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.
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Hamilton County and Cincinnati are heading to court to decide who can set policy for Metropolitan Sewer District (MSD) projects. The conflict came to a head after Hamilton County commissioners deliberately halted federally mandated MSD projects to protest the city’s job training rules for contractors. The Republican-controlled county argues the rules favor unions, burden businesses and breach state law, but the city says the rules are perfectly legal and provide work opportunities for city workers.
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Councilman Chris Seelbach and union supporters yesterday gathered outside the Hamilton County Administrations Building to call on county commissioners to open bidding on several Metropolitan Sewer District (MSD) projects. County commissioners blocked the work in protest of Cincinnati’s “responsible bidder” rules, which require MSD contractors to meet more stringent job training requirements and pay into a pre-apprenticeship fund that will train new workers in different crafts. The Republican-controlled county says the rules are illegal, favor unions and burden businesses, but the Democrat-controlled city says the standards help train local workers and create local jobs.
Meanwhile, county commissioners appear ready to take the city-county dispute to court. If the conflict isn’t resolved by the end of the year, the federal government could impose fines to force work on a mandatory overhaul of the local sewer system to fully continue, according to Commissioner Chris Monzel.
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Hamilton County Commissioner Chris Monzel says the county is willing to go to court to fight Cincinnati’s “responsible bidder” rules for Metropolitan Sewer District (MSD) projects. The county says the rules are illegal, burden businesses and favor unions. But city officials, particularly Councilman Chris Seelbach, says the rules help train workers and create local jobs. The rules impose stricter job training requirements on MSD contractors and require them to fund pre-apprenticeship programs that would help train new workers in different crafts.
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City officials and the Cincinnati Public Schools Board plan to announce a new collaboration today. The initiative intends to align and better implement the city and school district’s shared policy goals. “We want to establish the framework and make sure the right culture is there,” Councilman P.G. Sittenfeld, who announced the collaboration, previously told CityBeat. “Then people can do what elected officials are supposed to do: roll up your sleeves and come up with smart, viable policies.”
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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
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project. Streetcar items will now be taken up by the Major Transportation and Regional Cooperation Committee.
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: