Discussion:
Back in May 2017, the City Council passed Resolution No. 7875 revising the city's purchasing policy which aligned the city administrator purchasing guidelines with the City Code allowing the city administrator to approve purchases up to $25,000. The policy also delegated authority to the city administrator to pay claims.
Part of the rational behind allowing the city administrator to release payments was the implementation of an automated accounts payable system that went live last summer. The automated accounts payable system has controls and purchasing limits coded into the accounts payable process. A video of this process was presented to Council last winter. This new system has further strengthened our internal controls over payment processing and has resulted in a more timely payment of vendors. The city is now paying vendors within a matter of a week or two versus four weeks on average a year ago.
Since the EDA and the City are legally separate entities, the statute allowing the Council to delegate payment authority to the city administrator does not apply to the EDA. Thus the EDA is still approving the claims list, whereas the City Council is reviewing the claims list as a report only with no formal action taken.
From an operational standpoint, the EDA and the City's checks are processed together since the EDA is a fund within the City. What can often happen is that the same vendor will provide services to both the EDA and the City. We will cut the vendor one check for both invoices. However, one portion of that check can be released immediately and one part of that check needs to wait to be released after EDA Commission approval. Additionally, since the EDA only meets monthly making sure vendors are paid within the 35 day statutorily required window is problematic.
Minnesota Statute Section 469.097, subdivision 7 of the EDA act does allow the Authority to delegate authority to the executive director powers or duties that Authority deems proper. In order to ensure timely payment of bills and other claims and to mirror the bill paying process on the city side, staff would recommend the Authority delegate purchasing authority and the payment of bills and claims to the executive director for items up to $25,000.