HomeMy WebLinkAboutOrdinance 1229 Section 3.32.125 - Local Business Preferencce Program Purchasing Policies and Proceduresvm
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CITY OF PALM DE ERT
OFFICE OF THE CITY MANAGER
STAFF REPORT
REQUEST: Approval of Ordinance No.1229 Adding Section 3.32.125 (Local
Business Preference Program) to Chapter 3.32 (Purchasing Policies
and Procedures) of the Code of the City of Palm Desert, California
SUBMITTED BY: John M. Wohlmuth, City Manager
DATE: November 10, 2011
CONTENTS: Ordinance No. 1229
Recommendation
By Minute Motion:
Waive further reading and pass the attached Local Business Preference
Ordinance to the second reading.
Executive Summary
Approval of the staff recommendation will approve the first reading of a Local Business
Preference Ordinance to the second reading. The Local Business Preference
Ordinance permits the purchasing officer to allow up to a 5% credit of the total bid price to
a local business (within the Coachella Valley having a business license with a local
address) for purchasing supplies, materials, and equipment under $25,000.
Background
Most cities in the Coachella Valley have some type of a local purchase preference policy
or ordinance. The policies or ordinances differ from city to city in regards to the extent of
their preference and what type of procurement the city is considering.
The attached Palm Desert Ordinance applies to the purchasing or procurement of
supplies, materials, and equipment from $0 to $25,000. The ordinance also applies to
services first solicited on or after January 1, 2012. However, since the procurement of
services utilizes qualifications, experience, and quality of proposal as the primary
Staff Report
Approval of Ordinance No. 122-9,___ Adding Section 3.32.125 to Chapter 3.32
November 10, 2011
determining factor rather than price, local businesses have been given credit when
ranking the most suitable consultant.
A local business is defined as a vendor or contractor with a valid physical business
address within the Coachella Valley and having a valid business license by a jurisdiction
located in the Coachella Valley. The Coachella Valley is the nine city limits of the cities
and the CVAG boundaries for the Riverside County unincorporated areas. P.O. Boxes
shall not be used for establishing such a physical address.
The Local Business Preference Ordinance does not apply to the following purchases or
contracts:
Goods or services provided under a cooperative purchasing agreement, such as
the State of California Department of General Services cooperative purchasing
contract.
2. Purchasing or contracts which are partially or fully funded by another
governmental entity and the laws, regulations, or policies governing such funding
prohibit application of the preference such as state and federal funds.
3. Purchasing made or contracts let under emergency or non-competitive situations.
4. Purchases with an estimated cost of $25,000 or more.
5. Application of the Local Business Preference to a particular purchase, contract, or
category of contract for which the City Council is the awarding authority may be
waived at the City Council's discretion.
6. Public Works Act projects.
7. Bids that are non -responsive.
Fiscal Analysis
The application of this ordinance may slightly add to the cost of purchasing or procuring
supplies, materials, or equipment (not to exceed 5% of the total bid). However, one
could argue that the City would recover the additional cost by increased jobs, taxes, and
secondary economic impacts.
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Staff Report
Approval of Ordinance No.1229 Adding Section 3.32.125 to Chapter 3.32
November 10, 2011
The application of this ordinance should have sustainability benefits identified in the
sustainability plan, such as reduced pollution due to an incremental reduction of shipping.
Submitted By:
City manager
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ORDINANCE NO. 1229
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF PALM DESERT, CALIFORNIA, ADDING
SECTION 3.32.125 (LOCAL BUSINESS PREFERENCE
PROGRAM) TO CHAPTER 3.32 (PURCHASING POLICIES
AND PROCEDURES) OF THE CODE OF THE CITY OF
PALM DESERT, CALIFORNIA.
THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, ORDAINS:
SECTION 1. FINDINGS
(a) The City annually spends significant amounts on purchasing supplies, materials,
and equipment, and contractual and professional services. The dollars used in making these
purchases are derived in large measure from taxes and fees derived from Local Businesses and
the City Council has determined that funds generated in the community should, to the extent
possible, be placed back in the local economy. Therefore, the City Council has determined that it
is in the best interest of the City to give a preference to Local Businesses in making such
purchases whenever the application of such a preference is reasonable in light of the dollar -value
received in relation to such expenditure.
(b) The City Council further finds that the Coachella Valley is in a state of economic
depression and many local businesses have been forced to close their doors due to severe
financial losses. Many of these local business establishments have been doing business in the
Coachella Valley for many years. The City Council finds that the City should promote and
stimulate local businesses by requiring that purchases of supplies, materials, and equipment and
contractual services be acquired from Local Businesses.
(c) The City Council further finds that this action is necessary to grow the local
economy and preserve the local businesses that have diligently served the Coachella Valley for
many years.
(d) Strategies that encourage people to buy locally are an important component of
economic sustainability. Retaining local dollars within a community reduces economic export
and increases the financial productivity of taxpayer dollars and increases the consumption of
local goods and services while fostering a sustainable community. In working towards a
sustainable economy, the City Council recognizes that sustainable procurement policies are an
important step on the path to a sustainable community. By leveraging the purchasing power of
the City to buy local products and services instead of products and services from outside the
Coachella Valley it strengthens the local economic activity and employment as well as sets an
example that helps foster and maintain a vital economic community for future generations.
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ORDINANCE NO. 1229
SECTION 2. SECTION 3.32.125 IS ADDED TO CHAPTER 3.32 (PURCHASING
POLICES AND PROCEDURES) AS FOLLOWS
"3.32.125 Local Business Preference Program
(a) Statement of Policy. It is the policy of the City to promote employment and
business opportunities for local residents and firms on all contracts and give preference to local
residents, workers, businesses, contractors, and consultants to the extent consistent with the law
and interests of the public.
(b) Local Business. In this Chapter, "Local Business" means a vendor, contractor, or
consultant who has a valid physical business address located within one of the nine incorporated
cities of the Coachella Valley, or within an unincorporated area of Riverside County in the
Coachella Valley within the boundaries of the Coachella Valley Association of Governments, at
least six months prior to bid or proposal opening date, from which the vendor, contractor, or
consultant operates or performs business on a day-to-day basis, and holds a valid business
license by a jurisdiction located in the Coachella Valley. Post office boxes are not verifiable and
shall not be used for the purpose of establishing such physical address.
(c) Local Preference in Purchasing. In the bidding of, or letting for procurement of,
supplies, materials, and equipment, as provided in this Chapter, the purchasing officer may give
a preference to Local Businesses in making such purchase or awarding such contract in an
amount not to exceed five (5%) percent of the Local Business' total bid price. Total bid price
shall include not only the base bid price but also adjustments to that base bid price resulting from
alternates requested in the solicitation. In order for a Local Business to be eligible to claim the
preference, the business must request the preference in the solicitation response and provide a
copy of its current business license from a jurisdiction in the Coachella Valley.
(d) Local Preference in Services. In awarding contracts for services, including
consultant services, preference to Local Business shall be given whenever practicable pursuant to
this Chapter consistent with the Statement of Policy in subsection (a) above. The contractor or
consultant will also, to the extent legally possible, solicit applications for employment and
proposals for subcontractors and subconsultants for work associated with the proposed contract
from local residents and firms as opportunities occur and hire qualified local residents and firms
whenever feasible. In order for a Local Business to be eligible to claim the preference, the
business must request the preference in the solicitation response and provide a copy of its current
business license from a jurisdiction in the Coachella Valley.
(e) Exceptions to Local Business Preference Policy. The preference set forth in this
Section shall not apply to the following purchases or contracts:
(1) Goods or services provided under a cooperative purchasing agreement.
(2) Purchases or contracts which are funded in whole or in part by a
governmental entity and the laws, regulations, or policies governing such funding prohibit
application of that preference.
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ORDINANCE NO. 1229
situations.
(3) Purchases made or contracts let under emergency or noncompetitive
(4) Purchases with an estimated cost of $25,000.00 or more.
(5) Application of the local business preference to a particular purchase,
contract, or category of contracts for which the City Council is the awarding authority may be
waived at the City Council's discretion.
(6) Public works projects
(7) Bids that are non -responsive.
(f) Quality and Fitness. The preferences established in this Section shall in no way be
construed to inhibit, limit or restrict the right and obligation of the purchasing officer to compare
quality and fitness for use of supplies, materials, equipment, and services proposed for purchase
and compare the qualifications, character, responsibility, and fitness of all persons, firms, or
corporations submitting bids or proposals. In addition, the preferences established in this Section
shall in no way be construed to prohibit the right of the City Council or the purchasing officer
from giving any other preference permitted by law or this Chapter.
(g) Application. The Local Business Preference provided in this Section shall apply
to new contracts for supplies, materials, equipment, and services first solicited on or after
January 1, 2012. This Section shall be implemented in a manner consistent with otherwise
applicable provisions of this Chapter.
(h) Verification of Local Business Preference Eligibility. Any vendor or consultant
claiming to be a Local Business, shall so certify in the bid, in writing to the purchasing officer.
The purchasing officer shall not be required to verify the accuracy of any such certifications, and
shall have sole discretion to determine if a vendor or consultant meets the definition of "Local
Business."
(i) Enforcement.
(1) The information furnished by each bidder requesting a Local Business
Preference shall be under penalty of perjury.
(2) No person or business shall knowingly and with intent to defraud,
fraudulently obtain, retain, attempt to obtain or retain, or aid another in fraudulently obtaining or
retaining or attempting to obtain or retain certification as a Local Business for the purpose of this
Section.
(3) No person or business shall willfully and knowingly make a false
statement with the intent to defraud, whether by affidavit, report, or other representation, to a
City official or employee for the purpose of influencing the certification or denial of certification
of any entity as a Local Business.
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ORDINANCE NO. 1229
(4) A business which has obtained City certification as a Local Business by
reason of having furnished incorrect supporting information or by reason of having withheld
information, and which knew or should have known the information furnished was incorrect or
the information withheld was relevant to its request for certification, and which by reason of such
certification has been awarded a contract to which it would not otherwise have been entitled,
shall:
(i) Pay to the City any difference between the contract amount and
what the City's costs would have been if the contract had been properly awarded;
(ii) In addition to the amount described in sub -section (i) above, be
assessed a penalty in an amount of not more than ten percent (10%) of the amount of the contract
involved; and
(iii) Be subject to debarment from future award of contracts from the
City.
(5) The penalties identified in (4) above shall also apply to any business that
has previously obtained proper certification and, as a result of a change in its status would no
longer be eligible for certification, fails to notify the purchasing officer of this information prior
to responding to a Solicitation or accepting a contract award."
SECTION 3. COMPLIANCE WITH CALIFORNIA ENVIRONMENTAL QUALITY
ACT
This ordinance complies with the "City of Palm Desert Procedure for Implementation of
California Environmental Quality Act", in that the ordinance is exempt because there is no
possibility that the adoption of the ordinance will have any significant negative effect on the
environment.
SECTION 4. CERTIFICATION AND PUBLICATION
The City Clerk shall certify to the passage and adoption of this ordinance and shall cause
the same to be published once in the Desert Sun, a newspaper of general circulation, printed and
published within the County of Riverside, and circulated within said City.
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ORDINANCE NO. 1229
PASSED, APPROVED, AND ADOPTED by the City Council of the City of
Palm Desert, California, at its regular meeting held this day of , 2011, by
the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
RACHELLE D. KLASSEN, CITY CLERK
CITY OF PALM DESERT, CALIFORNIA
JEAN M. BENSON, MAYOR
725 00. 0000 1 \6981175.4