There has been a great deal of talk about local government contracting and its impact on all of us here in the Imperial Valley. Whether it is on the part of the cities, the Imperial Irrigation District, or the county, this issue generates passionate feelings. Precisely because of its importance, we need to examine it without bias or preconceived notions of what a “local company” is. It is likely that the vast majority of directors, council members and supervisors agree with the general concept, but the devil is in the details.
Some argue that it is always best to contract locally. This may be true. Moneys spent locally tend to stay locally. Depending on the analysis— and they vary — those moneys are turned over in the local community as many as seven times. Thus a $5 million project would theoretically generate as much as $35 million of economic impact. Our community would certainly benefit from that kind of investment. So discussion closed, right? Not so fast, not so easy.
If this issue were as simplistic as that, every local contracting agency would be doing it. The biggest question is how to define a local company. Does it have to have a business license here? Does it need to have an office or shop here? Does it need a certain number of employees based here? Does it qualify as local if the owner of the company lives here? What if the company has a business license, an office and a few employees but every time a big job comes around the most of the workers are brought in from other areas or south of the border? Does that still count as local? Not so easy.
There has been an organization formed in the Imperial Valley to support local businesses. A great idea in concept but once again the difficulty is determining a valid and fair definition of what is local. What about those businesses at the mall? Are they also local? Most are national, if not international, chains stores, even if to their employees the work is local. What about Wal-Mart, is it local? I am sure that the hundreds of Valley residents that work there believe so.
Further questions arise with respect to local contracting. What about quality and competitiveness. Do taxpayer funded projects deserve just quality or should we expect the best quality? Increased number of bidders typically provides for a decrease in costs. This is true whether in business or government, in roads or in buildings. I believe that is what we call healthy competition. Not so easy as “always.”
Lastly, is there any local benefit if the contract is not only for the locals? We may want to ask the hotel and motel operators. The restaurant and retail owners may also have a difference in opinion. These types of businesses benefit greatly from an influx of temporary workers. A full examination offers that there may be a level of competing interests among the separate business groups. We might even want to check with our local governments concerning increases in the occupancy tax and sales tax revenues. A review of local government budgets would show the significant impact of these types of revenues.
Perhaps this issue isn’t quite as easy as some would like to think. It could be that providing the best delivered project at the best possible value should be the number one priority. After all, it is the taxpayers’ money. Of course the passionate or self-interested don’t want discussion; they have already decided that it’s always best to hire locally. That may in fact be the right policy but as always, the devil is in the details.
Jon Edney is a former El Centro city council member.
Some argue that it is always best to contract locally. This may be true. Moneys spent locally tend to stay locally. Depending on the analysis— and they vary — those moneys are turned over in the local community as many as seven times. Thus a $5 million project would theoretically generate as much as $35 million of economic impact. Our community would certainly benefit from that kind of investment. So discussion closed, right? Not so fast, not so easy.
If this issue were as simplistic as that, every local contracting agency would be doing it. The biggest question is how to define a local company. Does it have to have a business license here? Does it need to have an office or shop here? Does it need a certain number of employees based here? Does it qualify as local if the owner of the company lives here? What if the company has a business license, an office and a few employees but every time a big job comes around the most of the workers are brought in from other areas or south of the border? Does that still count as local? Not so easy.
There has been an organization formed in the Imperial Valley to support local businesses. A great idea in concept but once again the difficulty is determining a valid and fair definition of what is local. What about those businesses at the mall? Are they also local? Most are national, if not international, chains stores, even if to their employees the work is local. What about Wal-Mart, is it local? I am sure that the hundreds of Valley residents that work there believe so.
Further questions arise with respect to local contracting. What about quality and competitiveness. Do taxpayer funded projects deserve just quality or should we expect the best quality? Increased number of bidders typically provides for a decrease in costs. This is true whether in business or government, in roads or in buildings. I believe that is what we call healthy competition. Not so easy as “always.”
Lastly, is there any local benefit if the contract is not only for the locals? We may want to ask the hotel and motel operators. The restaurant and retail owners may also have a difference in opinion. These types of businesses benefit greatly from an influx of temporary workers. A full examination offers that there may be a level of competing interests among the separate business groups. We might even want to check with our local governments concerning increases in the occupancy tax and sales tax revenues. A review of local government budgets would show the significant impact of these types of revenues.
Perhaps this issue isn’t quite as easy as some would like to think. It could be that providing the best delivered project at the best possible value should be the number one priority. After all, it is the taxpayers’ money. Of course the passionate or self-interested don’t want discussion; they have already decided that it’s always best to hire locally. That may in fact be the right policy but as always, the devil is in the details.
Jon Edney is a former El Centro city council member.
