Ocean City To Try Credit Card Purchases

OCEAN CITY – The Town of Ocean City entered into a one-year pilot program for a purchasing card agreement this week, enabling a select number of town employees to use purchasing cards, or credit cards, in lieu of purchase orders in an effort to save time and money.

“Time is money,” said City Manager Dennis Dare this week, as he presented the pilot program to the City Council for approval. Currently, all purchases are made though purchase orders, rather than through the use of purchasing cards. Purchase order requests are made by the employee to the department head for approval then sent to the budget manager, city manager, and finally to the purchasing director, who in turn issues the purchase order to the requesting department.

Dare explained that while this process works, it can be time consuming as well as costly.

“We probably spend in the neighborhood of $50 per purchase order,” he said.

Travel and Internet purchases are also becoming more difficult to use with purchase orders.

“We’re finding it increasingly cumbersome, we cannot use it on Internet purchases,” said Dare.

Purchasing cards would eliminate some of the problems, allowing for more online purchases, which would ultimately save money, result in better efficiency with travel and ease with larger account purchases, such as through Home Depot.

The purchasing cards would be limited to a select number of employees, particularly during the first year of the program.

“Any credit card issues would have to be approved by the city manager,” said Dare.

The online component of the program, CenterSuite, which is an online card management system, would be used to monitor purchases. The employee, department head, city manager, purchasing director and internal auditor would be given access to the system, allowing them to monitor and view card activity at any time.

“This program can offer rebates, just like your personal credit cards,” said Dare, explaining that after $1 million is charged, the town would be eligible to receive a rebate.

M&T Bank would also be waiving all fees for the first year, said Dare.

“It will not replace purchase orders, it complements it,” said Dare. “We would roll it out on a smaller basis before we make it widespread.”

Councilman Lloyd Martin questioned limitations on the cards, such as restrictions on where gas can be purchased.

Dare explained that the card can be restricted to nearly any specifications desired, noting city management would be able to add, subtract or change where and how the card is used through the program.

“We can restrict it to pay at the pump only, that way a cup of coffee can’t be tacked on to it,” he said.

Councilman Jay Hancock questioned whether loopholes in the system would be found, as has been the case on the federal level where government credit card spending has often become excessive.

“I hope it works. I think the potential is there for a lot of savings, but I think we’ll have to be careful. There’s always someone trying to circumvent the system,” said Hancock.

“The program provides those [checks and balances] to us,” said Dare, assuring the council that the M&T pilot program had been thoroughly examined.

Dare added that other banks and programs were considered, but none maintained the merits of the M&T program.

“M&T was the only bank we were able to find that has a program, at our level, with these benefits,” said Dare.

The council questioned how frequently the program would be monitored over the next year. Dare explained that all charges require the online approval of the department head, which would insure that accounts are reviewed daily, weekly and monthly.

The council voted unanimously to move forward with the pilot program.

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