by German Lopez
City’s rule for MSD projects attempts to increase local employment, job training
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
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
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
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
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
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.