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Consideration of request by Finance Director for approval of a six-year intergovernmental agreement with the City of Milwaukee for utilization of their workforce tracking software for economic development inclusion projects
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Submitted by:
John Ruggini
Department:
Finance
A. Issue
The Procurement Equity Policy requires Tax Increment Financing projects include required Distressed Zip Code hiring inclusion goals. Specialized software is necessary to track the workforce information necessary to determine whether developers have met this goal. The City has previously used a private cloud-based software provider. However, the City of Milwaukee has developed its own software program and is willing to make it available to the City of Wauwatosa for approximately a 25-50% savings.
B. Background/Options
Early in 2022, the City of Wauwatosa instituted and managed an Equity and Inclusion initiative for commercial developers seeking Tax Incremental Financing (TIF)to supplement their development projects. The inclusion program includes two major initiatives:
A. Developers seeking TIF support for commercial development projects are to make a Good Faith Effort (GFE) to utilize Disadvantaged businesses as follows.
(1) 25% of Professional Service expenditures
(2) 25% of Construction Goods and Service expenditures
B. Additionally, the program requires best efforts to have 25% of onsite labor hours for any
newly hired workforce to come from residents living in the 12 most Distressed Milwaukee County Zip codes.
The workforce development goal requires specialize software so that contractor and sub-contractor can upload payroll information that can be then verified. For the three projects completed to date, we have used a private cloud-based software solution and the average cost has been $10,200. Staff felt this was excessive given this made up 10-15% of the total project cost and in comparison, to other cloud-based solutions the City uses for other purposes. The vendor met with City staff but declined to provide a reduction in pricing.
The City’s contracted monitor, Prism, made the City aware that the City of Milwaukee had similar frustrations and had recently completed developing its own in-house product. City staff and Prism consultants determined the Milwaukee product, “LCR” would meet City requirements and also create efficiencies - for example, Wauwatosa would not have to enter contractors that were already registered with the City of Milwaukee.
Attached is an intergovernmental agreement negotiated between our two cities to establish the terms and conditions under which the City of Wauwatosa will license Labor Compliance Reporting software (“LCR”) from the City of Milwaukee for a period of six years.
LCR is a web-based tool built, owned, and utilized by Milwaukee to track payroll and socio-demographic information of the workforce hired by Milwaukee’s private contractors and sub-contractors. Wauwatosa will utilize LCR to track payroll and socio-demographic information of the workforce hired by private developers involved in the construction of economic development projects receiving public support as required by our “Economic Development Procurement Inclusion” policy
We anticipate that this Agreement will save us an estimated 25-50% per project compared to its current expenses with a private third-party software company. That company was not willing to negotiate its pricing structure.
The Agreement is an intergovernmental cooperation agreement authorized by Wis. Stat. § 66.0301. and is also pending approval before the City of Milwaukee Common Council.
Both Cities intend to submit this agreement for an innovation grant sponsored by the State of Wisconsin and to present the partnership as a model to the Intergovernmental Cooperation Council of Milwaukee County.
B. Strategic Plan (Area of Focus)
Financial Resiliency and Economic Development
C. Fiscal Impact
Approximate savings of $2,500 - $7,500 per project. Savings will benefit the Tax Increment Districts.
D. Recommendation
I recommend approval of this intergovernmental agreement with the City of Milwaukee for a period of six years.