AISD staff to formalize HUB participation program

On Monday, the Austin Independent School District board of trustees directed staff to move forward with final plans for the district’s first official historically underutilized business program (known as HUB), though many board members expressed reservations.

Although the issue has long been on the agenda of the AISD Board Oversight Committee on Excellence Through Equity, Diversity and Inclusion, the ability to create an official HUB program arose in December after board members heard the results of a joint study examining AISD’s contracting process. The study finds AISD to be a “passive participant” in discriminatory practices.

At AISD’s Monday workshop meeting, staff, legal consultants and representatives from Nera Economic Consulting presented trustees with a rough outline for a HUB program that would begin in September. The proposed program would attempt to increase the number of AISD contracts awarded to small, minority- and women-owned businesses. According to staff, unlike similar programs in Houston and Dallas ISDs, this program would track multiple ethnicities instead of putting them into a catch-all minority category.

Lino Mendiola, outside legal counsel for the district, said that AISD already has in place informal HUB policies, which are overseen by DM Dukes & Associates, a consulting firm for which state Rep. Dawnna Dukes (D-Austin) serves as president. Nonetheless, he said, although an informal program “strongly encourages” contractors to employ HUBs, it cannot set mandatory, narrow requirements the way a formalized program can.

Mendiola explained that under the proposal “the contractors, if they want to win a contract, will have to either meet the goal (to hire a certain number of HUB contractors) or have demonstrated a good-faith effort. So, we are not in any way making this a quota.”

Mendiola said that AISD plans to contract with an outside agency to provide a list of certified HUB subcontractors in the area. A primary contractor’s “good-faith effort” must include a demonstrated attempt to solicit a bid from the list, but prime contractors would be excused from employing a HUB if bids were priced too high.

Chief Financial Officer Nicole Conley estimated that operation of a district-wide program would cost AISD about $956,000 annually. A program aimed only at regulating construction management contracts would cost about $631,000 annually, she said. Each program has an initial $375,000-to-$400,000 one-time startup cost.

“These are only estimates – we won’t know until we really build out the program,” Conley added, noting that funding could potentially come from AISD bonds, maintenance and operations monies or a mixture of both.

Although they supported moving forward with the program, several board members expressed reservations about its potential drawbacks. Many were concerned about future financial costs, the potential uptick in lawsuits from disgruntled contractors and the accusations of favoritism that might come once the program was implemented.

“The one thing I hope, and I say this to our fellow board members,” said District 4 Trustee Julie Cowan, glancing at board Vice President Paul Saldaña of District 6, “is just that, I really hope we allow the staff to define the goals and set up the parameters of this, and us not have our fingers in it. … Otherwise it can look like we are influencing this process a little bit.”

Saldaña, who later stated that he has a passion for HUB issues, chairs the Board Oversight Committee on Excellence through Equity, Diversity and Inclusion and previously served on the boards of the Greater Austin Hispanic Chamber of Commerce and the Texas Association of Mexican American Chambers of Commerce.

District 5 Trustee Amber Elenz asked staff to provide a more definitive budget that stipulates exactly where program funding would come from. Elenz expressed her preference for the program to be funded through present and future bond money.

“Without (knowing where the money is coming from), I’m not going to be able to support it at this time,” she said.

Staff noted that while the program could open up AISD to legal challenges because it is a race- and gender-conscious program, it was not unusual for a school district of AISD’s size to have a HUB initiative like the one proposed.

Present at the meeting, Dukes voiced her support for the program. Dukes has a history of involvement in HUB issues and added an amendment to House Bill 3560 in Texas’s 80th legislative session that required local governments to make HUB databases available.

The AISD board is set to formally vote on the program at its Feb. 29 regular meeting.

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