News Column

Rules on Minority-, Woman-owned Businesses Frustrate Ogdensburg Authority

Dec 17, 2012

Christopher Robbins

The Ogdensburg Bridge and Port Authority worries that new state rules requiring one-fifth of its business be done with minority- or woman-owned businesses could make it difficult to continue its economic development work.

Gov. Andrew M. Cuomo set a goal that 20 percent of all public contracts would go to minority- or woman-owned business enterprises, or MWBEs. Under previous rules, the OBPA self-imposed a 10 percent goal for MWBE contracts.

"It is a real challenge," said Frederick S. Morrill, authority deputy executive director. "The goals have been moved up."

That goal has been extended to state and regional economic development grants, requiring public authorities and other recipients to try to award at least 20 percent of their contracts to minority- and woman-owned businesses.

"We were recently informed that economic development money would be bound by MWBE requirements," said Wade A. Davis, authority executive director. "That makes it difficult for us."

Because of the remote, non-racially-diverse nature of the north country, the OBPA is concerned that it will be unable to meet the requirements.

"The people at Empire State Development told us that the availability of MWBE businesses in our region doesn't matter," Mr. Morrill said. "We'll do the best we can to follow the guidelines."

According to the U.S. Census Bureau's 2006-10 American Community Survey, 93.8 percent of St. Lawrence County residents listed their race as white. Within the city, 90 percent of respondents indicated they were white.

Thus far, Mr. Davis said, the authority has not fared well in its efforts to contract to MWBEs, listing single-digit compliance numbers for the first two quarters of its fiscal year.

"That is with every effort that we have trying to find folks that have a MWBE," Mr. Davis said.

The authority is concerned that its inability to meet the MWBE requirements could cost it state grant funds in the future.

"Our potential to get to those numbers is just shy of impossible," OBPA Chairman Samuel J. LaMacchia said. "It doesn't make sense to me."

The state Division of Minority and Women's Business Development certifies MWBEs. They are defined as "an on-going independent business owned, operated and controlled by minority group members and/or women." Per the state's rules, the businesses must have existed for at least a year and 51 percent of control must be in the hands of women or minorities.

Mr. Davis said some north country authorities are contracting MWBEs from downstate to serve as fronts, who then subcontract out to local firms. However, doing so incurs an additional cost. Otherwise, the authority will look elsewhere for MWBEs, potentially passing over local contractors.

"We might have to look at a firm in Lowville or Syracuse rather than one in Ogdensburg or Canton," he said. "In doing so, we end up having to pay more because they have to come all the way up here."

Though the requirements have no penalties written in for noncompliance, the New York State Authorities Budget Office could censure the OBPA for not meeting the goal.

Source: (c)2012 Watertown Daily Times (Watertown, N.Y.). Visit Watertown Daily Times (Watertown, N.Y.).

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