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FWCS chooses higher wage rates for $23.7 million in projects approved by voters

Non-union wages could have saved taxpayers millions, critics insist

Wednesday, February 13, 2013 - 12:01 am

The first $23.7 million in Fort Wayne Community Schools projects funded through a $119 million tax increase approved by voters last year will pay union-level wages that critics say could unnecessarily increase costs by millions of dollars.

But members of the committee that made the decision Tuesday said they were obligated to follow the law, not to get the most work at the lowest price.

At issue was Indiana's “common wage” law, which requires most governments to establish minimum wage scales on construction projects costing $350,000 or more. The law requires each government to create committees that will establish wage rates for a period of three months – a decision that is supposed to reflect the level of wages most commonly paid in each county for specific jobs.

The FWCS committee Tuesday voted 3-2 to reject wage rates proposed by the Associated Builders and Contractors, which represents non-union “merit shops,” in favor of the scale offered by the AFL-CIO. ABC representative Ken Neumeister told committee members ABC wages average about $12 to $20 per hour less than union wages, a difference that could lower a project's cost by 15 percent to 30 percent, depending on the amount of labor involved.

“(Both wage scales) are legal,” committee member and ABC contractor Al McComb said. “Our job is to follow the statute and do what is best for the people who will pay the bills. We're obligated to protect the taxpayers. Why pay some guy more to do the same job just because he's working for FWCS?”

A total of 10 projects costing an estimated $24.7 million are covered by Tuesday's decision, including eight that will be funded through the $119 million referendum. Largest projects include improvements to Memorial Park ($7.6 million), Harrison Hill ($7.5 million), temporary modular classrooms for Snider High School ($4 million) and chillers at six schools ($3.3 million).

Under Neumeister's calculations, ABC wages could have cut the cost of $24.7 million in projects by $3.6 million to $7.2 million. McComb and Neumeister, a former contractor, voted for ABC wages.

Voting for union wages were AFL-CIO representative Chris Guerrero, attorney Jack Morris and former FWCS board member “Mitch” Sheppard. Morris and Sheppard were also on the committee that supported union wages three months ago and were reappointed to the committee at Monday's school board meeting.

“If our purpose was to pay the lowest wage, there wouldn't be a regulation at all,” Morris said, noting that union collective bargaining agreements that mandate the same pay for large numbers of workers is a “compelling argument” in the AFL-CIO's favor.

But if that were the final word, McComb said, it would also make the hearing unnecessary.

Neumeister insisted both wage scales would pass legal muster – a Southwest Allen County School committee adopted ABC wages on $2 million in projects earlier Tuesday – and said the fact that about 94 percent of the contractors in Allen County are non-union indicates ABC wages are most common.

The committee establishes minimum wages but contractors can pay more.

Sheppard said she doubts the taxpayers would have benefited even if the committee had chosen ABC wages, implying contractors would have simply made more money. “If anybody thinks FWCS would save the difference, they're na´ve,” Sheppard said.

FWCS board member Glenna Jehl, who attended the meeting, disagreed.

“Taxpayers expect the schools to show fiscal responsibility and benefit students, and we let them down,” she said.