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City Council :Minutes February 13, 2006 Page 4 covered by prevailing wage laws through the Federal Davis-Bacon Act and the State of Minnesota's prevailing wage law for all projects funded in whole or in part by federal or state funds. Projects not covered by prevailing wage laws are building and improvement projects funded by the city. Therefore the adoption of a local prevailing wage ordinance would apply only to city funded projects. . Discussion followed that the city does not have issues with quality of work or timeliness of completion but that this would be a policy issue. Attorney Beck stated that this is something the city can do and there are no legal issues. The downside of adopting such an ordinance would be the issues of enforcement and hidden overhead costs. Councilmember Gumphrey stated that he doesn't feel this is a union or non union issue. He stated that he is concerned that we are taking the lowest bidder and the difference can't be all in wages when there's a difference of over $200,000 as in the Northstar Business Park project. He stated that when an employer wants a job, they get it, whether they are union or non union. If a company doesn't have any work and there's a project available and the contractor wants to keep his guys employed, he'll bid that project accordingly and it doesn't necessarily have anything to do with prevailing wage but on the margin of what he's going to make. Terry Maurer stated that he doesn't mean to make this a union or non union issue. He stated that this doesn't bring into account the competitive bidding environment, how much work each contractor has, and other issues that all factor into this process. He stated that staff has no way of knowing what adding this kind of ordinance mayor may not do to the overall bidding environment. Mayor Klinzing stated she liked the idea of placing a project cost threshold before such an ordinance would apply. . Councilmember Motin stated he doesn't feel it makes sense to have a prevailing wage at the city level. He stated that the Davis-Bacon Act was enacted because people from one state that were much less skilled with much lower wages were going into another state where there was higher pay and were able to undercut projects; and those people were not familiar with the code and regulations at that time and were giving a substandard product. He stated that the Davis-Bacon Act was encouraged not for prevailing wages but to avoid that undercutting. He stated that if someone is not being paid prevailing wage doesn't mean they are not being paid well or fairly. There are a lot of costs associated for the groups that are using the prevailing wage while for those who are not paying that same rate may not incur that same cost. He stated that one of the arguments used at the federal and state levels and that the labor unions have is that people have better training. He stated that contractors at the local level are not likely to train for the one project, that we don't have the massive projects that are going to encourage them to bring that extra skill and education into place. He stated such an ordinance wouldn't get the city a better project, that the same people doing construction now would submit bids for upcoming city projects whether or not prevailing wage is required on the project. He stated that there may be some benefits but feels that the burdens that get added to the city would not justify this ordinance. Councilmember Dietz agreed and stated that he doesn't feel the city has issues of timeliness or quality and that this would increase the cost of projects. He stated that there is no need for this city ordinance. .