HomeMy WebLinkAbout10,Workshop-local preference policyAgenda Item # 10
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Public District
WORKSHOP
To: Board of Directors
From: Robert Mescher
Date: January 19, 2011
Subject: Discussion Regarding a Local Procurement Policy
1. WHY THIS MATTER IS BEFORE THE BOARD
The Board requested this workshop to discuss the potential of implementing a local
procurement policy for the District.
2. HISTORY
The District's purchasing procedures are defined in Chapter 3.08 of the District Code.
Types of procurements are:
• Commodities or equipment
• Service contracts (Public Works and other service contracts)
• Joint purchasing with the State and other public agencies
• Special services
• Consulting services
• Emergencies
Our total annual procurements are about $20,000,000.
3. NEW INFORMATION
The Board requested staff to investigate the possibility of a local preference
procurement policy to encourage utilization of Truckee local businesses.
Eligible Procurements
Types of procurements that could include a local preference component are:
• Commodities or equipment up to $10,000
• Public works contracts up to $15,000
• Other service contracts
• Special services
• Uonsuiting services
• Emergencies
These eligible procurements represent about $2,000,000 or 10% of the District's total
annual procurements.
Examples of special services relate to financial, economic, accounting, engineering,
legal, or administrative matters.
Examples of consulting services relate to private architectural, landscape architectural,
engineering, environmental, land surveying, or construction project management firms,
where the firms have equal competence and professional qualifications.
Other Agencies
Counties and cities have local preference procurement policies to assist their local
businesses, expecting that sales and property tax revenue will increase in the long
term.
Most California counties have a local preference procurement policy; typically 5% of
the total contract cost.
The Town of Truckee has a local preference policy based on the local business'
contribution of local sales tax.
Our neighboring local agencies do not have a written local preference procurement
policy:
Alpine Springs County Water District
North Tahoe Public Utility District
Northstar Community Service District
Placer County Water Authority
Squaw Valley Public Service District
Tahoe City Public Utility District
Tahoe Truckee Sanitation Agency
Truckee Fire Protection District
Truckee Sanitary District
Challenges
Some challenges to creating local preference policy are:
• Ensuring the rate payers benefit
• Defining "local"
o Geographic parameters
o Business license location
o Location of residence of employees/owner
o Rate payer
• Business
• Business owner
• Employees
• Defining the preference adjustment
o Percentage of contract cost
o Additional qualification points
4. FISCAL IMPACT
There is no fiscal impact associated with this workshop.
The District's total annual procurements are about $20,000,000. Approximately
$2,000,000 or 10% of the annual procurements are eligible to include a local
preference policy. If the local preference policy gave a 5% preference adjustment to
local venders, the potential cost to the District would be $100,000.
The indirect fiscal impact of reduced competition due to a local preference adjustment
is difficult to determine.
5. RECOMMENDATION
Review this report and provide comments.
Robert Mescher
Acting Administrative Services Manager
Michael D. Holley
General Manager