Ann Arbor school board debates: Prevailing wage, minority businesses, local workers - where's the value?
Fresh concrete is scored on the sidewalk outside Skyline High School's main office, as crews finish construction on the building in this 2008 Ann Arbor News file photo. The Ann Arbor school board debated its policies for awarding construction and other labor contracts at Wednesday's Committee of the Whole meeting.
Lon Horwedel | The Ann Arbor News
School board trustees deliberated on what should factor into the board's decision for hiring labor and construction contractors — prevailing wage, business location, the race or gender of the business owner? The question also became should the board cement these factors into its policies.
At the root of the debate was: what obligation does the board have to hire the lowest bidder, in order to put more dollars toward educational programing and teachers; and what responsibility does it have to enhance the local economy?
This issue of contracting, and who to contract with, has come up continuously at the board table for at least a decade, Board of Education members said Wednesday.
Existing board policies do not contain any hiring provisions and instead simply outline the processes for bidding out contracts and purchase orders.
Board President Deb Mexicotte said she recalls this was done intentionally with the idea of allowing for flexibility.
"(The board ) wanted to be able to make more case-by-case decisions around contracting, while articulating the types of things we would like to see," she said. "And different boards have articulated differently over time."
When Ann Arbor Public Schools was campaigning for the $255 million comprehensive school improvement bond and sinking fund in 2004, there was a great deal of attention placed on contracting, said Treasurer Glenn Nelson. School officials went to great lengths to attract small local businesses and historically underutilized businesses, or HUBs, to do a significant portion of the work, which included projects at every building in the district.
HUBs are often female-owned, minority-owned or small businesses.
"The struggle was sometimes the number of workers or the size of some of those smaller companies," Mexicotte said, adding the board awarded contracts to larger, out-of-area companies and "encouraged them very strongly to bring in those smaller companies as subcontractors. … So it was not necessarily codified in our board policy or (administrative) regulations, but it was something the board talked about being committed to."
School board members, from left, Andy Thomas, Christine Stead and Glenn Nelson
AnnArbor.com file photo
Sinking fund money is local tax dollars, so the district was not required in 2004 to contract with prevailing wage employers for sinking fund projects. But Trent said because some of the bond and sinking fund projects overlapped and, in some cases, could use the same company to do various aspects of the work, school officials decided to avoid complications by hiring only prevailing wage employers.
According to a report that Trent provided to the board, during the first half of the six-year comprehensive school improvement plan, 10 percent of the contracts awarded went to HUBs. During the second half of the plan, 31.7 percent of the work was given to HUBs. Now, Trent said, that percentage is even higher, as the district has a general contractor doing most of its sinking fund work and the general contractor happens to be a female-owned business.
The Ann Arbor Public Schools sinking fund millage is set to expire in 2014.
The $45.8 million technology bond that voters approved in May 2012 also is local dollars, so the prevailing wage stipulation does not apply.
Ann Arbor school trustees had a range of opinions Wednesday night on whether the board should adopt formal policies dealing with contract awards.
Trustee Irene Patalan pointed out that most recently, due to the economy and budget constraints, the board seemingly has taken the position that it will award contracts to the lowest qualified bidder. She said she puts her faith in Trent to recommend the best value to the board, but she would be interested in seeing a report on how these contract awards have fared.
"Have we gotten burned?" Patalan asked. "If Randy could answer that question, that would be valuable to me. I would hate to take anything major away from our kids and the schools and would want to know if we're saving money upfront, are we paying for it later? I also ask myself would we only hire local teachers?"
Secretary Andy Thomas said he would be in favor of looking at a policy addressing prevailing wage and hiring local, but he argued HUBs are moot and there is no longer a "good ol' boys network" when it comes to contract bidding.
He said with the openness and transparency of the district's bidding process, where anyone can go to the website and apply, he doubts that significant barriers to these types of businesses still exist.
"Unless there are still businesses out there as examples that are somehow being excluded from the bid submission process because of their status as a minority- or woman-owned or small business, then I think we should drop it," Thomas said.
Nelson's apprehension in adopting a new contracting policy was the community's skepticism about how public bodies spend taxpayer money.
"I think it is very important for us to work on the core mission of the schools, and the core missions is getting students prepared for the rest of their lives," Nelson said. "… We are able to do more for our mission … in taking the lowest qualified bidder.
"(The public) wants to support us if we're educating children. That's what they think our job is."
Trustee Susan Baskett
Baskett said she also has heard skepticism from the public about how the district spends its money. "But the skepticism I hear from people is the big dollars — when they see the raises, when they see the salaries."
She said she is not sure why it has to be one or the other — supporting education or supporting the local economy — and not both. She cited the district's extensive career and technical education programs, such as the home building and information technology programs.
"We have to respect the fact that we have some of our graduates in these various trades because of our educational offerings. If they can't find work, they take their families, take their children and they leave," Baskett said. "… The money that we spend is recycled back into the community with the local workers.
"It's like someone earlier tonight said, we have to think about taking care of the locals and the locals will take care of us." Baskett mentioned a number of businesses that have donated money for equipment, camps or events at the schools.
About six people from various labor and construction trades and unions spoke in favor of the board looking at adopting prevailing wage, local preference and HUB policies during the public comment portion of Wednesday night's meeting.
Lightfoot argued in favor of bringing many of these individuals to the table to provide information or to serve on the board's ad hoc committee, which she and Baskett will head up. One more board member will be assigned to the committee. Trustees set a target of making a final decision on contracting policies prior to the start of the next academic calendar, or before September.
Danielle Arndt covers K-12 education for AnnArbor.com. Follow her on Twitter @DanielleArndt or email her at daniellearndt@annarbor.com.
Comments
Local Contractor
Tue, Jan 29, 2013 : 11:17 p.m.
Out of all of the comments on here I agree with "John" the most and would like to take his comments even further. Lets start with the terminology of "Lowest Qualified Bidder" sometimes referred to as "Lowest Responsible Bidder". The key words here are "Qualified" or "Responsible". As John and some others have pointed out, the lowest bid is NOT always, and is many times not qualified or responsible and are planning to cut corners or have missed some major aspect of the scope of work and then will have to cut corners to make up for it, or I have seen sometimes where the owner gave the "Extra" money to the contractor to make up for their mistake after the fact, making them higher in the long than the next bidder who had the entire scope covered right from the beginning. Then there is the inexperienced contractor who just did not have a complete understanding of the bid documents and all of the requirements of the owner and the project so they did not include enough cost in their bid to cover Safety, Restoration or various General Conditions. Secondly, I strongly believe in awarding on a prevailing wage basis just as John does but I also think it should be kept local as well. We can easily have contractors from out of town or even out of State who are prevailing wage contractors, but they are taking local money out of our community and back to theirs to be spent in their community. We have to support each other and ourselves. A person who has been out of work for 6, 12 even 18 month's can not afford to vote YES to a millage increase to benefit the schools, even if they wanted to. But if that money is coming back around in the form of a job, then the cash flow continues. What goes around comes around. And that's all I have to say about that.
PETE CULVER
Tue, Jan 29, 2013 : 8:42 p.m.
Prevailing Wage Rates are set to create a level playing field for wages of workers of the contractors bidding projects. It assures that "local" contractors won't be low-balled by outside companies using untrained / unskilled workers. Why wouldn't you want to have contractors that live and pay taxes and spend their money in the community have a fair shot at bidding work? ...Non-union contractors would have the same opportunity to have these projects awarded to them as long as rates are paid. Finally, the Michigan Prevailing Wage Act should consider having a responsible bidder amendment added to the Act. Construction work has detailed applications for your schools if they are to be built properly. It Requires that contractors bidding work have certified training programs.. If the PW Act in Michigan is repealed, your schools can expect a massive drop in skilled construction workers. That means the costs of future work will soar because of problems for shoddy construction. As a trustee of the school board that should be your bottom line...a saving to the tax-payer.
snapshot
Sun, Jan 27, 2013 : 5:16 a.m.
I'm loving that the school board actually makes a distinction between "tax" dollars from "bond" dollars which are paid for with property "tax" dollars, so in reality ALL funds are "tax" dollars. So lets make it simple: Lowest responsible bidder with a 5% preference to minority, women, and veteran owned businesses.
John
Fri, Jan 25, 2013 : 4:48 p.m.
This entire discussion has been interesting to read. My opinion is to the Prevailing Wage and this is why. Prevailing Wage is a well-tested and proven method of bidding public jobs throughout the entire country. The concept is established to support local contractors, inherently supporting the idea of "Local Preference". The government collects historical wage data from the community and defines at what rate of pay the majority of workers, of a specific craft, earn. This wage is defined as the "Prevailing Wage" for this community. This is an important element in ensuring that public construction projects do not destabilize the local construction industry, in leveraging public works investments for supporting local economies and local governments, and to advance other priorities such as workforce development. I believe that this idea levels the playing field and supports our community. The concept of Lowest Bidder sounds great. However it opens the door to all kinds of problems for the project and our community. Typically the lowest bidder has missed something or is planning on cutting corners that could cost our community down the road, regarding longevity, repairs, faulty craftsmanship, etc… Prevailing Wage also prevents an out of state contractor migrating into our community, paying their employees less than our area standard wages and taking "Our Tax Dollars" out of "Our Community". This practice has large ramifications and is why the Prevailing Wage standard was originally created. Material cost are a fixed cost, if wages are a fixed cost (Prevailing Wage) and the contractor is a Responsible contractor (Having a prior history or can prove proficiency in the scope of work for Bid), then we can choose the Lowest Bidder whom meets this criteria, regardless of ethnical background or gender. Then, and only then, will we, as resident tax payers, be assured we will receive the best value for our hard earned tax dollars.
Tanzor
Fri, Jan 25, 2013 : 2:35 p.m.
The last thing the school board needs to do is form yet another committee (hoc) to help them do their job. It's the responsible of "the board" to award contracts based upon sealed bids and capability to perform the services necessary. To award a contract using race or gender is blatant discrimination, plain and simple. If the "HUBs" are unable to win contracts it is because they are not completive.
YpsiLivin
Thu, Jan 24, 2013 : 6:50 p.m.
From "State & Local Government Procurement: A Practical Guide" (published by the National Association of State Procurement Officers - c. 2008, page 8) "The text of this chapter has already described the commitment of the procurement professional to maintaining the openness of the competitive process. Socioeconomic programs that legislatures and city councils adopt to achieve some social goal through public procurement run counter to that commitment. Types of policies that fall within this category are environmental and sustainability mandates, minority and gender-based set-asides and preferences, local vendor preferences, and prohibitions against doing business with vendors that have capital investments in countries considered to have violated human rights."
Bear
Thu, Jan 24, 2013 : 6:38 p.m.
stupidest thing I've ever heard of is this fable called "my tax dollars", as if they somehow belong to you. Once taxes are collected, they are not "yours". They belong to the government. If you didn't have to pay taxes, I'm betting your wages would be cut to reflect that change. Stupid concept, stupid idea, stupid thing to say. Second stupidest thing heard is this idea of "spending other people's money". It isn't other people's money. It is money allocated through state and local funds to support public education and belongs to public education. The people of Michigan voted to figure out how that money is collected, where it is derived from and how it is shared. These smart alec smarmy litte blurbs do nothing to add to the conversation except show how little minds work. Delete this comment if you will censors, I still hold that small minds speaking meanly about things they do not understand say the stupidest things and thing themselves wise.
Westfringe
Thu, Jan 24, 2013 : 6:19 p.m.
Lowest bid. Schools need to focus on educating.
Bear
Thu, Jan 24, 2013 : 6:42 p.m.
remember that when you hire more overpaid administrators or add costs to schools that have little or nothing to do with education like teacher tests and reports and more administrative garbage to justify hiring more administrators. Think of that when you try to turn schools into 'for profit' private businesses. Think of that when you are cutting teacher's pay to the point where no one wants to go into education anymore.
JB SHOOTER
Thu, Jan 24, 2013 : 4:43 p.m.
It looks to me as if the lowest qualified bidder that is recommended and approved by the board works best. No need to add more red tape.
motorcycleminer
Thu, Jan 24, 2013 : 2:21 p.m.
Just like the DDA and prince john and his merry band on 5th st..when it comes to spending other peoples $$$ both on themselves and their petty projects these people run full speed ahead...It's a shame their first priority isn't to attend to the needs of the people their supposed to represent...
Basic Bob
Thu, Jan 24, 2013 : 2:11 p.m.
While I think it is appropriate to give consideration to minority or female-owned businesses, they should not just be a storefront for local contractors who are paid less because some business owner needs to take their percentage off the top without risk or cash outlay. I don't know who the board's general contractor is, but many operate this way. Although it sounds much like living wage, prevailing wage is code for union scale. Unions still control this facet of state government. Personally, I would only hire union construction workers, but for unskilled work I don't see the benefit.
no flamers!
Thu, Jan 24, 2013 : 1:41 p.m.
The mission of the school board is to deliver great education while using our tax dollars for that sole purpose. This "task force" should not be empowered to impose its version of social justice on the tax base by favoring racial minorities or women-owned contractors. And as another poster indicated, it is of course very common for men to make the wives the business "owner to qualify" for these contracts, while the wife has no active role. What message does that send to young girls?
Radlib2
Thu, Jan 24, 2013 : 1:34 p.m.
Since america has never redressed its henious crimes against black people, giving them perfertial treatment is appropiate. Blacks were excluded from almost every economic aspect for so long, they've never recovered. It is not reverse racisim, nor is it going against what MLK preached. It is simply what is fair.
Snarf Oscar Boondoggle
Fri, Jan 25, 2013 : 2:42 a.m.
http://www.dol.gov/oasam/programs/history/shfgpr00.htm ... i just entered this in an above reply, but it seems equally importnat here as well. sorry if the double offfends "The Federal Government and Negro Workers Under President Woodrow Wilson"
E Claire
Thu, Jan 24, 2013 : 8:20 p.m.
ps Radlib, you should spend some time in the black community. Not with the small activist crowd but with the real people. You'll see that most agree with the people posting replies to you.
E Claire
Thu, Jan 24, 2013 : 8:08 p.m.
Radlib, you said "since America" in your first post. You think a whole country (or just the white people?) alive today are at fault and should make amends for what a group of people did in the past. Most people alive in this country today are not the descendants of slave owners. You want privileges for a group of people who, although they may be ancestors, were never held as slaves in this country. People who have the same opportunity as any other minority group. Japanese immigrants were put in camps in the 40's but they are thriving today. Should we put the wealthy black family ahead of the poor white family when looking at who to help? You speak as if you feel black people are inferior to other races. Black people don't need special help, they need people like you to stop stereotyping them as disadvantaged due to skin color. There's no difference between the poor black child and the poor white child except that the poor white child is not told over and over that he is a victim.
Radlib2
Thu, Jan 24, 2013 : 7:22 p.m.
So now that the deck has been stacked for several centuries, we're supposed to say " let's just keep things fair and equal?" Nothing has been fair, nor will it be unless we make some recompense to close the gap.
Radlib2
Thu, Jan 24, 2013 : 7:19 p.m.
Ecaire, your argument makes no sence. Our government perpitrated immoral acts against a race on a massive scale. How does an incident in Detroit compare? Bad analogy.
E Claire
Thu, Jan 24, 2013 : 6:35 p.m.
hey Radlib, a black male beat my aunt to death in Detroit years ago. Should my family hold all black people responsible? Should we still be waiting for an apology from the black community? What is your race? I have many friends who are black; we grew up in the D but these people do not expect an apology or a hand out. They are all doing fine mostly because they didn't allow guilty white folk like you to make them feel like they need a leg up to do what a white person can do without special help.
Westfringe
Thu, Jan 24, 2013 : 6:22 p.m.
No, it's not fair Radlib2. SKIN COLOR SHOULD NOT BE A DECIDING FACTOR IN ANY SITUATION, be it positive or negative. To have it any other way is to perpetuate racism.
Radlib2
Thu, Jan 24, 2013 : 4:43 p.m.
When and when have blacks been given preferential treatment? Sure, there are a few isolated cases, but as a general rule, blacks were excluded at least until the 1950s. The effects have lingered. They still exist. People want to say "let bygones be bygones" but that doesn't help those who have had a systemic disadvantage. We never offered an official apology to black people, let alone gave any reparations. MLK would most certainly agree, especially when one considers that the median net worth for white people is 8 times that of black americans, that some redress is warranted. There is a causal connection in the disparity we see between the two races.
Mike
Thu, Jan 24, 2013 : 4:17 p.m.
Martin Luther King would not approve of your statement at all. The time for preferential treatment is over and we should judge people by the content of their character and not the color of their skin............slavery ended almost 150 years ago but it still has value to many to be used as a divisive tool in this country..............
nekm1
Thu, Jan 24, 2013 : 2:17 p.m.
wow...who thinks like this? This is 2013....everyone has equal footing. Life is what YOU put into it. Not what others give you. If you allow color to hold you back, that is your problem, not mine. I was born into poverty, worked my butt off to better myself, and have never looked back. Your kind of thinking will never allow the young to get ahead! Look around the world. No one has the diversity and the opportunities found in America. For all people.
alarictoo
Thu, Jan 24, 2013 : 2:02 p.m.
@Radlib2 - Many of the people who came, or were brought, to the USA were treated poorly, taken advantage of, etc. What makes the blacks more deserving of preferential treatment, than, say, the Native Americans or the Chinese; or the acts against them more heinous?
no flamers!
Thu, Jan 24, 2013 : 1:46 p.m.
Your grievance against American for its "henious crimes against black people" are not to be solved by a task force of the Ann Arbor School Board. The horrible injustice of slavery, which was practiced in almost every country and widely throughout Africa for thousands of years, was not perpetrated by any living person or against any living person. Making today's white the perps that must pay is bad; making today's blacks victims is worse. It also makes no more sense than asserting your slavery grievance against the black people in Africa that firs practiced and perfected the business of selling black slaves to whites. It is a horrible blight on human history, but it is well past the time to move on.
Silly Sally
Thu, Jan 24, 2013 : 1:12 p.m.
This poll was flawed as it gave the choice of "one" or "all". I voted for Lowest, but I would have voted for "lowest" with a small factor towards "local", as long as it was not too much of a premium. Say 1% or 2%
E Claire
Thu, Jan 24, 2013 : 8:17 p.m.
This response was supposed to be under radlibs post, not this one. Why oh why can't we edit!
E Claire
Thu, Jan 24, 2013 : 8:15 p.m.
ps Radlib, you should spend some time in the black community. Not with the small activist crowd but with the real people. You'll see that most agree with the people posting replies to you.
Silly Sally
Thu, Jan 24, 2013 : 1:04 p.m.
Wow, Deb Mexicotte wants to take MY tax dollars and spend them, not on the best value but based upon the race of the sub-contractor. She said this just 2 days after we celebrated the birthday of the man who wanted us to live in a land where people were to "not be judged by the color of their skin, but by the content of their character." Is she ever racist. I once worked for a minority owned firm, owned by a rich African-American man. He got that way because the American auto companies wanted to have minority suppliers. One part that Ford bought was made in Michigan by a small, machine shop in Plymouth, shipped to Arizona to have the minority firms label placed on it, then shipped back to Dearborn. It would have been better if the wasted shipping money went to either Ford shareholders, the small Plymouth firm, or to Ford customers in the form of lower process. But instead it made a rich African-American man richer only because of the color of his skin. This is what Deb Mexicotte wants to do with other people's money, our tax money. Bids should be based on many factors, price, quality, delivery. BUT NOT RACE.
Snarf Oscar Boondoggle
Fri, Jan 25, 2013 : 2:40 a.m.
"The Federal Government and Negro Workers Under President Woodrow Wilson" department of labor :: www.dol.gov/oasam/programs/history/shfgpr00.htm ..
E Claire
Thu, Jan 24, 2013 : 6:28 p.m.
Spot on SillySal. I'm a female, small business owner but I wouldn't expect a business to hire me to provide a service based on anything but skill and cost. If a white male can do better for less, he should get the job, fair and square.
Silly Sally
Thu, Jan 24, 2013 : 2:39 p.m.
- I meant to say lower PRICES, not process - My 5th grade teacher once said to me, when I gave an excuse for bad behavior, "tow wrongs do not make a right" What ever happened to long dead slaves and victims of Jim Crow should not be used as an excuse to discriminate against one group in favor of another, all of whom were born long after these bad policies ended.
alarictoo
Thu, Jan 24, 2013 : 1:53 p.m.
@Radlib2 - You are applying a double standard. It was/is okay for the black people to complain, but not for others? Now race/ethnicity should be a consideration for whether or not the 1st Amendment applies to someone's right to complain? I'm not advocating for either 'side' here. I'm just pointing out that your argument is specious.
Radlib2
Thu, Jan 24, 2013 : 1:42 p.m.
Has has been a factor since before the birth of the country; virtually every time, it has worked against black people, now that something is given to a few, you have the nerve to complain?
Itchy
Thu, Jan 24, 2013 : 1:18 p.m.
It is a shame that this is how the game is played. Credit is given by our government, for those that find ways to reward minorities. Ford has been doing this for many years. and gets away with it. Our DC government really does not care. Now, this is coming home, close to us as our school board is going to find ways to play the game too. On top of this - other priorities like grades, budget shortfalls, rising costs of health care, etc. go unresolved.
lefty48197
Thu, Jan 24, 2013 : 12:46 p.m.
The low bidder ALWAYS missed something in the bid and then they have to cheat on something to get the job done. 30 years construction experience. Also, a guy starts a construction company, makes his wife the President and silent partner and suddenly they get minority preference. Its a swcam.
lefty48197
Thu, Jan 24, 2013 : 12:59 p.m.
Its a SCAM, I meant to say...
ChrisW
Thu, Jan 24, 2013 : 12:34 p.m.
It's too easy to spend "other people's money"..
Snarf Oscar Boondoggle
Fri, Jan 25, 2013 : 2:34 a.m.
like this: www.ralph-epperson.com/images/leon_trotsky_russian_communist.jpg from the websiet:: nar2012.blogspot.com/2012/04/trotskys-formula-for-america-1934.html ... before anyone howls at the source, please COMPREHEND THE CONTENT first. tia. it only took 79 years
Itchy
Thu, Jan 24, 2013 : 12:01 p.m.
Rome is burning and the Ann Arbor school board is fiddling!
jns131
Fri, Jan 25, 2013 : 12:21 a.m.
The devil went down to Georgia....uh Michigan he was looking for a soul to steal? Or AAPS?
Macabre Sunset
Thu, Jan 24, 2013 : 11:11 a.m.
quoting, "It's like someone earlier tonight said, we have to think about taking care of the locals and the locals will take care of us." Baskett mentioned a number of businesses that have donated money for equipment, camps or events at the schools. Sounds like a good ol' boys network to me. What else have they donated in return for preferential treatment of their bids?
jns131
Fri, Jan 25, 2013 : 12:20 a.m.
Sally? I was thinking the same thing.
Silly Sally
Thu, Jan 24, 2013 : 1:08 p.m.
Was Deb's mentor Kwani Kilpatrick?
lefty48197
Thu, Jan 24, 2013 : 12:47 p.m.
Red wing hockey tickets help.