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Materials, Goods and Maintenance Service contract costs of any dollar value must adhere to pre-defined signature
approval limits. All Information Technology (IT) purchases require the approval of the IT Manager for network
compliance. Any IT Purchase for a service department
must be authorized via an IT Work Order authorized by a department head or designee.
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EXHIBIT
PURCHASING BID AND AUTHORIZATION CHART
PROFESSIONAL SERVICES
ORDER TYPE COST POINT FEATURES
Professional Services $0 to $25,000
(RFP Highly Recommended)
Prudent judgment should be
exercised and obtaining
comparative pricing if
practical. Orders require
department head or designee
approval. Price proposals are
not required but three are
recommended and must
include a Department Head
and Finance Director
approved CPO and service
contract, with Risk Manager
approval and City Attorney
review only if required based
on the nature of the contract.
These services include
those of a highly technical
nature requiring extended
training and certification.
Include legal, accountancy,
technology and specialty
consulting services.
These are general
guidelines. The evaluation
and selection of consultant
services may vary on a
case-by- case basis.
Greater than
$25,000
A formal RFP is required for
contracts of $50,000 and
greater; competitive
proposals are encouraged for
contracts of $25,000 to less
than $50,000. Three (3)
competitive proposals are
encouraged and the package
must include a Department
Head, Finance Director, Risk
Manager, and City Managerapproved CPO and service
contract. City Council
approval is required for
contracts of $125,000 and
greater. City Attorney review
only if required based on the
nature of the contract; See
the Non-Legal Professional
Services table in the
Professional Services section
of this Policy for the full fourtier approval breakdown.
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EXHIBIT
EMERGENCY PURCHASE FORM – EXAMPLE
Emergency Date
Cost
Department/Division
Vendor
Address
Telephone
Emergency Description
Describe Emergency:
Because emergency purchases do not normally provide the City an opportunity to obtain competitive quotes, these purchases shall be limited to those necessary to address and immediate operational, health, safety, or infrastructure need. The following procedures shall apply:
• Complete a requisition and obtain a purchase order within three days of the emergency.
• Notify City Manager and Finance of emergency costs greater than $5,000. • Notify City Council at the next regularly scheduled meeting of emergency cost greater than $125,000.
• If Emergency purchases cause line-item budget shortfalls, the department responsible shall obtain City Council approval for additional appropriation; or request that the City Manager transfer appropriations from other programs, within the same Fund, to cover the purchase.
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EXHIBIT
MINIMUM INSURANCE REQUIREMENTS
Minimum Scope of Insurance asrelated to the provision ofservice to the City CONSULTANT shall provide his insurance broker(s)/agent(s) with a copy of these requirements and request that they provide Certificates of Insurance complete with copies of all required endorsements to: Project Manager, City of Los Altos, 1 N. San Antonio Rd., Los Altos, CA 94022
Minimum Scope of Insurance Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office Form CG 0001 covering CGL on an “occurrence” basis, including products-completed operations, personal & advertising injury, with limits no lessthan $1,000,000 (or $2,000,000) per occurrence.
If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit.
2. Automobile Liability: Insurance Services Office Form Number CA 0001 covering, Code 1 (any auto), or if Consultant has no owned autos, Code 8 (hired) and 9 (non- owned), with limit no lessthan $1,000,000 per accidentfor bodily injury and property damage.
3. Workers’ Compensation insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease.
4. Professional Liability (Errors and Omissions) Insurance appropriate to the Consultant’s profession, with limits of no less than $1,000,000 per occurrence or claim, $2,000,000 aggregate.
Other Insurance Provisions. The insurance policies are to contain, or be endorsed to contain, the following provisions:
• Additional Insured Status. The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy, with endorsements under CG 20 26, with respectto liability arising out of work or operations performed by or on behalf of the Consultant including materials, parts or equipment furnished in connection with such work or operations.
• Primary Coverage. For any claims related to this contract, the Consultant’s insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City,
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its officers, officials, employees, or volunteers shall be an excess of the Consultant’s insurance and shall not contribute to it.
• Notice of Cancellation. Each insurance policy required above shall be endorsed to state that coverage shall not be canceled except after thirty (30) days’ prior written notice (10 daysfor non-payment) has been given to the City.
• Waiver of Subrogation. Consultant hereby grants to City a waiver of any subrogation which any insurer of said Consultant may acquire against the City by virtue of payment of any loss under such insurance. The consultant agrees to obtain any endorsement that may be necessary to effect this waiver of subrogation, but this provision applies regardless of whether the City has received a waiver of subrogation endorsement from the insurer.
• Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. The City may require the Consultant to provide proof of the ability to pay losses and related investigations, claim administration, and defense expenses within the retention. • Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M.
Best’s rating of no less than A:VII, unless otherwise acceptable to the City.
Claims Made Policies. If any of the required policies provide claims-made coverage:
5. The Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work.
6. Insurance must be maintained, and evidence of insurance must be provided for at least three (3) (or five (5)) years after completion of the contract work.
7. If coverage is canceled or non-renewed and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Consultant must purchase “extended reporting” coverage for a minimum of three (3) years after completion of contract work.
Verification of Coverage. Consultant shall furnish the City with original certificates and amendatory endorsements affecting coverage required by this clause. All certificates and endorsements are to be received and approved by the City before work commences.
However, failure to obtain the required documents prior to the work beginning shall not waive the Consultant’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.
Special Risks or Circumstances. City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.
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PLEASE NOTE: See the City Template General Service and Contract Agreements posted in the Templates Folder online. Check for periodic updates and other provision requirements.
Assistance is available from the Risk Manager.
Requesting departments are responsible for verifying insurance coverage requirements with Risk Management as these parameters may be modified periodically. It is equally important to reference the TEMPLATE General Service and Contract Agreements posted on the Templates folder online and supplied by Risk management while preparing RFPs and finalizing agreements. Departments must attain insurance documents from the vendor prior to execution of the agreements/contracts.
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EXHIBIT
PURCHASE CARD POLICY
OVERVIEW
The City has implemented Purchase Cards (CalCard) based on the State-wide “CalCard” program. The program is designed to establish a more efficient and cost-effective method of purchasing and paying for small dollar City purchases. This program should minimize the need for voluminous blanket/open purchase orders and petty cash requests.
This document puts forth the practices and procedures required of those using Calcard and those who manage their use. The topics addressed in this policy follow:
• Responsibility
• Requesting CalCard
• Calcard Basics
• Spending Limit
• Prohibited Purchases
• Purchase Documentation
• Revocation of Privileges
• Emergency Purchases
• Reconciling Statements
• Disputed Charges
• Returning Items
• Lost or Stolen CalCard
• Declined Purchase
• Review & Audits
• Invoices & Receipts
• Purchase Card Employee Agreement
RESPONSIBILITY
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Department Heads: Responsible for authorizing individuals within the Department to receive CalCard and designated approvers. Department heads must approve individual requests for CalCard and make any changes to them. Department heads are ultimately responsible for ensuring the cards’ proper use in conformance with City practices and procedures.
Designated approvers: Designated approvers are selected and authorized by Department heads, responsible for reviewing monthly statements and submitting them to Finance in complete form. These approvers are responsible for ensuring that cardholders track and report any disputed/unauthorized charges to "Calcard" and to Finance. Individual Department Head Calcard statements and transaction logs will be reviewed by the Finance Director and City Manager.
• Read and be fully aware of the requirements of this document and the City’s Purchasing Policy
• Read and execute an approved Purchase Card Employee Agreement. • Maintain secure possession of the CalCard and keep the account number confidential.
• Ensure that all purchases strictly comply with City instructions. • Obtain the best possible value for the City with CalCard purchases. • Never give a CalCard to anyone for use.
• Always retain and maintain original records of receipts. • Promptly reconcile monthly statements and provide a complete Purchase Card Log including supervisor/department head review and approval. This documentation must be submitted to Finance, along with all supporting original invoices/receipts and packing slips (if shipped), within ten business days after the statement is received. • Purchases made on behalf of another department, although uncommon, must be authorized by an authorized signer from the department being charged prior to submission to Finance.
• Promptly resolve disputed items since only authorized charges will be paid. Disputed items may be suspended pending resolution by the department responsible. Failure to pay charges on a timely basis will result in card suspension. Any late fees that result from such delays will be charged to the department budget. • Immediately call “CalCard” if a card is lost or stolen and notify Department supervisors and Finance.
• Resolve all incorrect charges and product returns as quickly as possible. • Return the CalCard to Finance upon the request of a supervisor, suspension of
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privileges, or termination of employment.
Finance: Responsible for administering the program, activating and terminating CalCard, and maintaining a record of individuals authorized to conduct purchase card transactions.
Finance is also responsible for processing monthly payments.
REQUESTING CALCARD
To apply for a CalCard, the Department head should send an email request to Finance and ultimately submit an approved Purchase Card Employee Agreement (Exhibit 2) specifying an individual purchase limit as well as a total monthly limit. Total monthly limit should not exceed $10,000.
CALCARD BASICS
CalCard are to be used exclusively for City business. They are Visa credit cards that work just like a personal credit card except that monthly charges are paid directly by the City.
Calcard purchases are held to individual transactional limits set by Department heads and to the small dollar purchase limit established by City purchasing policy. Department heads also set a total monthly dollar limit for each individual cardholder. Each time the card is used, an electronic process verifies that the purchase is within these limits. If the purchase violates these limits, the supplier will not accept the order.
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CalCard will be issued in an employee’s name, bear a “City of Los Altos” imprint and display a unique color scheme to distinguish them from personal credit cards. Cardholders are directly responsible for the proper use of their cards and department heads for the management and review of those they have authorized.
Monthly statements will be sent to cardholders for verification of charges against invoices/receipts, coding of appropriate budget accounts, and approval by an immediate supervisor and department head or designee. Finance will receive a full set of statements.
Monthly statements for cards held by Department heads are to be reviewed and approved by the City Manager and/or their designee.
The effectiveness of the Calcard program is dependent on the timely review, processing and submission of approved monthly transactions. Providing timely, accurate and complete purchase documentation is critical. Use of such cards is a privilege that provides a valuable alternative purchasing mechanism and requires strict adherence to established practices.
Non-compliance with the City Purchasing Policy will result in card revocation and/or disciplinary action.
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SPENDING LIMITS
CalCard purchases shall be subject to individual transaction limits approved by Department Heads and must comply with the City’s small-dollar purchasing threshold of less than $10,000. In addition, Department Heads shall establish a total monthly limit for each cardholder.
30-Day Monthly Transaction Limit
• Cardholder spending limits may be modified only on an as-needed basis and must receive prior approval from the Department Heads or their designee. • To request a change in a cardholder’s spending limit, the cardholder must submit a properly approved Purchase Card Employee Agreement to [email protected], along with a memorandum providing a brief justification for the requested change and specifying the proposed new limit.
PROHIBITED PURCHASES
Purchases made shall be strictly for City of Los Altos business. CalCard cannot be used for:
• Personal use and entertainment
• Cash advances or refunds
• Per diem and mileage advances
• Any transaction exceeding the Department Head’s established limit or the approved purchasing card limits—the level at which a purchase requisition and purchase order are required
• Professional services, except for industry-wide training services (such as seminars). • Purchases prohibited by the City’s Purchasing Policy
• Unauthorized travel-related expenses
• Fines
• Splitting purchases to circumvent the dollar limit
PURCHASE DOCUMENTATION
• Always get an original invoice/receipt from the supplier. • If paying for a conference orseminar,the originalregistration form and/or certification of completion must be provided.
• For non-conference business meals, the itemized restaurant receipt indicates purchased items should be provided.
• Forsubscriptions, keep a copy of the renewal notice or initial subscription request. • In the case of internet purchases, provide a copy of the E-commerce receipt.
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• In all cases, items being shipped or picked up at point-of-sale must be supported by a delivery packing slip with approval from Department Head.
If placing an order by phone, mail, orfax, or on the internet:
• Instruct the supplier to include your name, department, and address on the shipping label
• Instruct the supplier to include a receipt and delivery packing slip (charge slip, invoice, or cash register receipt) with the package.
• Verify the order is correct upon delivery, sign the packing slip and have another member of the receiving Department inspect and sign the packing slip as well. • Retain the original invoice/receipt/packing slipsforreconciliation and substantiation.
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REVOCATION OF PRIVILEGES
Failure to follow established City purchasing procedures or the improper use of CalCard will result in one or more of the following consequences:
• Suspension of card privileges
• Disciplinary action, up to and including termination of employment There may also be criminal and civil consequences related to misuse of public funds and potential action by the bonding company that provides the City’s blanket employee bond.
Your account can be canceled for:
• Failure to exercise reasonable care in safeguarding the CalCard from loss or unauthorized uses
• Failure to meet the monthly reconciliation submission deadline for two (2) consecutive months, which may result in the CalCard being locked or suspended • Making improper or unauthorized purchases
• Excessive lost receipts, defined as more than two lost receipts within a six-month period
• Failure to comply with the intent, requirements, and provision of the CalCard Policy • Splitting purchases to circumvent CalCard limits or authorization requirements • Determination by the Department head that there is no longer a business purpose Your account will be canceled immediately upon separation from the City, or if the card is intentionally used for personal purposes or shared with unauthorized users.
EMERGENCY PURCHASES
Finance management can approve a temporary increase in Calcard transactions and monthly limits in the event of an emergency as defined in the City’s purchasing instructions. Such increase requests can be directed to Finance by Department heads and/or the City Manager.
Emergency purchases will still require the retention of supporting invoices/receipts/packing slips as a basis for payment and grant assistance recovery.
RECONCILING STATEMENTS
CalCard statements are mailed directly to the departments and are also available for download through the U.S. Bank online system. Immediately upon receipt, the cardholder must verify the accuracy of the statement by comparing charges to supporting invoices/receipts. The review shall encompass the following items:
4. The reconciled CalCard statement, verifies that statement charge amounts do not
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exceed or differ from receipt amounts.
5. Any items on the statement that were not purchased, received, or supported by a packing slip (if applicable).
6. Original invoices/receipts (in the order they appear on the statement) submitted to the designated approver for review and signature.
7. If a receipt has been lost, a memorandum (T drive) documenting the description and amount of the charge.
8. The Card Activity Report signed by the cardholder and the approver, including the appropriate budget/expense account codes.
9. Department Heads are responsible for ensuring that reconciled and approved statements for all cardholding employees, including invoices/receipts, are submitted to Finance within ten (10) business days of mail delivery.
DISPUTED CHARGES
If an item on the monthly statement is incorrect, the cardholder should call the supplier immediately to resolve the problem and inform his/her designated approver. Calcard should also be contacted to file the proper file dispute form if necessary. Additionally, Finance should be notified of these disputes as statements are submitted.
RETURNING ITEMS
For an over-the-counter purchase, return the item directly to the supplier and obtain a credit receipt. Requesting a cash refund is not allowed.
If the purchase was made by internet, phone, mail, or fax:
• Contact the supplier for return instructions.
• Get a return reference number from the supplier or credit number.
Be sure to check subsequentstatementsto verify credit received for the returned items.
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LOST OR STOLEN CALCARD
• Reporting Lost or Stolen CalCard: 1-800-344-5696 (24 hours/7 days a week) • Inform your designated approver and Finance Department: [email protected].
DECLINED PURCHASE
If a supplier purchase is declined, contact CalCard, and your designated approver to inquire about the reason for the decline. This may be an indication of an exceeded transaction limit, monthly limit, unauthorized purchase category, or simply a processing error.
REVIEW & AUDITS
All accounts are to be reviewed at the Department level and audited regularly as part of the annual interim and year-end audit process. Finance will conduct unscheduled audits of credit card transactions and request specific identification of tangible goods purchased.
INVOICES & RECEIPTS
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Supporting original invoices/receipts/packing slips are required without exception before payment can be made. If the supplier does not provide an invoice/receipt/packing slip at the time of transaction or delivery, you must contact the supplier and request replacement documentation. Failure to provide the required documentation may result in non-payment of the charge. Any resulting late fees or penalties shall be charged to the benefiting department.
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EXHIBIT
PURCHASE CARD EMPLOYEE AGREEMENT
Section 1: Completion of this section is required when applying for a new Cal Card.
This section must be fully completed, signed by the applicant and the Department Head, and returned to Finance for processing.
You are entrusted with a City of Los Altos purchasing card, issued based on your official need to acquire supplies, equipment, and materials for the City. The City may revoke this card at any time, and its issuance does not confer any rights or entitlements based on your position.
Your signature below acknowledges that you have read this Agreement and agree to comply with its terms.
I understand that I will be making financial commitments on behalf of the City of Los Altos and will obtain the best value for The City.
I have read, understood, and agree to follow the policies and procedures described in the City’s Purchasing Instructions. I agree that under no circumstances will I use the purchasing card to make personal purchases, either for myself or for others.
I understand that the purchasing card will be issued in my name and “City of Los Altos.” Personal use of the card is strictly prohibited. Any unauthorized or personal charges must be reimbursed to the City, including related fees.
The purchasing card remains the property of the City and is subject to all applicable internal control and verification requirements, including production of the card upon request. I will immediately notify Cal Card and the Finance Department in the event the card is lost or stolen.
I am responsible for all charges, for reconciling monthly statements within ten days of the bank’s statement received, and for submitting approved statements with original receipts to Finance. If I fail to meet the monthly reconciliation submission deadline for two (2) consecutive months, the Cal Card will be locked or suspended.
I agree to surrender the purchasing card immediately upon request by the Program Administrator or upon termination of employment with the City of Los Altos, regardless of the reason.
I understand that failure to comply with the requirements of the Purchase Card Instructions may result in the revocation of card privileges and other disciplinary actions, including employment termination.
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______________
Print EmployeeName Employee Signature Date
______
Dept. Head Signature Print Name Date
Single Purchase Limit $ __ Total Monthly Limit $ __
Section 2: Completion of this section is required only if the Cal Card is ready to be picked up.
I certify that all purchases charged to Cal Card, unless annotated to the contrary, are true, correct and for official business only. Payment is authorized.
Cal Card Number Print Name Employee Signature Date Pick Up