(A) Authorization. Pursuant to Minnesota Statutes and the City Charter, the City Council requires the city payment of local government bills according to this section and federal/state laws and rules that may apply.
(B) Claims.
(1) Itemization; declaration. The Council, commissions, boards, committees or officers authorized by law or resolution of the City Council to audit and allow claims shall not audit or allow the claim until the person claiming payment, or the person’s agent, reduces it to writing, in items and signs a declaration to the effect that such account, claim, or demand is just and correct and that no part of it has been paid. The City council, commissions, boards, committees, officers or others as established by resolution of the City Council may in its discretion allow a claim prepared by the clerk or secretary of the board or officer prior to such declaration by the claimant if the declaration is made on the check or order- check by which the claim is paid, as provided in other sections of this section or law.
(2) Application. The provisions of this section do not apply to any claim or demand for an annual salary or fees fixed by law, nor to the salary or wages of any employee whose salary or wages have been fixed on an hourly, daily, weekly or monthly basis, by the City Council, commissions, boards or committees and which is now authorized by law to be paid on a payroll basis.
(3) Electronic funds transfer. Electronic funds transfer is the process of value exchange via mechanical means without the use of checks, drafts or similar negotiable instruments. A city may make an electronic funds transfer for a claim for a payment from a bank account or investment of excess money and for payment of bond principal, bond interest and a fiscal agent service charge from the debt redemption fund, payroll or other related financial transaction accounts. This authorization includes the following policy controls:
(a) The City Council shall delegate the authority to make electronic funds transfers to the City Clerk and/or Treasurer and the Deputy City Clerk-Treasurer;
(b) A list of all transactions made by electronic funds transfer shall be submitted to the City Council, commissions, board or committee upon request at its next regular meeting after the transaction.
(4) Claims processing time lines. The City Council is authorizing the payment of claims by two methods. Method one is “pre-approved” where certain claims against the city may be paid. Examples of claims would be: utility bills, obligations of the city where discounts are available for prompt early payment and where contract(s) exist specifying the parameters for payment (or in resolution of the Council if different from the parameters contained herein). Method two is “regular” where claims are paid at the Council designated regular meetings and unless a claim qualifies for method one, must be paid by method two. The City Clerk and/or Deputy City Clerk and Deputy City Clerk-Treasurer are authorized to process claims unless otherwise authorized by resolution of the Council.
(C) Declaration form.
(1) The declaration provided for is sufficient if in the following form: “I declare under the penalties of law that this account, claim or demand is just and correct and that no part of it has been paid.”
(2) The check or order-check by which the claim is paid may have printed on its reverse side, above the space for endorsement thereof by payee, the following statement: “The undersigned payee, in endorsing this check (or order-check) declares that the same is received in payment of a just and correct claim against the city and that no part of it has heretofore been paid.” When endorsed by the payee named in the check or order-check, the statement shall operate and shall be deemed sufficient as the required declaration of the claim.
(D) Auditing claims. When any account, claim or demand against the city shall have been verified in the manner prescribed in this chapter, the Council, commission, board, committee, officer or other as established by resolution of the Council to whom it shall be presented may receive and consider it and allow or disallow the same, in whole or in part, as shall appear just or lawful, saving to the claimant the right of appeal.
(E) Duplicate warrants or orders.
(1) Issuance. When any order or warrant of the city shall become lost or destroyed, a duplicate thereof may be issued by the officers authorized by law to issue the orders or warrants.
(2) Record to be kept. Any officer issuing duplicates under this section shall keep a record showing the number, dates and amount of such mutilated, lost or destroyed orders or warrants, together with the date of issuance of the duplicates therefore, and the names of the persons to whom issued. It may be preferred to issue a new order, order-check or warrant with a new number, date and the amount allowing for the action of a “stop payment” to be issued by the financial institution upon the outstanding order, order-check or warrant at the direction of the authorized officers representing the City Council, commissions, boards or committees.
(F) Prompt payment of local government bills.
(1) Definitions. For the purpose of this section, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
CONTRACT. Any written legal document or documents signed by both parties in which the terms and conditions of any interest or other penalty for late payments are clearly stated.
DATE OF RECEIPTS. The completed delivery of the goods or services or the satisfactory installation, assembly or specified portion thereof, or the receipt of the invoice for the delivery of the goods or services, whichever is later.
GOVERNING BOARD. The elected or appointed board of the municipality and includes, but is not limited to, the City Council, commissions, boards and committees.
MUNICIPALITY. The home rule charter the city created under Minnesota Statutes.
(2) Payment required. The municipality must pay for each vendor obligation according to the terms of the contract or, if no contract terms apply, within the standard payment period unless the municipality in good faith disputes the obligation. Standard payment period is defined as within 35 days of the date receipt. Further, the city shall take advantage of discounts that may be offered from vendors and will pay such bills within the discount period if practical. Also, the city will pay such bills that require penalties if the bill is not paid within the required period of time. In accordance with § 33.02, payments may be made more frequently than within the 35 day rule. It is the policy of the City Council and all of its commissions, boards and committee to pay bills at the regular meetings established normally on a monthly basis. It shall also be the specified policy of the City Council, commissions and boards to authorize interim payments as provided for in this section with the appropriate officers signing the related orders, order-checks or warrants and that the interim payments will be provided to the Council, commissions and boards at their next regular meeting for review in accordance with division (D) of this section and to take the appropriate official actions as required therein.
(3) Invoice errors. If an invoice is incorrect, defective or otherwise improper, the city must notify the vendor within 10 days of the date of receipt. Upon receiving a corrected invoice from the vendor, the city must pay the obligation within the standard payment period as defined in this section.
(4) Payment of interest on late payments required. Except as otherwise provided in this section, the city shall calculate and pay interest to a vendor if the city has not paid the obligation according to the terms of the contract or, if no contract terms apply, within the standard payment period as defined in this section. The standard payment period for a negotiated contract or agreement between a vendor and the city, which requires an audit by the city before acceptance and payment of the vendor’s invoice shall not be begun until completion of the audit by the municipality.
(a) The rate of interest calculated and paid by the municipality on the outstanding balance of the obligation not paid according to the terms of the contract or during the standard payment period shall not exceed 1.5% per month or part of a month and only if required by the vendor.
(b) No interest penalties may accrue against the city for delaying payment of a vendor obligation due to a good faith dispute with the vendor regarding the fitness of the product or service, contract compliance, or any defect, error or omission related thereto. If such delay undertaken by the municipality is not in good faith, the vendor may recover costs and attorney’s fees.
(c) The minimum monthly interest penalty payment that a municipality shall calculate and pay a vendor for the unpaid balance for any one overdue bill of $100 or more is $10. For unpaid balances of less than $100, the municipality shall calculate and pay the actual interest penalty due the vendor.
(5) Applicability. This section applies to all goods, leases and rents and contracts for services, construction, repair and remodeling. Purchases from or contracts for service with a public utility or a telephone company under the jurisdiction of the public utilities commission with an approved practice regarding late fees are not subject to this section.
(G) Penalty. Violations of the provisions of this section shall be as follows:
(1) Any person who willfully and falsely makes the declaration provided for in this section is guilty of a felony as provided for in Minnesota Statutes;
(2) Every member of the council, commissions, boards and committees who shall audit and allow any claim required to be itemized, without the same having been first duly itemized and verified and shall be guilty of a gross misdemeanor.
(Ord. 301, passed 2-11-2002)