The Examiner U-46 News Feed
Split vote approves wage resolution in U-46
By Seth Hancock
The Board of Education in School District U-46 voted in favor of the administration’s prevailing wage resolution but by a 4-3 split vote as those opposed sought to offer some relief to taxpayers on Monday, June 20.
Phil Costello, Cody Holt and Jeanette Ward voted no. Last year the rates were approved by a 4-2 vote, Costello was not at the meeting.
Costello clarified what the rates represent asking “this is a minimum wage for any (outside) contractor” the district uses, which Rickey Sparks, director of Business Services, said was correct. Those rates are driven by union wages instead of market forces.
U-46 uses the Illinois Department of Labor’s (DOL) figures to set rates, but Holt asked for some clarification at the June 6 meeting when the rates were presented as conflicting information was given on whether the district could do its own survey. The administration had told Holt they could not, but a memo sent to the board last year showed otherwise.
Turns out U-46 can do its own survey as CEO Tony Sanders said: “State law still requires the board should pass the resolution establishing a prevailing wage, but it does allow school districts to survey… across our communities to determine our own prevailing wage. It has never been done in the state of Illinois.”
Miguel Rodriguez, chief legal officer, corrected Sanders saying “we’re not sure whether it’s been done or not” as the DOL representative the district spoke to only said they did not remember it having been done.
Sanders said the DOL surveys U-46’s numbers to come up with its rates and he didn’t “know that we’d get any different results” from doing their own survey.
However, Sanders would later have to clarify that statement after an exchange between Traci Ellis, who voted for the rates, and the three who voted no. The DOL only uses numbers from those contractors who’ve worked with U-46, meaning competitors aren’t surveyed.
Holt said his concerns are with the DOL’s numbers which “are highly inflated in my opinion.” He said in his own research that studies show prevailing wage laws increase costs nearly 20 percent and hinder competition.
The Examiner found a Government Accountability Office (GAO) 2011 report to the United States House of Representatives as well as a 2008 study by Suffolk University’s Beacon Hill Institute that show just that. The GAO report was in regards to the Davis-Bacon Act of 1931 which states prevailing wage laws were born out of including Illinois’ in 1941.
The GAO report showed that there’s “a lack of transparency in the survey process” that boxes out competition allowing only those entrenched contractors to seek government work. The Suffolk University study showed prevailing wage rates increase costs by an average of 22 percent.
“These rates hinder local small businesses and minority contractors from being able to bid competitively on government jobs,” said Holt who added that “if we can get the taxpayers the same quality of work at a lower price, I think that we should be able to do so.”
Holt said that he’s opposed to the “archaic, New Deal era law,” which Ward noted Gov. Bruce Rauner’s turnaround agenda includes eliminating prevailing wage laws in Illinois, but his no vote regarded the DOL rates. He said he would vote for a prevailing wage set by a U-46 survey.
Rodriguez said the district could be subject to penalties and the board could be charged with a misdemeanor if it didn’t set a wage, but it did not have to be the DOL rates.
“The suggestion is to not follow the law because we don’t like the law, because that’s what I’m hearing,” said Ellis despite Holt clearly saying the opposite. Holt reiterated: “Nobody on this board is saying that we’re against the law and that we’re voting to violate the law.”
Holt noted that last year the district spent $25 million on capital projects, which taxpayers could have saved $5 million if the 20 percent figure bore out, and “I believe wholeheartedly that we would find that the rates would come down and that the Department of Labor’s rates are inflated,” but Ellis interrupted “based on what?” Holt said based on his research.
Ward said: “They can’t compel us to vote yes on a thing. If they can compel us to vote yes then why vote?”
Ellis responded that she “didn’t say they could compel us. I said that we are required by law to pass a resolution” and a district survey would “likely yield the same information.”
Costello said: “But I don’t understand how you’re saying that. If you’re asking Cody how he’s getting his information, how do you know it would be the same information? We don’t know.”
“We just know that they can’t compel” a business to provide wages Costello added and “they can’t get that information from some people, and perhaps that’s people we want to do business with.”
Ellis said: “I thought that I heard Miguel and Tony say that they were surveying the same data that we would likely survey.”
Sanders clarified: “I was saying that they surveyed us for all the contractors that we do business with to find out their prevailing wage.”
Ward said: “So, that’s the contractors we do business with, not the contractors we don’t do business with obviously.”
Ellis said: “Ok, well I’m not for spending our time doing a prevailing wage survey. So I just wanted to clarify.”
Veronica Noland supported the rates and said U-46’s role should not be one of a consumer but rather one as a micromanager of the contractors. She said she’s more concerned with workers than with taxpayers.
“Those contractors, those folks who are working, they are our parents and our community,” Noland said. “We hurt our community when we are trying to undercut their pay. I have a problem with that because there’s a reason we have prevailing wage. It’s a protection for employees so that we aren’t underpaying employees and creating a system where the employees are making less and less and they can’t live on it.”
Noland added: “For us to say that we can do our own survey and say that we can do a better job to try and save our taxpayers money, we are also hurting our taxpayers if we’re trying to nickel and dime our community.”
Costello and Holt both responded that competition will lead to better results.
Holt said: “I would argue that it does hurt local business owners, small business contractors, from being able to even competitively bid for government jobs within our district.”
Costello said: “I think it opens up new markets. Undercutting it is one way to look at it. I look at it as being competitive, and if you can provide the quality service that’s done through the bid process… and they can do that, we should get the most competitively priced manager possible because that means we can put that much more in terms of dollars into our schools.”
Noland said not only does she want the district to micromanage the wages of outside contractors but also the benefits through a “qualified bid.”