HomeMy WebLinkAboutItem 5 - Ord./City ExpendituresEUGENE CITY COUNCIL
AGENDA ITEM SUMMARY
Public Hearing and Possible Action: An Ordinance Concerning City Expenditures;
Amending Sections 2.515 and 2.525, of the Eugene Code, 1971;
and Repealing Section 2.555 of that Code
Meeting Date: January 10, 2005 Agenda Item Number: 5
Department: Central Services Staff Contact: Sue Cutsogeorge
www. cl. eugene, or. us Contact Telephone Number: 682-5589
ISSUE STATEMENT
This is a public hearing regarding a change to City Code regarding payment of City expenditures. The
council is requested to consider taking action on the ordinance at this meeting, if possible.
BACKGROUND
The City Code includes several references to the ability of certain individuals to make payments for
various reasons.
· Section 2.515, which was last amended in 1998, states that the Finance Officer* may pay out
money only on a check signed by the Mayor, City Manager and Finance Officer.
· Section 2.525, which was last amended in 1982, states that the Finance Officer may issue checks
drawn on city bank accounts to pay city bills and claims.
· Section 2.555, which was last amended in 1989, states that the City Manager, Finance Officer,
and Mayor are authorized to issue checks and warrants to pay salaries.
· Section 2.585, which was last amended in 1990, states that the City Manager or designee may
make payments from the risk fund for insurance premiums and in settlement of claims.
In addition, the council passed Resolution No. 4364 in 1993 which stated (among other things) that the
Mayor, City Manager and Finance Officer should provide facsimile signatures to the City's banking
institutions for the purpose of authorizing checks to be honored for payment of employees and vendors.
Technology has dramatically changed the way in which business is conducted with regard to financial
payments. Salaries for employees and officers of the City are now largely paid by direct deposit made
through electronic transfers. Some institutions are issuing stored value payroll cards instead of checks
or direct deposit of salaries. Payments for federal and state taxes are made through electronic funds
transfers. Hult Center performers are often paid with wire transfers. The future may bring even more
options for making payments of various types.
*The Finance Officer is a position that is described in City Code with a variety of financial duties. The current Finance
Officer is Dee Ann Hardt, the City's Finance Director.
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The language in the City Code does not recognize that payments may be made in a variety of ways
other than by physical check and that signatures on checks are now frequently done by facsimile or
electronically instead of by physical signature. In order to clarify that other forms of payment and
signature are allowed, City Code needs to be changed to reflect these technological advances. In
addition, in order to efficiently operate City business, payments can be made throughout the
organization rather than all payments being made centrally out of the Finance Division, which means
that the number of people that should have authority to make payments has been increased.
The proposed ordinance amends the City Code to allow the Finance Officer to make all payments in
connection with City business, upon the signature or authorization of the City Manager or the City
Manager's designee. The payments could be made in a variety of forms, including checks, electronic
funds transfers, wire transfers, and other types of payment methods. The City Manager will have the
authority to designate in writing for other appropriate people to authorize and make payments. The City
Code change also deletes the current sections of code that refer to payments.
In making these payment delegations, staff ensures that proper internal controls are maintained.
Currently, nearly all City vendor payments are made via the "main" accounts payable checking account.
These payments are initiated by department staff, through a request for a purchase order. These requests
are approved by supervisory staff within the department with an electronic signature. The payment
requests are forwarded, by business software, to Finance staff. Payment is made after central Finance
staff enter the vendor invoices, verify that proper purchasing rules have been followed, ensure that the
goods or services have been received, that there's sufficient budget authority to make the payment, and
the payment has been properly approved.
Although staff issues vendor checks from the central Finance office weekly, there are situations where
this process is not efficient for a variety of reasons. In some cases, there is a high volume of checks
written to non-standard vendors for a very small amount of money (like jury duty payments or library
book refunds). In another case, payment has to be made immediately and cannot wait for the weekly
accounts payable check run (like payment to Hult Center performers). For those limited purposes, the
central Finance office permits department staff to have separate departmental checking accounts to meet
those limited, identified needs. This practice has been used for a number of years, and Finance staff
recently realized that City Code needed to be updated to allow for this practice.
Although the process for authorizing payment from those departmental checking accounts differs from
the payments made centrally, Finance staff developed procedures to ensure adequate internal controls
over the use of those accounts. Central Finance staff will continue to be responsible for authorizing
the use of those separate accounts. As part of the authorization process, Central Finance staff authorizes
individual departmental staff to be signers on those accounts, and authorizes different staff to be
responsible for reconciling the accounts on a monthly basis. This ensures a separation of the signing and
reconciling duties.
Each month, a request for payment to replenish the departmental checking accounts from the main
account is made. The requests to replenish the accounts are approved by appropriate supervisory
department staff and submitted to Finance for processing through the centralized accounts payable
process. In addition to the monthly submission for reimbursement, on a daily basis by a link with the
bank, Finance staff review the activity in every checking account for unusual transactions.
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If there is no opposition to the ordinance, staff recommends that the council consider approving it the
same night as the public hearing. In addition, the council agenda for this meeting includes consideration
of a resolution to replace Resolution No. 4364.
RELATED CITY POLICIES
There are no specific financial management goals or policies related to this action.
COUNCIL OPTIONS
The council options for this item include passing the ordinance at this meeting, or waiting and taking
action on January 24.
CITY MANAGER'S RECOMMENDATION
The City Manager recommends taking action to approve the ordinance at this meeting, if possible.
SUGGESTED MOTION
Move to adopt an ordinance concerning City expenditures; amending sections 2.515 and 2.525, of the
Eugene Code, 1971; and repealing Section 2.555 of that code.
ATTACHMENTS
A. Ordinance Concerning City Expenditures
FOR MORE INFORMATION
Staff Contact: Sue Cutsogeorge
Telephone: 682-5589
Staff E-Mail: Sue. L.Cutsogeorge~ci.eugene.or.us
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ATTACHMENT A
ORDINANCE NO.
AN ORDINANCE CONCERNING CITY EXPENDITURES;
AMENDING SECTIONS 2.515 AND 2.525, OF THE
EUGENE CODE, 1971; AND REPEALING SECTION 2.555
OF THAT CODE.
THE CITY OF EUGENE DOES ORDAIN AS FOLLOWS:
Section 1. Subsection (2) of Section 2.515 of the Eugene Code, 1971 is
amended to provide:
2.515 Finance Officer- Records and Reports.
(2) The finance officer shall receive, receipt, and safely keep all money
belonging to the city and select the depositories for city money and
securities rT~,,:,
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~;~ ~,, +~ .......... ;+ ........... ~ ;; ...... ~;~ 1 The finance
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officer shall keep a separate set of accounts for each fund and make no
disbursement from any fund other than the fund from which the
disbursement is authorized.
Section 2. Section 2.525 of the Eugene Code, 1971, is amended to provide:
2.525 Finance Officer - Expenditure Authorization [to ' .....
(1) Provided that expenditures do not exceed the adopted appropriation
and are for purposes approved in the adopted budget, the finance
officer may issue checks drawn on city bank accounts, and cause
electronic or other types of payments or transfers to be made in
orderto pay city bills and claims, including salaries of all regular
officers and employees of the city. Ail checks, electronic or other
types of payments or transfers shall be signed or authorized by
the city manager or the city manager's designee.
(2) The provisions of this section, and the provisions of section 2.527 do
not apply to funds deposited in or disbursed from the risk management
fund, which are governed solely by the provisions of section 2.585.
Section 3. Section 2.555 of the Eugene Code, 1971, is repealed.
Ordinance- 1
Section 4. The City Recorder, at the request of, or with the concurrence of the
City Attorney, may administratively correct any reference errors contained herein or in
other provisions of the Eugene Code, '197'1, to the provisions added, amended or
repealed herein.
Passed by the City Council this Approved by the Mayor this
~ day of ,, 200_ ~ day of ,200_
City Recorder Mayor
Ordinance - 2