NYC’s grade on MWBEs falls to C-minus for FY '21

A report found that 84% of minority- and women-owned business enterprises still do not have access to city government spending, dropping New York City’s grade on the issue to C-minus from C, Comptroller Scott Stringer said Monday.

According to the annual report, “Making the Grade: NYC Agency Report Card on MWBEs,” the share of MWBEs who receive city contacts has not exceeded 22% since fiscal 2015.

Susan Watts/Office of NYC Comptroller

Stringer said city fell to a C-minus for MWBE spending in fiscal 2021 after getting a passing grade of C in each of the previous two fiscal years.

“Over the last eight years, my office has given voice to solutions from MWBEs directly on how the city can better connect them with opportunities, which has led to real change,” Stringer said in a statement. "But there is still room for significant improvement."

The report found that of the $30.4 billion in contracts the city awarded in fiscal 2021 only $1.166 billion, or 3.8%, were awarded to MWBEs.

While the city has almost tripled the number of certified MWBE firms since fiscal 2015, the report said 84%, or 8,886 out of the 10,500 certified firms, did not receive any city spending in fiscal 2021.

In FY 2021, the city earned a B grade with Asian American-owned businesses, a D with Hispanic American- and women-owned businesses and an F with African-American- owned businesses.

Two mayoral agencies, the Commission on Human Rights and Department for the Aging got A grades as they spent over 50% of their eligible dollars with MWBEs while the Department of Transportation received an F, spending less than 5% of eligible funds with MWBEs.

The Comptroller’s Office itself was awarded an A grade for fiscal 2021 and has steadily increased its MWBE spending from 13% in fiscal 2013 to about 53% in fiscal 2021.

Stringer renewed his call for the adoption by the city and its agencies of the “Rooney Rule," which is aimed at making cabinet-level positions more diverse and inclusive. The comptroller’s office has worked with public companies to adopt the rule, which requires firms to include women and people of color in every CEO search.

Other recommendations include:

• All incoming citywide officials should appoint executive-level chief diversity officers;
• The next comptroller should conduct a racial equity audit of the city’s agencies;
• The next mayor should create a plan to close the gap between certification and receiving city spending for MWBEs; and
• The City Council should reassess MWBE legislation with a targeted focus on goals.

Stringer has also hosted representatives of MWBE small banks from around the country to help them expand business opportunities in New York City.

New York City is one of the largest issuers of municipal bonds in the country.

At of the end of the second quarter of fiscal 2021, it had about $38.57 billion of general obligation debt outstanding. And that's not counting the various city authorities that issue debt. The NYC Transitional Finance Authority has $41.64 billion of debt outstanding while the NYC Municipal Water Finance Authority has $31.12 billion of debt outstanding.

The city’s GOs are rated Aa2 by Moody’s Investors Service, AA by S&P Global Ratings, AA-minus by Fitch Ratings and AA-plus by Kroll Bond Rating Agency.

The term-limited Stringer will leave office on Jan 1, 2022. On Nov. 2, voters will choose from among Democrat Brad Lander, Republican Daby Benjamine Carreras, Conservative Paul Rodriguez and Libertarian John Tabacco Jr. to be the next comptroller.

City voters will also elect a new mayor and a new City Council, whose members have been mostly term-limited out of office.

“As this administration prepares to leave office, it is clear that the city, from the next mayor and comptroller to the next City Council, have abundant opportunities to address the systemic inequities experienced by communities of color especially as we continue to rebuild our economy amid the COVID-19 pandemic,” Stringer said.