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Home My WebLink About960557.tiff RECORD OF PROCEEDINGS MINUTES BOARD OF COUNTY COMMISSIONERS WELD COUNTY, COLORADO APRIL 1, 1996 TAPE #96-10 The Board of County Commissioners of Weld County, Colorado, met in regular session in full conformity with the laws of the State of Colorado at the regular place of meeting in the Weld County Centennial Center, Greeley, Colorado, April 1, 1996, at the hour of 9:00 a.m. ROLL CALL: The meeting was called to order by the Chair and on roll call the following members were present, constituting a quorum of the members thereof: Commissioner Barbara J. Kirkmeyer, Chair Commissioner George E. Baxter, Pro-Tem Commissioner Dale K. Hall Commissioner Constance L. Harbert Commissioner W. H. Webster Also present: County Attorney, Bruce T. Barker Acting Clerk to the Board, Shelly Miller Finance and Administration Director, Don Warden MINUTES: Commissioner Harbert moved to approve the minutes of the Board of County Commissioners meeting of March 27, 1996, as printed. Commissioner Hall seconded the motion, and it carried unanimously. CERTIFICATION OF HEARINGS: Commissioner Baxter moved to approve the hearing conducted on March 27, 1996, as follows: 1) Special Review Permit for a trash business in the A (Agricultural) Zone District, David L. and Donna J. Reed. Commissioner Webster seconded the motion, which carried unanimously. ADDITIONS: The following was added under Bids: 2) Present and approve sale of guns - Sheriff s Department. CONSENT AGENDA: Commissioner Hall moved to approve the consent agenda as printed. Commissioner Webster seconded the motion, and it carried unanimously. READING OF ORDINANCE BY TAPE: CONSIDER READING ORDINANCE NO. 77-D BY TAPE: Commissioner Hall moved to read Ordinance No. 77-D into the record by tape. The motion was seconded by Commissioner Baxter, and it carried unanimously. 960557 BC0016 COMMISSIONER COORDINATOR REPORTS: No reports were given. PUBLIC INPUT: No public input was offered. WARRANTS: Don Warden, Director of Finance and Administration, presented the following warrants for approval by the Board: All Funds $ 698,940.66 Electronic Transfer: Payroll Fund $ 76,502.95 Commissioner Webster moved to approve the warrants as presented by Mr. Warden. Commissioner Baxter seconded the motion, which carried unanimously. BIDS: APPROVE WELD COUNTY NORTH JAIL COMPLEX - FINANCE DEPARTMENT: Pat Persichino, Director of General Services, recommended acceptance of the low bid from Clark Construction Company for$7,268,300.00, including Alternate #3. He referenced Section 14-9 of the Home Rule Charter concerning the bidding process, which the Board must interpret. Ed Jordan, Weld County Sheriff; William Morton; and Bob Miller, Attorney, spoke in support of awarding the bid to Roche Constructors, Inc. Greg White, Attorney representing Clark Construction Company, stated his interpretation of the Home Rule Charter is that Weld County is to award the bid to the low bidder unless there is a tie. He requested to the Board to act as it has in the past by awarding the low bidder and noted the majority of the sub-contractors are local. Dave Clark, Vice President of Clark Construction Company, responded to questions from the Board. Sandra Roche and Tom Roche commented regarding the local sub-contractors and the preference law of the Home Rule Charter. Mr. Clark clarified he was unaware of the local preference law and noted nothing was clearly stated. Virginia Schild, Weld County taxpayer, suggested acceptance of the low bid which will save $22,000.00. Commissioner Webster stated the Home Rule Charter states Weld County "shall" give preference to local bidders; therefore, the Board is obligated to accept the bid most beneficial to Weld County. He then moved to award the bid to Roche Constructors, Inc., for $7,291,200.00. Commissioner Hall seconded the motion and stated both companies are competitive in price and quality and reiterated the interpretation of the Home Rule Charter regarding the beneficial aspects to Weld County. He suggested the interpretation may need to be placed on the November ballot; however, the Board is at this time obligated to work within the Home Rule Charter as written. Commissioner Harbert suggested all paragraphs of Section 14-9 of the Charter be reviewed and noted that preference to Weld County bidders was not stated in the bid documents. She noted the bids must be open to more than Weld County companies to be competitive and stated she cannot provide reasons for not accepting the low bid. Commissioner Harbert stated the most beneficial bid to Weld County is the low bid because it will save almost Minutes, April 1, 1996 960557 Page 2 BC0016 $23,000.00. She also clarified the intent of the writers of the Home Rule Charter is not clearly stated, and the policy is to accept the lowest bid except when quality is questioned. Commissioner Harbert reiterated her belief in the competitive bid process and that the Home Rule Charter requires what is best for Weld County, which is why she will vote against the motion. Commissioner Baxter stated he feels the$22,000.00 could be spent elsewhere and agrees the bid process must remain competitive; however, he clarified the preference to Weld County will provide economic benefits and he will vote for the motion. Chair Kirkmeyer stated the Board's duty and obligation is to adhere to the Home Rule Charter, which ensures an open and competitive bid process. She agreed the bidders were competitive in price and quality; however, the Charter states the bid awarded shall be most beneficial to Weld County. Chair Kirkmeyer stated, therefore, she will vote for the motion and noted the overcrowding of the jail must be alleviated as soon as possible. On a roll-call vote, the motion carried four to one with Commissioner Harbert voting nay. PRESENT AND APPROVE SALE OF GUNS - SHERIFF'S DEPARTMENT: Mr. Persichino explained the Sheriffs Department has recommended certain guns be declared as surplus and sold as follows: three AR15's - Colt to B & B Guns & Ammo for $1,200.00; thirty-six 686's and ten 66's - Smith and Wesson to Grashorns Gunworks for $5,807.50; and two AR15's - Colt, ten 686's and five 66's- Smith and Wesson to Orchards Hardware/Ace Hardware for$3,137.00, for a total of $10,144.50. Sheriff Jordan explained these weapons are being replaced with 9mm weapons, and Mr. Warden confirmed funds have been budgeted for the new weapons. Commissioner Webster moved to approve staff recommendations, and Commissioner Baxter seconded the motion. Mr. Warden clarified the motion must include declaring said guns as surplus. Commissioners Webster and Baxter agreed, and the motion carried unanimously. BUSINESS: NEW: CONSIDER INTERGOVERNMENTAL AGREEMENT WITH CITY OF EVANS, COLORADO, FOR IMPROVEMENT OF 17TH AVENUE AND AUTHORIZE CHAIR TO SIGN: Drew Scheltinga, Engineer for Public Works Department, stated this is the second year the County has participated with Evans for improvements. He explained the project and indicated the total of this agreement is $35,968.30. Commissioner Hall moved to approve said agreement and authorize the Chair to sign. Commissioner Baxter seconded the motion, which carried unanimously. CONSIDER INSTALLATION OF TRAFFIC CONTROL DEVICES ON WELD COUNTY ROADS 7 AND 13: Mr. Scheltinga explained he met with the citizens in this area near the Town of Mead, and they strongly feel the speed limit should be reduced. He stated a site inspection and a traffic study have been performed, and, considering the development in the area, staff recommends the speed limit be reduced to 45 mph, which conforms with State standards. Responding to questions from the Board, Mr. Scheltinga stated serious discussion has begun with the Town of Mead to asume traffic control in this area. Commissioner Hall moved to approve the installation of said traffic control devices, and Commissioner Webster seconded the motion, which carried unanimously. Minutes, April 1, 1996 960557 Page 3 BC0016 CONSIDER INSTALLATION OF TRAFFIC CONTROL DEVICES ON EAST 16TH STREET AT FERN AVENUE: Mr. Scheltinga recommended the "Yield Ahead" and "Yield" signs at said intersection be replaced with "Stop Ahead" and "Stop" signs to prevent future accidents in the area. Commissioner Webster moved to approve said recommendation, and Commissioner Baxter seconded the motion, which carried unanimously. CONSIDER INSTALLATION OF TRAFFIC CONTROL DEVICES ON WELD COUNTY ROAD 54 BETWEEN WELD COUNTY ROADS 43 AND 45: Mr. Scheltinga stated this request is the result of a citizen's complaint, and, after investigation, staff recommends lowering the speed limit to 45 mph on the straight portions of the road and to 35 mph on the curved section. Commissioner Baxter moved to approve staff recommendation, and Commissioner Webster seconded the motion. It carried unanimously. CONSIDER REAPPOINTMENT AND APPOINTMENT TO HUMAN SERVICES COMMITTEE: Commissioner Harbert moved to reappoint B. J. Dean, United Way representative, and to appoint Irene Rodriguez to said Board to replace Shana Oster as a parent policy representative, with terms to expire December 31, 1998. Commissioner Hall seconded the motion, which carried unanimously. CONSIDER APPOINTMENTS TO AREA AGENCY ON AGING: Commissioner Harbert moved to appoint Laurel Belau to replace Donald Shedd, John Espinosa to replace Renee Gonzales, Shirley lanelli to replace A. Warren Holm, and Marguerite Scott to replace Pedro Rucobo, and to reappoint Priscilla Kimboko, all with terms to expire January 31, 1999. Commissioner Hall seconded the motion, which carried unanimously. FIRST READING OF ORDINANCE NO. 77-D, IN MATTER OF REPEAL AND REENACTMENT WITH AMENDMENTS OF ORDINANCE NO. 77-C, EMERGENCY MEDICAL SERVICES RULES AND REGULATIONS: Mr. Warden confirmed the tape is complete. Gary McCabe, Ambulance Director and member of the committee formed to review Ordinance No. 77-C, stated the Ordinance has not been revised for a number of years. He reviewed the amendments recommended by the committee which set forth requirements and changes in health care. Commissioner Webster moved to approve the first reading of Ordinance No. 77-D, and Commissioner Baxter seconded the motion. No public testimony was offered, and the motion carried unanimously. FINAL READING OF ORDINANCE NO. 169-A, IN MATTER OF REPEALING AND REENACTING ORDINANCE NO. 169, THE UNDESIRABLE PLANT MANAGEMENT PLAN: Commissioner Hall moved to read Ordinance No. 169-A into the record by title only. Commissioner Harbert seconded the motion, which carried unanimously. Bruce Barker, County Attorney, read the title of said ordinance, and no public testimony was offered. Commissioner Baxter moved to approve the third reading of Ordinance No. 169-A, and Commissioner Harbert seconded the motion, which carried unanimously. Minutes, April 1, 1996 960557 Page 4 BC0016 Let the record reflect Commissioner Harbert excused herself from the meeting at this time. PLANNING: CONSIDER VACATION OF USR #767 - MENDELL/BEECHER (PLANNER EASTIN): Shani Eastin, Planning Department, referred to her memo to the Board and explained Development Standard #9 of USR#767 states the Permit is not transferrable; therefore, Steven K. Mendell, of the Gilbaugh Agency, has requested the Permit issued to Henry J. and Susan M. K. Beecher be vacated. She noted RE#1831 was conditionally approved upon the applicant vacating said Permit. No public testimony was offered. Commissioner Baxter moved to approve said vacation, and Commissioner Hall seconded the motion, which carried unanimously. CONSIDER VACATION OF RE #1376 - WEBER/GALETON WATER AND SANITATION DISTRICT(PLANNER EASTIN): Ms. Eastin referred to her memo to the Board and explained the recorded exemption lots have been incorporated into surrounding lots, thus eliminating the recorded exemption. She further explained said lots were created through SE #558, #559, and #560. No public testimony was offered. Commissioner Webster moved to approve said vacation, and Commissioner Baxter seconded the motion, which carried unanimously. CONSIDER VACATION OF SUP #366 - HUNTER/VERMEER (PLANNER EASTIN): Ms. Eastin referred to her memo to the Board and explained the RE #1681 was approved by staff and split SUP-#366 into two parcels. She further explained, pursuant to a Condition of Approval of RE#1681, the applicants chose to vacate the Permit rather than comply with the Development Standards and Conditions of Approval of said Permit. No public testimony was offered. Commissioner Hall moved to approve said vacation, and Commissioner Baxter seconded the motion, which carried unanimously. RESOLUTIONS AND ORDINANCES: The resolutions were presented and signed as listed on the consent agenda. Ordinance No. 77-D was approved on first reading, and Ordinance No. 169-A was approved on final reading. Let the minutes reflect that the above and foregoing actions were attested to and respectfully submitted by the Acting Clerk to the Board. Minutes, April 1, 1996 960557 Page 5 BC0016 There being no further business, this meeting was adjourned at 10:15 a.m. BOARD OF COUNTY COMMISSIONERS 17�`sA /� D COUNTY, COLO ADO ;;- j►�" , .? � G�� Liiv t I7 //i//ltda ) 1.4, 4 Barb? J. Kirkmeyer, C�hhhhair 1 $isei i to the Board / 9 ,� Je � •G E. Ba erlr ern • •.trib lerk tot he Board Dale K. Hall �� (re2-19.:5-rtnntej /Y1i�1isjonstance L. Harbert W. H. 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(6 N H 0 En.+ >, A N - A fk U ti 01 0 F $4 b Y 0 Si 0 0 .] H v i O• 0) (4 N X v 0 Y U CO • > L A C N !A '0 'S N bl 01 o 0 Y F N 0) o 0 N >. N 4 0 w .0 O 44 U 0 0 0 0 0 -H 0 L° w mw X a 04 N 0 F oI H Tr14 Lc, t coF. ai it x it i[ It it it # rn N N N N 00 N v W L _LiY Y Y W1 N 0 0 0 0 0 0 0 0 0 x v o -iv o v v m w m v 04 m Y Y Y Y Y Y Y Y Y m H a aaa a a a a a MAR-18-1996 08:12 GROWLING BEAR CO 303 353 6964 P.01 GROWLING BEAR CO. (INC. ) 2330 4TH AVE. GREELEY, COLO. 80631 PHONE 970-353-6964, FAX 970-353-6974 MARCH 17,1996 COUNTY COMMISSIONERS: BARBARA KIRKMEYER GEORGE BAXTER o CONNIE HARBERT DALE HALL ; _, r co O BILL WEBSTER r:� r - 0 RE: WELD COUNTY JAIL NORTH GREELEY, COLO. Ui DEAR COMMISSIONERS: IT HAS COME TO MY ATTENTION THAT THE BID RESULTS OF THE TWO LOW BIDDERS OF THE WELD COUNTY JAIL NORTH WAS LESS THAN 0 .50% APART. THE LOW BIDDER WAS FROM LARIMER COUNTY AND THE NEXT LOW BIDDER WAS WELD COUNTY'S, ROCHE CONSTRUCTION. I FIRMLY BELIEVE THAT THE TWO BIDS WERE BOTH: COMPETITIVE IN PRICE AND QUALITY. APPROXIMATELY TEN YEARS AGO WELD COUNTY SCHOOL DISTRICT 6 SPENT 20 MILLION PLUS TO BUILD MORE FACILITIES TO ACCOMMODATE GROWTH. ONE OF THE GOALS OF THIS EXPENDITURE WAS TO KEEP THE CONSTRUCTION MONEY SPENT IN WELD COUNTY. ALL OF THE GENERAL CONTRACTORS, EXCEPT ONE, WHO BUILT THESE FACILITIES WERE NOT FROM WELD COUNTY. A RULING WAS PASSED DOWN THAT A CERTAIN PERCENTAGE OF THE LABOR FORCE FOR EACH CONTRACTOR WOULD BE WELD COUNTY RESIDENTS. THE RESULT WAS MANY FT. COLLINS, DENVER, AND LOVELAND RESIDENTS SUDDENLY HAD GREELEY ADDRESSES. BY USING A WELD COUNTY CONTRACTOR THIS WOULD NOT HAPPEN AND WELD TAXPAYERS WOULD BENEFIT BOTH DIRECTLY AND INDIRECTLY. PLEASE UTILIZE THE BID PREFERENCE TO RESIDENT WELD COUNTY BIDDERS SINCE THE PERCENTAGE DIFFERENCE WAS SO LITTLE AND THE EVENTUAL BENEFIT WOULD BE GREATER TO WELD COUNTY. YOURS TRULY, KEVIN SHIRONAKA PRESIDENT TOTAL P.01 MAR 18 ' 96 7: 56 303 353 6964 PAGE . 001 Roche D CCU n Constructors, Inc. = " (MIS a ) 361 71st Avenue•Post Office Box 1727 A Greeley,Colorado 80632 , , ^n 1 C ?j1 3' 5,3 Phone(970)356-3611 •FAX(970)356-3619 March 14, 1996 CLERIC - TO Il r,O' Ms. Barbara Kirkmeyer, Chairman of the Board Weld County Commissioners 915 10th Street Greeley, Colorado 80631 Re: Weld County North Jail Complex Greeley, Colorado Dear Ms. Kirkmeyer: We are respectfully requesting that the Weld County Commissioners give preference to Roche Constructors, Inc., for the referenced project under Section 14-9 - Bidding - Procedure. This section states in pertinent part that the County Commissioners shall give preference to resident Weld County bidders in all cases where the bids are competitive in price and quality. It is our understanding that the apparent low bidder at this point is Clark Construction, with a base bid of$7,263,000. Our base bid is$7,285,700, which is a difference of$22,700 or 0.31%. Therefore, we believe that our bid is competitive in price. If Alternates 5 and 7 are accepted, the difference between Clark and Roche Constructors would be$2,200. Roche Constructors is a local contractor established in 1971. Our quality has been proven in the projects we have completed over the past 24 years. In addition, we have completed two remodel contracts for the existing Weld County Jail and have extensive experience in this size of project. Your consideration in the selection of Roche Constructors, Inc., as the general contractor on the referenced project is appreciated. Sincerely. ROCHE CONSTRUCTORS, INC. Thomas J. Roche President TJR/vsh pc: Don Warden, Finance Director George Baxter Connie Harbert Dale Hall Bill Webster 4825 Quality Court 337 North Vineyard 2710 Gateway Oaks Drive Las Vegas, Nevada 89103 Ontario,California 91764 Sacramento, California 95833 Phone(702)871-8666 Phone(909)984-2400 Phone(916)649-9299 FAX(702)871-9570 FAX(909)984-3600 �7C 06C C_1(J4 pit_ FAX(916)927-4893 03/15/96 FRI 15:46 FAX 970 356 2232 MUTTON'S OFFICE EQUIP. U001 �F1° l�L®ffi90 ELD CCLI TY' FAX I�NI (303) 356-2232 7 All Locations �I Ell ljni 1,r. f Greelav 352-7503 FonCollins 221-0617 CLERK Loveland 221-0617 OFFICE ITYe Fon Morgan 867-4887 TO THE / 1303 8th Avenue, Greeley, CO 80631 America's Office Supplier 15 March 1996 Memo to: Weld County Commissioners Please note the letter from Roche Constructors. This same problem has been a constant thorn in our side. We live- here, we have our office here, all of our employees are here, and we buy whatever we can here. We employ 30 people. You multiply this by say 3 or 4 and you get some 90 to 100 people who live on our efforts. We agree with Pat Roche. We feel you need a preferential percentage that you allow local business who have offices in Weld County and Greeley. This is the same for the City of Greeley. Now seems to be a good time for both the County and City to face up to this problem and take some concrete action to help local residents and businesses. Because of the 5% preference we can not do business with the State of Wyoming. Sincerely BRATTON OFFICE EQUIPMENT, INC. Ace_ 7g.4..4-1 . Gene Bratton Canon Copiers • Sevin Copiers • IBM Typewriters • FAX Machines • Steeicase Furniture MAR 15 ' 96 15: 41 ��, dos-) (A ; Pa_ 970 356 2232 PRGE . 001 03/15/96 FRI 15:47 FAX 970 356 2232 BRATTON S OFFICE EQUIP. Z 002 Mar 15.1996 03:01PM FRCtl Sandra L. Roche To 3562232 P.01 'Roche pc�� l�. Constructors, Inc. i `57r rr,f , '^ ri 381 71at Menus•PM Ma Bar 1727 1 15 `� aaetat Colossi*soe3z Rona plat 366as11•FAX(970)356-3519 CLEni{ TO THE BO',i March 15. 1996 VIA FACSIMILE AND U.S. MAIL Mr. Robert Branton Bratton's Office Supply 1303 Bth Avenue Greeley.CO 80631 Re: Weld County Jail North Greeley.Colorado Dear Mr.Oration: As you may or may not be aware,Weld County received bids from general contractors on the referenced facility on March 14. 1996. Roche Constructors was one of seven bidders on the protect. We submitted the second lowest bid,which was$7,285,700 or 0.31%higher than the low bidder. Additionally. there were nine alternates. Roche Constructors could be as close as$2,200 to the low bid,depending on which alternates are accepted. The apparent low bidder,Clark Construction Is a Loveland Contractor, Weld County has a preferential ordinance for local contractors which states for the County Commissioners shall give preference to resident Weld County bidders In all cases where the bids are competitive in price and quality. The local preference lows are common In many cities,counties and states where we do business. and most often is a disadvantage for Roche Constructors. Roche Constructors has been based In Greeley for 24 yeas and hos supported numerous local civic organizations, patronizes local businesses and employs Greeley residents. I can assure you that if Roche Constructors is awarded the project, a considerable amount of local labor and materials will be Incorporated Into the project. Therefore,retaining more of Weld County taxpayer's funds with local businesses. If you agree with this concept. I would ask that you call the County Commissioners listed below to show your support In awarding this project to Roche Constructors, Inc. Time Is of the essence,as this will be discussed at the Board Meeting on Monday, March 18. 1996,with the final vote following within two weeks. • Barbara Kirkmeyer (303)654-9841 • George Baxter 1970)656-3660 • Connie Harbert (970)330-1413 • Dale Hall 1970)351-6118 • Bill Webster (970)352-3356 Poet Moe Bo•28160 337 Nordt Vineyard 2710 Gateway Oaks Drive Las Was,Nevada 59126 Ontario,CaBtornls 91764 Sacramento.California 95a33 Phone(702)871.8868 Pion 1909)984-2400 Phone(916)649-9299 F►,rani rn.Orm CAW 1Of %,M.J•F. CA v M,rt,•r,,on, MAR 15 ' 96 15: 42 970 356 2232 PAGE . 002 �.', Recc_, cPr' Pit 03/15/96 FRI 15:47 FAX 970 356 2232 BRATTON'S OFFICE EQUIP. 14003 Mar 15.1996 03:01PM FROM Sandra L. Roche TO 3562232 P.02 Roche Constructors, Inc. Mr.Robert Diction March IS. 1996 Page 2 If you have any questions. please call. Thank you for your consideration. Sincerely. ROCHE CONSTRUCTORS, INC. aiessfracie Thomas J. Roche President TJR/vsh Enclosure MAR 15 ' 96 15: 42 970 356 2232 PRGE . 003 • LEBOEUF, LAMB, GREENE & MACRAE L.L.P. A LIMITED LIABILITY PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS NEW YORK 633 SEVENTEENTH STREET LOS ANGELES WASHINGTON SUITE 2800 NEWARK ALBANY PITTSBURGH DENVER, CO 80202 SALT LAKE CITY BOSTON. 13031291-2600 SAN FRANCISCO DENVER H ARRISBU RG FACSIMILE'. 13031 297-0422 LONDON HARTFORD BRUSSELS JACKSONVILLE WRITER'S DIRECT DIAL. MOSCOW (303) 291-2600 ALMATY March 27, 1996 Commissioners of Weld County Weld County Centennial Building Greeley, Colorado Ladies and Gentlemen: This letter is provided on behalf of Roche Constructors, Inc., ("Roche") for your consideration in determining which bidder should be awarded the Weld County North Jail Complex project ("Jail Project"). The following is a brief discussion of the factual background, relevant preference provision of the Weld County Charter ("Charter"), and important economic and legal issues involved in the selection of a general contractor for the Jail Project. I. FACTUAL BACKGROUND On March 14, 1996, Roche, a resident of Greeley and Weld County, bid $7,285,700 on the Jail Project. Roche was one of seven bidders on the project. In addition, there are nine alternates. As you may or may not know, Roche has been doing business in Weld County for 24 years and is managed by its President Thomas J. Roche. Since 1971 Roche has supported numerous local civic organizations, patronized local businesses and employed several Weld County residents. Roche has previously completed two remodelling contracts on the existing Weld County Jail and has extensive experience with public institution projects of equal or greater size than the Jail Project at issue. In the past six months, Roche has lost over $17,000,000 in bids in Nevada due to local preference rules even though it was the low bidder. In addition, Roche has lost other bids in other states such as Arizona on a similar basis. Roche is aware of a 5% local preference rule in the state of Wyoming. Adams County also has a 5% local preference rule. March 27, 1996 Page 2 Loveland-based Clark Construction ("Clark") bid $7,263,000 on the Jail Project and is the apparent low bidder. Clark is located in Larimer County. The difference between the Roche and Clark bids is only $22,700. This makes for a minuscule three one hundredths of a percentage point difference between the two bids (or 0.31%). If certain alternates are used on the Jail Project the percentage could even be less than 0.31%. Nevertheless, it appears the bid by Loveland-based Clark may be recommended to the Commissioners of Weld County ("Commissioners"). The final vote concerning the awarding of the Jail Project is to be held on Monday, April 1, 1996. II. THE PREFERENCE PROVISION OF THE CHARTER The Weld County Home Rule Charter, effective January 1, 1976, Article XIV, Section 14-9(3) requires the Commissioners to give preference to resident Weld County bidders in all cases where the bids are competitive in price and quality. Section 14-9 of the Charter addresses bidding procedures for Weld County purchases. Subsection (3) of section 14-9 states that "[t]he County Commissioners shall give preference to resident Weld County bidders in all cases where the bids are competitive in price and quality." (Emphasis added). Therefore, so long as a Weld County bidder's bid is competitive in terms of price and quality with bids received from non-resident bidders, the Commissioners are required to give that Weld County bidder preference. The Weld County Home Rule Charter Commission ("Commission") which studied, heard testimony, and drafted the Weld County Home Rule Charter at issue intended the word "competitive," as it pertained to price, to allow for at least a 1% difference (up to as much as 5% if necessary) between the low bid from a non-resident bidder and a slightly higher Weld County bidder. See Affidavit of J.L. "Bud" Johnson, Chairman of the Weld County Home Rule Charter Commission, dated March 27, 1996, at ¶ 3, attached hereto as Exhibit "A." The drafting Commission did not intend "competitive" to mean "equal" or that the preference provision only be used as a "tie-breaker." Id. at ¶ 4. Indeed, for the several years immediately following the effective date of the Charter in 1976, the Commission adopted the 1% (at least) preference for Weld County bidders as its policy. Id. at ¶ 5. See also Affidavit of Norman Carlson dated March 27, 1996, attached hereto as Exhibit "B." This policy was intended by the drafters of the Charter to give Weld County bidders a preference over non-resident bidders. Johnson affidavit at ¶ 5. See also Carlson affidavit. The Commission strongly believed that local businesses should be given a preference for Weld County contracts because local contractors made economic contributions to the March 27, 1996 Page 3 county and because the Commission also believed a resident contractor would be more likely to adequately service the contract since a resident Weld County contractor would have a vested interest in their local work and reputation. Id. at ¶ 2. Despite the original intent behind the preference provision of the Charter, it appears the provision is now being used by the Commissioners as merely a "tie-breaker." This use of the preference provision of the Charter by the Commissioners as a tie-breaker renders it meaningless. The odds against an exact tie on bids over $1,000,000 are greater than winning the lottery. More importantly, the current use of the preference provision by the Commissioners is clearly contrary to the intent of the drafters of the Charter. However, under either interpretation of section 14-9(3) of the Charter, the Roche bid is "competitive" with the Clark bid in terms of price. A three one hundredths of a percentage point difference between bids over $7,000,000 is inconsequential. The Roche bid is within 1% of the Clark bid and thus clearly competitive under the original intent of the preference provision. Furthermore, the 0.31% difference between the bids is in effect a "tie" and therefore, even under the Commissioners' current "tie-breaker" interpretation of the preference provision, Roche, a Weld County bidder, is entitled to a preference over Clark, a non-resident of Weld County. With respect to quality, it appears that both Roche and Clark intend to use some of the same subcontractors on the Jail Project. Moreover, Roche is 17th on the list of the 25 largest general contractors in the State of Colorado as ranked by the Daily Journal in 1995 and is 322nd on the list of the top 400 in the United States as ranked by the Engineering News-Record. In addition, Roche has extensive experience in projects of this size. Therefore, an argument, if made, that the Roche bid is not competitive with the Clark bid in terms of quality is without merit. Furthermore, Roche has committed to a 12 month completion date whereas Clark has committed to only a 16 month completion date. The shorter duration would save Weld County a substantial amount of money in interest. Additionally, prisoners now housed elsewhere could be transferred to the county-owned facility sooner, thereby creating additional cost savings. March 27, 1996 Page 4 III. ECONOMIC BENEFITS TO WELD COUNTY OF AN AWARD OF THE JAIL PROJECT TO ROCHE An award of the Jail Project to Roche would have an extremely favorable economic impact on Weld County during the period of construction and beyond in the areas of indirect business taxes (sales, excise and property taxes), compensation to Weld County workers, proprietary and property income, job creation, and the production of goods and services. See Economic Impact of Having A Local Contractor, Roche Constructors, Construct the New Jail, prepared by Ann J. Garrison, Economics Professor at the University of Northern Colorado, dated March 27, 1996, attached hereto as Exhibit "C." Dr. Garrison's report states that there are two ways of stimulating the performance of a local economy. Id. These are by (1) increasing the amount of money/income flowing into the local economy or (2) reducing the amount of money/income flowing out of the local economy. Id. The first type is known as increasing "exports" of the economy while the second type is known as decreasing "imports" of the economy. Id. With respect to the Jail Project, an award of the contract to non-resident Clark would cause a flow of money, income, and jobs out of Weld County. Id. In addition, this leakage of money, income, and jobs out of Weld County would result in lower taxes being collected by the Weld County government. Id. On the other hand, these same parameters would rise if a local firm such as Roche was awarded the contract. Id. In either case, there is a "ripple effect" through the local economy. Id. Through this "ripple effect," both the private sector and the public sector benefit by the addition of money or income into the local economy and fewer dollars leaving the local economy. Id. These benefits to the local economy take the form of higher taxes, employment, production, and income. Id. Dr. Garrison's evaluation of the economic benefits of an award of the Jail Project to Roche is founded on a Weld County based input-output analysis called "IMPLAN." Id. As is more fully explained in Dr. Garrison's report, IMPLAN provides the means to calculate the impact a company's operations, or change in its operations, have on the entire Weld County economy. Id. IMPLAN includes, and tracks, the supply and demand information for 528 industries within Weld County. Id. The specific IMPLAN variables for Weld County include (1) employment of wage and salary workers, (2) production or output, (3) personal income or employee compensation, (4) total income (employee compensation, proprietary income, and other property income), and (5) value added (employee compensation, proprietary income, other property income and indirect business taxes). Id. Dr. Garrison's analysis specifically March 27, 1996 Page 5 compares the economic impact on Weld County of the Jail Project being awarded to Roche versus an award of the project to Clark. Id. The comparison is based upon Roche's bid that will spend 20% of the contract amount or $1,457,140 (20% of $7,285,700) in the Weld County economy through Roche and the use of Weld County subcontractors and Clark's plan to spend approximately 3% in Weld County or$217,890 (3% of $7,263,000). Id. A side by side comparison of the subcontractors Roche and Clark intend to use on the Jail Project shows that Roche and four subcontractors located in Weld County will perform six subcontractor functions on the contract while Clark will only be using two Weld County subcontractors. As noted above, Roche and its Weld County subcontractors will be performing 20% of the work on the Jail Project. Clark's Weld County subcontractors will be performing approximately only 3% of the Jail Project. Roche and its subcontractors will be performing the landscaping, roofing, painting, earthwork, concrete, and carpentry work. In addition, general conditions, bond, insurance, and fee work on the Jail Project will stay in Weld County. On the other hand, Clark's two local subcontractors will perform only earthwork and roofing. Dr. Garrison's report concludes that the economic benefits to Weld County through an award of the Jail Project to Roche instead of Clark are as follows: (1) $39,408 of indirect business taxes; (2) $375,988 of compensation to workers; (3) $624,954 of proprietary and property income; (4) $1,867,674 of production or output; and (5) 18.69 jobs. Id. Thus, it is clear that the economic impact on Weld County of an award of the Jail Project to Roche instead of Clark is significant. Indeed, the difference in indirect business taxes collected in Weld County if Roche is awarded the contract ($39,408) by itself exceeds the difference between the price of the two bids ($22,700). Id. Furthermore, with respect to 1995 taxes, Roche paid $38,892.31 to the Weld County Treasurer in the form of property taxes (a sum much greater than the difference between the bids). Roche paid another $11,859 in vehicle ownership taxes to the Weld County Treasurer (a sum which is one-half the amount at issue here). In addition, Roche paid $289,767.37 to the City of Greeley in the form of use taxes, taxes on building permits, and sales taxes for a total tax bill of $357,114.04. Roche Development Companies also paid in excess of $59,863.03 in personal property taxes in 1995. Moreover, Roche currently employs 39 Weld County residents with an annual payroll of$1,423,108.44. It should be noted that these amounts (or very similar amounts) will continue to be paid to Weld County governments even after the Jail Project is completed. Finally, in 1995, Roche paid $4,450,860.07 to local Weld County vendors and subcontractors for business supplies and services to support its Greeley operation. March 27, 1996 Page 6 In addition to the economic benefits an award of the specific Jail Project to Roche would bestow upon Weld County, Roche, as a Weld County contractor, will have an ongoing positive economic impact on the county. For example, if only Roche's expenditures on supplies and services within Weld County are considered, the economic benefits to the county include the following: $6,950,455 in additional production; $3,301,900 additional indirect business taxes, compensation to workers, proprietors, and property owners; and 110 additional jobs. Id. IV. RATIONALE OF LOCAL PREFERENCE PROVISIONS The justification for local preference provisions such as the one contained in section 14-9(3) of the Charter is that they benefit the local economy. This rationale behind local preference provisions is clearly articulated in the following case law from several different jurisdictions: 1. The Ohio Court of Appeals adopted the language of a municipal bidding preference ordinance as the justification for the ordinance. J.A. Croson Co. v. City of Zanesville, 623 N.E.2d 152 (Ohio Ct. App. 1993). The preamble of the ordinance at issue in Croson stated that "the Zanesville City Council has determined that it is in the public interest for the City of Zanesville to purchase equipment, material, and supplies from local business, and to hire local contractors to perform public improvement contract[s]" and that "providing a system of preferences for local business will benefit the local economy, increase local job opportunities, and generate additional tax revenues for the City of Zanesville." Id. at 152. 2. The purpose behind a Washington preference statute was to grant "a preference to those who contribute to the state's economy." Equitable Shipyards, Inc. v. State, 611 P.2d 396, 404 (Wash. 1980). 3. San Francisco local ordinance's purpose was to "reduce the burden on local businesses . . . and to encourage businesses to locate and remain in San Francisco." Associated Gen. Contr. v. City & County of San Francisco, 813 F.2d 922, 943 (9th Cir. 1987). 4. The purpose of a South Carolina preference statute was to encourage local industry so as to stabilize the local economy. Gary Concrete Products, Inc. v. Riley, 331 S.E.2d. 335, 339 (S.C. 1985). The South Carolina Supreme Court also noted that the money to be paid to a local contractor is likely to stay within the local community and enhance the tax base of the local government. Id. at 339 (Citing Galesburg Constr. Co., Inc. v. Bd. of Trustees, 641 P.2d. 745, 750 (Wyo. 1982)). March 27, 1996 Page 7 Therefore, as the above legal precedents point out, the justification for the local preference provision of section 14-9(3) of the Charter is to benefit the Weld County economy. Here, an award of the Jail Project to Roche, a Weld County resident, would be consistent with the rationale behind the Charter's local preference provision in that it would significantly benefit the Weld County economy as described in Dr. Garrison's report. In sum, the Commissioners should award the Jail Project to Roche. The Roche bid is "competitive" in terms of both price and quality to the Clark bid. Furthermore, an award of the Jail Project to Roche will result in significant economic benefits to Weld County. Through the submission of this letter it is our hope that the Commissioners will properly apply section 14-9 of the Charter to its decision concerning the award of the Jail Project contract. Specifically, the Commissioners should adhere to subsection (3) of the Charter which requires the Commissioners to give Roche a preference over Clark as a result of its "competitive" bid. Sincerely, Robert N. Miller DN 99980 00100 DN66116.1 03/27/96 9:23am AFFIDAVIT OF J.L. "BUD" JOHNSON 1. I, J.L. "Bud" Johnson, hereby swear and affirm that I was chairman of the Weld County Home Rule Charter Commission ("Commission") which studied, heard testimony, and drafted the Weld County Home Rule Charter ("Charter"). 2. I remember the discussion and debate concerning the Weld County Bidding Procedures of the Charter. Specifically, I recall that portion which provided a preference for resident Weld County bidders for Weld County contracts. The Commission strongly believed that local businesses should be given a preference for Weld County contracts because they made economic contributions to the county. The Commission also believed a resident Weld County contractor would be much more likely to adequately service the contract since local bidders would have a vested interest in their local work and reputation. 3. In addition, I remember that the Commission seriously considered drafting into the Charter a specific percentage within which a local Weld County bidder must bid in order to receive the local preference. The percentages considered were amounts up to 5%. However, on further reflection, the commission did not want to unduly tie the hands of the Board of County Commissioners. Instead, the Commission wanted to provide some flexibility so they chose the language which is currently in the Charter which says that the preference shall be given if the resident bid is competitive. 4. The Commission never intended "competitive" to mean "equal" or that the provision only be used as a "tie-breaker". The Commission understood that equal bids would be highly unusual and that such an interpretation of the preference provision would thereby negate the s;(a 4 �J EXHIBIT A provisions' intent. It was the Commission's belief that bids that were less than 1% apart were to be deemed "competitive." 5. It is my understanding that for the several years immediately following the adoption of the Charter in 1976, the Weld County Board of Commissioners adopted the 5% preference to Weld County bidders as its policy. This policy was intended by the drafters to give Weld County bidders a preference over non-resident bidders. Dated: March 27, 1996. J I . 'B Johnson " A. jy'--• SUBSCRIBED AND SWORN to before me this a/day of*04996. •.`�°TARY: P U Ll t- G.a otary Public Residing in My Commission Expires: DN 89000 07476 DN66199.1 03/27/96 9:15am 2 AFFIDAVIT OF NORMAN CARLSON I, Norman Carlson, do hereby swear and affirm that I served as Weld County Commissioner from 1976 to 1984. I was a member of the first Board of Commissioners after the Weld County Home Rule Charter ("Charter") was passed by the voters of Weld County and became effective in 1976. I was very much aware of the provision in the Bidding Procedure portion of the Charter which mandated that the County Commissioners give preference to resident Weld County bidders in all cases where the bids are competitive in price and quality. In order to fully implement the clear intent of this provision of the Charter for Weld County bids, the Board of Commissioners agreed to a policy that any resident bidder who was within 5% of the lowest bidder and whose bid was otherwise equal in quality would be awarded the bid based on the mandatory resident preference of the Charter. This rule was uniformly applied by the Weld County Commissioners for the eight years I was a member in order to provide a preference to local bidders. I was surprised to learn that there is no such policy today to give local residents a preference. Dated: March 27, 1996. Norman Carlson 9 K 110 SUBSCRIBED AND SWORN to before me this a 7 day of ,,,�,,� �1996. `,otaar �` PV9\ ' s sr.. ° Not Public %„*-• Not Residing incii LA± 1 Irethtmission Expires: EXHIBIT ECONOMIC IMPACT OF HAVING A LOCAL CONTRACTOR, ROCHE CONSTRUCTORS, CONSTRUCT THE NEW JAIL Prepared for Robert Miller, Attorney Prepared by Ann J. Garrison Economics Department College of Arts and Sciences University of Northern Colorado March 27, ]996 EXHIBIT C EXECUTIVE SUMMARY Two options were considered. The first was to have Roche Constructors, a Greeley firm, be awarded the contract to construct the local jail Roche's bid was $7,285,700. With this choice, Roche's subcontractors would spend 20 percent of the contract amount in the Weld County economy. This amount of expenditures equals 81,457,140. The second option considered involves Clark Construction, a Loveland firm. Clark's bid for the project was $7,263,000. With this bid, the estimate was that 3 percent of the total would be spent in the Weld County economy by Clark's subcontractors. Subcontractors' expenditures with this example would be$217,890. 1MPLAN, a county specific input-output database/model allows the prediction of the economic impact of the jail being built by Roche Constructors or by Clark Construction. The table below compares the economic impact of the contract being awarded Roche Constructors versus it being awarded Clark Construction. TABLE I INCREASES IN ECONOMIC ACTIVITY IN WELD COUNTY CONTRACT AWARDED TO ROCHE CLARK NET CONSTR. CONSTR. DIFFERENCE Indirect business taxes $ 46,337 $ 6,929 $ 39,408 Workers' compensation $ 442,096 $ 66,108 $ 375,988 Proprietary & property income $ 734,836 $109,882 $ 624,954 Production or output $2,196,056 $328,382 $1,867,674 Employment 21.86 jobs 3.17 jobs 18.69 jobs If the contract is awarded Roche Constructors, the numbers in the column labeled NET DIFFERENCE represent the higher economic benefits from having a local firm, Roche Constructors, be awarded the contract. These numbers are the net benefits to the county. If the contract is awarded Clark Construction, the numbers in the column labeled NET DIFFERENCE represent the net economic cost or loss to Weld County's economy by awarding the contract to a firm located outside Weld County. The net difference in indirect business taxes collected if the local contractor is awarded the contract ($39,408) by itself exceeds the difference between the two firms' bids, $22,700. While the numbers for Roche Constructors in Table I are job specific, this local firm has an ongoing positive impact on the county economy. If only the firm's expenditures on supplies from vendors in Weld County are considered, the firm's economic benefits include the following. $6,950,455 in additional production; $3,301,900 additional indirect business taxes, compensation to workers, proprietors, and property owners; $3,098,535 additional compensation to workers, proprietors, and property owners; $2,108,410 additional compensation to workers; and 110 additional jobs. If only indirect business taxes are considered, the firm's annual spending within the county on supplies adds $203,365 in indirect business taxes. Proprietor's and property owners gain $990,125 from the local spending on supplies. When Roche Constructors buys supplies in Weld County, both the private and public sectors benefit, The benefits that the public sector receives in the form of higher taxes come with no additional incentives paid the firm by the public sector. Roche Constructors also employs 39 people in the firm's local office. The annual payroll to these workers is $1.4 million. INTRODUCTION Two of the ways to stimulate the performance of a local economy include either increasing the amount of money/income flowing into the economy or reducing the amount of money/income flowing out of the local economy. The first type of activity is known as increasing the"exports" of the economy, and the second type is known as decreasing the"imports" of the economy. In the specific example being considered, awarding the construction contract to a firm out of the county would cause a flow of money, income, and jobs out of the county. Also, this leakage out of Weld County would result in lower taxes being collected by the government. Conversely, these parameters would rise if a local firm received the contract. In either case, there is a ripple effect through the economy. It is through this ripple effect that both the private sector and the public sector benefit by additional amounts of money or income coming into the county, or fewer dollars leaving the county. These benefits take the form of higher taxes, employment, production, and income. While there are several different methods of measuring the performance of a local economy, one way that is state and/or county specific is input-output analysis. Input-output analysis is used by economists for two reasons. The first reason is for economic impact analysis, and the second is for regional forecasting. This type of analysis shows the interdependence of the sectors, or parts, within a given economy. IMPLAN, AN INPUT-OUTPUT MODEL AND DATABASE IMPLAN, an input-output database/model, provides the means to calculate the impact a company's operations, or a change in its operations, have on the entire county economy. IMPLAN includes supply and demand information for 528 industries within a county. Thus, it allows the economic activity of these 528 industries to be tracked as any of these industries is affected by an increase or decrease in its sales, or contracts. IMPLAN was developed for the USDA. It was constructed by the University of Minnesota. There is a different 1MPLAN for each state and for each county. IMPLAN for Weld County includes the following economic variables: Employment of wage and salary workers in the county Production or output in the county Personal income, or employee compensation, in the county Total income(employee compensation, proprietary income, and other property income) in the county. Value added (employee compensation, proprietary income, other property income and indirect business taxes) in the county. Employee compensation, or personal income, includes wages and salaries, and benefits like health and life insurance paid for by the employer. Payments received by self-employed people make up proprietary income. Rent, royalties, and dividends are lumped together to form other property income. Indirect business taxes consist of taxes not levied directly on income. Personal and corporation income taxes are levied directly on income. These two income taxes are not included in indirect business taxes. When a given industry or business has an increase in sales or contracts awarded, the business or industry must buy more from its suppliers so it can meet the increased demand that is registered via the higher sales or contracts received. Normally employment will rise too. In terms of the input-output model, there is a direct effect on the company's production, employment, worker compensation paid, proprietary income, and indirect taxes paid. The effect is called direct because it flows directly from the increase in sales or contracts. An indirect effect is caused by the change in the level of sales to the company as this business purchases more from its suppliers. The indirect effect shows a backward linkage between the firm with the higher sales and its suppliers. Employment, production, personal income, total income and value added of the suppliers are altered by the changes in its sales to the firm with the higher sales or contracts. A third effect, induced effect, consists of an economy being stimulated by the spending of the workers of the original company and its suppliers. Obviously, the more workers and their families have to spend and/or the more workers who can spend, the larger any economy's fortunes. Just as with the direct and indirect effects, employment, production, personal income, total income, and value added are the economic parameters affected by both a change in the sales or contracts of the one firm. When the three effects, direct, indirect, and induced, are combined, the combination generates the total effect, on production, employment, personal income, total income, and value added. ECONOMIC IMPACT OF ROCHE CONSTRUCTORS, INC. RECEIVING A$7.5 MILLION CONTRACT AND THE SUBCONTRACTORS SPENDING$1,457,140 The following calculations were obtained by multiplying 20 percent of the $7,285,700 contract bid submitted by Roche Constructors times five different multipliers. This 20 percent figure, or S1,457,140, is the amount Roche's subcontractors would spend in the Weld County economy These multipliers are for Industry 54, New Government Facilities. They are specific to Weld County, based on LMPLAN. Table II shows the tots! effect if Roche receives the contract. TABLE II INCREASES IN ECONOMIC ACTIVITY FROM ROCHE'S SUBCONTRACTORS' EXPENDITURES LN WELD COUNTY(TOTAL EFFECT SHOWN) 1. EMPLOYMENT 21.86 JOBS 2. WORKER COMPENSATION (PERSONAL INCOME) $442,096 3 WORKER COMPENSATION, PROPRIETARY INCOME AND OTHER PROPERTY INCOME (TOTAL INCOME) $734,836 4. WORKER COMPENSATION, PROPRIETARY INCOME, OTHER PROPERTY INCOME AND INDIRECT BUSINESS TAXES (VALUE ADDED) $781,173 5. OUTPUT (PRODUCTION) $2,196,056 • As soon as the subcontractors' suppliers receive additional purchase orders, the direct effect would start to generate economic benefits in the county. The subcontractors' suppliers in Weld County should produce $424,319 more output as a result of purchases by these subcontractors, if Roche receives the contract. If Clark Construction receives the contract, its subcontractors' expenditures in Weld County would generate.$63,450 more output for the suppliers. Assuming the contract goes to Roche, these same supplying firms would employ an additional 8.17 people and-pay $140,177 more in worker compensation. Proprietary and other property income received by these Weld County suppliers is predicted to go up $230,228. Indirect business taxes are predicted to go up by $17,486 as a result of Roche's subcontractors buying more from their Weld County suppliers. When the additional household income is spent, again as a result of Roche's getting the S7,285,700 contract, 6.83 more jobs should be created, $103,603 more in worker compensation would be earned, and $26,811 in additional indirect business taxes would flow to the government. In addition,the increased household spending is predicted to generate$3I4,597 in production and $168,883 income for business and other property owners- It can also be argued that the subcontractors' suppliers would receive new orders for goods and services, if Clark receives the contract. Since Clark's subcontractors would spend a lower absolute and relative amount within Weld County, the positive economic impact would be lower as a result of Clark's subcontractors' economic purchases within the county. Table III summaries the net benefits according to the direct effects, indirect effects and induced effects, if Roche Constructors is awarded the contract, rather than Clark Construction. TABLE 111 NET BENEFITS FROM THE DIRECT, INDIRECT AND INDUCED EFFECTS DIRECT INDIRECT INDUCED EFFECTS EFFECTS EFFECTS Output $1,239,250 -$360,870 $267,554 Employment 5.86 jobs 6.98 jobs 5.84 jobs Workers' compensation $ 168,662 $119,216 $ 88,111 Workers' compensation, proprietary income, and property income $ 285,647 •$195,802 $143,629 Indirect business taxes $ 1,611 $ 14,871 $ 22,802 Hello