On a five-three vote, the Great Bend City Council Monday night approved expanding the preference the city gives to local businesses that bid on projects and procurements. Local bidders will now be given a 5% leeway with a cap of $20,000, up from 3% and $5,000.
At the April 2 meeting, Councilman Alan Moeder asked to have a discussion regarding increasing the local business preference in the city’s procurement policy. And he led the discussion Monday as the council met virtually for the second time via Zoom Meeting.
“We spent 80,000 a year for an economic development coordinator,” he said. But, we sometimes forget the most economic development comes from the local business the city already has.
“We forget they have been the key to this community many times,” he said. “When we lose businesses, it is harder to reclaim them than it is get a new business to come.”
In this day and age in bidding processes, for new construction, 40% to 50% of the bid is labor only, Moeder said. “It has changed dramatically last few years.”
When we keep the local workforce working, that money circulates through the community three to five times, he said. “So, if we look at half a million dollars, that can range from one and a half million to two and a half million.
“We’ve got to keep whatever business we can in this area in business, one way or another,” he said. “Because we lose them, we’re not going to get them back.”
City Administrator Kendal Francis emailed the city managers’ list-serve and asked them to respond with how their cities addressed the issue. He received 16 responses from communities and counties ranging in size from Kiowa (931) to Johnson County (544,179).
“Our 3% falls right in line with the median mean,” he said.
He noted that Minneapolis’ and Junction City’s policies are worth looking at. They both provide a preference, 5% and 3% respectively.
“However, that preference only gives the local bidder the option to price-match the lowest bid,” he said. “That provides local businesses with additional considerations, but also ensures that the city receives the best pricing.”
He said he is not opposed to raising the preference limits. “However, I would recommend putting some type of maximum dollar amount to it.”
The upcoming Events Center bid was referenced. It is anticipated to be $500,000-plus project.
“If you raise the percentage to 5% and remove the max dollar amount, that could result in the city paying an additional $25,000 for the project,” Francis said. “It does keep the money local, however it requires the locals to pay more to fund it as well.”
He also said local businesses already have a built-in advantage on these types of projects, because they do not have the level of mobilization costs that an out of town company would incur.
“We also want to be cautious of over incentivizing local businesses as that can hamper competition,” he said. “Out-of-town businesses will stop bidding if they see the scales are weighted too heavily in favor of the local businesses and that they aren’t able to compete.”
What does the current policy say?
The city’s policy states that local vendors shall receive preference in the amount up to 3% but no more than $5,000.
Local preference applies to businesses in the following order: Those within city limits; (2) those located within Barton County; and those located within Kansas.
Goods and services purchased by the City shall be purchased from local merchants and businesses, unless:
1. Such goods of like quality and services are not immediately available locally.
2. The cost of such goods or services plus taxes, shipping and handling exceeds that allowed by the local preference limits.
3. Federal/State funds or other funds are used that prohibit the application of the preference.
4. The business entity has any outstanding liens, fines or violations or other debts with the City of Great Bend.
Great Bend City Council meeting at a glance
Here is a quick look at what the Great Bend City Council did Monday night:
• Finalized a real estate exchange with CJS Properties, owned by Nelson Stone, for property near Fire Station 2 on West 10th. There is no cost to the city.
• Approved a facility use agreement allowing the Bat Cats, a semi-professional baseball team, to use Al Burns Field at Veterans Memorial Park from May 1 to Aug. for $1. The agreement is the same as in years past, Suelter said.
The Great Bend Recreation Commission has signed the agreement as has team sponsor Roger Ward.
• Discussed a local business preference for city procurements.
Councilman Alan Moeder asked to have a discussion regarding increasing the local business preference in the city’s procurement policy. Currently, the city provides a 3% preference, with a cap of $5,000, City Administrator Kendal Francis said.
The council approved changing the limits to 5% with a cap of $20,000.
• Discussed reopening city parks at the request of Councilman Dana Dawson. Approved was opening Stone and Rotary lakes to fishing only, and Veterans Memorial Lake to fishing and all activities, except that the playground equipment will be closed.
All restroom facilities will be closed.
• Approved several Community Development Block Grant applications after capping the loan amounts at $15,000. Some of the applicants had requests substantially more than that.
These included: Kleen Smart requesting $10,000; Identifications Company, $10,000; Stephen McAnulla Photography, $15,000; Wells Sit and Sleep, $15,000; Re-Perks, $15,000; and Magna Dry, $15,000.
All seven are three-year loans at .5% interest, and they have the option of making interest only payments for 12-months. They meet the requirements for job retention and the low- to moderate-income restrictions. There is no penalty for early repayment, said Great Bend Economic Development Inc. President Jessica Milsap.
They are all for working capital, defined as salaries/wages, inventory purchase, utilities, rent, insurance payments, etc.
It was at the April 6 meeting that the council approved utilizing the two city-controlled CDBG economic development revolving loan funds through the Kansas Department of Commerce’s CDBG program. The balance of both, as of the end of last year, was a combined $179,200.
This was done in response to the COVID-19 crisis. The Commerce Department allowed for immediate use of these funds, backing off on some of the requirements.
Following the April 6 action, the council OKed the first such loan to DAT Fitness, owned by David Tudor who will receive $4,000 to help with routine business expenses.
• Approved a request for unlicensed businesses to serve complimentary alcohol on their premises for the Art & Wine Walk event that has been rescheduled to Sept. 17. It will run from 4-8 p.m.
Approval has been granted the five previous years and the event has occurred without incident. The council originally approved this, but it was for the original May 7 date.
• Heard a report from City Administrator Kendal Francis.
• Heard a report from Community Coordinator Christina Hayes. Among other things, she noted the city has raised enough money for the July 3 fireworks display. But, the communities involved in the ninth-annual June Jaunt (which includes Great Bend) voted to cancel this year’s multi-city summer festival. They are focusing on the 10th-annual event next year.
• Approved abatements at: 824 Morton, Accumulation of Trash/Refuse, owned by Moses Properties LLC; 208 Fruit, Accumulation of Trash/Refuse, owned by Ismael and Amalia Campos; 205 Frey, Accumulation of Trash/Refuse, owned by Miguel and Brandi Garay; 1210 Ninth, Accumulation of Trash/Refuse, owned by Zaira Huitron; and 210 Hubbard, Accumulation of Trash/Refuse, owned by Rodney Gray.
• Discussed the city’s ongoing response to the COVID-19 pandemic.
• Approved a tree trimmers license for Skyview Tree Service of Hays.
