value does not exceed One Thousand Five Hundred Dollars ($1,500.00) in a single transaction; and 2. Supplies, materials or equipment when sold at a price at least as great as that paid by the city for the same. (Prior Code, Sec. 7 -35) (a) For all public trusts created pursuant to 60 O.S., Sections 176 -180, for which the City is beneficiary and for which the trust's governing body (Trustees) are comprised entirely of members of the City's governing body, the above noted requirements of Section 7 -101 through 7-112 shall apply. (b) For the purposes of the public trusts, as used above, the tcrms governing body shall mean board of trustees of the trust, City Manager shall mean Trust Manager as appointed by the trustees, City Treasurer shall mean Trust Treasurer as appointed by the trustees or required by the trust indenture. The provisions of this ordinance shall become effective thirty (30) days from the date of final passage as provided by state law. PA-S, ED by the City Council of the City of Owasso, Oklahoma on the day of 2005. Mayor Sherry Bishop, APPROVED as to fonn and legality this day of , 2005 Attorney Published in the Owasso Reporter, Owasso, Tulsa County, Okla- homa, July 12, 2005. CITY OF OWASSO, OKLAHOMA ORDINANCE NUMBER 819 AN ORDINANCE RELATING TO PART SEVEN, FINANCE AND TAXATION, CHAPTER 1, FINANCE AND BUDGET ADMINISTRA- TION, OF THE CODE OF ORDINANCES OF THE CITY OF OWAS- SO, OKLAHOMA, AMENDING SAME BY PROVIDING FOR PRO- CESSING METHODS AND INTERNAL CONTROLS OVER MUNICIPAL PURCHASES AND CASH DISBURSEMENTS, AMENDING COMPETITIVE BIDDING PROVISIONS BY PROVID- ING FOR AN ELECTRONIC BIDDING PROCESS, REPEALING AS DUPLICATIVE OF OTHER LAWS PROVISIONS RELATING TO MAINTENANCE BONDS, DIRECTING CODIFICATION AND DECLARING AN EFFECTIVE DATE. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF OWASSO, OKLAHOMA, THAT, TO -WIT: SECTION ONE (1): Part Seven, Finance and Taxation, Chapter 1, Finance and Budget Administration, of the Code of Ordinances of the City of Owasso, Oklahoma, shall be amended by providing and codifying as follows: SECTION 7 -101 DEPOSITORIES DESIGNATED FUNDS TO BE DEPOSITED All banks, trust companies and savings and loan associations within this city which are incorporated under federal or state law are hereby designated as depositories for the funds of the city. The city treasurer shall deposit daily all public funds received by him in such banks, trust companies or savings and loan associations. Such institutions where such funds are deposited shall he required to meet the requirements of state law as depositories for public funds and such deposits shall be secured as set forth in Title 62 OS Sec- tions 517.1 et seq "Security for Local Public Deposits Act". (Prior Code, Sec. 7 -27; Ord. No. 323, 10/5/82) SECTION 7- 102PURCHASES OF GOODS, SERVICES AND CAP- ITAL (a) The City designates department directors as purchasing officers empowered to purchase or contract against budget appropriation accounts. (b) For all purchases of goods, services or capital (all purchases or disbursements other than payroll and debt service related) over $5,000, requisition forms, purchase orders or contracts shall be prepared and approved, in writing, by a designated purchasing officer prior to the time the purchase commitment is made. (c) For all purchases or contracts for goods, services or capital over $25,000, governing body approval shall be obtained prior to the time the commitment is made, and such approval shall be record- ed in the minutes of the governing body. (d) For all purchases of goods, services or capital over $5,000 the approved requisition, purchase order or contract shall be for- warded to an officer or employee charged with keeping the appro- priation and expenditure records (encumbering clerk) who shall determine that there exists available unencumbered appropria- tion in the accounts to be charged. Upon such determination, the encumbering clerk shall attest to that fact in writing. If appropria- tion is not available for the proposed purchase or commitment, the purchase or commitment shall not proceed until budget amendments are authorized to provide sufficient appropriation. Upon approval of the purchasing officer and encumbering clerk, an encumbrance shall be recorded in the appropriation and expen- diture records in the amount or estimated amount of the commit- ment. These encumbering requirements shall not apply to the following type of purchases or commitments: - Payroa and Personal Services Utility and Telephone Services (Governed by State Corpora- tion Commission) Insurance (Governed by contract) Debt Service (e) After satisfactory delivery of the merchandise or completion of contract provisions, an invoice or claim form shall be obtained adequately documenting request for payment. The officer or employee receiving satisfactory delivery of merchandise or con- tract service shall acknowledge such fact by signing the invoice, claim form, delivery ticket or receiving advice. The invoice or claims form, along with the written acknowledgment of receipt, shall be forwarded to the officer or employee responsi- ble for processing accounts payable who shall review the invoice for accuracy and propriety, including comparison to the autho- rized requisition, purchase order or contract, if applicable. Upon completion of the accounts payable officer review, an invoice or claims listing shall be submitted to the governing body for approval during the next regular or special meeting. (f) Upon approval of the invoices or claims for payment, checks or other payment documents as authorized by State law (11 O.S., Section 17 -102) shall be prepared and submitted to the City Trea- surer, along with a copy of the approved invoice or claims listing. The Treasurer shall compare the checks or other payment docu- ments to the invoice or claims listing and verify their accuracy. Upon verification, the Treasurer shall sign the checks or other documents and prepare them for distribution. In addition, the Treasurer shall prepare or caused to be prepared a check regis- ter. (g) The City Treasurer shall record or cause to be recorded in the appropriate journals and ledgers the purchases and cash dis- bursements incurred and paid. SECTION 7 -103 PAYMENTS FROM SELF INSURANCE A. Every contract for, or purchase of, supplies, materials, equipment or contractual services for more than Twenty Five Thousand Dol- lars ($25,000.00) shall require the prior approval of the City Coun- cil; provided, however, the foregoing provisions shall not be appli- cable to payments for medical services and supplies arising from claims against the Workers Compensation Self Insurance Fund or medical, dental and optical services and supplies as well as administrative costs relating thereto arising from claims against the Health Care Self Insurance Fund, B. The City Council hereby designates the City Treasurer and the City Manager, or his Designee, as purchasing officers empow- ered to purchase or contract against the budgeted Health Care Self Insurance Fund in accordance with the procedures set forth below. 1. After satisfactory delivery of merchandise or completion of con- tract provisions, an invoice or claim shall be obtained adequately documenting the request for payment. The officer or employee receiving satisfactory delivery of merchandise or contract service shall acknowledge such fact by signing the invoice, claim form, delivery ticket or receiving advice. Further, such officer or employ- ee shall make certain that sufficient funds are available in the appropriation for the proposed expenditure. If sufficient funds are not available at such time, then, in such event, the payment shall not proceed. Otherwise, the supportive documentation shall be submitted to the City Manager or the City Manager's designee for consideration and approval of payment, which shall be approved in writing by the City Manager or the City Manager's designee. 2. Upon approval of the invoices or claims for payment, a warrant, check, wire transfer or other payment document as authorized by State law [11 O.S. 17 -102 (A)] shall be prepared and, along with a copy of the approved invoice or claims listing, submitted to the City Treasurer for execution and issuance. 3. The City Treasurer shall record or cause to be recorded in the appropriate journals and ledgers the purchases and cash dis- bursements incurred and paid. 4. Copies of the approved invoice or claims list and /or check (war- rant or other ayment instrument) shall be provided to the City Council for informationalpurposes at its next regular meeting; however, the City Council approval is not required prior to pay- ment of the invoices or claims if incurred and paid in accordance with the provisions above. SECTION 7 -104 COMPETITIVE BIDDING (a) The City shall adhere to the provisions of Oklahoma Statutes (1991), Title 61, Sections 101 et seq. when determining when competitive bidding is required and the manner in which compet- itive bids will be obtained. (b) If the City Charter provides for additional competitive bidding requirements, such additional requirements shall be met. (c) In addition to the requirements of (a) above, public trusts cre- ated pursuant to O.S. Title 60, Section 176, of which the City is beneficiary, shall also follow the competitive bidding provisions of Section 176(g) of Title 60. (d) The City is authorized to employ, implement and utilize auc- tion electronic bidding in accordance with the provisions of 11 O.S. § 17 -115 as adopted by Enrolled House Bill No.2253, effec- tive November 1, 2004. The Administration of the City is hereby authorized to promulgate policies and procedures for implemen- tation of the auction electronic bidding as authorized by state law to the fullest extent thereof. SECTION 7 -105 WHEN COMPETITIVE BIDDING IS NOT REQUIRED The following may be purchased without giving an opportunity for competitive bidding: 1. Supplies, materials, equipment or contractual services whose cost does not exceed Twenty Five Thousand Dollars ($25,000.00) in a single transaction; (Ord. No. 712, 6/18/02) 2. Supplies, materials, equipment or contractual services which can be furnished only by a single dealer, or which have a uniform price wherever bought; 3. Supplies, materials, equipment or contractual services purchased from another unit of government at a price deemed below that obtainable from private dealers, including war surplus; 4. Equipment to replace existing equipment which has become inoperable when the council declares the purchase an emergen- cy; 5. Contractual services, including but not limited to gas, electricity, telephone service, purchased from a public utility at a price or rate determined by the State Corporation Commission or other gov- ernment authority; 6. Supplies, materials, equipment or contractual services when pur- chased at a price not exceeding a price set therefore by the State purchasing agency or any other state agency hereafter autho- rized to regulate prices for things purchased by the State, or any county purchasing agency or city purchasing agency wherein such county or city has a population equal to or in excess of 50,000 persons, and, (Ord. No. 455, 1/5/93; Ord. No. 520, 3/5/96). 7. Contractual services of a professional nature, such as engineer- ing, archi- tectural and medical services. (Prior Code, Sec. 7 -33) SECTION 7 -106 PAYROLL DISBURSEMENTS (a) For all employees and officers of the City, a documented record shall be maintained in a personnel file of the authorized rate of pay or salary for each employee or officer. (b) For each pay period, a documented record of time worked and leave taken shall be prepared, in the form of time sheets, cards or logs, for each employee and officer to be paid. For employees exempt from the overtime provisions of the Fair Labor Standards Act, the record may exclude time worked. Such record of time worked and leave taken shall be verified as to its accuracy in writ- ing by the employee or officer, supervisor or department director if applicable. (c)Upon verification of the work record, a payroll statement or regis- ter, including the amount of gross pay, authorized deductions and net pay, shall be prepared and submitted to the City Manager or designee for review and written approval. (d)Upon approval of the payroll statement or register, the net payroll checks shall be prepared along with checks for payment of relat- ed payroll taxes and other payroll benefits, required by law or contract. (e) The checks shall be presented to the City Treasurer along with the approved payroll statement or register. The Treasurer shall compare the checks to the payroll statement or register and ver- ify their accuracy. Upon verification, the Treasurer shall sign the checks and prepare them for distribution. In addition, the Trea- surer shall prepare or caused to be prepared a check register. (f) No payroll related encumbrances are required to be recorded in the budgetary accounting records as long as the payroll costs are recorded as expenditures at the time they become due and payable. However, no payroll costs may be incurred or paid if they exceed the available appropriation for the accounts to be charged at the legal level of control. (g) The City Treasurer shall record or cause to be recorded in the appropriate journals and ledgers the payroii costs incurred and /or paid for the pay period. (h)A copy of the payroll statement, register or payroll check register shall be provided to the governing body for informational purpos- es; however, governing body approval is not required prior to the payment of payroll related costs if incurred and paid in accor- dance with the provisions above. SECTION 7 -107 DEBT SERVICE (a)AII long -term indebtedness, in the form of bonds, notes or lease purchase obligations, shall only be incurred in the manner pro- vided by law. (b) Once lawfully incurred, payments of principal and interest on the bonds or notes and payments on the lease purchase obligations shall be paid in accordance with the terms as specified in the bond indenture, note agreement or lease purchase contract by the City Treasurer without further approval of the governing body. (c)The manner of payment shall be consistent with the manner used for the payment of purchases of goods, services or capital as described in Section 7 -102 (f) above. (d) The City Treasurer shall record or cause to be recorded in the appropriate journals and ledgers the debt service payments and maintain current records of the remaining amount of indebted- ness. SECTION 7-108 INTERFUND TRANSFERS (a) All transfers of resources between funds (both operating and residual equity transfers) shall only be made in accordance with governing body appropriations. Such appropriations shall be contained in the original or amended budget of the municipality. (b)Once lawfully appropriated, interfund transfer payments may be made by the City Treasurer without further governing body approval. Such transfers, however, may not exceed the amount lawfully appropriated. (c)The manner of payment shall be consistent with the manner used for the payment of purchases of goods, services and capital as described in Section 7 -102 (f) above. (d) The City Treasurer shall record or cause to be recorded in the appropriate journals and ledgers these interfund transfers. SECTION 7 -109 PETTY CASH (a) As provided for in 11 O.S., Section 17 -102 (D) of the Oklahoma State Statutes, the municipality may have petty cash accounts for use in making certain small payments for costs incurred in oper- ating the municipality. (b) Each petty cash account established shall require governing body approval, including the amount of the petty cash imprest balance. However, in no case, should the imprest balance exceed $9,000. (c)The petty cash accounts shall be reimbursed by utilizing proper- ly itemized invoices or petty cash voucher slips and by then pro- cessing the reimbursement in the manner used for payment of purohases of goods, serrices and capital as described in Section 7 -102. SECTION 7 -110 FINANCIAL REPORTING (a) The City Treasurer shall prepare a monthly budget status report. The report shall be placed on the Agenda for governing body acknowledgment at the first meeting following the close of the previous month. SECTION 7 -111 SALES, COUNCIL TO DECLARE SURPLUS OR OBSOLETE; COM- PETITIVE BIDDING No surplus or obsolete supplies, materials or equipment of a val- ue of more than Five Hundred Dollars ($500.00) may be sold until the council shall have declared them obsolete or surplus. Before the city manager sells any surplus or obsolete supplies, materials or equipment, except as otherwise provided below, he shall advertise them for sale in a newspaper of general circulation in the city or give notice in such other manner as he deems necessary adequately to reach prospective buyers to give them opportunity to make bids. All bids shall be sealed and shall be opened in public at a designated time and place, except when the sale is by auction. The city man- ager may repeatedly reject all bids and advertise or give notice again. He shall sell such supplies, materials or equipment to the highest responsible bidder for cash. In case of a tie, he may sell to either of the bidders tying, or may divide the sale among two (2) or more tying, always selling to the highest responsible bidder or bid- ders for cash. (Prior Code, Sec. 7 -34) SECTION 7- 112SALES, WHEN COMPETITIVE BIDDING IS NOT REQUIRED The city manager may sell the following without giving an oppor- tunity for competitive bidding: 1. Surplus or obsolete supplies, materials or equipment whose total value does not exceed One Thousand Five Hundred Dollars ($1,500.00) in a single transaction; and 2. Supplies, materials or equipment when sold at a price at least as great as that paid by the city for the same. (Prior Code, Sec. 7 -35) SECTION 7 -113 APPLICABILITY TO PUBLIC TRUSTS (a) For all public trusts created pursuant to 60 O.S., Sections 176- 180, for which the City is beneficiary and for which the trust's gov- erning body (Trustees) are comprised entirely of members of the City's governing body, the above noted requirements of Section 7 -101 through 7 -112 shall apply. (b) For the purposes of the public trusts, as used above, the terms governing body shall mean board of trustees of the trust, City Manager shall mean Trust Manager as appointed by the trustees, City Treasurer shall mean Trust Treasurer as appointed by the trustees or required by the trust indenture. SECTION TWO (2): Declaring an Effective Date The provisions of this ordinance shall become effective thirty (30) days from the date of final passage as provided by state law. PASSED by the City Council of the City of Owasso, Oklahoma on the 5th day of July, 2005. /s/ Craig Thoendel, Mayor ATTEST: /s/ Sherry Bishop, City Clerk (SEAL) APPROVED as to form and legality this 5th day of July, 2005 /s/ Bob Buss, Attorney at Law STATE OF OKLAHOMA, TULSA COUNTY, ss: JULY 12T 2005 Subscribed and sworn o bef6re me 13TH day of JULY, 2005 Notary Public My Commission expires: MEMORANDUM TO: HONORABLE MAYOR AND CITY COUNCIL CITY OF OWASSO FROM: SHERRY BISHOP FINANCE DIRECTOR SUBJECT: PURCHASES AND CASH DISBURSEMENTS ORDINANCE DATE: June 30, 2005 BACKGROUND: The Purchase Order Act (62 O.S., 5.310.1- 310.9) is one of the many state statutes that regulate budgeting, purchasing and spending for municipalities. Municipalities are required to follow the provisions of the Act when acquiring goods and services unless otherwise provided by ordinance. The Act specifies each step of the process from submitting a purchase order through the final approval by the governing board. As an alternative to the provisions of the Act. the City Council has the authority to adopt a municipal ordinance providing methods and ensuring adequate internal control over purchases and cash disbursements. The Purchase Order Act has been updated several times over the years, but the Act was designed around a manual, hand - written ledger system and some provisions are cumbersome. Our audit firm, Crawford & Associates, has written a "model' purchasing and cash disbursements ordinance. The "model' ordinance incorporates the provisions of the state statute with optional language for the points most frequently modified by city ordinances. Some of the language provided in the model ordinance is not an actual change but clarifies areas where the requirements in the state statutes are vague or unclear. Some normal accounting procedures are included in the ordinance. The ordinance makes it clear that certain procedures have been legally authorized. Other procedures currently in practice would become requirements under this ordinance. Staff has reviewed the state statutes and the "model' ordinance as well as our current practices. Based on that review, staff believes that our purchasing and payment process could be more efficient and more cost effective with some modifications by a city ordinance. Incorporating the requirements of state statutes into our city ordinance provides a clear concise reference for purchasing requirements. CURRENT PROCESS: When a purchase is needed, a requisition is submitted to the finance department; a purchase order is issued and encumbered against the appropriation; the finance director certifies the encumbrance; the city manager approves the purchase; and the purchase order is returned to the department originating the requisition. The department makes their purchase and submits the signed invoice and purchase order to the finance department for payment processing. The payment is itemized on Purchases and Cash Disbursements Ordinance July 1, 2005, Page 2 of 4 the claims list for approval by the governing body, and then checks are issued to the vendors. All payments except payroll and related taxes and insurances follow this procedure. PROPOSED CHANGES: The proposed changes to our current process address three major points. The major changes in this proposal are: To allow department directors to authorize purchases up to $5,000 without a purchase order or encumbrance. To allow payments of principal and interest on long -term debt without further approval by the governing body. To allow payments of transfers between funds that have been appropriated by the governing body without further approval by the governing body. These three changes are found in the various sections of the ordinance as summarized below. 1. ENCUMBRANCES THE PURCHASE ORDER ACT requires that a purchase order be certified before every purchase commitment is made. The certification verifies that budgeted funds are available and that an -- encumbrance against the appropriation has been recorded. This provision in state statutes is intended to prevent overspending a budget. With a computerized accounting system, current budget data is readily available lessening the need for encumbrances of routine purchases. PROPOSED LANGUAGE would specify a dollar amount at which an approved purchase order would be required prior to the purchase commitment. Purchases under that amount could be authorized by the department director without additional approval or budget encumbrance. Staff proposes the department director authority be set at $5,000. Purchases over $5,000 would require an approved purchase order and an encumbrance against the appropriation prior to the purchase. Purchases over $25,000 would still require prior governing body approval. This change would make our process more efficient and reduce the processing time to pay vendors. Payments for purchases would still be approved by the governing body on the claims list. 2. DEBT SERVICE PAYMENTS THE PURCHASE ORDER ACT requires the governing body approval of all payments. The monthly payments for revenue bonds or notes are included on the claims list for approval by the governing body. PROPOSED LANGUAGE would authorize the City Treasurer to pay principal and interest on bonds or notes or payments on a lease purchase obligation as specified in the documents approved by the governing body. This authority makes the process more efficient and would eliminate the risk of a late payment because of the timing of council meeting dates. Purchases and Cash Disbursements Ordinance July 1, 2005, Page 3 of 4 3. INTERFUND TRANSFERS THE PURCHASE ORDER ACT requires the governing body approval of all payments. hrterfind transfers are considered a payment and require governing body approval. PROPOSED LANGUAGE would authorize the City Treasurer to pay interfund transfers as appropriated by the governing body. The City of Owasso routinely has two types of interfund transfers. One type is a transfer of revenue. An example is the sales tax pledged to pay the revenue bonds issued by the OPWA. Each month the sales tax is transferred from the general fund to the OPWA sales tax fund. At the end of the month, two -cents of sales tax is transferred from the OPWA sales tax fund back to the general fund. The other type of interfund transfer is to fund operations of one fund from another find. An example in this FY budget is a transfer from the general fund to the OPGA fund. Interfund transfers are itemized in the annual budget and approved by the City Council or the Authority Trustees. Since these transfers are appropriated by the governing body during the budget process, these transfer payments could be more efficiently accomplished by empowering the City Treasurer to make such transfers without additional authorization. OTHER REQUIREMENTS ADDRESSED: 1. PAYROLL DISBURSEMENTS Requirements of the Payroll Purchase Order Act are not clear and interpretation varies from city to city. This ordinance would clarify the procedure and payroll reporting requirements. It would not change Owasso's current procedures. The payroll report would continue to be provided to the governing body after payroll has been paid. 2. COMPETITIVE BIDDING The ordinance does not change any bidding requirements, but eliminates conflicting language and requires compliance with state statutes. 3. PETTY CASH The ordinance does not change Owasso's current use of petty cash as allowed under state statutes. The ordinance does provide specific authorization by the city council for that practice and restricts the total amount allowed. The City and OPWA and OPGA currently have a combined total of $7,500 in imprest petty cash accounts. Staff is proposing that the maximum be set at $9,000. 4. FINANCIAL REPORTING This ordinance would require monthly financial reporting to the City Council. Monthly reports currently provided to the Council would become a legal requirement and be on the agenda for acknowledgement. 5. PUBLIC TRUSTS The City and the trust authorities (OPWA and OPGA) operate under different state statutes. The proposed ordinance specifies that the requirements of this ordinance apply to the public trusts as well as the Citv. Purchases and Cash Disbursements Ordinance July 1, 2005, Page 4 of 4 6. DEPOSITORIES DESIGNATED A requirement for City Council approval of all transfers from one depository bank to another has been removed from the ordinance (current Section 7 -101 as compared to proposed Section 7 -101). While there may have been a time when such action would have been considered a policy decision, the number of local banks has grown and thus the number of available depositories. It is in the best interest of the City of allow the Treasurer the prerogative to transfer funds from one bank to another based on the merits of transfers and the management of the City's funds. It should be noted that the current practice is to allow the Treasurer such authority, however, documented action by the City Council is not on file. REQUEST: This request is for Council adoption of Ordinance #819, an ordinance relating to the administration of purchases and cash disbursement of the City of Owasso by amending Part 7 (Chapter 1, Finance and Budget Administration) of the "Code of Ordinances." RECOMMENDATION: Pursuant to review by and subsequent to discussions with the City Council the staff recommends Council adoption of the proposed ordinance #819, and the publication of such be authorized. ATTACHMENTS: Ordinance No. 819 Part 7 of the "Owasso Municipal Code" Finance and Taxation CHAPTER 1 FINANCE AND BUDGET ADMINISTRATION Section 7 -101 Depositories Designated; Funds to be Deposited Section 7 -102 Funds Secured by Unit Collateral System Section 7 -103 Contractual Services Defined for Purchasing Section 7 -104 Purchases, How Made Section 7 -105 When Prior Approval by the Council is Required Section 7 -106 Competitive Bidding Section 7 -107 When Competitive Bidding is Not Required Section 7 -108 Sales, Council to Declare Surplus or Obsolete Competitive Bidding Section 7 -109 When Competitive Bidding is Not Required Section 7 -110 Maintenance Bonds Required on Public Improvements; Contracts SECTION 7 -101 DEPOSITORIES DESIGNATED: FUNDS TO BE DEPOSITED All banks, trust companies and savings and loan associations within this city which are incorporated under federal or state law are hereby designated as depositories for the funds of the city. The city treasurer shall deposit daily all public funds received by him in such banks, trust companies or savings and loan associations. Such institutions where such funds are deposited shall be required to meet the requirements of state law as depositories for public funds and such deposits shall be secured as set forth in Section 7 -102 of this code. Funds may be transferred from one depository to another as the council may direct by motion or resolution. (Prior Code, Sec. 7 -27; Ord. No. 323, 10/5/82) SECTION 7 -102 FUNDS SECURED BY UNIT COLLATERAL SYSTEM The deposits of the city shall be secured by the Unit Collateral System provided by the Oklahoma Statutes. (Prior Code, Sec. 7-28) State Law Reference: Unit Collateral System, 62 O.S. Sections 516.1 et seq. SECTION 7 -103 CONTRACTUAL SERVICES DEFINED FOR PURCHASING "Contractual services," for the purpose of this chapter shall mean services performed for the city by persons not in the employment of the city, and may include the use of equipment or the furnishing of commodities in connection with the services under express or implied contract. Contract services shall include travel; freight; express; parcel post; postage; telephone; telegraph; utilities; rents; printing and binding; repairs, alterations and maintenance of buildings, equipment, streets and bridges, and other physical facilities of the city; and other services performed for the city by persons not in the employment of the city. (Prior Code, Sec. 7 -29) SECTION 7 -104 PURCHASES, HOW MADE All purchases of supplies, materials, equipment and contractual services for the offices, departments and agencies of the city government, shall be made by the city manager or by other city personnel in accordance with purchase authorizations issued by the city manager. However, the city manager may as an alternative to the foregoing, implement and utilize the procedures set forth in the state purchase order act, Section 310.1 of Title 62 of the Oklahoma Statutes. (Prior Code, Sec. 7-30 as amended) Page 7 -5 Finance and Taxation SECTION 7 -105 WHEN PRIOR APPROVAL BY THE COUNCIL IS REQUIRED Every contract for, or purchase of, supplies, materials, equipment or contractual services for more than Twenty Five Thousand Dollars ($25,000.00) shall require the prior approval of the city council; provided, however, the foregoing provisions shall not be applicable to payments for medical services and supplies arising from claims against the Workers Compensation Self Insurance Fund. (Prior Code, Sec. 7- 31; Ord. No. 435, 8/6/91; Ord. No. 520, 3/5/96; Ord. No. 712,6/18/02) SECTION 7 -106 COMPETITIVE BIDDING Before any purchase of, or contract for, supplies, materials, equipment or contractual services are made, as otherwise provided below, including lease contracts with options to purchase, the city purchasing authority shall give written notice for sealed bids to at least three (3) persons, firms or corporations dealing in and able to supply the same, a request for quotation, or invitation to bid, and specifications, to give them opportunity to bid; or publish notice of the proposed purchase in a newspaper of general circulation within the city. He shall favor a person, firm or corporation in the city when this can be done without additional cost to the city; but he shall submit requests for quotation to those outside the city when this may be necessary to secure bids or to create competitive conditions, or when he thinks that by so doing he can make a saving for the city; and shall purchase from them when he can make a saving for the city. All bids shall be sealed and shall be opened in public at a designated time and place. He may repeatedly reject all bids, and again may submit to the same or other persons, firms or corporations the request for quotation, or invitation to bid, or again publish notice of the proposed purchase. He may purchase only from the bidder whose bid is most advantageous to the city, considering price, quality, date of delivery and so on, and in case of a tie, may purchase from one of those tying, or may divide the purchase among those tying, always accepting the bid or bids most advantageous to the city. (Prior Code, Sec. 7 -32) State Law Reference: Bidding required on public construction or improvement contracts of $25,000 or more, 61 O.S. Section 103. SECTION 7 -107 WHEN COMPETITIVE BIDDING IS NOT REQUIRED The following may be purchased without giving an opportunity for competitive bidding 1. Supplies, materials, equipment or contractual services whose cost does not exceed Twenty Five Thousand Dollars ($25,000.00) in a single transaction; (Ord. No. 712, 6/18/02) 2. Supplies, materials, equipment or contractual services which can be furnished only by a single dealer, or which have a uniform price wherever bought; 3. Supplies, materials, equipment or contractual services purchased from another unit of government at a price deemed below that obtainable from private dealers, including war surplus; 4. Equipment to replace existing equipment which has become inoperable when the council declares the purchase an emergency; 5. Contractual services, including but not limited to gas, electricity, telephone service, purchased from a public utility at a price or rate determined by the State Corporation Commission or other government authority; 6. Supplies, materials, equipment or contractual services when purchased at a price not exceeding a price set therefore by the State purchasing agency or any other state agency hereafter authorized to regulate prices for things purchased by the State, or any county purchasing agency or city Page 7 -6 Finance and Taxation purchasing agency wherein such county or city has a population equal to or in excess of 50,000 persons, and, (Ord. No. 455, 1/5/93; Ord. No. 520, 3/5/96). Contractual services of a professional nature, such as engineering, architectural and medical services. (Prior Code, Sec. 7 -33) SECTION 7 -108 SALES COUNCIL TO DECLARE SURPLUS OR OBSOLETE; COM- PETITIVE BIDDING No surplus or obsolete supplies, materials or equipment of a value of more than Five Hundred Dollars ($500.00) may be sold until the council shall have declared them obsolete or surplus. Before the city manager sells any surplus or obsolete supplies, materials or equipment, except as otherwise provided below, he shall advertise them for sale in a newspaper of general circulation in the city or give notice in such other manner as he deems necessary adequately to reach prospective buyers to give them opportunity to make bids. All bids shall be sealed and shall be opened in public at a designated time and place, except when the sale is by auction. The city manager may repeatedly reject all bids and advertise or give notice again. He shall sell such supplies, materials or equipment to the highest responsible bidder for cash. In case of a tie, he may sell to either of the bidders tying, or may divide the sale among two (2) or more tying, always selling to the highest responsible bidder or bidders for cash. (Prior Code, Sec. 7- 34) SECTION 7 -109 SALES WHEN COMPETITIVE BIDDING IS NOT REQUIRED The city manager may sell the following without giving an opportunity for competitive bidding: I. Surplus or obsolete supplies, materials or equipment whose total value does not exceed One Thousand Five Hundred Dollars ($1,500.00) in a single transaction; and 2. Supplies, materials or equipment when sold at a price at least as great as that pail by the city for the same. (Prior Code, Sec. 7 -35) SECTION 7 -110 MAINTENANCE BONDS REQUIRED ON PUBLIC IMPROVEMENTS; CONTRACTS A. Anyone, hereinafter referred to as "principal', constructing improvements on public property within the city, or within jurisdiction of the city, shall furnish a three (3) year maintenance bond in the amount of one hundred percent (100 %) of the cost of the work. B. The bond shall be issued by a surety company, hereinafter referred to as "surety", approved by the city and licensed to do business in the state. C. The condition of the bond shall be such that the principal and surety therein named do agree and bind themselves unto the city that: I. The improvements, including all excavation, fill and backfilling thereof, and all other work done shall be constructed of materials and in such a manner that the same shall endure without any need of repair whatsoever for a period of three (3) years, from and after formal acceptance of the improvements by resolution of the city council of the city, and all at the expense of the principal or surety; Page 7 -7 Finance and Taxation 2. Such work performed shall be kept and maintained in a first class condition for a period of three (3) years as herein provided, and that all trenches, excavations or ditches that may sink or settle, shall be promptly refilled without any notice from the city, and that any breaks or failures occurring or arising from any cause whatsoever within the period of three (3) years shall be promptly repaired, and at all time during the period of three (3) years, maintained by the principal or surety, without notice from the city; and 3. Upon neglect, failure, or refusal of the principal to make any needed repairs or backfills upon the work within ten (10) days after notice to the principal and surety by letters deposited in the United States mail, addressed to the principal and to the surety, that the principal or surety shall jointly and severally be liable to the city for costs and expenses of making repairs or backfills, or making good any defects or imperfections. D. The obligation shall be null and void and of no force and effect provided that the principal and surety shall faithfully and severally keep and perform all of the obligations herein provided to be kept and performed by them, or either of them, otherwise to remain in full force and effect at all times. (Prior Code, Secs. 4 -14.5 to 4 -14.8) Page 7 -8