LOS ANGELES, Calif.–Mayor Antonio Villaraigosa today urged the City Council to swiftly pass an ordinance that would give a boost to local businesses that bid on city projects.
Speaking to a gathering of several hundred Los Angeles Chamber of Commerce members at the “Access City Hall” conference, the mayor said the ordinance would give an 8 percent advantage to local businesses.
“I think, well according to USC, it will create about 10,000 jobs, but importantly, recycle dollars back into local businesses,” Villaraigosa told the conference attendees. “Virtually every big city in the country has that but here.”
The city spent about $2 billion on construction during the 2010-11 fiscal year, with less than 15 percent going to local businesses, according to the mayor’s ofice. The city is expected to spend about $2.7 billion on construction during the current fiscal year.
The ordinance could help department general managers meet a goal set by the mayor for at least 25 percent of contracts going to local businesses, according to the mayor.
The ordinance, introduced by Councilmen Paul Krekorian and Bernard Parks, would consider the bids from local businesses at 8 percent below their submitted value for contracts where selection is based primarily on the lowest bid. It would also give an 8 percent point boost on contracts that are scored on a variety of other factors.
“This is a perfect opportunity to leverage the city’s own purchasing power as a local economic stimulus program to put people back to work,” Krekorian said.
The ordinance could increase the total cost to the city of contracts.
Officials are betting the ordinance would be a net positive, bringing in more revenue in the long term through sales, property and other taxes from employees at local businesses that benefit from the measure.
“It’s more than just a bet,” Krekorian said, noting the ordinance is based on an economic analysis by professors at the University of Southern California.
“It will have an immediate impact as soon as the money is spent,” he said. “It’s not a question of trying to just attract local businesses here.
It’s also that the money that we’re spending will be spent here.”
To qualify, businesses would have to be registered for at least six months and employ at least 50 full-time employees, half of which would have to work 60 percent of the time in the city.
The council is expected to vote on the ordinance within the next two weeks.
By Richie Duchon | City News Service