JACKSON, Miss. (WLBT) - Black- and minority-owned businesses in the capital city could have a major leg up in growing capacities and seeking city contracts, thanks to several partnerships between the Lumumba administration and outside groups.
The city has entered partnerships to help improve the outlook for black businesses in Jackson, including one designed to revamp the city’s Equal Business Opportunity (EBO) ordinance.
Another partnership will help Black business owners have access to the capital needed to grow their companies.
And another still is being put in place to help minority businesses off the ground by offering technical assistance and incubator services for aspiring entrepreneurs.
For Mayor Chokwe Antar Lumumba, the programs are not about race, but about improving the quality of life and economic status of the city’s Black community.
“This is not a race thing. It’s an economic thing,” he said. “The reason I believe we have to support minority businesses is that there is the expectation that they will hire people in minority communities and money will circulate in those communities.”
“If 85 percent of the population is left-handed, you need some left-handed jobs.”
A major part of the administration’s effort is to modify the city’s EBO ordinance to improve outcomes in minority participation and minority hiring among businesses chosen for city contracts.
The city received a grant from the Ewing Marion Kauffman Foundation to look at the ordinance.
The statute was put in place years ago and established requirements for minority participation in city contracts.
The rules require African American businesses to receive 8.67 percent of work on engineering and professional services contracts awarded by the city; 12.41 percent of work on construction contracts; and 6.78 percent participation in contracts for other goods and services.
Nearly 18,500 businesses were located in the capital city in 2018, of which more than half were owned by minorities, Census data shows.
Lumumba said that the current ordinance has several flaws, including that it does not encourage minority business growth.
Part of the problem is the ordinance does not require minority businesses to participate in the contracts in which they are included, something that some majority and minority contractors take advantage of.
“(White-owned) businesses can shuffle what businesses they want and hold them hostage,” he said. “(But) part of the onus lies on (minority) businesses because some of them go after the quick pass-through buck, which they get just for putting their name on the document.”
When businesses do that, Lumumba said it hurts not only minority residents but the city as a whole. Minority businesses aren’t doing the work, meaning employees are not needed.
On top of that, “the city ends up ... paying a premium so a contractor can give a bit of change to somebody to push them out of the way,” he said.
Jackson hired Siemens in 2012/2013 to completely overhaul its water billing system.
Two years ago, the city sued the firm and its subcontractors, citing complications with the billing system.
Attorneys for the city alleged that Siemens “conspired with its co-defendants and used a pass-through scheme in which it hired sham subcontractors and middlemen to inflate its EBO numbers and deceive the city’s residents.”
Lumumba, who could not comment on the suit as part of a settlement agreement with the firm, said changes to the EBO ordinance will be designed to address the pass-through problem.
“There are compliance components we have to build that will put teeth into how we enforce (minority participation) in contracts,” he said. “We want to spell out those things in the four corners of the document.”
It was not known when changes to the ordinance would be brought forward to the city council.
The city also is working with Goldman-Sachs and Hope Credit Union on a new program that will provide minority-owned businesses in Jackson and six other cities to have access to $2 billion in capital once the program is launched.
Jackson also has received a $1 million grant from the Rockefeller Foundation to provide technical assistance to minority businesses, including creating an incubator to help minority businesses get off the ground.
Lumumba said providing training to up-and-coming businesses is as important as helping those that are already established. Said the mayor, “Half of the businesses we have can’t grow or take advantage (of capital) because they don’t know how the process starts.”