Important Information for 2022 Neighborhood STAR Awardees

Contract Compliance

1. Affirmative Action/Equal Employment Opportunity

   The City AA/EEO ordinance requires all legal entities receiving $50,000 or more in city funds to submit a certified affirmative action program.

   An affirmative action program is your company's equal employment opportunity policy and practice. The City provides an affirmative action program template that you may use if you do not have an AAP. You will need to submit two items before the contract is signed or before you request reimbursement, whichever comes first:

   • Your AAP, and
   • $75 fee to certify your AAP for a 2-year period.

   In addition to the submission of your company’s AAP for certification, the same will apply to the general contractor and all subcontractors on your construction project. You must inform your general contractor of this requirement and the workforce participation goals.

   The City requires construction projects of $50,000 or more to achieve 32% minority labor total hours and 20% female labor total hours. Before the construction of your project, AA/EEO requirements will be further described at a pre-construction meeting.

   Please visit stpaul.gov/aaeeo for more information.

   Download the Affirmative Action/Equal Employment Opportunity (AA/EEO) Contract Specifications

2. Prevailing Wage Compliance

   The City Prevailing Wage ordinance applies to projects that involve construction where the total development cost of the project is greater than $25,000 and that include any amount of city (e.g., STAR) money.

   Prevailing wage is a minimum wage requirement for construction workers that your contractors will have to pay their workers (including owner/operators) while working on a City-funded project. These rates are contained in the wage decision that will be provided if you are awarded STAR money. You can view sample Department of Labor and Industry wage decisions, but please note that the actual wage decision that will apply to your project will be provided by the City.

   As a STAR awardee, you will want to tell potential contractors that prevailing wage will apply to the project. You will also want to attach the prevailing wage packet you receive from the City into your contract(s) with your contractors. Once your project begins your contractors will be expected to submit payrolls into LCP Tracker - an online payroll reporting the city uses to ensure compliance with the prevailing wage law.

   Prevailing wage will affect your entire project. For example, If you are using STAR money to renovate a patio, and you’re also renovating a bathroom and roof at the same time, prevailing wage will apply to those facets of your project.

   For more information, visit stpaul.gov/prevailingwage.

   Download the Prevailing Wage Requirements

3. Vendor Outreach Program

   The Vendor Outreach Program (VOP) applies to projects with a total project cost over $50,000. Businesses must be CERT certified to count toward VOP goals. Reporting requirements will be discussed further at a pre-bid or pre-construction meeting.

   For more information, visit stpaul.gov/vop.

   Download the Vendor Outreach Program (VOP) Basics handout

4. Minnesota Business Subsidy Law

   Minnesota Statute Sections 116J.993-.995 and City Council Resolution #99-742 require that a business receiving state or local government assistance must have a defined public purpose and recipients must set goals for job creation, wages and benefits to be achieved within 2 years of receiving assistance.

   Wage and Job Goals and Reporting

   This applies to recipients* receiving a business subsidy of $150,000 or more of grant funds, and loans and loan guarantees over $150,000; unless the project or recipient falls within an exemption.

   A notice and a public hearing on the subsidy is required.

   Specific wage and job goals to be attained within 2 years and a 5-year commitment to continue operations at its business location in Saint Paul.

   Annual reporting is required by March 1st of each year for the prior calendar year.

   *All for-profit entities and only nonprofit entities with at least 100 FTE and with a ratio of highest to lowest paid employee that exceeds ten to one qualify as a business subsidy recipient.

   MN Business Subsidy Common Project Exemptions**

   • Redevelopment property polluted by contaminants as defined in section 116J.552, Subd 3.
   • Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code, and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50 percent of the total cost.
   • Assistance for housing.
   • Assistance for pollution control or abatement including assistance for a tax increment financing hazardous substance subdistrict as defined under section 469.174, subdivision 23.
   • Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value.

   **This is not a complete list, consult MN Statutes 116J.993, Subd. 3 for the complete list

   MN Business Subsidy Reporting Only

   Annual reporting may be required of a business subsidy, if the assistance is in the form of a grant of $25,000 or more; or a loan of $75,000 or more, or a combination, when total assistance is less than $150,000, including all forms of City and HRA funding for a Project.

5. Saint Paul Living Wage Ordinance

   (Chapter 98 of Saint Paul Administrative Code)

   Applies to recipients receiving $100,000 or more in a City Business Subsidy (grants and most loans) unless the project or recipient falls within an exemption*;

   Any recipient of a City Business Subsidy and Tenant must pay a living wage to each employee (unless such employee is exempted) who is employed in the location for which the subsidy was provided for the longer of the duration of a City Business Subsidy or 3 years.

   *One exemption that could apply pertains to businesses that qualify as a “Small Business” under MN Statutes 645.445, which includes, in part, businesses that are not an affiliate and with 20 or fewer full-time employees or with annual gross revenues less than $1 million.

   A Living Wage is:

   • 130% of the federal poverty level for a family of four ($17.34 per hour for 2022), or
   • 110% of the federal poverty level for a family of four if health benefits are provided ($14.68 per hour for 2022);
   • Wage rates change annually

6. City Insurance Requirements

   Insurance must be obtained prior to getting under contract with the City. Please refer to this Insurance Certificate Sample when obtaining insurance.

   The required insurance coverage minimums are as follows:

   • General or Business Liability Insurance
     • $1,500,000 per occurrence
     • $2,000,000 aggregate per project
     • $2,000,000 products/completed operations total limit
     • $1,500,000 personal injury and advertising
        
   • Automobile Insurance
     • Commercial Vehicles: When commercial vehicles will be used in connection with the Project, these minimum coverage amounts are required:
       • Bodily Injury: $750,000 per person; $1,000,000 per accident
       • Property Damage: Not less than $50,000 per accident
     • Personal Vehicles: When personal vehicles are used in connection with the Project, the Grantor is not required to be named as Additional Insured, but proof of insurance is required prior to commencement of activities. Grantee must provide the Grantor with Endorsements from insurance company.
       • Bodily Injury: $30,000 per person; $60,000 per accident
       • Property Damage: $20,000 per accident
     • Rental Vehicles: When rental vehicles are used in connection with the Project, the Grantee shall either purchase insurance from the rental agency or provide the Grantor with proof of insurance as stated above.
        
   • Worker’s Compensation and Employer’s Liability
     • Worker’s Compensation coverage is required per Minnesota Statutes. Employer’s Liability shall have a minimum of $500,000 per accident / $500,000 per employee / $500,000 per disease policy limit. Grantees with 10 or fewer employees who do not have Worker's Compensation coverage are required to provide the Grantor with a completed “Certificate of Compliance” (State of Minnesota form MN LIC 04) verifying their number of employees and the reason for their exemption.
        
   • Professional Services Coverage
     • Professional Liability Insurance is required when Developer provides a service for which professional liability insurance is available for purchase. Professional Liability shall have minimum liability limits of $1,000,000 per occurrence / $1,000,000 aggregate.
        
   • Pollution Liability/Hazardous Waste, Builder’s Risk and Errors and Omissions
     • Pollution Liability/Hazardous Waste, Builder’s Risk and Errors and Omissions is required in the following minimum amounts:
       • Pollution Liability/Hazardous Waste: $1,000,000 per occurrence / $1,000,000 aggregate.
     • Errors and omissions coverage must be included if the Grantee will be providing services for the Grantor as a sublimit of the General Liability Policy. Agent must state on the certificate if Grantee carries errors and omissions coverage.
     • Builder’s Risk Insurance is required for the cost of the Project.