Contractor warns county of the price of preference

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By Sean Ryan

A contractor is warning Milwaukee County that paperwork, oversight and program management are unavoidable costs of a local hiring preference for projects.

“It might not cost bids, but it will cost taxpayers,” said Larry Rocole, vice president of J.P. Cullen & Sons Inc.’s Brookfield office, which is in Waukesha County.

Milwaukee County supervisors are considering a plan to either require local workers on public works projects or give builders a bid preference if they reach hiring goals.

Supporters of the plan Monday disputed arguments that local hiring will drive up costs.

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“I don’t believe that this will increase the cost of our projects,” said Supervisor Johnny Thomas, a sponsor of the plan, “but it definitely will help the economy in Milwaukee County.”

Thomas said the county can limit construction costs by capping the size of a bid cushion, much like the 5 percent cushion the city of Milwaukee offers local companies. Thomas said he is willing to consider awarding projects to builders if they are within 5 percent of the low bid but hire more county residents than other bidders.

The county will spend less if it makes local hiring a contract requirement rather than a means to get bidding preference, Rocole said. That type of hiring requirement would mirror the city of Milwaukee’s Residents Preference Program, which Rocole said has only a minor effect on bid prices.

“If they want to really keep it simple, that’s how you do it,” Rocole said, “but they’re going to still have some administrative costs that you have to do.”

Verifying that generals and subcontractors hire local workers is an intensive process, Rocole said. Cullen, which finished its work on Milwaukee City Hall a year ago, is still verifying worker hiring paperwork on the project, he said.

“We still haven’t been paid for City Hall,” Rocole said, “because we are still answering questions, and that’s all because of RPP.”

Thomas and Supervisor Theo Lipscomb, another local hiring sponsor, said it is difficult to say how much more they would be willing to pay in administrative costs because there are no estimates on what it would cost. Thomas said existing county staff members might be able to handle the task.

“We want to be mindful of how much more we spend on this program,” Thomas said.

County Executive Scott Walker will not oppose the proposal if the work group finds a way to give local workers a preference without driving up the cost of bids, said Tim Russell, Walker’s deputy chief of staff.

“Any of these decisions are a balance,” Russell said, “between achieving a goal and ensuring you get the best value for taxpayers.”

The Milwaukee County Board Committee on Economic and Community Development on Monday unanimously approved a resolution to create a committee to craft the local hiring preference program. The work group is to return to the board in May with a proposed plan.

But a hiring requirement will give county staff members the new responsibility of auditing payrolls to verify contractors are hiring county residents on public works projects, Rocole said. It may not cost contractors anything, he said, but it will add costs for the county.

“There will be,” he said, “and more than what they think.”