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HomeMy WebLinkAboutReso - CC - 016-2007RESOLUTION NO. 16-2007 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME ADOPTING AMENDMENTS TO THE CITY'S PURCHASING AND CONTRACTING PROCEDURES RESOLVED, by the City Council of the City of Burlingame: WHEREAS, in 2003, the City Council adopted Resolution 28-2003 establishing procedures for the reimbursement of expenses; and WHEREAS, in 2005, the City Council adopted Resolution 10-2005 incorporating and revising procedures for reimbursement of expenses in the City's Purchasing and Contracting Procedures; and WHEREAS, in 2006, the City Council adopted Resolution 9-2006 to revise per diem standards in response to State law changes; and WHEREAS, clarification of petty cash procedures, use of the quote system for purchasing, and out-of-state travel to Nevada is needed, NOW, THEREFORE, IT IS RESOLVED AND 1. The amended Purchasing and Contracting Procedures contained in Exhibit A hereto are approved. � �,, &�d MA OR I, DORIS MORTENSEN, City Clerk of the City of Burlingame, do hereby certify that the foregoing resolution was introduced at a regular meeting of the City Council held on the 21st day of February , 2007, and was adopted thereafter by the following vote: AYES: COUNCILMEMBERS: BAYLOCK, COHNN, KEIGHBAN, NAGEL, O'MAHONY NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE CITY CLERK CITY OF BURLINGAME PURCHASING AND CONTRACTING PROCEDURES Adopted 2/7/2005 Amended 2/22/2006 Amended—/ 12007 TABLE OF CONTENTS Resolution10-2005...............................................................................................................v Purpose................................................................................................................................. 1 I. Procedure to Use/Contracting Procedures....................................................................... 1-1 A. Introduction......................................................................................................... I-1 B. Exceptions to bidding/quotation requirements.................................................. I-2 C. Business License................................................................................................ 1-3 D. Contractor's License.......................................................................................... I-3 E. Contract Forms................................................................................................... 1-3 F. Insurance............................................................................................................. I-4 G. Bonds................................................................................................................. 1-4 H. Signatures........................................................................................................... I-6 IT. Purchase Orders............................................................................................................. H-1 A. Introduction....................................................................................................... 11-1 B. Procedure........................................................................................................... H-1 C. Obtaining a purchase order number.................................................................. II -1 D. Copies and Payment.......................................................................................... II -1 III. Check Request.............................................................................................................. III -1 A. Introduction....................................................................................................... III -1 B. Procedure........................................................................................................... JIM C. In case of urgency.............................................................................................. III -1 IV. Open Purchase Orders................................................................................................. IV -1 A. Introduction...................................................................................................... IV -1 B. Limitations........................................................................................................ IV -1 C. Listing................................................................................................................ IV -1 D. Submitting invoices for payment...................................................................... IV -1 V. Procurement Card Procedures........................................................................................ V-1 A. Purpose.............................................................................................................. V-1 B. General information........................................................................................... V-1 C. Procurement card authorization......................................................................... V-1 D. Card restrictions................................................................................................. V-3 E. Purchasing procedures ............................ F. Telephone mail order or internet procedures..................................................... V-4 G. Statement processing procedures after purchase ............................................... V-4 Adopted 2/7/2005 Amended 2/22/2006 i Amended—1 12007 H. Disputes............................................................................................................. V-6 I. Lost or stolen cards.............................................................................................. V-6 J. Changes to cardholder information and request for additional cards ................. V-6 VI. Petty Cash.................................................................................................................... VI -1 A. Introduction....................................................................................................... VI -1 B. Procedure........................................................................................................... VI -1 C. Maximum Amount............................................................................................ VI -1 VII. Bidding Procedures..................................................................................................... VII -1 A. Solicitation of Written Quotations.................................................................... VII -1 B. Informal Bidding............................................................................................... VII -1 C. Formal Bidding.................................................................................................. VII -2 D. Processing of Bids............................................................................................. VII -2 VIII. Emergency Procedures............................................................................................... VIII -1 DX. Capital Asset Accounting............................................................................................. IX -1 A. Policy................................................................................................................. IX -1 B. Purpose............................................................................................................... IX -1 C. Definitions.......................................................................................................... DX -1 D. Procedures......................................................................................................... DI -1 X. Expense Reimbursement Procedures............................................................................ X-1 A. Purpose.............................................................................................................. X-1 B. General Policy Statement................................................................................... X-1 C. Travel Expenses................................................................................................. X-2 D. Entertainment..................................................................................................... X-6 E. Other expenses.................................................................................................... X-7 F. Documentation.................................................................................................... X-7 G. Time for submittal.............................................................................................. X-8 H. Prohibited reimbursements................................................................................ X-8 Footnotes ....... Appendices A. Purchasing Forms Purchase Order Check Request Petty Cash Voucher ......................................... Footnotes -1 Adopted 2/7/2005 Amended 2/22/2006 ii Amended—1 12007 B. Contract Forms ` Short Form Contract 1 Consultant Form Contract Long Term Provision of Services Form Contract Materials Form Contract Request for Proposals Form Special Provisions Contract Checklist C. Bond Forms (see also Contract Forms) Bidder's Bond Labor and Materials Bond Performance Bond D. Standard Insurance Requirements (see also Contract Forms) E. Reimbursement Forms Travel Expense Report Lost Receipt Form Adopted 2/7/2005 Amended 2/22/2006 iii Amended—1 12007 PURCHASING AND CONTRACTING PROCEDURES Purpose: This procedure describes the City's requirements for purchasing or contracting for services and materials. This Administrative Procedure contains the following: I. Procedure to Use/Contracting Procedures II, Purchase Orders M. Check Requests IV. Open Purchase Orders V. Procurement Card Procedures VI. Petty Cash VII. Bidding Procedures VIII. Emergency Procedures IX. Capital Asset Accounting X. Expense Reimbursement Appendix Purchasing Forms Contract Forms Bond Forms Standard Insurance Requirements Travel Reimbursement Forms Adopted 2/7/2005 Amended 2/22/2006 Introduction -i Amended—I 12007 I. PROCEDURE TO USE/CONTRACTING PROCEDURES A. Introduction. In determining which procedure to use, the person authorized to make the purchase should determine; 1) which procedure is legally required by State or local law; and then 2) whether a more formal procedure would provide more benefit to the City. For example, while only verbal quotations may be legally required, written quotations might ensure a better evaluation. Burlingame Municipal Code chapter 2.28 adopts the State Uniform Public Construction Cost Accounting Act established by Public Contract Code Sections 22030 and following. This means that the City may use differing levels of contract cost to determine when formal bidding is required; however, use of that system also means that City officers and employees are obligated to scrutinize spending obligations and ensure that the City's money is properly accounted for. 1. Under $1,000: Departmental discretion. Purchase order is required if requested by vendor. $1,000 to $2,999: Two (2) or more verbal quotations are required. Purchase order required. Use telephone quotation form and submit with purchase order to Finance Department. $3,000 to $25,000: Three (3) or more written quotations and purchase orders are required. l Note: $25,000 or less: May be performed by City employees, by negotiated contract, or by purchase order after three (3) or more written quotations. However, this is a unusual occurrence and both the City Attorney and the Finance Director should be consulted on pursuing this alternative. 4. $25,001 TO $75,000: Awarded by informal bidding procedures pursuant to Burlingame Municipal Code Chapter 2.28 (See Section VII(B) below) or formal bidding procedures (See Section VII(C) below). 5. $75,001 to $100,000: Awarded by formal bidding procedures (See Section VII(C) below), unless the City Manager specifically authorizes in writing the use of informal procedures (See Section VII(B) below) for that project. 6. Over $100,000: Awarded by formal bidding procedures (See Section VII(C) below). Adopted 2/7/2005 Amended 2/22/2006 I-1 Amended—1 12007 In selecting the vendor or contractor to which to award the purchase or contract, it is expected that the award will be made to the responsible vendor or contractor that submits the lowest responsive quote or bid. In certain detailed quotes or bids, a request for proposal process, or in an extraordinary circumstance, a vendor or contractor who does not submit the lowest quote or bid may be awarded the purchase or contract. However, any such determination that is not based on a request for proposal process must be reviewed by the City Attorney and approved by the applicable department head. B. Exceptions to bidding/quotation requirements are listed below. However, the same rules with regard to approval apply, i.e. the Council approves any contract or purchase over $100,000; the City Manager approves any contract or purchase over $75,000: 1. Where a sole source of supply or standardization is determined to be beneficial to the needs of the City. Pre -approval by the Finance Director and the City Attorney in writing is required, and additional approval by the City Manager or the City Council may be required as determined by the City Attorney. 2. Where an emergency as defined in the State Uniform Public Construction Cost Accounting Act requires the purchase without following the bidding procedures. Pre -approval by the Finance Director or the Director's designee, and the City Attorney, if available, is required, and additional approval by the City Manager or the City Council may be required as determined by the Finance Director or City Attorney. 3. Specialized professional or recreational services.' 4. Insurance. 5. Where the calling for bids on a competitive basis is impractical or impossible. Pre -approval by the City Manager and the City Attorney is required, and additional approval by the City Council may be required as determined by the City Attorney. 6. Open purchase order. However, if the total purchases from a vendor or contractor for the fiscal year exceeds $10,000, the purchasing shall be reviewed annually for competitiveness by the Finance Director. If purchases exceed $25,000 in a fiscal year under an open purchase order, the purchasing or contracting shall be subject to the bidding procedures described above and the open purchase order process does not apply until purchases drop below $25,000 in a fiscal year. Adopted 2/7/2005 Amended 2/22/2006 I-2 Amended—1 12007 It is the general policy of the City that open purchase orders should be re- evaluated on no less than a 3 to 5 -year basis to ensure that the vendor is still providing a competitive price and quality product or service. 7. Purchase of equipment or software that are evaluated under a request for proposals process. C. Business License. Any vendor or contractor doing business in Burlingame must obtain a current City business license before award of purchase or contract is made. D. Contractor's License. Any call for a bid for a construction project of any kind must specify the level of State contractor's license required to perform the work. E. Contract Forms Considerations. If the minimal information provided on a purchase order will do, then a purchase order signed by the vendor or contractor is a contract. However, remember that the writing on that purchase order is probably all that can be relied on. If there is no date of delivery given or no quality description, then don't be surprised if things don't work out. Without a contract, a vendor or contractor may argue that there were some oral agreements that were different from what the purchaser understood. Very often, the lack of a more formal contract means that the understandings with the vendor or contractor may not be enforceable. 2. A contract is necessary if insurance or a bond is to be required. If there is ADY question of importance, use a contract. Attached are different forms of contract for use: a. Short Form Contract. This is intended for use when a vendor or contractor is going to perform limited work on City property, such as installing a piece of equipment. b. Material Contract. This is intended for use when equipment or supplies are going to be provided with little or no work to occur on City property. For example, a supplier is going to deliver and set up a copy machine. G. Consultant Contract. This is a form for alteration when retaining a consultant or other professional. Adopted 2/7/2005 Amended 2/22/2006 I-3 Amended—I 12007 d. Standard Request for Bids. This is for use when requesting bids; it is in a formal bid format, but can be redone to use in an informal bid process. Generally, it will be used with the Standard Special Provisions described in subsection (E). It also includes a standard agreement for use in awarding the bid. e. Standard Special Provisions. These are the standard provisions to be included in project specifications. F. Insurance. If a vendor or contractor is going to spend any extended period of time on City property, insurance is required. The standard insurance requirements are provided in Appendix D. However, if there are high risks involved in a project or if the potential damage would be extensive, then these limits should be increased. Approval of the City Attorney is required for any variation in insurance. A checklist for insurance is provided in Appendix B. G. Bonds Type of bonds. In many projects, there are 4 bond types that are generally required. As described below, some of these bonds are required as a matter of State law. In other cases, their use should be considered to best meet the public and City interest. a. Labor & Materials (or Payment) Bond. This bond seeks to protect the rights of subcontractors, laborers, and material suppliers to a public contract. This is the most important bond under State law and should be required whenever there is any labor involved of any substantial nature. i. For any project or contract that involves labor or installation of materials/products and will cost more than $25,000, a labor & materials bond must be required and provided.' ii. The amount must be equal to the amount of the contract. iii. The bond must be in California form. For example, the AIA Form (a national form) is not acceptable. A form labor & materials bond is provided in Appendix C. Adopted 2/7/2005 Amended 2/22/2006 I-4 Amended—I 12007 iv. Failure to obtain this bond exposes the City and City employees to direct liability for unpaid labor, subcontractors, and materials providers. b. Performance Bond. There is no statutory requirement that performance bonds be provided. However, a performance bond provides reasonable assurance that if the contractor defaults on the project, a bonding company will either provide or pay for another contractor to complete the work. Therefore, it is good practice to require a performance bond. A performance bond shall be required on all contracts over $75,000. i. The amount is equal to the amount of the contract. ii. A sample performance bond is provided in Appendix C. It is vital that the bond provide that any changes in the amount of the contract or the specifications will be covered by the bond. C. Maintenance Bond. As with performance bonds, there is no statutory requirement for a maintenance bond. However, it is good practice in many instances. It should be based on expected test and evaluation periods and can be for varying periods and amounts. Often, the performance bond may roll into a maintenance bond, and the submittal of an acceptable maintenance bond is a precondition to substantial completion of a project. d. Bidder's Bond. Whenever a project valued at $5,000 or more is put out for formal or informal bids, a bidder's bond must be required and provided.' The amount is 10% of the value of the bid, and ensures that the bonding company will pay the difference between the low bid and the bid actually awarded, should the low bidder fail to execute the contract for the project. It is a penalty bond. 2. Submittal and Review. When each bond is submitted, the City is required to verify through the State Insurance Commissioner's website that the bonding company is allowed to do business in the State. The webpage showing that infonnation must be printed out and attached to the bond for filing. Failure to perform this step means that the City maybe liable should the bonding company not perform its obligations under the bond .4 Adopted 2/7/2005 Amended 2/22/2006 I-5 Amended—1 12007 H. Signatures/Execution. Contracts. Except for exceptional situations, only the Director of Public Works and the Finance Director have explicit authority under the Municipal Code to execute contracts that bind the City. Authority for others to sign must come from Council action or when others are acting as the Director of Public Works or the Finance Director in their absence. Contracts must also be approved by the City Attorney as to form and by the City Clerk to attest. If an unauthorized City employee signs a contract that attempts to bind the City, that employee may be personally responsible to pay for the contract. 2. Purchase Orders. Purchase order signature authority is conferred by individual department heads. Finance will require written notification of individuals authorized to sign purchase orders. Adopted 2/7/2005 Amended 2/22/2006 I-6 Amended—1 12007 H. PURCHASE ORDERS A. Introduction. Purchase orders are the way in which a verbal quotation or a written agreement is translated into a fiscal commitment and properly appropriated under the City budget. As soon as agreement with a vendor is reached, a purchase order must be prepared. All purchases capital equipment (see Section IX(Q) and contracts require a purchase order. Also refer to the earlier discussion in Section I(E) about having a contract accompany the purchase order. B. Procedure. A purchase order requisition is prepared as soon as agreement with the vendor is reached. A copy of the written quotation, telephone quotation, or agreement must be forwarded to Finance. If the agreement is being submitted to the City Council for approval, a purchase order requisition must be prepared the day after Council approval, and a copy of the vendor agreement sent to Finance. C. Obtaining a purchase order number. To obtain a purchase order number until the implementation of the electronic purchase order requisition system, call the Finance Department at extension 215 Send the completed purchase order to the Finance Department. To obtain a purchase order number upon implementation of the electronic ` purchase order requisition system, enter a purchase order requisition in the electronic purchase order requisition system. After the purchase order requisition is approved by the requestor's supervisor, department head, and the Finance Department, a purchase order number is assigned by the electronic financial system. In an emergency situation, Finance can provide an emergency purchase order number. This number will then be entered into the electronic purchase order system. D. Copies and Payment. A department and a receiving copy will be returned to you. When the order is received, initial the "receive" copy, indicate receive date and quantity, and forward it to Finance for payment. If you receive only a portion of an order, make a copy of the receive copy, write "partial" in the description, note the amount to be paid, and forward the partial to Finance for payment. When Finance receives the invoice from the vendor, payment will be made based on the returned purchase order copy. Adopted 2/7/2005 Amended 2/22/2006 II -1 Amended—1 12007 III. CHECK REQUEST A. Introduction. For purchases of equipment that is not capitalized (see Section IX(C) for definition of capital assets) and for non -contractual services, check requests are the normal way of making payment to vendors. B. Procedure. Complete the check request form and obtain authorizing signatures. For first-time use of a vendor, fill in complete vendor information. The City is required to issue Form 1099's for payments to vendors, so if a payee is an individual, the City must obtain the individual's social security number for reporting to the IRS; the department making the purchase is responsible for obtaining the social security number, not Finance Department. C. In case of urgency, the Finance Department can quickly prepare checks, but this should be used only sparingly. Contact the Financial Services Manager directly when such instances arise. Adopted 2/7/2005 Amended 2/22/2006 III -1 Amended—1 12007 IV. OPEN PURCHASE ORDERS f A. Introduction. Open Purchase Orders are a method in which established vendors are listed for ease of use for repeatedly purchased supplies. If an item sought by a department is available from a vendor that is listed under an open purchase order, a department can choose to make the purchase from that vendor without using the more lengthy procedures outlined above for purchasing. B. Limitations. If the volume of business with a vendor exceeds $25,000 during a year, then the procedures for bidding set forth above are required for use. hi case of questions, contact the Finance Director. A single purchase under the open purchase order procedure cannot exceed $5,000. C. Listing. Finance Department provides a list of open purchase order vendors and current purchase order numbers by July 1 of each year. Departments are invited to submit the names and descriptions of vendors to Finance Department that they believe should be added to the list. D. Submitting invoices for payment. Departments must note current open purchase order numbers (see the current list of vendors), account number, and authorization for payment on each invoice before submitting to accounts payable for payment. l Adopted 2/7/2005 Amended 2/22/2006 IV -1 Amended—1 12007 V. PROCUREMENT CARD A. Purpose. To provide instructions on the proper use of the City of Burlingame procurement card for purchases of supplies, materials and equipment not to exceed limits established by a department's Approving Official. B. General information. 1. The VISA procurement card will have the employee's name and City of Burlingame seal embossed on the card. Authorization to use this card is restricted to an employee individually. It may not delegated. No member of staff, an employee's family, an employee's supervisor, or anyone else may use this card. It has been specially designed to avoid confusion with an employee's personal credit cards. The card is to be used for OFFICIAL CITY BUSINESS ONLY and MAY NOT BE USED FOR PERSONAL PURCHASES. The bank has no individual cardholder information other than the cardholder's work address. No credit records, social security numbers, etc. are maintained. 2. Prior to receiving a procurement card, an employee will receive a copy of the Cardholder Agreement, which indicates the maximum dollar amount for each single purchase and a total for all purchases made with the procurement card within a given month. C. Procurement card authorization. 1. Additional authorization controls have been added to protect the City. When a merchant seeks authorization for a purchase from the bank, the system will check each individual cardholder's single purchase limit, the cardholder's 30 -day limit, the Approving Official's limit, and the type of merchant where the cardholder is making a purchase before the transaction is authorized. All this is done at the time the card is scanned. Single Purchase Limit: Each single purchase is limited and must comply with the City of Burlingame's Purchasing Procedures. Cardholder's 30 -Day Limit: Each cardholder has been given a maximum limit per month. This amount has been determined by the employee's Department Head. The cardholder's 30 -Day limit is located at the bottom of the form included with the procurement card. Adopted 2/7/2005 Amended 2/22/2006 V-1 Amended—1 12007 Approving Official's Limit: Each cardholder has an Approving Official (in ` most cases it is the Department Head). The Approving Official's office l limit is based on the monthly limits established for each card under their control. For instance an Approving Official with 5 employees each having a $1,000 30 -day limit would have an office limit of $5,000. 2. Type of Merchant: Each Department Head has determined which type of merchants a cardholder is authorized to use with the card. See the following section regarding restricted uses. The procurement card is a supplement to the procurement process. As with other procurement methods the following conditions must be met when using the procurement card: Each single purchase may be comprised of multiple items, but the total including tax cannot exceed the single purchase dollar limit on the procurement card. If a purchase will exceed the limit established by the cardholder's Approving Official or the City, normal -purchasing procedures must be followed. Cardholders must ensure that sufficient funds are available in the budget prior to making anypurchases. The cardholder's Approving Official can l assist in verifying available funds. The issuance of a procurement card in an employee's name does not allow the procurement card company to do any credit check on a cardholder's personal credit. The company will not request any personal information from the cardholder, nor should any personal information be furnished. 4. Use of the procurement card is not intended to replace effective procurement planning that enables volume discounts. Purchases shall not be split to circumvent procurement regulations. 6. If a purchase made with a procurement card is questioned, a cardholder must be able to explain the nature of the purchase. If a cardholder cannot substantiate that the purchase was necessary and for official use, the cardholder's department will address this situation in accordance with City policy. Adopted 2/7/2005 Amended 2/22/2006 V-2 Amended—1 12007 7. Questions regarding a cardholder account should be directed to the procurement card Company, US Bank, at 1-800-227-6736. D. Card restrictions. The procurement card can be used like any other credit card to purchase supplies, materials, and equipment which are authorized and that do not exceed the single transaction limit or are restricted. The procurement card shall not be used for the following: 1. Cash advances 2. Personal services 3. Entertainment 4. Purchase of items carried in inventory unless out of stock 5. Alcoholic beverages 6. Medical drugs, narcotic drugs Tobacco products Splitting of purchase to circumvent the single transaction limitation A cardholder's Approving Official may apply other restrictions. E. Purchasing procedures. A cardholder's Approving Official will notify the cardholder when the procurement card has been received. Use of the procurement card is voluntary and a privilege. Accordingly, a cardholder will be required to sign the cardholder agreement and procurement card receipt prior to receiving your card. Within the types of merchants authorized by the Approving Official, a cardholder may use the procurement card at any merchant that accepts VISA cards for payment of purchases. Upon selecting purchases, present them and the card to the merchant. The merchant will complete a sales draft, which includes the following information: Card number, expiration date, and cardholder's name. Date and amount of purchase. Adopted 2/7/2005 Amended 2/22/2006 V-3 Amended—1 12007 Brief description of item(s) purchased. Merchant name and identification. The merchant will obtain authorization for the transaction via either a telephone call or direct telecommunication link to the VISA authorization network. The merchant will obtain an authorization number as long as the purchase is within the limits established for that card. Before signing the sales draft, verify that the amount is correct and that sales tax has been added. A purchaser will receive one copy of the signed sales draft. RETAIN THIS COPY in order to attach to the cardholder's monthly statement of account. F. Telephone -mail order or internet procedures A cardholder can be authorized by an Approving Official to make telephone orders or internet orders with a procurement card. Any telephone or internet order must be documented. If no external documentation is available a for telephone order, a log of telephone orders must be maintained for the same length of time as the billing cycle for the procurement card. When a Statement of Account statement is received that has telephone orders included, attach the log to the statement in lieu of a packing slip/receipt if no receipt is sent confirming the order. When an order is placed on the internet, print a copy of the order and receipt to attach to the statement in which the charge appears. If an order is placed through the mail, maintain a copy of the order form. Attach the order form and sales receipt, if available, to the statement in which the charge appears. G. Statement processing procedures after purchase At the close of each billing cycle, each employee who made purchases during the billing cycle will receive a Statement of Account from US Bank. The statement will itemize each transaction that was charged to the procurement card account. Upon receipt of the statement, complete each of the steps below within five (5) working days: Review the statement for accuracy Adopted 2/7/2005 Amended 2/22/2006. V-4 Amended—I 12007 Indicate the appropriate general ledger account code by each transaction, if appropriate. Attach all sales receipts, copies of telephone logs for phone orders and requisition forms to the statement in the order they appear on the statement. Sign the certification block and forward the reconciled statement and attachments to the Approving Official within five (5) working days of receipt. If an item that was purchased has been returned, attach the credit voucher to the statement on which the credit appears. If an item is charged incorrectly, provide a complete explanation of the error on the form, "Cardholder Statement of Questioned Item." Send this form directly to US Bank and forward a copy to the Approving Official. This is the cardholder's responsibility. The Approving Official will forward the copy to the Finance Department who will follow-up with US Bank regarding any adjustments necessary. Any item that is on a Statement of Account that is questioned must be submitted to Purchasing within five (5) working days from receipt of the statement. If a cardholder is not available to review the cardholder's Statement of Account within the five (5) day period, have all paperwork including receipts forwarded to the Approving Official to process in the cardholder's absence. The Approving Official will be responsible for processing statements for those on vacation or other leave. Upon the cardholder's return, the cardholder will still be required to sign the original Statement of Account. If a cardholder had no purchase activity during a particular billing cycle, no statement will be generated. At the same time, US Bank will forward a composite/summary statement to each Approving Official listing the totals for all the individuals with card activity during the last billing cycle. The Approving Official will review the summary statement and will match all the individual statements packet to the Approving Official Summary. The Approving Official will sign the voucher, attach all back-up, and obtain Department Head Approval (if the Approving Official is not the department head) and forward the entire packet to Finance for payment within fifteen (15) working days of the summary statement date. Adopted 2/7/2005 Amended 2/22/2006 V-5 Amended—1 12007 k" I. Disputes If items purchased with a procurement card are found to be defective, the cardholder has the responsibility to return the item(s) to the merchant for replacement or to receive a credit on the purchase. If the merchant refuses to replace or correct the faulty items, then the purchase of this item will be considered to be in dispute and will not be paid until resolved. A disputed item must be noted on the cardholder's Statement of Account so it will not be paid until the problem is resolved. To process a dispute, notify US Bank in writing, using the Cardholder Statement of Questioned Item form within sixty (60) days after the date of the first statement on which the disputed charged occurred. Be sure to provide a copy to the Finance Department. US Bank will research the disputed charge and make any necessary adjustments. Lost or stolen cards If a card is lost or stolen, hmnediately notify the Approving Official and US Bank. US Bank Customer Service can be reached at: 1-800-227-6736 Provide the following information to the Approving Official: Cardholder's complete name; card number; the date reported to police, if stolen; date US Bank was notified; and l any purchases made on the day the card was lost or stolen. A new card will be mailed to the cardholder after the loss or theft has been reported to US Bank. A new account number will be assigned to the new card. IT IS IMPORTANT THAT US BANK AND THE APPROVING OFFICIAL BE NOTIFIED IMMEDIATELY OF THE LOSS OR THEFT OF A CARD. J. Changes to cardholder information and request for additional cards Changes to a cardholder's name, address, and organization should be immediately reported to the Approving Official who will forward the information to the Finance Department. Upon a cardholder's leaving City employment or transferring to another department, the card shall be returned to the Approving Official by the cardholder, and the Approving Official will forward the card to the Finance Department. Adopted 2/7/2005 Amended 2/22/2006 V-6 Amended—1 12007 All requests for new cardholders must be done in writing addressed to the Finance Department. For any questions on the appropriate use of a procurement card, contact the Approving Official or the Finance Department. Adopted 2/7/2005 Amended 2/22/2006 V-7 Amended -1 12007 VI. PETTY CASH (" A. Introduction. The use of petty cash for purchasing is not a favored alternative. Petty cash should only be used to reimburse City employees for purchases that they have made pursuant to the reimbursement procedures found elsewhere in these administrative procedures. In an emergency, petty cash may also be used if a check request is not available, but only with the approval of the Finance Director. Petty cash use is expressly limited by this policy because the petty cash process creates diff culty in ensuring that tax reporting requirements are met and preventing an overage on a particular vendor's limit. B. Procedure. Complete petty cash voucher and attach back-up materials, such as invoices, statements, receipts. An authorizing signature is required. An individual cannot approve a petty cash payment for or to him or herself. An account number must be assigned to the payment request. C. Maximum Amount. Except for the Police Department and the Parks & Recreation Department, petty cash will only be used for payments under $300. For the Police Department and Parks & Recreation Department, petty cash will only be used for payments under $500. Purchases shall not be split to circumvent these petty cash maximum payment limits. Adopted 2/7/2005 ( Amended 2/22/2006 l Vl-1 Amended—1 12007 VII. BIDDING PROCEDURES As described above, these Purchasing Procedures require informal and formal bidding on certain contracts involving the City. Of course, more formal bidding may used at any time that a department head, the City Manager, or the City Council determines that would better serve the public interest. Informal bidding provides more flexibility on project timing: notice requirements are not quite as lengthy and Council approval is not required. However, a department head may determine that longer notice is appropriate or a project should go to Council for award and nothing in these procedures is intended to inhibit such a decision. A. Solicitation of Written Quotations 1. Ensure that quotations are sought from a changing list of contractors. Do not direct the request to the same contractors every time. 2. Ensure that the request for quotation and the specifications are clear. Clearly document the quotations that are received and file in the project file. B. InfornzalBidding5 The City maintains a list in the Public Works Department of qualified contractors according to categories of work. 2. Notice of the informal bid request is mailed to the construction journals identified for San Mateo County by the California Uniform Public Construction Cost Accounting Commission. Currently, those journals are Construction Bidboard, Inc and McGraw-Hill Construction Dodge; and two from the following list: Marin Builders Association; San Francisco Builders Exchange; Builders Exchange of Alameda County; Peninsula Builders Exchange; Builders Exchange of Santa Clara County. See htto://www.sco.ca.gov/ard/local/cuceac/cuccae man.pdf 3. All mailings have to be completed at least 10 days before the date that bids are due. 4. If a proj ect is estimated to cost more than $75,000 but not more than $100,000, written authorization from the City Manager is required before the informal bid process can be used. If the bids received are more than $100,000 in spite of the Adopted 2/7/2005 Amended 2/22/2006 VII -1 Amended—I /2007 estimate, contact the City Attorney to determine what the next steps in the bidding process must be. C. Formal Bidding6 Notice of the formal bid request is published in a newspaper of general circulation published in the City at least 14 days before the bids are to be received an opened. 2. Notice of the formal bid request is mailed to the construction journals identified by the California Uniform Public Construction Cost Accounting Commission for San Mateo County. Currently, those journals are Construction Bidboard, hic and McGraw-Hill Construction Dodge; and two from the following list: Marin Builders Association; San Francisco Builders Exchange; Builders Exchange of Alameda County; Peninsula Builders Exchange; Builders Exchange of Santa Clara County. See http://www.sco.ca.gov/ard/local/euccac/cuccae man.pdf 3. All mailings have to be completed at least 30 days before the date that bids are due. D. Processing of Bids Bids shall remain sealed until all bids are opened in public at the same time. If there are any questions regarding specific bids, rejection of bids, clerical errors, or otherwise, l contact the City Attorney immediately. Adopted 2/7/2005 Amended 2/22/2006 VII -2 Amended -1 12007 VIII. EMERGENCY PROCEDURES A. In case of emergencies, State law allows the City to take steps to shorten or waive certain purchasing and bidding procedures. Finance Department personnel are trained in quick processing of purchase orders, and the City Attorney can prepare the necessary paperwork for Manager or Council action. The EOC manual provides additional information on these procedures. B. Consult both the Finance Director and the City Attorney. Adopted 2/7/2005 Amended 2/22/2006 VIII -1 Amended—I /2007 IX. CAPITAL ASSET ACCOUNTING A. Policy. Each department head is ultimately responsible for the control of the assets within the department head's department. B. Purpose. To establish a system for capitalizing assets under the GASB 34 pronouncement. C. Definitions. The City capitalizes equipment that costs at least $5,000 and has estimated useful life in excess of one year. Structures and improvements and infrastructure with a value of at least $250,000 are capitalized. All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are recorded at estimated fair market value at the date of donation. D. Procedures. The Finance Department builds the Capital Assets Inventory based upon historical costs and capital outlay purchases. Once each year, the Finance Department will provide each department with a listing of its capital assets for review, edit, correction, and return to Finance. Any changes to existing asset listings must be reviewed and signed by the applicable department head. Adopted 2/7/2005 Amended 2/22/2006 IX -1 Amended—1 12007 X. EXPENSE REIMBURSEMENT PROCEDURES A. Purpose: The City of Burlingame is obligated to ensure that expenditures made by the City are for clearly public purposes and the City is accountable to taxpayers and citizens of the City to be prudent and wise in making those expenditures. The purpose of these procedures is to provide the process by which a City officer or employee may seek reimbursement for expenses that the officer or employee has incurred in the conduct of City business as authorized by the employee's supervisor or manager or other action. All such reimbursements are to be made in accordance with the budget for that expense. Officers and employees should ensure that their proposed expenses are reimbursable before incurring the expenses. Either the officer or employee seeking the reimbursement and the person approving the reimbursement are personally responsible for the integrity of the reimbursement process.' B. General Policy Statement. Reimbursement for expenses are made in order to advance the public, corporate purposes of the City of Burlingame. The California Constitution, the Government Code, the Burlingame Municipal Code, and the administrative procedures of the City govern the expenses that can be lawfully incurred and reimbursed on behalf of the City. City Council pre -approval for travel outside the State of California is required. Expenses cannot be used for personal benefit to the officer or employee. All expenses claimed for reimbursement are subject to audit 2 Before making a personal expenditure that will result in a claim for reimbursement, officers and employees should consider the use of a purchase order or prepayment by the City. While this will not always be possible given time constraints or the nature of the vendor, direct payment by the City will often result in cost savings to the City and avoid the necessary delay involved in any reimbursement. ' "Officers and employees" as used in these procedures include all volunteers. "Department head" as used in these procedures with regard to reimbursement payable to a department head means the City Manager. "Department head" as used in these procedures with regard to a board member or commissioner means the department head liaison to that board or commission. "Department head" as used in these procedures with regard to a Councihnember means the City Manager. "Department head" with regard to the City Manager means the Finance Director. An officer or employee may also be audited by the Internal Revenue Service and should ensure that the officer or employee keeps any necessary personal records, such as umeirnbursed business expenses for a sufficient period of time. Adopted 2/7/2005 Amended 2/22/2006 X-1 Amended—I 12007 C. Travel Expenses Travel expenses incurred while on City business or at the direction or authorization of the City are subject to reimbursement as follows: Length and location of travel. a. Unless the travel is either an emergency that precludes pre -approval or to the State of Nevada, out-of-state travel must be pre -approved by the City Council. Travel to another State in an emergency or to Nevada must be pre -approved by the Finance Director. b. No reimbursement for meals will be made for any travel/business totaling less than six (6) hours. Meals are often included as an integral part of a seminar or conference, and the included meal(s) will be reimbursed as part of the seminar or conference registration fee. If a meal is not included as part of a single -day conference, seminar, or training, an employee may be reimbursed for the cost of a meal. G. Unless expressly authorized in advance in writing by the City Manager based on exceptional travel circumstances, no reimbursement for lodging will be made for any of the following trips: A single -day conference, training, or business that is less than 180 miles road distance, one-way, from Burlingame and that ends or is over by 6:00 p.m. However, if the single -day conference, training, or business is 100 miles or more road distance, one-way, from Burlingame and begins at 9:00 a.m. or before, reimbursement for lodging for the evening before the conference can be approved even though the conference, training, or business may end before 6:00 p.m. ii. Any multiple day conference, training, or business that is less than 65 miles road distance, one-way, from Burlingame. 2. Transportation/Transit a. The maximum reimbursement for transportation expenses, such as vehicle mileage, airfare, or train fare, will be at the lesser of the following: 1) the vehicle standard mileage rate allowed by the Internal Revenue Service or Adopted 2/7/2005 Amended 2/22/2006 X-2 Amended -1 12007 2) the group airfare rate for League of California Cities travel, if available. http://www.ofa.dgs.ca.gov/Travel+Programs/AirFares_CityPairs.htm . b. If the travel is to a location that is more than 200 miles road distance, one- way, from Burlingame, the City will reimburse that employee for either the lowest commercial fare to that location based on the proposed itinerary or the vehicle standard mileage rate, whichever is less. C. The City will not reimburse an official or employee for any travel insurance of any kind. d. In addition to reimbursement at an airfare or mileage rate, the City will reimburse an officer or employee for the actual costs of any tolls for bridges or roadways actually paid. e. If an officer or employee believes that the limitations imposed by this subsection will actually cost the City more because of the travel time that may be involved, the officer or employee may seek the written approval of the City Manager for alternate travel. Parking a. Parking fees incurred at either a hotel or at a parking facility are reimbursable. However, unless the official or employee can demonstrate that no other reasonable alternative existed, valet parking costs will not be reimbursed beyond that incurred for a normal parking fee. b. Parking fees incurred at an airport parking lot during the time that the officer or employee is on travel are reimbursable to the extent that the total cost of the travel is within the limits established in subsection B(1) and (2) above, and do not exceed the cost of reasonable transportation to and from the airport. 4. Other Transportation a. Transportation to and from an airport, train station, or other transit facility is reimbursable. Public officials and employees are encouraged to use public transit whenever feasible, and determination of the reasonableness of the transportation used will be based on the availability, usability, and itinerary. As with parking fees, the total cost of travel is subject to the maximum amounts set forth in Subsection B(1) and (2) above. Adopted 2/7/2005 Amended 2/22/2006 X-3 Amended—1 12007 b. Transportation while at a conference, training, or business event is judged ` on a reasonableness standard. Unless the rental car and taxi expenses are t within the total amount allowed under Subsection B(1) and (2) above, rental car, taxi or other transportation expenses will only be approved when the official or employee demonstrates that there was no reasonable alternative to the use of that mode of transportation at the location involved or the mode was required by the nature of the trip or event. Rental car expense will be approved if the rental car is being used to transport other City employees or public employees and the financial benefit from the sharing of transportation results in an actual reduction in the net cost to the City. Lodging a. Officers and employees are expected to use the most cost effective lodging reasonably available. Government lodging rates are almost always available and should be sought. Conference hotel rates are usually negotiated by the organizations hosting the conference and may be used even though other lodging might be less expensive. The City will provide a transient occupancy tax exemption certificate if the host city permits such an exemption and requires back-up as Burlingame does. b. Lodging reimbursement approval will be based on no more than the maximum lodging rate allowed by the U.S. General Services Administration for that location. The current rates are available on the GSA Website at http://www.gsa.govIPortal/gsaleplcontentView.do?contentld=17943&contentType=GSA BASIC If government facilities are made available at a cost-effective rate, the official or employee is expected to make use of those facilities. However, if the lodging is in connection with a conference, training, or other education activity, lodging reimbursement shall not exceed the maximum group rate published by the conference, training, or activity sponsor, provided that lodging at the group rate is available at the time of booking. If the group rate is not available, the GSA per diem rate will govern. 6. Meals and incidental expenses a. Daily meal allowance and allowance for incidental expenses, such as laundry, tips, and similar expenses, are based on the maximum Meal and Adopted 2/7/2005 Amended 2/22/2006 X-4 Amended—/ 12007 Incidental Expense Rate established by the U.S. General Services Administration for that location. The current rates are available on the GSA Website at http://www.gsa.gov/Portal/gsaleplcontentView.do?contentId=17943 &contentType=GSA_BASIC Partial meal and incidental expense allowances can be paid for multiple day conferences, seminars, and business that require partial day travel. b. No meal allowance will be provided if meals are included in the conference or training package; if only some meals are included, the following deductions from the daily rate will be made for included meals: $7 for breakfast; $14 for lunch; and $20 for dinner. Telephones a. Telephone usage for City business purposes while away from the City is reimbursed on the reasonable costs of such calls. Cellular phones are often more cost-effective than using hotel phones directly. Collect calls should be avoided. 8. Conference/Training Registration a. It is expected that most conference, seminar, or training registration will be done in advance. This avoids the need for reimbursement claims for this expense. It also tends to insure the best rates, which are often given for advance registration. The City may disallow reimbursement for the additional costs incurred when advance registration is not used, unless the officer or employee can demonstrate that extraordinary circumstances or City needs compelled the late registration. 9. Advances a. The City recognizes that officers and employees may not be able to use their own funds or credit to pay for necessary expenses. An officer or employee may request an advance to pay for transportation, lodging, and meals if a written check request accompanied by a copy of the registration confirmation is filed with the Finance Department no later than ten (10) days before the travel is to commence. In an emergency situation, this time requirement may be waived by the Finance Director. b. In order to be eligible for approval of an advance, the Advance Request form attached to these procedures shall be completed and approved by the Adopted 2/7/2005 Amended 2/22/2006 X-5 Amended—1 12007 officer or employee's department head. A written estimate of the lodging ` expense and reservation shall be provided. The applicant shall also t provide a statement as to the form of transportation to be used and a copy of the transportation reservation, if any. C. Advances shall be made by check payable to the officer or employee. d. Within five (5) days of the completion of travel, the officer or employee shall file documentation as required for reimbursements below that demonstrate the expenses incurred. If overpayment has been made by the advance, the officer or employee shall repay the City for the overpayment within ten (10) days of the determination by the Finance Director that an overpayment has occurred under the these procedures. D. Entertainment Payment of any expenses for hosting of non -City officers or employees is generally not done on an individualized, reimbursement basis, but rather as a department expense. This type of expense is to be approved by the City Manager in advance. When a City officer or employee entertains on behalf of the City, the entertainment activity must be directly related to City business and should not personally benefit the host or other officers or employees. Elected officials of the City are currently barred by California Attorney General opinion from reimbursement for entertainment costs incurred with regard to persons who are not officers or employees of the City. Administrative meetings. Reimbursement for the cost of light refreshments served during an administrative meeting if the meeting is directly related to City business can be reimbursed. The cost of a meal can be reimbursed if the meal is an integral and scheduled part of the meeting, such as a working lunch. Note: When two or more officers and employees choose to dine together in order to continue business, reimbursement for the meal is not allowable. 2. Host to official guest(s) of the City. The cost of light refreshments or meals incurred when acting as a host to official guests of the City can be reimbursed. Examples of such guests are: Visitors from other governments, government agencies or organizations Members of the community Prospective employees Adopted 2/7/2005 Amended 2/22/2006 X-6 Amended—I 12007 Meetings of an organization of which the City is a member or for which the City sponsors membership of an officer or employee, such as the League of California Cities 3. Receptions/Luncheons. The cost of light refreshments and food served as part of a reception or luncheon. Receptions maybe held in conjunction with conferences (receptions that are not included in the registration fee), meetings of an organization of which the City is a member or for which the City sponsors membership of an officer or employees; employee recognition; length -of -service awards or retirement presentations; employee, staff, or volunteer picnics; rotation of officers. Employee birthdays, weddings, anniversaries, or farewell gatherings (other than retirement) are not considered official entertainment. E. Other expenses Officers and employees may find that some day-to-day expenses require purchasing directly without using normal purchasing procedures or petty cash. These should be used very sparingly and only when they have been authorized by a department head. If they are not authorized in advance, the claim for reimbursement may not be honored. F. Documentation 1. A claim for reimbursement is submitted through the appropriate department approval process to the Finance Department. 2. Original receipts are required for all of the following: – Conferences and seminars – Lodging – Rental Cars – Parking and tolls – Other transportation – Other purchases Credit card receipts are generally acceptable. Adopted 2/7/2005 Amended 2/22/2006 X-7 Amended—I 12007 Original receipts are not required for telephone bills for use of personal telephones, such as cell phones. Copies of the applicable charge sheets may be substituted. 4. Original receipts are not required for meals if the officer or employee is only seeking reimbursement within the meal and incidental expense rate described in Travel Subsection F above. The required travel expense report for claiming reimbursement for travel expenses is attached. For reimbursement of other expenses, the claim form attached shall be used. 6. If an original receipt has been lost, the officer or employee may submit a declaration in the form attached seeking approval of the affected expense. G. Time for submittal 1. Any claim for reimbursement for non -travel expenses must be submitted within ninety (90) days of the purchase for which the reimbursement is sought. A claim filed after the ninety (90) day period will not be paid except in case of an intervening emergency or catastrophe that has prevented the submittal from being timely. H. Prohibited reimbursements ` No reimbursement for expenses incurred pursuant to this policy will be made for the following expenditures: a. Alcohol, except with the express approval of the City Council for a particular event. b. Tobacco products or illegal substances of any kind. C. Expenses incurred by or because of a spouse or companion, who is not on City business (72 California Attorney General Opinion 20 (1992)) unless approved as part of a reasonable accommodation pursuant to the Americans with Disabilities Act. Adopted 2/7/2005 Amended 2/22/2006 X-8 Amended—1 12007 FOOTNOTES 1. Gov't Code § 4526. 2. Civil Code §§ 3247, 3248. 3. Public Contract Code § 20170. Cash, cashier's check, or certified check can also be used as security. 4. Code of Civil Procedure § 995.311. 5. Public Contract Code § 22034. 6. Public Contract Code § 22037. Adopted 2/7/2005 Amended 2/22/2006 Footnotes -1 Amended—1 12007 C,