The District failed to enforce its own law requiring local hires for taxpayer funded developments, costing residents hundreds of jobs and potentially $14 million in lost wages, a new city audit has found.
The city’s First Source program requires developers working on city-funded projects to fill 51 percent of newly created jobs with District residents. But a review of 16 projects started under the guidance of two now-defunct, quasi-independent agencies shows that only four projects met that threshold.
The projects that did have the required number of District residents include the DC USA retail complex in Columbia Heights and the Mandarin Oriental hotel by the Tidal Basin.
Developers can get a waiver for the 51 percent requirement if they show that there was a “good faith” effort to find residents with the needed skills. But Department of Employment Services, which is tasked with implementing the First Source Program, said they have no record that the agency ever tried to determine whether good faith efforts were made.
D.C. Auditor Deborah Nichols said a rough estimation puts the number of potential jobs lost to nonresidents at 361, and the potential wages lost at $14 million. Nichols said the figures show the “type of economic fortune that could have occurred for the District and its residents had District agency officials and developers been more committed to [First Source] laws and procedures.”
Nichols found that Mayor Adrian Fenty’s office had essentially ignored the city’s Living Wage Act of 2006, which requires city contractors to pay workers at least $12.10 an hour.
Nichols also noted that Fenty’s administration, including Attorney General Peter Nickles, refused to allow her access to all the documents she requested for the audit.
The mayor’s spokeswoman and Nickles could not be immediately reached for comment Wednesday.
At-Large Councilman Kwame Brown, who is running for D.C. Council chairman, has scheduled a public roundtable for July 8 to discuss the findings with the mayor’s office, his spokesman said.
“Local business owners and residents want to know that the government is doing everything within its power to protect them. We’re going to get closer to the truth and find out how our dollars have been spent,” Brown said in a statement.
The results of the audit were first reported by the Washington Business Journal.
