By PETER HUSSMANN
The Newton City Council will discuss the possible implementation of a "buy local" ordinance when it meets in regular session on Monday, a move the city administrator warns is fraught with potential pitfalls.
The discussion arises after the council recently decided to not to accept the low bid on purchases and agreed to pay just slightly more in order to make the purchase locally. In both instances the council rejected to the recommendation of the city administrator in agreeing to the higher purchase price.
In a report to council in regard to the topic, City Administrator Bob Knabel outlined the pros and cons of enacting a local preference ordinance.
On the positive side, Knabel noted that a "buy local" ordinance would provide guidelines for staff's recommendations and council decisions. If followed, it would provide limits as to the amount of deviation from the low bid and it would give local vendors a break and would encourage them to participate in more city contracts and sales.
On the negaitve side, Knabel noted that the overall bids will go up because of the ordinance. As vendors become aware of the policy and the allowable percentage, prices will inevitably go up. However, because of the small pool of vendors within the community who are capable of bidding, the city may find this only applies in a few instances.
Knabel also noted that while "local" refers to any business within the city limits, questions might arise from potential vendors just outside the city but within the local market area. Further, would large corporate franchises like Wal-Mart be considered "local" and benefit from the ordinance, Knabel questioned.
"This presents a 'slippery slope," Knabel states in his report. "If 5 percent is the limit, what's wrong with 6 percent? If a local vendor comes in at 6 percent over and there is a 5 percent limit, will it be rejecte or is it 'close enough?'"
Knabel said such an ordinance might also discourage outside vendors from bidding knowing that local vendors have an advantage. This, too, might drive prices up, he said.
Knabel said the council has several options pertaining to a "buy local" ordinance. It could adopt an ordinance that sets percentage allowances for local vendors and a not-to-exceed dollar amount, though this could lead to the "slippery slope" scenario; do not adopt an ordinance and strictly adhere to low bids, though this could be seen as unfair to local vendors; or make decisions on a case-by-case basis, which could lead to charges of favoritism and unfairness, he said.
Knabel is recommending that a "buy local" ordinance not be adopted.
"It would seem that being good stewards of public funds would mean that in all circumstances we would take the low bid," he writes. "One would think that all any business person would want is a fair chance. If they know the rules and the rules are followed and they want the free-enterprise system to work, then they would support the 'low bid' process. When subjectivity enters the decision it becomes fair for one and unfair for another."
However, should the council decide it wants some sort of "buy local" plan, he suggests the council adopt a "policy" rather than an ordinance.
"A written policy reduces subjectivity and gives specific direction," Knabel states. "It should eliminate or reduce random acts by either the staff or the council. It structures the decision making so that everyone knows the rules and makes the decisions clearer. Policies that are subjective, unclear and open to numerous interpretations are of little value in directing decisions."
Knabel said should a "buy local" policy be enacted, he would recommend that it be limited to a low limited percentage, 1 to 3 percent, with a low total, possibly not to exceed $1,000 per item.
"Again, being good stewards of public funds would mean that if a policy is adopted that it not be excessive," he states. "Reasonable low limits would still give the preference to the local business. Do we want to support local businesses? Absolutely and we need to do what we can to help them. But do we want to subsidize them with public monies? These are tough choices and decisions."
Two years ago, the Newton City Council rejected the implementation of a "buy local" policy, but at the same meeting voted to do just that.
Other items on Monday's 6 p.m. agenda include second consideration of the re-establishment of the Downtown Newton Self Supported Municipal Improvement District and a resolution to retain the serv ices of an Illinois accounting and managment firm to assist the ciyt with its mission/goal setting plan at a cost not to exceed $16,900.
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