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Published: Wednesday, 10/29/2003

Council mandates prevailing wage plan

Trade workers on affordable housing projects could see an increase in their pay, but the change might reduce the amount of affordable housing being built.

Toledo City Council yesterday voted 11-0 to pay prevailing wages to workers on affordable housing projects receiving some federal funding. Councilman George Sarantou was absent for the vote.

“It's a good, progressive move for the city of Toledo,” Councilman Frank Szollosi said.

The city receives funds from the U.S. Department of Housing and Urban Development's HOME Investment Partnership Program and makes them available to developers building affordable housing. Under federal law, developers receiving the loans or grants must pay prevailing wages, which are negotiated by the unions, to workers if the HOME funding covers the full cost of at least 12 units.

That means a project with a large number of units that receives a moderate amount of HOME funding may not be required by federal law to pay a prevailing wage.

The city's change means that a prevailing wage would be paid to all projects of 12 or more units receiving HOME funding, even if fewer than 11 of the units are covered by federal funds.

On Sept. 25, Mayor Jack Ford directed the city's Department of Economic and Community Development to pay the prevailing wage. With council voting it into law, the next mayor can't just overturn the order, he said.

Councilman Pete Gerken said the law would create jobs and keep dollars in the city.

The benefit to the community is that crews from other states or cities wouldn't take the money away, he said.

But there is nothing in the law to ensure that the work crews are local. The city is counting on the higher wages to attract city workers.

“I think we need to make sure that all the people who do these houses are local,” Councilman Bob McCloskey said.

Critics said the change could end up decreasing the amount of affordable housing being built, although no one spoke out against it at the meeting.

Ron Grant, executive director of Toledo Central City Neighborhoods community development corporation, said the law could cause problems with the group's Oakwood Homes project.

Accepting federal HOME funds could make the Smead Avenue project more expensive, he said.

If they build a $100,000 house using $3,000 in HOME funds, the prevailing wage law could raise the cost to $103,500 - an increase that is greater than the $3,000 they got from HOME.

He said one option would be to buy prebuilt homes from Indiana. The workers there are paid a prevailing wage, but overall the product would be cheaper than local construction at the prevailing rate.

“The money that they're trying to throw into the prevailing wage will really make the money go somewhere else,” he said.

He said Oakwood Homes III and IV would cost $5 million to $7.5 million, “and it sounds like the majority will be happening outside Toledo.”

But Mr. Szollosi said the change would not reduce the amount of affordable housing being built, because the prevailing wage would be residential, not commercial. Some analyses have shown that it “doesn't add any egregious cost to doing business,” he said.

“It's definitely good news for people seeking work in Toledo,” Mr. Szollosi said.

Council voted 10-0 to rezone Robinson Park so that the new Robinson Middle School can be built there.

The existing school would be a swing school, housing classes from other schools under construction until 2010, when it would be demolished and replaced with a park.

Council also voted 10-0 to give CitiFest the management and operation of the Erie Street Market.



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