HUD Determination of Noncompliance for City of Saint Paul and the Housing and Redevelopment Authority (August 25, 2009)
HUD’s limited on-site compliance review found Saint Paul, Minnesota to be noncompliant with several Section 3 provisions. In addition to finding that Saint Paul had perennially failed to file Form HUD-60002, HUD found that Saint Paul lacked procedures for the following obligations: to facilitate and notify Section 3 residents about their preferential training, employment or business opportunities; to notify potential contractors of and ensure contractor compliance with Section 3 requirements; and to document City actions taken in compliance with Section 3 and the results any impediments. (The HUD review was partially based upon an administrative complaint filed by Nails Construction Co.)
Voluntary Compliance Agreement Between HUD and the City of Saint Paul (February 2010)
This Voluntary Compliance Agreement (VCA) between HUD and the City of St. Paul, entered into in February, 2010, addresses the issues raised in HUD’s August, 25, 2009 Determination of Noncompliance. The agreement governs for four years. It requires the City to meet its Section 3 obligations through the following actions, among others: reporting to HUD semi-annually; obligating $650,000 to a Section 3 Implementation Fund; designating a staff person responsible for compliance; creating a written Section 3 compliance plan, to be approved by HUD; establishing a process for the City to certify Section 3 residents and business concerns, and maintaining a list of certified Section 3 business concerns; providing annual Section 3 training events for area contractors and residents; providing a no-interest revolving loan for Section 3 business concerns, including Section 3 start-ups; breaking contract work items into economically feasible units for Section 3 businesses (and requiring developers of privately-owned Section 3 covered projects to do the same); penalizing contractors and sub-contractors who fail to meet percentage requirements of Section 3 hiring and sub-contracting; including Section 3 residents as a preference group for all full-time and part-time City job vacancies (if current hiring practices do not comply with Section 3); and, if at least 30% of new hires are not Section 3 residents at the end of the first twelve months under the agreement, entering into “first source” hiring agreements with organizations representing Section 3 residents (and requiring privately-owned Section 3 covered projects to do likewise).