ORDINANCE NO.   2012-2  

PURCHASING ORDINANCE

A.          Designation of Purchasing Agency and Purchasing Agent

1.         Purchasing Agencies:       The Leo-Cedarville Town Council is hereby designated as the Purchasing Agency for the Town of Leo-Cedarville, and shall exercise all of the powers and duties authorized under I.C. 5-22 et. Seq. The Town Council may issue warrants for the payment of money by the Town only at a meeting of the Town Council. (Reference, I.C. 36-5-4-3). The Town Council shall appropriate funds in such a manner that expenditures for a year do not exceed it budget for that year. (Reference, I.C. 6-1.1-18-4).

2.         Designation of Purchasing Agent:       The Leo-Cedarville Town Council hereby designates the Town Manager as Purchasing Agent for the Town of Leo-Cedarville. All purchases by the Town Manager must be in conformance with the Indiana Public Purchasing Law I.C. 5-22 et. seq. and with this Ordinance. The Town Council retains the right to change this designation or to designate additional purchasing agents as necessary.

[See Also Resolution 2012-05, adopted 2/28/2012, regarding Alternate Purchasing Agents.]

3.         Town Fiscal Officer:       The Leo-Cedarville Clerk-Treasurer shall be the Fiscal Officer of the Town of Leo-Cedarville. (Reference, I.C. 3-5-2-26; I.C. 36-5-6-2). The Town Fiscal Officer shall be responsible for disbursing money on behalf of the Town. Unless a state statute provides otherwise, Town monies may be disbursed only after an appropriation made by ordinance of the Town Council made from the fund against which the expense is to be charged. (Reference, I.C. 36-5-4-2).

B. Authority of Purchasing Agent:

1.         Scope of Agent’s Authority:       The Purchasing Agent shall be authorized to make purchases on behalf of the Town as directed by the Town Council or as authorized in this Ordinance. For purposes of this ordinance, the term “Purchase” means to buy, procure, rent, lease, or otherwise acquire. The term includes the following activities:

(1) Preparing description of requirements.
(2) Solicitation or selection of sources.
(3) Preparation and award of contract.
(4) All phases of contract administration.
(5) All functions that pertain to purchasing.
(Reference, I.C. 5-22-2-24). The Town manager may not issue or execute bonds, notes, or warrants of the town. (Reference, I.C. 36-5-5-7).

The Purchasing Agent shall not expend any money of the Town for a purpose not authorized by law, or in an amount exceeding that authorized by law, or to a person not lawfully entitled to receive the money. The Purchasing Agent shall be bonded against violations of this section.

The Purchasing Agent is authorized to make purchased on behalf of other boards or officers of the Town (e.g. Clerk-Treasurer, Storm Water Board etc. . .), but shall comply with the description of requirements and the preference of sources established by such other board or officer when purchasing goods or services for that board or officer.

2.         Purchasing Limits:       The Purchasing Agent shall be authorized to make purchases within the limits prescribed below without prior approval of Town Council, provided that such purchase is for a lawful government purpose, and is made from an account containing sufficient funds which have been appropriated by the Town Council for that purpose. The Purchasing Agents’ prior spending authority shall be:

Custodian: Single Purchase Limit:
Town Manager $2,500.00
All purchases or expenditures that exceed the limitations set forth above shall require prior approval of the Town Council. In such event, a Purchase Order shall be submitted to the Clerk-Treasurer who shall distribute the Purchase Order to the Town Council at the next regularly scheduled meeting. Once approved by the Town Council, the Purchasing Agent may proceed with the purchase or expenditure as set forth herein.

3.         Purchase Orders:       Prior to any purchase or expenditure of funds, regardless of amount, the Purchasing Agent(s) shall submit a triplicate copy of a Purchase Order Form (State Board of Accounts General Form 98, a sample of which is attached hereto) to the Clerk-Treasurer and obtain a written determination from the Clerk-Treasurer that sufficient funds are available in the appropriate account to make the purchase. In the event that the Clerk-Treasurer determines that insufficient funds exist, the Clerk-Treasurer shall indicate on the face of the Purchase Order Form, that the purchase order is denied due to insufficient funds and promptly inform the Purchasing Agent of the unencumbered balance in the account. If there are sufficient funds in the account, the Clerk-Treasurer shall by the Clerk Treasurer’s signature certify the sufficient availability of funds for the Purchase to proceed unless the Clerk-Treasurer has notice that the Purchase in question would violate the law of this Ordinance.

The Purchasing Agent shall give a copy of the Purchase Order to the contract vendor and shall file a copy of the Purchase Order with the Clerk-Treasurer and shall retain a copy in the Purchasing Agent’s own files. If the Purchasing Agent makes a point of sale purchase on account, with petty cash, or with a Town credit card pursuant to a credit card ordinance (if any), the Purchasing Agent need not provide a copy of the Purchase Order to the Vendor.

The Clerk-Treasurer shall report at the next scheduled meeting of The Leo-Cedarville Town Council any instance of insufficient funds within an account and or ordinance violation associated with a submitted purchase order.

4.         Receipt of Goods and Services:       The Purchasing Agent or his/her qualified designee shall be responsible for receiving and inspecting all purchased goods, and inspecting all purchased services prior to accepting any goods or services into the Town and accepting any receipt, bill or invoice for such goods and services. If purchasing a good or service on behalf of a board or officer of the Town, the Purchasing Agent may require a designated, qualified representative of such board or officer to inspect the goods or services prior to accepting them on behalf of the Town. If the vendor requires the Purchasing Agent or such other person who receives the goods or services to sign a Bill of Lading, Delivery Ticket, or other document confirming delivery of the goods or performance of the service, the Purchasing Agent shall obtain and copy of such documentation as well.

5.         Invoice or Bill:       The Purchasing agent is responsible for insuring that a fully itemized invoice or bill is issued for each purchase. The Purchasing Agent, or the qualified person who was responsible for inspecting and approving the goods or services received shall sign each bill or invoice, certifying that the goods or services were received and were accepted by such person on behalf of the Town. The Purchasing Agent shall file with the Town’s Fiscal Agent the signed invoice or bill along with the Town’s copy of any Bill of Lading, Delivery Ticket or other documents received from the vendor or carrier.

6.         Emergency Purchases:       The Purchasing Agent may make purchases without Clerk-Treasurer review or Town Council Approval only in case of emergency situations requiring repairs to key systems or facilities that, if not repaired, would be detrimental to the public, town employees, or to town property, and it is not reasonably possible to obtain a determination of available funds from the Clerk-Treasurer or approval of the Town Council as applicable. In the event of such an emergency, the Purchasing Agent (s) shall notify the Clerk-Treasurer with a written Purchase Order for the purchase/expenditure along with a written justification/explanation describing the emergency consistent with the exceptions herein defined as soon as reasonably possible.

7.         Point of Sale Purchases:       Many purchases by the Purchasing Agent shall be made through purchases from a retail establishment where no formal contract or invoice is generated. In such transactions, the Purchasing Agent must still complete the Purchase Order form described above for the Town’s internal records and use a receipt from the point of sale vendor in lieu of the bill or invoice. Where possible, the Purchasing Agent should establish accounts with regular vendors that will allow the Purchasing Agent or designated Town Employees to purchase supplies as needed on account, with an invoice issuing to the Town on a monthly basis, provided that there is no finance charge, or interest charged if payments are made within thirty days of the date of invoice.

Pursuant to the Town’s Petty Cash Ordinance, the Purchasing Agent may utilize a duly created petty cash fund, over which the Purchasing Agent or other person is a custodian for purposes of paying for point of sale purchases. Such fund shall be replenished pursuant to the terms of the Petty Cash Ordinance.

If the Town establishes a Credit Card Ordinance, the Purchasing Agent may use a Town credit card for point of sale purchases consistent with the terms of the Credit Card Ordinance. However, the Purchasing Agent must still comply with the Purchase Order procedures set forth above before using such credit cards.

C. Purchase of United States Products Only

The Purchasing Agent shall purchase only supplies manufactured in the United States unless the Town Council determines that:

(A)     the needed supplies are not manufactured in the United States in reasonably available quantities;

(B)     the price of the supplies manufactured in the United States exceeds by an unreasonable amount the price of available and comparable supplies manufactured elsewhere;

(C)     the quality of the supplies manufactured in the United States is substantially less than the quality of comparably priced available supplies manufactured elsewhere; or

(D)     the purchase of supplies manufactured in the United States is not in the public interest.

D. Bidding Requirements
1. Purchases up to $2,500

The Purchasing Agent may purchase supplies with an estimated cost of less than $50,000 on the open market without inviting or receiving quotes or bids.

2. Purchases between $2,501 and $50,000

If the Purchasing Agent expects a purchase to be at least $2,501 but less than $50,000, the Purchasing Agent shall come to the Town Council at a regularly scheduled meeting for approval. The Purchasing Agent shall provide information to the Council regarding specifications for the purchase and regarding comparative costs/prices and qualifications of known vendors/suppliers. However, the Council shall retain the right to modify the specifications for the purchase, to specify a specific vendor/supplier or to require the Purchasing Agent to formally solicit quotes or go through a formal bidding process at its discretion.

3. Purchases between $50,000 and $150,000

If the Purchasing Agent expects a purchase to be at least $50,000, but not more than $150,000, the Purchasing Agent will invite quotes from at least three (3) vendors/persons known to deal in the types of supplies to be purchased. At least one (1) quote must come from vendors/persons who participate in state, federal or municipal pricing programs if such vendors/persons exist.

The Purchasing Agent shall mail an invitation to quote to at least three vendors/persons of his/her choice at least seven (7) days before the fixed time for receiving the quotes. The Purchasing Agent shall submit all quotes to Town Council for consideration, selection, approval or rejection. The Town Council shall award the contract to the lowest responsible and responsive offeror for each line or class of supplies required. The Town Council may reject all quotes.

The Purchasing Agent will notify vendors/persons of the Town Council’s decision. If the Purchasing Agent (s) does not receive a quote from a responsible and responsive vendor/person, he/she may use special purchasing methods set forth in I.C. 5-22-10-1 et. seq. to purchase the necessary supplies as long as the purchase is approved by Town Council.

3. Purchases Over $150,000

If the Purchasing Agent expects a purchase to be over $150,000, he shall use the competitive bidding procedures set forth in I.C. 5-22-7 et. seq.

E. Purchases of Services

The Purchasing Agent (s) may purchase services in whatever manner the Purchasing Agent (s) deems reasonable. The Purchasing Agent (s) may purchase services on the open market without receiving quotes or bids. However, preference will be given to service providers who participate in state, federal, or municipal pricing programs if such service provider exists. The Purchasing Agent (s) shall complete a Purchase Order Form which shall identify the vendor and submit the Purchase Order Form as defined herein.

F. Special Purchases

The Purchasing Agent may make “special purchases” without soliciting bids or proposals. A special purchase may be made in the following circumstances

(1) where there exists an emergency condition (as defined above);
(2) where there exists a unique opportunity to obtain supplies or services at substantial savings;
(3) at an approved auction;
(4) when compatibility of equipment or parts is an important factor;
(5) when there is a single source supplier of the items needed;
(6) or as otherwise allowed by I.C. 5-22-10.
Special purchases may be made without soliciting bids or proposals, provided that it is made with such competition as is practical under the circumstances. The Purchasing Agent shall submit a written recommendation to the Town Council describing the basis for the award of the contract. The Town Council may choose to accept the recommendation and award the contract, or may reject the recommendation. The Purchasing Agent shall comply fully with I.C. 5-22-10 when making a special purchase, and shall maintain the contract records for a special purchase in a separate file which shall include a written determination of the basis for the special purchase and the selection of a particular contractor. Such file shall be maintained for a minimum of five (5) years and shall include the name of each contractor, the amount and type of each contract, and a description of the supplies purchased under each contract.
G. Insurance Requirements for Certain Contracts

Insurance needs will vary from contract to contract depending on the size and nature of the contract. Generally speaking, for all contracts other than point of sale transactions, the Purchasing Agent should verify that the contractor carriers General Liability and Property Damage insurance, by obtaining a copy of the certificate of insurance establishing proof of such insurance before entering into the contract or allowing the contractor to provide the goods or services to the Town. Also, where possible, the Purchasing Agent should confirm that manufactures of materials purchased by the Town should carry Product Liability Insurance. Contractors performing public works jobs should, in addition to any bonding requirements and general liability insurance, carry Completed Operation coverage. Any contractor providing professional services should carry Professional Liability Insurance. The Purchasing Agent should confer with the Town Attorney regarding the appropriate type of insurance. The Purchasing Agent should obtain approval of the Town Council before waiving the proof of insurance requirements set forth here.

For large contracts or contracts involving specific hazard, where possible, the Purchasing Agent should try to negotiate as part of the contract that the contractor have the Town added as an additional insured on the contractor’s insurance policy, and that the contractor indemnify and hold the Town harmless for its conduct. Such language should be included in the face of the written contracts, and approved by the Town Attorney. For ongoing contracts, the contract shall provide that the purchasing agent shall be required to maintain such insurance throughout the contract period.

The appropriate amount of such coverage will vary depending on the nature and size of the contract. If reasonable, the Purchasing Agent should require the contractor to carry insurance up to seven hundred thousand dollars ($700,000.00) for injury or death of one person and five million dollars ($5,000,000.00) aggregate for injury or death to all persons and one million dollars ($1,000,000.00) for any property damage. The Purchasing Agent should seek Town Council approval for a modification of this amount or a waiver of the certificate of insurance

Before a Purchasing Agent may enter into a contract for any amount exceeding one thousand dollars ($1,000) in value the Purchasing Agent shall require the contractor to provide a certificate of compliance from the Indiana Workers Compensation Board showing that the contractor has complied with I.C. 22-3-2-5, 22-3-5-1, and 22-3-5-2. All subcontractors on the contract must likewise provide proof of Workers Compensation Insurance coverage for all workers. A contractor may not avoid this requirement by designating its workers as “independent contractors” unless the “independent contractors” can provide proof of valid workers compensation insurance. (Reference, I.C. 22-3-2-14(b)).

Nothing in this section shall excuse or replace bonding requirements under State law or Town Ordinance for any public works or development project.

 

Passed and adopted by the Town Council of the Town of Leo-Cedarville, Indiana on this   14th   day of   February  , 2012.

  John Clendenen        
John Clendenen
President

  Tim Richards             
Tim Richards
Council Member

  Kevin Veatch             
Kevin Veatch
Council Member

  Paul Steffens            
Paul Steffens
Council Member

  Ted Garton               
Ted Garton
Council Member

      ATTEST: John Eastes            
John Eastes
Clerk-Treasurer