of HUD's Area Office noted a lack of progress for non-elderly renters (Exhibit 16), and the Equal Opportunity Division requested additional information on equal opportunity compliance. (Exhibit 16B).
In his final recommendations, HUD's Community Planning Division Director found substantial performance. However, he requested submission of missing equal opportunity records and data, and he found that performance under the City's HAP was deficient in meeting renter needs. (Exhibit 16C). The Area Office therefore requested a schedule which set forth quarterly goals for the upcoming year for meeting renter needs and a quarterly report on its accomplishment. Plaintiffs' allegations fail to demonstrate either that these basic conclusions were arbitrary or that the actions taken were an abuse of discretion. Thus, their challenge of the Secretary's exercise of discretion in light of failure of substantial performance and lack of continuing capacity are unsupported and contrary to the uncontradicted affidavit and exhibits. Even taking all of their factual allegations as true, no abuse of discretion appears.
Likewise, Plaintiffs must fail as a matter of law in their challenge based on the allegation that the City has not given maximum feasible priority to activities benefiting low or moderate income persons in violation of Section 5304(b)(2) and 24 C.F.R. § 570.303(e)(6), in that it has failed to implement or to make progress on such activities, while conducting other programs of which the Plaintiffs disapprove. Applicants are required to certify that their programs were developed so as to give maximum feasible priority to benefiting low or moderate income persons or families, or aid in the prevention or elimination of slums or blight, or were designed to meet other urgent community needs. If the program is certified as being developed with maximum feasible priority being given to the Section 5304(b)(2) statutory objectives, the performance is then to be judged by whether the grantee has carried out a program substantially as described in its application.
It is also alleged that the City's performance was deficient because only 23% of the contractors on CDBG funded activities were "Section 3" contractors. This refers to Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C. § 1701 (u), which mandates that the Secretary, to the greatest extent feasible, require that opportunity for employment and training in connection with such projects be given to lower income persons residing in the project area and that contracts for work be awarded to business concerns located in or owned by persons residing in these areas. The regulations implementing Section 3 are found at 24 C.F.R. Part 135 and prescribe a series of compliance requirements. Again, however, there is no provision which would require that recipients hire a particular percentage of lower income persons or local business concerns, and the City's failure to hire more than 23% project-area contractors cannot be construed to be a violation of Section 570.303(e) (ii)(vi). Finally, the allegation that one of the 53 programs benefited less than one percent minority families does not support an allegation of discriminatory use of funds, given the substantial benefit to minority families in the other programs.
We therefore conclude that there was no abuse of discretion. HUD had, over the years, made evaluations of the programs proposed by the City in its various applications. The objections to the applications were relayed to the City and procedures followed improving the applications which were thorough and in compliance with the regulations. The Court cannot substitute its judgment for that of local officials or the Secretary. Defendants' affidavits and exhibits reveal a regular administrative procedure and an adequate basis for all administrative decisions, and Plaintiffs' factual allegations, affidavit and exhibits fail to raise material questions of fact which would permit the Court to hold otherwise. Defendants' Motions for Summary Judgment will therefore be granted.
An appropriate Order will be entered.
AND NOW, to-wit, this 3rd day of May, 1978, after hearing and due consideration of the arguments and briefs of counsel, and for the reasons stated in the Opinion filed herewith,
IT IS ORDERED, ADJUDGED AND DECREED that the Motions of all Defendants for Summary Judgment be and the same are hereby granted.