2014 CDBG Applicants' Workshop Section 3 Overview (see also DCA Policy– Appendix R)

Page CDBG Applicants' Workshop Community Finance Division Provision of the Housing and Urban Development Act of CFR Part 135 Helps foster local economic development, neighborhood economic improvement, and individual self-sufficiency Requires recipients of certain HUD financial assistance to provide job training, employment and contracting opportunities for low or very low income residents in connection with projects and activities in their neighborhood. September 11-13, 2013 What is Section 3?

Page CDBG Applicants' Workshop Community Finance Division Is the funded assistance for ▪Housing rehabilitation (including lead-based paint abatement) ▪Housing construction or ▪Other public construction? September 11-13, 2013 When is the regulation applicable?

Page CDBG Applicants' Workshop Community Finance Division ▪Are you a recipient of an award of $200,000+? ▪Are you a contractor/subcontractor for covered work with a contract of $100,000+? ▪Does not apply to purchase of supplies and materials except when installation is involved September 11-13, 2013 When is the regulation applicable?

Page CDBG Applicants' Workshop Community Finance Division ▪When hiring, contracting or job training opportunities arise in connection with housing rehabilitation, housing construction or other public construction. September 11-13, 2013 When is the regulation triggered?

Page CDBG Applicants' Workshop Community Finance Division ▪Demonstrate good faith effort to meet numerical goals established in regulation— “safe harbor” 30 percent of the number of new hires 10 percent of the total dollar amount of contracts for building trades 3 percent of the total dollar amount of other contracts September 11-13, 2013 What must a recipient do?

Page CDBG Applicants' Workshop Community Finance Division ▪Ensure that contracts/subcontracts of $100,000+ make same good faith effort 30 percent of the number of new hires 10 percent of the total dollar amount of contracts for building trades 3 percent of the total dollar amount of other contracts September 11-13, 2013 What must recipients and contractors do?

Page CDBG Applicants' Workshop Community Finance Division All CDBG contracts (Administration, Engineering, Construction) $100,000+ must include a Section 3 Clause September 11-13, 2013 What must recipients and contractors do?

Page CDBG Applicants' Workshop Community Finance Division ▪Outreach to Section 3 residents and businesses ▪Documentation of Outreach ▪Giving a Preference in hiring and contracting to Section 3 residences and businesses September 11-13, 2013 How are these “safe harbor” goals achieved?

Page CDBG Applicants' Workshop Community Finance Division ▪Not defined by regulation ▪Must be consistent with Federal, State and local laws ▪Will normally mean, “all things being equal”, the Section 3 resident or business will receive preference September 11-13, 2013 What does Preference mean?

Page CDBG Applicants' Workshop Community Finance Division Section 3 resident must meet the qualifications of the position to be filled. Section 3 business must have the ability and capacity to perform successfully under the terms and conditions of the proposed contract. September 11-13, 2013 Eligibility for Employment and Contracting

Page CDBG Applicants' Workshop Community Finance Division Resident of HUD assisted housing Residents of the non-metro county where the HUD- assisted project is located and who have a household income that falls below HUD’s income limits. September 11-13, 2013 Who are Section 3 Residents?

Page CDBG Applicants' Workshop Community Finance Division 51% or more owned by Section 3 residents Section 3 residents make up 30% of its full- time permanent staff Provide evidence of a commitment to subcontract more than 25% of the dollar award of all subcontracts to businesses that qualify as a Section 3 business September 11-13, 2013 What is a Section 3 business?

Page CDBG Applicants' Workshop Community Finance Division Updated and Adopted October 31, 2013 Solicitation Package being developed September 11-13, 2013 DCA Policy – See Appendix R

Page CDBG Applicants' Workshop Community Finance Division In whole or in part statement ▪Requirements apply to projects and activities funded in whole or in part with covered funds and the entire project budget is subject to Section 3 Full time ▪Regularly works a minimum of 40 hrs. per week New hires ▪full-time employees for permanent, temporary or seasonal employment opportunities September 11-13, 2013 DCA Policy – Some specifics

Page CDBG Applicants' Workshop Community Finance Division “Make Every Effort in Your Disposal” Order of Preference in Hiring (30% goal) ▪Section 3 Residents of HUD assisted housing ▪At the site ▪In the City ▪In the County Order of Preference for Contracting (10%/3% Goal) ▪ROB (Owned or controlled by LMI persons in the county) ▪30% hires ▪25% contracting September 11-13, 2013 DCA Policy – Some specifics

Page CDBG Applicants' Workshop Community Finance Division “Make Every Effort in Your Disposal” Providing Other Economic Opportunities ▪If a greater need is identified, training may be substituted for hiring and contracting goals. ▪Must equal or exceed 3% of total contract award ▪If a preference is claimed and if the contractor cannot comply with goals, this can substitute ▪See polices for standards for training September 11-13, 2013 DCA Policy – Some specifics

Page CDBG Applicants' Workshop Community Finance Division “Accepts responsibility for enforcing Section 3 requirements and pro-actively providing notice” September 11-13, 2013 Subrecipient Responsibilities

Page CDBG Applicants' Workshop Community Finance Division ▪Post job opportunities in sources generally available to LMI people ▪Place this language in all contract solicitations— “This project is covered under the requirements of Section 3 of the HUD Act of 1968.” ▪Pre-bid meetings ▪Preconstruction conferences ▪Section 3 Clause September 11-13, 2013 Subrecipient Responsibilities

Page CDBG Applicants' Workshop Community Finance Division ▪Providing Resident Certification and Affidavit Forms ▪Encouraging the training of Section 3 residents ▪Reporting ▪Refusing to award to violators ▪Use the DCA solicitation package ▪Documenting actions taken to comply September 11-13, 2013 Subrecipient Responsibilities

Page CDBG Applicants' Workshop Community Finance Division ▪Do at least one of the following Opportunity fair for contractors and residents Post job sites with 24”x24” placard with specific wording September 11-13, 2013 Subrecipient Responsibilities

Page CDBG Applicants' Workshop Community Finance Division ▪Use the DCA Solicitation Package. It must be returned or bid is not acceptable. ▪If numerical goals are not met, must provide explanation and documentation for DCA review and approval September 11-13, 2013 Subrecipient & Contractor Responsibilities

Page CDBG Applicants' Workshop Community Finance Division Post positions in at least three community sources (see Policy) Use of temporary agencies ▪Placements must self certify and be offered Preference For contracting, at least one pre-bid meeting must be held as form of Notice Post contracting opportunities in at least three community sources (see Policy) September 11-13, 2013 Operating Procedures

Page CDBG Applicants' Workshop Community Finance Division Contractor must convey past history of compliance ▪For contracts effective January 1, 2014 New contract language regarding compliance for those that claim a Preference ▪Preference must be maintained or subject to penalties ▪Contractors may be banned for future participation September 11-13, 2013 Operating Procedures

Page CDBG Applicants' Workshop Community Finance Division Instructions Section 3 Clause Cure and Termination Clause Selection of Preference Previous Compliance Certification Action Plan September 11-13, 2013 Solicitation Package

Page CDBG Applicants' Workshop Community Finance Division Pam Truitt, Grants Consultant Phone: (404) Michael Casper, Compliance Manager Phone: (404) September 11-13, 2013 Contact Information