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~ Ms. Schue wished to note that to the extent that Community Development Block Grant funds are involved, reallocation of resources would not be necessary. The amendment passed unanimously, 8:0. The motion to authorize staff to distribute the RFP for a period of 90 days, from March 15 to June 15, 1989, with City Council review of proposals, passed unanimously, 8:0. III. TARGETED BUSINESS ASSISTANCE PROGRAM Mr. Gleason introduced the issue, noting that a recent Supreme Court decision regarding this issue has raised a Constitutional problem. He referred the issue to Bill Gary of the City Attorney's Office. Mr. Gary noted that on January 25, 1989, the Supreme Court decided in City of Richmond vs. Croson that a City of Richmond minority set-aside program on public work contracts was unconstitutional because it violated the Equal Protection Clause of the 14th Amendment. He pointed out that the Richmond program included IIbenevolent" racial categories, as does the program that council was to consider. Mr. Gary explained that the Supreme Court had ruled that for a city to adopt a program that is specific in identifying particular protected categories, tit such as ethnic groups, three conditions must be satisfied: 1. The city must make specific findings supported by persuasive evidence that a court would verify that demonstrate past discrimi- nation against the specific racial classifications involved and that would also show that the City has in some way exacerbated the discrimination or been a passive participant in the discrimina- tion. (Mr. Gary stressed that this finding must be very specific against a particular protected group.) 2. The city must develop a program that is flexible enough to permit non-minority participation under some circumstances, so that other applicants may compete if there are no qualified applicants who meet the criterion of the protected group. 3. The city must narrowly target the program to address the specific discrimination that has been found. Mr. Gary said that it is the City Attorney.s opinion that the City of Eu- gene's proposal to create sub-categories within the set-aside program creates an insurmountable obstacle in terms of a lack of flexibility required by the Supreme Court. Mr. Gary also noted that the current set-aside program has no findings and, because no findings exist, no court could conclude that the City has narrowly targeted its program on groups that have been discriminated against. e MINUTES--Eugene City Council March 1, 1989 Page 9