The Honorable David W. "Bill" Foster, Chair, and Members of City Council

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1 CITY OF ST. PETERSBURG CITY COUNCIL Meeting of September 7, 2006 TO : SUBJECT : RECOMMENDATION : The Honorable David W. "Bill" Foster, Chair, and Members of City Council ORDINANCE repealing and deleting Chapter 2, Article V, Division 1, Section 2-177, St. Petersburg City Code ; Amending Chapter 2, Article V, Division 3, Section 2-234(c) and Division 4, Sections through 2-246, St. Petersburg City Code ; deleting references to Small Disadvantaged Business Enterprise ; Modifying and adding definitions ; Expanding the area where certified Small Business Enterprises may be domiciled ; providing for Small Business Enterprises goals and providing clarifying language The Administration recommends City Council 1.) CONDUCT the first reading of the proposed ordinance ; AND 2.) Set the second reading and adoption public hearing for September 21, 2006 Request To amend the City's Small and Disadvantaged Business Enterprise (SDBE) Ordinance (Number 457-G). Purpose To provide a more effective ordinance which will foster growth in the economy and provide opportunities to small businesses by affording them a chance to gain the experience, knowledge and resources necessary to compete and survive both in the governmental procurement as well as private procurement arenas. Background In June 1998, the City commissioned a Minority Business Enterprise Disparity Study. The study conducted by Policy Research Consulting, Inc. concluded that there was no disparity in the City's procurement and construction programs. Consequently, it was determined by the City Attorney that the City's race and gender conscious Minority/Women Business Enterprise (M/WBE) initiative was no longer legally defensible. In November 1999, City Council repealed the MIWBE Construction Program and adopted a race and gender neutral Small and Disadvantaged Business Enterprise (SDBE) Program. The objective of the SDBE Program, which went into effect March 2001, is to enhance procurement opportunities for certified SDBEs domiciled within city limits. To qualify for this program, SDBEs must register for certification with the City's Business Assistance Division. Qualification is based on the firm's annual sales and number of employees. Certified SDBEs when bidding on supplies or services are allowed a discount of their bid price up to fifteen percent on a graduating scale from zero to $1 million. In FY05, the City had in its database 1,603 local vendors. Of these, 54 were certified SDBEs. Of the $18 million spent locally, SDBEs received $1.02 million or 6.06%.

2 August 17, 2006 Page 2 Before the repeal of the M/WBE Construction Program, the City was successful in contracting with minority and women owned businesses. In 1998, for example, there were 230 certified M/WBEs. During that year, M/WBE utilization totaled $9.7 million or 27 percent of the $33.6 million spent on construction services. Of the $33.6 million, 18 projects totaling $2.09 million were sheltered. In a sheltered market, before solicitation, it is determined that only the designated group will be invited to bid for the contract (See Attachment : C). On October 1, 2001, responsibility for administration and oversight of the SDBE Program was transferred from the Economic Development & Property Management Department to Midtown Economic Development. The Business Assistance Division staff now under Midtown Economic Development has been administering the program. Since that time, City staff has been assessing the effectiveness of the current ordinance through the following : 1. Business Assistance Division staff internal review and survey of the effectiveness of the ordinance ; 2. Meeting with lead departments (Purchasing, Legal, and Engineering) to assess and improve opportunities for small businesses to procure contracts with the City ; 3. Simultaneously, Business Assistance Division staff is a member of and has been meeting with the Regional Task Force (a multi-jurisdictional agency group comprising of members from, the City of Tampa, Hillsborough County, Hillsborough County School Board, Pinellas County, Pinellas County School Board, HART Line, Tampa Port Authority, Polk County, Polk County School Board, Tampa Aviation Authority [HCAA] and the City of St. Petersburg) to review any related issues regarding W/MBEs and SDBEs and review similar ordinances in the area with the goal of eventual reciprocal certification. Findings/Analysis Based on internal reviews and meetings with lead staff persons, listed below are some of the major indicators that illustrate the need for a revised program : Former W/MBE Program (1998 Data) Existing SDBE Program (2005 Data) Construction Program. No Construction Program. Higher access to -City contracts due to annual No annual participation goals and Insufficient participation goals and sheltered markets certified businesses to shelter markets. Sheltered Market opportunities ). Benefits obtained were higher as stated above. More requirements for certifying as an SDBE with no added benefits. Certifications open to W/MBEs nation-wide. Certifications limited to businesses domiciled in St. Petersburg. 230 Businesses Certified. 51 Businesses remained Certified as of August 2006 (Only 4 were former W/MBEs. $9.7 Million Spent on Construction Services (27%). $1.02 Million Spent on Services (Janitorial, landscapin g, etc. (6.06% ).

3 August 17, 2006 Page 3 Survey In the summer of 2005, a telephone and follow-up written survey was conducted with the 54 St. Petersburg businesses that were certified in 1998 in the former W/MBE Program. The survey was conducted to determine their current status and their interest in doing business with the City of St. Petersburg under an enhanced program. The following are some of the highlights of the survey results : (See Attachment : D) 11 % (3) of the respondents indicated that they secured contracts with the City of St. Petersburg; 54 % (15) secured contracts with other governments ; " 100 (28) secured contracts with the private sector; 79% (22) were interested in certifying under a new and improved Program; Other Comments : Too many hurdles in the process with no added benefits ; and A desire for one-stop certification (reciprocal) in the Tampa Bay Region. Local Governments which accept certifications from other jurisdictions Of the seven local governments in the Tampa Bay Area, two (City of Tampa and Polk County) currently accept certifications from other local governments (See Attachment: E). Based on the findings and analysis of the current SDBE Program, the current ordinance should be revised to increase its effectiveness and achieve greater participation by small businesses. Proposal The following are some proposals which will enhance the current program : 1. Eliminate the Disadvantaged Business Enterprise Program ; 2. Retain and enhance the Small Business Enterprise Program (that is race and gender neutral) ; 3. Enhance the SBE Program to develop construction and professional services ; 4. Develop a SBE Construction Program with companies of sales volume up to $5 million and up to 25 full-time permanent employees ; 5. Amend the SBE Program for supplies and services and increase sales volume up to $3 million and up to 25 full-time permanent employees ; 6. Establish a SBE committee that will set an annual goal for the program and construction project participation goals on a project-by-project basis ; 7. Develop a SBE Professional Services Program to include where possible engineers, architects, landscape architects, brokerage and financial investments, accounting, auditing, claims review, legal and medical services ; 8. Develop a sheltered market component for supplies, services, professional services and construction ; 9. Expand the program to certified SBEs in Pinellas, Pasco, Hillsborough, Manatee and Polk counties ; and 10. Work towards reciprocal certification for the region. Benefits Some of the benefits to the proposed SBE Program include : 1. Expanding the program outside the city limits brings increased visibility regionally ; 2. Expanding and providing more opportunities for training and growth of local businesses ; 3. Installing the construction component will significantly increase the utilization of available small construction firms and reclaim some of the pre-2000 success in the construction area ; 4. Adjusting the sales volume and the eligibility criteria for supplies and services will increase the number of certified SBEs in the program ;

4 August 17, 2006 Page 4 Benefits (Continued) 5. Increasing the number of SBE suppliers will provide more sheltered market opportunities ; 6. Sheltered market contracts give SBEs the opportunity to perform as prime contractors and allows them to hire local SBE subcontractors and local residents, in addition to eventually graduating from the program to compete in the open market ; 7. Eliminating the DBE Program would encourage vendors to apply for certification without having to provide additional personal financial information ; and 8. Reciprocal certification means the SBE makes one-stop certification. Input from other Agencies City staff made a presentation on the proposed SBE ordinance, to the City Council Policy and Planning Subcommittee at the May 23, 2006 meeting. In addition, staff met with several outside agencies to secure their comments on the City of St. Petersburg's proposed SBE Ordinance. Staff made presentations to the following : The Regional Task Force ; NAACP-St. Petersburg Chapter; Pinellas County Urban League ; St. Petersburg Chamber of Commerce ; Suncoast Utility Contractors Association and the Tampa Bay Builders Association. Overall, the proposal was received well. Many of the comments have been incorporated in the proposal (see Attachment F : Comments from Interest Groups and Actions Taken). Recommendation Administration : The Administration recommends City Council 1.) CONDUCT the first reading of the proposed ordinance ; AND 2.) Set the second reading and adoption public hearing for September 21, Attachments : Attachment A: Proposed Small Business Enterprise (SBE) Ordinance Attachment B : Small and Disadvantaged Business Enterprise (SDBE) Ordinance Number 457-G Attachment C: Dollars Spent with Local Vendors ( ) Attachment D: W/MBE Program Status Survey (St. Petersburg Vendors) Attachment E : Local Governments which Accept Certifications from other Local Governments Attachment F: Comments from Interest Groups and Actions Taken

5 August 17, 2006 Page 5 Attachment : A Proposed Small Business Enterprise (SBE) Ordinance

6 Ordinance No. AN ORDINANCE REPEALING AND DELETING CHAPTER 2, ARTICLE V, DIVISION 1, SECTION 2-177, ST. PETERSBURG CITY CODE ; AMENDING CHAPTER 2, ARTICLE V, DIVISION 3, SECTION 2-234(c) AND DIVISION 4, SECTIONS THROUGH 2-246, ST. PETERSBURG CITY CODE ; DELETING REFERENCES TO SMALL DISADVANTAGED BUSINESS ENTERPRISE ; MODIFYING AND ADDING DEFINITIONS ; EXPANDING THE AREA WHERE CERTIFIED SMALL BUSINESS ENTERPRISES MAY BE DOMICILED ; PROVIDING FOR SMALL BUSINESS ENTERPRISE GOALS ; PROVIDING CLARIFYING LANGUAGE ; AND PROVIDING AN EFFECTIVE DATE. THE CITY OF ST. PETERSBURG DOES ORDAIN : deleted. Section One. Section of the St. Petersburg City Code is hereby repealed and Section Two. Section (c) of the St. Petersburg City Code is hereby amended to read follows : (c) Should tie bids be received, the following prioritized list will apply for award. (1) Loealminority Certified small business enterprise as defined in Section 2- _240. (2) Business located within City limits, with current occupational tax paid. (3) County-based business. (4) State Regional based business. Regional-based business includes business within Pasco, Polk, Hillsborough or Manatee County : Section Three. The title of Division 4 of Article V of Chapter 2 of the St. Petersburg City Code is hereby amended to read as follows : DIVISION 4. SMALL BUSINESS ENTERPRISE ASSISTANCE PROGRAM. 1

7 Section Four. Section (b) of the St. Petersburg City Code is hereby amended to read follows : (b) Intent. It is the City's intent to establish a race and gender neutral program called the Small and Disadvantage d Business Enterprise(S-DBEj Assistanee Program. The program is intended to enhance contracting and procurement opportunities for small and-disadvantaged business enterprises. The procurement opportunities include construction, eontlraetttal services, professional eensulting services, and commodities supplies. and deleted. Section Five. Section of the St. Petersburg City Code is hereby repealed Section Six. read as follows : Section of the St. Petersburg City Code is hereby created to Sec Definitions. (a) The definitions set forth in Section (Procurement Code) shall 4pplly to this division with the exception of the definition of "Construction" which is defined in subsection (b). The following definitions shall also apply to this division : (1) Annual Sales Volume. The total of all business receipts, before any deduction, measured for a one calendar year period. (2) Certified. The process whereby a business has been determined eligible and qualified by the City as a Small Business Enterprise in accordance with criteria established by the POD. (3) Commercially Useful Function. A SBE is considered to be serving _a commercially useful function when it is responsible for the execution of a distinct element of a contract and carrying out its responsibilities in actually performing, manning and pervising the work involved. (4) Construction. The process of building, altering, repairing, improving, landscaping, or demolishing. apy public structure, building or roadway, or other public improvements of any kind to anyyublic real property : however, this term does not include the minor (contracts of $50,000 or less) landscaping, redecorating, operation, repair, or maintenance of existing structures buildings or real property- 2

8 (5) Prime Contractor. The contractor which serves as the party of the first part to the contract, actin directly or through agents or employees to perform a service for the City of St. Petersburg. _ (6) Professional Services. Personal services to the public which require as a condition precedent to the rendering of such service the obtaining of a license or other legal authorization, including architects, professional engineers landscgpe architects, registered surveyors certified public accountants public accountants and specialized consulting services. (7) Sheltered Market Program. A program that provides that certain contracts or subcontracts are designated, before solicitation of bids for competition from certified Small Business Enterprises only. (8) Small Business Enterprise (SBE) An independently owned operated and controlled business which is not dominant in its field of operation and is a provide of supplies, services or construction. The business must have been in o eration for at least one (1) year and must serve a commercially useful function. The business must meet criteria established by the POD and be certified pursuant to the SBE certification program. (9) Subcontractor. A person or entity who has a direct contract with the prime contractor to perform a portion of the work of a contract. and deleted. Section Seven. Section of the St. Petersburg City Code is hereby repealed Section Eight. Section of the St. Petersburg City Code is hereby reserved. Section Nine. Section of the St. Petersburg City Code is hereby amended to read as follows : Sec Authority of the Mayor or designated representative POD. (a) (b) Assistance within City Agencies. Where feasible, the Mayo POD shall provide apprepriae staff who shall be responsible for assisting businesses with learning how to do business with the City. Where staff assistance is provided, priority shall be given to assistance to small disadvantaged businesses. Special publications. The Mayor or designated representative POD shall give special publicity to procurement procedures designed to assist businesses, in particular, small and disadvantage businesses, with learning how to do business with the City. 3

9 (c) Source lists. The Mayor or designated representativ POD shall compile, maintain, and make available source lists of certified small an businesses for the purpose of encouraging procurement from small an businesses. (d) Solicitation mailing lists. To the extent deemed appropriate and as may be required by regulation, the Mayor or designated representative POD shall include small and disadvantaged businesses on solicitation mailing lists. (e) Solicitation of small and disadvantaged businesses. The Mayor or designate representative POD shall assure that small disadvantaged businesses are solicited on each procurement for which such businesses may be suited. (f) Training programs. The Mayor or designated representative POD shall develop special training programs to be eondueted by the City to assist including small and disadvantage businesses with learning how to do business with the City., that will improve the ability of small and disadvantaged businesses to provid goods and serviees to the eity. This trai ing may inelude, but may not be limi to, methods f6r obtai ' - ' ce and bonding, with the intent of assisting thes%-.1 btisinesses to be able to provide these iterns when required by the eity- (g) $50,000.00), at the diseretio of the Mayor or designated fe, shall be Certification. The POD shall establish a procedure to certify that a small business has met the requirements of this division to qualify as an SBE, which shall include, but not be limited to a re-certification procedure and a procedure for recognizing certification by other governmental units utilizing similar certification criteria. Existing certified small business enterprises and disadvantaged business enterprises will continue to be certified until their current certification expires, at which time these enterprises must be certified pursuant to this division. (h) Bid evaluations. For bid evaluation and quote evaluation purposes only, the Mayor or designative representative POD may include in Invitations to Bid and Requests for Proposals (both written and verbal) for supplies, and services, and objectively measurable discounts for bids and quotes submitted by small businesses enterprises, as defined in this chapter. When establishing such discounts, the Mayor -erdesignee POD shall use the following scale as a guideline basis to determine the low bidder. Bids and quotes in excess of the percentages on the following scale shall be deemed financially unreasonable. 4

10 TABLE INSET : Percentage of Discount Bid Amount Range 15 % on low bids from 0--1,500 10% on low bids from 1, ,999 9 % on low bids from 20, ,999 8 % on low bids from 40, ,999 7% on low bids from 60, ,999 6 % on low bids from 80, ,999 5 % on low bids from 100, ,999 4 % on low bids from 150, ,999 3 % on low bids from 250, ,999 2 % on low bids from 500, ,999 1 % on low bids from 1,000,000--or more Bids and ess of the pereentages on the Hiowirtg seale shall be deeme u 0 Bonding requirements. The POD may reduce the level or change the types of bonding normally required as provided in Section Progress payments. The POD may make such special provisions for progress payments as deemed reasonably necessary to encourage procurement from SBEs. Payment assistance. When a firm certified under the City of St. Petersburg SBE Program is awarded a City project as a prime contractor, the POD may permit the issuance of joint checks. Sheltered market program. The POD may create a sheltered market pro ram designed to provide contract opportunities for SBEs and maw rp omulgate administrative policies to implement the sheltered market program. (m) Administrative Procedures. The POD may establish administrative procedures to offer assistance to SBEs to meet their contractual obligations and to implement the provisions of this division. deleted. Section Ten. Section of the St. Petersburg City Code is hereby repealed and 5

11 Section Eleven. to read as follows : Section of the St. Petersburg City Code is hereby created Sec Small Business Enterprise goals. (a) Professional Services. The POD will establish procedures by which ready, willing and available SBEs shall be notified and considered for Professional Services contracts and will establish procedures to monitor the utilization of such SBEs in the award of Professional Services contracts. SBE Committee. The POD shall establish an SBE Committee with membership consisting of City staff members. The SBE Committee shall establish annually a recommended City-wide SBE goal, based on readiness, willingness and availability of prime contractors and subcontractors. The annual City-wide goal shall be achieved through the utilization of participation percentages and/or the sheltered market program. (c) Participation Percentages. The SBE Committee shall establish SBE participation percentages for each construction project in the amount of $50,000 or more The percentages are not to exceed 50 percent of the total contract amount for each project. The participation percentages shall be based on the availability of SBE contractors on a contract-by-contract basis and shall be included in bid specifications and bid advertisements for all City construction contracts. Sheltered Market Program. The SBE Committee shall also administer a construction sheltered market program. Only certified SBEs are eligible to participate in the sheltered market pram. The sheltered market program shall be utilized where it is determined that there are sufficient SBEs to afford effective competition and it is necessary to meet the annual City-wide goals for SBE participation. - (1) For sheltered market contracts, SBE prime contractors or subcontractors collectively shall perform at least 20 percent of the contracting effort, including the cost of materials, goods and supplies, with their own organization and resources. Construction projects appropriate for the sheltered market program shall be designated on a contract-by-contract basis. For projects less than $50,000, the POD has the authority to implement a sheltered market without the approval of the SBE Committee. For projects in the amount of $50,000 or more, the SBE Committee will review projects and costs and will identify those projects which are appropriate for including in the sheltered market program. 6

12 The percentage of the total dollars placed in the sheltered market program shall be reviewed yearly by the POD, who will determine whether implementation of the sheltered market is in the best interest of the City. (e) Bidding All contractors bidding on a construction project shall be required to subcontract the designated percentage of work including the cost of materials, goods and supplies to certified SBE subcontractors, or demonstrate and document good faith efforts to satisfy the goal Prime contractors bidding on construction contracts must submit the following with their bid : a list of the names of the certified SBEs to be utilized as subcontractors, a letter of intent from each SBE intending to perform as a subcontractor or serve as a material supplier, a description of the work to be performed by the SBE subcontractor and the agreed upon dollar value for such work. (f Changes after Contract Execution. Proposed changes in regard to the designated SBE subcontractor after bid opening must be approved by the POD. The prime contractor must make reasonable efforts to replace an SBE subcontractor with another certified SBE. Documentation of good faith efforts. A prime contractor submitting bids to provide construction services shall be responsible for achieving and maintaining the required participation percentages for the duration of an awarded contract. If the contractor is not able to achieve or maintain the required percentage goal, the contractor must demonstrate and document that good faith efforts were made to achieve or maintain the goal Documentation that contractors made good faith efforts to obtain compliance with participation goals shall be submitted on forms provided by the POD in the bid documents. The POD shall review the documentation and determine whether good faith efforts were demonstrated. The POD shall have the right to. reject bids for noncompliance with this section. Rejection of Bids Where it is determined that none of the bids meet the SBE criteria in this division or in administrative regulations promulgated hereunder, the POD shall have the discretion to re-bid the contract or alternatively to select the bid which substantially complies with this division and is in the best interest of the City. If the latter option is selected the POD should set forth in writing the reasons for selection Nothing in this section precludes the POD from exercising his or her authority to accept or reject bids in accordance with other sections of the City Code or bid documents. Cil Award of Contracts. All construction contracts shall be awarded to the lowest responsive and responsible bidder. In awarding any construction or purchase 7

13 contract pursuant to this division, the POD may reject any bid determined not to be the lowest responsive and/or responsible bid. Compliance. The POD shall monitor contracts and contractors/vendors for compliance with SBE participation requirements throughout the contract term. The POD shall also prepare compliance guidelines for the contractors/vendors. These guidelines shall include monitoring and rgporting_procedures and recommendations for actions to be taken should noncompliance occur. Section Twelve. as follows : Section of the St. Petersburg City Code is hereby amended to read Sec Business assistance office ; financial assistance. (a) Procurement assistance. The Mayor or designated representativ POD may establish appropriate, business assistance programs; nrehudmg-butte limited to the Business Assistance E3enter, to assist in carrying out the provisions of this part-division, including, but not limited to a business assistance center to support small businesses during the procurement process. The providing of sta support will help ensure that the needs of small and disadvantaged btisinesses are will make eity assistance to small and disadvantaged businesses more aeeessible to them. (b) Financial assistance. The Mayor or designated representative POD may create or coordinate with existing service providers to implement cooperative programs that provide financial and bonding support for certified DBEs -arid SBEs. These programs will include agencies and service providers which facilitate business management and operations skills development programs for DBES a SBEs. Section Thirteen. Section of the St. Petersburg City Code is hereby amended to read as follows : Sec Report to the City Council. The Mayor or designated reptesentativ POD shall aramally report in writing rp ovide information to the City Council, as requested, concerning the awarding of contracts to small and disadvantaged businesses year. To the extent practicable, the report required by this sectiot information provided should include the total dollar value of awards made in the fiscal year to small and- disadvantaged businesses. 8

14 Section Fourteen. Section of the St. Petersburg City Code is hereby amended to read as follows : Sec Compliance with State and Federal Regulations. The provisions of this division shall be construed according to and in conformity with acts of Congress and the Legislature of the State of Florida concerning bidding and awarding of contracts. Where a procurement involves the expenditure of state or federal assistance or contract funds, the Mayor or designated representative POD shall comply with such state or federal law and authorized regulations which are mandatorily applicable and which are not presently reflected in this Code. Section Fifteen. Additions and Deletions. Words in underlined type are additions to the existing St. Petersburg City Code and words in strikethrough type are deletions. Section Sixteen. Severability. The provisions of this ordinance shall be deemed to be severable. If any portion of this ordinance is deemed unconstitutional, it shall not affect the constitutionality of any other portion of this ordinance. Section Seventeen. Effective Date. In the event this ordinance is not vetoed by the Mayor in accordance with the City Charter, it shall become effective upon the expiration of the fifth business day after adoption unless the Mayor notifies the City Council through written notice filed with the City Clerk that the Mayor will not veto the ordinance, in which case the ordinance shall become effective immediately upon filing such written notice with the City Clerk. In the event this ordinance is vetoed by the Mayor in accordance with the City Charter, it shall not become effective unless and until the City Council overrides the veto in accordance with the City Charter, in which case it shall become effective immediately upon a successful vote to override the veto. LEG L : _Xj,DEPARTMENT : 9

15 August17,2006 Page 6 Attachment : B Small and Disadvantaged Business Enterprise (SDBE) Ordinance Number 457-G

16 i ORDINANCE NO. 457-G AN ORDINANCE PROVIDING FOR THE ESTABLISHMENT OF A SMALL AND DISADVANTAGED BUSINESS ENTERPRISE ASSISTANCE PROGRAM ; PROVIDING FINDINGS OF FACT ; PROVIDING INTENT ; PROVIDING FOR DEFINITIONS ; PROVIDING FOR A POLICY STATEMENT ; PROVIDING FOR THE AUTHORITY OF THE MAYOR OR DESIGNEE ; PROVIDING FOR A BUSINESS 1 ASSISTANCE OFFICE ; PROVIDING FOR REPORTS TO CITY COUNCIL ; PROVIDING FOR SEVERABILITY AND PROVIDING FOR AN EFFECTIVE DATE. THE CITY OF ST. PETERSBURG DOES ORDAIN : Section l. Division 3 of Article V of Chapter 2 of the St. Petersburg City Code is Thereby created to read as follows : Division 3. Small and Disadvantaged Business Enterprise Assistance Program Sec Finding of Facts ; Intent. (a) Findings of.fact. On November 4, 1999, the City Council repealed its fonner Minority Business Enterprise regulations, based on the findings of the Minority Business Enterprise Disparity Study. The Disparity Study was prepared by Policy Research Consulting, Inc., and documented and demonstrated that there was no longer any legally justified basis to continue race-specific procurement policies for inclusion of minority and womenowned businesses, It was also the finding of the study that race-neutral policies should be explored as a method to sustain the levels of utilization of minority and women-owned businesses in the procurement of City goods and services. (h) Intent. It is the City's intent to establish a race and gender neutral program called the Small and Disadvantaged Business Enterprise (SDBE) Assistance Program. The program is intended to enhance contracting and procurement opportunities for small and disadvantaged business enterprises. The procurement opportunities include construction, contractual services, professional consulting services, and commodities. i

17 457-G Page 2 I I See Definitions. The Mayor or designated representative shall promulgate regulations establishing detailed definitions of the following terms, using, in addition to the criteria set forth in this Section, such other criteria as it may deem desirable, including the number of employees and the dollar volume of business. As used in this Article : (a) Disadvantaged Business Enterprise. A small business which is owned- or disadvantages- at least 51 percent owned and controlled by one or more 'both individuals who are socially and econorgic_ally disadvantaged or in die case of a corporation, in which 51 percent of the stock is owned b one or more such individuals These owners will not b limited to members of minori rou s and shat) be required to document their personal net worth in order to demonstrate that they are in fact fimth socially and economically disadvantaged, The disadvantaged business must also comply with the following : 1. The business must serve a commercially useful function, 2. The business must be principally domiciled in the city limits of St. Petersburg, 3. The business must be a service provider, construction agency, or n&4. non-manufacturer with 50 or fewer employees, The business must have annual gross receipts that do not exceed two million five hundred thousand dollars ($2,_500,000)aW i 5. The business must be certified by the Business Assistance Divi-tim Mayor or designated representative as a Disadvantaged Business - to rise. I b) Personal Net Worth. The net value of th assets of an individual remaining after total liabilities re deducted An individual's personal net worth does not include the individual's ownership interest in an applicant or h rti ipatixig DBE firm or the individual's equity in his or her,prienlace of resideiice. An individual's pgsonal net worth include only his or her own share of assets held iointly or as property with the individual's spouse

18 457-G Page 33 (e) Small Business Enterprise. A local business which is independently owned and which is not dominant in its field of operation or an affiliate or subsidiary of a business dominant in its field of operation. The small business must also comply with the following : 1. The business must serve a commercially useful function,?. The business must he principally domiciled in the city limits of St. Petersburg, with preference provided to those businesses located in the State designated Enterprise Zone within St. Petersburg, 3. The business must, together with affiliates, be either a service provider, construction agency, or non-manufacturer 2ncl-, 4. The annual sales and number of employees of the business does not exceed the per industry amounts set forth below : Annual Sales Industry Volume No. of Employees Agriculture, Forestry $ 500,000 9 or less acid Fishing Mining 1,000, or less Construction 2,500, or less Manufacturing 1,000, or less Wholesale 1,000, or less R~tail 500,000 9 or less Finance, Insurance and 500,000 5 or less Rkal Estate Transportation, 500,000 9 or less Cq)mmerce and Utilities Service Industry 500,000 9 or less and 5. The business must be certified by the Business AsNistance $ivisiou Mayor or designated representative as a Small Business Enterprise.

19 i 457-G Pige a 4 (d) Manu uc rer. Manufacturer means a business that is both of the following : l. Primarily engaged in the chemical or mechanical transformation of raw materials or processed substances into new products and 2. Classified between Codes 2000 to 3999, inclusive, of the Standard Industrial Classification (SIC) Manual published by the United States Office of Management and Budget, 1987 edition. Sec Statement of Policy and Its Implementation. (a) -Statement of Policy. It shall be the policy of the City to assist amafl-and disadvantaged busimsses focal businesses with learning how to do business with the City. Recognizing that small and disadvantaged businesses have uni. ue cogg_ems. it shall be the policy of the City to assist small and disadvantaged businesses with such concerns. S j (b) Implementation. The Mayor or designated representative. shall implement the policy set forth in Subsection (a) of this Section in accordance with the regulations promulgated by the City Council under this Article. Sec Authority of the Mayor or designated representative. (a) Assistance within City Agencies. Where feasible, the Mayor or designated representative shall provide appropriate staff who shall be responsible to } for assisting businesses with learning how to do business with the City. Where staff assistance is ri s 'v small a disadvantage d businesses, (b) Special Publications. The Mayor or designated representative shall give special publicity to procurement procedures =d issue special ptiblicatit designed to assist businesses, in articular, small and disadvantaged businesses, with learning how to do business with the City. (e) Source Lists. The Mayor or designated representative shall compile, maintain, and make available source lists of certified small and disadvantaged businesses for the purpose of encouraging procurement from small and disadvantaged businesses.

20 i I 457-G Page 5 r (d) Solicitation Mailing Lists. To the extent deemed appropriate and as may be required by regulation, the Mayor or designated representative shall include small and disadvantaged businesses on solicitation mailing lists. (e) Solicitation of Small and Disadvantaged Businesses. The Mayor or designated representative shall assure that small and disadvantaged businesses are solicited on each procurement for which such businesses may be suited. (f) Training Programs, The Mayor or designated representative shall develop special training programs to be conducted by the City to assist businesses including small and disadvantaged businesses with learning how to do business with the City. The training may also include other training. as deemed necessar,x, that will improve the ability of small and disadvantaged businesses to,provide goods and services to the City. This training: may include but may not be limited to, methods for obtaining insurance and bonding. with the intent of assisting these businesses to be able to provide these items when required by the City. (g) Sheltered Market Component. Informal contracts (contracts under $50,000), at the discretion of the Mayor or designated representative, shall be made available only to certified DBEs and/or SBEs. Projects and/or contracts so designated shall be economically feasible contracts or portions of contracts. (h) Bid Evaluations. For bid evaluation and quote evaluation purposes only, the Mayor or designee may include in Invitations to Bid and Requests for Proposals (both written and verbal) for supplies, services, and construction, objectively measurable discounts for bids and quotes submitted by small businesses, as defined in this chapter. When establishing such discounts, the Mayor or designee shall use the following scale as a guideline ; Pe e t eofdiscount i Amount Range 15 0 on low bids from 0-1,500 10% on low bids from 1,500-19, on low bids from 20,000-39,999 8 /a on low bids from 40,000-59,999 7% on low bids from 60,000-79,999. 6% on low bids from 80,000-99,999

21 457-G Page 6 _ 5 on low bids from 100, ,999 4% on low bids from 150, ,999 3 % on low bids from 250, ,999 y on low bids from 500, ,999 1 on low bids from 1,000,000 - or more Bids and quotes in excess of the percentages on the above scale shall be deemed financially unreasonable. Sec Discretionary Authority of the Mayor or designated representative. (a) Bonding. Notwithstanding other provisions of this Code, or Florida Statute, the Mayor or designated representative may reduce the level or change the types of bonding normally required or accept alternative forms of security to the extent reasonably necessary to encourage procurement from small and disadvantaged businesses. An alternative form of security. shall be in the form of cash cashier's check or irrevocable letter of credit and shall be subject to the same conditions as the bond required for the contract. In reducing the level or types of bonding normally required of. small businesses, the Mayor or designated representative should take precautions to ensure that the City and any third parties will be adequately protected. Required bonds maybe waived or modified under the following ci_rcumst~nces : i Where the amount of the contract is less thin $50000 approval is hereby given to the Mayor or designated representative to waive or madi y the state law requirements for a public construction bond ~ and the bond rgquirements contained in the City Code or I ~j V,y,~gXe the amount of the contract is equal to or greater than 50 but less than $ the Mayor or designated representative may waive or modi the requirements of the public construction bond contained in the City Code or state law to accept other sufficient security or to dispense with sufficient security ; provided that at the time the contract is paesented to City Council for ggproval. the Mayor shall notify the City Council of his decision to modify or dispense with security and the reasons therefor. The City Council may by majority vote reverse the decision of the Mayor.

22 457-G Pale 7 However, unless the City Council reverses the decision of the Mayor, his decision shall be final and' the City Council's approval of the contract with respect to which the bond was waived or modified shall constitute a waiver of the requirement for sufficient security contained in the City Code and a waiver of the state requirement for a public construction bond The provisions contained herein for the waiver or modification of the state law requirements for a public construction bond shall only be effective for so lon-z as the state law allows for such a waiver or modification. (b) Progress Payments. The Mayor or designated representative may make such special provisions for progress payments as deemed reasonably necessary to encourage procurement from small and disadvantaged businesses. (c) Grants. Where federal assistance or contract requirements are stricter with regard to procurement from small and disadvantaged businesses than the procedures set forth in Section 2-20 _2 (Authority of the Mayor or designated representative) and Section (Discretionary Authority of the Mayor or designated representative), Antherity-ei~-tiic Mayor oi designated representative), Section _6 (Compliance with Federal Requirements) mandates that the Mayor or designated representative comply with those federal requirements when expending such funds. Sec Business Assistance Office ; Financial Assistance. (a) Procurement Assistance. The Mayor or designated representative may establish as deemed appropriate, business assistance, including, but not limited to the Business Development Center, to assist in carrying out the provisions of this Part. The providing of staff support will help ensure that the needs of small and disadvantaged businesses are considered during the procurement process. Establishment of business assistance will make City assistance to small and disadvantaged businesses more accessible to them.

23 457-G Paje S i (b) Financial Assistance. 'rhe Mayor or designated representative will either create or coordinate with existing service providers to implement cooperative programs that provide financial and bonding support for certified DBEs and SBEs. These will include agencies and service providers which facilitate business management and operations skills development programs for DBEs and SBEs. Sec Report to the City Council. The Mayor or designated representative shall annually report in writing to the City Council concerning the awarding of contracts to small and disadvantaged businesses during the preceding fiscal year. To the extent practicable. the report required by this Section should include the total dollar value of awards made in the fiscal year to small and disadvantaged businesses. Sec Compliance with Federal Regulations. Where a procurement involves the expenditure of federal assistance or contract funds, the Mayor or designated representative shall comply with such federal law and authorized regulations which are mandatorily applicable and which are not presently reflected in this Code. Section 2. The provisions of this Ordinance shall be deemed severable. The unconstitutionality or invalidity of any word, sentence or portion of this ordinance shall not affect the validity of the remaining portions. Section 3. In the event this ordinance is not vetoed by the Mayor in accordance with the City Charter, it shall become effective upon the expizatiat. of the second business da AeL adoppdion unless the Mayor m6fics the City eatincil thratt 5h wrifti, notice filed w idrdx-eity which. case the ordir=ec 9hall become. 64 days after adoption. In the event this ordinance is vetoed by the Mayor in accordance with the City Charter, it shall not become effective unless and until the City Council overrides the veto in accordance with the City Charter, in which case it shall become effective as provided above. E

24 IYS~IY IYYYIlI~iY11Y~ 457 -G Page 9 First reading conducted on the 14th day of December, Passed by St. Petersburg City Council on second and final reading, as amended, on the 18th day of January, hair-councilmetnber Presiding Officer of the City Council ATTEST : City Clerk ~, ' `' ~ Title Published : Times 1-t 118/ t i i of vetoed. Effective date Monday, January 22, 2000 at 5:01 p.m. i

25 August 17, 2006 Page 7 Attachment : C Dollars Spent with Local Vendors ( )

26 Attachment C : dollars spent with local vendors and SDBEs *2004 * Qtrs YTD Local Vendors 1,210 1,515 1,414 1,359 1,603 Dollars Spent $6.9 m $7.3 m $6.5 m $4.6 m $18 m Locally Certified SDBEs Dollars Spent w/ $38,472 $157,495 $381,768 $268,127 $1,020,495 SDBEs olo Spent w/sdbes % 5.86% % Parlic4uation leas been oily in goods and services. No Construction dollars included. 9 Source : City of St. Petersburg Purchasing Department

27 August 17, 2006 Page 8 Attachment : D W/MBE Program Status Survey (St. Petersburg Vendors)

28 I Attachment D : Midtown Economic Development Business Assistance Division Memorandum TO : FROM : Shrimatee Ojah-Maharaj, Manager Minnie Killen, SBE Specialist DATE : August 5, 2005 SUBJECT : St. Petersburg Former Certified W/MBE Construction Program Survey Tracking Results Survey conducted in the summer of 2005 via telephone and follow up by letter with the 54 businesses from St. Petersburg that were certified in the W/MBE Program. Total numb er of businesses certified under former W/MBE Program 230 St. Petersburg's companies certified under the former M/WBE Program % Number of these companies certified under the SDBE Program 8 15% Number of M/WBEs reviewed for the survey % Number of businesses responded 28-52% In business : No response 5 9% Businesses whose telephone disconnected % Of the 28 businesses that responded: Businesses still m operation and performing same type of service % Businesses that have worked or secured contracts for the city 3 1 1% 1 Businesses that have worked or secured contracts with other 15 54% government entities Businesses that have worked for the private sect or % Businesses that are interested in certifying under the SBE Program 22 L 79% Other comments recieved : Too many hurdles without added benefits " One-stop certification needed

29 August 17, 2006 Page 9 Attachment : E Local Governments which Accept Certifications from other Local Governments

30 August 17,2006 Page 10 Attachment : E Local Governments which Accept Certifications from other Local Governments City of Tampa Accepts Polk Count y Accepts Pinellas Count Affidavit Required Manatee Count No Program Pasco Count No Program Hillsborough County SBEs not accepted ; Accepts D/WMBEs from other jurisdictions City of St. Petersburg Does not accept

31 August 17,2006 Page 11 Attachment : F Comments Received from Interest Groups and Actions Taken

32 Attachment F : Comments from Interest Groups and Actions Taken Comments / Suggestions Actions (City of St.. Petersbur g) NAACP " Post construction opportunities at the BAC " To be implemented upon adoption " Do a pie chart for goods and services " In progress " Revise the slide with the 25 employees (include full-time " Completed permanent) Urban League " Maybe the employee count should be 50 " Census and market area data indicate that 25 full-time permanent employees is the acceptable trend for the region " Create a Business Incubator Program " BAC service provider explored Pilot program without success " Visit the Independent Minority Development Council in " Spoke with a representative from the council by telephone and Birmingham Ala. obtained information on the program Chamber of Commerce " Build in a provision for exceptions for 25 employees " Criteria will be in the Policy and Procedure document " Build in a provision for local preference " Refer to, Section of the proposed ordinance (tie bids) " Accept certification from the Florida Minority Council (State of " Under further consideration at the Regional Task Force level Florida Suncoast Utility Contractors Association " Pre-quality all SBEs " Reference was made in terms of financial ability, skill, judgment and experience, including other factors. Based on trade, professional licensure is mandatory " Certification should be an indication of qualification " Certification will not be an indication of qualification " Develop a way to track success " BAC staff will be trained to access and retrieve city-wide data for tracking and monitoring. BAC staff is also exploring ways to synchronizing BAC data with city-wide data " Develop skill sets on the business side Subs 0 It is and integral art of the technical assistance provided to

33 " Certified business should be licensed SBEs " Currently art of the certification requirements Regional Task Force Meeting : Hillsborough County Comments " Create a lean ordinance : just a statement of policy, " Suggestion applied administrative policies should be specific including all items " Hillsborough will track regionally (not by city). Relevant " St. Petersburg will move towards local and regional tracking market area is one market, Regional " Hillsborough certification is for two years " The proposed certification period is for two years " Hillsborough representative will recommend to the Board of " City Council scheduled to adopt amendments to the SDBE Commissioner reciprocity with the City of St. Petersburg by the Ordinance on 9/21/06 end of September 2006 " Hillsborough County has suggested a target date for reciprocity " City will be ready for implementation by Ordinance adoption implementation by November 2006 City of Tampa Comments " City of Tampa has implemented Process Mapping (review of " BAC staff will establish a committee to review CIP projects for projects for tangible opportunities to small businesses) they such opportunities begin at the concept stage (7-10 months before projects) to engage them early in the process, and for necessary recruiting and certification " City of Tampa recommended to get a liaison at each department " BAC staff in process of scheduling training program with all (determine the discretionary level of their budget). major city departments to obtain and share such information " Contracts for less than $25,000 are the best opportunities for " Analysis in progress SBEs, 80% of funds expended are for contracts less than $25,000 " City of Tampa requested for all governments to submit their " Provided, 8/10/06 (Revised) SBE criteria for review to come to common terms for reciprocity purposes " City of Tampa has included language in their performance " No Action at this time appraisal process to raise the level of consciousness and awareness as a tool of enforcement, commitment, and accountability of Management Staff