HomeMy WebLinkAbout4.05 Cal-Card Program
STAFF REPORT CITY CLERK
File #600-30
CITY COUNCIL
DATE:August 21, 2012
TO:
Honorable Mayor and City Councilmembers
FROM:
Joni Pattillo, City Manager
SUBJECT:
Authorization to Enter into an Agreement with US Bank to Provide Purchase Card
Services Under the Cal-Card Program Established by the State of California
Prepared by Paul S. Rankin, Administrative Services Director
EXECUTIVE SUMMARY:
US Bank and the State of California have entered into an agreement that provides purchase
card services. The program was established pursuant to an RFP administered by the State of
California. Local government agencies are also allowed to participate in the program. The
program offers several advantages to the City and would replace the current Business Cards in
use for city business related purchases.
FINANCIAL IMPACT:
The program will give the City the opportunity to earn rebates based on timely payment and the
volume of transactions. The program does not levy any per card charge nor is there a minimum
dollar volume of purchases required. The purchase cards are designed to be paid each month
and will not incur any interest costs.
RECOMMENDATION:
Staff recommends that the City Council adopt the resolution authorizing the City Manager to
execute an agreement with US Bank to provide purchase card services.
Submitted By Reviewed By
Administrative Services Director Assistant City Manager
DESCRIPTION:
The City currently utilizes a limited number of Business Cards issued by Bank of America for
credit card purchases related to City Business. The cards are established under authorized
departments and checked out on an as needed basis.
The State of California offers local agencies the opportunity to utilize the State’s Master
Agreement with US Bank to obtain purchase card services. Many local agencies have adopted
the program as an efficient means to make small purchases. Locally, the Dublin San Ramon
ITEM NO. 4.5
Page 1 of 2
Services District (DSRSD), the Town of Danville, and the cities of Pleasanton and San Ramon
participate in the program. Staff conducted outreach and the agencies had positive feedback on
their experience.
This program is designed to allow for the purchase of what is needed when it is needed for City
operations. The Cal-Card is a VISA purchase card which means that merchants who accept
Visa will accept the Cal-Card. However, it differs from a traditional Bank Card in that there could
be purchase controls established based on the cardholder. Cal-Card has established specific
Merchant Category Codes which will be established by user groups. For example, it may be
appropriate to restrict travel and lodging for a user that would typically obtain supplies with the
purchase card. The program allows the agency to set maximum dollar limits for card holders
(Separate limits can be set for: single transaction; single day; month; quarter; or annual.) The
Program Administrator will also be able to establish limits for transactions per day or month. If
the program is approved, these controls will be established as part of the program
implementation and defined in internal Administrative Procedures.
The program allows the Staff to efficiently complete the procurement of small dollar value
transactions related to official City Business. Each card would be issued for use by an individual
named cardholder. A monthly statement is produced for each cardholder and the
documentation and expense coding will be submitted to Finance. One invoice is generated for
all activity during a billing period. The program requires payment within 45 days of the invoice.
This processing time is more flexible than the approximately 20 day grace period with the
current provider of these services. The ability to utilize the purchase card for small purchases
may also help reduce the frequency of small reimbursement checks to employees.
Staff would propose that City related business travel expenditures also be an allowed
component of the program. The current credit cards are used to make arrangements for
meetings and conferences and the Cal-Card Purchase Card could also be used for this activity.
The administrative procedures developed as part of the implementation will comply with the
purchasing requirements established by the City’s Purchasing Ordinance.
In order to implement the Program, the City will need to submit an agreement to US Bank along
with agency financial information. A proposed Resolution (Attachment 1) would authorize the
City Manager to execute the agreement on behalf of the City. US Bank has indicated that a
typical implementation can require 60 days. In addition to developing written procedures, there
will need to be coordination of card limits, merchant access, and training. Once the Cal-Card
program is implemented Staff will proceed with cancelling the existing Business Cards.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
ATTACHMENTS:
1. Resolution Authorizing the City Manager to Execute an Agreement
with US Bank to Provide Purchase Card Services
2. Agreement - Addendum For Local Agencies
Page 2 of 2
RESOLUTION NO. xx - 12
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
* * * * * * * * *
AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH US BANK
TO PROVIDE PURCHASE CARD SERVICES
WHEREAS,
the City desires to annually utilize purchase cards for certain purchases related to
City business; and
WHEREAS
, the State of California Department of General Services has selected US Bank to
administer a statewide program; and
WHEREAS
, the ability to obtain purchase cards under the terms and conditions of the State
Cal-Card program offers certain advantages to the City; and
WHEREAS
, the use of the purchase cards will be in accordance with administrative procedures
to be implemented to insure conformance with City purchasing policies and to protect against
the inappropriate use of the purchase card; and
WHEREAS,
in order to participate in the program the City must submit an executed agreement
that that has been approved as to form by the City Attorney; and
NOW, THEREFORE, BE IT RESOLVED
that the City Council of the City of Dublin does hereby
authorize the City Manager to execute the “Addendum to the State of California Purchase Card
Program Master Services Agreement (DGS MSA 05-06-99-01) with US Bank, to provide
Purchase Card services under the State Cal-Card program (attached hereto).
BE IT FURTHER RESOLVED
, that the City Manager shall direct Staff to deliver any additional
information required by US Bank, and to develop and implement administrative procedures
following best practices to insure an effective use of the Cal-Card program.
PASSED, APPROVED AND ADOPTED
this 21st day of August, 2012, by the following vote:
AYES
:
NOES
:
ABSENT
:
ABSTAIN
:
______________________________________
Mayor
ATTEST
:
ATTACHMENT 1
_______________________________________
City Clerk
ATTACHMENT 1
ADDENDUM TO STATE OF CALIFORNIA PURCHASE CARD PROGRAM
MASTER SERVICES AGREEMENT (DGS MSA 5-06-99-01)
This Participating Agency Addendum (Participating Agency Addendum) is entered into, by and between U.S.
Bank National Association ND (U.S. Bank) and the Participating Agency identified herein and executing this
Participating Agency Addendum as Participating Agency, and constitutes an addendum to and modification of the
State of California Purchase Card Program Master Services Agreement (DGS MSA 5-06-99-01) dated October 19, 2006
(the "Agreement") between the Department of General Services ("DGS") on behalf of the State of California, and U.S.
Bank. The Master Services Agreement DGS MSA 5-06-99-01 and its amendments are incorporated by reference and
made a part of this Participating Agency Addendum. This Participating Agency Addendum shall become effective upon
signing by or on the behalf of U.S. Bank (Effective Date) and supersedes any previous and like addenda with
Participating Agency.
RECITALS:
A. DGS has entered into the Agreement for the purpose of making available the Purchasing Card Program as
described in the Agreement for use by for Participating Agencies; and
B. The Agreement contemplates the inclusion of Participating Agencies by a process of voluntary execution of an
addendum; and
C. The Participating Agency has received a copy of the Agreement and after thorough review of the Agreement desires
to become a Participating Agency as that term is defined in the Agreement.
AGREEMENT:
NOW THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by reference, the
mutual promises and covenants set forth in the Agreement, which is incorporated herein by reference, and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Participating Agency, and
U.S. Bank agree as follows:
1. The Participating Agency agrees to accept and perform all duties, responsibilities and obligations required of
Participating Agency as set forth in the Agreement. CAL-Cards shall be issued to employees of the Participating
Agency upon execution of this Participating Agency Addendum by the Participating Agency and U.S. Bank. U.S. Bank
shall submit invoice(s) to the Participating Agency at the address indicated herein.
2. U.S. Bank is authorized to place the seal or logo of the Participating Agency on the CAL-Cards issued to employees
of the Participating Agency for the sole purpose of identifying the card for official use only. Such sea
subject to use limitations as apply to the State seal on Page 3 of the Agreement.
3. The Participating Agency shall make monthly payments as provided in the Agreement to U.S. Bank of the full
amount of the official monthly invoice by causing a check or checks or a warrant or warrants to be issued payable to the
order of U.S. Bank on demand or by use of an Automated Clearing House or Electronic Data Interchange
payment to U.S. Bank.
4. The Participating Agency shall provide U.S. Bank with a copy of its audited financial statements within sixty (60)
days of completion and, upon request of U.S. Bank, such other financial information as may be reasonably requested.
5. Either party may terminate this Participating Agency Addendum at any time by giving thirty (30) days written notice
to the other party, whether or not such other party is in default.
6. The Participating Agency declares that CAL-Cards shall be used for official Participating Agency purchases only,
and shall not be used for individual or consumer purchases nor to incur consumer debt. The Participating Agency
warrants that it possesses the financial capacity to perform all of its obligations under the Agreement and this
Participating Agency Addendum and the Participating Agency will not allow purchases to be made with CAL-Cards or
incur any other financial obligation hereunder or under the Agreement prior to determining that existing appropriations
available therefore are sufficient in amount to pay for such purchases or such other financial obligations.
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7. The contact notice address for the Participating Agency is:
Program Manager Name VIVIAN GONG, FINANCE MANAGER
Participating Agency Name CITY OF DUBLIN
Mailing Address 100 CIVIC PLAZA
City, State, Zip DUBLIN, CALIFORNIA 94568
Email Address VIVIAN.GONG@DUBLIN.CA.GOV
8. The agreements of the Participating Agency set forth in this Participating Agency Addendum and the Agreement
constitute valid, binding and enforceable agreements of the Participating Agency and all extensions of credit made
pursuant to this Participating Agency Addendum and the Agreement to the Participating Agency will be valid and
enforceable obligations of the Participating Agency in accordance with the terms of the Agreement and this Participating
Agency Addendum. The execution of this Participating Agency Addendum and the performance of the obligations
hereunder and under the Agreement are within the powers of the Participating Agency, have been authorized by all
necessary action and do not constitute a breach of any agreement to which the Participating Agency is a party or is
bound. The signer of this Participating Agency Addendum further represents and warrants that he or she is duly
authorized by an applicable constitution, charter, code, law resolution or other governmental authority to enter into
transactions of this nature. Participating Agency represents and warrants that this transaction is within the scope of the
normal course of business and does not require further authorization for Participating Agency to be duly bound by this
Participating Agency Addendum. This Participating Agency Addendum requires approval as to form by the Attorney for
the Participating Agency. If this Addendum is not approved as to form by the Attorney for Participating Agency, the
completion of the attached Certificate of Authority is required and must accompany this Participating Agency Addendum.
In witness whereof, the parties have, by their duly authorized representatives, executed this Participating Agency
Addendum.
Dated this ____ day of _____________, 20___ by: Dated this day of _____________, 20___ by:
CITY OF DUBLIN U.S. Bank National Association ND
Legal Name of Participating Agency
(Signature of Authorized Individual) (Signature of Authorized Individual)
JONI PATTILLO Steven R. Kehr
(Printed Name of Authorized Individual) (Printed Name of Authorized Individual)
CITY MANAGER Vice President
(Printed Title of Authorized Individual) (Printed Title of Authorized Individual)
Approved as to form:
(Signature of Attorney for Participating Agency)
JOHN BAKKER, CITY ATTORNEY
(Printed Name of Attorney)
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