LA City Council To Vote On Boosting Local Businesses
LOS ANGELES (CBS) — Local businesses would be given preferential
treatment when bidding for contracts with the city of Los Angeles under a proposed ordinance to be considered tomorrow by the Los Angeles City Council.
When Mayor Antonio Villaraigosa unveiled the so-called "Local Preference Ordinance" at a news conference in September, he estimated it would create about 10,000 jobs.
The ordinance would favor local businesses by sweetening their bids by 8 percent over those of outsiders. For example, when the city is deciding to award a contract to the lowest bidder, it would deem a local firm's $1 million bid to be $920,000.
Also, when the city is soliciting bids, local businesses' proposals would be awarded extra points. For example, if a local business scored 100 points in the evaluation, the city would deem it to have scored 108 points.
To receive the "local preference," a business would have to lease or own a building in Los Angeles County, and at least half of its full-time employees would have to work in the county at least 60 percent of the time.
The company would also have to maintain a business tax registration certificate for the prior six months.
"Currently the city of Los Angeles spends approximately 84 percent of its procurement dollars with businesses that are located outside of the city of Los Angeles," Villaraigosa said in September. "Therefore, out of $1 billion allocated for governmental contracts, only $180 million goes back to local businesses.
"This represents a significant missed opportunity to stimulate the local economy," the mayor said.
Leron Gubler, president and chief executive of the Hollywood Chamber of Commerce, hsa said local businesses are currently at a disadvantage when competing with outsiders.
"(The playing field) is not level because of the higher cost of doing business in a city," he said in September. "You have a lot of businesses way out on the fringes where the cost of real estate is a lot less, the cost of building taxes is a lot less, and all those things factor into the cost of doing business. The city's gross receipts tax here is much higher than in other
areas."
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