State budget kills preference for Milwaukee contractors

    The state budget signed by Gov. Scott Walker effectively throws out a Milwaukee ordinance that gave city-based contractors an edge for road and sewer projects.
    The preference ordinance affecting sewer and road projects in the city was narrowly adopted by the Common Council in 2009. It allows the city to ignore the low bid in some sewer and road contracts. A contractor with city offices can be awarded a contract with a bid that is up to 5 percent higher than the low bid. The preference is capped at $25,000 per project.
    The Wisconsin Underground Contractors Association (WUCA) has fought the initial ordinance from the outset. The organization and others proposed the amendment that the Joint Finance Committee included in the budget, said Richard Wanta, the WUCA executive director.
    Wanta said the ordinance has cost city taxpayers $80,000 more than if the low bidder was picked in nine contracts since the end of 2010, when it took effect.
    “They would have more cash to fix their old sewers, water mains or repair potholes in the community,” Wanta said. “If not used for construction, the money could have gone for the purchase of new squad cars, police overtime or extended library hours.”
    Ald. Ashanti Hamilton, a supporter of the ordinance, said the ordinance was intended to encourage businesses to locate in the city and provide employment for residents.
    “We have put a lot of time and energy into making sure it is a fair process,” Hamilton said. “We are disappointed in the provision, and the city attorney is looking at it.”
    Earlier, critics complained that if other municipalities adopted similar ordinances islands would be created where only a few contractors could successfully bid on projects. Other communities haven’t followed Milwaukee’s lead, however.
    The bulk of the contracts not awarded to the low bidder went to MJ Construction Inc., owned by Michael Tomasini. The business had long been located in Menomonee Falls but a portion was relocated in leased space in a building at 8617 W. Kaul Ave. owned by Tomasini and his wife. The ordinance originally required the Milwaukee building to be owned by the business to qualify, but the city approved MJ because it had leased the space for more than a year when the first contract was awarded.
    Tomasini has been a Walker contributor, donating $5,000 in 2009 and $5,000 in 2010. He didn’t respond to a request for comment.
    Milwaukee Alderman Ashanti Hamilton said the budget provision could also kill an ordinance being drafted that would require city contracts for a wide range of goods and services be given to small businesses and those run by minorities and women
    The budget forbids any “political subdivision” from using a bidding method that gives preference based on the geographic location of the bidder or that uses criteria other than the lowest responsible bidder in awarding a contract except when needed to require federal aid.
    Hamilton said that provision could impact an ordinance being drafted that would give preferences to small businesses and those run by minorities and women.
    The proposed ordinance is the result of a study that showed a racial disparity in city contract awards. Race-based ordinances are allowed if there is proof that past or present discrimination resulted in racial disparity, Hamilton said.
    “The Milwaukee city attorney has been asked for an opinion on whether it would affect the disparity ordinance,” Hamilton said. “We know that it is pretty explicit about the public works (road and sewer) contracts.”

    Sign up for BizTimes Daily Alerts

    Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

    No posts to display