ST. LOUIS — Mayor Cara Spencer is accelerating efforts to rewrite city minority- and women-owned contractor rules, saying the Trump administration has threatened grant cuts and prosecutions in cities with such programs.
In a letter to businesses, contractors and residents released on Saturday, Spencer said the city will stop on Monday issuing new construction contracts that trigger the rules and move immediately to redo city laws that govern minority participation.
Otherwise, she said, the U.S. government could start clawing back the city’s federal grants, assess civil and criminal penalties, and even target city employees and contractors.
Moreover, she said, it could threaten the city’s recovery from the May 16 tornado that tore through north ÃÛÑ¿´«Ã½.
“Unlike other communities, these changes threaten federal funding the City is actively fighting to secure,†she wrote.
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The announcement marks the latest blow to a decades-old city program. Officials have already stopped certifying businesses to participate in the program and privately pitched a “race-neutral†replacement promoting small businesses.
The program, which dates back to the 1980s, has had trouble in the past: Contractors have failed to meet targets. A minority contractors group once sued the city for racial discrimination. And the most recent study on the topic commissioned by the city, covering the years 2016-21, found that minority- and women-owned firms were still getting shorted.
On a level playing field, the study said, the firms would have gotten 43% of city contractor dollars. Instead, they got 29%. And on contracts exempt from minority hiring rules, they got 19%. The city, the study said, should do more to reduce disparities.
But on President Donald Trump’s first day in office in January, he ordered the dismantling of federal racial diversity efforts. In May, the Justice Department put out a memo saying it could use a law intended to punish corruption to go after anyone getting public money while engaging in so-called diversity, equity and inclusion programs.
And on Tuesday, U.S. Attorney General Pam Bondi  explicitly targeting policies favoring minority- or women-owned businesses.
Spencer, in her letter, reaffirmed the city’s past efforts on such programs, saying they had made ÃÛÑ¿´«Ã½ better. And she expressed sympathy for city employees and contractors struggling with the uncertainty around the program.
But she said threats from Washington couldn’t be ignored. She said the Trump administration had made clear it would terminate and claw back crucial grants to cities operating diversity programs.
“This would be felt sharply and disrupt promising development, public safety and infrastructure projects, as well as community services,†she wrote.
And she said money wouldn’t be the only thing in the crosshairs.
“Enforcement actions may be brought against not just the City, but also its hardworking employees and anyone who signs a grant agreement while the City implements programs with race- or gender-based goals,†she wrote. “Such penalties include fines and imprisonment.â€
Moreover, she said, ÃÛÑ¿´«Ã½ is at greater risk than other cities because it’s negotiating with the federal government right now for money and manpower to help rebuild after the tornado.
“The City does not take lightly the prospect that access to this desperately needed federal funding could be foreclosed or clawed back,†Spencer said.
All of that, Spencer wrote, means some construction contracts will be paused immediately: Unless there is an emergency, no new construction contracts subject to the hiring rules will be issued until fixes are in place. Those rules govern projects worth $400,000 or more, officials said, whether they are city projects or private projects receiving city tax breaks.
Spencer said legislation “adaptive to the changed federal landscape†would be ready to file when the Board of Aldermen reconvenes the week of Sept. 7.
City officials, including Otis Williams, chief of the city’s development agency, said on Saturday that they expect the fixes will be put in place quickly, and not many projects will be delayed.
Still, there was some good news in the letter for concerned minority contractors: Spencer said existing deals will continue under the current minority hiring rules.
Shaun Carr, a longtime Black business owner, said that could help his firm and others planning work on current projects.
“But right now,†Carr said, “that’s a Band-Aid.â€
Aldermanic President Megan Green said she’s worried the city is overreacting. She said the disparity study the city commissioned was designed to legally prove the need for the program.
“I think they’re being overly conservative,†Green said.
