City revisits “historic” ordinance

The Springfield City Council is poised to water down an ordinance aimed at putting city residents to work on public works projects.

The proposal before the council would cut fines for contractors who don’t use city residents to work at least half of the hours logged on public works projects worth at least $100,000. The proposal also would halve $500 fines for workers who fib about where they live while also allowing contractors to start counting hours worked by office employees in determining whether residency requirements have been met. And contractor requests for waivers would be decided by the mayor and an ad hoc committee instead of the city purchasing agent, who now is supposed to make recommendations on whether residency requirements should be set aside for some projects.

The ordinance that took effect in 2016 hasn’t always been followed. For example, it requires the city’s purchasing department to make quarterly reports to the budget office on waivers, but no such reports have been prepared, according to city budget director Bill McCarty. Nor has the city prepared standards and procedures for granting waivers, as called for in the ordinance.

Since the ordinance took effect, two of six contractors have met worker residency requirements. The purchasing department recommended waivers for two of the four contractors that fell short after companies wrote letters explaining circumstances that included a lack of city residents who were qualified union members and a reluctance to replace long-term employees with city residents. Those waivers, apparently, were granted. The purchasing department recommended fines of $14,697 for Denler, Inc., a Mokena company that employed no city residents and was paid $587,877 for street repairs under a 2017 contract, and $4,435 for Otto Baum, a Springfield firm that was paid $449,398 for street repairs accomplished with a workforce of fewer than 20 percent city residents. The money was withheld from final payments made to the two contractors.

On Tuesday, the council meeting as a committee delayed action on a $364,500 street crack-filling contract for Denler, with aldermen alternately saying they wanted to know why the company’s bid was lower than competitors while also saying they were concerned that the company had hired no city residents under the previous contract, despite financial sanctions.

Under the current ordinance, contractors are supposed to be fined at the rate of 1/20 th of one percent of the contract value for every percentage point shy of the required 50-percent residency rule. Under the proposal now before the council, the fine would be lowered to .0125 percent of each 1 percent of a contract’s value for every percentage point below the required residency threshold. The proposed new calculation is confusing and subject to interpretation, Ward 8 Ald. Kris Theilen observed, but in any case, the fine would be lower than the current penalty. Depending on how the proposed change is interpreted, the fine would be either $625 for every $100,000 in contract value, or twice that amount. In the case of Denler, which paid nearly $15,000 under the current rules, the fine under the mayor’s proposal, depending on interpretation, would have been either slightly less than $3,750 or twice that.

Theilen called for a clearer formula.

Other aldermen said the ordinance needs more teeth. The proposal allows contractors who don’t meet residency requirements to be barred from bidding on future contracts for as long as three years, but the prohibition would be discretionary and made by the city purchasing agent in consultation with the mayor. The proposal also would allow the purchasing agent to levy larger fines after consultation with an ad hoc committee. The proposal doesn’t say who would be on the committee.

The proposed revisions came after the mayor and other city officials met with contractors last spring and asked for suggestions. Corporation counsel Jim Zerkle told aldermen that the 2016 ordinance was always seen as “a pilot project.” However, no one uttered the words “pilot project” during nearly 40 minutes of discussion when the ordinance was passed two years ago. Back then, aldermen, the mayor and others hailed the measure as a breakthrough, with Brad Schaive, business agent for Laborers Local 477, calling it “historic.”

“I think everyone has the right to the American Dream, and I think this ordinance goes a long way to ensuring that happens,” Schaive told the council in 2016. Ward 3 Ald. Doris Turner also was a fan.

Two years ago, Turner said that talk about unemployment in the black community was mostly talk. “Usually, the result is some type of program that will employ 25 people for a few weeks, and then after that few weeks or months, it’s over, the program goes away, the jobs go away and everyone’s back in the situation they were in,” she said. “This ordinance is a catalyst to change unemployment rates in our community forever.”

On Tuesday, Turner said she still believes the ordinance can result in permanent change in employment rates.

“We can make whatever tweaks we need to make,” Turner said. “We’re not changing the essence of the ordinance.”

Contact Bruce Rushton at [email protected].