County projects no longer subject to wage restrictions

Construction contracts awarded by the Anoka County Board will no longer have a prevailing wage requirement – unless federal or state dollars are helping to pay for the project.

The county board voted 4-2 at its meeting Feb. 12 to rescind a 1989 resolution which put a prevailing wage provision in place for county construction contracts of more than $10,000.

The prevailing wage will still apply to county construction contracts that have federal and state funding – for example, many highway projects and housing rehabilitation projects through the federally-funded Neighborhood Stabilization Program – since both the federal and state governments have prevailing wage mandates.

Indeed, the prevailing wage, which is the minimum standard of wages for a contractor/subcontractor’s employees that must be agreed to by any contractor before the county will award the contract for labor, materials, supplies or services, is set by the Minnesota Department of Labor and Industry.

Those job classification wages are spelled out in the bidding documents for construction contracts, on which companies submit bids.

According to the Minnesota Department of Labor and Industry website, wage rates are certified once a year.

The original 1989 resolution was amended by the county board in 1990 to include a penalty for contractors who failed to comply with the prevailing wage requirement.

At that time, the county board determined that “it is in Anoka County’s and the public interest that public contracts be awarded to contractors who compensate employees at the prevailing wage rates.”

According to the resolution adopted by the county board Feb. 12, the provision which applied the prevailing wage to construction contracts over $10,000 adopted 23 years ago is no longer applicable.

The resolutions adopted in 1989 and 1990 are no longer pertinent, the resolution states.

“Anoka County does and will continue to pay prevailing wage when there are any state or federal dollars involved in a construction project,” it states.

According to information presented to the county board, the intent of the original resolutions was that the larger county contracts would be subject to the prevailing wage standards, while the smaller contracts would not be.

Voting for the resolution were Anoka County Board Chairperson Rhonda Sivarajah and Commissioners Robyn West, Julie Braastad and Matt Look.

Voting no were Commissioners Jim Kordiak and Carol LeDoux. Commissioner Scott Schulte was not at the meeting.

According to West, who chairs the county board’s Management Committee that recommended ending the prevailing wage requirement, the action will benefit small companies because the prevailing wage requirements and penalties made it less feasible for local smaller contractors to bid on projects.

The local contractors do not get the business and the cost is higher for the county, West said.

But Kordiak, who offered the prevailing wage resolution when it was approved by the county board in 1989, said he was a longtime supporter of organized labor and while he did not view this as a union/nonunion issue, he continued to support the prevailing wage provision.

“Unions look out for their members better than companies and managers and do a fantastic job supporting employees,” he said.

“They invest in positive outcomes.”

While he could support raising the contract minimum from $10,000 to $100,000 given today’s economy, he did not want to “throw the baby out with the bath water,” Kordiak said.

According to Look, the prevailing wage would still be in place for construction projects that receive federal or state funding.

And he challenged anyone that maintained that nonunion work is subpar compared with union work, Look said.

“This action evens the playing field for small companies wanting to grow their business,” he said.

The rescinding of the prevailing wage resolution was part of a series of changes to the county’s financial policies and procedures approved by the county board Feb. 12.

According to County Administrator Jerry Soma, in reviewing the existing resolution, staff concluded that the $10,000 minimum contract amount put in place and not changed for 23 years was no longer applicable.

For example, a recent contract to do a small project, remodeling in Anoka County Law Library, which included moving some walls, cost $40,000 and the prevailing wage applied, Soma said.

Staff felt it made sense to remove all the provisions at this time, he said.

“This action makes it clean,” Sivarajah said.

Sivarajah has received a number of complaints from small businesses about the prevailing wage requirements, notably about the amount of paperwork involved, which has resulted in them not bidding on county projects, she said.

“The paperwork is very burdensome,” Sivarajah said.

Peter Bodley is at [email protected]