Town of Smithsburg, MD
Washington County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the Mayor and Council of the Town of Smithsburg as indicated in article histories. Amendments noted where applicable.]
[Adopted 10-6-2009]

§ 41-1 Overview of policy.

A. 
The Town Charter requires advertising for sealed bids for supplies, equipment, construction of public improvements or contractual services involving more than $10,000.
B. 
The Town utilizes some purchase agreements initiated by the federal, state, county or other municipal governments (the "initiating government" level) for certain items: road salt, some vehicles, etc.
C. 
For amounts anticipated to be $10,000 or less, the following general principles as set forth in the following sections apply.

§ 41-2 Expenditures of $10,000 or less.

The Town can utilize purchase agreements initiated by the federal, state, county or another municipal government for purchases in these categories, without soliciting competitive quotes, proposals or bids. Otherwise, absent such purchase agreements, the Town:
A. 
May, but need not, solicit and secure up to three verbal quotes for purchases or services anticipated to cost less than $3,500.
B. 
Shall solicit and secure at least three written quotes from potential suppliers for purchases or services anticipated to cost more than $3,500 but not more than $7,000.
C. 
Shall solicit and secure at least three written sealed bids from potential suppliers for purchases or services anticipated to cost more than $7,000 but less than $10,000.

§ 41-3 Quotes or bids exceeding anticipated cost.

In the event that a proposed purchase produces quotes or bids in excess of the high-end cap of the process utilized, approval of the Mayor and Council shall be obtained before the award of the contract. Without such approval, the process which would have been appropriate, considering the result obtained, shall be followed. The individual quotes or bids shall be maintained and held in a confidential status, with the results known only to the Clerk-Treasurer and the Town Attorney, until completion of the appropriate process or approval of the Mayor and Council of the process utilized, whichever occurs first.
A. 
All deliberations of the Mayor and Council relative to such approval shall be conducted in executive or closed session, with the minutes of such meetings sealed until the earlier to occur of:
(1) 
Approval of the process followed and award of the contract; or
(2) 
Award of the contract.
B. 
In either case, upon conclusion of the contract award, the minutes should be unsealed.

§ 41-4 Emergency purchases and contracts.

Emergency purchases and contractual services are exempt from the above process, the total cost of such purchases and services on an emergency basis being unknown in advance. The Town should make reasonable efforts to establish written labor and equipment rates on a periodic basis with persons capable of supplying the labor, equipment and/or materials which it anticipates might be needed in specific types of emergencies.
[Adopted 10-6-2009]

§ 41-5 Overview of policy.

A. 
The Town will limit its long-term debt borrowing to capital improvements or projects that cannot be financed on a pay-as-you-go basis within a reasonable period of time from current revenues.
B. 
The Town will not use long-term debt to fund current operations or current operating costs.
C. 
Capital projects financed through the issuance of bonds shall not be financed for longer than the expected useful life of the project.
D. 
Interest, operating and maintenance expenses will be capitalized only for enterprise or utility fund facilities and will be strictly limited to those expenses incurred prior to the actual operation of the facilities.
E. 
The Town will make its best effort to keep the average maturity of nonutility general obligation bonds at or below 20 years.
F. 
Total debt service for general long-term debt will not exceed 10% of total operating revenues.
G. 
Enterprise or utility-fund-related debt service will be self-liquidating or supported by the revenues of the utility itself. Given the Town's historical low level of general long-term debt outstanding, general obligation debt may be used by the utility funds to lower interest borrowing costs. Such utility general obligation debt is not subject to a per capita cap.
H. 
Total nonutility general obligation debt will not exceed 10% of the assessed valuation of taxable property or $1,000 per capita.
I. 
The Town will avoid the use of short-term tax anticipation borrowing or other short-term debt for noncapital purposes except when necessitated by cash flow or other emergency situations. Any bond anticipation debt will be retired within six months after completion of the project, if financed. Continual rollover of short-term debt without principal paydown will be avoided.
J. 
The Town will not participate in acting as the conduit for conduit debt unless the Town has approved the borrower's creditworthiness and the purpose of the borrowing issue. Conduit debt will not be approved which would have a contingent impact on the general revenues of the Town or the marketability of the Town's direct debt.[1]
[1]
Editor's Note: Amended at time of adoption of Code (see Ch. 1, General Provisions, Art. II).
K. 
The Town will not borrow using derivatives.