5.6. SR 02-13-2006 - Laserfiche WebLink

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City of Elk River REQUEST FOR COUNCIL ACTION Agenda Section Meeting Date Worksession February 13, 2006 Item Description Discussion of Prevailing Wage Ordinance Item Number 5.6. Prepared by Lori Johnson, City Administrator Reviewed by Introduction This item is on the agenda for Council discussion following a presentation by Amy Bodnar at Open Mike in December requesting that the city adopt a prevailing wage ordinance. Discussion The City of Elk River is 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 projects not already covered by prevailing wage laws such building projects (library, street office expansion, YMCA) and to public improvement (street reconstruction, overlay, sewer lining) projects. Consideration of a local prevailing wage ordinance is a policy decision weighing the benefits of requiring prevailing wages against the additional costs. First, what are the benefits of having a local prevailing wage ordinance? During Ms. Bodnar's presentation, quality of work and on time completion of projects were stated as benefits as well as payment of higher wages to residents working on city projects. As far as quality of work and timely completion ofprojects, the city has specifications and requirements as part of the bidding process to ensure that the city receives quality work that is completed on time whether the project is a prevailing wage project or not. Please see item six in Terry Maurer's memo for more detail on this issue. Second, what are the additional costs? Most of the additional costs come from the labor portion ofthe contract, either in the form of higher pay, additional benefits or both. Another minor cost increase comes from increased engineering overhead to administer and enforce the local ordinance. Again, see Mr. Maurer's memo for more detail on estimated cost increases. Further, even though prevailing wage is not required on all public improvement projects, some contractors pay prevailing wage anyway. This may be due to the type of contractor involved or where the contractor is from. The city is required to accept the low responsible bidder. This process ensures that the contractor is qualified to complete the project whether or not prevailing wages are paid.