G55-05 (2) Ordinance No. G55-05
AN ORDINANCE
AMENDING ORDINANCE G82-03 AMEND G CHAPTER 5.08
OF THE ELGIN MUNICIPAL CODE, 1976 AS AMENDED,
ENTITLED "SOURCE SELECTION; COMPETITI E SEALED BIDDING"
WHEREAS, the City Council of the City of Elgin is a ome rule municipality as defined in
Article 7, Section 6a of the 1970 Constitution of the State of Il inois; and
WHEREAS,a home rule unit may exercise any power . n d perform any function pertaining to
its government and affairs; and
WHEREAS,an ordinance providing for the regulation . d procedures for the procurement of
supplies, services and construction by the City pertains to the Novernment and affairs of the City of
Elgin; and
WHEREAS,on September 24,2003 the City Council o the City of Elgin adopted Ordinance
No.G82-03 which provided for certain amendments to Chapte 5.08 of the Elgin Municipal Code,as
amended, entitled "Source Selection; Competitive Sealed Bidding"; and
WHEREAS, the City Council of the City of Elgin ha- determined that it is necessary and
desirable to continue with the local purchasing preference provided for in Elgin Municipal Code
Section 5.08.160, by repealing the sunset provision in Sectio 2 of Ordinance No. G82-03.
NOW, THEREFORE, BE IT ORDAINED BY THE I ITY COUNCIL OF THE CITY OF
ELGIN, ILLINOIS:
Section 1. That Ordinance No.G82-03 be and is h reby amended by repealing Section 2
thereof in its entirety.
Section 2. That all ordinances or parts of ordinani es in conflict with the provisions of
this ordinance be and are hereby repealed.
Section 3. That this ordinance shall be in full fore: and effect from and after its passage
and publication in the manner provided by law.
Si Ei Schock
Ed S hock, Mayor
Presented: June 8, 2005
Passed: June 8, 2005
Omnibus Vote: Yeas: 7 Nays: 0
Recorded: June 9, 2005
Published:
Attest:
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
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May 20, 2005 G
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TO: Mayor and Members of the City Council FINANCIALLY STABLE CITU GOVERNMENT
ETFIC'IENI SERVICES
AND QUALITY INFRASTRUCTURE
FROM: Olufemi Folarin, City Manager
William A. Cogley, Corporatio Counsel
SUBJECT: Ordinance Providing for Local Purchasing Prefeience
PURPOSE
The purpose of this memorandum is to submit to the Mayor ard members of the City Council a
report regarding the City's experience with a local purchasing reference ordinance and whether
an ordinance providing for the further continuation of a local purchasing preference should be
adopted.
egik RECOMMENDATION
It is recommended that the City Council adopt an ordinance providing for the continuation of the
City's existing ordinance providing for a local purchasing preference.
BACKGROUND
On September 24, 2003, the City Council adopted Ordinance G82-03 providing for a local
purchasing preference. A copy of Ordinance G82-03 is attached.
The City's existing local purchasing preference is provide for in Elgin Municipal Code
Section 5.08.160 and applies to competitive sealed bids. Th ordinance provides a responsive
and responsible local business with a preference in the amou t of two percent (2%), but not to
exceed $500, for contracts of$25,000 or less and in the amou t of one percent (1%), but not to
exceed $2,500, for contract in excess of$25,000.
Section 2 of the subject ordinance provided for a two ye r sunset provision whereby the
ordinance will automatically expire on September 24, 2005. ection 2 further provides that the
City Manager is directed to submit a report to the City Counc 1 prior to the automatic expiration
of the ordinance and therein advise the City Council of th City's experience with the local
purchasing preference and recommend to the City Council ether an ordinance providing for
the further continuation of a local purchasing preference shoul be adopted.
Ordinance Providing for Local Purchasing Preference
May 20, 2005
rPage 2
Attached is a report from Gail Cohen, the City's Human Resources and Purchasing Director, on
the City's experience with the local purchasing preference since the inception thereof in
September, 2003. Such report provides that the local purchasing preference has been used three
times during this time period. The three instances are set forth in the attached report. The
increased cost to the City resulting from the local purchasing preference over this time period
totals $1,334.50. The City has also received two letters of complaint regarding the subject
ordinance with both such letters of complaint coming from car dealers.
Given all of the circumstances in this matter it is recommended that the City continue with the
local purchasing preference ordinance as set forth in Section 5.08.160. Adoption of an ordinance
is required given the sunset provision in Ordinance G82-03.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None
V/LLINANCIAL IMPACT
The continuation of a local purchasing preference ordinance will result in increased costs for
City procurements. The amount of such increased costs for City procurements is unknown and
will depend upon the number of circumstances in which the local purchasing preference is
r. applied.
gt ....L-Lit-AL IMPACT
A local purchasing preference ordinance should be limited to circumstances where the City is a
market participant; i.e. contracts involving the use of City funds. A local purchasing preference
ordinance should also be based upon a substantial reason for requiring the hiring of local
contractors and that non-resident contractors or workers must somehow be shown to constitute a
particular source of the problem which is attempted to be remedied, e.g., high levels of
unemployment in the local trades. Findings on the issue of unemployment levels in the City
were included in Ordinance G82-03.
ALTERNATIVES
1. Adoption of an ordinance continuing a local purchasing preference ordinance as proposed
or in an amended form.
2. Do not adopt an ordinance continuing the local purchasing preference ordinance.
Respectfully submitted for Council consideration.
WAC/mg
r Attachment
Ordinance No. G82-03
AN ORDINANCE
AMENDING CHAPTER 5 . 08 OF THE ELGIN MUNICIPAL CODE, AS AMENDED,
ENTITLED "SOURCE SELECTION; COMPETITIVE SEALED BIDDING"
WHEREAS, the City of Elgin is a home rule municipality as
defined in Article VII, Section 6A of the 1970 Constitution of the
State of Illinois; and
WHEREAS, a home rule unit may exercise any power and perform
any function pertaining to its government mild affairs; and
WHEREAS, an ordinance providing for the regulation and
procedures for the procurement of supiplies, services and
construction by the City of Elgin pertains to the government and
affairs of the City of Elgin; and
WHEREAS, unemployment levels within the City of Elgin have
been and continue to remain at a higher level than the unemployment
levels in the State of Illinois and nationwide; and
WHEREAS, a local purchasing preference for City of Elgin
contracts will result in additional business opportunities and
employment opportunities within the City of Elgin and will assist
00k in reducing unemployment levels within the ity of Elgin.
NOW, THEREFORE, BE IT ORDAINED BY THE C:TY COUNCIL OF THE CITY
OF ELGIN, ILLINOIS :
Section 1 . That Chapter 5 . 08 of the Elgin Municipal Code,
1976, as amended, entitled "Source Selection; Competitive Sealed
Bidding" , be and is hereby further amended by adding a new Section
5 . 08 . 160 thereto entitled "Local Purchasing Preference" to read as
follows :
"5 . 08 . 160 : Local Purchasing Preference :
A. Notwithstanding anything to the cOntrary in this chapter
or in this title, in the award of contracts by
competitive sealed bid, the lowest evaluated bid price
from a responsive and responsible local business shall be
accepted, provided that the lowest bid from a responsive
and responsible local business does not exceed the lowest
evaluated bid price from a responsive and responsible
non-local business by more than to percent (2%) but not
to exceed a total of $500 for contracts of $25, 000 or
less, or by more than one percent (1%) but not to exceed
a total of $2, 500 for contracts n excess of $25, 000 .
B. For the purposes of this section, a local business shall
mean a business authorized to do business under the laws
of the City of Elgin, a business with its principal place
(.1114 of business located within the corporate limits of the
City of Elgin, which has the majprity of its regular,
full time workforce located within the City of Elgin and
is subject to City of Elgin taxe3, including, but not
limited to sales taxes .
C. Any person, business, organization or bidder that submits
false or misleading information in connection with an
assertion that such person, business, organization or
bidder constitutes a local business under this section
shall be subject to being suspended from doing business
with the city as provided in Chapter 5 . 30 of this code. "
Section 2 . That Section 5 . 08 . 160 of the Elgin Municipal Code,
1976, as amended, shall without further council action
automatically expire September 30, 2005 . It is hereby declared to
be the legislative intent of the city council that the adoption of
ordinance provisions for a local purchasing preference is being
done on an experimental basis only and that no person, business,
organization or bidder shall have any property interest, vested
right or other continuing protectable interest in the continuation
of a local purchasing preference. The city manager is directed to
submit a report to the city council prior to the automatic
expiration of Section 5 . 08 . 160 and therein shall advise the city
rcouncil as to the city' s experience witi a local purchasing
preference and recommend to the City Council whether an ordinance
providing for the further continuation of a local purchasing
preference should be adopted.
Section 3 . That all ordinances or parts of ordinances in
conflict with the provisions of this ordinilnce be and are hereby
repealed.
Section 4 . That this ordinance shall be in full force and
effect from and after its passage in the manner provided by law.
s/ Ed 1 Schock
Ed Schpck, Mayor
Presented: September 24 , 2003
Passed: September 24 , 2003
Vote : Yeas : 5 Nays : 1
Recorded: September 25, 2003
Published:
Attest :
eift.
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
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May 9, 2005
MEMORANDUM
• TO: Olufemi Folarin, City Manager
FROM: Gail Cohen, Human Resources and Purchasing Director ll1--'
SUBJECT: Local Purchasing Preference
As required by Chapter 5.08.160 of the Elgin Municipal Code, I am reporting the City's experience
with the Local Purchasing Preference since its inception in Septerriber, 2003.
The Local Purchasing Preference has been used twice thus far ma�o||own:
�
Bid Name Low Bidder Elgin Bidder Increased Cost to City
6 used midsize 4 door Spring Hill Ford Ron Hopkins
sedans East Dundee IL Elgin IL
$53.970 $54.470 $500.00
2OU4Poin�Epoxy Marking Specialists AC Pave
� Pavement MarkingArlington Heights IL Gtrip)ng
$92.348.00 Elgin IL
$92.897.50 $549.50
TOTAL $1.049.50
The Ordinance has not increased the City's cost of doing busine , nor has it provided any
significant advantage for local vendors. We received two letters of complaint regarding the
ondinonca, both from car dealers.
Based on the facts above, as well as my original objections (St mber 10, 2003 memo
attached), I recommend that the Local Purchasing Preference expre on September 30, 2005.
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Cc: VViUiam {�og|ey. Legal O*pa�ment��
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September �
MEMORANDUM
TO: BID Cogley, Corporation Counsel
FROM: Gail Cohen, Purchasing Directo
SUBJECT: Local Purchasing Preference
Please find below survey results from Illinois communities and natibnal cities and counties
regarding local purchasing preferences. All three surveys indicate that the majority of
governmental entities do have local purchasing preferences. As Purchasing Director, I am
opposed b>the imposition ofmlocal purchasing preference for the*mUVwingreasons:
�
• Elgin's busibase is large h or diverse enou h to support a local
purchasing preference. Many of our competitive bids hay no participation from Elgin
companies. A local purchasing preference would benefit nly a few Elgin businesses
offering the goods and services we competitively bid.
• Local purchasing preferences may discourage out of tvendors from participating in
our bidding process, decreasing the number of bids and increasing the prices we pay for
goods and services. In a bid recently brought before Council, an out of town automobile
dealer's bid was slightly less than an in-town dealer. Our vehiclebidmhave historically
received few responses. The Fleet Superintendent has wbrked hard to increase dealer
interest and participation in these bids; a local purchasing preference would decrease
rparticipation back to one or two bidders.
• Local bidders | d have "advantage" i h they its
operations. They have had opportunities to develop relat onships with departments.
They have lower travel and other overhead expenses tha out of town vendors. The
majority of our small dollar purchases, such as food, hardVvare, hand tools and
landscaping supplies, are purchased from Elgin businesses.
• Local purchasing preferences benefit only a small portion of the community while
penalizing every taxpayer. A local purchasing preferenc benefits only the vendor who is
awarded a contract. All other taxpayers, including other lcal cal businesses, are penalized
when the City spends more on goods and services.
• How is"local business"defined; does it include someone who works out of their home for
a company headquartered in another town or state? Dos it include a local branch of a
national or multi-national company? Once a definition is greed upon,who verifies that a
business meets the definition?
• Elgin is a major part of the Fox Valley and the Chicagolad area. Elgin works with
neighboring communities on many issues including econbmic development, expansion of
O'Hare and rapid transit. Elgin businesses are not insular entities but part of the larger
geographic region. A local purchasing preference seem*to contradict the way Elgin
public and private sectors conduct their business inothe��oreos.
If you need additional information on this subject, please call me at 5607.
rillb'
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ILLINOIS CITIES AND TOWN
Municipality Local Preference—Yes/No
Arlington Heights No
Aurora No
Chicago Yes
Chicago Public Schools No
Cook County Yes
Evanston Yes
Illinois Central Management Services No
Joliet No
Kane County No
Lisle No
McHenry County No
Park Ridge No
Schaumburg No
Skokie No
Springfield Yes - lesser of 2% or $2,000 added to
low bid if not local for eval purposes
Springfield School District #186 No
Water Reclamation District Greater Chicago No
Winnetka No
A few of the"yes"respondents mentioned that an Illinois statute prohibits the use of
local purchasing preferences when other than local funds are being spent.
DRAFT 5/11/05
i)rdinance No. G
AN ORDINANCE
AMENDING ORDINANCE G82-03 AMENDINçI CHAPTER 5.08
OF THE ELGIN MUNICIPAL CODE, 1976, AS AMENDED,
ENTITLED"SOURCE SELECTION; COMPETITIVE SEALED BIDDING"
WHEREAS,the City Council of the City of Elgin is a home rule municipality as defined in
Article 7, Section 6a of the 1970 Constitution of the State of Illinois; and
WHEREAS,a home rule unit may exercise any power and perform any function pertaining to
its government and affairs; and
WHEREAS, an ordinance providing for the regulation and procedures for the procurement of
supplies, services and construction by the City pertains to the goVernment and affairs of the City of
Elgin; and
WHEREAS,on September 24,2003 the City Council of tle City of Elgin adopted Ordinance
No.G82-03 which provided for certain amendments to Chapter 5. 8 of the Elgin Municipal Code,as
amended, entitled "Source Selection; Competitive Sealed Bidding"; and
WHEREAS, the City Council of the City of Elgin has eltermined that it is necessary and
rdesirable to continue with the local purchasing preference provided for in Elgin Municipal Code
Section 5.08.160, by repealing the sunset provision in Section 2 of Ordinance No. G82-03.
NOW, THEREFORE, BE IT ORDAINED BY THE CI1Y COUNCIL OF THE CITY OF
ELGIN, ILLINOIS:
Section 1. That Ordinance No. G82-03 be and is herby amended by repealing Section 2
thereof in its entirety.
Section 2. That all ordinances or parts of ordinance S in conflict with the provisions of
this ordinance be and are hereby repealed.
Section 3. That this ordinance shall be in full force aiid effect from and after its passage
and publication in the manner provided by law.
Ed Schock, Myor
Presented:
Passed:
Vote: Yeas Nays:
rRecorded:
Published:
- Attest:
rk
Dolonna Mecum,City Clerk
F:\Legal Dept\Ordinances\Purchasing-Local Preference Amended-WAC.doc
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