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Overpaying for school repairs isn't really 'for the children'

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The Fort Report

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FWCS decision to pay higher wages raises questions about stewardship of $119 million bond

Saturday, November 17, 2012 - 6:43 am

In 2007, the public soundly rejected a $500 million property tax increase the Fort Wayne Community Schools insisted was needed to repair and upgrade its aging buildings. In May, however, 66 percent of voters approved a pared-down $119 million plan after officials vowed to be good stewards of the extra cash.

A largely unnoticed decision this week gives reason to doubt that pledge, however.

By a 3-2 vote, members of the FWCS “common wage” committee adopted union-backed minimum wages on the $4.67 million in construction contracts the district expects to award in the next three months – wages non-union firms insist could inflate the cost to taxpayers by 15 to 30 percent compared to the pay scale proposed by the Associated Builders & Contractors.

The contracts in question are part of the district's annual maintenance budget, not the referendum-approved bond. But if the committee makes the same choice early next year when it begins to consider wages to be paid on $119 million, the amount of tax dollars squandered could be staggering, if the ABC's claim is accurate: between $17.8 million and $35.7 million.

And that would be about as far removed from “good stewardship” as any decision could get.

There is no guarantee the board will do that, of course. The three members who Tuesday supported wages reflecting collective bargaining agreements – attorney Jack Morris, AFL-CIO representative Chris Guerrero and former FWCS Board member “Mitch” Sheppard – would have been free to make the opposite decision, FWCS attorney Bill Sweet said.

And that pretty well illustrates the insanity inherent in Indiana's “common wage” law, which requires local governments to establish wage guidelines on construction projects costing at least $250,000. Not only does the law raise the possibility that taxpayers will spend more and get less, it allows committee members on both side of the debate to make decisions that are both self-serving and arbitrary on the basis of guidelines that are murky at best.

ABC representative Ken Neumeister, a former contractor, noted that the FWCS has adopted ABC wages in the past and argued that his organization's wages are most “common” because most Allen County contractors are non-union “merit shops.” Guerrero countered that wages established through collective bargaining represent the single most “common” scale, and said unions also provide programs to train apprentices and hire veterans.

“Are we supposed to factor in what good you're doing? I don't care who did what,” Morris said, trying to get to the point. “What is the most common wage?”

For the next three months, at least, that question has been answered in a way that is likely to increase costs for FWCS taxpayers. The obvious question, of course is: Why would representatives of a school system that regularly claims to be short of cash willingly do that?

Unfortunately, among all its other shortcomings, this law also invites suspicion – perhaps unfairly. Guerrero's motive was self-evident, as was Neumeister's and that of committee member Al McComb, a non-union contractor. As for Morris, an attorney who serves as executive director of the Allen County Democratic Party, he was supported by unions during a previous campaign for state Senate. And while on the FWCS board, Sheppard had been endorsed by the teachers' union.

So was Tuesday's vote essentially designed to support and reward unions at taxpayers' expense?

“The way I see it, we want to protect workers' wages. They're taxpayers too,” Morris said.

“This (law) puts us in a bad position,” FWCS Board President Mark GiaQuinta acknowledged. Although he doubts ABC claims of huge potential savings – "why would contractors give those savings to us?" – he would prefer to award contracts to the most responsive bidder, and suspects Republicans in the General Assembly may abolish the law next year.

State Sen. President Dave Long, R-Fort Wayne, said the Legislature may consider labor-related bills in 2013 but was uncertain the common-wage issue will be among them.

“We do need a more consistent approach. (But) just because we'll have a supermajority doesn't mean anything will happen,” he said.

This much is certain, however: FWCS officials have indicated they may seek another building-repair bond in the future, but if they refuse to allow the free-market system to work and pay more than necessary for projects covered by that first $119 million, taxpayers should think twice before giving them another cent.

This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel. Email Kevin Leininger at, or call him at 461-8355.