By buying collectively, metro cities aim to save big

  • Article by: MARIA ELENA BACA , Star Tribune
  • Updated: April 28, 2010 - 8:47 PM

Nineteen metro cities are banking on strength in numbers, unleashing their collective purchasing power to aid their bottom line.

The North Metro Mayors' Association will seek a single source to supply all their members with janitorial and office supplies and furniture. It's not a glitzy step, but it's a start in a program that supporters hope will help cash-strapped cities to maximize resources and efficiency.

"It will be everything from ballfield paint to water treatment chemicals to office furniture, you name it," said David Ewald, president and CEO of Ewald Consulting. "By putting together a group and harnessing more purchasing power, they can get a better deal. ... Local communities are continually under the gun to try and keep their service levels up and keep taxes down."

Ewald said it's too soon to estimate how cooperation will affect the budgets -- and taxpayers -- of the member cities, which range in size from Minneapolis to small cities like Columbus and Dayton.

But even small percentages can add up, he said. "When you're dealing with volumes, things like road salt, a savings of 2 to 4 percent or more turns into real dollars."

"Cities have been cutting everything they possibly can on the human side, cutting a cop here, a public works person there," said Champlin Mayor Mark Uglem, who oversaw a similar purchasing strategy during his career in the private sector. "It's the same thing at Champlin. I said, 'What about the other side of the ledger? How about how we purchase?'"

As the group did research, it found a disparity in the prices cities pay for the same products and services. Chlorine bleach, for example, swung from $1.99 to $3.99 a gallon. Sometimes prices could be connected to volume, but sometimes they couldn't, said Joseph Strauss, executive vice president and chief operating officer for the association.

The group placed its first ad for bids last week, in Finance and Commerce; another will go into the Minneapolis/St. Paul Business Journal on Friday. Bidding opens May 11; a core group will review the bids and make a decision on May 18. It is bound by state requirements to find the "lowest responsible bid," the best value from a proven supplier.

The group will draw on local expertise to make big decisions about specialized equipment.

If this round succeeds, the group plans to move on to seeking bids for road salt, sand and gravel, then for field-marking paint, water treatment chemicals and portable toilets. Neighboring cities, counties and school districts also have expressed interest.

As the program goes forward, participants will evaluate efficiency and savings, and watch for possible pitfalls, such as friction between cities, bid challenges or other snags.

Cities can opt out entirely, or from individual purchases, to support local suppliers or for any other reason.

"The way that this is set up, all the cities, regardless of size, will benefit based on their participation in the group," Uglem said. "The more participation, the larger you are, the better benefits will flow to the cities."

Maria Elena Baca • 612-673-4409

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