HomeMy WebLinkAboutCity Council Member Item for the May 4, 2015, City Council MI /1
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CITY OF HUNTINGTON BEACH
City Council Interoffice Communication
To: Honorable Mayor and City Council Members
From: Billy O'Connell, City Council Member Q)
Date: April 27, 2015
Subject: CITY COUNCIL MEMBER ITEM FOR THE MAY 4, 2015, CITY
COUNCIL MEETING — ESTABLISHING A "BUY AMERICA"
PROCUREMENT POLICY
STATEMENT OF ISSUE:
With an annual budget of roughly $340 million, the City Council and staff are charged
with the procurement of many products and contract services. In order to provide
oversight and sound public policy to ensure that all goods and services are let through a
competitive process, and that existing contracts are being closely monitored and re bid
on a fair and regular basis, the City Council must understand the contract process and
be updated as to existing contracts.
The City purchases millions of dollars of goods and services each year, ranging from
pens and pencils to computers and fire trucks; and services such as architectural,
consulting, janitorial, and tree trimming. While the budget process provides some
oversight, the City Council should periodically review existing contracts and contracting
processes to assure and maintain a fair and transparent procurement process, while
continuing to stimulate the local Huntington Beach economy and helping local
businesses to grow. In addition, the City should continue and find new ways to
incentivize local businesses such as the existing bidding advantage to local and US
businesses (seven and a half (7.5) percent local business preference in the evaluation
of certain bids or proposals) and provide additional job opportunities for residents in our
community.
RECOMMENDED ACTION:
Direct the City Manager to agendize a Study Session to occur no later than August 17,
2015, to discuss the following:
(1) All City agreements in effect, including but not limited to purchase orders, service
agreements, professional service agreements, public works contracts, and
franchise agreements. Council should be presented with the contracts broken
down by: (a) the project or bid title; (b) description of service or commodity; (c)
vendor(s) name; (d) total contract amount; (e) term of contract, including any
extension(s), and terms of amend ment(s)/change order(s)/special provisions; (f)
City department(s) that requested goods or services; (g) if the goods were
produced in the United States.
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CCMI — Establishing a "Buy America" Procurement Policy
Page 2
April 27, 2015
(2) Recommendations regarding opportunities to improve and enhance the
procurement and contract management processes.
(3) Presentation of a proposed City policy that all U.S., California, and City of
Huntington Beach flags flown on City property will be "Made in America" and City
clothing, including uniforms, will be domestically produced.
(4) A procurement policy that mandates at least forty -percent (40%) of the total
annually purchased City goods must be purchased from companies where the
goods were domestically produced. The policy should contain an escalator of ten
percent (10%) up to seventy -percent (70%) for all goods and commodities
purchased by the City follow the domestically produced mandate.
xc: Fred Wilson, City Manager
Ken Domer, Assistant City Manager
Joan Flynn, City Clerk
Michael Gates, City Attorney
Esparza, Patty
From: Flynn, Joan
Sent: Monday, May 04, 2015 5:39 PM
To: Esparza, Patty
Subject: Fwd: "Buy America"- Council Agenda item
Will you print and put into the file too. Since it did not go to the majority of council I did not put it into supplemental
communication.
Joan Flynn, City Clerk
Huntington Beach
Begin forwarded message:
From: Jenelle Bader <Jenelle.Bader(@sce.com>
Date: May 4, 2015 at 2:51:15 PM PDT
To: "Wilson, Fred" <Fred.Wilson@surfcity-hb.org>, "O'Connell, Billy" <Billy.00onnellC'surfcity-hb.org>,
"Flynn, Joan" <iflynnCsurfcity-hb.org>
Subject: "Buy America"- Council Agenda item
Good afternoon Councilman O'Connell, Fred and Joan -
I was reviewing agenda item #14 and wanted to reach out to you in case this item
moved passed tonight's meeting and was approved for a study session. As you are
aware, SCE has a franchise agreement with the city of Huntington -Beach which allows us
to operate, maintain and provide electric service within the City. We submitted our
franchise payment earlier this year in the amount of $982,279.80.
Understanding the original intent of the Federal Government's "Buy America" law to
stimulate the American economy, SCE has developed a process by which we can comply
with Buy America where we contract with a government entity that uses federal funds to
pay us for certain types of projects and/or materials. Typically, Buy America compliance
is therefore a requirement of the contract.
Nevertheless, it is important, however, to understand the realistic impacts such as
increased project costs and potential delays to meet required standards. To comply, SCE
must also charge for materials accordingly as it would be unfair for all ratepayers to
absorb the increased costs. I'd like to receive feedback from the City on the intent of the
Council item and if this item calls for an entirely different "Buy America" standard for the
City than the Federal law currently dictates. Please understand that SCE has over 140,000
skus (stock keeping units (pieces of equipment, nuts, bolts, etc.) in its inventory. Any
number or combination of these skus may be called into play on any given project. We
also run into reliability problems as materials that we source domestically may not have
been tested or subject to the same benchmarking as components we historically
sourced from other parties. There are also issues related to certification. For example,
1
many components are sourced through intermediaries and it is often difficult to get
certifications from our vendors. Unlike typical governmental contracts, where
contractors bid and buy materials specifically for a project, SCE uses materials from its
inventory. These materials are specially designed to ensure a safe and reliable electric
system.
Finally, it is not clear to us whether the City's policy will be applied to work on the basis
of permit conditions on franchise work where SCE is not entering into a contract with
the City on individual projects. Mandating Buy America compliance for utility work in the
City's rights of way would violate our franchise. Although adopted by ordinance,
franchises have been held to be contracts. Any added requirement that adds delay or
cost to our activities constitutes a violation of our franchise. We also respectfully submit
that the City does not have jurisdiction over the design of our facilities and the materials
we choose to use. Such decisions are within the control and regulation of the California
Public Utilities Commission. As such, a requirement along those lines would not likely be
enforceable. It may be that the city is only considering this requirement for goods that it
purchases, and for which it takes delivery and pays. This does not typically occur in the
work we provide under our franchise agreement.
We'd be happy to provide additional information as needed and appreciate your
consideration when discussing this agenda item.
Thank you.
Sincerely,
Jenelle (Godges) Bader
Region Manager, Local Public Affairs
Southern California Edison
714-699-0354 (cell)
7333 Bolsa Avenue
Westminster, CA 92683
24 Hr. Power Emergency / Outage Hotline (800) 611-1911
Power Outage Info: www.sce.com/PowerOutagecenter
N
May 2, 2015
The Honorable Mayor Jill Hardy and City Councilmembers
Huntington Beach City Hall
2000 Main Street
Huntington Beach
Re: Support of Councilmember O'Connell's Agenda Item No.14 - Buy America Procurement Policy
Dear Mayor and City Council:
I am writing in support of Councilmember Billy O'ConnelI's agenda item on the Monday, May 4,
2015 Huntington Beach City Council agenda, concerning city contracting and procurement policies
and practices. I have been a resident of Huntington Beach for almost 40 years. I am also an owner
and the C.E.O of a Hospital in Monrovia.
We employ over 200 people, a significant number of which live within a 3 mile radius of the
Hospital. As a result, the city of Monrovia has enjoyed continuous growth and increased tax
revenues. We have also made a conscientious effort to support a number of local, small businesses
since our opening. In fact, although we have the ability to make use of "national" contracts ( i.e.,
printing, office supplies, furnishings, small equipment) offering cost savings, we have chosen, where
reasonable, to purchase from local vendors where quality was equivalent, and costs, although
points higher, was still reasonable. By supporting the local businesses who hire local, residents, they
have flourished and therefore they grow and hire additional employees. The benefits of all this is
simple. It is a domino effect Local businesses grow in sales due to more "employed" catchment area
residents who will be able to spend more dollars locally - from household goods, to restaurants and
other forms of entertainment, to automobiles and other high ticket items. Following this model,
obviously the greater the sales, the more tax revenue opportunity there is for our city of
HUNTINGTON BEACH. That leads to a better Community for ALL of us.
Therefore, I strongly support Councilmember O'Connell's proposals contained in Agenda Item No.
14.1 know it will work, as it has elsewhere, and request YOUR support as well.
7Kupferstein.
ubmitted,
—.0900111— -¢� r Electronic Waveform Lab, Inc.
5702 Bolsa Ave.
Hunt
Huntington Beach, GA 92649
toll -free: (800) US-H-WAVE
fax: (714) 843-1992
www.h-wave.com
April 30, 2015
The Honorable Mayor Jill Hardy and City Councilmembers
Huntington Beach City Hall
2000 Main Street
Huntington Beach, CA 92648
Re: Support of Councilmember O'Connell's Agenda Item No. 14 — Buy America
Procurement Policy
Dear. Mayor and City Council:
I am writing in support of Councilmember Billy O'Connell's agenda item on the Monday,
May 4, 2015 Huntington Beach City Council agenda, concerning city contracting and
procurement policies and practices. As an owner of a company in Huntington Beach
which employs 150 workers, I strongly support Councilmember O'Connell's
recommendation to promote the increased procurement of American -made products by
the City.
Councilmember O'Connell's proposal offers your City Council an opportunity to stand-
up and show your support for Local Business Preference measures that will strengthen
local independent businesses and our local economy. As a major employer in the City,
I can attest to the fact that local businesses create jobs and local jobs create community
wealth, which in turn builds community cohesiveness and strength.
This policy is long overdue and I strongly support and endorse Councilmember
O'Conhell's efforts. I encourage your YES vote for agenda item No. 14.
Sincerel rs,
�r
Jim Heaney r.
Electronic Waveform Lab. Inc
5702 Bolsa Ave.
Huntington Beach Ca 92649