2005_0516_Packet - Laserfiche WebLink

Home

Summary of Previous Council Discussions The following are excerpts of discussions regarding purchasing cards held at previous Council meetings. Purchases on Store Credit versus Purchasing Cards - [From Staff Memo and Council discussion on 10/18/04) The purchasing function and audit controls are approached in the same manner no matter which purchasing tool is made. Whether the purchase is made with cash, check, store credit, or with a purchasing card, the same level of purchasing authority and scrutiny is applied. Thanks to technological advances, the use of purchasing cards have emerged in recent years as a viable and preferred purchasing tool. With purchasing cards, the City's purchasing function is less costly, with rg eater audit controls. By capitalizing on available technologies the City is able to downsize its staffing level. The decision to eliminate a position within the Finance Department in 2004 was directly related to the use of purchasing cards and other available technologies. Purchasing Tools - [From Staff Memo and Council discussion on 8/23/04) While the City utilizes a number of purchasing tools, the two most common methods include: 1) Purchasing on `store credit' 2) Purchasing cards Approximately 80% of all city purchases are on `store credit'. In this case, a vendor allows the City to make a purchase or acquire services, based on the City's promise to pay at a later date. Once the goods and/or services are received, the City then issues a check or makes an electronic transfer of funds as payment. Typically the payment is made within 30 days of purchase. This purchasing method, while being the dominant method for decades, has its limitations. With the emergence of purchasing technologies, the City has greatly emphasized the use of City Purchasing Cards over the last 8 years. Purchasing cards work similar to an individual's credit card, with one distinct advantage -better purchasing control. Unlike most credit cards, purchasing cards can be issued in such a manner that restricts: a) Which vendor a purchase is made with b) What type of supply or material is purchased c) The daily, weekly, monthly amount of purchases With purchasing cards, the City can issue cards that are departmental-specific or employee- specific. For example, a purchasing card could be issued to a park maintenance employee with the restriction that the card can only be used at a local hardware or lumber store, and only for purchases up to $200. This ensures that the employee only receives authorization to make purchases that are directly related to his/her function, and can only make purchases up to a pre- set amount. 2