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Council committee reduces construction retainage and seeks formal contractor-debarment rules
Summary
A committee passed an ordinance cutting contract retainage on construction projects and signaled plans to formalize a contractor debarment process to address recurring poor workmanship.
CLEVELAND — The committee approved an ordinance that reduces contract retainage on city construction projects and discussed plans to formalize debarment of contractors with deficient performance records.
Bonnie (identified as Chief Operating Officer/T1 in the transcript) explained the ordinance (No. 599-2025) seeks to reduce the standard retainage from 5% to lower rates and eliminate retainage on projects estimated at $500,000 or less. Under the measure, projects under $500,000 would carry no retainage; projects above $500,000 would have a 3% retainage up to 50% completion and 1.5% after 50% completion, with full release of retainage on final acceptance.
The administration said the change is intended to encourage small contractors to bid on city work—retaining 5% on every invoice can limit smaller firms’ cash flow—and to increase competition, which can lower prices. Chief Bonnie also said performance bonds and other bonding tools remain in place as protections.
Council members expressed concerns about construction quality. Councilman Polensek asked how the city would ensure satisfactory completion if retainage is removed on smaller jobs; administration cited performance bonds and said the city would pursue protections through bonding and documentation. Several council members requested historical data on contractor noncompliance and the dollar amounts pursued through performance bonds. The administration said it would produce that information.
Council members also discussed moving to a formal contractor debarment process for repeat poor performance. The administration said it has been considering a formalized debarment program and will bring legislation to establish a documented process; that proposal would include rights of appeal and procedures for inclusion in vendor files.
The committee approved the retainage ordinance and asked for follow-up information about historical bond recoveries and a formal debarment policy.
All names and procedural actions are drawn from the May 19 committee transcript.
