It shuts out open shop contractors, and imposes a new “slush fund” tax.
This column was posted at Watchdog.org with minor revisions a short time ago.
Cincinnati City Council is determined to make what the Cincinnati Enquirer has called “the biggest public works project ever undertaken in Hamilton County,” where Cincinnati is the county seat, a union-only, “slush fund”-generating enterprise.
The project is a federally mandated $3.2 billion, 20-year upgrade to sewer systems under the jurisdiction of the Metropolitan Sewer District of Greater Cincinnati, encompassing all of Hamilton County and portions of two adjoining counties.
Hamilton County owns MSD. The City of Cincinnati merely operates it, but recent legislation passed by council attempts to dictate the project’s rules.
County leaders are justifiably furious. The Enquirer reported a week ago that its commissioners, two Republicans and one Democrat, “halted all sewer projects until Cincinnati City Council backs off two rules that govern who can bid on sewer project work.”
The first element of Council’s gambit involves weeding out potential MSD project bidders based on their track record of graduating building trades apprentices. As explained by the Enquirer’s Sharon Coolidge:
The “responsible bidder law” says that companies that bid on sewer projects that cost $400,000 or more must run apprenticeship programs that have graduated workers each of the last five years or partner with a group that has.
The law’s “each of the last five years” requirement would effectively shut most if not all non-union contractors out of the bidding process. Here’s why.
Apprentice programs are designed, through a combination of classroom and on the job training, to impart specific, targeted skills to trainees so that they can become journeymen in one of the building trades such as carpentry, masonry, or plumbing.
Union contractors obtain their workers by contacting the union locals of the various building trades whose services they will need to complete their projects. These unions either run their own apprenticeship programs or do so in cooperation with other union locals, and graduate many members each year.
Larger non-union companies typically have their own apprenticeship programs, sometimes calling them “craft training.” Though they may have multiple graduates in any given year, they do not consistently generate graduates each and every year.
Chris Runyan, President of the Ohio Contractors Association, a statewide trade association which he said has mostly union but some open shop contractors among its members, told me on Wednesday that under the law as written, two of Greater Cincinnati’s largest non-union general contractors will be shut out of all MSD project bidding. That’s because even though each company has had several years with multiple graduates from their state-certified apprenticeship programs, they have also had at least one year in the past five with no graduates. Smaller open shop contractors, some of whose in-house programs aren’t certified (another one of the law’s requirements), or who utilize outside programs which aren’t, will also be frozen out.
The second element of the law to which the county has objected is its requirement, as described by the Enquirer, that contractors pay a new tax — of course, the law doesn’t call it a tax, but that’s what it is — of ”10 cents for every hour each worker clocks into a special fund Cincinnati City Council created.” The city will then supposedly direct the money collected, which is expected to amount to an estimated $3 million over 20 years based on an estimated 30 million labor hours needed to complete all phases of the work, into “pre-apprentice programs.”
But what is a “pre-apprenticeship program”? According to HBI, a non-profit corporation devoted to workforce development in the building trades, it is a “construction curriculum specifically designed to teach at-risk and underserved populations including academically-challenged individuals.” The Enquirer’s Sharon Coolidge describes it as “a way to train unskilled workers who lack basic tools – reading, math, punctuality – to be construction workers or tradesmen.”
Both attempted definitions oversell what pre-apprentice programs can and do accomplish. In layman’s terms, pre-apprentice programs are remedial education programs sprinkled with a dash of motivational and self-esteem training which have a spotty track record of success in getting their participants ready for a real-world job. Additionally, when managed by government-funded or government-selected entities, these programs have all too often seen more than their fair share of wasteful spending.
One recent such example occurred in southwestern Ohio. A November 2012 reportby Ohio’s Inspector General found that “over one quarter, or $255,000 of all expenditures” out of $1 million in federal stimulus money granted to the Constructing Futures jobs training initiative were questionable because they were impermissible under the grant’s terms or lacked adequate documentation. Even the unquestioned expenses seem largely to have helped organizations involved in administering the grant defray already existing overhead costs.
Runyan and other critics, including dissenting City Council members, have accurately described the pre-apprentice training fund as a “slush fund.”
If it seems like the law was specifically tailored to the unions’ wishes, it’s because it probably was. Coolidge has reported that “Rob Richardson Jr., who represents a labor-management fund called Laborers Employers Cooperation and Education Trust, has been at (Councilman and law sponsor Chris) Seelbach’s side throughout the responsible bidder process.”
One thing is certain: If the responsible bidder law stays, contractors won’t eat the 10 cents-per-hour tax. They will instead consider that additional cost in preparing their bids. MSD ratepayers, most of whom are outside Cincinnati’s city limits, will ultimately bear the tax’s burden.