B. Purchasing Policy Revisions
CITY OF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952.227.1100
Fax: 952.227.1110
Building Inspections
Phone: 952.227.1180
Fax: 952.227.1190
Engineering
Phone: 952.227.1160
Fax: 952.227.1170
Finance
Phone: 952.227.1140
Fax: 952.227.1110
Park & Recreation
Phone: 952.227.1120
Fax: 952.227.1110
Recreation Center
2310 Coulter Boulevard
Phone: 952.227.1400
Fax: 952.227.1404
Planning &
Natural Resources
Phone: 952.227.1130
Fax: 952.227.1110
Public Works
1591 Park Road
Phone: 952.227.1300
Fax: 952.227.1310
Senior Center
Phone: 952.227.1125
Fax: 952.227.1110
Web Site
WW'/I.ci .chan hassen.mn. us
MEMORANDUM
TO:
Mayor & City Council Members
FROM:
( fz .
lo~
Greg Sticha, Finance Director
DATE:
June 23, 2008
SUBJ:
Revision of Purchasing Policies & Procedures Manual
BACKGROUND
In April of 2008, the state legislature approved several revisions to statutes
concerning bidding requirements. The revisions include raising the statutory
limit of requiring sealed bids for non-professional service purchases from
$50,000 to $100,000. In addition, the statutes changed the requirements for
purchases between $25,000 and $100,000 and pLrchases below $25,000.
The city's current purchasing policies and procedures manual follow the old
state requirements, and the staff is requesting revisions to follow the new
statutes.
A summation of the new requirements is as follows:
,
1. Purchases greater than $100,000 need to follow the sealed bid process.
2. Purchases between $25,000 and $100,000 need to have two written
quotes and do not need to be advertised. The quotes must be kept on file
for a minimum of one year.
3. Purchases less than $25,000 can be made either with two written quotes
or in negotiation on the open market at the discretion of the governing
body.
Attached is a copy of the purchasing policies and procedures manual with the
requested changes to follow the statutory requirements. In addition, staff is
requesting raising the limit for requiring RFP's (Request for Proposals) on
professional services from $15,000 on an annual basis to $25,000.
ATTACHMENT
1. Excerpt from the Purchasing Policies & Procedures Manual
The City of Chanhassen · A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks. A great place to live, work, and play.
F\GregS\Council\2008\revise policies and procedures manual 6-23.doc
Section 1. Purchasing Guidelines
1.3 Quick Reference Guide
Value of Purchase Quotations Needed Payment Request Approvals Needed Prior
Options to PurchasinQ
Less than $100 None Petty Cash Department Yes
Credit Card Finance No
Check Request City Manager No
City Council No
$100-$4,999 Departmental Discretion Credit Card Department Yes
Check Request Finance No
Purchase Order City Manager No
City Council No
$5,000-$10,000 Two Written Quotes or Check Request Department Yes
RFP's Purchase Order Finance No
City Manager No
City Council No
$10,000-$24,999 Two Written Quotes or Check Request Department Yes
RFP's Purchase Order Finance No
City Manager Yes
City Council No
$25,000-$99,999 Two Written Quotes or Check Request Department Yes
RFP's Purchase Order Finance Yes
City Manager Yes
City Council Yes
Greater than $100,000 Sealed Bids Check Request Department Yes
Purchase Order Finance Yes
City Manager Yes
City Council Yes
Notes: If a cooperative purchasing agreement is in place, quotations are not needed.
RFP's are required for contracting services in excess of $25,000 on an annual
basis except from the consultant pool (see RFP section of this document).
The city manager may delegate authority for approval of agreements less than
$25,000 (see Agreement Processing section of this document). Purchases
between $10,000 and $25,000 have to be approved by the City Manager.
The city council has pre-approved payment for utility accounts and payroll
transfers that occur in the normal course of business even though they may
exceed $15,000 because these are contractual accounts. The vendors that fall
under this situation include Minnegasco, Northern States Power, Metropolitan