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Cities losing prevailing wage momentum

Sean Ryan

Municipalities are losing their battle to reverse a decision that would require prevailing wages be paid on more projects.

Thirteen municipalities are appealing Wisconsin Department of Workforce Development decisions requiring developers pay prevailing wages when building streets or sewers that eventually will be owned by governments. But the DWD on Tuesday rejected Chippewa Falls’ appeal.

The decision in Chippewa Falls would require prevailing wages be paid to workers who built streets and sewers for the 36-acre Willow Creek subdivision. If the workers’ original wages were lower than prevailing wage rates, someone must pay the difference.

The state surveys contractors annually to find how what they pay workers on private projects. It uses the results to set the prevailing wage for each county.

Chippewa Falls City Attorney Robert Ferg said he does not know if the city or Willow Creek developer Westwood Land Co. LLC, Eau Claire, would pay. He said the city has not decided if it will appeal the DWD ruling in circuit court.

“If it would hold up, it affects, one, how development agreements are done,” Ferg said, “and, I would assume, it would affect the cost the developers have to pass on to homebuyers.”

All 13 DWD decisions are on the same topic, so DWD’s ruling on Chippewa Falls indicates the department probably will reject the other 12 appeals, said Robb Kahl, executive director of the Construction Business Group. The CBG, which is financed by contractors and workers covered by the International Union of Operating Engineers Local 139 collective bargaining agreements, filed the 13 complaints that resulted in DWD’s prevailing wage decision.

If the DWD decisions stand, the CBG can file complaints about any developments completed within two years of a complaint being filed in which developers built infrastructure and turned it over to municipalities, Kahl said.

“We could file dozens, if not hundreds, more if we went back and scoured the state,” he said.

But Kahl said instead of filing hundreds of complaints, his group prefers to negotiate with municipalities and work cooperatively. He said the goal is to collaborate and have CBG’s investigators meet with municipal staffers to teach them about prevailing wage law.

“In order to work with them cooperatively moving forward,” Kahl said, “sometimes you have to put the past behind you.”

As DWD considers the appeals, there is a measure in the proposed state budget that would require developers pay prevailing wages when hiring workers to build projects that will be turned over to a government.

The budget measure only will affect projects that apply for permits after Jan. 1, 2010. But the DWD rulings allow prevailing wage rules to apply retroactively. The budget measure also lists specific types of work that would be covered, while the DWD decisions are broad, covering more types of infrastructure.

One comment

  1. What? Prevailing wage could adversely effect residential development? Talk about a No-sh*t moment, or as our kids would say…DUH!
    Ever ask yourself, why the only entities that can support Unions, are ‘tax-funded’ or governmentmental agencies.
    The surest way to kill residential construction… just keep pushing prevailing wage, and card check legislation. Guaranteed results.

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