Jackson proposing doing away with minority firm quotas
An ordinance that establishes quotas for hiring minority firms in the city of Jackson could soon be on its way out.
Jackson officials are hoping to replace the city’s Equal Business Opportunity (EBO) ordinance with a new “small and disadvantaged business” program.
The program would be based on federal standards, and would do away with the current ordinance, which sets quotas for awarding municipal contracts to minority-owned businesses.
Chief Administrative Officer (CAO) Robert Blaine hopes the new rules will be in place at the start of the next fiscal year.
The fiscal year runs from October 1, 2018 to September 30, 2019.
“Essentially, what we’ll be doing is taking part of the budget and reserving that for small disadvantaged businesses (SDBs),” he said.
As part of the program, the city will set aside between $7 million and $8 million a year, specifically for SDBs. The allocation would account for about 10 percent of the city’s $70 million to $80 million discretionary spending budget, he said.
Also, the city will be partnering with local banks to help SDBs obtain credit, as well as putting in place expedited payment schedules to ensure projects will put as little strain as possible on businesses’ capital.
So far, about five banks have agreed to partner with the city.
“Our goal is to create a market in which small businesses can compete,” Blaine said. “When businesses want to do work for the city, they can go through a technical assistance program with banks to establish a line of credit, and that credit can be used for city contracts.”
Blaine said the majority of contracts awarded under the program will be for $50,000 or less.
“With (the current) EBO ordinance, we sometimes get the same firms that keep rotating through and (it doesn’t) create the growth that we want to see happen,” he said.
Ward Seven Councilwoman Virgi Lindsay supports the idea and wants to learn more about it at upcoming council meetings.
“We have a lot of talented and hardworking people here. We need to teach them how to take full advantage of the business opportunities available to them through the city and the state,” she said.
Blaine said the program will be based on current federal standards.
According to the Small Business Administration, SDBs must be 51 percent owned and controlled by individuals who are identified as “economically and socially disadvantaged,” be owned by someone who’s average adjusted gross income for three years is $250,000 or less and be owned by someone who has $4 million or less in assets.
Individuals identified as “socially disadvantaged” are those that have been “subjected to racial or ethnic prejudice or cultural bias within American society, without regard to their individual qualities,” the administration’s Web site states.
Those groups include African Americans, Hispanic Americans, Native Americans, Asian Americans and others.
The U.S. Census Bureau reported that in 2012, Jackson had 18,459 businesses. Of those, 11,161 were minority-owned.
The city adopted the ordinance in 1999, after a study identified past inequities in the awarding of city contracts to minority and female-owned enterprises.
The ordinance sets bench marks the city must reach in awarding contracts, with different participation levels required for different work.
African American firms, for example, are required to receive 12.41 percent of construction contracts, 6.78 percent of contracts for non-professional services, and 8.67 percent of professional service contracts.
The ordinance also established quotas for firms owned by Asian Americans, Hispanic Americans and female-owned businesses.
Percentages of minority participation were not available for fiscal year 2017 or 2018.