City of Culver City, California
City Council Agenda Item Report
RECOMMENDATION:
That the City Council approve the amended Council Policy Statement Number 4209,
entitled “Executive/Purchase Cards,” rescind Council Policy Number 4205, “Use of
Credit Cards,” amend Resolution 95-R005, and adopt Resolution 2005-R___.
BACKGROUND/DISCUSSION:
On January 23, 1995, City Council approved twenty-seven (27) City Council policies
with the passage of Resolution 95-R005. This Resolution included Council Policy
Number 4205, “Use of Credit Cards” (Attachment 1). Subsequently, Council Policy
Number 4209, “Executive/Purchase Cards Policy,” (Attachment 2) was established
on December 16, 1996 by Resolution 96-R121. It was later revised on March 25,
2002.
The Executive/Purchase Cards Policy is a stand alone Council Policy that did not
replace Council Policy 4205, “Use of Credit Cards”. At the time, the staff report
recommending adoption of the Executive/Purchase Cards Policy sought to improve
the efficiency and control of purchasing practices for low-priced items in lieu of the
administrative burden associated with using petty cash. Alternatively, the “Use of
Credit Cards” Policy was adopted to facilitate business travel, lodging, and meal
expenses.
The proposed policy combines the Credit Card Policy and Executive/Purchasing
Card Policy to form one consistent policy. For this reason, staff recommends that
the proposed Executive/Purchase (Credit) Card Policy replace the “Use of Credit
Meeting Date: 09/19/05 Item Number: A-1
AGENDA ITEM: Consideration of Amendments to City Council Policies on
Executive/Purchasing Cards.
Contact Person/Dept.:
Nick Kimball, Management Analyst
Phone Number:
(310) 253-5682
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [X] Attachments: [X]
Public Notification:
Master Notification List (9/14/05)
Department Approval:
Scott Bixby 9/13/05
CAO Approval:
Scott Bixby for Jerry Fulwood 9/13/05
City Controller Approval:
N/ACity of Culver City, California
City Council Agenda Item Report
Cards” Policy. The remainder of this report refers only to the Executive/Purchase
(Credit) Card Policy.
Currently, the Purchasing Office and Approving Official, such as a Department Head
or Manager, review all Purchase Card expenses. Prohibited purchases are listed in
the current policy and card use is limited to employees whose names appear on the
Purchase Card.
The purpose of amending the Executive/Purchase Cards Policy is to create one
consistent policy, increase employee accountability for expenses, further delineate
responsibility for oversight of card expenses and issuance, and provide limited
exceptions of card use to meet departmental needs. The proposed policy includes
language that identifies and increases accountability, responsibility, and
departmental flexibility for Executive/Purchase card use.
Development of Policy
In developing the proposed amendments to the policy, staff reviewed current policies
and procedures, evaluated past practice, and contacted other cities to obtain
information about similar policies.
Information regarding purchasing card programs was gathered via an email survey
using the Municipal Management Association of Southern California (MMASC) list
serve. Staff also conducted phone interviews with Beverly Hills, Santa Monica, and
West Hollywood and reviewed credit card policies mailed from other cities.
The proposed policy amendments were presented to the Budget Subcommittee on
four occasions between June 2004 and August 2005. At these meetings,
subcommittee members and a number of Department Heads reviewed the policy
and suggested revisions. Staff incorporated the input received from the
subcommittee members into the proposed policy.
Proposed Policy
The following amendments, suggested by the Budget Subcommittee and staff, have
been incorporated into the proposed Executive/Purchase (Credit) Cards Policy
(Attachment 3, Exhibit A):
1. Approving Official
a. Current Policy: The Approving Official is responsible for reviewing
charges to ensure that purchases are appropriate, comply with applicable
policies, and are properly documented.City of Culver City, California
City Council Agenda Item Report
b. Proposed Policy: Language is added to more explicitly define who may be
an Approving Official, including Department Heads or a manager or
supervisor that has been given authority by the Department Head. The
City Treasurer is responsible for reviewing Department Head and CAO
Executive/Purchase card purchases.
2. Executive/Purchasing Card Eligibility and Issuance
a. Current Policy: Requests for Executive/Purchasing cards must be
approved by the Responsible Official (i.e. CAO, Department Heads, City
Clerk and City Treasurer) on a case-by-case basis.
b. Proposed Policy: The administrative process is streamlined by
establishing a list of positions within each department that are eligible for
an Executive/Purchase card. The initial list was compiled by soliciting
feedback from Department Heads regarding which positions required a
Purchase card. Once the proposed eligibility list is approved,
amendments to the list must be approved by the Council. Additionally, it is
the responsibility of the department to notify the Purchasing Office if an
eligible position has been reclassified or has received a title change.
3. Use of Executive/Purchasing Card
a. Current Policy: There are a number of provisions that govern the
acceptable use of Executive/Purchasing cards, including restricting the
use of the card the employee whose name is embossed on the card.
b. Proposed Policy: To allow flexibility for departments with multiple shifts,
language is added to allow use of the card to an employee whose name is
not embossed on the card if the employee is given authorization by the
Department Head.
c. Current Policy: The policy outlines conditions for use, telephone order
and online purchase procedures, and documentation and payment
procedures.
d. Proposed Policy: The proposed policy amends the “Telephone Order
Procedures” section and replaces it with “Telecommunications Order
Procedures.” The definition is expanded to include any form of
telecommunications, including but not limited to, telephone, cell phone, or
facsimile orders. Online purchase procedures are outlined in a separate
section of both the current and proposed policy.
e. Proposed Policy: Due to the special nature of their job, language is added
to allow K-9 Police Officers to use Executive/Purchase cards for care of
animals and other necessary related items (e.g. dog food and vet care).
f. Current Policy: A single purchase limit of $500 is imposed on Purchase
cards purchases.
g. Proposed Policy: The single purchase limit on Purchase cards is
increased to $1,000. The original single purchase limit has not been City of Culver City, California
City Council Agenda Item Report
amended since the policy was originally adopted in 1996 and is insufficient
for many current uses. For example, many employees use Purchase
cards to cover travel expenses. Often times, employees must stay
multiple nights at a hotel, exceeding the $500 limit. Employees must often
make up the difference using personal funds and getting reimbursed later.
4. Other Card Restrictions
a. Current Policy: A number of purchases are prohibited, including cash
advances, personal purchases, alcoholic beverages, and fixed or
controlled assets.
b. Proposed Policy: Language is added to clarify a fixed or controlled asset
(items costing $1,000 or more), which must be delivered to the City’s
warehouse for tagging and identification. Some flexibility is added by
permitting the purchase of fixed or controlled assets, but only with prior
approval or in emergency situations.
5. Terminating Employment
a. Current Policy: Upon termination of employment, Executive/Purchase
cards must be collected from the employee and destroyed. The City
Treasurer is responsible for notifying the financial institution and closing
the account.
b. Proposed Policy: Language is added to state that employees who leave
City service will not receive their final paycheck until their Executive/
Purchase card is returned. The final paycheck is released once the bank
has confirmed that there have been no additional charges on the card
since the date of termination.
6. Miscellaneous
a. Current Policy: The term “Bank”, defined as the contractor who will issue
the cards, supply billing reports, and other billing information as needed, is
used throughout the policy.
b. Proposed Policy: The term “Bank” has been replaced with “Financial
Institution,” with the same definition.
Additional format changes are made to increase the overall clarity and flow of the
policy.
Resolution Adoption Procedures
City Council Policy 1001, entitled “Adoption of Council Policy Statements,” allows
City Council to adopt policies as a means to establish policies not already covered
by ordinances, and to supplement or complement other resolutions or policies
already in existence. The policies adopted cannot conflict with any ordinance or City of Culver City, California
City Council Agenda Item Report
resolution of the City and require four affirmative votes of the City Council to become
effective. The Council may also direct the creation or modification of a policy.
The resolution drafted to amend the Executive/Purchase Cards Policy would rescind
previous resolutions affecting only this policy. Adopting this resolution would cancel
previous versions of the policy and enact the amended draft of the policy presented
for your consideration.
FISCAL ANALYSIS:
The proposed amendment to the Executive/Purchase Cards Policy increases the
single purchase limit for Purchase cards from $500 to $1,000. This increase reflects
the total overall increase in the cost of doing business since the original policy was
adopted. As such, the proposed single purchase limit increase should not create
any additional financial burden to the City.
ATTACHMENTS:
1. Current Council Policy Number 4205, “Use of Credit Cards”
2. Current Council Policy Number 4209, “Executive/Purchasing (Credit) Cards”
3. Proposed Resolution Number 2005-R___
Exhibit A: Proposed “Executive/Purchasing (Credit) Cards” Policy
MOTION:
That the City Council:
1. Approve the amended Council Policy Statement Number 4209, entitled
“Executive/Purchase Cards,” rescind Council Policy Number 4205, “Use of
Credit Cards,” amend Resolution 95-R005, and adopt Resolution 2005-R___;
and
2. Direct the City Attorney’s Office to prepare the policy and authorize the Chief
Administrative Officer to distribute the policy following specified procedures in
City Council Policy No. 1001 “Adoption of Council Policy Statements.”
OR
3. Discuss this item and provide further direction to staff.
(A 4/5ths affirmative vote is needed to adopt the resolution and enact the policy)