Written Testimony of Chris Pozzuto, City of Springboro - HB 146 Permissive Prevailing Wage (June 25, 2021)

Summary

Written testimony of Chris Pozzuto, City Manager, City of Springboro, on HB 146 Permissive Prevailing Wage, dated June 25, 2021. The testimony supports House Bill 146 and states that Prevailing Wage adds, at a minimum, 10%-20% to the cost of local government projects. For a Performing Arts Center project, it says the design/build contractor's estimate of approximately $3.9 million rose to $4.5 million once Prevailing Wage was included, an increase of $600,000. It says bids on road projects used to number anywhere from 6-8 and now typically number 2-3.

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Written Testimony of Chris Pozzuto
City Manager, City of Springboro
HB 146 Permissive Prevailing Wage
June 25, 2021

Thank you for the opportunity to provide written testimony in support of House Bill 146. As the
City Manager of a community in Southwest Ohio of 19,000 residents, HB 146 is a bill
concerning local government control of community development projects in its jurisdiction.

Prevailing Wage in the State of Ohio is, in its most simplistic form, an antiquated way to
significantly increase labor costs to local governments and ultimately our tax payers. Through
our experiences in dealing with Prevailing Wage projects, Prevailing Wage adds, at a minimum,
10%-20% to the cost of local government projects with no discernable benefit, other than
inflating labor costs for the same labor that would be working on the project otherwise.

For example, the City recently constructed a Performing Arts Center as part of a redevelopment
project at the corner of State Route 73 and State Route 741 in the center of our community.
Originally, the design/build contractor estimated the build to be approximately $3.9 million as
they were not aware it would need to be constructed with Prevailing Wage. Once we received
the revised estimate with Prevailing Wage included – the estimate increased to $4.5 million! The
revised estimate included the same building design, same labor to construct the building, but a
$600,000 increase. Unfortunately, we have numerous examples of large scale projects whereby
the cost of construction increases exponentially because of the Prevailing Wage requirements.
This is an unnecessary increase in cost to the local taxpayers.

The City of Springboro supports HB 146 because it provides the choice of determining whether
or not the application of Prevailing Wage is needed in local communities. In some communities
it may make sense, others not. With the State of Ohio being a “Home Rule State”, that choice
should be left to each individual community.

In addition, the choice of local government projects being Prevailing Wage or not can also
provide more competition. Over the past few years, the City has witnessed our projects being
bid by fewer contractors. In the past, on road projects for example, we would receive anywhere
from 6-8 bids. Now, we typically receive 2-3 bids. There are many reasons for this; less
contractors due to changes in the economy, more work to be bid around the state and no real
understanding of the Prevailing Wage law by many contractors. Many contractors simply do not
bid local government work because they have no understand of the Prevailing Wage law and
how it would affect them, so they avoid the work altogether. Minimal bids typically translates
into less competition for the work and higher costs.
I urge this committee and the General Assembly to do what many communities in the state have
been asking for many years – pass HB 146 to allow for more local choice and the opportunity for
communities to keep costs as low as possible for our local taxpayers. This bill will allow local
governments another choice in soliciting bids for construction projects to ensure the continued
economic vitality of our community.


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