Council recommends changes to proposed local-hire policy
June 23, 2010
SOUTH LAKE TAHOE, Calif. – The South Lake Tahoe City Council recommended several changes Tuesday to a proposed ordinance that would make it easier for local contractors to win city public works contracts.
The Council directed staff to clarify who could qualify for an exemption to the California law requiring the city to accept the lowest responsible bid for projects costing more than $5,000 and lower the maximum preference available to local contractors under the exemption.
The revised ordinance is expected to be back in front of the City Council for possible approval at its next regularly scheduled meeting on July 13.
In the proposed ordinance, a contractor who is a responsible bidder and qualifies as a “small business” would win a contract as long as they are not more than 5 percent more expensive than the least expensive responsible bid by a business that doesn’t meet the “small business” requirements.
A “small business” has 25 or fewer employees or gross receipts averaging $4 million or less over the past three tax years, under the proposed ordinance. A “small business” must also have a city business license.
All businesses located within Lake Tahoe Unified School District’s boundaries would qualify for the exemption as long as they meet the other requirements of the proposed ordinance.
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“I think it would be fair to create a situation that goes somewhat beyond the limits of the city for contractors,” said Councilman Bill Crawford.
Also on Tuesday, the Council recommended cutting a proposed cap on the maximum advantage a small business could receive under the ordinance from $100,000 to $50,000. A $50,000 advantage is still substantial, said Mayor Kathay Lovell.
The Council also directed City Attorney Patrick Enright to loosen requirements for primary contractors to qualify for the small business exemption Tuesday.
Under the original proposal, if 25 percent or more of a primary contractor’s subcontractors qualified as small businesses, the primary contractor would qualify for the exemption.
The council told Enright to change the language of the ordinance to require a primary contractor to make their “best efforts” to hire local subcontractors in order to qualify.
Relying on a exact figure like 25 percent had the potential to be problematic, said Public Works Director John Greenhut.
Primary contractors should also have some leeway in the subcontractors they hire, Crawford said.
“We’re trying got create jobs for local people. That’s fine,” Crawford said. “How far do we want to go?”
Enright is expected to develop a definition of “best efforts” prior to the July 13 meeting.
City staff will restart the bid process for construction of the El Dorado Beach portion of the Lakeview Commons project because of “mathematical errors” in the original process.
Clark & Sullivan, the contractors who expected to be awarded the construction contract following the original bid process, protested the move, contending two protests the city received from unsuccessful bidders were unfounded.
Making the original bids public also puts the company at a disadvantage the second time around, said Clark & Sullivan co-founder B.J. Sullivan.
Sullivan said soliciting bids again would delay the project by a year. City Attorney Patrick Enright disagreed, saying an August awarding of the contract would allow the project to be completed in the 2011 building season as scheduled.
The project includes several improvements at El Dorado Beach, including the construction of a pedestrian plaza and repair of retaining wall.
The council voted to have local law enforcement agencies present information on how three medical marijuana dispensaries in South Lake Tahoe are complying with California medical marijuana laws at their July 13 meeting following a suggestion by City Councilman Jerry Birdwell.