AN ORDINANCE creating a program to promote the use of small economically disadvantaged businesses in competing for City contracting opportunities.

NOW THEREFORE,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. Findings. The City Council finds the following:

1. The success of small economically disadvantaged businesses is important to the region's overall economy, including the development of job opportunities and social mobility in the City.

2. Businesses located within the City that seek contracting opportunities operate under a competitive disadvantage with businesses located elsewhere because of higher taxes and higher operating and administrative costs.

3. Economic justice is served by enhancing opportunities for small economically disadvantaged business owners who pursue relevant technical and entrepreneurial training to become more skilled competitors.

4. Businesses who locate and remain in economically distressed areas help to strengthen those areas by stimulating economic activity and revitalizing neighborhoods.

5. Through its contracting activities, the City is in a position to create important economic incentives to use small economically disadvantaged businesses.

6. It is in the City's economic interest to provide incentives to encourage small economically disadvantaged businesses to locate and remain within the City.

Section 2. Boost for Small Economically Disadvantaged Businesses. The Executive Services Department ("ESD") shall implement a "Boost" Program under which the City and its contractors have an incentive to make use of small economically disadvantaged businesses as prime contractors, subcontractors, and suppliers on City contracts.

Section 3. Scope. The Boost Program shall apply to City public works, consulting, and procurement contracts.

Section 4. Definitions.

"Director" means the Director of the Executive Services Department.

"Economically distressed area" means a geographic area determined by the City Council to require the use of incentives in order to stimulate economic activity and revitalize declining neighborhoods.

"Located within" the City or an economically distressed area means that a business at least:

(a) has its primary offices or distribution points (other than residential or post office box) physically within the relevant boundaries; and

(b) lists the address on a valid business permit as being within the relevant boundaries; and

(c) has been doing business within the relevant boundaries for at least 12 months; and

(d) submits other proof as required by the Director.

"Small Economically Disadvantaged Business" means that a business and the person or persons who own and control it are in a financial condition which puts the business at a substantial disadvantage in attempting to compete for public contracts. In assessing these financial conditions, ESD shall substantially adopt the approach used by the Federal Small Business Administration ("SBA"), provided that the SBA dollar ceilings for various standard business classifications and levels for owners' personal net worth shall be adjusted by the Director to account for local market conditions.

Section 5. Criteria for Participation. To be certified for the Boost Program, a business must be a Small Economically Disadvantaged Business serving a commercially useful function and must meet at least one of the following additional criteria:

(a) Located within the City of Seattle. A business located within the City, as defined above, may meet this criterion as a means to offset the competitive disadvantages experienced by Small Economically Disadvantaged Businesses and to encourage other such businesses to locate and remain within the City.

(b) Business Development. A Small Economically Disadvantaged Businesses can meet and maintain this criterion by having the person(s) who owns and controls the business annually complete at least 15 hours of business-related training in a program approved by the Director. In establishing regulations for approval of any such training program, the Director shall look for one or more of the following indications of the program's value: (1) the program's historical use or support from within the relevant industry, (2) any affiliation the program has with established schools, if any, (3) accreditation by an established association.

(c) Located within Economically Distressed Area. A Small Economically Disadvantaged Business may meet this criterion by being located within an economically distressed area as defined by the City Council.

Section 6. Certification Process. ESD is authorized to develop a process for certifying businesses for participation in the Boost Program. If feasible, ESD shall arrange, or contract for, a coordinated certification agency in cooperation with other agencies that may adopt compatible programs.

Section 7. Limitation of Certification. In order to provide significant opportunities and incentives for Boost businesses to prove themselves competitive within the market, the certification of such businesses shall be limited to five (5) years or a specified contract and dollar volume of participation. Section 8. Methods of Providing Incentive. The Boost Program shall use one or more methods to create an incentive to promote the use of Boost businesses. This incentive shall be produced either through a bonus system in which the increased participation of Boost businesses is a factor in the award of contracts or through a set-aside system under which contractors are required to achieve a specified level of participation by Boost businesses. Where the bonus system is used, the contract shall state the maximum incentive available for Boost participation and the possible methods for making use of the incentive. Where a set-aside system is used, the contract shall state a required minimum utilization.

The program may provide additional incentives for Boost businesses meeting two or more of the additional criteria for certification.

Section 9. Violations and Sanctions A person who violates any provision of this ordinance or the rules promulgated under its authority or who fails to comply with representations or commitments made to receive a benefit or qualify for an incentive under the Boost program shall be subject to sanctions including but not limited to: (a) liquidated damages, (b) withholding of funds, (c) a civil fine or penalty, (d) disqualification from eligibility for bidding on or entering into or participating, as a subcontractor or in any other manner, in a contract with the City for a period not to exceed five (5) years. The Director shall set forth the sanctions and/or liquidated damages to be imposed and the reasons therefor in a written order and shall promptly furnish a copy of the order to the contract awarding authority or contract administering authority, and shall mail a copy by certified mail, return receipt requested, to the person being sanctioned.

Section 10. Appeals. Any person against whom sanctions have been imposed by the Director may appeal within fifteen (15) days from the date the Director's decision was mailed to the person being sanctioned, by filing a Notice of Appeal with the Office of the Hearing Examiner. Within forty-five (45) days after receiving the Notice of Appeal, the Hearing Examiner shall convene the appeal hearing. Written notice of the hearing date shall be given to the appellant and to the Department at least thirty (30) days prior to the hearing. Within thirty (30) days after conclusion of the appeal hearing, the Hearing Examiner presiding at the hearing shall prepare a written decision and order. The final decision shall be filed as a public record with the City Clerk, and copies thereof mailed to each party of record and to the Director.

Section 11. Rule-Making. ESD is authorized and directed to promulgate rules to implement this Ordinance and to present these rules to the Council before they become effective.

Section 12. This ordinance shall take effect and be in force thirty (30) days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Municipal Code Section 1.04.020.

Passed by the City Council the _____ day of ____________, 1999, and signed by me in open session in authentication of its passage this _____ day of _________________, 1999.

_____________________________________

President _______ of the City Council

Approved by me this _____ day of _________________, 1999.

___________________________________________

Mayor

Filed by me this _____ day of ____________________, 1999.

___________________________________________

City Clerk

(Seal)

JGJ:jj/peyer

July 27, 1999 BOOSTORD (Ver. 2 ) 6