Government Accountability Project Asheville

The formal meeting of the Asheville City Council for Tuesday, April 9th, 2024 was canceled. City Council met on that date at 2:30 pm for a Budget Work Session. You can watch a recording of the work session online at this link

Read this week’s Report Back below.

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PROBLEMATIC

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CONCERNS

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EMAIL TEMPLATES

Use our prepared email templates to take action on this week’s items.

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Things that seem problematic

Asheville 2024-2025 Budget – 2023 Asheville Disparity Study – Business Inclusion Office Funding

On October 24th, 2023, the Asheville City Council unanimously accepted the Asheville Disparity Study, prepared by contractor Miller 3 Consulting. The 523-page study, which you can review in full here, was a follow-up to the original 2018 Disparity Study, which showed that Minority and Women Business Enterprises (MWBE) were not getting contracts with the City at an equitable rate. This demonstration of disparities gave the City the legal pathway to establishing an Office of Business Inclusion to target those populations for future contracts, in an attempt to reduce these disparities.

The 2023 follow-up report showed that these disparities persist five years later. It also included 27 recommendations for how the City could reduce these disparities and more effectively increase the number of MWBE firms successfully bidding on contracts. (We have summarized each of these recommendations below.) The basic recommendations were as follows:

  • The City needs to set annual goals for addressing disparities in contracting with WMBE, and then consistently collect data and report on progress toward those goals.
  • The City needs to look at improving its record on more inclusive contracting as a city-wide organizational challenge. These problems cannot be addressed in a piecemeal manner, but require buy-in across the government.
  • The City needs to invest in expanding the pipeline of available firms, rather than just focusing on those firms that are already in the pipeline.
  • Finally, there are various ways that the City could expand the scope of Business Inclusion.

We were pleased in October when the City Council accepted the report with a unanimous vote, especially because the scope and depth of the recommendations is so impressive. We believe that implementing them would go a long way toward truly leveling the playing field, especially for Black-owned businesses, who had the worst disparities in both 2018 and 2023.

We’re flagging this issue now because we’re concerned that the City may not be devoting the necessary resources to addressing these critical problems. Historically, the Office of Business Inclusion has been a one-person department, and it’s hard for us to imagine how one employee, no matter how skilled and committed, could implement a significant portion of these recommendations. If addressing these disparities is indeed a priority, we think this department will have to grow in size and scope. (We understand that a new Business Inclusion Manager has just been hired, and look forward to hearing their perspective on how the recommendations can be implemented, and whether the current budget for Business Inclusion is sufficient for that task.)

This winter and spring, the City has been engaging in the annual process of developing a budget. We’ve yet to hear any mention of the 2023 Disparity Study recommendations or a possible expansion of the Office of Business Inclusion in any of the City’s budget work sessions or documents, or at the Council retreat. (It’s of course possible that we missed it, given the many hours of meetings.) We think the City Manager and City Council should publicly discuss what priority they plan to give to the 2023 Disparity Study recommendations and whether the current budget and size and scope of the Office of Business Inclusion is sufficient.

Things to do

Write to the Asheville City Council and City Manager and ask them how the 2023-2024 budget will address the recommendations in the 2023 Disparity Study, and whether they think a one-person department is sufficient to accomplish these critical equity goals.

We have prepared an email template below that you can use to contact the Asheville City Council.

Report Back

Unresolved: The 2023 Disparity Study and its implications for the City budget being developed were not discussed at the Budget Work Session this past Tuesday. This is not a big surprise, since it was not on the agenda. The good news is that the budget process will continue, so there is still time to alert City leaders to the importance of this conversation. If you haven’t already, please use our email tool below to send a message.

GAP Supporters Taking Action: 8

Recipients and Responses:

  • City Manager Debra Campbell: No response
  • Mayor Esther Manheimer: No response
  • Vice Mayor Sandra Kilgore: No response
  • City Council Member Antanette Mosley: No response
  • City Council Member Kim Roney: No response
  • City Council Member Maggie Ullman: No response
  • City Council Member Sage Turner: No response
  • City Council Member Sheneika Smith: No response

EMAIL TOOL

Fill out the form below and click the “start writing” button to open up our email tool. By using the tool, you will enable us to track how many emails were sent overall in the campaign. You will be able to edit, adapt, and/or personalize the content in the tool, and then it will send individual emails to each of the designated recipients. The email tool will automatically include a greeting at the top (e.g. “Mayor Manheimer”) and will also include your name, email address, and city at the bottom.

If you prefer not to use our tool, you can send an email to the addresses below. We ask that you send us a copy at info@gapavl.org so we can add your email to the tally of emails sent.

EMAIL TEMPLATE TEXT

To: AshevilleNCCouncil@ashevillenc.gov, dcampbell@ashevillenc.gov
CC or BCC: info@gapavl.org
Subject: Addressing disparities in business inclusion in this year’s budget

Dear City Council Members and City Manager Campbell,

Last October, you unanimously accepted the 2023 Disparity Report, which included 27 thoughtful and substantive recommendations for addressing serious disparities in Minority and Women Business Enterprise contracts with the City. I know that you share my conviction that shifting these persistent inequities is a top City priority. I’m writing today to ask if you have considered expanding the Office of Business Inclusion, which is tasked with implementing all of these recommendations, and which currently consists of a single person. I hope you will ask staff whether they need more resources to be able to do so effectively, and will incorporate their needs into your ongoing budget deliberations.

Thanks for your leadership,

2023 Disparity Study Key Terms (go back to report above)

Small Minority and Women Business Enterprise (SMWBE) – firms at least 51% owned by either Minorities or Women. (The report primarily emphasizes small firms, but the overall goal, as we understand it, is to increase contracts from both large and small firms.)

Availability—the percentage of firms by race and gender in an industrial category and available to do business with a government entity.

Utilization—the percentage of receipts in an industrial category that are spent with a given class of firms (e.g., SMWBEs).

Disparity Ratio—ratio of the percentage of receipts received by SMWBEs from a particular public entity in a specific category of work (e.g., construction), to the percentage of firms that are SMWBEs available to do business with that public entity; also, the public entity’s SMWBE utilization divided by SMWBE availability.

Summary of 2023 Disparity Study Recommendations

1. Identification of Race/Gender-Conscious Goal Possibilities

The importance of establishing goals and benchmarks so that progress can be assessed each year.

Establishment of Race/Gender-Conscious Goals: Availability, utilization, and disparity measures should be tracked on an annual basis and annual goals set.

2. Enhancements to Procurement and SMWBE Procedures and Practices

A series of recommendations all around “organizational, cultural, structural, and programmatic changes that will lead to transformative and sustainable change.” Essentially, the City should approach this as a broader shift in the way it operates across the board, not just as an isolated problem to be solved on its own.

A. Change Inclusion Focus from Programmatic (Compliance with Asheville Business Inclusion [ABI] Policy) to Organizational (Commitment to Inclusive Procurement Environment): City’s focus has been on making improvements in a piecemeal manner—one project or department at a time—and the report suggests they need to look at the problem more holistically and address it in the whole government and city, not just one job at a time.

B. Address Decentralized Nature of the City of Asheville (COA) Procurement Process and Impact on SMWBE Participation: COA “appears to operate in a decentralized procurement environment that has the overall effect of decreasing accountability and transparency as it relates to SMWBE participation…” They recommend “the Purchasing Division and ABI Office work collaboratively with buying departments’ leadership to ensure COA policy and practices are adhered to.”

C. Identify Community Economic Development and Inclusive Procurement Objectives: COA should move toward “inclusive procurement, which focuses in an ongoing manner on working to ensure that all vendors—regardless of race, ethnicity, gender, national origin, sexual orientation or disability—have the opportunity to bid, win the COA’s procurement and contracting prime and subcontracting opportunities and learn from the COA staff how to become more effective when unsuccessful in pursuing opportunities.”

D. Training and Development: All staff engaged in procurement should attend a training seminar (to learn basics of SMWBE program); this will set them up to train others. Staff should be encouraged to “ seek additional National Institute of Government Purchasing (NIGP) certifications and become certified compliance officers through organizations such as the American Contract Compliance Association (ACCA).”

E. Full Implementation of MWBE Programmatic Initiatives: “It does not appear that full and aggressive implementation (of COA’s SMWBE policies) has ever occurred, based on a 2018 audit of the COA’s SMWBE program and M3 Consulting analysis. The COA needs to work to further implement its currently established initiatives before making programmatic adjustments. This can only be done sufficiently when Items A. through C. listed above are addressed. The COA’s current SMWBE programs require ABI Office and department staff who are well-grounded in procurement, M/WBE programs and supplier diversity to achieve the programs’ outlined objectives. Otherwise, these programs and initiatives become no more than subcontractor goal programs, supported by insufficient certification efforts and redundant outreach. In a subcontractor-focused program, the responsibility of inclusion is passed on to COA’s prime contractors. The COA should seek to have direct relationships with diverse businesses at the prime contractor level.”

F. Culture Audit: “The culture audit will allow examination and explanation of the common rules of behavior and underlying beliefs of the COA that drive its organization and the way people approach their work.” It will provide a precise measure of employee perceptions and recommendations for cultural and system interventions for more effective diversity management to support organizational goals. If bias—implicit or unconscious—is one of the factors significantly impacting the COA’s organizational and procurement culture, a culture audit will support identification to root it out.”

G. Address Data Capture Issues: “The COA must be able to adequately track levels of SMWBE participation to anticipate necessary adjustments.” Once these changes are implemented, M3 Consulting recommends that the COA update the statistical portion of the disparity study to capture FY 2018 through FY 2022 data to provide both a more accurate reflection of SMWBE utilization at prime and subcontractor levels…”

H. Budgeting, Forecasting and Scheduling: “The COA should develop a forecasting process appropriate for each procurement category that provides project information necessary for planning its activities as it relates to SMWBE participation… With this information, the COA can begin to (a) project the impact of the COA’s purchases on economic, business and employment growth in the Asheville, NC Metropolitan Statistical Area (MSA), (b) conduct matchmaking, and (c) identify areas where local capacity is needed among both SMWBEs and Non-SMWBEs to begin pre-bid capacity building efforts.”

I. Monitor Contracts for Issue of Concentration: “The COA should monitor its contracts to ensure that SMWBEs are not overly concentrated in certain product areas as a means of the COA meeting its SMWBE goals. Contracts should be continuously reviewed to ensure that (1) the same Non-SMWBEs and SMWBEs are not securing a significant percentage of the COA contracts and that (2) the same SMWBEs are not accounting for a significant percent of the COA SMWBEs participation.”

3. Long-Term Availability and Capacity-Building Initiatives

These are all about “increasing the pipeline of available firms.” In other words: it’s not enough to try to recruit at-the-ready firms for these contracts; if the City wants to really change these disparities they have to look for ways to support more firms leveling up to do the needed work.

Impact of Prequalification and Certification on Availability Pipeline: “The ABI Office should work to ensure that pre-qualification and certification processes are not counter-productive to promoting inclusion.” The consultants have a “master list” of SMWBE firms, only some of which are “pre-qualified,” and they are suggesting that the Asheville Business Inclusion (ABI) office go through it and do outreach to those firms not pre-qualified to learn more about them and then work with other local entities to help them increase capacity.

The Starting Point: Youth Entrepreneurship: They describe a series of possible programs that could be offered to young people—entrepreneurship, financial literacy, mentorship, apprenticeship, etc.

Refocus Certification and Pre-Qualification Efforts to Identification of Qualified Firms: The City has its own certification process, and also accepts certification from state agencies (Historically Underutilized Business [HUB] and the North Carolina Department of Transportation [DOT]’s Disadvantaged Business Enterprise Program). “Because of a few non-MWBEs that have attempted to illegally access these programs, over time, the certification application process has become increasingly burdensome to the MWBEs that public entities are trying to reach.” In the end, a lot of MWBE’s aren’t certified, and if the City works with them, they don’t get “credit” for it in terms of their inclusion goals. The recommendation is to get more firms that are already qualified to get certified.

  • A. Expanding Competition
    Deeper Dive of Bid, Request for Proposal and Selection and Evaluation Process: This one (and the next two) are a response to: “Due to policies (such as pre-qualification) and practices (such as awarding contracts to a few firms in certain instances), the COA has limited competition in some of its opportunities.”
  • Goal-Setting and Other SMWBE Tools Applied by Threshold: The City should conduct a “spend analysis… to obtain a greater understanding of the individual opportunities and the dollar values associated with them. The spend analysis allows the COA to review these individual opportunities by size… When individual opportunities are sorted by size, appropriate programmatic efforts by the ABI Office can be established.” If we’re reading this right, this basically says the Business Inclusion Office should focus on getting MWBE folks bigger opportunities.
  • Assess Performance of Personnel with Buying Authority: The COA should be able to track the performance of individuals with buying authority to determine the degree to which they are making inclusive purchasing decisions. The individual with buying authority’s track record can be considered in annual or semiannual performance evaluations.

4. Expanded SMWBE Initiatives

These are various ideas for how the program could be expanded.

A. Promoting SMWBE Participation at the Prime Contractor Level: A bunch of ideas that all relate to increasing the rate of MWBE’s as primary vs. subcontractors. There seems to be capacity out there, but it’s not materializing in terms of those folks getting primary contracts. The recommendation includes stuff like setting targets, more tracking, etc.

B. Develop SMWBE Program That Addresses Requirements of Large Construction and Development Projects: “Developing project based SMWBE goals for large capital improvement/development projects.” Essentially, these are big projects with lots of phases within them, and the ABI should break those down opportunities and set goals for how much SWMBE participation they can aspire to get for each part.

C. Implement Small Business Set-Asides and Sheltered Market Projects: “Increasing the success of its small business set-aside programs.”

D. Address Concerns about Slow Payments: “Some firms expressed concerns about slow payments from the COA and from prime contractors. The ABI Office should further investigate these claims and determine whether a contractor payment monitor is needed. This investigation may also assist the COA to determine whether the ABI Office needs contract compliance support internally or consider external providers.”

E. Bonding and Insurance Program Related to Project-Based Procurement Process: Bonding requirements can be a barrier. “The approaches include waiving bonding requirements, removing customary bonding stipulations at the subcontract level, reducing bonding and phasing bonding.”

F. Joint Ventures, Mentor/Protégé Programs, and Distributorships: “The COA should develop specific procedures for verifying, counting and tracking the participation of SMWBEs in joint ventures, mentor/protegé programs, and distributorships.”

G. Effective Matchmaking and Outreach Programs: Matchmaking refers to “efforts to bring together potential SMWBEs, Non-SMWBEs and City personnel on specific opportunities that encourage an environment of relationship building.” The City has done some of this, but not enough. Re: Outreach: The city should expand its pool of vendors by looking at other sources for available firms, such as Data Axle or Dun & Bradstreet.

H. Monitoring and Tracking Reports—Overall and Project-by-Project: “In annual reporting on the achievement of SMWBE efforts to the mayor and city council, procurement and ABI Manager reports should also include the degree to which the COA’s efforts have:

  • Promoted and strengthened economic prosperity in the Asheville area;
  • Enhanced competition;
  • Expanded business capacity; and,
  • Removed barriers and reduced or eliminated disparities.”

I. Post-Award Compliance Responsibilities: Making sure that departments are doing contract compliance follow-up to ensure that contractors are utilizing SMWBE subcontractors and paying them on time.

J. Partnerships with Technical Assistance Providers: “A firm assessment tool should be developed to determine firms that are:

  • Start-up;
  • Emerging; and
  • Mature.

By developing a full technical assistance program and utilizing existing service providers with expertise in different areas, the COA should be able to maximize its dollars while also providing technical assistance.”

K. Working Capital Loans, Paymaster8 Programs and Prompt Pay Requirements: “A hindrance to SMWBEs’ success on COA projects is the management and financial systems infrastructure requirement. The COA should consider working with minority-owned banks and financial assistance providers to serve as paymasters for small qualifying firms.”

(go back to report above)