Business of education

Memphis leaders say diversifying school business contracts will help in the classroom, too

PHOTO: Laura Faith Kebede
Winston Gipson confers with his wife and daughter, who help run Gipson Mechanical Contractors, a family-owned business in Memphis for 35 years.

Winston Gipson used to do up to $10 million of work annually for Memphis City Schools. The construction and mechanical contracts were so steady, he recalls, that his minority-owned family business employed up to 200 people at its peak in the early 2000s.

Looking back, Gipson says being able to build schools was key to breaking through in the private sector.

“When we got contracts in the private sector, it’s because we did the projects in the public sector,” said Gipson, who started Gipson Mechanical Contractors with his wife in 1983. “That allowed us to go to the private sector and say ‘Look what we’ve done.’”

But that work has become increasingly scarce over the years for him and many other minorities and women. The program designed to address contract disparities in Memphis City Schools was cut during its 2013 merger with Shelby County Schools.

A recent study found that a third of qualified local companies are owned by white women and people of color, but such businesses were awarded just 15 percent of the contracts for Shelby County Schools in the last five years.

It was even worse for black-owned construction companies, like Gipson’s, which make up more than a third of the local industry but were awarded less than 1 percent of contracts.

The disparity is being spotlighted as the city prepares to mark the 50th anniversary of the death of civil rights leader Martin Luther King Jr., who was assassinated in Memphis while trying to fight for the rights of minority workers in 1968.

On Jan. 25, Chalkbeat will co-host a panel discussion on how Shelby County Schools, as one of the city’s largest employers, can be an economic driver for women- and black-owned businesses. Called “Show Me The Money: The Education Edition,” the evening event will be held at Freedom Preparatory Academy’s new Whitehaven campus in conjunction with MLK50 Justice Through Journalism and High Ground News.

Community leaders say school-related business contracts are a matter of equity, but also an education strategy. Since poverty is a crucial factor in why many Memphis students fall behind in school, the lack of job opportunities for their parents must be part of the discussion, they say.

The district already is taking steps to improve its record on minority contracting, starting with setting new goals and resurrecting the city district’s hiring program.

Big district, big opportunity

Shelby County Schools is Tennessee’s largest district. With an annual budget of more than $1 billion, it awards $314 million in business contracts.   

An otherwise dismal 1994 study of local government contract spending highlighted Memphis City Schools’ program to increase participation of historically marginalized businesses as one of the county’s most diverse, though some areas were cited as needing improvement. The same study criticized the former county school system, which lacked such a program, for its dearth of contracts with Minority and Women Business Enterprises (MWBEs).

But when the two districts merged in 2013, the program in Memphis City Schools disappeared.

“We had to cut, cut, cut,” said school board member Teresa Jones. “We were trying to stay alive as a district. We did not focus as we should have.”

Jones, a former school board chairwoman, said it’s time to revisit the things that were working before the merger. “We have to get back,” she said, “to make sure there’s equity, opportunity, access, and an atmosphere that promotes business with Shelby County Schools.”

District and community leaders say the consolidated district has lost its ability to develop relationships with qualified minority-owned businesses.

“There was an infrastructure where African-Americans felt comfortable enough approaching the school system” for work, said Melvin Jones, CEO of Memphis Business Contracting Consortium, a black business advocacy group formed in 2015. “There was trust. During the merger, they dropped the infrastructure.”

Brenda Allen

Without the outreach, “we’re seeing the same vendors,” said Brenda Allen, hired last summer as procurement director for Shelby County Schools after working in Maryland’s Prince George County Public Schools, where she oversaw a diversity contracting program.

“We’re not marketing the district like we should,” she told school board members in November.  

Shelby County Schools is not alone in disproportionately hiring white and male-owned companies for public business. Just 3 percent of all revenue generated in Memphis goes to firms owned by non-white people, even though people of color make up 72 percent of the city’s population, according to a 2016 report by the Mid-South Minority Business Council Continuum.

Not coincidentally, district and community leaders say, Memphis has the highest rate of young adults who aren’t working or in college, and the highest poverty rate among the nation’s major metropolitan areas. About 60 percent of students in Shelby County Schools live in poverty and all but three of the district’s schools qualify for federal funding for schools serving high-poverty neighborhoods.

Jozelle Luster Booker, the CEO of the MMBC Continuum, developed an equity contracting program for the city utility company following the 1994 study that was so critical of the city. The program funneled half a billion dollars to minority-owned businesses — an example of how government policies can promote equitable contracting, and grow businesses too.

“When that happens, you could basically change the socioeconomic conditions of that community, which impacts learning,” Booker said. “They’re ready to learn when they come to school.”

Shelby County Schools plans to hire a consulting firm to help develop a procurement outreach program and set diversity goals for its contractors and subcontractors. The program will launch in July, and Allen plans to hire three people to oversee it.

PHOTO: Brad Vest/The Commercial Appeal
Bricklayers from TopCat Masonry Contractors LLC work on an apartment complex in downtown Memphis in 2014.

The district also is part of a city-led group that provides a common certification process for businesses seeking contracts with city and county governments, the airport, the transit authority, and Memphis Light Gas & Water. The city’s office of business diversity and compliance also has a list of qualified minority businesses, offers free business development courses, and accepts referrals from other government entities to reduce redundancy.

“As you spend public dollars, you always want those dollars to be spent in your neighborhoods because that money comes back into your economy,” Allen said. “When people have jobs, you should see crime go down. You should see more people wanting to do business in the community if you have a good program.”

Leveling the playing field

In order for it to work, there has to be consistent reports, measures and, most of all,  accountability, according to Janice Banks, CEO of Small Planet Works, who helped the district with its disparity study.

Gipson agrees.

A wall of his second-floor Memphis office is lined with photos of some of his most significant projects during his 35 years of business, including a multimillion-dollar mechanical contract with AutoZone when the Memphis-based car part company moved its headquarters downtown in the early 2000s.

The work was made possible, he said, because of public sector jobs like constructing nine schools under Memphis City Schools. But that work evaporated after the merger. “It’s mostly been Caucasian companies that do the work (now),” he said. “It’d be one thing if you didn’t have anyone qualified to do it.”

Shelby County Schools will have to show commitment, he said, if it wants to level the playing field.

“You have the mechanism in place to make a difference,” he said. “Now do you make a difference with that mechanism or do you just walk around, beat your chest, and say we have a disparity study and let things run the way they’ve been running?”

“If you don’t make it happen, it will not happen,” he said.


More than 1,000 Memphis school employees will get raise to $15 per hour

PHOTO: Katie Kull

About 1,200 Memphis school employees will see their wages increase to $15 per hour under a budget plan announced Tuesday evening.

The raises would would cost about $2.4 million, according to Lin Johnson, the district’s chief of finance.

The plan for Shelby County Schools, the city’s fifth largest employer, comes as the city prepares to mark the 50th anniversary of the assassination of Martin Luther King Jr., who had come to Memphis in 1968 to promote living wages.

Superintendent Dorsey Hopson read from King’s speech to sanitation workers 50 years and two days ago as they were on strike for fair wages:

“Do you know that most of the poor people in our country are working every day? They are making wages so low that they cannot begin to function in the mainstream of the economic life or our nation. They are making wages so low that they cannot begin to function in the mainstream of the economic life of our nation … And it is criminal to have people working on a full time basis and a full time job getting part time income.”

Hopson also cited a “striking” report that showed an increase in the percent of impoverished children in Shelby County. That report from the University of Memphis was commissioned by the National Civil Rights Museum to analyze poverty trends since King’s death.

“We think it’s very important because so many of our employees are actually parents of students in our district,” Hopson said.

The superintendent of Tennessee’s largest district frequently cites what he calls “suffocating poverty” for many of the students in Memphis public schools as a barrier to academic success.

Most of the employees currently making below $15 per hour are warehouse workers, teaching assistants, office assistants, and cafeteria workers, said Johnson.

The threshold of $15 per hour is what many advocates have pushed to increase the federal minimum wage. The living wage in Memphis, or amount that would enable families of one adult and one child to support themselves, is $21.90, according to a “living wage calculator” produced by a Massachusetts Institute of Technology professor.

Board members applauded the move Tuesday but urged Hopson to make sure those the district contracts out services to also pay their workers that same minimum wage.

“This is a bold step for us to move forward as a district,” said board chairwoman Shante Avant.

after parkland

Tennessee governor proposes $30 million for student safety plan

Gov. Bill Haslam is proposing spending an extra $30 million to improve student safety in Tennessee, both in schools and on school buses.

Gov. Bill Haslam on Tuesday proposed spending an extra $30 million to improve student safety in Tennessee, joining the growing list of governors pushing similar actions after last month’s shooting rampage at a Florida high school.

But unlike other states focusing exclusively on safety inside of schools, Haslam wants some money to keep students safe on school buses too — a nod to several fatal accidents in recent years, including a 2016 crash that killed six elementary school students in Chattanooga.

“Our children deserve to learn in a safe and secure environment,” Haslam said in presenting his safety proposal in an amendment to his proposed budget.

The Republican governor only had about $84 million in mostly one-time funding to work with for extra needs this spring, and school safety received top priority. Haslam proposed $27 million for safety in schools and $3 million to help districts purchase new buses equipped with seat belts.

But exactly how the school safety money will be spent depends on recommendations from Haslam’s task force on the issue, which is expected to wind up its work on Thursday after three weeks of meetings. Possibilities include more law enforcement officers and mental health services in schools, as well as extra technology to secure school campuses better.

“We don’t have an exact description of how those dollars are going to be used. We just know it’s going to be a priority,” Haslam told reporters.

The governor acknowledged that $30 million is a modest investment given the scope of the need, and said he is open to a special legislative session on school safety. “I think it’s a critical enough issue,” he said, adding that he did not expect that to happen. (State lawmakers cannot begin campaigning for re-election this fall until completing their legislative work.)

Education spending already is increased in Haslam’s $37.5 billion spending plan unveiled in January, allocating an extra $212 million for K-12 schools and including $55 million for teacher pay raises. But Haslam promised to revisit the numbers — and specifically the issue of school safety — after a shooter killed 14 students and three faculty members on Feb. 14 in Parkland, Florida, triggering protests from students across America and calls for heightened security and stricter gun laws.

Haslam had been expected to roll out a school safety plan this spring, but his inclusion of bus safety was a surprise to many. Following fatal crashes in Hamilton and Knox counties in recent years, proposals to retrofit school buses with seat belts have repeatedly collapsed in the legislature under the weight the financial cost.

The new $3 million investment would help districts begin buying new buses with seat belts but would not address existing fleets.

“Is it the final solution on school bus seat belts? No, but it does [make a start],” Haslam said.

The governor presented his school spending plan on the same day that the House Civil Justice Committee advanced a controversial bill that would give districts the option of arming some trained teachers with handguns. The bill, which Haslam opposes, has amassed at least 45 co-sponsors in the House and now goes to the House Education Administration and Planning Committee.

“I just don’t think most teachers want to be armed,” Haslam told reporters, “and I don’t think most school boards are going to authorize them to be armed, and I don’t think most people are going to want to go through the training.”

Editor’s note: This story has been updated.