COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE COUNCIL COMMITTEE ON LABOR AND CIVIL SERVICE - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, 4/25/02 2 p.m. - - - BILL NO. 000349 - Amending Section 17-107 of the Philadelphia Code, entitled "Contractors: Labor-Management Relationships," by revising the penalties for violation of the prevailing-wage ordinance and providing for issuance of notices of violation; all under certain terms and conditions. PRESENT: Councilman Darrell L. Clarke, Chair Councilman Frank DiCicco Councilman W. Wilson Goode, Jr. Councilman Richard T. Mariano Councilman Angel L. Ortiz Councilman Frank Rizzo - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 4/25/02 LABOR & CIVIL SERVICE COMMITTEE INDEX WITNESS Juan Ramos.................................... Director Fair Labor Standards Unit 3 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349
This is the Committee on Labor and Service for the purposes of hearing Bill No. 000349. Would the clerk please read the title. I'd like to say for the record that Councilman Mariano, Councilman Wilson Goode Jr., Councilman Frank DiCicco, Councilman Angel Ortiz, and Councilman Frank Rizzo are present for a quorum. Would the clerk will please read the title of the bill .
Bill No. 000349, an ordinance 14 amending Section 17-107 of the Philadelphia Code, entitled "Contractors: Labor-Management Relationships," by revising the penalties for violation of the prevailing-wage ordinance and providing for issuance of notices of violation; all under certain terms and conditions.
Thank you. Is there anyone here to testify on this bill. (Witness comes forward.)
Please state your name for the record. 4 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349
Distinguished Members of City Council, my name is Juan Ramos, the Director of the Fair Labor Standards Unit for the City of Philadelphia. I am here in support of Bill No. 000349, entitled "Contractors: Labor-Management Relationship." The Philadelphia Labor Standards Unit, or the PLSU, was established in 1958 to enforce federal and municipal prevailing-wage laws outlined in both the Davis-Bacon Act and in Section 15 17-107 of the Philadelphia City code. Today, the PLSU consists of ten employees who are responsible for monitoring approximately 600 ongoing projects throughout the City. The Labor Standards Unit is responsible for overseeing all projects conducted by any City operating department. The Labor Standards Unit is also responsible for the overseeing of projects conducted by the Philadelphia Housing Authority, the Office of Housing and Community Development, and other similar agencies. 5 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349 Specific duties include, but are not limited to, involvement in pre-bid meetings, involvement in preconstruction meetings, audits of contractors' payroll records, ongoing site inspections, and weekly certified payroll monitoring. The importance of this legislation is to more effectively enforce the City of Philadelphia's prevailing-wage ordinance that sets secure, proper wages for workers on City contracts. Under the existing law, if contractors violate the ordinance, they can only be compelled to pay fines or make restitution after an arduous and, at times time-consuming audit process. It should be noted that contractors can be disqualified from City work for a three-year period for intentional violations of the ordinance or violations of the ordinance on more than one City contract. Presently, the Labor Standards Unit has little real authority to swiftly and effectively impose proportionate penalties for discrete violations of the ordinance. This legislation will maximize the efficiency of the Labor Standards Unit 6 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349 by making proportionate fines apart of the Labor Standards Unit's audit and enforcement mechanism. Let me give City Council an example. Under the existing regulatory regime, if a contractor fails to timely submit a certified payroll to the Labor Standards Unit, the Labor Standards Unit may only fine the contractor $300 after it conducts a time-consuming audit. This limits the Labor Standards Unit's enforcement capabilities while it enables a certain level of contractor noncompliance with the ordinance while an audit is being conducted. Indeed, by limiting the Labor Standards Unit's right to penalize immediately by citation and in a proportionate manner, I believe the Labor Standards Unit is faced to more often with having to debar contractors from doing City work for a three-year period, a penalty that can, and does, cause business failure, penalties that might less frequently be invoked by the Labor Standards Unit if it had more immediate recourse to lesser penalties that would send compliance signals to City contractors more efficiently. The proposed violation process will allow 7 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349 the Labor Standards Unit to officially issue a citation notice, imposing targeted commensurate penalties for each violation detailed. The purpose of this ordinance is to add needed enforcement leverage to the existing process. It is intended to improve our current system of contractor monitoring by empowering the PLSU to enforce compliance on all City contractors fairly and effectively. I'd like to thank City Council for their time, and I invite questions if you have any. I also want to recognize a couple members of my staff as well as members of the Board of Labor Standards.
Thank you. Are there any questions of this witness by members of the committee? Councilman Ortiz.
Mr. Ramos, just for the record so that we can establish a record, in the first paragraph, you present a case in terms of the ordinance and how it's been functioning. In the last year and a half, two years, have any contractors been fined and/or cited? And do you 8 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349 have a list of those contractors?
The answer is yes, we have a list of those contractors. In the last two years that I've been head of this unit, Councilman, there's only been one contractor that has been debarred.
It was a contractor by the name of, I believe, Hubener & Company.
And how many other contractors have been cited for failure to do this?
Well, cited in that they have been notified that they have not complied, that in certain instances, money is withheld until they have complied, which is the purpose of this City Council considering the amendment of this, that in the -- with this amendment, there will be, as you proposed in '98, you can fine a contractor. The problem with the '98, it was a very good bill, but it didn't give us the authority to actually ticket someone for taking whatever time they want to take in complying. So we have a number of contractors. I 9 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349 could get you those numbers of how many contractors in fact have been late in turning in certified payrolls to the Board.
Could you make that list available to the Chair of contractors who have been fined, if any, and those contractors that have consistently not provided the information that they've been asked.
Absolutely. With the exception, you won't get who has been fined 'cause I don't have the authority. That's why we want to amend --
Yes. And in certain cases, we have withheld payments and so they have complied, yes.
Well, you know, those two have been cited down line, and that company that has been debarred, the contractor, is that the only one in the last two years?
And they have -- they submit payroll records to you? How do they do 10 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349 that, quarterly?
It's supposed to be weekly. That's why we want this amendment, so we can --
They're supposed to, yes. And I would say, in all fairness to our contractors, well over two-thirds of them do submit them in time.
And when they submit these payroll reports to you, they have the name and address of the individuals and so on?
And the amount of money that they get paid by skilled trade and labor and so on and down that's detailed in that report?
This is all based on just City contracts or contracts in which the City has some relationship with?
As long as it has City monies, we will monitor those contracts. 11 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349
For instance, if a hotel is being built and it has a TIF, it doesn't have direct money from the City, but it has a TIF, do they have to submit their payroll records to the office?
Councilman, as long as they have federal dollars in the building of that hotel, then they have to submit themselves to Davis-Bacon.
Well, let's say that they don't have federal dollars, that this is just a tax break from City property tax and not paying City property tax and they don't have federal dollars.
Unless there are federal dollars, there is no monitoring of that hotel.
So the Ritz-Carlton didn't have federal dollars, but they did get the 12 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349 tax-increment financing. I think we need to -- I need to --
Yeah, we did monitor the Ritz-Carlton because it had federal dollars
They were generally packaged not only with tax-increment financing, but also with HUD 108, so a lot of the hotels were packaged with HUD 108 dollars automatically would fall under Davis-Bacon.
They do, and I just want to know if all of them are submitting payroll and detailed payroll records to the office.
Could you hold on for a second, Councilman? (Mr. Ramos confers off the record with a colleague.) 13 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349
Could you submit a list to the Chair of all those projects that currently have to submit reports to your office?
Yes. It's public education. And the answer to that is yes, as long as there's federal dollars, most projects, especially big projects, comply with prevailing-wage requirements.
They are to us because the State was not involved in this region, and we wanted to make sure that workers, Philadelphia workers, were being protected, so we --
And we're trying to turn over that job to who it belongs to, to the State. 14 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349
Thank you. Good afternoon. Are you familiar with the letter Eileen O'Brien, the administrative analyst, sent to Councilman Mariano? Are you familiar with the letter that the administrative analyst for the Bureau of Administrative Adjudication sent to Councilman Mariano?
I'm just curious. I'll just paraphrase a little bit about what she has in her letter saying that the Bureau of Administrative Adjudication Code Unit will assist the Bureau of Labor and Standards in enforcing the prevailing-wage ordinance. And basically it says that they will provide for fines for up to $300 and establish the code violation notices maybe issued in the amount of $100. 15 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349 I'm curious as to the process. What is the mechanism? Is someone going to go out and issue a citation as you would for -- and I'm not minimizing your mission here -- a trash violation or a parking violation? Who is the person who will actually issue the citation?
The person who would actually issue the citation would be the inspectors of the Labor Standards Unit. And I have just on this day discussed this issue of how it would actually work with Licenses and Inspections. They have their code violation notice, their CVN, which is a ticket-type of format. So, yes, the answer to that is that it would work similar to what L&I does, and I'll go and more than likely use whatever format has worked for them over there.
Is there a certain number of people that will be empowered or have the authority to issue these citations?
Yes. According to the bill 23 that the City Council has presented through Councilman Mariano, that is addressed in , Section e, that you guys would give us the 16 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349 authority to issue these violations.
Okay, I'm sorry. I didn't get a chance to read the pink copy before I came up, and so I apologize for that. And the decision as to who those inspectors will be is going to come from the -- is that a joint agreement between the Bureau of Labor and Standards or the Bureau of Administrative Adjudication or --
I would have to get that information for you from Councilman Mariano. We're the enforcement unit, so I would suspect that we would be the ones actually citing, you know, violators.
If I may interrupt you. The intent as the sponsor of this bill was exactly what Mr. Ramos has said, but the Bureau of Administrative Adjudication will handle any, like, administration parts of his complaint. (Inaudible.)
It would probably be pretty much like a ticket for -- not to compare it, but what you would do with a ticket for putting 17 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349 trash out, and you get a chance to go adjudicate it.
I understand that, I understand that part of the process, and maybe I'm not clear on it, and that's what I'm trying to get to, some clarification. Does this -- will this bill allow for someone to be empowered to be able to issue the ticket? Is it a typical employee of the Bureau of Administration, which we referred to as enforcement officer, or is it someone other? It's a non-city employee, I assume, or a non-Bureau of Administration of Adjudication employee. Would it be an employee of --
Yes. The way we see this, this would not be an additional cost to the City of Philadelphia.
Although the intent of it is not to be a revenue-generating -- 18 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349
I'm not going down that path. I mean, I support the bill, but I just want to be clear on the legality as to -- you have to have an issuing authority for the citations, and is that what this amendment will address?
The individual who works for the Bureau of Labor Standards has the same authority as the enforcement officer who writes ticket for a parking violation?
Or I like to equate it to what the Councilman equated it before, to L&I versus an officer, but the answer to that as far --
I think they'll be able to ticket. I think the legislative intent was that the Labor & Standards could actually write and do the tickets and the enforcement. Any follow-up would be done by adjudication, which would mean a hearing or --
I understand that part of it. My concern is, will they have the 19 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349 same -- if I work for you, the Board of Labor and Standards, and I have a ticket book, or whatever it is that I'm going to be issuing, do I have the authority -- I mean, by what authority do I have to you the write that citation? Is that covered in this bill? I'm not an attorney so that's why I'm --
I want to make that sure when you do that, what you're attempting to do is --
That it's not going to fall through, you know, the cracks, and that somebody's going to challenge the authority to be able to do that.
Are all the employees in the office also civil servants?
Mr. Ramos, does the Department currently have enforcement powers? 20 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349
So this is adding to the enforcement powers that they currently have, thus allowing them to actually issue a citation.
So they already have enforcement powers with the inability to actually enforce with the citation. Okay, okay.
We can -- we withhold dollars of contractors that are not complying.
Again, my only concern is -- I support the bill; I just wanted to make sure that you had that authority and that it's perfectly clear, because I don't want anybody to suggest that the violation is only worth the paper that it's written on. Because who are you -- whoever that "you" is -- to issue a violation? I just wanted to make sure of that Thank you. No further questions.
Thank you. 21 4/25/02 LABOR & CIVIL SERVICE COMMITTEE, BILL 000349 Any other questions from members of the committee of this witness? (No further questions.)
Anyone else who wants to testify on this bill? (No response.)
There being none, we will complete the public hearing and move into the public meeting.
You're welcome. - - - 22 4/25/02 LABOR & CIVIL SERVICE COMMITTEE PUBLIC MEETING
Councilman Mariano, do you want to make a motion? We're in a public meeting now. Do you want to make a motion to report the bill out of committee.
I make a motion to report this bill out of committee with a favorable recommendation and for a suspension of the rules too.
All in favor of the bill? Those opposed? None opposed. There being none, the bill 16 passes. The bill will be reported out. Thank you. That's the end of the meeting. (Proceedings end at 2:29 p.m.) - - - 23 CERTIFICATE I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia's meeting of the Committee on Labor and Civil Service of Thursday, April 25, 2002, are contained fully and accurately in the stenographic notes taken by me, and that this is a true and correct transcript of same. RE: Ordinance No. 000349 _______________________________, Josephine Cardillo Registered Professional Reporter and Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)