Section 3 and Vicinity Hiring Preference Webinar August 2 ... assistance shall, to the greatest...

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Transcript of Section 3 and Vicinity Hiring Preference Webinar August 2 ... assistance shall, to the greatest...

  • U.S. Department of Housing and Urban Development

    Section 3 and Vicinity Hiring Preference Webinar

    August 2, 2011 2:00 – 4:00 PM EST

    U.S. Department of Housing and Urban Development • Community Planning and Development

  • Introductions • Speakers

    – Carole Burchette, Cloudburst Group • carole.burchette@cloudburstgroup.com

    – Julia Pierson, Cloudburst Group • julia.pierson@cloudburstgroup.com

    • From HUD NSP Team – John Laswick

    • john.a.laswick@hud.gov

    • Best Practice Presenters

    – Lesley Edmond- Washington, DC – Department of Housing and Community Development

    • Lesley.edmond@dc.gov

    – Rebecca Wiener – Community Resources & Housing Development Corp.

    • rebecca@crhdc.org

    2U.S. Department of Housing and Urban Development • Community Planning and Development

    mailto:carole.burchette@cloudburstgroup.com� mailto:julia.pierson@cloudburstgroup.com� mailto:john.a.laswick@hud.gov�

  • Webinar Objectives • Clarify Section 3 responsibilities by providing tips

    to: –Increase understanding of the objectives of

    the Section 3 regulations; –Ensure compliance with annual reporting

    requirements; and –Provide guidance for NSP3 vicinity hiring

    preference • Presentation Slides available now on:

    – http://hudnsphelp.info/index.cfm?do=viewFind aResourceDetails&resourceID=908

    3U.S. Department of Housing and Urban Development • Community Planning and Development

    http://hudnsphelp.info/index.cfm?do=viewResource&ResourceID=908

  • Purpose of Section 3

    • “To ensure that employment and other economic opportunities generated by certain HUD financial assistance shall, to the greatest extent feasible, and consistent with existing Federal, State and local laws and regulations, be directed to low- and very low-income persons, particularly those who are recipients of government assistance for housing, and to business concerns which provide economic opportunities to low- and very low-income persons.” (quoted from 24 CFR part 135.1(a))

    4U.S. Department of Housing and Urban Development • Community Planning and Development

  • “To the Greatest Extent Feasible”

    What does this mean?

    5U.S. Department of Housing and Urban Development • Community Planning and Development

  • The Times Have Changed

    • Today’s discussion is “how to creatively implement Section 3 requirements to get results”

    • Perhaps we need a new sub-title: “Local Jobs Initiative”

    6U.S. Department of Housing and Urban Development • Community Planning and Development

  • What Section 3 is NOT….. • Not race or gender specific • Not an entitlement for eligible individuals and

    businesses • Not only applicable to direct recipients • Not optional – It’s the Law!

    7U.S. Department of Housing and Urban Development • Community Planning and Development

  • Applicability for Housing & Community Development Programs - 135.3(3)(ii)

    • Threshold: $200,000 for grantees and subrecipients $100,000 for contractors and subcontractors

    • Housing rehabilitation (including lead-based paint abatement)

    • Housing construction • Demolition • Other public construction

    8U.S. Department of Housing and Urban Development • Community Planning and Development

  • Activities Covered

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    NSP A. Financing B. Purchase & Rehab √ C. Land Banks D. Demolition √ E. Redevelopment √

    CDBG Housing Rehabilitation √ Infrastructure √ Public Services Public Facilities √

    HOME Housing Rehabilitation √ New Construction √

    U.S. Department of Housing and Urban Development • Community Planning and Development

  • Applicability to Entire Project - 135.3(b)

    • Section 3 requirements apply to the entire project or activity that is funded with Section 3 covered assistance, regardless of whether it is fully or partially funded with Section 3 Covered assistance. – Example: leveraged private funds with other

    programs  If a project budget is $500,000, and of that,

    $250,000 is NSP, $150,000 is state funded, and $100,000 is private bank loans, Section 3 requirements will apply.

    10U.S. Department of Housing and Urban Development • Community Planning and Development

  • Definitions - 135.5 • Housing & Community Development Programs -

    Employment associated with building trades

    11U.S. Department of Housing and Urban Development • Community Planning and Development

    Building Trades: – Carpentry – Masonry – Plumbing – Electrical – Demolition

    Professional Services: – Architectural – Engineering – Legal – Management and

    Administrative Support

  • Definitions

    • Section 3 resident – Public Housing resident, or – Resident of metro area or non-metro county in

    which the Section 3 covered assistance is expended, and who qualifies as a low-income or very low-income person.

    12U.S. Department of Housing and Urban Development • Community Planning and Development

  • Definitions • Section 3 business concern:

    – 51% or more owned by Section 3 residents, OR

    – 30% of employed staff are Section 3 residents, OR

    – 25% of subcontracts committed to Section 3 businesses

    13U.S. Department of Housing and Urban Development • Community Planning and Development

  • Eligibility for Employment and Contracting

    • A Section 3 Resident must meet the qualifications of the position to be filled -

    135.34(c) • A Section 3 Business Concern must have the

    ability and capacity to perform - 135.36(c)

    14U.S. Department of Housing and Urban Development • Community Planning and Development

  • Numerical Goals - 135.30(b-c) • Employment:

    – 30 percent (30%) of new full-time hires annually (means 1 out of 3 new hires should be qualified Section 3 residents)

    • Contracts: – 10 percent (10%) of the total $ amount of all

    Section 3 covered contracts for building trades work

    – Three percent (3%) of the total dollar amount to all other contracts, like professional services contracts

    15

  • PHA and the NSP Program

    • Public and Indian housing assistance has different Section 3 requirements than those for housing and community development assistance providers

    • As a participant in NSP activities either as a grantee, subrecipient, or consortium member, PHAs must track their Section 3 goal achievements separately than those goals for the PHA activities

    16U.S. Department of Housing and Urban Development • Community Planning and Development

  • Responsibilities - 135.32 • Implement procedures designed to meet Section

    3 requirements – have a plan • Notify Section 3 residents and business

    concerns about training and employment opportunities

    • Notify contractors and incorporate the Section 3 clause language

    • Facilitate training and employment of residents • Award contracts to Section 3 businesses • Document actions to comply • Submit Annual Summary Report

    17U.S. Department of Housing and Urban Development • Community Planning and Development

  • Annual Summary Report • Annual Summary Report of Section 3 Activity – Applies

    to all HUD funded housing activities

    – Regulation 24 CFR 135.90 states all grantees of Section 3 covered funds must submit form HUD 60002 annually to HUD HQ Fair Housing Equal Opportunity Office (FHEO)

    – Due at the time CAPER Report is submitted

    – If no CAPER is required to be submitted to HUD, then the Annual Summary Report is due by Jan. 10 of each year or within 10 days of project completion

    – However, FHEO would prefer that the Annual Summary Report be online at:  http://www5.hud.gov:63001/apps/po/e/srs/Public/form.cfm

    18U.S. Department of Housing and Urban Development • Community Planning and Development

  • Consequences of Non-Compliance

    • Non-compliance with HUD’s regulations in 24 CFR Part 135 may result in: – Sanctions, – Termination of contract for default, – Debarment, and – Suspension from future HUD contracts

    19U.S. Department of Housing and Urban Development • Community Planning and Development

  • Break for Questions and Answers

    20U.S. Department of Housing and Urban Development • Community Planning and Development

  • How Does Section 3 Apply? • A contractor is awarded 5 separate contracts of

    $60,000 each to rehab 5 houses.

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     Section 3 applies to the Grantee if the investment in the NSP project exceeded $200,000, but since each contract is under $100,000, the contractor does not share the responsibility

    HOWEVER, the recipient is still responsible for meeting its Section 3 goals, so it should award 10% of its contracts to Section 3 qualified business concerns.

    U.S. Department of Housing and Urban Development • Community Planning and Development

  • How Does Section 3 Apply? • A city is awarded a $1.5 million NSP3 grant and

    plans to self-manage the acquisiti