Thursday, February 24, 2011

Prevailing wage and PLAs eliminated for school construction projects

Press Release from the 1851 Center for Constitutional Law:

OSFC agrees to eliminate Prevailing Wage and Project Labor Agreements for School Construction

Agency will also Review Strickland Era Contracts for Corruption

COLUMBUS - The Ohio School Facilities Commission (OSFC) today agreed to adopt OSFC Resolution 11-16, marking the conclusion of a lawsuit brought by the 1851 Center for Constitutional Law, a public interest law firm representing Ohio taxpayers. The Center argued that OSFC's funding of school projects with Prevailing Wage was unconstitutional, and that the Strickland Administration and labor unions engaged in corrupt activity in procuring, at great taxpayer expense, Prevailing Wage (PW) and Project Labor Agreements (PLAs) on school building construction projects around the state.

Under the Resolution, the agency will no longer fund Ohio public school construction projects that implement Project Labor Agreements (PLAs) or Prevailing Wage (PW). The move is expected to save Ohio taxpayers tens of millions of dollars, and level the playing field between union and non-union contractors.

"Project Labor Agreements" require non-union contractors to enroll their own employees as dues-paying members of a local union hall and abide by union work rules for the duration of the project. It is typically infeasible for non-union contractors to bid on projects with PLAs, which results in the elimination of competitive bidding, and drives up the costs of projects.

"Prevailing Wage" is a wage rate that is set based upon the average wage paid to union workers in a particular locality. It is typically well above the market wage rate, and its use reduces competitive bidding and drives up costs on projects.

Richland County taxpayers in Shelby and Madison school districts brought the lawsuit against OSFC, former Governor Ted Strickland, former OSFC Director Richard Murray, and Laborers' International Union of North America. The lawsuit alleged that Strickland and Murray pressured school districts to use union labor, at taxpayer expense, to ensure union donations to Strickland's campaign.

"The adoption of this resolution is a monumental victory for the taxpayers of Ohio, who can expect to save tens of millions of dollars now that they won't be subsidizing inflated union wages on multi-million-dollar school construction projects, and for non-union workers, who can now compete for public contracts on a level playing field," said 1851 Center Director Maurice Thompson. "Ohioans and non-union workers across the state should be very pleased with this outcome, and the Kasich Administration and Attorney General DeWine are commended for their cooperative approach in resolving this matter."

The Resolution OSFC will:

* Prohibit the use of Prevailing Wage on state-funded school projects;
* Prohibit the use of PLAs on state-funded school projects;
* Repeal all of OSFC Resolution 07-98, the Resolution implemented under the Strickland Administration that favored use of PW and PLAs;
* Review existing contracts with PW and PLAs, including those where 1851 has alleged rampant corruption;
* Allow OSFC to rescind PLAs and PW terms on existing school construction projects that OSFC is funding;
* Commit OSFC to the belief that "open contracting for publicly funded construction projects aids in lowering costs of such projects."

The Resolution halts a practice outlined in the 1851 Center's Complaint, whereby local construction unions would ensure the victory of a school district's tax levy campaign to build new schools in exchange for the school district's promise to implement union-friendly PW and PLAs.

"Higher quality schools can now be built for less, and tax levy elections in Ohio will now more accurately reflect taxpayers' wishes, rather than construction union clout," said Thompson.

As a result of the Resolution, the 1851 Center earlier today voluntarily dismissed its lawsuit, Oleksa v. Murray, which was pending in the Richland County Court of Common Pleas.

The Complaint in the case is available here.

More information on the case is available here.

Review new OSFC Resolution 11-16 here.

The 1851 Center for Constitutional Law is a non-profit, non-partisan legal center dedicated to protecting the constitutional rights of Ohioans from government abuse. The center litigates constitutional issues related to property rights, voting rights, regulation, taxation, and search and seizures.

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