Council adopts procurement policy after officials cite federal and state rules

Corcoran — The City Council on Monday approved updated financial management policies governing competitive bids and vendor selection after staff said an audit found the city lacked a required policy.

The move responds to an audit finding that the city did not have a written procurement policy for federal funds, a gap staff said created risk during recent funding reviews.

City staff told council the options in the draft policy were constrained by federal and state law. “The simplified acquisition threshold for federal is 250,000. But in Minnesota's statute, it's 175,000,” a staff member said, explaining why the council could not raise the city's local simplified threshold to $50,000 as one council member proposed.

The discussion centered on balancing practical staff discretion with mandatory federal regulations in the Code of Federal Regulations (CFR 200.321(b)) and the Federal Acquisition Regulation, Part 13. Staff said those rules require specific selection criteria for vendors and that many vendors the city works with already comply with federal contracting standards.

Council member Jeremy moved to approve the policy as drafted. The motion passed by voice vote.

Staff said the change responds to the recent influx of federal funds and the need to document procurement procedures for audits; they pledged to confirm statutory references with the city attorney and to continue providing operational support to staff conducting procurements.

Council discussion also covered routine procurement practices already done informally (for example, telephonic references for purchases under $5,000) and emphasized that operational due diligence will continue even when formal thresholds differ.

The ordinance and related policy language adopted were the staff-drafted financial management procedures presented at the meeting. The action was procedural; no changes to appropriation or immediate contracts were made at the meeting.