by Dena S. Owens —
What Mayor Jim Strickland and his administration call “a clerical error” is turning up the heat on what already was a hot mayoral race-issue: the amount that the City of Memphis spends – and should spend – in minority-and-women-owned business enterprise (MWBE) contracts.
“Our MWBE numbers are up, but due to a clerical error, not as much as we thought,” Strickland’s office said in a statement provided to The New Tri-State Defender regarding a published report about 2018 MWBE data errors.
That report (Memphis Business Journal) made it clear that Strickland was off base in his January State of the City address and subsequent interviews (including one with The New Tri-State Defender) when he said city spending on MWBE contracts had risen to 24 percent, doubling the performance of prior years.
While the city had an increase in MWBE spending for fiscal year 2017, the amount spent for fiscal year 2018 is lower – 18 percent – and represents a three percent decline from 2017.
“At 18 percent, it’s still 50 percent higher than the 12 percent the year before I was mayor,” Strickland said in released statement. “By no means does this clerical mistake take away all the good we have done and the progress we will continue to make in growing our MWBE’s.”
In his reelection bid, Strickland has stressed keeping the momentum going and accelerating it.
The “clerical mistake” involves not taking into account that in 2018, Memphis spent $154 million in public works contracts and $19 million of that amount was spent on MWBE contracts. When calculated together with all 2018 expenditures, $290 million, the correct share of MWBE expenditures is 18 percent – not 24 percent – and less than the 21 percent expended for 2017.
“We’re doing a thorough review of our MWBE numbers, but I still have full confidence in the Office of Business Diversity and Compliance (OBDC), and equally as important, its mission,” said Strickland.
Joann Massey directs the OBDC. In the story detailing the calculation error, she took full responsibility while emphasizing the city’s ongoing commitment to increasing MWBE participation in the economy and the mayor’s 800 Initiative.
The 800 Initiative is a plan to grow 800 small black businesses by 2023 through loans, grants and assistance with strategy and programming.
All city departments are to submit final monthly data reports to the Office of Performance Management – the area ensuring productivity, transparency and accountability. The fallout from the 2018 MWBE data errors includes eliminating Massey’s occasional practice of reporting OBDC stats directly to the mayor’s office.
The New Tri-State Defender had not reached Massey by press deadline.
The report about the faulty MWBE numbers generated a social media buzz that found its way into multiple settings online and elsewhere.
Tami Sawyer, Shelby County Commissioner and equity-focused 2019 Memphis mayoral candidate, issued a statement saying, “The momentum that we need in Memphis is not momentum that goes backwards for people of color and women.
“This is why Memphis can’t wait for city and government leaders who can make and deliver on promises, and who won’t hide behind their teams when mistakes are made.”
Dr. Willie W. Herenton, former Memphis mayor and 2019 Memphis mayoral candidate, provided no comments about the MWBE data errors when approached by The New Tri-State Defender.
He choose to affirm his development of position papers on topics vital to city growth – including community and economic development – that will be released as his campaign moves forward.
In February, a Forbes.com article asserted that “the future of entrepreneurship in America will include many more people of color than in the past, as recent data shows.” The national journal also highlighted Memphis’ 800 Initiative as a possible model for other cities working to improve MWBE spending.
The statement from Strickland’s office said his administration had “increased our certified MWBE’s with the City from 138 to 589. … We’re encouraging the public to do business with minority and women-owned businesses through Buy901.net.”
Strickland said a policy he initiated almost 2 years ago remains.
“I will sign no contract until I verify that it has an MWBE spend. If it doesn’t, I send it back to the division to find out why. That won’t change.”
Recently on Twitter, the city posted a graph illustrating a 98 percent growth rate in MWBE spending, comparing past fiscal years with the incorrect 2018 figure.
“Government is not perfect. No one is,” Strickland said in his statement. “But, when we make mistakes, my administration owns up to them, shares what went wrong with our citizens, and then acts quickly to make corrections.”
