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Archive for Tuesday, March 24, 2009

City to mull adopting ‘buy local’ policy

City commissioners feel like they ought to put their money where their mouths are when it comes to buying local.

March 24, 2009

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On the street

Should the city adopt a “buy local” policy?

I think it’s a good idea to keep our resources here in the city.

More responses

Local businesses may receive some help from City Hall on Tuesday night. Or they may get hurt.

It depends on how you view the idea of a new purchasing policy that would give city commissioners the right to buy products and services from local vendors, even if they are not the low bidder.

The idea has support from some city commissioners and businesses that serve as City Hall vendors.

“When we buy something locally, I think it is an investment of city tax dollars into the local businesses and residents who pay the tax to begin with,” said City Commissioner Mike Amyx, who is pushing for the policy. “This would be money that gets put back into the community.”

But staff members and some businesses have raised questions about the policy. A staff memo reviewing the idea of a local purchasing policy noted that if Lawrence adopts such a policy, other communities may adopt policies that make it more difficult for Lawrence companies to win bids in those cities.

That’s the concern that Steve Glass, president of Lawrence-based LRM Industries, also has. Glass — whose company provides concrete and asphalt services — has urged the city not to adopt a local purchasing policy, especially for the construction industry.

“It is our belief that the construction industry and the taxpayers benefit by treating bids from all contractors equally rather than giving preference to local contractors,” Glass said in a letter to commissioners.

Other frequent City Hall suppliers disagreed. Junior Brubeck of Lawrence-based Jim Clark Motors said he thought the potential for most Lawrence businesses to lose out-of-town sales was relatively small.

“I would think the potential reward is a lot more than the risk for us,” Brubeck said.

The idea for a local purchasing policy came up earlier this month after city commissioners reviewed bids for about $200,000 worth of police cars. The low bid came from Shawnee Mission Ford, but Lawrence-based Laird Noller Automotive submitted a bid that was only $738 higher than the Shawnee Mission Ford price.

Details of how the local preference policy would work haven’t been determined. In general, the policy would allow the city to select a local company — meaning a company with a Lawrence office or store — if the local company’s bid is within a few percent of the low bid. A percentage of somewhere between 1 percent to 5 percent has been suggested.

Staff members said the extra costs could add up. They estimated that if a local preference policy caused bids from all vendors to increase by 1 percent, it would cost the city about $500,000 in extra vendor fees in 2008.

Commissioners meet at 6:35 p.m. today at City Hall, Sixth and Massachusetts streets.

Comments

skinny 5 years, 9 months ago

I think it is smart to go with the low bid, seeing it is our tax dollars you are talking about!!

Chris Ogle 5 years, 9 months ago

Just make it easier for a business to locate here, and let the bids take care of themselves.

Mark Zwahl 5 years, 9 months ago

The tax dollars being spent is the money of the community members. Spending that money within the community makes sense and keeps more money in the area - spread amongst those we share the land and space with.

This is a simple policy and Amyx is correct to suggest it. Buying local would help sustain and even create more local jobs. Wouldn't that be a good use of tax dollars?

Time to see the big picture and also look at energy efficiency, waste and pollution when spending our tax dollars.

Mark Zwahl 5 years, 9 months ago

The tax dollars being spent are those of community members - i.e. US. Spending that money within the community makes sense and keeps more money in the area - spread amongst those we share the land and space with.

This is a simple policy and Amyx is correct to suggest it. Buying local would help sustain and even create more local jobs. Wouldn't that be a good use of tax dollars?

Time to see the big picture and also look at energy efficiency, waste and pollution when spending our tax dollars.

redmoonrising 5 years, 9 months ago

Whatever they set the percentage at, we can almost assume we will be paying that much more locally. Why would local businesses have the incentive to be low bidder if they know they can get it for 1-5% more. While it makes sense, you add up all that percentage and it could be a big cost to us, the taxpayers. I always prefer supporting local businesses but they have to earn that business with their pricing policies. This gives them free rein to charge that extra to their benefit but not the taxpayer's.

KU_cynic 5 years, 9 months ago

While it might seem benign to spend a few more bucks here and there to support local suppliers, such a policy could eventually morph into a situation where there are some not-very-competitive local suppliers whose major customer is the city. Oila, a special interest would be born, and it would be difficult to reverse the policy and get the local firm off the government teat.

Let's make it simple: If the bid is a tie on price and total delivered cost, the tie goes to the local supplier.

jspawk 5 years, 9 months ago

Oh....let me see if I got this....so we (public) should go downtown and spend our money locally, while they're blowing our money in nearby cities? I think I'll go spend my money at the mall this weekend.....

PapaB 5 years, 9 months ago

Give local a chance to match, then go with the local bidder. If they're getting new business from the city that they didn't previously have, they should be able to shrink their margins to be competitive. If they can't shrink margins, they should be offering a better quality service/product.

craigers 5 years, 9 months ago

PapaB, I was thinking the same thing. Give the local company the option of matching and beating the low bid and if they don't, then go with the low bidder out of the city.

Jeremy 5 years, 9 months ago

What is so local about Laird Noller Ford, which is based out of Topeka, KS?

What if Shawnee Mission Ford or any other operation that does business with the city rents a storage unit in town or opens a P.O. box so it has a local address and then calls its self a local business?

Every dollar counts, especially when wages and benefits are being cut for city workers and their families!

This is an incredibly slippery slope and I see my tax dollars sliding down it...

BrianR 5 years, 9 months ago

Protectionism is never a good idea. Would the PD have to take the new cars to Shawnee Mission Ford for any kind of service or warranty stuff? If so, Laird Noller would be the low bidder considering time and fuel to get cars down there. Anybody know the answer to this?

PapaB, I like that solution; a best and final bid is a good idea.

feeble 5 years, 9 months ago

Hasn't medicade been doing the no-bid contract thing for a while? How well is that working out for the taxpayer. I agree with giving local firms a chance to match the low bid, but ultimately, the city needs to go with the low bid.

HermioneElliott 5 years, 9 months ago

So, the local businesses can charge whatever they want, and we will pay it, because they are, sob, local? No.

Richard Heckler 5 years, 9 months ago

I'm all for keeping local money in town but how will anyone know if the bids are competitive?

The city commission is already controlled by local special interests unless voters choose NOT to elect Amyx,Johnson and Bush. This group will only give us more Hack,Amyx,Chestnut and Dever which the city cannot afford. Local special interests control these politicians which is why they like getting them elected.

In essence I'm saying locals are getting plenty of our local corporate welfare tax dollars…. but are we getting the best bang for the tax buck? Why do our taxes and user fees continue to escalate?

WE like to spend in Lawrence. Going on line and calling around provides us with a view on costs. Then we shop around Lawrence. If a Lawrence price is within reason of course we buy here. If an item is going to cost $50 and more then we might reconsider or simply do without.

In essence it is best to shop around in order to know IF taxpayers will get the best bang for our tax dollars . Blindly spending money on local special interests does not come off as a fiscally responsible approach.

Until I know a whole lot more the answer is no.

Centerville 5 years, 9 months ago

"It depends on how you view the idea of a new purchasing policy that would give city commissioners the right to buy products and services from local vendors, even if they are not the low bidder." So, absent a comparable bid process, what's to protect a city commissioner from charges (especially trumped-up charges) of cronyism?

avoice 5 years, 9 months ago

If this policy is put in place, only local bidders will join in the bidding anyway. In construction, for example, most jobs take hours and hours to bid in the first place. Especially if a policy is set that allows local bidders to match a low bid from outside the community, the local bidder can piggyback off the time the outside bidder wastes in this process. You don't get to recoup that time investment if you don't get the job, so you don't even bid jobs that you don't think you stand a good chance of getting.

BigAl 5 years, 8 months ago

Buy local whenever possible. Support the employers in Lawrence/Douglas County that support us. Local business pays local sales tax, they pay local property tax, they pay wages and hire our work force. Support your local businesses whenever you possibly can.

By the way, Laird Noller is NOT based out of Topeka. Laird Noller is based out of Lawrence and always has been. Laird Noller supports and pumps money into Lawrence and Douglas County every day. Shawnee Mission Ford will pull money OUT.

Buy local whenever possible.

igby 5 years, 8 months ago

Since nothing is made or produced here the city is just dealing with middlemen (the good ole boy's), that are local anyway.

fletch 5 years, 8 months ago

Seems like you can set some decent guidelines for this. If a local bid is within 1-2% of the lowest, go local, or at least put the bid up for vote at the city commission instead of instant approval. If the bid is something large (250K+) then have a separate set of triggers. Then set up a board/position through the City Manager's office to act as an ombudsman and weed out any cronyism in the bidding process.

somebodynew 5 years, 8 months ago

OK, I like PapaB's solution, but in deference to avoice's dispute, how about this - the local bidder must go through the process (spending their time and money to do it) and be within a marginal percentage point (pick the standard) to get the bid. If they don't invest the time, too bad. If they do and are close, then go with local.

redmoonrising 5 years, 8 months ago

I don't think so Big Al. There was a Laird Noller Ford in Topeka long before there was one in Lawrence. It may be all based in Lawrence now, don't know, but I had a brother-in-law who worked for Laird Noller in Topeka long before he purchased the Lawrence dealership. He had not only a dealership but also a parts store in North Topeka for many years before coming to Lawrence.

And I still say, unless they make the percentage very low, we are indeed practicing protectionism and it will cost us all in the end, no pun intended. While I strongly support buying and using local, sometimes it just isn't economically smart. Let the locals bid and win, showing they too are interested in local business.

usesomesense 5 years, 8 months ago

Buying locally translates to local business owners having more money to spend in Lawrence and more jobs for Lawrence citizens.
The margin of return is significantly higher than the few percent we're talking about when you look at the bigger picture. Also, buying locally can frequently increase value - especially those that aren't obvious. For example, anything requiring regular maintenance would probably be serviced faster by a local company, reducing downtime and keeping efficiency up (I know - you can't say efficiency and government in the same conversation - but it does work that way for businesses at least).

If the money from the city goes to Kansas City (or wherever) it stays in Kansas City - they're not coming here to shop.

Not only should there be an allowance for differential, but local vendors should be given the opportunity to price match. Some manufacturers will work with the vendor if they get a competitive bid to show them. Ultimately this will lower costs, since out of town companies will bid ultra low to try to make it impossible for the local vendor to get the bid and manufacturers will be forced to price match to get the deal.

usesomesense 5 years, 8 months ago

On a further note: "Local businesses" should be defined as a local resident owning at least 20% of the business as a whole to qualify. If they just have a corporate owned office here they're not really local - most of the money is going out of town.

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