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Council examines common wage issue

Wednesday, May 1, 2013 - 12:01 am

Fort Wayne City Council usually does not meet on the fifth Tuesday of a month, but members met informally Tuesday night to discuss the issue of setting the common wage for workers on public projects.

According to Indiana law, any company that is awarded a contract by the state or a city for public construction project -- and any subcontractor -- must pay workers a common construction wage on projects of more than $350,000. A local board of five people sets the common wage.

The board normally chooses between wage scales proposed by the AFL-CIO and the non-union Associated Builders and Contractors (ABC), which claims its scale can reduce a project's cost between 15 percent and 30 percent.

With City Council facing a possible tax increase later this year members are looking for any way to cut costs. Councilman Russ Jehl, R-2nd, previously suggested council could consider linking approval of a tax increase to Mayor Tom Henry's willingness to allow council to make one of the city's two appointees to the common-wage committee, which would likely swing the balance in favor of the ABC.

Councilman Geoff Paddock, D-5th, outlined the controversy: Some say using the lower ABC wages could lower the cost of public projects and save taxpayer money. Others believe using the lower scale would take money away from labor unions and put it in the hands of contractors.

Paddock is not convinced taxpayers would see any savings from using the ABC scale. City controller Pat Roller and city attorney Carol Helton noted that wages account for about 24 percent of the cost of city projects, so any savings would be on that portion of the project only.

County Commissioner Nelson Peters told council that he believes using the ABC rate, which the county uses most of the time, "allows us to ultimately save tax dollars." He cited costs associated with electrical renovations of the Rousseau Center, saying had the county gone with the union scale it would have added 16 percent to the total cost of that project.

Bill Meyer, vice president of Shambaugh, speaking in favor of the union scale, noted that higher-paid workers "are paid a living wage" and have disposable income to spend in the community.

Paddock also believes "higher wages are something we should encourage, not discourage" for a better quality of life.

He also noted that the local board is set by state statute, so any change would likely require a change in state law -- and the General Assembly doesn't meet again until January, which is the earliest time at which the issue could be addressed.