HomeMy WebLinkAboutAgenda - 06-07-2011 - 5dORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: June 7, 2011
Action AgenSa j
Item No. Q
_SUBJECT: Approval for Implementation of Purchasin Card Pro ram
DEPARTMENT: Financial Services
PUBLIC HEARING: (Y/NJ No
ATTACHMENT(S):
Application
"Piggy Back" State Contract Letter
INFORMATION CONTACT:
Clarence G. Grier - 245-2453
David Cannell - 245-2651
PURPOSE: To approve the County entering into an agreement with Bank of America to
implement a Purchasing Card Program.
BACKGROUND: Orange County raised the purchase order threshold from $100 to $500 at the
beginning of Fiscal Year 2011. As illustrated below the number of purchase orders issued
deceased by over thirty-nine percent between fiscal year 2010 and 2011. However the number
of accounts payable checks issued and invoices processed has not gone down.
FY 2011 FY 2010 % DECREASE
PURCHASE ORDERS 2,691 4,439 39.37%
# OF AP CHECKS 22,313 24,909 10.42%
INVOICES PAID 51,790 55,152 6.10%
Industry standards estimate the end-to-end cost of a paper-based transaction to be between
$90 and $130 with the cost of issuing a check accounting for $20 of that estimate.
A Purchasing Card Program will allow the County to greatly reduce the quantity of each of the
transactions listed above. The program will allow the County to issue a single electronic
payment at the end of the billing cycle rather than writing separate checks to multiple vendors.
The Purchasing Card functions much like a credit card; however commodity restrictions and
spending limits can be placed on cards on a card by card basis. Also each employee
authorized to use a County Purchasing will be required to sign an agreement with strict
penalties for unauthorized purchases (see attached). The Purchasing Agent will serve as
Program Administrator and will monitor expenditures on a regular basis.
The gains in efficiencies and cost savings realized by those gains are ample justification for the
program. Other benefits that should be pointed out that would be gained by instituting this
program are:
1. Rebates -Bank of America is the State Contract provider for Purchasing Cards. The
County would benefit from rebates based on the County's total expenditures, as well as
rebate rates based on the expenditures of all State and Local Government agencies
participating in the Bank of America program.
2. Reduction in Paper usage -The transactions will be predominantly electronic and
reduce the number of checks written as well as the paper required to process accounts
payable to multiple companies.
3. Financial resource planning -Issuing one check per month to a single recipient will
allow the County to hold onto funds longer and be able to take advantage of short term
investment opportunities.
If the Board approves this program, Financial Services plans to implement the program initially
through pilot programs. This will allow the County to be up to speed when the cards are made
available to all departments in late third quarter 2011. Each department will be assessed on a
case by case basis and only certain employees will be issued cards. Each employee that uses
the card as well as departmental accounts payable staff clerks will be given ample training
before cards are activated.
The Bank of America Purchasing Card Program is utilized by multiple other local governments
that also have Munis as their enterprise resource planning solution and will therefore interface
easily with the County's existing system.
FINANCIAL IMPACT: If approved, there are no service fees associated with this program.
RECOMMENDATION(S): The Manager recommends that the Board approve of the County
entering into an agreement for the Bank of America Purchasing Card Program and authorize
the Chair to sign the Application on behalf of the Board.
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BanltofAmerfca ~NigherStandards
BANK OF AMERICA VISA PURCHASING CARD APPLICATION
Does your Organization currently bank with Bank of America, N.A. USA Yes No x
~rganlZatlOn IrlfOrmatlOn (Please type or print):
Name of Organization (As it will appear on card): Limit 24 spaces:
~O IR IA IN ~G ~E I ~C ~O IU IN IT ~Y ~ I I I I I I I I I I I
Organization Legai Name Orange County
Street Address 200 S Cameron Street
City/State/Zip Hillsborough, NC 27278 Tax ID # 56-6000327
Business Phone 919-245-2651 No. of Employees +/_ 800
Type of Organization: University Community College State Agency
Municipality District School Board State Department
County _x Other (specify)
Program Administrator(s): (attach additional list if necessary)
Name David Cannell Title Purchasing Agent
Business Address 200 S Cameron St
City Hillsborough State NC Zip 27278 Business Phone 919-245-2651
E-mail address dcannell@co.orange.nc.us Fax number 919-644-3324
Name Title
Business Address
City State Zip Business Phone
E-mail address Fax number
Program Information:
1. What is the total dollar amount of your annual purchases?
2. What is your projected annual spending volume with the Purchasing Card (total)?
Yr lAnticipated Volume Pilot Rollout
3. What is your average small dollar purchase amount (for use as a guideline)?
4. What brand is your Finance and Procurement System:Munis
5. Do you use other systems for your card program? Such as cost allocation, expense tools, eProcurement, etc.
763642.02 1
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Bankof Arnerica~~Higher Standards
6. What are your annual payables?
many invoices do you process annually?
What types of purchases do you plan to use the Purchasing Card for (travel, office supplies, etc.)?
8. How many cards do you anticipate initially?
At full implementation?
9. When do you plan to implement a Purchasing Cazd program (target date)?
Planned Reporting Method:
Features:
^ EDI
^ Statement Billing (ASCII File)
^ Visa Information Management
^ Works
^ Paper
Planned Payment Method
^ ACH Credit
^ ACH Debit
^ Wire Transfer
^ Check
Additional Technology
^ Cost Allocation Process
^ eProcurement
^ ePayables
Signature and Authorization:
The Organization named above (the "Organization"), by the signature of its authorized officer below, requests that a Visa Purchasing Cazd account
be established by Bank of America, N.A. (USA) in the name of the Organization, and that Visa Purchasing Cazds be issued to the representatives of
the Organization as the Organization designates from time to time. The Organization acknowledges that it has read a copy of, and agrees to be bound
by, the terms and conditions contained in the State of North Carolina's statewide procurement card contract (Contract #946A resulting from
RFP#501220) and amendments which may be added from time to time (collectively the "Agreement") administered by the North Cazolina Division
of Purchase and Contract. The Organization understands that its participation in the Purchasing Card Program may be terminated if it fails to make
timely payments hereunder or as otherwise set forth in the Agreement. If the Agreement is terminated, Bank of America may, at its option, upon
notice to the Organization, terminate Organization's account or issue new terms for the account. Organization represents and warrants that (i) this
Agreement is a duly authorized, legal, valid, binding and enforceable obligation and (ii) its performance of its obligations under this Agreement will
not violate any law, regulation, judgment, decree or order applicable to Organization. This agreement is effective as of the date written below.
Name (print): Title:
Signature:
Organization:
TO ENSURE PROMPT PROCESSING, CONFIRM THAT THE FOLLOWING IS PROVIDED:
4 Complete Application: Complete all sections of the Application including Signature(s) and Authorization and Resolution.
4 Financial Statements: Enclose the two most recent years audited financial statements or two most recent years tax returns (if applicable).
4Submit the completed Application, along with required documentation to:
Bank of America
Gary L Clazk
Global Treasury Services
421 Fayetteville Street
Mailstop: NC7-002-17-03
Raleigh, NC 27601
For questions aboutthis application contact Gary L Clazk at Phone: 919-359-0610; Fax: 919-882-8257
Email: gary.l.clazk(cr~baml.com
763642.02
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Bank of America~~Nigher Standards
AGREEMENT CERTIFICATION
I certify that each signature appearing on the previous page for Organization is the true signature of a person authorized to execute the
form on behalf of Organization, and I further certify that I have full authority to execute this certification. The Bank is entitled to rely
upon this certification until written notice of its revocation is delivered to the Bank.
Guidelines for completion: This Certification should not be signed by the individual who signed the Agreement. It should
be signed by Organization's counsel, or any other individual as permitted by Organization's
organizational documents.
(ORGANIZATION'S LEGAL NAME)
[Signature]
[Print Name]
[Title]
Gary L Clark, Senior Vice President
763642.02
ORANGE COUNTY
HILLSBOROUGH
NORTH CAROLINA
l~ana9er's ~f~ce
May 23, 2011
State of North Carolina
Department of Administration
Attention: Garey Graham
1305 Mail Service Center
Raleigh, NC 27699-1305
Subject: Bank of America Purchasing Card Contract
Dear Mr. Graham:
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Orange County has been exploring the use of Purchasing Cards with Bank of America, the State of
North Carolina's Purchasing Card Contractor. At this time we are ready to begin gathering
information needed for account setup, such as initial cardholders, payment options, credit line,
transaction or dollar limits, etc.
We request that we be allowed to participate in the State arranged program and "piggy back" the
current agreement with Bank of America.
We realize that the procurement card is a payment mechanism. It does not change our existing
requirements for competition, use of term contracts, or accountability. We further acknowledge that
our program will be subject to NCAC T01:05b.1523.
Listed below is our Program Administrator contact information for the Purchasing Card Program:
Program Administrator Name: David Cannell, Purchasing Agent
Email address: dcannell@co.orange.nc.us
Phone Number: 919-245-2651
Thank you for your assistance, we look forward to your reply.
Best Regards,
Otange County
Frank W. Clifton, Jr.
Orange County Manager
cc: Tracey Wopperer, Bank of America
AREA CODE (919) 245-2300 688-7331 FAX (919) 644-3004
Ext. 2300