Sec. 18-302. Small business enterprise certification.
A. The burden of proof rests on the applicant to establish that the standards and criteria have been met to obtain SBE certification. The City Manager shall certify SBEs for the SBE participation programs consistent with the standards set forth in 49 CFR, Parts 23 and 26 as established by the U.S. Department of Transportation for the Federal Disadvantaged Business Enterprise Program as follows:
1. An eligible SBE under this program shall be an independent and continuing operation for profit, performing a commercially useful function, and which is owned and controlled by one or more eligible small business owners respectively. The ownership and control by a small business owner shall be real and substantial, and shall be indicated by customary incidents of ownership, as demonstrated by an examination of the substance rather than the form of ownership and operating arrangements.
2. A small business owner must possess the authority to direct or cause the direction of the management and policies of the firm critical to the operation of the primary business of the firm and the trade areas in which the firm is certified and apart from administrative duties and functions, and to make day-to-day decisions, on such matters of management, policy and operations. The firm shall not be subject to any formal or informal restrictions that limit the customary discretion of a small business owner. There shall be no restrictions by partnership agreements, charter requirements or other arrangements that prevent a small business owner from making a business decision of the firm without the cooperation or vote of any owner or other party who is not a small business owner.
3. An SBE applicant shall satisfy business size standards commensurate with small business status. Except as required otherwise by law, to determine small business status for each trade, the City Manager shall adopt the annual gross receipt limitation for each trade as established by the United States Small Business Administration (SBA) 13 CFR, Part 121, Small Business Size Regulations, Subpart A, Size Eligibility Provisions and Standards for participation in SBA programs, as such SBA limitations are amended from time to time.
4. An SBE applicant shall satisfy an individual personal net worth standard not exceeding limits identified by U.S. DOT regulations, 49 CFR, Parts 23 and 26 which is commensurate with small business status. The City Manager shall adopt the personal net worth limitation for each individual owner(s) as established by the 49 CFR, Parts 23 and 26, participation by disadvantaged business enterprises in DOT financial assistance programs, as such limitations are amended from time to time. To determine personal net worth, each SBE applicant shall submit to the City, and the City Manager will examine, a personal net worth financial statement including supportive documentation and evidence.
5. For purposes of this program, the applicant must be actively involved in the day-to-day management of the firm. If the actual management of an SBE firm is contracted out to individuals other than the owner, those persons who have the ultimate authority to hire and fire the managers or who can obligate the firm in financial and contractual matters will for the purpose of this article, be considered as controlling the business.
6. To determine the ownership or control of a business, all securities or other interests that constitute ownership or control of a business for purposes of establishing it as an SBE must be held directly by a small business owner. No securities or other ownership interests held in trust or by any guardian for a minor shall be considered held by a small business owner.
7. Ownership and control shall be measured as though not subject to the community property interest of a spouse.
8. A business will be declared ineligible for certification when a reasonable and prudent determination cannot be made as to ownership and control for a family-owned enterprise where the members of the family actively involved in the business are not the qualifying individuals for certification.
B. The City Manager shall investigate SBE applications for certification. Failure to cooperate and provide all information and documentation required to make a determination of eligibility under this article will disqualify the applicant for certification. The investigation of ownership arrangements may exceed the review of formal documents submitted by each entity if:
1. The firm is applying for certification with the City for the first time;
2. The firm is newly formed or it has small business ownership of less than 100 percent;
3. There is a previous or continuing employer-employee relationship between or among present owners;
4. A business which is not an SBE has an interest in the firm;
5. The ownership of the firm has changed since documents have been submitted to the City Manager;
6. A review of the documents submitted with the application raises serious objective concerns regarding either ownership or control of the firm; or
7. Information provided in the application process is found to be false, fraudulent, misleading or materially inaccurate.
C. The City Manager shall grant certification to a business that continues to meet certification eligibility requirements which include an annual review of applicable information. If a business is denied certification, the business cannot reapply for certification for a period of 12 months from the date of the notice of denial; but the business shall have the right to appeal the denial and to be certified if the appeal is decided in its favor.
D. To remain certified, all SBEs appearing in the certification database will be required to submit a new affidavit with required documentation on an annual basis to the City Manager as follows:
1. All documentation required as part of the annual update process will be evaluated for completeness and accuracy to determine whether any changes have occurred that affect the status of the business as a bona fide SBE. An investigation may be conducted to evaluate an applicant for continuing certification or recertification as deemed appropriate by the City Manager.
2. All certified SBEs are subject to monitoring by the City Manager to assure that the required ownership and control shall continue.
E. The City Manager may immediately remove or decertify a business that the City Manager finds is no longer a bona fide SBE. Any of the following reasons, which are not intended to be all-inclusive, are sufficient grounds for decertification:
1. The business no longer satisfies the ownership, control, or size requirements.
2. The SBE fails to submit, within a reasonable time period, information requested by the City Manager.
3. The business defaults and is terminated for cause on two or more City contracts within a one-year period.
4. The SBE is found to have provided false, fraudulent, misleading or materially inaccurate information to obtain certification that affects the eligibility status of the firm for certification.
F. Businesses decertified for reasons other than the business’s voluntary request may not apply for recertification for one year from the date of notice of decertification or removal. A business that is decertified may file an appeal under Section 18-303. (Ord. No. G-5518, § 3, 2010; Ord. No. G-6742, § 3, 2020)