St. Paul engages community in contracting reform

City Attorney Choi plans fundamental changes in how the City does business with minorities and women

By Anna Pratt (February 6, 2008)

Originally published in The Spokesman-Recorder

St. Paul City Attorney John Choi will deliver an “audit disparity implementation plan” at the end of this month, detailing ways the City can improve its contracting practices to be more inclusive of minorities and women.

His report is a preliminary step in how the City will fully respond to a recent “audit and performance review” of Planning and Economic Development (PED) and the Housing and Redevelopment Authority (HRA), the departments that deal with the bulk of municipal projects. The 100-page audit/performance review exposed numerous snags in the system, including little or no enforcement of affirmative action ordinances and inefficient coordination of related staff work.

It pointed out that minority- and women-owned business enterprises cashed in on less than seven percent of contracts totaling over $220 million in 2006. Meanwhile, many minority entrepreneurs say they are frustrated that their attempts to do business with the City have often been rejected.

Several lawsuits against the City make arguments along those same lines; they are still in litigation stages in local to federal-level courts, according to Choi.

Over the past couple of months, Choi has been meeting weekly with various community stakeholders, including members of a City taskforce, the Equal Access Working Group (EAWG), which initiated the audit some years ago; advocates from the interfaith social justice organization ISAIAH; and City workers, among others, to incorporate their feedback into his in-progress proposal.

The biggest issue, as Choi sees it, is accountability, he said, which calls for “lots of systemic changes.”

City Council President Kathy Lantry (Ward 7), who has been involved in the audit from the get-go, said she is proud of Choi’s work so far. As a relatively new City employee, his is a refreshing approach.

“He is meeting with folks and asking them to help him shape a plan rather than coming in and saying, ‘Here’s how to fix it,’” Lantry remarked. “The bottom line is that he understands clearly that the City isn’t achieving sufficient outcomes. He got that from the beginning.”

Mending a ‘fragmented, divided system’

Also forthcoming is a $250,000 disparity study. By taking a broad view of the marketplace, the analysis will explain to what extent minorities and women have been barred from economic opportunities. The Florida-based agency MGT of America is undertaking the study, the release date of which is still unknown.

One thing the City has already done is extend the reach of its Vendor Outreach Program (VOP — “chapter 84” of St. Paul’s administrative code) that sets goals for inclusion of minority- and female-owned business, and its Affirmative Action in Employment ordinance (“chapter 183”) requiring contractors to take affirmative action or to display a “good faith effort” to do so.

A landmark 1980 court case, J.A. Croson vs. the City of Richmond, put such programs to the test; municipalities must now prove that there are legally defensible reasons for them (through a disparity study, for instance). In December, the HRA, which is a separate agency from the City, took legal steps to officially incorporate chapters 84 and 183 into its policy, as the audit/performance review had recommended.

PED says it has followed the Vendor Outreach and Affirmative Action ordinances, and HRA officials have claimed they adhere to them as well, but without documentation of that there has been “confusion and inefficiency,” leading to “lost opportunities for more completely accomplishing inclusion goals,” the audit states.

Among recommendations that came from community members who gathered on January 31 at the MLK Center in St. Paul was the notion that one person and one department should oversee compliance and general enforcement of all human rights laws, including “chapter 84” and “chapter 183,” according to several people who attended.

Currently, the division of labor between PED, HRA and the Department of Human Rights (DHR) is “not aligned,” said Choi. No one person is in charge of compliance, creating “a very fragmented, divided system,” as he put it at the meeting.

To go a step further, community members said the director for compliance and enforcement should be chosen through a public selection process like that of the police and fire chiefs, to keep him or her from being politically tied to the mayor. The city council, which has a hand in approving contracts, should also be held accountable for ensuring compliance.

Additionally, given that the Human Rights Department’s budget was slashed by 40 percent in 2004, proper funding should be allocated to the department, some community members agreed.

“Cautiously optimistic”

Overall, greater transparency is needed. That goes for the publicity of contracting opportunities and awards, online and elsewhere, along with other data. Lonnie Ellis, director of social justice ministries for Church of Immaculate Heart of Mary and Church of St. Luke, who has been active on this issue through ISAIAH, said he wants to know when the City will be able to produce proof that it is following through on the laws.

The audit, he said, showed the City has relied on a loophole of “chapter 84” called “alternate compliance,” which means that it could enter into agreements with businesses that it has a binding contract with. However, the audit revealed no evidence of any such binding agreements, he said.

He and others who have been involved in the discussion advocate for that part of the law to be eliminated. They would also like to see a civilian review board formed to help oversee compliance. To counteract an insider culture, training opportunities should be in place to help foster relationships between general contractors and minority subcontractors.

Choi said many of their recommendations agree with his thoughts on the subject. In the end, “I think people will know they had a part [in the final report]. It will reference the values I heard,” he said.

Admittedly, however, Choi is faced with many challenges. “We’re cautiously optimistic about [his plan],” Ellis commented. “We know systems don’t change quickly.”

Mike Thomas, who is part of a lawsuit against the City, said there is still a “strong sense of urgency for some of these things.”

At the close of the meeting, there were “concrete suggestions,” he said, for making it happen. James Thomas, pastor of Mount Olivet Baptist Church, who has been following the debate since acquaintances approached him about their experiences with the City, also reflected on the January 31 meeting. “[The plan] has a lot of promise. City staff showed an interest in what the community has to say,” he said.

Still, the pastor says he has some reservations. For one thing, it is unclear going forward how much the public will be kept in the know. That is why he and others have asked Choi and the mayor to return to the community in April to talk about what actions will be taken.

“It seems as if the City wants to do right, but there’s a big difference between appearances and actuality, or what actually happens,” said Thomas.