Frustrated by the county’s deteriorating economic situation, the
board of supervisors voted unanimously last week to double the
local contract cost preference from 5 to 10 percent, which will
apply to everything but state-defined
”
Public Projects.
”
I assume they will be funding
”
Keep Out
”
signs next, followed by alligator-filled moats.
Frustrated by the county’s deteriorating economic situation, the board of supervisors voted unanimously last week to double the local contract cost preference from 5 to 10 percent, which will apply to everything but state-defined “Public Projects.” I assume they will be funding “Keep Out” signs next, followed by alligator-filled moats.
Let’s just hope there will be enough food left inside to sustain us before they lock the gates, because I’m a big eater.
County staff members, trying to eke more out of their shrinking budget, had recommended elimination of the preference in the latest revision of the purchasing procedure. The board, though, took the opposite tack, and it amounts to a mere gesture at a time we desperately need solutions.
But hey, elections are just around the corner.
This change means that local taxpayers could be overpaying up to 10 percent more for supplies and services. How much will that decision cost the county in dollars? Supervisors did not even bother to find out. Will this really help the local economy? No one knows. They had the bit in their teeth and there was no stopping them in a hasty and unsupported decision – uncharacteristic of a board that previously had been careful, some would say cautious, when it came to spending.
Make no mistake, San Benito County is in no position to play “go away, we’ve got ours,” and there is no reason our local businesses should be noncompetitive. But if you’re sure to get a 10 percent bonus, why bother squeezing the pencil?
What we should be doing is encouraging cities with discriminatory local preferences, such as San Jose, to drop them, because they are freezing us out of the big markets. What we should not be doing is erecting walls against counties such as Santa Cruz and Monterey that offer opportunity and a level playing field. In other words, we should have considered similar provisions before rushing into a dark alley.
The local preference policy in Santa Cruz County applies only when the prices between a local and a non-local supplier are equal. Then the local firm gets the edge. You can be sure they are doing it that way not to alienate the big, rich dog – Santa Clara County – but it benefits us.
Even better is the well-thought-out policy in Monterey County. Monterey’s policy includes preferences for both San Benito and Santa Cruz counties, classifying our businesses as their local suppliers. They give us a preference, but we do not return the favor.
Monterey County’s policy also contains provisions to protect the taxpayer and encourage businesses to remain in the area. When the formal or informal bid from a local supplier is within 5 percent of the low bid from a non-local supplier, the local gets an opportunity to reduce its bid to equal the lowest bidder. If more than one local bid is within 5 percent, that chance goes first to the lowest-bidding, local supplier. If the business declines, the deal goes to the next local bidder within 5 percent. If the local supplier agrees to match the low bid, it wins the contract.
Now that’s thoughtful and frugal.
There are several other provisions that make sense, including defining a local supplier as one that has been in business in the area – any of the three counties – for not less than the past five consecutive years. The reason Monterey includes the three counties as local area suppliers is to ensure the taxpayers get a good deal. Walling off Monterey County could be self-defeating.
Most important, this policy is just a bigger Band-Aid – a politically popular but poor substitute for the analyses, plans and actions required to put the county’s residents on solid financial footing.
Marty Richman is a Hollister resident.
