St. Paul contracting audit finds much room for improvement

Mayor Coleman pledges action to ‘move forward’

The recently released audit and performance review of contracting practices in St. Paul found a general “lack of monitoring and enforcement” of its civil rights and equal opportunity laws. Improvement is needed in a number of areas — ranging from showing stronger leadership to clarifying employee duties — to demonstrate that inclusion is a priority that goes beyond mere “paperwork,” it states.

During the St. Paul City Council meeting on Wednesday, November 28, auditor James Hall delivered the report that he and his associates from Milwaukee put together after they spent months and months sifting through all sorts of data, testimonies and other information. Council members took it in silently without any discussion afterwards.

The 104-page final report is a thorough analysis of contracting activities from 2002 to the present within the two offices that handle the bulk of City contracts — Planning and Economic Development (PED) and the Housing and Redevelopment Authority (HRA) — as it relates to follow-through on ordinances that are supposed to enhance minority and female involvement.

For years, minorities, women and others have protested that few contracts for City-funded projects seem to be within their reach. Some City officials claim that its failure to connect with people of color and women is tied to a plethora of administrative wrinkles, and is not malicious or intentional. But community activists remain skeptical, saying they have been disregarded too many times to believe it is arbitrary.

On Wednesday, Mayor Chris Coleman, referring to his 2005 campaign platform wherein he emphasized “equal access for everyone,” embraced the report as the first of its kind. Typically, government agencies will internally audit administrative arms, but outside auditors are on rare occasions brought in to do the job, some insiders explained. On top of that, civil rights administration typically receives little oversight.

“This is a fresh and honest look,” Coleman told reporters during a press conference. “We’re far from perfect, but this is an opportunity to move forward with specific and concrete steps.”

To set it in motion, also on Wednesday, the mayor appointed City Attorney John Choi to devise a plan for carrying out the report’s recommendations, or at least those that are doable. Choi and other City officials pointed to this as a testimony to the mayor’s desire to turn things around.

Outside city hall, the audit has garnered intense reactions, both good and bad, from community members. A concern among some community members prior to the audit’s completion was that it would be watered-down; some activists criticize the final product for glossing over the matter of compliance, which they say could make the City liable under state-level laws.

Clifton Boyd, a business owner who serves as the president of the local branch of the National Association of Minority Contractors and a member of a City task force called the Equal Access Working Group (EAWG) that called for the audit in the first place, said during the council meeting that he’s glad the report is finally out.

However, that doesn’t mean his or his fellow EAWG members’ work is done, he said. The report did not get as detailed as he and other EAWG members had hoped for in terms of financial information, for instance, or its overall compliance, or even the compliance of specific companies.

“We want to see an annual review and that we have to make sure the proper personnel is in place to conduct business the way it should be done,” Boyd said.

What the audit says
While the report suggests that the City seems to be taking steps to reach out to minorities and women, especially in recent years, a lack of clarity, coordination and communication, among other things, stand in the way of its progress. (To read the full report, go to www.stpaul.gov and click on “final report.”)

Overall, the audit found a lack of accountability for the enforcement and monitoring of the Vendor Outreach Program (VOP, chapter 84) and Affirmative Action Ordinance (chapter 183). HRA, in particular, lacks a firm commitment to these laws, it states.

“Chapter 84” requires companies to make a “good faith effort” to achieve a goal of 15 percent utilization of minorities, women and small businesses combined. Under “chapter 183,” contracts must be accompanied by affirmative action plans; while six percent of total labor hours are to be performed by women, 11 percent of skilled craft hours should be minority-filled, and 11 percent of general laborer hours should reflect the work of minorities.

Simply having a vendor outreach program and affirmative action ordinances is not enough. Last year, Hall cited in his presentation to the council, only 6.6 percent of over $220 million in PED/HRA contracts went to minorities and women. From the department of Contracts and Analysis Services (CAS), African American business owners were paid around $300,000 of $94 million. Some other minority groups saw even less.

One way to make a big difference right away is to designate a point person to deal with all compliance issues, Hall said. Right now, staff duties often overlap between PED, HRA, and Contracts and Analysis Services (CAS), causing some work to be duplicated and other things to go unfinished. Every employee needs to be made aware of how his or her role fits into the big picture, Hall emphasized.

As it is, there’s no evenhanded way of applying and confirming compliance. Although sometimes City or HRA funds don’t enter the equation until it’s too late, PED/HRA staffers aren’t following up with developers about compliance.

In some cases, compliance information for a company is unavailable or it’s marked as zero and affirmative action plans aren’t on file. Goals don’t usually come into play in certain professional services, such as in architectural, legal, surveying and real estate services. Also, “the ‘good-faith’ method of achieving the goals applies by default in situations where the actual goals are not achieved,” the report states.

“It is unclear why there is a general absence of communications from VOP [Vendor Outreach Program] and DHR [Department of Human Rights] staff concerning failure of contractors to comply with the requirements…” the report goes on. “There is no response or the response is that compliance staff have not had time to review the paperwork and are not sure when they can get to it,” project managers have commented in the report.

Auditor Bill Lynch said there’s a lot more that can be done early and late in the process. “Staff needs to better document what they’re doing and stay on top of what’s happening. The City is in a position where it can be selective about whose projects it supports. It should look at how well it is doing in inclusion,” said Lynch.

Following through
When a developer fails to display a “good faith effort,” special measures such as withholding payment or termination should be exercised, the auditors recommended. While the Human Rights Commission has certain oversight duties, including the power to adopt rules and procedures, more staff and resources are needed.

That may be partly due to cutbacks between 2001-2004 under former Mayor Randy Kelly’s administration, according to a former City official (name withheld). Back then, the Human Rights Department budget was cut in half. The Human Rights Commission was short the number of appointees it has to have to do business, limiting its abilities to accomplish anything for almost three years.

Additionally, a committee to oversee these improvements, including community representation, should be organized, among other changes. Still underway in St. Paul is a disparity study, which will provide some additional perspective as to what extent people of color, women, and those with disabilities are kept from City-funded projects. That study will be published in January, according to City officials.

Ramsey County Judge Kathleen Gearin issued a “writ of mandamus” or a court order in early November asking the City to level the playing field for minorities by modifying programs and/or adding new ones. This was in response to a lawsuit filed by Brian Conover. Meanwhile, a couple of related state- and federal-level lawsuits against the City are still in litigation stages, both of which are likely to wrap up in the coming months, according to Choi.

During the community meeting at Mount Olivet Missionary Baptist Church on Thursday, Conover raised the question of whether or not charging the city attorney with implementing the report’s recommendations constitutes a conflict of interest. Choi denied it, pointing to the human rights work he did before joining the City.

“Mayor Coleman obviously has faith in me, that I can engage communities of color and make thoughtful recommendations,” Choi said. His plan of action will come out sometime in February.

Employed by the City for two years, Choi said he’s eager to implement the changes. “The biggest thing is accountability,” he said. “Right now [the system] is not configured to get a lot of this done… It’s a management issue.”
Nathanial Khaliq, president of the St. Paul chapter of the NAACP and an EAWG member, voiced his approval. Choi’s track record as a champion for human rights makes him a good choice for the job, he said.

Lonnie Ellis, the director of Social Justice Ministry for the Churches of St. Luke and Immaculate Heart of Mary, has been an advocate for minorities on this issue through an interfaith social justice organization called ISAIAH. “The audit shows we have segregation of opportunities in the City,” Ellis said. “We haven’t been following the laws that were put in place to address that.”

He said he would be watching to see what City actions transpire in the coming months. “Now is not the time to say it’s too hard or too expensive. We need to implement every one of these recommendations,” he said.

Anna Pratt welcomes reader responses to annaprattjournalist@gmail.com.