Loading...
RPVCCA_CC_SR_2015_01_20_E_Purchasing_Card_PgmCITYOF MEMORANDUM iRANCHO PALOS VERDES TO: HONORABLE MAYOR & CITY COUNCIL MEMBERS FROM: DENNIS McLEAN, DIRECTOR OF FINANCE DATE: JANUARY 20, 2015 SUBJECT: PURCHASING CARD PROGRAM REVIEWED: CAROLYNN PETRO, ACTING CITY MANAGED Staff Coordinator: Allan Kaufman, Senior Administrative Analyst RECOMMENDATION Receive and file State of California Participating Addendum No. 7-14-99-22 Local Agency Subscription Agreement ("Subscription Agreement"); and 2. Approve the Subscription Agreement to allow the City to participate in the State of California's Purchase Card Services Program (CAL -Card); and 3. Approve Certificate of Authority; and 4. ADOPT RESOLUTION NO. 2015- : A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES AUTHORIZING THE CITY'S USE OF THE CAL -CARD PROGRAM THROUGH U.S. BANKAND DESIGNATING THE CITY'S SIGNATORIES BACKGROUND AND DISCUSSION On June 19, 2012, the City Council adopted Policy No. 43: Banking Services Procurement, establishing the City's written policy for evaluation, the competitive process and the procedure for reporting its findings to the City Council. As part of this policy, the City Treasurer shall perform a biannual evaluation. Staff expects the first evaluation will be performed in 2016, two years after the City transitioned to Bank of the West in 2014. This evaluation will entail a review of the City's banking fees and services. One such service is the payment (purchasing) card program. E-1 PURCHASING CARD PROGRAM January 20, 2015 Page 2 of 3 Municipal Code 2.44.070 authorizes credit card purchases and states: "Purchases made by credit cards authorized by the city council and issued to those employees approved by the city manager, provided such purchases conform to the written policy established by the city manager or his or her designee. " Purchasing cards provide a flexible and cost-effective way to manage appropriate purchases, while providing streamlined accounting for incidental and time critical expenses (e.g. workshop registrations, travel, small hardware supplies, and gas for City vehicles). Purchasing cards are issued to City Council Members and designated employees to use for valid City related expenses. Furthermore, manual tracking is eliminated and replaced with automated billing reports. The City currently has 24 purchasing cards (credit cards) under one umbrella account with Bank of America with a total combined credit limit of $200,000. One card is in the possession of the Finance department with a maximum credit limit of $100,000 to facilitate a mechanism to make purchases during emergency events, if ever necessary. Currently, there is no cost to the existing program as the City pays no issuance fees and timely pays its account in full each month, thus avoiding finance charges. When the City migrated its banking services in 2014 to Bank of the West from Bank of America, purchasing card services were not included in the umbrella agreement as they are classified as "service enhancements". As a result, the City has kept the purchasing card service with Bank of America until a suitable replacement program could be found. Staff has researched Bank of the West's purchasing card program along with the state's CAL -Card program and determined that the CAL -Card best matched the City's needs. CAL -Card Program am The CAL -Card program is a VISA credit card system administered by the State of California Department of General Services through U.S. Bank. The CAL -Card program is solely geared towards governmental agencies. Presently, there are over 200 cities in the state that participate in the CAL -Card program including three (3) in the South Bay: Redondo Beach, Manhattan Beach and Lawndale. Staff contacted these three Cities and received positive feedback from all of them on their experience using the CAL -Card program through U.S. Bank. The CAL -Card purchasing card program would facilitate the expense reconciliation process as well as provide other benefits to the City, most notably: No cost to participate in the program. Reduces number of requisitions, purchase orders, invoices, checks and costly/paper-based processing; one invoice is generated for all activity during a billing period. The City will receive a rebate check of 1.30% of the transaction amount by mail E-2 PURCHASING CARD PROGRAM January 20, 2015 Page 3 of 3 every quarter that will be deposited as miscellaneous revenue. • No deposit relationship is required. • Suppliers are paid promptly — within two to three days. • Allows Program Administrators to establish pre -determined user authorization through spending controls including cycle, single purchase or merchant category through its user-friendly online portal. • Provides 24-hour program management assistance with authorizations, issues, and inquiries. • Proactive general fraud protection that comprises of 24/7 monitoring based on geographic and spending patterns. • Extensive fraud coverage up to $100,000 per cardholder. Based on Staff's research, it would appear that Bank of the West's purchase card program is positioned to better accommodate larger cities that have a higher transaction volume relative to that at Rancho Palos Verdes. Accordingly, the City would not have access to all of Bank of the West's expense reporting tools. The City would also not be able to take advantage of the Bank of the West's primary rebate (rewards) program as it would not meet the minimum annual transaction amount of $750,000. The City's average transaction amount is approximately $260,000 annually. In addition, the City would only receive a 0.50% rebate based on its annual transaction amount. Staff felt this rebate rate was not competitive to that offered by the CAL -Card program. Implementation A standard implementation takes 30-60 days after signing the Subscription Agreement and Certificate of Authority; upon which time, the City will transfer the City's purchasing card service from Bank of America to U.S. Bank (through the CAL -Card program). FISCAL IMPACT There is no anticipated cost to the City. Attachments A) Subscription Agreement - U.S. Bank B) Certificate of Authority - U.S. Bank C) Draft Resolution E-3 State of California Participating Addendum No. 7-14-99-22 Local Agency Subscription Agreement This Local Agency Subscription Agreement ("Local Agency Subscription Agreement") constitutes an agreement to participate under the terms and conditions of the Purchase Card Services Participating Addendum No. 7-14-99-22 ("Participating Addendum") signed September 29, 2014 and entered into by U.S. Bank National Association ("U.S. Bank") and the State of California, Department of General Services ("State"). This Local Agency Subscription Agreement is entered into by U.S. Bank and the "Local Governmental Agency" identified herein, and shall become effective upon signing by U.S. Bank ("Effective Date"). RECITALS A. The State has entered into the Participating Addendum for the purpose of making available a Purchase Card Program as described in the Participating Addendum for use by State of California state agencies and local governmental agencies; B. The State is willing to permit Local Governmental Agency to participate in the Purchase Card Program provided that Local Governmental Agency assumes all responsibility and liability for Local Governmental Agency's performance of the terms and conditions of the Participating Addendum as if Local Governmental Agency was the entity signing the Participating Addendum, but Local Governmental Agency shall not be liable for the acts and omissions of the State under the Participating Addendum or this Local Agency Subscription Agreement The State shall not bear liability or responsibility for Local Governmental Agency under the Participating Addendum or this Local Agency Subscription Agreement; and C. Local Governmental Agency has received a copy of the Participating Addendum from the State, and after a thorough review of the Participating Addendum, desires to participate as a Local Governmental Agency under the Participating Addendum. Participating Addendum No. 7-14-99-22 is incorporated into this Local Agency Subscription Agreement in its entirety and all terms and conditions of the Participating Addendum apply to the Local Governmental Agency. AGREEMENT Now therefore, in consideration of the foregoing Recitals, the mutual premises and covenants set forth in the Participating Addendum, which are incorporated herein by reference, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, all parties agree as follows: Local Governmental Agency Responsibility. Local Governmental Agency agrees to accept and perform all duties, responsibilities and obligations required of Participating Agencies as set forth in the Participating Addendum Authority. The representations, warranties and recitals of Local Governmental Agency set forth in this Local Agency Subscription Agreement and the Participating Addendum constitute valid, binding and enforceable agreements of Local Governmental Agency. All extensions of credit made to Local Governmental Agency pursuant to this Local Agency Subscription Agreement and the Participating Addendum will be valid and enforceable obligations of Local Governmental Agency and Local Governmental Agency shall pay to U.S. Bank all Debts incurred by Local Governmental Agency in accordance with the terms of the Participating Addendum and this Local Agency Subscription Agreement. The execution of this Local Agency Subscription Agreement and the performance of the obligations hereunder and under the Participating Addendum are within the power of Local Governmental Agency, have been authorized by all necessary action and do not constitute a breach of any contract to which Local Governmental Agency is a party or is bound. 3. Purpose of Card Use. Local Governmental Agency declares that cards shall be used for official Local Governmental Agency purchases only, and shall not be used for individual consumer purchases or to incur consumer debt. Local Governmental Agency warrants that it possesses the financial capacity to perform all of its obligations under the Participating Addendum and this Local Agency Subscription Agreement. 4. The notice address for Local Governmental Agency is: City of Rancho Palos Verdes 30940 Hawthorne Blvd Rancho Palos Verdes, CA 90275 Attn: Finance Department 5. Authorization. Local Governmental Agency certifies to U.S. Bank that the person executing this Local Agency Subscription Agreement is authorized by Local Governmental Agency in accordance with its organization rules and applicable law to bind Local Governmental Agency to the terms and conditions of this Local Agency Subscription Agreement, including the authority to incur Debt in the name of Local Governmental Agency. 6. Execution. By signing below, the individual(s) signing this Local Agency Subscription Agreement is/are acting in his or her capacity as an authorized signing officer of Local Governmental Agency and not in his or her personal capacity, and certifies and warrants that (1) all action required by Local Governmental Agency organizational documents to authorize the signer(s) to act on behalf of Local Governmental Agency in all actions taken under this Local Agency Subscription Agreement, including but MMWR 55772 Page 1 of 5 R 10/2014 © 2014 U.S. Bank National Association. All rights reserved. E-4 not limited to, the authority to incur Debt on behalf of Local Governmental Agency, has been taken, (2) each signer is empowered in the name of and on behalf of Local Governmental Agency to enter into all transactions contemplated in this Local Agency Subscription Agreement, and (3) the signatures appearing on all supporting documents of authority, if any, are authentic. 7. Reliance. Local Governmental Agency has read, understands and agrees to all terms and conditions in this Local Agency Subscription Agreement and the Participating Addendum, and U.S. Bank is entitled to act in reliance upon the authorizations and certifications set forth herein. IN WITNESS WHEREOF, the parties have, by their authorized representatives, executed this Local Agency Subscription Agreement. Dated this day of .20 By Local Governmental Agency: City of Rancho Palos Verdes (Name) (Signature of Authorized Signer) Carolynn Petru (Printed Name of Authorized Signer) Acting City Manager (Printed Title of Authorized Signer) Approved as to form: (Signature of Attorney for Local Governmental Agency) Carol Lynch_ _ _ (Printed Name of Attorney) Dated this day of , 20_ By U.S. Bank: U.S. Bank National Association (Signature of Authorized Signer) Kelly M. Caspers (Printed Name of Authorized Signer) Vice President (Printed Title of Authorized Signer) MMWR 55772 Page 2 of 5 R 10/2014 © 2014 U.S. Bank National Association. All rights reserved. E-5 CERTIFICATE OF AUTHORITY 'INSTRUCTIONS' Before completing the Certificate of Authority, please read: • If the Local Agency Subscription Agreement being signed was "approved as to form" by an attorney, it is not necessary to complete the attached Certificate of Authority (C of A). • If the Local Agency Subscription Agreement was not "approved as to form" by an attorney, please complete the attached C of A (page 5). • Be sure to date all documents upon signing. Undated documents cannot be accepted and will be returned for dating. Signing Instructions for Certificate of Authority Note that three (3) different individuals must sign and date the C of A. If the Local Governmental Agency does not have three individuals who are authorized to sign on behalf of the Local Governmental Agency, please refer to page 4. Section 1 Organizational Information- Enter the legal Local Governmental Agency name and the tax ID number on the C of A. Note: The legal name of the Local Governmental Agency name is required. The legal name is usually the name on the Local Governmental Agency's financial statements. Section 2 Authorized Persons - The individual who signed the Local Agency Subscription Agreement must complete and sign in Section 2. Section 3 Execution Requirement - Check only one box in Section 3 to indicate how many individuals (either 1 or 2) that the Local Governmental Agency requires to sign legal documents on behalf of the Local Governmental Agency Section 4 Execution - No action required. Section 5 Certification - Two (2) individuals must sign and date Section 5 as well as insert their names and titles. Note. The individual(s) who signed in Section 2 cannot sign in Section 5 or this document is invalid. • An officer of the Local Governmental Agency ("Officer One") is required to sign the top area of Section 5 attesting to the signatures in Section 2. • One other officer of the Local Governmental Agency ("Officer Two") must sign the bottom area of Section 5 attesting to the signature of Officer One. Please see examples below: 5. Certification. I certify that I am the Secretary and I am acting in my official capacity as an authorized officer who has been given the authority by the Local Governmental Agency to certify that the Authorized Person(s) has/have the full power and authority under applicable law and the governance rules relating to the Local Governmental Agency to execute and deliver to U.S. Bank, on behalf of the Local Governmental Agency, and to bind the Local Governmental Agency under, the Documents for the purpose of establishing and extending the Services. I also certify that the name(s) and title(s) of the Authorized Person(s) set forth above are correct and that the signature appearing beside each name is a true and genuine specimen of his/her signature. JOHN DOE 1 PRINTED NAME OF THE SECRETARY OF THE LOCAL GOVERNMENTAL AGENCY n (CANNOT BE AN AUTHORIZED PERSON LISTED IN SECTION 2) n Signature of the Secretary of the Local Governmental Agency n DATE I certify that I am an officer of the Local Governmental Agency, and as such, I certify that the above-named Secretary is acting in such capacity on behalf of the Local Governmental Agency, the signature below is my genuine signature and the signature above is the genuine signature of such Secretary. JANE SMITH, TREASURER n PRINTED NAME & TITLE OF INDIVIDUAL SIGNING BELOW (1 (CANNOT BE AN AUTHORIZED PERSON LISTED IN SECTION 2) Signature 11 Attested by One (1) Other Individual of the Local Governmental Agency DATE MMWR 55772 Page 3 of 5 © 2014 U.S. Bank National Association. All rights reserved R 10/2014 E-6 EXAMPLES TO Signing Instructions for Certificate of Authority (C Of A) EXAMPLE 1: 1. One (1) person is required to sign legal documents, and 2. Local Governmental Agency has more than two (2) authorized signatories who can attest to signatures of other signatories. Local Agency Subscription Agreement: Person A signs C of A Section 2: Person A completes and signs. C of A Section 3: First box is checked. C of A Section 5: Person B (preferably the Secretary) signs attesting to the signature of Person A AND Person C signs attesting to Person B's authority and signature EXAMPLE 2: 1. Two (2) people are required to sign legal documents, and 2. Local Governmental Agency has more than two (2) authorized signatories who can attest to signatures of other signatories. Local Agency Subscription Agreement: Persons A and B sign. C of A Section 2: Persons A and B complete and sign. C of A Section 3: Second box is checked. C of A Section 5: Person C (preferably the Secretary) signs attesting to the signatures of Persons A and B AND Person D signs attesting to Person C's authority and signature. EXAMPLE 3: 1. One (1) person is required to sign legal documents, and 2 Local Governmental Agency has only one (1) other authorized signatory who can attest to signatures of other signatories. Local Agency Subscription Agreement: Person A signs. C of A Section 2: Person A completes and signs. C of A Section 3: First box is checked. C of A Section 5: Person B (preferably the Secretary) signs attesting to the signature of Person A - NOTE: If the Secretary can sign the C of A, than they cannot be Person A; they must be Person B. AND Person A signs attesting to Person B's authority and signature. EXAMPLE 4: 1. Two (2) people are required to sign legal documents, and 2. Local Governmental Agency has only one (1) other authorized signatory who can attest to signatures of other signatories. Local Agency Subscription Agreement: Persons A and B sign. C of A Section 2: Persons A and B complete and sign. C of A Section 3: Second box is checked. C of A Section 5: Either Person A or B (preferably the Secretary) signs attesting to the signature of Persons A and B. NOTE: If the Secretary can sign the C of A, than they must sign in Section 4 and the other person must sign in Section 5 AND the Person who did not sign Section 4 signs attesting to the signing authority and signature of the person who did sign in Section 4, subject to the note above. MMWR 55772 Page 4 of 5 © 2014 U.S. Bank National Association. All rights reserved. R 10/2014 E-7 CERTIFICATE OF AUTHORITY 1. Organizational Information. This Certificate of Authority has been completed on behalf of the following Local Governmental Agency (the "Local Governmental Agency"): Local Governmental Agency Legal Name: Federal Tax Identification Number: City of Rancho Palos Verdes 95-2867872 2. Authorized Persons. In accordance with the governance rules relating to the Local Governmental Agency, the following individuals (the "Authorized Person(s)") are authorized, on behalf of the Local Governmental Agency, to execute and deliver to U.S. Bank National Association ("U.S. Bank") and/or its affiliates the applicable contract(s), any applicable addenda and/or amendments thereto and any other documents or writings required by U.S. Bank (collectively, the "Documents") for the purpose of establishing one (1) or more card programs, extending credit and providing related services to the Local Governmental Agency with U.S Bank in the United States (collectively, the "Services"): Name Carol nn Petru Title j Signature Acting City Manager F Kathryn Downs Deputy Director of Finance 3. Execution Requirements. The governance rules relating to the Local Governmental Agency require the following number of Authorized Persons to sign the Documents for the Services (choose only one box): ❑ One (1) Authorized Person ® Two (2) Authorized Persons 4. Execution. By signing the Documents, each individual signing in his or her capacity as an authorized signing officer of the Local Governmental Agency and not in his or her personal capacity, certifies and warrants that (a) all action required by Local Governmental Agency's organizational documents to authorize the signer(s) to act on behalf of the Local Governmental Agency in all actions taken under the Documents, including but not limited to, the authority to incur debt on behalf of the Local Governmental Agency, has been taken, (b) each signer is empowered in the name of and on behalf of the Local Governmental Agency to enter into all transactions and Services contemplated in the Documents, and (c) the signatures appearing on all supporting documents of authority are authentic. 5. Certification. I certify that I am the City Clerk and I am acting in my official capacity as an authorized officer who has been given the authority by the Local Governmental Agency to certify that the Authorized Person(s) has/have the full power and authority under applicable law and the governance rules relating to the Local Governmental Agency to execute and deliver to U.S. Bank, on behalf of the Local Governmental Agency, and to bind the Local Governmental Agency under, the Documents for the purpose of establishing and extending the Services. I also certify that the name(s) and title(s) of the Authorized Person(s) set forth above are correct and that the signature appearing beside each name is a true and genuine specimen of his/her signature. CARLA MORREALE 1T Printed Name of the CITY CLERK of the Local Governmental Agencyft (Cannot be an Authorized Person listed in Section 2) Signature of the City Clerk of the Local Governmental Date I certify that I am an officer of the Local Governmental Agency, and as such, I certify that the above-named City Clerk is acting in such capacity on behalf of the Local Governmental Agency, the signature below is my genuine signature and the signature above is the genuine signature of such City Clerk. TERESA TAKAOKA. DEPUTY CITY CLERK I Printed Name & Title of Individual Signing Below 9 (Cannot be an Authorized Person listed in Section 2) Signature It Attested by One (1) Other Individual of the Local Governmental Agency Date MMWR 55772 Page 5 of 5 R 10/2014 © 2014 U.S. Bank National Association. All rights reserved. E-8 RESOLUTION NO. 2015- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES AUTHORIZING THE CITY'S USE OF THE CAL - CARD PROGRAM THROUGH U.S. BANK AND DESIGNATING THE CITY'S SIGNATORIES WHEREAS, On June 19, 2012, the City Council adopted Policy No. 43: Banking Services Procurement, establishing the City's written policy for evaluation, the competitive process and the procedure for reporting its findings to the City Council. As part of this policy, the City Treasurer shall perform a biannual evaluation. This evaluation will entail a review of the City's banking fees and services. One such service is the payment (purchasing) card program; and states: WHEREAS, Municipal Code 2.44.070 authorizes credit card purchases and "Purchases made by credit cards authorized by the City Council and issued to those employees approved by the City Manager, provided such purchases conform to the written policy established by the City Manager or his or her designee."; and WHEREAS, The CAL -Card program is a VISA credit card system administered by the State of California Department of General Services through U.S. Bank; and WHEREAS, on December 11, 2014, due to forthcoming changes in City staff, the Acting City Manager/Deputy City Manager appointed the Deputy Director of Finance as Acting City Treasurer; and WHEREAS, on January 6, 2015, the City Council approved Acting City Manager/Deputy City Manager Carolynn Petru and Acting City Treasurer Kathryn Downs as the City's signatories of record for its banking system ; and WHEREAS, it is appropriate to designate the same signatories for the City's purchasing card system as for its banking system. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES HEREBY FINDS, ORDERS AND RESOLVES AS FOLLOWS: Section 1: The City Council hereby authorizes the City's participation in the CAL - CARD Visa credit card program through U.S. Bank. Section 2: The following City officials, who are identified by position title, are hereby each designated and appointed to serve as signatories on the CAL -Cards established with U.S. Bank and issued to the City in accordance with the State of California Participating Addendum No. 7-14-99-22 Local Agency Subscription Agreement and Certificate of Authority: E-9 (1) Carolynn Petru, Acting or Interim City Manager/Deputy City Manager; and (2) Kathryn Downs, Acting City Treasurer/Deputy Director of Finance. PASSED, APPROVED, AND ADOPTED THIS 20TH DAY OF JANUARY 2015. MAYOR ATTEST: CITY CLERK State of California ) County of Los Angeles )ss City of Rancho Palos Verdes ) I, CARLA MORREALE, City Clerk of the City of Rancho Palos Verdes, hereby certify that the above Resolution No. 2015- was duly and regularly passed and adopted by the said City Council at a regular meeting held on January 20, 2015. CITY CLERK CITY OF RANCHO PALOS VERDES E-10