Myrtle Beach City Council postponed first reading of an ordinance that would create incentives for small businesses that contract with the city, saying they needed more details.
The program would deduct a specified amount from a project bid if the business contracts with a local small business. The city would deduct a dollar-for-dollar amount from the bid based on the amount of money that would go to a qualified small business.
For example, if two contractors submit bids to the city for $1 million, but one bid includes $50,000 being paid to a qualified small business, the city would deduct $50,000 from the total bid amount and evaluate it as though it were a $950,000 bid. The portion of money going to a small business could not be more than 5 percent of the total bid, according to the formula.
In order to qualify as a small business for the incentive program, businesses must have been based in Myrtle Beach for at least six months; completed a vendor application with the city’s purchasing division; have a city business license; have 20 employees or fewer; and provide proof that the business’s gross income is not more than $1 million.
City manager John Pedersen said the city may pay more on a certain bid, but that the increase in cost would be partially offset by an increase in business license fees paid by the small businesses from increased revenue.
“It’s going to make a difference, but not a whole lot,” he said. “But this is about supporting small businesses.”
Councilman Wayne Gray said he was concerned that larger bids that take advantage of the small business incentive program could cause the city to pay more than it needs to for a project. Gray asked that there be more specific limitations on the formula.
“At the end of the day, it’s costing the taxpayers of this community additional [money] to have something done that could be going to something else,” Councilman Mike Lowder said. “I think we need to look at a cap somewhere on a bid amount.”
Pedersen said he would bring several examples with different hypothetical figures, ranging from lesser expensive projects to more expensive projects, at the next City Council meeting, scheduled for Dec. 9.
The incentive program is part of the city’s goal to expand small business opportunities. Last month, city staff held a small business forum attended by members of about 15 businesses to help local owners understand the city’s bidding process.
There also is a workshop scheduled in January in conjuction with Horry County, Horry County Schools, Conway, North Myrtle Beach and Surfside Beach.