Councilman, if I can, the prevailing wage ordinance has been on the books in Philadelphia since at least the 1950s. But Mr. Kromer has not been subject to --
What causes -- where has the law failed to provide the protection that this bill is aimed at giving? I mean, why does this issue come up at this time? I'm just trying to figure it out. We've done a great deal of construction work over many, many years. And I always thought that the prevailing wage law applied everywhere. 103 6/8/99 - WHOLE COMM. - Bill 990221
This is not an Administration bill, so I think the sponsors can address that.
Well, from your experience, do you know of any need for this particular provision? Is it additional safeguards?
Well, again, the concerns that I have, I think, can be addressed through some further discussion with the building trades, and I think we should pursue that, and that those goals need to be achieved, whether they have this legislation or not. As I said, we do have an obligation to the federal government. We also have a clear agreement -- what I feel is a clear agreement -- to promote the hiring of Philadelphia residents. And I think we all want to achieve both those things.
Well, I think it's important to have the discussion on the Philadelphia residents. There also have been hearings with respect to subcontractors who are very concerned, minority subcontractors who are 104 6/8/99 - WHOLE COMM. - Bill 990221 very much concerned about what they feel are inequities in the grant of contracts, and I'm hoping that's a part of the discussion 'cause we ought to clear that up. And then there is the matter of the living wage bill. Basically, the prevailing wage deals with workers at a higher level of income than the living wage, maybe double or triple the amount of living wage. I think workers at the lower levels ought to also be involved in these discussions. I think this is a good time for us to clear up all of the inequities in the wage system that exist, and labor ought to be recognized at every level as being central to, you know, any kind of effective performance, and they ought to be compensated properly. And the laws that exist ought to be complied with fully, and where the laws are inadequate, they ought to be changed to make sure we recognize, you know, the dignity and the work skills of the various people and that they get paid fairly, particularly where government is involved. And I think government has to be the model employer if government has the 105 6/8/99 - WHOLE COMM. - Bill 990221 responsibility for seeing to it that workers at every level are protected, and in the first instance, certainly, where government is involved. So I hope in these discussions that take place, all of these interests are involved, and we come forth with recommendations which will permit us at one point to deal with the living wage, with the situations between subcontractors and general contractors and with the situation of minority workers. We ought to clear the whole situation up so that Philadelphia can really rank number one nationally in its fair treatment of all workers. If there are discussions, since it is publicly known that I'm very much involved in labor issues, I'm making this declaration publicly 'cause apparently, discussions have been ongoing that I know nothing about. I would feel very much more involved if I were notified of these meetings. I would like to participate in them. I'm a member of the Labor and Civil Service Committee, which seems to me ought to be the committee that's dealing with this issue. And I just hope we finally put to rest all of these 106 6/8/99 - WHOLE COMM. - Bill 990221 labor issues and see that workers everywhere get proper and fair treatment they're entitled to. Thank you, Madam Chair.
Mr. Feder, first let me -- there was an amendment circulated, and I think I heard you either talking about it or reading something that I thought I heard. Is this your amendment. It's a proposed amendment to Bill 12 990221, delete the amendment, the definition of City work?
Okay. Now, with regard to some of definitions, I've figured out pretty much letter o. on , City Agency Departments, Boards and Commissions. Letter p. and then the qualifier, small letter i., double i. and triple i., do you have a list or can you provide us any information on what various agencies come under these definitions or 107 6/8/99 - WHOLE COMM. - Bill 990221 qualifiers?
I certainly don't have such a list, but I can certainly try to develop one if you'd like.
That certainly would be helpful so I know who we're talking about. And lastly, Mr. Kromer, you and Councilman Kenney were engaged in a discussion I think about half to three quarters of which I heard and followed. Can you go back to the issue of some work that's being done and how many units and what triggers what? I mean, what's -- what is that issue about?
As I understand it, Councilman Kenney was concerned about developers who might be circumventing the requirements which trigger the payment of prevailing wage, and those requirements briefly are that for rental housing development funded through the Community Development Block Grant Program, a development eight or more contiguous units trigger the requirement. With regard to the Federal Home 108 6/8/99 - WHOLE COMM. - Bill 990221 Program, another funding source, not as substantial as the Community Development Block Grant, if more than units are contracted 5 together, then prevailing wage is triggered 6 regardless of whether it's rental or sales 7 housing. 8 Now, the issue, as I understand it, is 9 that a particular developer may organize a Phase I 10 development that may be seven units and a Phase II 11 development that may be six units. And there is an appearance that the regulations are being circumvented. And I indicated that to the extent that there are concerns about that, we need to address them because regardless of this proposed legislation, we have an obligation -- we the City Administration -- to HUD to enforce the prevailing wage. And if there's an attempt to circumvent, we need to deal with it.
And this is by the particular developers, either selection or application of what properties to -- this is, I guess, mostly -- this is primarily rehabilitation or is this new construction also?
I would expect it would be 109 6/8/99 - WHOLE COMM. - Bill 990221 primarily rehabilitation, but I would want to look at the specific cases that are the subject of the concern.
Okay. Now, on the handout that you referred to, I think you indicated that it was a part of your testimony, although when we got your testimony, it wasn't a part of it.
No, it's around, I just got my hands on it. If you can just walk us through some of these numbers. This is Cecil B. Moore Stage A?
Now, down at the bottom of that same row, it says "Total Workforce Participation, 271." What's the 271 number?
The 271 at the bottom refers to all of the workers on the venture. The statistics in the box refer to Philadelphia workers. 110 6/8/99 - WHOLE COMM. - Bill 990221
Oh. The 271 number can't be the total of -- it's not the total of the 50, the 105, and 92.
No, it should be the total of those plus the total number of non-Philadelphia resident workers.
Right, I'm just -- I'm trying to get some of these numbers to add up into something that I can understand.
If you took the first line in each of the three categories, under the box --
Right, that gets you 147, I think, right? I'm sorry, 247.
That is the total number of Philadelphia resident workers on this particular job out of a grand total workforce of 271. And so the difference between the Philadelphia resident figure and the 271 would be the nonresident workers on the job.
No, that would be the total workforce -- resident and nonresident.
All right. I'd like to resubmit that -- was an error in the calculation. Let me go through again my understanding of the breakdown. The figure in the last category, in the left-hand column, Total Workforce Participation that currently reads 271 should instead read 247, and I will resubmit that with the correction. The 247 is the entire workforce of Philadelphia residents plus nonresidents. Of that total workforce of 247, 92 were nonresidents. That is in the category just above that, second to 112 6/8/99 - WHOLE COMM. - Bill 990221 the last, number of workers outside of Philadelphia. And that means that the Philadelphia resident workers would amount to 155 -- 50 from the project area and adjacent zip codes, that first line in the first category below the box, and then 105 Philadelphia workers from other areas, in the second category.
All right. So it's 155 out of the 247 live in Philadelphia.
50 of whom live in the adjacent zip codes to the particular project question.
Right, okay. And with the 247 number now being the total workforce participation, I assume you'll have to make some adjustment to the 123, the 9, and the 139 because I assume that that's now supposed to add up to 247 also, down at the bottom?. 113 6/8/99 - WHOLE COMM. - Bill 990221
We'll double-check those figures and make whatever change is needed.
Okay, and the reason you raised -- my recollection is that you raised the this issue in the context of last Tuesday's issue with regard to -- I think those figures indicated that on one project, it was 55 percent residential, Philadelphia participation, and 54 percent on the other, giving us 45 and 46 nonresident participation on two large projects.
Again, is it my recollection of your earlier testimony that in light of that, as compared to this, that the extension of the particular provisions in front of us may affect the kind of numbers that we're seeing on a Cecil B. Moore Stage A project versus some of the other projects that we were talking about last week?
I can't predict that but what I wanted to make clear is that I believe 114 6/8/99 - WHOLE COMM. - Bill 990221 we're all concerned about the employment of Philadelphia residents, and whether -- regardless of this legislation and regardless of whether prevailing wage applies or not, the employment of Philadelphia residents has to continue to be a priority. And I'm expecting that, among other things in the discussions that are upcoming with the building trades, we'll talk about Cecil B. Moore Stage B, which is about to get underway, and seek to equal or exceed the Philadelphia resident employment goals that we see here on this development, which I believe was a mix of prevailing wage and non-prevailing wage.
My last question is, do you have any perspective on why these numbers, which end up being 63 percent resident, 37 percent nonresident, why these numbers are somewhat different, 11, 12 -- I'm sorry, about 8 or 9 percent different than the other projects?
There really is a lot of variation from venture to venture, so it really would not be accurate to say, Well, all downtown development is like this and all neighborhoods are 115 6/8/99 - WHOLE COMM. - Bill 990221 like that. Just as you can't say that with respect to prevailing wage versus non-prevailing wage. The bottom line is the same, though, as Councilmembers made clear, we need to do more about Philadelphia resident employment.
Thank you. The Chair recognizes Councilman Mariano.
Thank you, Madam President. Mr. Kromer, to follow up on Councilman Nutter, you don't think that the prevailing rate and the neighborhood employment are directly unproportional, as one goes up, the other one goes down?
I don't think they're necessarily incompatible with each other, and everyone I've spoken to seems to be in agreement that we need to work together to achieve both goals.
I just wouldn't want you to be on record as someone to interpret that you think they were inversely proportional. 116 6/8/99 - WHOLE COMM. - Bill 990221 I would have to add that, you know, the prevailing rate -- and the carpenters are going to get up here and they're going to testify, but they have different rates for housing than they will for a commercial job. So there's only one group in the City that I know of -- well, there's three actually -- Congreso de Latinos Unidos, Top, and there's another one whose name escapes me that actually works with the carpenters, and I'm looking at Lenny Lombardo there. Lenny has been responsible for getting minority Philadelphia residents in the program. And I think from a person that comes from a building trade background, and I can think back when I started in the building trades in the mid-'70s, a lot of the minority members that were in my apprentice class don't live in the City of Philadelphia by their own choosing. Now, when I speak with Alva Martinez, and when she has us speak to the classes of these young men and women that are learning to be carpenters and electricians and plumbers and sprinkler fitters and sheet metal workers, I say, Look, do me one 117 6/8/99 - WHOLE COMM. - Bill 990221 favor, I mean I can't hold you to this, but stay in your neighborhood, you know. That might be more like a social problem, but I don't think we can cure all the woes of the City of Philadelphia and put it on the back of the building trades that are prevailing rate. I know you didn't intend that to happen, but people need to reinvest in their own community. But, I'll tell ya, they can reinvest a lot better in their community if they're making a decent union wage that Lenny and all those guys make as carpenters. I mean, no matter what race or socioeconomic background. And Top Win and Congreso gets people to that. But this isn't something you just hand someone where you get out of high school and say, Hey, you're a union carpenter. It takes four, five, six years to be a carpenter. Then ten years after that, after they turn their ticket to become a real good carpenter. When you turn your ticket after apprentice school, most of yooz get laid off, right? I mean, if I was a foreman -- I mean, you don't -- you'd rather have somebody with 30 years' experience putting up that dry wall or 118 6/8/99 - WHOLE COMM. - Bill 990221 doing that wood or doing the moulding or whatever it is that you guys still do than have someone who's been out of apprenticeship for a year. That's business. The problem -- and there's always going to be a problem here, and we can talk in coded messages and we can try to figure out, and I think the bill -- and I was one of the sponsors of the bill. The bill has good intentions, but we have to realize there's a bigger problem, and it's being addressed at different levels, but it's going to take a long time to figure that all out. I mean, if building trades was traditionally a white male group for 20, years, 16 it isn't any longer. Now, I can't speak for the 17 carpenters but I can speak a little bit for the 18 electricians. We can send you all shapes, sizes, 19 colors and sexual preference, and that's the way 20 they work it. 21 It is a business, it is a business, and 22 these guys are businessmen, and they have 23 something to offer. They don't have time on a 24 construction job to sit down and be concerned 25 who's working with you. If it's a man or a woman 119 6/8/99 - WHOLE COMM. - Bill 990221 or someone who has different philosophies than you. It's let's get this job done and then get on to the next one. Very many times, it's get this job done and then get laid off. That's what they face every day. So my second question is to Mr. Hankowsky. Mr.
Hankowsky, you said on of your testimony that you're concerned about special firms and businesses for projects with PIDC and PAID that you provide financing or land to, and you say sometimes they have specialized equipment that require manufacturer installation. Do you think this bill will affect the installation of this special equipment?
I think it could. I guess I've been around long enough that I've dealt with enough peculiar problems over the years, and I think generally, we've worked out any issues that have arisen with the building trades. But occasionally -- particularly today with technology companies where somebody makes some kind of piece of equipment that only they'll install because only they'll warranty it. And, you know, it's true, they come from some other place, they come 120 6/8/99 - WHOLE COMM. - Bill 990221 in, you know, Philadelphia and they put that in place.
Yeah and does something. So I just don't want to create a scenario where when we're trying to work with these companies to grow their jobs and businesses in Philadelphia, we're creating some encumbrance obstacle, snag that because this would sort of a one-size-fits-all bill, it would just drop on top, and I wouldn't be able to say, you know, you could do that.
Can I be correct in assuming that your concern is -- and please correct me if I'm wrong. Your concern is keeping businesses from the City because they may feel that with the encumbrance of this bill, there would be a further labor problem. And you don't want somebody to say, Look, Bill, I want to come here, but if I got to pay the riggers or the electricians or the carpenters that great rate that they make, I'm not coming to your city.
Well, it's not just 121 6/8/99 - WHOLE COMM. - Bill 990221 that gross.
I mean, I've dealt with a companies where there was actually a very specific kind of room that would make it pressure that had to do with some kind of pharmaceutical thing that they were, you know, that they were subbed like to Merk or something. And they said this is made by company in Ohio, and they come out and they put it in and, you know, we can't quote/unquote -- you know, we're going to pay whatever that company charges us to pay it, but they may or may not be union, they may or may not be prevailing wage. I just don't want that to be a problem.
And we've also had companies, as I said in my other comment, where they've, you know, they have their own machinists, there may be a nonunion operation, but they're an operation, and we lend them money and they buy a piece of equipment and they have their machinists 122 6/8/99 - WHOLE COMM. - Bill 990221 put the piece of equipment in.
But we're not inventing the wheel here. I mean, this has all been done, and you have Philadelphia area labor management, you have Deputy Mayor Murphy who does a fine job on this. I mean, this all stuff -- and having been a business agent, I can tell you what's not in the scope of work. I mean, most of the arguments on the jobs are between the trades. It's not with the trades. If there's something that the carpenters can't do, they know what they can't do. There's no way -- or the electricians, they're not going to try to hook up some special equipment because they understand that if it gets messed up, the person that they work for may be responsible for fixing that equipment. That's all in the scope. When it's built, it's in there. And before it's built, that's in the scope of the job.
But your earlier comment is one of my concerns, which is, as much as things are better today than they were, we are still in a very difficult, competitive environment. I mean, I met two companies last 123 6/8/99 - WHOLE COMM. - Bill 990221 week, each of which told me that if, you know, if we stay in the City of Philadelphia for ten more years and sign a lease, it's going to cost us 1.3 million more than it's going to cost us if I go to Conshohocken, what are you going to do about it? So --
Well, bring 'em down to my Keystone Opportunities Zone on Tioga Street.
Well, those are some of the options, but we continue to be confronted with that, you know, cost of doing business in the City, which isn't driven by this. It's just, you know, 'cause I don't want to create any barriers, if I don't have to.
All right, thank you. No more questions, Madam Chair.
Thank you. The Chair recognizes Councilman Clarke.
Thank you, Madam President. I don't know if this question should be directed to Mr. Kromer or to Mr. Feder, probably 124 6/8/99 - WHOLE COMM. - Bill 990221 both. It's related to the language in the bill 3 and I'd like to get your interpretation. When you talk about off-site fabrication of sheet metal ducts and other building-related materials, is it your interpretation that this would also include modular housing? 'Cause we've done quite a of bit that here in the City of Philadelphia here of late.
Councilman, I suspect that none of the three of us knows enough about off-site fabrication to be able to answer that question.
No, I don't know, but we can research that and get a response to you.
Okay, thank you. There's another issue I have. As a staff person for some years back, I had the pleasure of working with staff at the RDA and the Office of Housing when this whole issue, as it relates to non-prevailing wages came about. The thrust was to reduce the cost of housing. And what I would like to know is, has there been an analysis on that since this has been 125 6/8/99 - WHOLE COMM. - Bill 990221 going on for about four or five years ago? Has the bottom-line unit costs been reduced since that was the basis for one of the basises (sic.) for doing that?
We can provide you some information with a breakdown of the cost of prevailing versus non-prevailing jobs so that you could have a look at that, yes.
Thank you. The Chair recognizes Councilman Ortiz.
Thank you, Madam Chair. Mr. Kromer, could you give me -- what is Cecil B. Moore Stage A? What is that? And what does it consist of? What is Stage A?
Cecil B. Moore Stage A is the first phase of the development in the Home Ownership Zone area between 17th and 20th Street, between Master and Montgomery. It consists of 30 sales housing units, most of them new construction and most of them located on 18th Street. So this is all sales housing in the 126 6/8/99 - WHOLE COMM. - Bill 990221 first phase of a larger development in North Philadelphia.
Is that the first phase of building or of the total construction of it?.
First phase of the total development. But what does Stage A mean? I mean, does Stage A mean the house fully fitted?
These workers are completing those houses in the next stage, which I refer to as Stage B, is in another nearby site, again, starting new.
Do you have breakdowns of the minority workers and the percentages of that, you know, African-American, Latinos and so on?
Yes. Again, we will check the figures here on the left-hand column, but you will see what is contained in the material distributed. It does break down minority and female. We can further break that down by race and ethnicity, if that would be useful. 127 6/8/99 - WHOLE COMM. - Bill 990221
Do you have the same breakdown in the subcontractors and contracting area?
Do you have the same breakdown in terms of skill level?
A skill level -- laborers, electricians, carpenters and so on, a breakdown in terms of minority participation in all of those skill levels and so on?
In terms of people and developers, do you have a listing of developers or reports of developers and the way they have tried to circumvent the prevailing wage 128 6/8/99 - WHOLE COMM. - Bill 990221 legislation?
No, I don't. That's why it's important that we know of any complaint along those lines because we do have an obligation to enforce the rules which are now in place.
On behalf of PIDC, we may get one or two instances a year where there's some issue that comes up regarding prevailing wage in some construction project. Sometimes it's a sub issue, sometimes it's an installation issue. They're usually resolved.
The Chair recognizes Councilman Kenney for a point of order.
Point of clarification. 129 6/8/99 - WHOLE COMM. - Bill 990221 There have been ongoing discussions between the building trades and the Mayor's office and their representatives about specific complaints about specific developers that I am not in a position here, in a public record, to divulge, but privately would happy to tell you, and I'm sure that they would also tell you, but there's been ongoing sometimes vociferous and angry conversations that have gone on with the Mayor and the Mayor's people and representatives of the various trades over this issue. So --
Well, I guess they were dealing directly with the Mayor. I don't know whether or not Mr. Kromer was informed by the Mayor as to these meetings or these complaints, but there's been at least two or three meetings that I know of that have already taken place. And specifics about what their complaints were discussed at the meeting quite heatedly. So I mean, there is an unofficial record, I guess, of the developers involved and the specific complaints, and those representatives 130 6/8/99 - WHOLE COMM. - Bill 990221 -- when representatives of the carpenters union here today come to the table, I mean, if they have something --
Do those developers continue to receive contracts from the Mayor's office?
I attended one meeting of that group, and there was a reference to Community Development Corporation projects, but there was no 13 specific issue that was raised there.
Well, I think that should be a part of the record of the developers doing that. That should be a part of the record.
But it confounds me that that information is not -- if the discussions are taking place in the Mayor's office but the Office of Housing Economic Development gives the contracts, how come those names are then not filtered down to OHCD so that OHCD can then put certain regulations saying you're not going to get 131 6/8/99 - WHOLE COMM. - Bill 990221 a contract if you continue these practices? That's confounding. It seems there's a lack of communication between the Mayor's office and the Office of Housing and Community Development.
I'm only supposing that perhaps there's a motivation on the Mayor's office not to the eliminate some of these developers for various reasons. So perhaps there's no reason for Mr. Kromer to even know about it. There may be an opportunity to protect some of those developers as opposed to getting rid of them.
Well, yeah. We have a living wage legislation that I'm quite concerned about that I believe ties into very closely into what we're talking about here. And I hope that now we can we can begin tying that in with what we're discussing. Mr. Kromer, I'm interested in the second page of your testimony that says that -- and I would like your explanation of it. That for this reason regarding repair programs to maintain prevailing wage would substantially reduce the 132 6/8/99 - WHOLE COMM. - Bill 990221 number of Philadelphia-based neighborhood contractors and companies participating in OHCD funding repair programs. We're talking about leveling the playing field in terms of getting minority folks to be able to enter into this process and participate. Obviously, one of the ways of doing that is with minority-based contractors. I'm not -- I'm interested in raising the wages of minority contractors that they pay, but I'm also interested in maintaining that they are able to compete. Explain that to me because I've gotten some questions, and there are divergent points of views on this issue. And I think if it can be resolved in which minority contractors can then play on a level playing field and also pay a living wage and a prevailing wage. But explain that -- your statement for me along those lines, will you?
My understanding, through the Philadelphia Housing Development Corporation, which administers the biggest repair program, the Basic Systems Repair Program, is that a 133 6/8/99 - WHOLE COMM. - Bill 990221 substantial number of the contractors participating in this program are small, neighborhood-based contractors which do not pay prevailing wage, which work on a variety of different types of construction activities, many of them not City-funded.
What's the level of contracts? What is the amount of contract in terms of monies?
Oh, I can provide you with a breakdown that will show the program as a whole and the level of minority neighborhood participation and the dollar amount that that represents, but it is very substantial.
The cost varies. In some instances, it's below $2,000 per unit and would not fall within this proposed ordinance. A substantial number of other cases, however, do exceed the $2,000 threshold. But, again, I can provide that breakdown for you for a year's worth of repair cases. 134 6/8/99 - WHOLE COMM. - Bill 990221
But the statement you make is that it would substantially reduce the number, and I would like you to substantiate that.
I want you to expound on that paragraph, on that phrase, that it would substantially reduce the number of Philadelphia-based neighborhood contractors.
My understanding is that those small neighborhoods contractors would not be able to participate in a program that required the payment of prevailing and, therefore, would drop out of the program.
Because they are working on other construction activity which is not City-funded and could not afford to charge on those construction jobs the level of contract amount that would enable them to continue to support prevailing wage. Therefore, their only option would be to drop out of the program so that they could continue to afford to do business.
Well, because they're working on other programs, they would not 135 6/8/99 - WHOLE COMM. - Bill 990221 be able to bid on City programs? Wouldn't the fact that the City at least would be presenting a level playing field for all contractors and asking that all contractors pay at least the prevailing wage give minority contractors -- we had this discussion in my office last night and went back and forth. Wouldn't that give minority contractors a level playing field in terms of being able to bid on a prevailing wage basis?
My understanding is that by paying prevailing wage, some of the construction work that those contractors are doing now would not be economically feasible and would be less than break even.
I would like you to explain that to me. You mean that if they get the City contract, they would not be able to do the outside contracts?
That's my understanding, that there's a mix of contracts, including some non-City construction activity which would not be feasible if prevailing wage were to be paid.
I'd like an 136 6/8/99 - WHOLE COMM. - Bill 990221 explanation. Really, I'd like to talk to minority contractors because this is -- if you're putting a level playing field which, is what we're talking about here, and I'm a minority contractor and I'm then competing against, let's say, Mr. Keating, Keating will have to pay the same wages that I'm paying. I'm just putting it as an example. You know, I know Keating is not going to go for this type -- it's a name.
But there aren't really prevailing wages yet. They don't have classifications in their union for this yet. I don't think they have somebody that just does windows. You know what I'm getting at? We might be talking about stuff that's not really there yet. We may, in the long run, by this -- just one minute -- be able to help people that have a chance of getting into the union. They may be able to go into the carpenters union at a classification that they never had before.
I'm trying to get an understanding because he's saying that they would be working here, but then they would lose the jobs 137 6/8/99 - WHOLE COMM. - Bill 990221 outside and they would have to choose one or the other. That's what you're saying?
I'd be glad to join you in some discussion with some of those contractors just to talk that over. I think that the more we all know about those issues, the better.
I believe Councilwoman Tasco is next if she's available.
Yes, yes, yes, yes. When Councilman Kenney discussed the problems, he cited a problem that caused the initiation of this legislation because he couldn't get a resolution with the administration. If a developer bids on a project and doesn't follow the project as bid on, wouldn't he be breaking the law, the basis of the contract, by not paying prevailing wage?
If he says he's doing a contract, he's building 20 houses and how 138 6/8/99 - WHOLE COMM. - Bill 990221 ever you say that he break it up, I mean, where's your oversight, where's your monitoring?
Absolutely, it would be a violation of the regulations, and we at the Office of Housing and Community Development would be responsible for enforcing them.
Well, is it that that issue can't be resolved? Why are we here discussing this when there hasn't been a problem when you all haven't addressed the issue that this developer is breaking the law?
Again, I don't know of any complaint, any specific complaint. I expect to hear what they are and to respond to them. But as of now, I have nothing that has been reported to me in the way of a complaint. If there is, though, we're legally obligated to deal with it.
The complaints traditionally go to the Office of the Wage 139 6/8/99 - WHOLE COMM. - Bill 990221 Standards, which is the Deputy Mayor for Labor. And they investigate with their staff the allegations normally brought by the union against a particular contract or developer. So I don't know whether or not Mr. Kromer would be getting those specific complaints initially, but the Department of Wage and Labor Standards would get those complaints. Mr. Murphy was here earlier, but he's not here and maybe --
Madam President, I would like to engage in a conversation with Mr. Kenney, Councilman Kenney. If the wage -- if the complaint is waged with the Bureau of Labor Standards with the City?
And they know that they have a contract with OHCD, and on the basis of contract, they're breaking the law, where is the problem? Nobody's enforcing the law?
So we're here to 140 6/8/99 - WHOLE COMM. - Bill 990221 change the whole apple cart because we can't get the Administration to make the developer or OHCD follow the law and honor the contract as presented?
I don't know if it's changing the whole apple cart because, I guess, as was stated earlier, there's been a prevailing wage standard in the City since the 1950s. I just think that some of this work on large-scale development has fallen through the cracks from traditional large construction projects down to the end of home repair. Somewhere in the middle comes this nuance of rental and for-sale housing development that is paid for by dollars and tax credits that funnel through City-related agencies. And it's not as direct link. So I think what this is attempting to do, either through amendments that Mr. Feder recommended or other changes, is to close that gap in that nuance of construction work that is now, in many instances, being circumvented, or circumventing prevailing wage standards.
What we can do, 141 6/8/99 - WHOLE COMM. - Bill 990221 Councilwoman, is, with the Deputy Mayor for Labor and the Redevelopment Authority, and I just heard from one of their staff, is identify every complaint that has been received and how each of those is being addressed. Regardless of this proposed ordinance, we have an obligation to follow up, and we will do that.
But Councilman Kenney, if the Administration, including OHCD, were to honor the existing prevailing wage, how are they breaking the law?
Well, technically, the developer probably isn't breaking the law by doing the development in phases. It is an interesting idea to try to circumvent the law that you're holding. So, for example, if the prevailing wage standards are triggered at eight properties or more, and the guy's doing five in Phase I and four in Phase II and five in Phase II, the letter of law is not being broken, but certainly the spirit is being broken because he's paying his workers a much lower wage rate to do the work that should be done prevailing wage, and he's pocketing the 142 6/8/99 - WHOLE COMM. - Bill 990221 profit. And what we're saying is that maybe technically, he's within the law by doing it in phases. But in the spirit of the law, he's really trying to circumvent what we in the State and in the federal government have intended to be fair wages for a fair day's work.
How does the amendment keep him from going through various phases?
'Cause it will require him -- the way it is written now with that amendment would require the prevailing wage in everything over $2,000 in all the development, so that the eight-property trigger wouldn't be effective or would be moot. It's anything over $2,000 would be at the prevailing wage.
Okay, thank you. Mr. Kromer, what is the prevailing wage rate versus the non-prevailing wage rate? What's the disparity? Are the carpenters going to talk 143 6/8/99 - WHOLE COMM. - Bill 990221 about that?
All right, that will be my question. Okay, thank you.
Madam President, first I have a general objection to the entire procedure. I don't know why every member of Council -- and every member of Council is a member of the Committee of the Whole -- why we're dealing with a matter like this instead of having it go through one of the regular Council committees so that we can get all of the facts, spend whatever time is necessary over many days or weeks. And the only problem is that I'm just having difficulty getting a handle on and which the City says they haven't got any complaints about, the City departments that are involved with this. I don't know whether we're trying to solve a problem that doesn't exist. It seems to me to be clearest and why it's a matter of the Committee of the Whole, I don't understand. I understood both of you, Mr. Hankowsky 144 6/8/99 - WHOLE COMM. - Bill 990221 and Mr. Kromer, to have said that you haven't gotten complaints of the kind that we're talking about and that if you had gotten complaints, you would be seeking to resolve them. You know, I thought this might have to do -- maybe it does, I can't find out what the problem is. We had hearings -- I think Councilman Kenney was the Chairman of a hearing in which there were a group minority contractors complaining. I'm trying to see, does that fit into this area or doesn't it? And that's why I said it's good, Mr. Kromer, that you're dealing with that. I thought maybe it's involved with living wage, I still don't know. But it seems to me if we deal with wages, we ought to deal at every level. Madam Chair, I just don't see what the problem is that we're dealing with. If it's a matter of some contractor trying to avoid the law, I think we've got all kinds of procedures available to deal with that, and we have representatives of the City involved in this work who say if they know of a complaint, they would try to address it. I don't know what it's doing 145 6/8/99 - WHOLE COMM. - Bill 990221 on the floor of City Council.
If I could recommend, during the period specified by Councilman Kenney, between now and the time when the consideration of the bill is resumed, we can communicate with one another through the Deputy Mayor for Labor and others, the implementing agencies, and identify all of the complaints that those other agencies and the Deputy Mayor are aware of, record them, and identify how we are following up so that that information will be in the hands of Council prior to the reopening of this issue.
Well, I am concerned, Mr. Kromer, about your statement that in the home ownership repair group, is that where you feel that this bill might have an adverse effect?
Now, you say the repair work is financed by Community Development Block Grant funds.
I thought the prevailing wage law applied to all federal 146 6/8/99 - WHOLE COMM. - Bill 990221 funding. Doesn't the Community Development Block Grant funds, isn't that federal funding?
No. When Community Development Block Grant funds are used -- and the Block Grant is federal, but the prevailing wage only applies to rental development, so owner-occupied repaired does not trigger prevailing wage.
I see. That's another nuance. And I always understood that the contracts -- and, Madam Chair, I'm stunned by the language in the bill which talks about $2,000. I always thought that the issue was in projects in the area of $1 million, not in the small home ownership projects. Is that a new interest that's being --
Excuse me, Councilman Cohen. I believe that Councilman Kenney has a point of order.
We had discussed 147 6/8/99 - WHOLE COMM. - Bill 990221 earlier in the course of this hearing that that is basically off the table, as far as discussion. The home ownership repair program is not something that was intentionally included in this particular legislation and will be removed at some future date because it's not something that really is at issue. So, I mean, it keeps on being raised but it's not --
The point of order is you're arguing about something we're not arguing about. We're not arguing about the home ownership --
Well, I disagree with you. I think I'm arguing about something that's the subject of this bill.
And I don't appreciate these points of order that are being raised to obscure facts. I think points of order ought to be limited to areas that are appropriate, and not whenever Councilman Kenney feels like 148 6/8/99 - WHOLE COMM. - Bill 990221 interjecting a point of order in order to disrupt the discussions that are taking place.
Madam Chair, I'm sorry, I will refrain from points of order that Councilman Cohen doesn't agree with.
I just wish you would operate in the proper fashion. It's the only complaint I have. But I don't -- is this a change of policy by -- I mean, what is it that we are considering here? Why are we all gathered here teething this as a very important problem when we haven't even defined the problem, we don't know what the problem is? I mean, is this a mystery session today, you know, where we're trying to solve a mystery? If the administration representatives, Madam President, don't know what the problem is and say they have not been confronted with it, but if there is a problem, they'd be happy to deal with it, I think we ought to go ahead and let them deal with it.
Can anyone at the table, the witness table respond to Councilman 149 6/8/99 - WHOLE COMM. - Bill 990221 Cohen's question?
I believe that there's testimony on this, and I'd recommend hearing and following up on the testimony.
Mr. Kromer, could you indicate to what extent do you think it would have an adverse effect on the small home improvements?
Yes. Again, as I responded to Councilman Ortiz's question, I believe that a substantial number of the small neighborhood-based contractors currently participating in the City-funded repair programs would not continue to participate. But I think it's been indicated that these repair programs would not be a part of the bill. At the same time, though, with Councilman Ortiz, I think it is worthwhile to have some further discussion with some of these contractors about some of the issues that you've brought up, and I'd be interested in following up with you and other interested Councilmembers.
All right. I'm 150 6/8/99 - WHOLE COMM. - Bill 990221 lost. I just wonder, has the union raised the issue that they want to be involved in these small home ownership contracts? Has that been raised with you?