Purchasing Basics for Municipal, Joint and County Public Libraries - PowerPoint Presentation

Slide1

Purchasing Basics for Municipal, Joint and County Public Libraries

Victoria Rosch

Associate State Librarian, Library Support Services

New Jersey State Library

2015Slide2

Local Agency Procurement LawsNJSA 40A:11-1

governs the award of contracts for services for boards and public entities

including municipal, joint and county

libraries

Association libraries (non-profits) do not have to comply, but may want to as a

“best practice” since they accept public funding

Resources:

 NJ Local Agency Procurement Laws at

http://www.state.nj.us/dca/divisions/dlgs/programs/lpcl.htmlSlide3

Purchasing Processes There are three main processes for most purchases: bid, quote or use of sound business judgmentWhich process to use is determined by many factors

such as what is being purchased, the cost of the purchase (threshold), and whether or not the library has a Qualified Purchasing Agent

There are Statutes that exempt certain categories

(not many) from

this processSlide4

Thresholds and Qualified StaffDesignation as a Qualified Purchasing Agent (QPA) requires a certificate issued by the Division of Local Government Services as well as ongoing trainingMost libraries do not have a QPA and must meet the threshold standards for those local government units without a QPASlide5

Business Judgment? Quote? Bid?

Less than $2,625

Use sound business judgment

$2,625

-

$17,499

Get

2 quotes for services from 15% of bid

threshold

up to the bid

threshold

$17,500

Requires the bidding process - complicated procedure - work closely with municipal officials and lawyer

*current as of

02.05.15Slide6

Purchases Exempted By NJSA 40:54-12.1 and NJSA 40:33-8.1

The board of trustees

(The county library commission…) …

may, within the limits of funds appropriated, purchase the following without advertising for bids: 1. library materials including books, sound recordings, videos, and audiovisual materials; 2. necessary rebinding; and 3. specialized library services (NJSA 40:54-12.1)

“Specialized library services” must be determined cautiously – digitization may qualify, but an integrated library system does not – seek the advice of a QPA or the Division of Local Government ServicesSlide7

Exceptions PermittedEmergencies affecting public health, safety and welfare – adopt a resolution and file a report with the Division of Local Government ServicesSingle Source (really rare) – apply for State Treasurer approval through

the Division of Local Government ServicesSlide8

Alternate Methods of Purchase

Competitive Contracting

(

NJSA 40A:11-4.1

)

Purchasing integrated library system which would exceed the bid threshold

Concessions – for example, receiving funding from a book rental service (like Bookswim) in an amount exceeding the

bid

threshold might use competitive contracting

Note: Private

companies making money from a taxpayer-funded property (like a website

hosting private advertising,

or

a link to Amazon)

does not appear to be supported by law – check with your attorneySlide9

Alternate Methods of Purchase

Concessions

(

NJAC

5:34-9.4 (g

))

If it is estimated that the library will receive

less

than $17,500 from all vendors providing a certain

service, and

therefore this would be a non-competitive contract,

the

rationale for this

decision must be documented and the quotation process may be used

If it is estimated that the library will receive $17,500

or more from

all vendors providing a certain service, the library will need to go through the formal

bid or competitive

contracting

process

 Slide10

How to Determine ThresholdsAmount for determining whether to use the bid, quote or use of sound business judgment process is based on the aggregation of all purchases and anticipated purchases for the year (or contract period) for the provision or performance of any goods or services

(whether one or more vendors)

Pay-To-Play threshold ($17,500*) is based on the aggregation of a

single vendor’s

cumulative contracts

Business Registration Certificate threshold ($2,625*) is based on a

single vendor’s

cumulative contracts

*current as of

02.15.15Slide11

Business Registration ProgramPL. 2004, c.57 affects purchasing of goods and services over $2,625 (vendor’s cumulative contracts not aggregation by type of goods or services)

Library materials are not exempt

Only required to obtain one time unless business address changes

For instructions on implementing the law see:

http

://

www.state.nj.us/dca/divisions/dlgs/programs/lpcl.html#1Slide12

Pay-To-Play

Chapter 271, P.L. 2005 and Chapter 19, P.L. 2004 (as amended by P.L. 2005, c.51); N.J.S.A. 19:44A-20.4 et seq.

Applies to any aggregate amount per vendor of

$

17,500

or more per

year

or contract period and

this

includes library materials

For information

see:

http://

www.state.nj.us/dca/divisions/dlgs/resources/poli_docs/p2pguide.pdfSlide13

Purchasing RequirementsExcellent information for any purchasing questions may be found at the Department of Community Affairs Division of Local Government Services webpage on Local Public Contracts Law: http://

www.state.nj.us/dca/divisions/dlgs/programs/lpcl.html

See also:

Part 6: Purchasing

at

http://lss.njstatelib.org/library_law

Slide14

Purchasing EssentialsSumming UpLocal Public Contracts Law governs the award of contracts for materials and services for boards and public entities (NJSA 40A:11-1)

Know the legal thresholds for when to use the sound business judgment, quote, or bid procedure

Be aware that the municipality/county may have a cooperative agreement in which the library may participate and/or that there may be a state contract available for the particular goods you seek -

http://www.state.nj.us/treasury/purchase/pricelists.shtml

Library materials and specialized library services are exempt from the bid and quote process (NJSA 40:54-12.1), but not the Business Registration Program

Note that the purchase of an Integrated Library System requires the competitive contracting procedureSlide15

Procurement/Purchasing CardMunicipal, county and joint municipal libraries may accept credit cards as a form of payment, but

may not use

a credit card, debit card, in-house or store credit card to pay vendors

Read Local

Finance Notice

2013-17

at

http://

www.state.nj.us/dca/divisions/dlgs/lfns/13/2013-17.pdf

before proceeding

Requires a resolution, training of personnel, appointment of program manager, controls in accordance with law and policies and procedures must be in place

$2,625 limit per purchase unless the library has a QPA

  Slide16

Getting a “P” CardPurchasing Card Program http://www.state.nj.us/treasury/purchase/pcard.shtmlState contract available

for Visa card with Bank of America (T-1654)

Must have appropriate software that interfaces

“P” card purchases with

accounting softwareSlide17

Using a “P” CardTransactions cannot exceed 15% of the bid threshold ($2,625) without a QPAMay not be used for items or services of a personal nature for employees, officials or volunteers (travel, food and accommodations)Using a P-card does not change how vendors are selected

pursuant

to the Local Public Contracts Law

A service such as PayPal may be tied to a P-card Slide18

Purchasing Services from a NonprofitNonprofits that contract with government entities are not required to file the Business Entity Annual Statement

(PL

2007,

c304) Slide19

State Contract and State Cooperative PurchasingA good place to start is Treasury’s FAQ on this subject

(http

://

www.state.nj.us/treasury/purchase/coop_faq.shtml)

You may search by vendor or specific product or service

If a vendor states they are on State contract, check to make sure this is true for the item you are purchasing

Using this method eliminates the need for the library to obtain bids, quotes, the Business Registration and follow Pay to Play rulesSlide20

Local or National Cooperative ContractNational Cooperative contracts - carefully review Local

Finance Notice 2012-10

(http://www.state.nj.us/dca/divisions/dlgs/lfns/12/2012-10.pdf),

state laws affecting the agency’s contracting authority, and relevant case law affecting the use of national cooperatives

.

Local Cooperative contracts (for example utilities) may be availableSlide21

Hiring ProfessionalsAttorneys, engineers, architects, etc. must all file a Business Registration if the professional services

are over

the 15% bid

threshold

Bidding is not required (NJSA

40A:11-5 (1)(a)(

i)), but it

is best to use the Competitive Contracting procedure as found in NJSA 40A:11-4.1 for hiring professionals (also see the administrative code at NJAC 5:34-4.1 et seq

.)

Pay-to-Play

laws

must be followed if not using a bid process and

if

spending

above the $17,500

thresholdSlide22

Resolution for Hiring Professionals"The governing body shall in each instance state supporting reasons for its action in the resolution awarding each contract and shall forthwith cause to be printed once, in the official newspaper, a brief notice stating the nature, duration, service and amount of the contract, and that the contract is on file and available for public inspection in the office of the clerk..." Slide23

Sample Newspaper Notice for Contract Award

CONTRACT AWARD

SAMPLE NEWSPAPER

NOTICE

The

following is a sample resolutions for publishing Notices of Contract Award for Professional Services.

Professional Services - Local

Notice of Contract Award

The (name of the local government unit) has awarded a contract without competitive

bidding as a professional service pursuant to N.J.S.A. 40A:11-5(1)(a)(i). The contract and the resolution authorizing it are on file and available for public inspection in the office of (municipal clerk)

Awarded to: _____________________________________________

Duration: _____________________________________________

Nature and type of contract: _________________________________

Amount of Contract*: _________________________________

*Indicate by dollar value of contract, per hour/per occurrence, pursuant to schedule of

rates/fees contained in the contractSlide24

Discarding/Selling Government Property

Estimated

fair value of the property or group of items to be sold at the same time

is:

Below

15% of the bid threshold

($2,625*),

item/s may be disposed of as deemed appropriate for a government entity - trash, recycle, given to association library or sold at private sale without advertising for bids (NJSA (40A:11-36 (6)).

Equal to or over

15% of the bid threshold

and

the purchaser is another government entity,

a

mutually agreeable

price is negotiated and both

units pass resolutions verifying the sale.   

Equal to or over 15% of the bid threshold

and

the purchaser is NOT another government entity, publically offer the item/s through a sealed bid or auction process by live auction or an on-line auction.

*current

as of

02.05.15Slide25

Deposits/Investments/Banking

Follow Cash Management laws (NJSA 40A:5-14 and 15)

Deposit all funds paid to local unit within 48 hours of receipt

Investments limited by law and may not risk principal (NJSA 40:54-19.3 and NJ Cash Management Fund)

CDs, checking, savings permitted only at GUDPA approved banks (Governmental Unit Deposit Protection Act see (

http

://

www.state.nj.us/dobi/division_banking/depositories/gudpa.htm

)Slide26

Ineligible CostsGifts, scholarships, donationsDebt serviceLease payments on equipment or software exceeding five yearsCosts that exceed the actual or fair market value of the goods or services

provided

Rent

paid to the municipality for library use of municipal facilities or

equipment

Capital

expenses not meeting the criteria as defined in N.J.A.C. 15:21-12.5 (c) Slide27

Purchase Order SystemHelps protect and control expenditures No check is issued without a properly authorized POTrustees

designate by resolution at the annual reorganization

meeting the

person/s who may

approve

purchase

ordersSlide28

Purchase Order SystemSample Process

Prepared by requestor

Approved by

the

head of the department requesting the expenditure (assurance

that there funds available in the budget may be the responsibility of the department head or the business

office)

Returned to

business office for

submission to the director

or CFO for

signature

Treasurer of the library

board reviews purchase orders prior to the trustee meetingSlide29

Voucher SystemSample process

Treasurer

of the library board certifies to the board

at the monthly meeting that

sufficient funding is available in the budget for the purchases on the bills

list (list of purchase orders)

Assuming the board approves the bills list, the treasurer countersigns the POs

POs are returned to the Purchasing

Agent (may be municipality)

for

processing Slide30

Statutory Requirements for the Position of Treasurer (NJSA 40:54)Board must elect from its members a president, treasurer and secretary (54-11)

Treasurer must be bonded (54-13)

The board shall, by its treasurer, upon its warrant signed by its president, receive (

municipal funding)

from the disbursing officer of the municipality…

(54-13

)Slide31

Statutory Requirements for the Position of Treasurer (NJSA 40:54)Oversees the recording keeping and reports to the board regarding investments of the board (54-19.4)

The treasurer does not make investment decisions for the board

… authorization to invest funds …shall be by resolution adopted by a majority vote of all the members of the board of trustees at any regular or special meeting of the board

(54-19.3)Slide32

Office of TreasurerCounty Library System

The

county treasurer shall be the custodian of the county library tax collected and of all

other funds

or moneys of the commission, and

upon

receipt of bills properly authorized by

the commission

, payment thereof shall be made if sufficient funds are on hand

.

(NJSA 40:33-12)

Use municipal law as guidelines to assure proper authorization by the commissionSlide33

Office of TreasurerCommonly Performed Duties

Certifies that payroll is accurate

Presents and certifies

the monthly financial report to the

Board

Presents and certifies the monthly bills list

Certifies that funds are available in support of any resolution before the BoardSlide34

Office of TreasurerCommonly Performed Duties

Co-signs checks upon authorization by the board

Oversees any funds held outside of the municipality if the municipality holds municipal funding for the library

Reviews the annual audit and presents it to the board

Trustees may authorize treasurer and/or director to transfer funds between subaccountsSlide35

ResourcesGordon Ball, Procurement Specialist, DCA DLGS: Gordon.Ball@dca.state.nj.us or

(609) 633-6152

NJ Local Agency Procurement Laws

http

://

www.state.nj.us/dca/divisions/dlgs/programs/lpcl.html

http://

lss.njstatelib.org/library_law

; Part 6: Purchasing

Every

director should be a member of the State Library’s listserv

- njpublibs

. Slide36

Purchasing ManualNew Jersey Local Public Contracts Law and Regulation

Reference

Manual

With Related and Supporting Information

N.J.S.A

. 40A:11-1 et seq. and N.J.A.C. 5:34

Current

as of April 1, 2014 Prepared by: Bloustein Local Government Research Center, Rutgers, the State University and New Jersey Division of Local Government Services

http://www.nj.gov/dca/divisions/dlgs/programs/lpcl_docs/Full%204-14%20LPCL-NJAC%20Reference%20Handbook.pdf