[HISTORY: Adopted by the Council of the City of Pawtucket: Art. I, approved 4-22-1992 as Ch. No. 2249; Art. II, 4-23-1992 as Ch. No. 2253. Amendments noted where applicable.]
Accounting Division — See Sec. 4-507 of Charter.
[Approved 4-22-1992 as Ch. No. 2249]
Firms and organizations that do business with the City of Pawtucket expect and deserve to be paid in a prompt and timely manner. Unjustified delays in paying vendors, construction contractors and providers of service may discourage such firms and organizations from doing business with the city and may ultimately increase the costs to the city of purchasing materials, equipment and supplies, undertaking construction and reconstruction projects and obtaining a wide variety of professional and other specialized services, including those that are provided to persons in need. Consequently, this Article sets standards for the payment of bills incurred by the city within specified periods of time and requires interest payments in situations where contract payments do not conform to these standards. Consistent with accepted business practices and with sound principles of fiscal management, it is the intent of this Article to encourage the city to make payments expeditiously and further reduce existing payment processing times whenever feasible, while at the same time permitting the city to perform proper and reasonable financial oversight activities designed to ensure that the city government receives the quality of goods and services to which it is entitled to ensure that public funds are spent in a prudent and responsible manner.
As used in this Article, the following terms shall have the following meanings unless otherwise specified:
- Any department, board, bureau, commission, division, office, council, institution, authority or committee in the executive, legislative or judicial branches of city government and all other quasi-public bodies created by state law or city ordinance whose purpose and function are directly related to the health, safety and welfare of the general populace of the city.
- CITY FUNDS
- Funds held by the Director of Finance in the general fund of the city.
- An enforceable agreement entered into by a contractor and the City of Pawtucket.
- Any person, partnership, firm, corporation or association:
Selling materials, equipment or supplies or leasing property or equipment to the City of Pawtucket.
Constructing, reconstructing, rehabilitating or repairing buildings or highways for or on behalf of the City.
Rendering or providing services pursuant to a contract with the city, including, without limitation, services which help people in need.
- DESIGNATED PAYMENT OFFICE
- The office designated by the City to which a proper invoice is to be submitted by a contractor.
- NONPROFIT PROVIDER
- Any not-for-profit firm, partnership or corporation which provides services to people in need pursuant to a contract with the city. A "nonprofit provider" is a contractor for purposes of this Article.
- PAYMENT DATE
- The date on which a payment is due according to a contract or the date on which a proper invoice is submitted to the proper city authority if there is no specified contract payment date.
- PROPER INVOICE
- A written request for a contract payment that is submitted by a contractor setting forth the description, price and quantity of goods, property or services delivered or rendered, in such form and supported by such other substantiating documentation as the City Director of Finance or his or her appointee may reasonably require.
- RECEIPT OF AN INVOICE
- The date on which a proper invoice is actually received in the designated payment office or the date on which the city receives the purchased goods, property or services covered by the proper invoice, whichever is later.
- REQUIRED PAYMENT DATE
- The date by which a contract payment must be made in order for the city not to become liable for interest payments, pursuant to § 7-5.
- The reduction by the Director of Finance of a payment due to a contractor by an amount equal to the amount of an unpaid legally enforceable debt owed by the contractor to the city or any amount which the city is entitled to withhold under the terms of the contract or any amount owed by the contractor to the city by way of a statutory obligation or enforceable lien, of which the contractor had previous knowledge or notice.
All bills shall be paid within forty-five (45) working days of receipt of a proper invoice or other contractual dates for periodic payments, except when a contractor has failed to submit a bill in accordance with contractually imposed time frames.
Partial payments shall be made by the city on partial deliveries or partial completion of services in accordance with the contract. Each completed delivery or service must be paid in accordance with the provisions of § 7-3 of this Article.
Whenever the city is required to make a payment from city funds according to a contract and the city does not make the contract payment by the required payment date, it shall make an interest payment to the contractor in accordance with this Article on the amount of the contract payment which is due, unless failure to make such contract payment is the result of a lien, attachment or letter of notice disputing either the amount due or the quality of the services performed or quality of the good delivered, provided that said letter of notice is sent to said contractor by certified mail, return receipt requested, within ten (10) working days of the city's receipt of the invoice or request for payment or other legal process against the money due the contractor, or unless the amount of the interest payment as computed in accordance with the provisions of § 7-6 of this Article is less than ten dollars ($10.).
Required payment date; extension.
The required payment date shall be forty-five (45) working days after the receipt of a proper invoice for the amount of the contract payment due; except when:
The Director of Finance in the course of his or her employment determines that there is reasonable cause to believe that payment may not properly be due, in whole or in part.
In accordance with specific statutory or contractual provisions, payment must be preceded by an inspection period or by a city review to determine the resources applied or used by a contractor in fulfilling the terms of the contract.
The necessary city, state or federal government appropriation required to authorize payment has yet to be enacted or appropriated.
The cash balance of the fund or account from which the payment is to be made is insufficient to finance the payment.
A proper invoice must be examined by the federal or state government prior to payment.
The goods or property have not been delivered or the services have not been rendered by the contractor in compliance with the terms or conditions of the contract.
Any time taken to satisfy or rectify any of the types of conditions described in this subsection shall extend the required payment date by an equal period of time.
The city shall have fifteen (15) working days after receipt of an invoice at its designated payment office to notify the contractor of defects in the delivered goods, property or services. Defects in the invoice or improprieties shall delay the commencement of the time period specified in Subsection B of this section. When the city fails to notify a contractor of such defects or suspected improprieties within ten (10) working days of receiving the invoice, the number of days allowed for payment of the corrected proper invoice will be reduced by the number of days between the 10th day and the day that notification was transmitted to the contractor. If the city, in such situations, fails to provide reasonable grounds for its contention that a defect or impropriety exists, the required payment date shall be calculated from the date of receipt of an invoice.
The city department shall have five (5) working days after receipt of invoice to transmit the invoice to the office of the Director of Finance for processing.
A proper invoice submitted by the contractor shall be required to initiate any payment, except where the contract provides that the contractor will be paid at predetermined intervals without having to submit an invoice for each scheduled payment, in which case the city department responsible for making the purchase shall submit an approval voucher to the Director of Finance for the payment that is due and, for the purposes of determining eligibility for payment of interest and subject to the exception of time-to-rectify provisions of Subsection B of this section, the required payment date shall be the payment due date specified in accordance with the contract.
Interest payments on amounts due to a contractor according to this Article shall be paid to the contractor for the period beginning on the date after the required payment date and ending on the day a proper invoice was approved for payment by the Director of Finance.
The city, if required by this Article shall calculate and pay interest upon payment of the principal sums due. Interest payment shall accompany payment of the net amount due for goods and services.
The city shall not require companies to petition, invoice, bill or wait any additional days to receive interest due.
Interest shall be paid at a rate equal to the prime interest rate as reported on the money market page of the Wall Street Journal published on the first regular business day of each month.
Unpaid interest shall compound every month overdue.
Any interest paid to a contract under the provisions of this Article shall not be included as revenue for the purposes of determining any reimbursement rates applicable to the contractor.
In the event that an interest payment is made by or incurred by a contractor in the course of transacting business with any entity other than the city, the interest shall not be an obligation of the city, and the city shall not reimburse the contractor for the interest.
The acceptance of payment, in whole or in part, by a contractor shall not be deemed to constitute a waiver of interest otherwise due under the provisions of this Article.
No contract entered into after January 1, 1992, shall contain any provision requiring the payment of interest in a manner inconsistent with this Article, and any provision contained in the contract which waives the right to the payment of interest is hereby declared to be contrary to public policy and wholly void.
Any determination made by the city according to § 7-5 shall be subject to review by the City Purchasing Board. The proceedings shall only be commenced in the absence, or upon completion, of other review procedures specified in the applicable contract or by applicable regulations.
Notwithstanding any other provision of law to the contrary, the liability of the city, insofar as incurring an obligation to make an interest payment to a contractor under the terms of this Article is concerned, shall not extend beyond the date of a notice of intention to file a claim, the date of a notice of a claim or the date commencing a legal action for the payment of such interest, whichever occurs first. Any interest payment owed by the city in accordance with the provisions of this Article as of that date shall be paid as directed by the court.
With respect to the court actions or other legal processes referred to in this section, any interest obligation incurred by the city after the date specified in this section in accord with any provision of law other than this Article shall be determined as prescribed by that separate provision of law, shall be paid as directed by the court and shall be paid from any appropriation available for that purpose.
The provisions of this Article shall not apply to payments due and owing by the city:
Under the Eminent Domain Procedure Law.
As interest allowed on judgments rendered by a court according to any provision of law other than those provisions contained in this Article.
To the federal government; to the state or any state agency or its related instrumentalities; to any duly constituted unit of local government, including but not limited to cities, towns, school districts, special districts or any of their related instrumentalities; to any public authority or public benefit corporation; or to employees of the federal, state or any city government or any federal, state or city agency when acting in, or incidental to, their public employment capacity.
To contractors of third party payment agreements.
To entities which receive federal or state funds through any intermediary organization.
In situations where the city exercises a legally authorized set-off against all or part of the payment due the contractor.
The Director of Finance shall file quarterly reports with the Mayor and the City Council. Included in the report shall be:
[Added 6-24-1992 by Ch. No. 2265]
Any vendor who is a party to any agreement or contract with the City of Pawtucket, and any vendor who had been a party to any agreement or contract with the City of Pawtucket, and as a result of that vendor's agreement or contract with the City of Pawtucket, is under city, state or federal investigation for participation in any activity which is in violation of any city, state or federal law, is excluded and exempt from the prompt payment requirement of this Article.
[Approved 4-23-1992 as Ch. No. 2253]
Any claim paid by the City of Pawtucket by agreement of the City Council and the Committee of Claims and Pending Suits or by judgment arrived at by a court of competent jurisdiction shall be assessed against the individual department responsible for said payment; i.e. Water Department, Public Works, School Department, Parks and Recreation, Department of Zoning and Code Enforcement. Said judgment and/or payment shall be included as a line item in the budget of the particular department responsible.
This assessment shall be included in the responsible department's financial statement issued by the Director of Finance.