Following county commissioner’s Feb. 12 meeting, the dispute between Cincinnati and Hamilton County over contracting rules for Metropolitan Sewer District (MSD) projects appears to be heading to court.
The court battle comes after the county dismissed multiple concessions from the city and put MSD’s revamp of the local sewer system on hold in protest of the city’s rules. With a federal mandate looming, both sides agree a resolution is needed soon to avoid costly fines from the federal government.
For many across the city and county, the conflict is understandably confusing. The debate has often been mired down by biased media reports and political talking points that obfuscate the issue. Jargon referencing “responsible bidder,” “local hire,” “local preference,” unions, apprenticeship programs, a pre-apprenticeship fund and contractors make it even more difficult to grasp what is going on.
Cutting through the politics, here is what the responsible bidder rules actually do and why the city and county seem incapable of compromise.
What is responsible bidder?
It’s a city ordinance that essentially forces MSD contractors to adopt job training measures known as apprenticeship programs and pay for a pre-apprenticeship fund. By requiring the training options, the city hopes workers will be able to improve their skills and successfully transition to other jobs once their MSD work is finished.
Apprenticeship programs take workers through extensive on-the-job and classroom-based training in which they can hone their skills in a specific craft, such as electrical or plumbing work. Because workers get paid for their work while participating in an apprenticeship, the programs are typically characterized as an “earn-while-you-learn” model.
The pre-apprenticeship fund will put money toward programs that will teach newcomers basic skills, such as math and reading, so they can eventually move up to an apprenticeship program.
The rules don’t apply to every MSD contractor. Contracts worth less than $400,000, which make up roughly half of MSD’s sewer revamp, are exempted.
What about local hire and local preference?
Those are ordinances separate from responsible bidder that give preference to Cincinnati-based businesses. They try to keep MSD contracts within local companies.
What’s the conflict about?
The conflict is between Cincinnati and Hamilton County, which jointly run MSD. The Democrat-controlled city supports the rules, while the Republican-controlled county opposes them.
The city and county also dispute which governing body can set policy for MSD. Under a 1968 agreement, the county owns and funds MSD, and the city operates and maintains it. City Council argues the agreement allows the city to set policy for MSD, but the county disagrees. Both sides acknowledge the set-up is far from ideal.
So, did the city’s rules halt MSD projects?
No. Nothing in the city’s ordinances forces MSD projects to stop. County commissioners singlehandedly halted MSD projects in protest of the city’s rules. If it were up to the city, work would continue today.
Why are these projects so important?
By federal decree, the city needs to revamp the sewer system to bring it up to environmentally safe standards. The project will cost $3.2 billion over 15-20 years, making it one of the most expensive in the city’s history.
If the city and county don’t carry on with the revamp soon, the federal government will begin issuing fines. By some guesses, the fines could begin rolling in by the end of the year.
Why does a majority of City Council support responsible bidder?
Councilman Chris Seelbach, the Democrat who championed the rules, says they will boost local employment and create more job training options for the city’s struggling workforce.
Other Democrats on council agree, although some, like Councilman P.G. Sittenfeld, believe the ordinance is “imperfect.”
Does responsible bidder benefit workers?
Some research suggests it would.
The left-leaning Center for American Progress (CAP) in a December report argued apprenticeship programs provide an opportunity to revitalize the U.S. workforce.
“By 2020, America is projected to experience a shortage of 3 million workers with associate’s degrees or higher and 5 million workers with technical certificates and credentials,” the report claimed. “Compounding our inadequate workforce development system, research shows that employers are now spending less on training than they have in the past. At the same time, industry surveys show that a lack of qualified workers is a top concern for many employers.”
Citing a 2012 study from Mathematica Policy Research, CAP estimated apprenticeship programs alone can boost a worker’s lifetime earnings and benefits by more than $300,000. Over 36 years of employment, that’s an average gain of nearly $8,400 a year.
Why do county commissioners oppose the rules?
In terms of policy, county commissioners say the responsible bidder rules favor unions and burden businesses.
On a legal basis, the county argues the city’s responsible bidder rules conflict with state law and the local hire and preference rules enforce unconstitutional geographic preferences.
Does responsible bidder actually favor unions?
Since unions tend to offer better and more apprenticeship programs, yes.
But the rules don’t exclude non-union businesses from participating. For example, Ohio Valley Associated Builders and Contractors maintains some non-union apprenticeship programs that would qualify under the law.
Still, most of the union favoritism debate centered around a regulation the city actually offered to give up. Specifically, under current rules employers are only eligible to contract with MSD if they have apprenticeship programs that have graduated at least one person a year for the past five years. In October, Seelbach offered to strip the mandate and replace it with an incentive program. The county seemed unmoved by the proposal.
What about businesses? Does responsible bidder burden them?
By requiring businesses to adopt apprenticeship programs and put 10 cents for each hour of labor into a pre-apprenticeship fund, the law certainly places more regulations on businesses. Whether the requirements are a burden is subjective.
John Morris, president of the Ohio Valley Associated Builders and Contractors and an opponent of the law, told CityBeat the pre-apprenticeship fund’s requirement will increase business costs by $2-3 million over 15-20 years.
Citing MSD estimates for the cost of labor, Rob Richardson, regional manager of the Laborers’ International Union of North America, said the fund will cost businesses $1.5 million.
Even if someone accepts Morris’ estimate, the requirement adds up to at most 0.1 percent of the $3.2 billion project.
More broadly, some supporters of the city’s rules question whether placing a burden on businesses is innately a bad thing. The basic point of government regulations is to make the economy and businesses work better for the public. In that sense, regulations are always going to burden businesses to some extent.
For example, financial regulations burden big banks and financial institutions. But many Americans agree the regulations are necessary to avoid another financial crisis like the one that plunged the country into the Great Recession.
Still, critics argue the extra regulations would increase the cost of business, and the impact could ultimately be felt by MSD ratepayers.
Why don’t the city and county just compromise?
They kind of tried, but it seems the philosophical split between Hamilton County Republicans and Cincinnati Democrats is too strong to reach a substantial agreement.
The city, for example, has offered multiple concessions to the county. In May, City Council modified the law to ease some requirements and add an exemption for contracts worth less than $400,000, which covers half of the contracts involved in MSD’s sewer revamp. In October, Seelbach offered to replace a strict mandate with a looser incentive program. Seelbach also told CityBeat on Feb. 6 that he would consider raising the contract exemption from $400,000 to $750,000.
In return, the county rejected the concessions and instead offered to establish aspirational inclusion goals and some funding for local job training programs — as long as the city repealed its rules altogether.
Which side would win the court battle?
It’s hard to say. Both sides — and their lawyers — seem pretty confident about their legal standing.
So what’s next?
At the current rate, it looks like the city and county are heading to court. Whether the process involves a full-on legal battle or mediation between the city and county’s lawyers remains uncertain, but it’s clear something will eventually have to give.
This blog post will be regularly updated as the situation develops.
Hamilton County commissioners on Wednesday unanimously approved a resolution that seeks a compromise over Cincinnati's controversial contracting rules for Metropolitan Sewer District (MSD) projects.
Both sides agree the issue must be resolved soon to avoid a costly legal battle and allow MSD to fully continue work on a federally mandated $3.2 billion revamp of the local sewer system. But so far the Democrat-controlled city and Republican-controlled county have failed to reach an agreement.
"We really are approaching a crisis here in this dispute with the city," said Commissioner Greg Hartmann, who proposed the resolution commissioners approved Wednesday.
The county's proposal creates aspirational inclusion goals and funding for local job training programs for MSD and Greater Cincinnati Water Works. The county estimates the resolution will cost $550,000-$700,000 a year.
But it remains unclear if the county's measures will satisfy a majority of City Council, which as of December supported its own set of contracting rules.
The city rules require contractors to follow stricter standards for apprenticeship programs, which unionized and nonunion businesses use to train workers in crafts, such as electrical work or plumbing. The rules also ask contractors to put 10 cents for each hour of labor into a pre-apprenticeship fund that will help train newcomers in different crafts.
With the county proposal approved, commissioners say it's up to the city to make the next move in the dispute.
The county's proposal:
Hamilton County commissioners on Wednesday announced they will accept a Mount Airy facility offered to the county as a gift by Catholic Health Partners, opening the door to a new county crime lab at the location.
The acceptance comes despite lingering uncertainties about whether the Board of Elections will also move to the former hospital in Mount Airy. County commissioners previously warned the Board of Elections must move with the crime lab to provide the occupancy necessary to financially justify renovations at the 500,000-square-foot facility.
The decision also comes despite remaining questions about how exactly the cash-strapped county government will fund the move and the renovations it entails.
Hamilton County Coroner Lakshmi Sammarco and Sheriff Jim Neil both lobbied for the new crime lab. Citing expert opinions, they argue the current crime lab lacks space and needs to be modernized, which could put criminal evidence and trials at risk.
Board of Commissioners President Chris Monzel called the gift a “once-in-a-lifetime opportunity” — a sentiment both other commissioners seemed to follow.
“This is a home run for law enforcement in Hamilton County,” Commissioner Greg Hartmann said.
Commissioners explained they will seek various
opportunities to fill out remaining space in the facility.
Mayor John Cranley on Jan. 23 offered to move some city police services to the facility, but Hartmann told CityBeat the offer wouldn’t be enough to replace the Board of Elections.
“Without the Board of Elections coming with the crime lab, that’s not enough occupancy,” Hartmann said. “There would be some good potential co-location opportunities with the city (at the Mount Airy facility), but not enough to take up 400,000 square feet.”
But with Wednesday’s development, county commissioners appear ready to take up the Mount Airy facility and new county crime lab even if the Board of Elections doesn’t move.
On Monday, the Board of Elections split along party lines over whether the board should move its offices and early voting from downtown to Mount Airy, where only one bus line runs. Democrats say the move would reduce voting access for people who rely on public transportation to make it to the ballot box. Republicans argue the potential of free parking at the facility outweighs the lack of public transportation.
Of course, part of the issue is political: Democrats benefit from a downtown voting location that’s easily accessible to Democrat-leaning urban voters, and Republicans benefit from a location closer to Republican-leaning suburban voters.
With the board’s tie vote, the issue now goes to the secretary of state — Republican Jon Husted — to potentially decide. The secretary of state’s office says Husted will make a decision after he reviews documents from the Board of Elections explaining both sides of the tie vote, but spokesperson Matt McClellan says Husted would like to see the issue resolved locally before he is forced to intervene.
Mayor John Cranley on Thursday offered the Hamilton County Board of Elections free space at the city-owned Shillito’s building to keep their offices and early voting downtown.
The offer comes in the middle of a contentious debate between Democrats and Republicans on the Board of Elections over whether the county should move the board to a former hospital at Mount Airy, where only one bus line runs.
The Board of Elections currently rents its offices from a private landlord. Moving to the Mount Airy facility would place the board on county-owned property and allow the county to avoid paying rent.
Along with the Board of Elections move, the county wants to establish a new crime lab at the Mount Airy location. Consolidating the crime lab and Board of Elections at the Mount Airy facility would provide the critical mass necessary to financially justify the move and the renovations it would require, according to county officials.
To solve the critical mass issue if the board moves to the former Shillito’s building instead, Cranley, a Democrat, said he’s willing to look into moving some city police services, including SWAT operations, to the Mount Airy facility.
But Hamilton County Commissioner Greg Hartmann, a Republican, told CityBeat the offer probably won’t satisfy the county’s needs.
“Without the Board of Elections coming with the crime lab, that’s not enough occupancy,” he said. “There would be some good potential co-location opportunities with the city (at the Mount Airy facility), but not enough to take up 400,000 square feet.”
Hartmann said it’s now up to the Board of Elections to accept or reject the Mount Airy facility. If the board declines to move to Mount Airy, Hartmann explained the county would likely drop the Mount Airy plan and the county coroner would go without a new crime lab.
For the city, Cranley’s offer raises questions about what other potential uses exist for the Shillito’s building, given the high property demand downtown. But Cranley said there’s currently no credible attempt at marketing the facility for other uses.
“The building is vacant, and we spend over $100,000 a year just to maintain a vacant building,” Cranley said. “I believe that getting someone in there that takes a significant amount of space is going to open up the rest of the building, which would be over 200,000 square feet, to make it more marketable. I think long-term it would be better for the city financially.”
He added, “In the short-term I think there are some things more important than money. And I think the symbolism of keeping the Board of Elections and voting downtown is just worth it.”
City Council appears to agree with the mayor. Shortly after Cranley announced his offer, council passed a symbolic resolution opposing the Mount Airy move.
From an electoral perspective, part of the issue is which voting location would favor Democrats or Republicans. Democrats tend to dominate in urban areas like downtown, while Republicans could benefit from a facility in Mount Airy that’s closer to suburban voters.
State Rep. Alicia Reece, who joined Cranley for the announcement, tried to defuse concerns that she, Cranley and other Democrats are trying to keep voting downtown for electoral gains.
“The reality is the Board of Elections at its current location has declared both Democrat and Republican winners of elections,” Reece said. “I think the focus is to just make sure that we have a facility that everyone can have access to, whether you’re driving or whether you’re on the bus.”
The agenda defined City Council’s first meeting of the new year — the first full session since council decided to continue work on Cincinnati’s $132.8 million streetcar project.
The meeting also showed that the Democratic majority — once fractured over the streetcar project and parking privatization plan — now appears to have formed a coalition on most issues facing the city. Perhaps more than anything, that could indicate the direction of Cincinnati for the next four years.
Most contentiously, the Democratic majority on City Council rejected a repeal of the city’s contracting rules for Metropolitan Sewer District (MSD) and Greater Cincinnati Water Works (GCWW) projects.
The rules dictate how the city and county will award contracts for the federally mandated $3.2 billion revamp of the local sewer system.
The city’s rules impose stricter job training requirements on city contractors and require them to fund pre-apprenticeship programs that would help train new workers in different crafts.
Councilman Chris Seelbach, a Democrat who spearheaded the rules, argues the requirements will help foster local jobs and job training.
But the Republican-controlled county government, which also manages MSD and GCWW, says the requirements unfairly burden contractors and favor unions. Last year, county commissioners halted MSD’s work on the sewer overhaul in protest of the city’s rules.
The county’s halt has put 649 jobs and $152 million worth of sewer projects on hold, according to data released by Councilman Charlie Winburn, a Republican who opposes the city’s rules.
With the federal mandate looming, county commissioners on Wednesday unanimously proposed a compromise that would create some job training and inclusion initiatives.
“We are approaching a crisis here in this dispute with the city,” said Commissioner Greg Hartmann, a Republican who opposes the city’s rules.
Vice Mayor David Mann, a Democrat, said he will look at the county’s proposal. But he cautioned, “I’m not going to repeal it until we have a substitute. To have a substitute we have to have conversations. This could be the beginning of a framework.”
The issue could end up in court. The city’s lawyers previously claimed they could defend the local contracting rules, but the county insists the city would lose.
“Portions of what the city wants will not stand in court. Our lawyers should meet,” Hartman told Seelbach on Twitter.
If the city and county don’t act before February, Winburn said the
federal government could impose a daily $1,500 fine until MSD work fully
Supportive housing project in Avondale
A supermajority of council — the five Democrats plus Charterite Kevin Flynn — agreed to continue supporting state tax credits for Commons at Alaska, a 99-unit permanent supportive housing facility in Avondale.
Although several opponents of the Avondale facility claim
their opposition is not rooted in a not-in-my-backyard attitude, many
public speakers argued the housing facility will attract a dangerous
crowd that would worsen public safety in the neighborhood.
Supporters point to a study conducted for similar facilities in Columbus that found areas with permanent housing facilities saw the same or lower crime increases as demographically comparable areas.
Other opponents decried the lack of outreach for the project. They claim the project was kept hidden from residents for years.
National Church Residences (NCR), which is developing the facility, says it will engage in more outreach as the project moves forward.
Councilman Christopher Smitherman, an Independent, said council’s decision ignores what most Avondale residents told him.
“The supermajority of residents that I have talked to that are directly impacted by this project are against it,” asserted Smitherman, who is leading efforts against the facility in council.
Even if council decided to rescind its support for the Avondale project , it’s unclear if it would have any effect. NCR already received state tax credits for the facility back in June.
City Council unanimously approved a study that will look into potential race- and gender-based disparities in how the city awards business contracts.
The $690,000 study is required by the courts before the city can pursue initiatives that favorably target minority- and women-owned businesses with city contracts, which Mayor John Cranley and most council members support.
But Flynn and Councilwoman Yvette Simpson, a Democrat, voiced
doubts that the study’s findings will fulfill the legal requirements necessary to legally enact initiatives favoring minority- and women-owned businesses.
Given the doubts, Simpson cautioned that the city should begin moving forward with possible inclusion initiatives before the disparity study is complete.
“I do think we need to rally around a mantra that we can’t wait,” agreed Democratic Councilman P.G. Sittenfeld.
Once the study is complete, several council members said it will, at the very least, provide valuable data to the city.
Other notable actions
• Council approved a tax budget that lowered the property tax millage rate from 5.7 mills to 5.6 mills, which will cost $500,000 in annual revenue, according to city officials.
• Council approved an application for a $70,000 grant that would fund local intervention efforts meant to help struggling youth.
• Council approved an application for a nearly $6 million grant to provide tenant-based rental assistance to homeless, low-income clients with disabilities.
• Council disbanded the Streetcar Committee, which the
mayor and council originally established to look into halting the
project. Streetcar items will now be taken up by the Major Transportation and Regional Cooperation Committee.
The latest administrative shakeups at City Hall spurred
controversy after the city administration confirmed City Solicitor John
Curp will leave his current position and one of the new hires — Bill
Moller, a city retiree who will become assistant city manager — will be
able to “double dip” on his pension and salary ($147,000 a year). Councilman
P.G. Sittenfeld said on Twitter that City Council will discuss the personnel changes at today’s council meeting. The hiring decisions are up to Interim City Manager
Scott Stiles, but some council members say they should be more closely
informed and involved. (This paragraph was updated after council members called off the special session.)
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City Council advanced a largely progressive agenda that moves forward with initiatives aimed at job training, homelessness and inclusion. Specifically, the Democratic majority on council acted as the foundation in keeping controversial contracting rules for sewer contracts, continuing support for a permanent supportive housing facility in Avondale and approving a new study that will look into potential race- and gender-based disparities in how the city awards business contracts. With the Democratic coalition seemingly established on most issues facing the city, it’s now much clearer what direction council will take the city over the next four years.
Hamilton County commissioners yesterday proposed a compromise with the city over controversial contracting rules for Metropolitan Sewer District (MSD) and Greater Cincinnati Water Works projects. Although both sides agree the issue must be resolved soon to avoid a costly legal battle and allow MSD to carry on with work on a federally mandated overhaul of the local sewer system, the Democratic-controlled city and Republican-controlled county have failed to reach a resolution. Since the county put MSD projects on hold in protest of the city’s rules, $152 million worth of sewer projects and 649 potential jobs have been put on hold, according to data from Councilman Charlie Winburn, a Republican who opposes the rules.
Councilmen P.G. Sittenfeld and Chris Seelbach questioned whether recent personnel changes at City Hall violated the city charter. The concern is whether Mayor John Cranley pushed Interim City Manager Scott Stiles to move John Curp from his previous role as city solicitor to chief counsel of the city’s utilities. Sittenfeld and Seelbach noted the charter prevents the mayor and council members from interfering with personnel decisions. But Stiles declined to answer and sidestepped Seelbach and Sittenfeld’s questions.
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Hamilton County commissioners yesterday accepted a Mount Airy facility offered to the county as a gift by Catholic Health Partners, with plans to use the former hospital as the campus for a new crime lab. The acceptance came despite previous warnings that the Mount Airy facility could not be taken in by the county if the Board of Elections didn’t also move its office and early voting to the Mount Airy location, where only one bus line runs, from its current downtown office. A party-line tie vote left the Board of Elections move in limbo, with a tie-breaking decision expected from the Republican secretary of state in the next few weeks. Democrats oppose the move because it would limit voting access for people who rely on public transportation, while Republicans argue free parking at the new facility would outweigh the loss of bus access.
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