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HomeMy WebLinkAboutM-77-0057I I — .• tr,kler I 1 Rg '1) t.) K) Cbseph Graggie City Manager Maurice Mayor A, Vette CITY OF PiIAML FLORIDA INTtR,OPNCt MEMORANDUM_ bAte: 1E1 .1 EC T ; OF\ to: 51 December 3, 1976 Commission Agenda December 15, 19/6 REFERENCES ENCLOSUktS: rtLt: Please schedule Joseph Kaplan, Attorney for the Carpenters Union, on the Agenda for the City of Miami Commission Meeting December 15th. Mr. Kaplan will discuss the carpenters prevailing wages and the recent ruling by the Attorney General for the State of Florida. Also, please contact Mr. Kaplan as to the time of his appearance before the Commission. His telephone number is 325-1661. MAF/et cet Joseph Kaplan, Esquire Riera Gomez, Civic Actionof ttit Honorable Members of the city Commission I Joseph R. Grassie ' City Manager CITY OF MIAMI. FLORIDA INTER -OFFICE MEMORANDUM bAtt .Jith 71977 6ubJtCT: Request that City Establish a Prevailing Wage Law for City Construction fttrtatNCES: f_NCLCSURt:s: to July of 1976 a discussion took place between the City Commission, and Mr. Joseph H. Kaplan, representing the Miami Building and Construction Trades Council and the Carpenters District Council of Miami, on the subject of requiring the City of Miami to pay prevailing wages including fringe benefits on municipal work projects. We have attempted to estimate the effect that the passage of such an ordinance would have on cost and on small minority contractors attempting to do business with the City. In order to obtain first-hand information, on December 13, 1976, Mr. Henry G. Moon, Construction Engineer for the Department of Public Works, met with representatives of different contractors associations to obtain continents on the proposed prevailing wage law for City construction. Present at that meeting were: • Associated Contractors and Builders, Inc. • Engineering Contractors Association Latin Builders Association, Inc. Minority Contractors Association, Inc. • Underground Contractors Association Also, the Drainage Contractors Association and the South Florida Builders Association were not present at that meeting, but concur with the following views expressed by the other contractors. All contractors stated that their organizations were unanimously opposed to the proposed ordinance establishing a prevailing wage law for City construction. Also, this would result in higher bids, running from 10% to 25% of total construction costs, and that many small contractors would not submit bids under such an ordinance. The representatives of the contractors associations expressed their opinion that higher costs would result due to the fact that the proposed ordinance would basically require union wage rates which MEIE Ate considerably higher than open shop rates. Also, additional administration costs and loss of flexibility on their usage of bmployees will have a direct effect on contractors. Additionally, the proposed ordinance was discussed with Mr. Jim Woodall, Executive Manager of the Associated General Contractors bf America. This Association represents some of the larger union Contractors that have bid on City projects. Mr. Woodall stated that his organization was 100o against the proposed ordinance because it would be inflationary, and at the taxpayers expense. In order to obtain some additional cost estimates on what the Proposed ordinance would represent to the City, an analysis was tirade on completed contracts from a 20 month period of October 1974 through June 1976. buring this time, the City completed 82 contracts in the amount of $20.8 million. The breakdown of these contracts is as follows. `thirty-nine contracts were awarded to 21 union contractors for $10.6 million, and 43 contracts were awarded to 23 non -union contractors for $10.2 million. Using this period of time as a benchmark and the assumption that if the City would have paid the higher prevailing wages and fringe benefits, the following would have resulted. Assume that the lower rate contracts are 60°% labor cost and that the higher wages and fringe benefits are 20a above the non -union wages. Therefore, 60% of $10.2 million or $6.1 million would be the labor cost. If we then increase these costs by the 20%, the City would have had a higher cost of $1.2 million for the contracts awarded during this 20 month period. During the same period of time, out of the 23 non -union contractors, 9 were minority contractors, while none of the other 21 included any minority firms. It should be noted that from the staff analysis conducted on the assumption that this ordinance is adopted, the following conclusions were formulated: Estimated cost to the City will be 5% to 10% higher A lower number of contractors would bid on City projects It will affect the number of small minority contractors doing business with the City Honorable Members of the city Commise In /`\ * The City would have to establish a mechanism or agehey to establish criteria for wage rates in the Miami area and to monitor compliance of the ordinance ihalty, in an effort to check with other jurisdictions in the area that have a similar ordinance, we contacted the Cities of Hialeah, North Miami Beach and Opa Locka to obtain their e tperience in this area. However, they have no actual experience under this new ordinance, but their purchasing agents expressed concern that the requirements would force non -union contractors to bid higher, and that this requirement would also reduce the dumber of bidders. tO, thoM, CITY OR MIAMI, FLORIDA INTER.OFr'ICE MEMORANDUM Honorable Members of the City Commission rge F Knox, Jr. City Att net oAtr:: December 8, 1976 FILE: MIA 76-49 Request that the City Establish a Prevailing Wage Law for City. Contractors SUnJECt: htFEhENCES: ENGLOSU#ES: Letter from the Attorney General of the State of Florid, On July 1, 1976, a request was made for the City Commission of the City of Miami to establish a prevailing wage law in all contracts entered into by the City of Miami. At such time the commission requested of this office that we request an opinion of the attorney general of the state of Florida as to the legality of enacting same. Please find attached a copy of such opinion. The conclusion of the attorney general is that an ordinance requiring contractors to pay a prevailing wage rate, including fringe benefits, on public works contracts, let out by the City of Miami, would be legal. It is of note, however, that: (1) this attorney general's opinion is not law; and (2) the attorney general's opinion involved herein is based upon (a) out of state law; (b) a prognostication of what the law will be; and (c) a decision that in light of the Municipal Home Rule Powers Act will hereinafter affect precedent in the state of Florida (c- `' 1' Via- GFK/EMS/bbb Enclosure ;::a* 1 . LLB, ti. ft°EIENt t 5HtV'N Attorney Lieneral STATE C)1~' FLORIDA II1a'A1tTMEN'1' OF LEGAL AFFAIRS OFFICE O1FTHE ATTORNEY GENERAL THE CAPITOL 1ALLAHAtibLE FLONIDA 32304 Mr, Frank H. Weston ►etinq City Attorney Lail Department City of Miami 65 S.W. First Street Miami, Florida 33130 NbVembur 10, 1976 Sb� 'SO 076-212 Re: LABOR LAW --Validity of ordinance requiring contractors on municipal works projects to pay laborers prevailing wages including fringe benefits. §5166.021; 215.19(1) (b), (c) , (cl) ; (2) (a) , (b) ; (3) (a) - (e) ; (7) , F.6. ; Art. VIII, §2 (b) , Fla. Const. Dear Mr. Weston: This is in response to your request for an opinion on substan— tially the following question: MAY A MUNICIPALITY LAWFULLY ENACT AN ORDI- NANCE REQUIRING CONTRACTORS TO PAY A PREVAILING WAGE RATE INCLUDING FRINGE BENEFITS ON PUBLIC WORKS CONTRACTS LET BY THE MUNICIPALITY? Section 215.19, F.S., provides in part that: Every contract in excess of $5,000 in amount to which the state, any county or municipality in the state, or any political subdivision of the state or other public agency or authority is a party which requires or involves the employment of free laborers, mechanics, or apprentices in the construction of any public building, or the prosecution and completion of any public work or for repairs upon aily public building or public work, shall contain a provision that tl1 ,ka.t • wages for all '.11 DOCU :DENTS FOLLOW" Mr. Prank 11 Westbh liege 'CWo 076412 laborers, mechanics and apprentices, if such apprentices are available in the area in Which the said public work is located, employed by any contractor or subcontractor on the work covered by the contract shall be not less than the prevailing rate of wages for similar skills or classification ox. work in the city, town, village or other civil division of the state in which the said public work is located, which provision shall refer to and incorporate this section in the contract by reference. schedule of prevailing wages furnished by the Division of Labor, Department of Commerce, is required to be inserted into the specifications, and such schedule shall for the purpose and duration of the contract be deemed the prevailing wage rate as contemplated by this section regardless of any pre- vious or subsequent determination. Section 215.19(1)(b). Every request for payment made by the contract on such proj- ect must contain an affidavit that all provisions of this section (i.e., 5215.19, F.S.) have been complied with by the contractor and,to the best of his knowledge, by all of his contractors. Section 215.19(1)(c), F.S. Employers of appren- tices on public works projects are required to file with the Division at Tallahassee within 15 days from the date of employ- ment, the name, classification and wage rate applicable to each apprentice employed on the job. Section 215.19(1)(d), F.S. The Division of Labor is required to make a continuing study to determine the prevailing wage rates of laborers, —i mechanics and apprentices employed in work similar to that contemplated by S215.19 in the various parts of the state and shall furnish such schedule upon request. Section 215.19(2)(a), F.S. Prior to publication of invitations to bid, every public mmmw contracting authority in the state must notify the Division of the nature and magnitude of the work and its location. Section 215.19(2)(b), F.S. The wage schedule must be posted on the job, and the.contractor shall mail to the Division in Tallahassee an affidavit stating that the notice has been posted and is being maintained. Section 215.19 (2) (c) , F.S. Sections 215.19 (3) (a)-(e) , F.S., set forth a detailed procedure for handling grievances of laborers who allegedly have not been paid the prevailing wage and for investigations into allegations regarding noncompliance with the act and disposition of disputes by the Division. Sec- tion 215.19(8) snakes the knowing violation by a contractor or subcontractor of the provisions of 5215.19 or of a lawful order or rule of the contracting authority or of 'the Division of Labor "SUP Oi T1\'E r FOLLOW" Me. Frank H. Weston I t1 fe 'three 076-2i2 authorized by said act a misdemeanor of the second degree. Additionally, the Division of Labor is required to include in its legislative budget request the estimated amounts heeded for ::administering the provisions of this section, and the legislature shall appropriate such amounts as it deems necessary for this purpose. Section 215.19(7), F.S. It cannot be disputed that the City of Miami, as a munici- pal corporation, has the authority under its police powers to regulate in the area of minimum wages. West Coast Hotel Company v. Parrish, 300 U.S. 379 (1937). The question then becomes to what extent was that authority proscribed, restricted or abrogated by the enactment of S215.19, F.S., Florida's Prevailing Wage Law. While in some jurisdictions the answer to this question would involve simply an analysis of S215.19, F.S., in order to determine if this statute constitutes a legislative preemption of the field, in Florida other factors must be considered, among these, the constitu- tional and statutory relationship existing between Florida's municipalities and the state, the legislative intent surround- ing the enactment of 5215.19, F.S., and the purpose to be served by such legislation. When considering issues of preemption and state power vis-a- vis municipal regulation, the courts have generally followed two lines of reasoning. On one hand, a number of states have adopted a traditional preemption view which entirely prohibits municipal regulation of a subject area which has been found to be preempted to the state. See Wholesale Laundry Board of Trade, Inc. v. City of New York, 234 N.Y.S. 2d 862 (1962) . A general statute dealing with state func- tions applicable statewide cannot be changed by the enact- ment of a local law. See City of Utica v. Mercon, 336 N.Y.S. 2d 880, 862 (N.Y. Sup. Ct. 1972); City of Minnetonka v. Mark Z. Jones Assoc., 236 N.W.2d 163 (Minn. 1975). Underlying these cases is the presumption that the state is sovereign and the municipalities possess only such powers as are clearly con- ferred on them by law. See Greene v. City of Winston-Salem, 213 S.E.2d 231 (N. C. 1975). The validity of municipal enactments is dependent upon their not being inconsistent with any general law of the state. City of Utica, supra. Until recently it could be persuasively argued that Florida, notwithstanding Art. VIII, 52(b), Fla. Const., was among those :states which adopted a restrictive view toward the existence of municipal powers. For example, early Florida cases DO; UI\;1ENTS FOLLOW" 0,6412 Mtn. Prank H. We8eorl Page Pout repeatedly stress that municipalities, as Creatures of the legislature, may exercise only such powers as are conferred by express or implied provisions of law, and all doubts as to the existence of a power in a municipality are resolved against the city. See State ex rel. Friaz v. Burr, 84 So. 61 (Fla. 1920) ; Town of I. thlo v. Bank of Commerce, 110 So. 837 (Fla. 1926). See also, City of Miami Beach v. Fleetwood Motel, Inc., 261 So.2d 801 (Fla. 1972); Rinzler v. Carson, 262 So.2d 661 (Fla. 1972) . On the other hand, a more flexible view of municipal powers has been. formulated which generally forbids municipal regu- lation only when an ordinance seeks to prohibit that which a statute expressly permits. No conflict would be found where an ordinance merely seeks to supplement the burdens imposed by the statute, provided the additional burdens are logically consistent with the statutory purpose. See City of India- napolis v. Sablica, 342 N.E.2d 853 (Ind. 1976); City of Baltimore v. Sitnick, 255 A32d3 A376 (Md.506 (1969);C unty Council v. Montgomery Assoc. Inc. 3 It has been stated in reference to the subject of municipal ordinances that, as a general proposition, additional regula- tion to that of the state law does not constitute a conflict. The fact that an ordinance enlarges upon the provisions of a statute by requiring more than the statute requires creates no conflict therewith. See American Nat'l Bldg.Nid. 1961), citing Assoc. v. Mayor and City Council, 224 A.2d 883 37 Am.Jur. Munic. Corp. §1.56. This view of municipal powers has been referred to as the doctrine of "concurrent powers" and is utilized as an alter- native to the doctrine of preemption by occupation when war- ranted. As stated in American Nat'l, supra, at 887, It would appear that the tests of general law were devised not to draw an impermeable line between the authority of the City and the State, but rather to merely define the inclusive limits of the state's powers. "General" under this test merely means that the subject is of sufficient statewide effect to give the State authority to leg- islate. It does not mean that it is not of significant local effect to give the city at least concurrent power to legislate. . . . I i f n �ORT 1 Y FOLLQ' Mr. Prank )1 . Wsttn Patio Five D76-212 This doctrine Was initially formulated in Maryland, which, like Florida, possesses constitutional and statutory "home - rule" provisions which seek to assure to municipalities and/or Counties "the power of self-government and freedom from interference by the legislature in the exercise of that power." City of Baltimore v. Sutnick, supra, at 379. Maryland, like Florida, found it necessary to delegate to political subdivi- sions the power to enact local laws in order to reduce the "log -jam" of local bills which occurred during the legisla- tive session and to permit local legislation to be enacted by those directly affected by it without interference by repre- sentatives from other sections of the state. Florida's Municipal Home Rule Powers Act, S166.021, F.S., has been said to constitute a legislative recognition that the powers of municipalities are derived directly from the Consti- tution. City of Temple Terrace v. Hillsborough Ass'n of Retarded Citizens, 322 So.2d 571, 576 (2nd D.C.A. 1975), aff'd, 332 So.2d 610 (Fla. 1976). Ch. 166, F.S., is an attempt to -- return as broad a control as possible over municipal govern- mental matters directly to the municipalities. The provisions of §166.021,F.S., are to be construed so as to secure for mu- nicipalities the broad exercise of home -rule powers granted by the Constitution. Thus, in light of Art. VIII, §2(b), Fla. Const., and S166.021, F.S., the continued validity of the Florida cases cited, infra, which adopted a restrictive view of municipal powers is highly questionable. Instead, Florida would appear to be among those states, such as Maryland, which do not resolve conflicts between the state and its political subdivisions on the sole basis of preemption but instead look also to the purpose of the local regulation in light of the home -rule powers possessed by rnuniciplaities. Cf. City of Temple Terrace, supra, at 577. The payment of prevailing wages would appear to be an area in which uniformity would be neither desired nor required and which, of necessity, would vary greatly among the various parts of the state. An ordinance which requires the payment of fringe benefits on public works projects let by a munici- pality would foster the same purpose as does S215.13, F.S., namely, to prohibit the payment of substandard wages thereby depressing the labor market. The higher cost of living in an urban area, and the more severe substandard housing and con- struction problems could justify additional municipal regula- tion on the basis that the state and municipality might act concur1cftly on the subject matter See City of Baltimore v. Sutnick, supra, at 384. Fpct4 its local elected officials � " t ``•��i ti+ r " Mr. frank R. Weett r Page Six b76-2i2 are aware of the unique conditions within their municipalities and should be given broad leeway to act on behalf of the people they represent when the subject is one which is suited to decentralized control and when the legislature has not forcibly estpressed a strong intent to occupy the entire field. Addi- tionally, prevailing wage provisions are to be liberally con- strued to effectuate their purpose, namely, to protect govern- ment employees from substandard earnings by fixing a floor under wages on government projects. Walker v. County of Los Angeles, 361 P.2d 247 (Cal. 1961); O. G. Sansone Co. v. Department of Transportation, 127 Cal. Rptr. (Ct. App. 2d 1976). In certain areas, any local regulation would obviously run counter to the clear legislative purpose of the enactment. See, e.g., County Council v. Montgomery Assoc. Inc., 333 A.2d 596 (Md. 1975). This does not, however, appear to be the case regarding ordinances defining prevailing rate of wages to be paid on public works projects within a municipality. Section 215.19, F.S., does not expressly prohibit the payment of fringe benefits on public works projects. The Prevailing Wage Law prohibits the payment of not less than the prevailing rate of wages on such projects. Thus, while the legislature has required that a certain prescribed minimum wage be paid on such projects it has not expressly prohibited municipalities, pursuant to their home -rule powers, from adding to this mini- mum requirement if local conditions and the purpose of the law are best served by such action. While the legislature has not required municipalities without local ordinances regulating this subject to pay fringe benefits, see AGO 074-200, neither has it expressly prohibited municipalities which desire to enact such legislation from so proceeding. While it is obviously impossible to definitely state which position the Florida courts would adopt regarding this ques- tion, I am inclined to the view that pending legislative or judicial clarification, the municipalities may enact local ordinances which require the payment of fringe benefits on municipal public works projects in keeping with the intent of the Municipal Nome Rule Powers Act, the purposes to be served by enactment of prevailing wage laws, as well as recent Florida decisions which indicate a significant shift in favor of local control over subjects of legitimate local concern and away from a restrictive sovereign preemption view. `.4SUPPO' ��; P. 1'•. 1 i Mr. Vrank H. We8tem Paq* tew.n SUMMARY Pending legislative or judicial clarifica.. tion, a municipality has the authority to enact an ordinance requiring contractors to pay a prevailing wage rate including fringe benefits on public works contracts let by the municipality. Sincerely i.\ 211‘r\I T L. S VI ATTORNEY GENERAL Prepared By: Sharyn L. Smit.1 Assistant Attorney General RLS/SLS/sf