RES 1989-31 - 0000418255
RESOLUTION NO. 31 - 1989
' RESOLUTION TO MAKE TAX FREE PURCHASES OF MATERIALS AND
SUPPLIES FOR THE FRIDLEY CIVIC CENTER
WHEREAS, the City of Fridley has recently substituted Kraus - Anderson
Construction Company as the construction manager for the Civic Center Remodeling
Project; and
WHEREAS, the Kraus- Anderson Construction Company has recently advised the City
that pursuant to Minnesota Sales and Use Taxation Regulations Section 8130.1200
subparagraph 3(D) that it is possible for the City to purchase materials and
supplies for the Civic Center remodeling without paying sales tax for these
items; and
WHEREAS, in order for the City to not pay sales tax on materials and supplies
purchased it is necessary for the City to directly purchase all supplies and
materials and for this purpose to designate each of the individual contractors
as purchasing agents for the City of Fridley; and
WHEREAS, by designating each of the contractors as purchasing agents for the
City of Fridley, the City then assumes full responsibility for any defects in
said materials and supplies as well as assuming risk of any losses which might
be sustained as a result of the theft of said materials and supplies; and
WHEREAS, in order to comply with Minnesota Sales and Use Taxation Regulation
Section 8130.1200 subparagraph 3(D) it is necessary to provide certain terms and
' conditions in the contract between the City of Fridley and each of its
contractors.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fridley as
follows:
1. That except for those contracts where supplies and materials have already
been purchased and paid for by the City, the City hereby authorizes the
City staff to execute the following addendum to all of the contracts it
has entered into on the Civic Center remodeling project:
"Tax free purchases will be accomplished by the City establishing
a principal /agent relationship with the contractor per the following
items;
(a) Title to all materials, supplies and equipment purchased
pursuant to this appointment shall immediately vest in the
City of Fridley at the point of delivery.
(b) The risk of loss with respect to such materials, supplies and
equipment is that of the City of Fridley.
(c) The City of Fridley and not the contractor has the
responsibility for all defective materials, supplies and
equipment.
I(d) The City of Fridley will furnish adequate notification to all
Page 2 - Resolution No. 31 - 1989
vendors and suppliers of this agency relationship, and shall
make clear to such vendors and suppliers that the obligation
for payment is that of the City of Fridley and not of the
contractor.
(e) All purchase orders and other documents furnished to the
vendor shall clearly reflect this agency relationship.
(f) The contractor is authorized to and will appoint its
subcontractors as additional purchasing agents to purchase
materials, supplies and equipment under these same terms and
conditions."
2. That the City staff is authorized to execute change orders with each
contractor who enters into the addendum referenced in paragraph 1 above.
This change order shall reflect a price reduction which shall be an amount
equal to the amount of sales tax which the contractor would have paid but
for the Addendum referenced above.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 27TH DAY OF
FEBRUARY, 1989
ATTEST:
_V CS, /"
SHIRLEY A. 15aPALA - C Y CLERK
WILLIAM J. NEE OR
M