Los Angeles Votes to Amend Charter In Favor of LA City-Based Businesses

Measure BB will allow LA to implement an additional contracting bid preference for businesses that are located in the city of Los Angeles.

Last week Los Angeles City Council adopted resolutions declaring the results of the June 7, 2022 Primary Election, including the passage of the City of Los Angeles’ Measure BB. The Measure, authored by Councilmember Paul Koretz, amends the City Charter to add “City of Los Angeles” to the definition of “local” in Section 371a. of the Charter, thereby permitting the City to implement an additional contracting bid preference for businesses that are located in the city of Los Angeles.

“It’s not a secret to this group that businesses in LA — particularly the small businesses that make up about 97 percent of businesses in LA County — have taken an enormous hit over the last 2 years, “ said Councilmember Koretz. “At the height of the pandemic, businesses were shuttering their doors left and right, and there were about 300,000 Angelenos out of work. This at a time when rents, utilities, insurance, sales taxes, and business taxes also place businesses in the City of LA at a competitive disadvantage. This Measure will open up the City’s financial purse and contracting dollars to local businesses and help LA’s business community regain the foot-hold they had before the pandemic.”

Currently, businesses operating in the City of LA, paying City of Los Angeles wages, City of Los Angeles rents, City of Los Angeles insurance, and City of Los Angeles business tax, receive the same point preference on bids to do business with the City as businesses operating in Santa Clarita or Lancaster. Furthermore, based on data compiled by the City of Los Angeles’ Bureau of Contract Administration during the 2018-2019 – the last full fiscal year before the COVID-19 pandemic – only 7 percent, or one in fifteen, local business enterprise awards went to City of LA businesses as a result of the City’s Local Business Preference Program. Those businesses secured only one-quarter of one percent – or $96,000 out of a potential $41.5M – in contracting dollars awarded through the program.

“LA’s entrepreneurial spirit is what makes this city so unique and vibrant,” said L.A. City Controller Ron Galperin. “We have a responsibility to do everything we can to support our local businesses and improve the City’s contract bidding process, which is something I’ve long advocated for in my reports and audits. The passage of Measure BB opens up new opportunities for LA’s business community, especially for the many women- and minority-owned small businesses that are the heart and soul of our great city. After a difficult two years that has left so many businesses struggling to keep their doors open, this measure will finally give local businesses the leg up that they deserve.”

In order to effectuate the intent of Measure BB, Councilmembers Koretz, Blumenfield and Harris-Dawson introduced a motion instructing the Bureau of Contract Administration, Chief Legislative Analyst, the City’s Chief Procurement Officer, and the City Attorney to report back to the City Council with recommendations for the implementation of a contracting bid preference for businesses located in the City of Los Angeles.

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