HomeMy WebLinkAboutAgenda Report - February 19, 1997 (66)CITY OF LODI COUNCIL COMMUNICATION
AGENDA TITLE: Authorization to Initiate Procurement Card Pilot Program
MEETING DATE: February 19, 1997
SUBMITTED BY: Finance Director
RECOMMENDED ACTION: That the City Council adopt the attached resolution authorizing participation
in the State Department of General Services' CAL -Card program, and
authorize staff to initiate a one-year pilot program to implement and
evaluate the limited use of the CAL -Card procurement card within the Finance Department's Purchasing
Division.
BACKGROUND INFORMATION: In 1992, the State of California Department of General Services launched
an 18 -month pilot project to evaluate the costs and potential benefits of a
purchase card program.
By January, 1994, six state agencies were participating in the program, and over 1,200 cards were in use. Since
then, the state's CAL -Card program has been expanded to involve over 100 state and local agencies, including
25 cities throughout California.
Some of the more obvious benefits are a reduction in the number of purchase orders to be typed and the number
of checks to be processed. As a result of these efficiencies, the cost per transaction can also be reduced (the
State estimates a savings of $24.49 per transaction in administrative costs alone).
Other benefits include the ability to place a limit on both the dollar amount and the type of business where the
card can be used, as well as the ability to designate specifically the persons authorized to purchase on behalf of
the City. In addition, regular management reports provided by the card issuer can improve the level of
management control over purchase activity.
The CAL -Card program provides a VISA card issued by Colorado National Bank/Rocky Mountain Bank Card
System through the State's Master Service Agreement for the CAL -Card program. There is no annual
membership fee; the cost to the City would be 1110 of 1% of the value of all purchase card transactions, payable
to the State.
Initially, one card would be provided to the Purchasing Officer, and use of the card would be limited to purchases
of $500 or less. Assuming the cost/benefit profile resembles State results, staff expects to come back to the
Council within a year to recommend expanding the use of the CAL -Card to other departments.
FUNDING: Costs involved in the pilot program would be absorbed by the Purchasing
Division. Estimated one-year cost (assuming $60,000 in purchases) would
be $60.
Vicky McAthie, Finance Director
Prepared by Joel Harris, Purchasing Officer
APPROVED:
H. I§IXON FLYN
City Manager
RESOLUTION NO. 97-20
A RESOLUTION OF THE LODI CITY COUNCIL
APPROVING AUTHORIZATION TO INITIATE PROCUREMENT
CARD PILOT PROGRAM
WHEREAS, in 1992, the State of California Department of General
Services launched an 18 -month pilot project to evaluate the costs and potential
benefits of a purchase card program; and
WHEREAS, by January 1994, six state agencies were participating in the
program, with over 1,200 cards in use; and
WHEREAS, the State's CAL -Card program has expanded to involve over
100 state and local agencies, including 24 cities throughout California; and
WHEREAS, some of the more obvious benefits of the program are
reduction in the number of purchase orders issued, the number of checks to be
processed, the ability to place a limit on both the dollar amount and the type of
business where the card can be used, as well as the ability to designate
specifically the persons authorized to purchase on behalf of the City, and in
addition, regular management reports provided by the card issuer can improve
the level of management control over purchase activity; and
WHEREAS, the CAL -Card program provides a VISA card issued by
Colorado National Bank/Rocky Mountain Bank Card System through the State's
Master Service Agreement for the CAL -Card program; and
WHEREAS, initially one card would be provided to the Purchasing Officer,
and purchases would be limited to purchases of $500.00 or less; and
WHEREAS, assuming the cost/benefit profile resembles State results,
staff expects to come back to the Council within a year to recommend expanding
the use of the CAL -Card to other departments.
NOW THEREFORE, BE IT RESOLVED, that the Lodi City Council does
hereby authorize staff to participate in the State Department of General Services'
CAL -Card program, and hereby authorizes staff to initiate a one-year pilot
program to implement and evaluate the limited use of the CAL -Card procurement
card within the Finance Department's Purchasing Division.
Dated: February 19, 1997
I hereby certify that Resolution No. 97-20 was passed and adopted by the
City Council of the City of Lodi in a regular meeting held February 19, 1997 by
the following vote:
AYES: Council Members -
NOES: Council Members -
ABSENT: Council Members -
ABSTAIN: Council Members -
JENNIFER M. PERRIN
City Clerk
97-20