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HomeMy WebLinkAboutDocumentation_Regular_Tab 09_12/08/2011 �` �� VILLAGE OF TEQUESTA � ��� '-�=. ' .� AGENDA ITEM TRANSMITTAL FORM 4 �r 1. VILLAGE COUNCIL MEETING: Meeting Date: Meeting Type: Regular Ordinance #: N/A 12/8/2011 Consent Agenda: Yes Resolution 30-11 Originating Department: Water Utility Distribution 2. AGENDA ITEM TITLE: (Wording form the SUBJECT line of your staff report) Approve the Village of Tequesta Purchasing Policies and Procedures; Rev. 12-2011 3. BUDGET / FINANCIAL IMPACT: Account #: N/A Amount of this item: N/A Current Budgeted Amount Available: Amount Remaining after item: N/A N/AA Budget Transfer Required: No Appropriate Fund Balance: No 4. EXECUTIVE SUMMARY OF MAJOR ISSUES: (This is a snap shot description of the agenda item) Approve the Village of Tequesta Purchasing Policies and Procedures Rev 12-2011 5. APPROVALS: _ --_._ ; , _ .=�---- - Dept. Head: � I ���� Finance Director: 0 Approved ` � No Financial Impact Attorney: (for legal sufficiency) Yes ❑ No ❑ Village Manager: ��'' �—� SUBMIT FOR COUNCIL DISCUSSION: [� Routing Sheet Process � 1. Send ALL completed forms to • APPROVE ITEM: � Finance for review ONE WEEK prior to agenda items due into Clerk's Office. • DENY ITEM: ❑ 2. Finance sends Routing Sheet to Clerk by deadline. Form amended 08/26/08 3. Clerk formulates agenda and sends to Manager for review / approval. i<j/((1/// ` � MEMORAND UM To: Michael Couzzo, Village Manager From: JoAnn Forsythe, Finance Director ;r]� � Re: Revisions to the Current Purchasing P'olicies and Procedures �, ,E. �� .. ,� � �, , .f�. 4�� .-..� ���.�.. ���e ., ��, � � .��,�.�<< �. _, � , ����., �.u,��.,�� � ,��.. ,,� At a Resident Services Workshop with the Village Council on November 10, 2011, a concern was raised that the current purchase order procedures were lengthening the time departments had to wait to order and subsequently receive items. The Village Council suggested that raising the dollar amount requiring a purchase order from $2,000 to $5,000 would help facilitate the purchases of lower priced items. The finance department was in the process of making revisions to the current purchasing policies that were mostly to add clarity to the existent policy (i.e. reorganizing paragraphs, removing redundant wording, etc) and incorporated the Village Council requested change into this new policy. We are requesting that this item be brought before the Village Council for approval at their next regular meeting. RESOLUTION NO 30-11 A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF TEQUESTA, FLORIDA, ADOPTING CURRENT PURCHASING POLICIES AND PROCEDURES FOR THE VILLAGE OF TEQUESTA; PROVIDING AN EFFECTIVE DATE; AND FOR OTHER PURPOSES. WHEREAS, the Village Council of the Village of Tequesta, Florida, finds it in the best interest of the citizens to establish policies to ensure the financial stability of the Village; and WHEREAS, the Village Council of the Village of Tequesta, Florida, regularly reviews existing policies and revises andlor adds policies to provide additional clarity, promote fiscal responsibility and the efficient transaction of Village business; and WHEREAS, the Village Council of the Village of Tequesta, Florida, believes revising the current purchasing policies and procedures to raise the threshold of purchases requiring a purchase order from $2,000.00 to $5,000.00 is in the best interest of the Village; and WHEREAS, the Village Council of the Village of Tequesta, Florida, desires to adopt a current "Purchasing Policy and Procedures"; and WHEREAS, such a policy has been prepared and a copy thereof is attached hereto as "Exhibit A"; NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF TEQUESTA, PALM BEACH COUNTY, FLORIDA, AS FOLLOWS: Section 1: The Village Council of the Village of Tequesta, Florida, hereby adopts the "Purchasing Policies and Procedures", attached hereto as "Exhibit A", and hereby directs the Village Manager to implement said policy. Section 2: All resolutions or parts of resolutions in conflict herewith shall be and hereby are repealed. Section 3: This Resolution shall take effect immediately upon passage. Ex. A VILLAGE OF TEQUESTA PURCHASING POLICY AND PROCEDURES Rev Dec 2011 STATEMENT OF PURPOSE To establish policies, procedures and guidelines to insure that all goods, materials, supplies and/or services (herein after referred to as items) are acquired in the most efficient, effective and economical manner available. POLICY This policy will apply to all purchases of the Village irrespective of the funding source. It shall be the responsibility of the Village Manager and all employees involved in the purchasing process to comply with all procedures, guidelines and instructions as set forth in this policy. This policy is designed to insure that the Village procures all items at the lowest and best price consistent with the quality of materials, workmanship or level of service performance required. No purchase of items shall be authorized unless adequate funds have been appropriated. EXCEPTION - Grant agreements may contain provisions or requirements related to purchasing procedures, the disposition of fixed assets, etc., that differ from the Village's procedures. In the event there is a conflict between a gant provision/requirement and a Village procedure, the grant provision /requirement will take precedence over the Village procedure. DEFINITIONS AGREEMENT - see contract. APPROPRIATION - An act of the Village Council that authorizes the expenditure of specific dollar amounts for various purposes including the purchase of items. AUTHORIZATION - An act by a specific authorized officer, approving the expenditure of Village funds. For the originating deparhnent, the authorizing officer would be the deparhnent director or designee For all purchases over $5,000.00 authorization must also come from the Village Manager or designee. CHANGE ORDER - A modification to an original contract or change in contract scope which occurs during the provision of contractual services (after bidding and contractual award) which may result in an increase or decrease in contract cost and/or contract time. COMPETITIVE PROCUREMENT — The use of an invitation to bid, a request for proposals, a request for qualifications, or an invitation to negotiate. CONTINUING CONTRACT - A contract for professional services entered into in accordance with the Consultants Competitive Negotiating Act (FS 287.055) whereby the firm or individual provides professional services to the Village on an on-going basis. CONTRACT - A written commitment between the Village and a vendor, which obligates the Village to pay the vendar a specific dollar amount for the provision of specific goods and/or services. DESIGNEE - An individual appointed by an authorized officer to approve expenditures. _ __ 1 �Page EMERGENCY PURCHASE - For purchasing purposes, an emergency is a circumstance in which damage to Village facilities, personnel or serious damage to Village programs will result if prompt action is not taken. This purchase would be required by a sudden and unexpected turn of events (acts of God or uncontrollable circumstances) which involves, or could involve, a threat to the health, safety and welfare of citizens, and which can be rectified in whole or in part by the immediate purchase of items. Emergency Purchase Orders are considered on their individual merits. They will be processed as emergencies only when the Village Manager determines that it is necessary, based on the requesting department's written explanation. ENCUMBRANCE - Reservation of Village funds that have been authorized for a purchase that has not yet been completed. LAW ENFORCEMENT TRUST FiJNDS (Forfeiture Funds) - Those funds governed as to their use by Chapter 932 Florida Statutes. These funds may only enter the purchasing process after a recommendation of funding use is provided by the Chief of Police and approved by the Village Council. PREPAYMENT - To pay an agreed upon sum before receiving the item(s). PURCHA5E REQUISITION — Is a request to proceed with a purchase. It is also called a Purchase Order Request. It is originated and approved by the department requiring the goods or services. A purchase requisition is owned by the originating department and should not be changed without obtaining approval from the originating department. A purchase requisition is not a purchase order and should not be used to purchase goods or services ar be used as an _ authorization to pay an invoice from a suplier or service provider, PURCHASE ORDER — Is a document issued by a buyer to a seller indicating descriptions, types, quantities, agreed prices, date of performance or shipment for products or services and other associated terms and conditions the seller will provide to the buyer. SOLE SOURCE - The acquisition of items that for all practical purposes can only be obtained from a single vendor, usually because of limiting technology, technological compatibility with existing systems or goods or services already in use by the Village other unique qualities of the goods or services that preclude a competitor's price comparison. The Village Manager, irrespective of the cost of the item, must approve all sole source purchases. ETHICAL CONDUCT: Ethical business standards shall govern all procurement transactions. Infractions of the Village's procurement policy will be reported to the Village Manager. Disciplinary action for those infractions will be taken in accordance with applicable Village policy. Village personnel shall not solicit any gift or accept any gift from any supplier or prospective supplier. Village personnel shall comply with the Palm Beach County Code of Ethics as well as the State of Florida Code of Ethics relative to the solicitation, acceptance and/or reporting of gifts. Questions about the value of a gift or the appropriateness of an invitation should be referred to the staff person's supervisor or the Village Manager to ensure compliance with Village policy. The Village values its vendors and assumes that vendors, in turn, value the Village's business. No token or display of this appreciation is necessary ar encouraged. _ __ 2�Page The Village's reputation for impartiality and objectivity, as well as sound business practice, requires that employees not make decisions for the Village if their personal economic interests are directly affected by the outcome. Moreover, the Palm Beach County Code of Ethics as well as the State of Florida Code of Ethics prohibits the Village from contracting for goods or services with any Village official or employee. This prohibition includes the official's or the employee's outside business interests, as provided in both the county and state code of ethics. AUTHORITY AND RESPONSIBILITY: The Village has determined that purchasing and contracting decisions are made most effectively by the end-user of the materials, supplies, equipment, or services. This approach requires that employees involved at every stage of the purchasing process take responsibility for understanding the Village's policies and procedures regarding purchasing and vendor relations. Employees must be authorized to commit the Village's resources to a purchase, and are subject to disciplinary action up to and including the termination of employment if proper authorization is not obtained. The Finance department has the right to review and question any purchasing transaction. Departments Department personnel are responsible for: ♦ Ascertaining needs and determining the bona-fide business purpose of the transaction. ♦ Conducting price or cost analysis to ensu�e the Village is receiving the most efficient, effective and economical purchases/services available. ♦ Monitoring deparhnent budgets and verifying funding is available prior to committing to the purchase. ♦ Selecting a vendor in a fair, impartial and consistent manner when competitive procurement is not required. ♦ Initiating the purchase requisition. ♦ Verifying that all purchases for their department are in compliance with the Village of Tequesta's purchasing policies and procedures. ♦ Ensuring the proper receipt of ordered goods or services. ♦ Reviewing invoices or purchases, verifying receipt of ordered purchases agree with the purchase order and forwarding approved invoices to the finance department in a timely manner for payment. ♦ Negotiating and resolving disputes with vendors. Finance Department The Finance department is responsible for: ♦ Reviewing all purchase requisitions ♦ for completeness, ♦ for proper usage of accounts , ♦ ensuring that funding is available in the applicable budget ♦ for compliance with current purchasing policies and procedures ♦ Preparing purchase orders from completed purchase requisitions and forwarding them to deparhnents ♦ Paying invoices Designees Department Directors are ultimately responsible for the purchasing activities of their departments and must sign all purchase requisitions. Directors may delegate requisition approval authority to another employee within their department by completing a Delegation of 3 �Pa�e Authority Form and sending it to the Finance Department where it will be kept on file. Directors are responsible for ensuring that their designees have access to and are knowledgeable of current purchasing policies and procedures. PURCHASE REOUISITION/PURCHASE ORDERS Purchase requisitions and purchase orders are required for acquisitions of goods andJor services with a total purchase price of $5,000.00 or more. Purchase Requisitions: The originating department will be responsible for completely and accurately preparing the requisition. The purchase requisitions must include descriptions, prices, quantities, terms, delivery, vendor, contract numbers, charge (account) codes and any other standard or special instructions or explanations. Purchase requisitions may not be approved for any purchases which would result in spending in excess of amounts authorized in the annual operating budget. Deparhnents may take advantage and `piggy-back' a State or other government entities' purchasing contract as long as the contract is current and was procured with the same level of formality as the Village would have otherwise required. Purchase requisitions for piggy-back contract items must comply with the specifications of the piggy-back contract listing. In the event that competitive procurement cannot be obtained (e.g. sole source purchase) or circumstances do not allow for competitive procurement when otherwise required (e.g. emergency situations), reasons for the exception to policy must be fully documented and approved by the respective director and Village Manager. Purchase Orders All purchase orders are to be processed rip or to the purchase of goods or services from outside vendors. Blanket purchase orders Blanket purchase orders permits multiple purchases from the same vendor using the same index. May be used when the ordering department: ♦ Needs to purchase specific items or services repetitively over a specified time period usually one (1 year) ♦ Needs to frequently purchase low dollar goods ar services and can obtain mare favorable pricing through volume commitments Blanket purchase orders should not be used when: ♦ When a price agreement or business terms are not pre-negotiated with the vendor. ♦ When control over the department's expenditures would be weakened significantly. The Finance Department will generate the purchase order once the Village Manager and the appropriate directors or designees have approved the requisition. Orders must be placed only for items included on the approved requisition, at stated quantities and prices. Splitting orders, or even failing to combine orders when this logically should be done in the interest of economy, for the purpose of keeping total cost of each order below purchase order and/or bid limits, will be construed as a deliberate evasion of this policy. _. ___ 4�Page LEASE AGREEMENTS Department directors are required to submit a copy of all lease agreements associated with their department to the finance department at the beginning of each fiscal year or when entered into during the fiscal year. No lease ageement invoices will be processed without this supporting documentation. The originating department will prepare an annual requisition and the finance department will create and issue purchase orders from properly approved purchase requisitions. These purchase orders shall not exceed the end of the fiscal year in which they were issued. Lease invoices will then be paid each month or as noted in signed lease agreements, by the finance deparhnent. CONTRACTS All contracts and progress payments will be entered through the purchasing system as a purchase order so that the entire contract amount for the fiscal year is encumbered in the accounting system immediately. Contracts in progress will need to be requisitioned at the beginning of a new fiscal year. Deparhnent directors may administratively approve change orders to contracts previously approved by the Village Council provided that the total cost of the project budget approved by the Village Council is not exceeded. The department director may, administratively renew those contracts previously approved by the Village Council, which contain renewal options, provided that the total cost, and ultimate expiration date of the contract is not exceeded. PROCUREMENT THRESHOLDS In order to insure that all items are acquired in the most efficient, effective and economical manner available, the Village of Tequesta uses a three (3) tiered procurement process. Discretionarv Procurement Purchases of less than $5,000.00 are at the discretion of deparhnent staff. The deparhnent staff member making the purchase is required to make a reasonable attempt to insure that the Village receives the lowest and best price that is consistent with the desired quality of materials, physical convenience/distance, workmanship and/or level of performance. Informal Procurement Purchases of $5,000.00 but less than $25,000.00 require at least three written quotes which shall be attached to the purchase requisition. Comqetitive Procurement Purchases of $25,000.00 or more require the use of a Competitive Procurement process. ADDITIONAL REQUIREMENTS All contracts shall be approved by the Village Attorney as to form and legal sufficiency, by the Finance Director, or designee, as to sufficiency of appropropriated funds, and by the Village Manager. All contracts with a value less than the amount as set by Resolution of the Village Council may be signed and executed by the Village Manager, providing that such contracts be presented to the Village Council after execution. All contracts exceeding the amount as previously set by Resolution of the Village Council must be approved by the Village Council before being signed and executed. _. S�Page The procurement of architecture, engineering, landscape architecture, and surveying services for planning or study activities when the fee for such professional services exceeds $25,000.00, or for projects with a basic construction cost that exceeds $250,000.00 shall be pursuant to the requirements of the Consultants Competitive Negotiations Act (287.055, F.S.). It is an express violation of this policy to intentionally "split" contracts or purchase orders or otherwise manipulate them for the purpose of avoiding dollar limitations or any of the Village's purchasing policies. EXCEPTIONS Contracts for artistic services, academic program reviews, lectures, legal services, health services, services for persons with mental or physical disabilities, Medicaid services, family placement services, prevention services (mental health, child abuse, drug abuse, and runaway services), worker's compensation related training services, contracts entered into with other government agencies, and contracts with other persons possessing a high degree of professional skill shall be exempt from the requirements of advertising and competitive procurement and/or shall be as specified in Florida's Statute 287.055 (Consultants Competitive Negotiation Act), if applicable. The Finance Directar and Village Manager's authorization, as evidenced by a manual signature, shall not be required for any normal and customary payroll related expenditure. , The approval of the Village Council shall not be required for any interim payment when the full cost has been previously approved. Changes to purchases previously approved may be authorized by the Village Manager provided the total dollar amount and other substantial matters do not exceed previously authorized maximum limits granted by the Village Council. PAYMENT By issuing a purchase order in advance of the purchase, funds are properly encumbered and set- aside to pay these obligations. The encumbrance is not a contract but ensures that the required funding is available to meet the financial obligations. The finance department pays invoices for the Village. It is the originating department's responsibility to approve invoices and submit them to the finance department. Every vendor's invoice is due for payment within some period of time after it is generated. This is normally computed as a number of days after the invoice date. The Village's standard for payment of vendor's invoices is within thirty days of the invoice date. The Village must pay its obligations in a timely manner. Failure to comply with payment terms often leads to: ♦ Credit hold, where a vendor refuses to fill any subsequent order until the outstanding obligation has been paid ♦ Stiffer tertns where the vendor may even demand payment in advance ♦ Higher prices on future purchases. The finance department pays against approved original invoices — not statements, proposals or quotations The finance department will match invoices submitted against any related purchase orders and if there is a conflict will return the invoices to the originating department to resolve the conflict. _ _ 6�Page SALES AND USE TAX The Village of Tequesta is exempt from paying sales tax, thus sales and use tax are generally not reimbursable, except for approved business travel and entertainment services. An individual may request reimbursement from the department director where it can be shown that it was not reasonable to require the individual to obtain the tax exemption. CREDIT MEMOS If a department believes it is entitled to a credit from a vendor or receives a credit memorandum that is deemed to be valid the deparhnent should notify the fmance department and send all credit memos there for processing. ADVANCING PERSONAL FUNDS Individuals, as a general rule, should not advance their own funds to purchase supplies and services on behalf of the Village. Purchases should be made through established purchasing policies and procedures. The Village should deal directly with vendors to arrange for the receipt of goods and the payment of obligations. In limited instances, most often related to business travel and entertainment expenses, the department or individual may pay for the item and be reimbursed. If it is necessary that an individual advance funds to purchase supplies or services for Village business, the immediate supervisor must first autharize the purchase. The reimbursement request must be supported by the business purpose of the transaction, bona-fide proof of payment AND must include the signatures of the purchaser AND of a direct supervisor who can attest to the receipt of the supplies or services by the deparhnent. Requests for reimbursements lacking these signatures will be returned to departments. Any actions that might be construed to be an intentional manipulation or circumvention of these policies will be documented and forwarded to the Village Manager. FISCAL YEAR-END PROCEDURES: The Finance department seeks to close the fiscal year, complete rate change calculations and prepare the Village of Tequesta's financial statements in a timely manner. The following policies are being implemented In order to accomplish this goal. All purchase orders must be received in the finance department by August 31 St in order to be processed in the fiscal year ending September 30`�'. Any purchase orders received after August 31 will be held and processed in the following fiscal year and encumbered against the following fiscal year budget The finance department must receive all invoices by November 15`" of the following fiscal year in order to be processed in the prior fiscal year ending September 30`�. Any invoices received after that date will be recorded in the following year and charged against the following year's budget. Village of Tequesta Purchasing Policy & Procedure Revised October 2011 _ 7I�d��