CITY COUNCIL: Resolution for Cal-Card Service Agreement with U.S. Bank

Meeting Date: August 4, 2009
Prepared by: Joyce Giuffre, Admin Svcs Director

City Council
Agenda Item Summary

Name: Consideration of a Resolution authorizing the City Administrator to execute a Cal-Card service agreement with U.S. Bank and approve revisions to City Policy A2006-01 to implement the Cal-Card program.

Description: The Cal-Card purchase card program was originally implemented by the State Department of General Services (DGS). DGS awarded the Cal-Card program agreement to U.S. Bank in October 2006. Local agencies may contract to be a participating agency of the Agreement through an Addendum between the agency and U.S. Bank (see Exhibit “A”).

The purpose of the Cal-Card program is to provide a method to procure and pay for non-critical items and reduce invoice and check processing costs. It is not intended to circumvent the purchasing system, per the City’s Municipal Code.

Benefits of the Cal-Card program include:
• Built-in controls, such as dollar limits, merchant limits, commodity limits set per card.

• Facilitates emergency purchases.

• Eliminates multiple vendor invoices and related invoice processing costs.

• Online transaction management and dispute resolution.

• Potential rebates to the City, such as Prompt Payment Rebate, Volume Sales Rebate and Average Transaction Rebate

The City’s existing Policy A2006-01 is attached with proposed revisions to implement the Cal-Cards purchasing program (see Exhibit “B”). The revised policy outlines the procedures for cardholders and incorporates procedures when using Cal-Card purchase cards.

The City Attorney has reviewed the U.S Bank service agreement.

Overall Cost:
City Funds: No cost to participate in the Cal-Card program.

Staff Recommendation: Adopt the Resolution.

Important Considerations: By participating in the Cal-Card purchase program, the City will reduce invoice processing costs and will gain from the program’s other benefits.

Decision Record: None

Reviewed by:

____________________________ _____________________
Rich Guillen, City Administrator Date

CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
RESOLUTION 2009-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA AUTHORIZING THE CITY ADMINISTRATOR TO EXECUTE A CAL-CARD SERVICE AGREEMENT WITH U.S. BANK AND APPROVE REVISIONS TO CITY POLICY A2006-01 TO IMPLEMENT THE CAL-CARD PROGRAM

WHEREAS, the Cal-Card purchase card program is offered by U.S. Bank through an
agreement with the State Department of General Services; and

WHEREAS, local agencies may contract to be a participating agency of the Cal-Card
agreement through an Addendum between the agency and U.S. Bank; and

WHEREAS, the City desires to be a participating agency of the Cal-Card agreement; and

WHEREAS, City policy A2006-01 needs to be modified in order to implement the Cal-Card purchasing program.

NOW, THEREFORE BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES:
1. Authorize the City Administrator to execute a Cal-Card service agreement with U.S. Bank.

2. Approve the revisions to City Policy A2006-01.

PASSED AND ADOPTED BY THE CITY COUNCIL this 4th day of August 2009 by the following roll call vote:

AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:

SIGNED,

_________________________
ATTEST: SUE McCLOUD, MAYOR

_________________________
Heidi Burch, City Clerk

EXHIBIT B

PROPOSED REVISIONS – Exhibit “B”
City of Carmel-by-the-Sea
Credit Card and Cal-Card Policy and Procedures
A2006-01
Purpose
These guidelines establish the City of Carmel-by-the-Sea’s basic policy and procedures for managers using City credit or Cal-Cards cards for the purchase of small dollar supplies and services on behalf of the City and pay for travel expenses when on City business.

Objective
The use of the City credit cards by managers instead of other payment options is intended to:
• Reduce procurement and payment processing costs.

• Minimize out-of-pocket expenses by managers that need to be reimbursed after the
employee incurs the costs on his/her personal credit card.

• Enhance internal controls by better identifying specific managers making supply, service or travel purchases on behalf of the City.

• Take advantage of cost-saving opportunities by purchasing online where credit card
payment is required at the time of placing the order.

Policy
• The Finance Manager Administrative Services Director will apply for City credit or
purchasing cards as requested by managers and approved by the City Administrator. The
monthly card limit is $1,000 for each manager who is issued a card. will be determined according to specific needs of each department.

• Credit card and Cal-Cards purchases must follow City purchasing guidelines as set by municipal code section 3.12. If used for travel expenses, the use of the credit and Cal-Cards must follow travel authorizations and per diem amounts per City policy.

• Employees may not use City credit or Cal-Cards for personal expenses, even if the intent is to reimburse the City at a later date. If a City credit or Cal-Card is used for personal expenses, it will be considered a misuse of City’s funds and will result in disciplinary action, up to and including termination.

Procedures
• Requesting credit card or Cal-Cards – Managers will submit credit card or Cal-Card
requests to the City Administrator for approval. After approval, the Finance Manager
Administrative Services Director will submit the credit card application with the
appropriate card limits.

EXHIBIT B

• Custodian of credit card or Cal-Card – Managers are regarded as the primary
custodian of the credit card and should keep a record of the card status (i.e. a check out log that includes the name, date, and purpose the card was used). When the card is not in use, the Manager shall ensure the card is maintained in a secure location on city premises.

Cal-Cards may be issued to support staff with City Administrator approval.
• Proper Documentation – Each cardholder is responsible for obtaining itemized
receipts/invoices from the vendor. The receipts/invoice should reflect the following
information:

• Description of goods or services purchased

• Quantity purchased

• Price per item

• Amount of sales tax and total amount

• Shipping charges, if any

• Timely payment – Managers Cardholders are responsible for ensuring that monthly
credit card statements are submitted to the Administrative Coordinator with supporting documentation in a timely manner so that the Finance Manager Administrative Services Director can issue payment by the due date.

• Standard Process for Payment – The City’s standard accounts payable system will be
used to process monthly credit card and Cal-Card statements for payment. For each
charge, supporting documentation, including original invoices, should be attached and
account numbers indicated.

• Disputed charges – Cardholders are responsible for ensuring that the vendor, the issuing bank, and the Finance Manager Administrative Services Director are notified
immediately of any disputed charges. Copies of written correspondence will be
forwarded to the Finance Manager Administrative Services Director.

• Lost or Stolen Cards - Cardholders are responsible for notifying the issuing bank and the Finance Manager Administrative Services Director if the card is lost or stolen. Failure to do so may result in making the cardholder responsible for any fraudulent use of the card.

• Return of the Card Upon Request or Termination – Cardholders will surrender their
card upon request of the City Administrator or upon termination of employment with the City.