Maybe an efficiency expert could help.
The Greensboro City Council met from 5:40 to 9:53 p.m. on Tuesday, Jan. 17 in the Council Chambers and the only item that was discussed at any length was spending $300,000 for a disparity study to justify the city’s Minority and Women’s Business Enterprise (MWBE) Program, and that item passed 9 to 0.
What is amazing is that Mayor Nancy Vaughan cut off the speakers from the floor after three minutes and quieted the audience. If the 2016 Mayor Vaughan had been running the meeting it would have lasted a lot longer. Vaughan did allow a speaker to give her time to Rev. Nelson Johnson of the Beloved Community Center, something that in the past the council has forbidden. But there are the rules for everyone else and then there are the special rules for Johnson according to Vaughan.
The issue before the council was on whether or not to spend $300,000 on a disparity study for the MWBE Program. Most of the speakers were MWBE contractors who benefit from the program and many spoke about how important the program was to their companies.
This City Council is extremely dedicated to the MWBE Program. It is discussed by the council more than any other issue. Whether or not a disparity study is done, the program is going to continue.
The main purpose of the study is to provide a legal defense for the MWBE Program that discriminates based on race and sex. The courts have ruled that such discrimination is legal if a disparity study proves that there is a disparity in the contracts being awarded to companies owned by white males versus companies owned by minorities and women.
The city’s last disparity study was done in 2012. It is not required that the city have a disparity study done every five years, but that has been the city’s practice.
Councilmember Mike Barber had suggested that instead of spending $300,000 on the disparity study that the money be used to set up programs to help MWBE contractors and to offer financial assistance to start up MWBE companies, but when Barber saw that he had no support for his idea, he voted along with the rest of the City Council to approve the $300,000 contract.
City Councilmembers Tony Wilkins and Justin Outling questioned the cost of the disparity study, which is an update of the 2012 study.
Along with ruling that MWBE programs were only legal when a compelling government interest for such a program can be proven, the federal courts also ruled that quotas for minority and women-owned businesses were illegal, but that goals were legal. In theory, if a company makes a verifiable “good faith effort” to meet the MWBE goals, but fails to meet them, the contract should be awarded to that contractor regardless of the actual percentage of MWBE subcontractors.
Sometimes that does happen, but what also happens is that the city will decide to rebid the contract and will keep rebidding it until some contractor meets the MWBE goals.
The program costs the city far more than simply the cost of running the MWBE division, because the program raises the cost of contracting with the city.
It’s also true that some MWBE companies are paper companies, which means that they get MWBE contracts and then subcontract the actual work, but the prime contractor gets credit for hiring an MWBE contractor even though the work may be done by a white male-owned company. The added cost in that case is the cost of the MWBE contractor who does nothing but bid on the contract and then subcontract out the work.
After 14 speakers spoke about the value of the MWBE Program to their companies and some on the value of a disparity study, the council discussed the proposed contract.
It’s worth noting that the two attorneys on the council, Outling and Barber, agreed that the disparity study was not legally required. Outling said the study was “not technically required.” But he said that he respected the opinion of City Attorney Tom Carruthers who, he said, “thinks it would be more cost effective in the long run.”
Outling said that, accepting that it was in the city’s best interest to have the study done, his question whether the city was getting a good value and could an acceptable study be done at a lower cost. Outling suggested that much of the study could be generated in house rather than spending $300,000 to have a study done when everyone knew the results of the study would be that there is not parity.
Outling said that the perception of the public was that the city spent a lot of time studying and not enough time doing. He said the city should “move all the resources we can away from studies and to efforts to move the ball forward.”
He said that if the city could have a sufficient study done for $100,000 and use the remainder of the money for training and financial assistance for MWBE companies, he would prefer that.
He added, “In five years we will be looking at another study which will show us the exact same thing – that there isn’t parity.”
Outling said he would support the study but, “I think the number is a little outrageous.”
Wilkins noted that Tampa, Florida, which is smaller than Greensboro, had a disparity study done for $80,000 less than Greensboro was spending.
Councilmember Marikay Abuzuaiter responded, “You can’t compare Tampa to Greensboro. You need to compare Greensboro to Greensboro.” It would have been a good argument to use last year when the city raised water rates and fees based largely on the argument that other cities had done so.
Barber said, “The cost is shocking.”
He said he was prepared to propose that rather than spending $300,000 on a study that the money be used for assistance for MWBE companies. He said Downtown Greensboro Inc. had come up with a program to spend about $20,000 on training and $80,000 on financial assistance for MWBE companies. He noted that a plan is just a plan, and as an example he said people worked long and hard on the Comprehensive Plan, but “anytime we have a rezoning we change the Comprehensive Plan and rezone it in a heartbeat.”
Barber said that nationwide by June 2015, over $100 million had been spent on disparity studies.
But Barber added that he had a great deal of trust in the staff and recognizing there was no support on the council for his proposal he was going to support the $300,000 study.
Councilmember Sharon Hightower, who continues to act as if the MWBE goals are quotas, had an entirely different opinion on the cost of the study. She said, “$300,000 is nothing.” About the talk of getting the $300,000 reduced to $200,000, she said, “Are we really going to nickel and dime it.”
Rodney Strong of Griffin & Strong, the company that was awarded the $300,000 contract for the disparity study, which as noted by several councilmembers is not really a study, but an update of the study that was done in 2012, said that to have a legal MWBE Program, “You have to have a baseline of discrimination.”
It is an interesting situation. The city has hired a firm who for $300,000 is going to find every bit of discrimination it can in Greensboro contracts. No one doubts that they will find discrimination, but wouldn’t it be interesting to have a study done by an organization looking for evidence that discrimination was less than it was, rather than one trying to root out every scrap of discrimination that it can?
What if Griffin & Strong came back with a report that said there is certainly discrimination in Greensboro, but it isn’t having a significant effect on awarding contracts. That is not going to happen, but if it did, Griffin & Strong would be putting themselves out of business.
One question that wasn’t asked is if the study shows what everyone believes it will show – that there is still significant discrimination in awarding city contracts – does that mean that the MWBE Program isn’t working?
The city has employees who work full time on the MWBE program. Are they not having a significant effect on awarding city contracts? If they are, shouldn’t the study show that discrimination against minorities and blacks has diminished considerably in the years the program has been in place?
One of the factors that makes this study different from many is that it isn’t simply based on statistics but also on anecdotal evidence. Which means if contractors believe they have been discriminated against because of race or sex, whether it is true or not it still is considered.
The MWBE Program was started over 20 years ago. At that time Greensboro had not elected a black woman as mayor. It had not hired a black man as city manager or a black woman. There had been no black chairmen of the Guilford County Board of Commissioners, or of the Guilford County Board of Education. There had been no black school superintendents or county managers. Greensboro had never elected a black city councilmember from a predominately white district, nor had it ever had four black city councilmembers. And Greensboro had not twice voted to elect a black man president of the United States. That’s anecdotal evidence that discrimination in Greensboro is not what it was 20 years ago. Not that discrimination doesn’t exist, because everyone knows that it does, but it is evidence that Greensboro is moving in the right direction. It will be interesting to see if the disparity study takes that into consideration.
Most of the speakers from the floor at Tuesday’s meeting spoke about the new union being formed for city workers. In North Carolina, government employees can unionize but they cannot negotiate contracts. The Greensboro firefighters currently have a union, so this is not new, but an expansion into other city workers.
Toward the end of the meeting Councilmember Jamal Fox said that he would miss the City Council retreat on Feb. 14 and had some requests to make about the 2017-2018 city budget, which will be discussed. He said he would like to have an inventory of all city-owned facilities to see if facilities could be consolidated to be more efficient.
Fox said that any department that was asking for budget enhancements should be asked to make cuts so that their department budget remained flat.
He said, “We need to continue to downsize the budget as much as possible.”
And he added that the city needed to be more creative with the budget to keep costs down.
If Wilkins, the only Republican on the City Council, had been talking about keeping the budget flat, not increasing departmental budgets, saving money by consolidation and being more creative to keep costs down, it wouldn’t have been surprising. But it appears Fox is a fiscal conservative and he’s serious about it.
When you compare that to Hightower, who says that spending $300,000 is “nothing,” you have quite a diversity of opinion on the Democratic side of the aisle.
Wilkins has not given up on trying to get the city not to spend $20,000 for two outdoor game tables in District 5, which he represents. The outrageously expensive game tables are the result of Participatory Budgeting.
Wilkins suggested that the $20,000 be used instead for the Out of the Garden program, one of the efforts to end food deserts in Greensboro.
Vaughan said she would support an additional $20,000 for Out of the Garden but she didn’t think the City Council could ignore the Participatory Budgeting process and reminded Wilkins that the people in his district voted for the game tables.
Wilkins responded that 71 people in District 5 voted for the game tables.
It does seem ridiculous for 71 people, which includes children, get to decide to spend $20,000 on two game tables, but that is how the Participatory Budgeting process works.
One of the problems with the entire program is not simply the lack of participation in Participatory Budgeting, but the unfairness of it. If the giveaway program that costs the city more than $500,000 a year was fair, there would be a way to vote against all the giveaways and in favor of putting the money back in the budget, but that kind of vote isn’t possible. If it were, the city might see more participation in Participatory Budgeting. But those in favor of the program might not like the results.
Wilkins said he wasn’t interested in spending an additional $20,000 but interested in diverting the money away from $10,000 game tables and to something more useful
Wilkins also asked the staff for a photo of a $10,000 game table. He said he had been looking online for months and couldn’t find a game table in that price range.
The staff said they would send him a photo of what the city was buying.