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1 COMMONWEALTH OF HOUSE OF REPRESENTATIVES 2 LABOR & INDUSTRY COMMITTEE 3 WILLIAMSPORT CITY HALL 4 245 WEST 4TH STREET, SECOND FLOOR SECHLER COMMUNITY ROOM 5 WILLIAMSPORT, PENNSYLVANIA

6 THURSDAY, SEPTEMBER 26, 2013 1:00 P.M. 7 PUBLIC HEARING - PREVAILING WAGE REFORM 8

9 BEFORE: HONORABLE STEPHEN BLOOM, CHAIRMAN 10 HONORABLE FRED KELLER HONORABLE GREGORY S. LUCAS 11 HONORABLE HONORABLE 12 HONORABLE DAN TRUITT HONORABLE 13 HONORABLE JOHN T. GALLOWAY

14 ALSO 15 PRESENT: HONORABLE GARTH D. EVERETT HONORABLE RICK MIRABITO 16

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SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 2

1 COMMITTEE STAFF PRESENT: NOAH KARN 2 RESEARCH ANALYST (R)

3 VICKI DILEO MINORITY EXECUTIVE DIRECTOR (D) 4

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1 I N D E X

2 OPENING REMARKS By Chairman Bloom 4 - 5 3 By Representative Galloway 5 - 9

4 PRESENTATION By Commissioner 10 - 14 5 By Commissioner Joe Kantz 14 - 20

6 QUESTIONS FROM COMMITTEE MEMBERS 20 - 46

7 PRESENTATION By Howard Fry 46 - 51 8 By Tim Horner 51 - 52 By Bill Burdett 52 - 55 9 QUESTIONS FROM COMMITTEE MEMBERS 55 - 58 10 PRESENTATION 11 By Jason Fink 59 - 61 By Krystle Bristol 61 - 66 12 QUESTIONS FROM COMMITTEE MEMBERS 66 - 75 13 PRESENTATION 14 By Frank Sirianni 76 - 84 By Abe Amoros 85 - 89 15 QUESTIONS FROM COMMITTEE MEMBERS 89 - 136 16 PRESENTATION 17 By Dr. Oscar Knade 137 - 142

18 QUESTIONS FROM COMMITTEE MEMBERS 142 - 146

19 CONCLUDING REMARKS By Chairman Bloom 147 20

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1 P R O C E E D I N G S ------2 CHAIRMAN BLOOM: I'd like to call to order this

3 meeting of the Pennsylvania House Labor & Industry Committee.

4 If we could please rise for the Pledge of Allegiance.

5 PLEDGE OF ALLEGIANCE RECITED

6 CHAIRMAN BLOOM: The flag was small but mighty. I'm

7 Stephen Bloom. I am a member of the House Labor & Industry

8 Committee, Secretary of the Committee. And I've been deputized

9 by Chairman Scavello to run the meeting here this afternoon.

10 I want to start out by allowing the members that are

11 here to introduce themselves. And I wanted to make note of the

12 presence also of representative , who is from this

13 local area and who has graced us with his presence here at the

14 hearing as well. And we'll start at my far right and have the

15 members of the Committee ---.

16 AUDIENCE MEMBER: Excuse me. And Representative

17 Rick Mirabito, ---

18 CHAIRMAN BLOOM: Oh:

19 AUDIENCE MEMBER: --- whose district it is.

20 CHAIRMAN BLOOM: I'm sorry. I did not see

21 Representative Mirabito back there.

22 REPRESENTATIVE MIRABITO: District Representative.

23 Welcome to it.

24 CHAIRMAN BLOOM: Thank you. Thank you. And thank

25 you for joining us. We'll start with the far right, my far

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 5

1 right, and we'll have the members introduce themselves.

2 ROLL CALL

3 CHAIRMAN BLOOM: Thank you. We have been holding a

4 series of hearings on the issue of prevailing wage reform

5 across the state, in the Capitol, and today is another in that

6 series. We're trying to hear from local individuals, municipal

7 officials, people in business and people in labor who are

8 interested in the issue. We've heard a lot of great testimony

9 so far over the previous several months. There are a number of

10 different bills pending, different possible scenarios for

11 reform of the prevailing wage laws as they now stand. And

12 today we're looking forward to another day of getting some

13 excellent testimony on the record so we can get a better feel

14 for what the appropriate solutions to some of the challenges

15 and difficulties posed by the existing Prevailing Wage Law we

16 can address.

17 I wanted to --- in lieu of the presence of our

18 Democratic Chair, I wanted to give Representative Galloway the

19 opportunity just to make a brief introductory statement as

20 well.

21 REPRESENTATIVE GALLOWAY: Thank you, Representative

22 Bloom. I appreciate that. First I want to say, I haven't been

23 to Williamsport since I was a kid. My dad took me here when I

24 was a young boy. And I've been around here for a while but I

25 haven't really stopped into this town. And I came in last

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1 night, and the first thing I did was I drove by the Little

2 League fields and I parked my car and I walked down that hill.

3 It's just an absolutely gorgeous part of the world. You know,

4 there's places in Pennsylvania where you stop in and your jaw

5 just drops, and this is one of them. It's a great town. It's

6 good people, friendly people. It's nice to be here.

7 I'm a what you would call a conservative Democrat.

8 I have a reputation for being what we used to call a Bob Casey

9 Democrat. I'm not a knee-jerk liberal Democratic. I'm not

10 someone who takes cheap shots. Hopefully, I have a reputation

11 of finding common ground, getting things accomplished and

12 keeping my word. And a good example of that is last year I

13 worked with a Republican Governor, Republican House and a

14 Republican Senate to pass comprehensive illegal immigration

15 reform. I found compassion, common ground, and passed

16 something called E-Verify, which is now the law of the land for

17 all public projects in Pennsylvania.

18 We have a --- and also I'd like to say the people on

19 this panel --- the Republicans on this panel are good people.

20 I mean, I have a lot of respect for each and every one of them.

21 They're extremely smart and extremely bright. I'm not going to

22 sit here today and take cheap shots. I'm going to stick to the

23 facts. Someone who's being part of this discussion for three

24 years now, attending hearing after hearing after hearing, and

25 hopefully this is the last one --- from what I've heard, this

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1 is the last one. Pennsylvania is in a lot of trouble right

2 now. We're 49th out of 50 in job creations. It's hard to

3 believe we're the Saudi Arabia of Marcellus Shale. Our

4 economy's contracting, unlike New York and New Jersey and Ohio.

5 Let's make no mistake about it. What you're about to discuss,

6 what you're about to talk about, this legislation, isn't going

7 anywhere. It's not going anywhere. It's not going anywhere

8 because of me. It's not going anywhere because of the

9 Democrats. Democrats, we don't control anything in Harrisburg.

10 We have a Republican Governor. We have a Republican House by

11 historic margins. We have the only Republican-controlled

12 Senate in the entire northeast. If the Republicans wanted to

13 pass this legislation, they could do it today. They could do

14 it yesterday. They could have done it years ago. But they

15 won't. Not because of Democrats. The Senate Republicans are

16 on record as saying they're not going to look at this issue.

17 We have a serious problem in Harrisburg, and nothing is getting

18 done. And it's not because Democrats are fighting Republicans.

19 I'm not going to sit here and say Democrats are any better than

20 Republicans. In a lot of ways, maybe we would be doing the

21 same thing if we were in total control.

22 Why nothing is happening is because Republicans are

23 fighting with Republicans. Republicans in the House are

24 fighting with Republicans in the Senate. Republicans in the

25 Senate are fighting with Republicans in the House. Republicans

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1 in the House are fighting with each other. And the Governor is

2 fighting with all of them. And nothing is getting done. We go

3 into Harrisburg, we go into session, we break for six hours so

4 Republicans can sit in a caucus and fight over what they're

5 going to bring on the floor. We go onto the floor ---.

6 CHAIRMAN BLOOM: Representative Galloway, could we

7 please --- I wasn't looking for an extended opening statement.

8 If you wouldn't mind kind of wrapping things up so we can get

9 into the testimony of the witnesses that have taken their time

10 to be here this afternoon.

11 REPRESENTATIVE GALLOWAY: My point is this. And I

12 will make it brief, and I appreciate that. Like I said, I'm

13 not somebody who takes cheap shots, but I've been through years

14 and years and years of talking about this bill. And at every

15 single hearing we're able to prove the people who show that

16 this is going to save taxpayers dollars are wrong. They're

17 wrong because the data they used to extrapolate that conclusion

18 is wrong. Non-union contractors don't submit wage data.

19 Therefore, your data is wrong. Therefore, your conclusions are

20 wrong. Labor costs barely reach 18 percent of a project, yet

21 you talk about saving 20 percent. How are you going to do

22 that? What are you going to do, move it down to 17 percent, 16

23 percent? That's all you're going to do is suppress wages a

24 little bit so contractors can save a little bit a month. We've

25 shown it over and over again.

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1 Just yesterday, when a bill was passed --- a

2 prevailing wage bill was passed out of Committee, we offered an

3 amendment to force everyone to submit data. That would make

4 the data correct. Republicans voted no. We offered to amend

5 it to provide receipts and to submit data; they voted no. We

6 offered to amend it to make sure that the projects weren't

7 divided so people couldn't cheat; Republicans voted no. We

8 offered to amend it to prevent kickbacks; the Republicans voted

9 no. I'm willing to work with anyone who can make things

10 better, but after three years this show is ending. Thank you.

11 CHAIRMAN BLOOM: Thank you, Representative Galloway.

12 And just by way of the record, we did agree as a --- the

13 Republican Chairman and the Democratic Chairman agreed

14 yesterday to discuss those amendments and consider them on the

15 floor.

16 But I want to go ahead and jump right into our

17 witnesses, because they have taken time to be here, and we're

18 already a minute or two behind schedule. And it's going to be

19 important to try to stick with the schedule throughout the

20 afternoon as a courtesy to all those who have taken time to be

21 here. So I would like County Commissioners Jeff Wheeland and

22 Joseph Krantz (sic). If you gentlemen can please step up to

23 the table. And to the extent --- and this goes for any of the

24 witnesses today. To the extent you're able to summarize your

25 testimony without reading the entire written testimony that you

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1 may have brought along, certainly that would be benefitted ---

2 appreciated by the members of the Committee and I think would

3 actually help us get to the nugget of some of the issues. So

4 feel free to deviate from your written remarks and kind of

5 shorten and summarize so that we can keep on track. If you

6 gentlemen want to proceed. Thank you.

7 COMMISSIONER WHEELAND: Okay. Thank you very much

8 for the opportunity to testify before this committee. Again,

9 my name is Jeff Wheeland. I'm Chairman of the Lycoming County

10 Board of Commissioners. I have as --- I will be brief. You

11 have a copy of my written testimony.

12 I'm going to kind of skip right ahead, if I could,

13 to specific examples with respect to Representative Galloway.

14 Here's an example, if you turn to page two, where you can

15 extrapolate accurately prevailing wage. And this was a project

16 that's currently ongoing, which is the demolition of an old

17 factory, the Brodart building. It's the Brodart project here

18 in Lycoming County. And it's a premier Brownfield

19 revitalization site. Federal and state dollars are part of the

20 funding mix for that demolition work. And as such, federal

21 David-Bacon rates govern the labor cost. Contractors on the

22 project --- and again, it's easy to figure out because they're

23 paying the David-Bacon rates versus prevailing wage. And had

24 the Davis-Bacon rates not superseded prevailing wages or being

25 trumped by the Davis-Bacon rates, project costs would have been

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1 about 30 percent higher because it's a very labor-intensive

2 project.

3 Following our two comparisons to help explain this

4 potential increase, the Davis-Bacon rate for a carpenter is

5 roughly $19 an hour, whereas the prevailing wage rate is about

6 $40 an hour. The Davis-Bacon rate for an unskilled laborer is

7 about $15 an hour, and the prevailing wage rate is about $35.

8 Now, to be fair, these kind of cost disparities are

9 not consistent across all labor categories, but they do

10 illustrate certainly to me that these inflated wage rates erode

11 the effectiveness of our public project funding. If prevailing

12 rates would have been imposed, this demolition budget could

13 have cost the city an additional $280,000 to $300,000. And

14 believe me, we spent almost a year --- well, literally years

15 gathering up the dollars for this project, much needed project

16 for Brownfield revitalization. And I was always under the

17 assumption that state government was smarter than federal

18 government. But in this particular case, the federal

19 government tends to be a little bit smarter when it comes to

20 taxpayer dollars.

21 I have another example. We currently are in the

22 process of building a $3.6 million terminal for the

23 Williamsport Regional Airport, and it's going to be constructed

24 within the next three years. And once again, thank goodness,

25 the Davis-Bacon rates are applied, so we're going to save about

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1 $350,000 on that project versus the prevailing wage.

2 Another example is our Lycoming County

3 Transportation Improvement Program, or the TIP. We have about

4 15 million highway and bridge projects that are funded by ---

5 $100,000 by state dollars, all subject to prevailing rate

6 provision. If these projects could have been funded with

7 federal dollars instead of state dollars, thus invoking federal

8 Davis-Bacon rates, it's estimated that approximately $4.5

9 million in project delivery costs can be saved. You know,

10 these costs could be --- conceivably cover the expense of

11 upgrading over seven locally structurally-deficient bridges.

12 I have other examples you can read from my

13 testimony, but I do believe that to get an accurate number on a

14 save, you can use Davis-Bacon on a job versus prevailing wage.

15 And also, if you look at the very last page, I provided,

16 compliments of the Boroughs Association, an analysis on the

17 different wage categories and prevailing wage rates.

18 Here's another example. Here in Lycoming County, we

19 had --- we do a lot of work with Habitat for Humanity. And we

20 allocated $25,000 for our 2005 fund --- state-funded

21 Brownfields for housing programs, together with some Act 137,

22 affordable housing dollars, to help the local affiliate

23 construct an affordable home. Both funding sources were

24 determined by the Department of Labor & Industry to be subject

25 to prevailing wage. The net effect of our investment was the

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1 prevailing wage rates drove the cost increase to the project up

2 about $15,000. In short, nearly 60 percent of the county's

3 contribution was lost to the prevailing wage and induced labor

4 cost.

5 You know, ladies and gentlemen, the real crux of the

6 matter here is, me, as County Commissioner, we have a great

7 working relationship with our 52 municipalities. It wasn't ---

8 it was only about two years ago that we put out a letter to

9 municipalities, 52 municipalities, our authorities, basically

10 requesting what are your infrastructure needs. And here, in

11 Lycoming County, population 120,000 people, we have over a

12 billion, a billion dollars' worth of infrastructure needs.

13 We have a logjam of projects that cannot be done

14 because of the prevailing wage. This stuff gets put on the

15 shelf, so to speak. Only the projects that absolutely,

16 positively, have to be done, we have to gather up the money to

17 do those projects when other projects suffer. Just recently,

18 yesterday it was in the newspaper locally here, we have a

19 ballpark up here that needed painted. They budgeted --- the

20 city budgeted $45,000. They had forgotten that prevailing wage

21 would have kicked in. The bids came in at $89,000. Project

22 shelved. Infrastructure is crumbling underneath us, and we're

23 not doing enough about it. This would be a small part to help

24 get these projects moving and moving forward.

25 One of the considerations I'd like to present to

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1 you, and it's not in my testimony, it was only thought of last

2 night, was give the counties an option for a five-year

3 moratorium on prevailing wage. Give us the option. Set it

4 aside for five years. Let's get rid of this logjam of projects

5 that have to be done. It's a thought, you know, and it

6 obviously would help stimulate the economy. So if there's any

7 questions, I'll feel free to take them.

8 CHAIRMAN BLOOM: What we'll do, Commissioner, is

9 we'll allow your colleague to go ahead and offer his testimony,

10 and then we'll have questions for both of you, if you don't

11 mind doing it that way.

12 COMMISSIONER WHEELAND: Thank you.

13 CHAIRMAN BLOOM: Commissioner?

14 COMMISSIONER KANTZ: Thank you. Good morning --- or

15 good afternoon, everyone. My name is Joe Kantz. I'm from

16 Snyder County. I'm the Chairman of Commissioners there. I'm

17 also the Treasurer for the State County Commissioners

18 Association of Pennsylvania. And I thank you for allowing us

19 to be here to offer our testimony today.

20 I'm going to go over my testimony very quickly, but

21 I do have brief statements here that I'll look at. And again,

22 I want the people that are here behind me to realize as well,

23 to imagine the year 1962, the cost of gasoline --- a gallon of

24 gasoline, 31 cents. I wasn't even born yet, I don't remember

25 those days, but I wish I could recognize them today. But 31

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1 cents, and look at what we're paying today. $3.37 was the

2 cheapest gas on the way here from Selinsgrove today. You know,

3 the average laborer --- the average home cost in 1962, $18,200.

4 I don't even know if I can buy roofing for that much today.

5 But things have changed a lot. But one thing that has not

6 changed over the last 50 years is the $25,000 threshold for

7 prevailing wage.

8 You know, I think it would be ludicrous for anyone

9 in this building to say that we should be paying laborers the

10 same rate they made in 1962, yet that's exactly what we're

11 telling the taxpayers, that their money is not worth as much

12 and they have to pay that same amount that they paid back in

13 1962, they've got to pay that prevailing wage on the same

14 amount that was set back in 1962, which is ludicrous as well.

15 Now, Pennsylvania Building and Construction Trades

16 Council, I believe they're going to testify here today, on

17 their website, on a white paper, makes an argument against the

18 Prevailing Wage Act that says it drives up the cost of

19 construction. They oppose people that say that. Opponents of

20 prevailing wage claim elimination of this onerous act would

21 save 10 to 30 percent. I'm going to give you some examples to

22 show you that that is exactly true in my county, where I come

23 from. We are not a heavily unionized county. I'll be very

24 honest about that. I think anybody that lives there would

25 agree. And to date, all the projects that I have bid out as a

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1 commissioner, not one single union shop has bid on those jobs.

2 So I'm trying to lay out all the facts so we can --- and that

3 may not be the case in all the counties. I realize that. But

4 in Snyder County, our commissioners have really worked hard to

5 try and take on some building maintenance projects that

6 technically have been let go for many years. We're trying to

7 get the buildings up to snuff because I think it's cheaper in

8 the long run to take care of things as they present themselves

9 then wait until there's a major disaster and then try and fix

10 everything. And hopefully we'll save money, but let me give

11 you two examples.

12 In 2010, we replaced all the windows in our

13 courthouse. They were terrible. They were outdated. They

14 were falling apart. We spent $133,000. This was a very

15 materials-based bid. Most of the money went into the material

16 for the new windows. The labor was not that intensive. It was

17 more materials cost in that bid, to be fair.

18 Our market-based wage --- if we had paid a

19 market-based wage, we would have saved about $14,000 in labor

20 costs on that project. So that's only 10.5 percent. But that

21 does fall between 10 and 30 percent. In 2011 we did a masonry

22 project, a lot more labor intensive. Materials were very

23 minimal, you know, some new mortar, taking off the caps on the

24 building, putting them back on, but mainly that project was

25 labor. So we would have saved a lot more money. That price

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1 tag on that project was only $55,000. But if we would have not

2 had to fall within that prevailing wage rate --- we technically

3 wasted $15,000 on that project because of prevailing wage,

4 which is 27 percent, again, between 10 and 30 percent.

5 2012 we replaced a flat roof on the courthouse at a

6 price tag of $132,000. Again, very labor intensive. There

7 were some materials involved, obviously, but a lot of labor to

8 install that new roof. $30,000 wasted. Now, some people may

9 say, well, I don't think it's fair to use the term wasted. So

10 I thought, okay, I'll be fair. I'll look it up in the

11 dictionary. And the definition is used or expended carelessly

12 or to no purpose. Well, again, in my county, if we used a true

13 Snyder County market-based wage rate, we would have done the

14 same work, paid workers a fair wage that they would normally

15 make in our county, and to boot, my taxpayers would have saved

16 $59,000. That would have been enough for us to do yet another

17 project in those three years that we couldn't afford.

18 Now, if prevailing wage was so necessary in

19 Pennsylvania and the $25,000 threshold was a fair rate in '62,

20 then no one can argue against the threshold being increased to

21 $190,000 today, because that's the rate of inflation. Fair is

22 fair. The workers have been protected for the past 51 years,

23 and I think it's about time the taxpayers would be treated the

24 same, since they are paying the rate. Again, you know, you've

25 seen the projects. You heard all the testimony. The old adage

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1 time is money holds true for our County Commissioners Office,

2 and I'm sure construction companies could do without all the

3 additional paperwork that Representative Galloway mentioned

4 earlier. I understand some members of this committee had

5 questions about that in the past at some of the hearings. And

6 quite frankly, I'm sure if I was a private contractor and I

7 wasn't working at a prevailing wage job, I don't have time to

8 submit that information. I have time to do my job, try and

9 make a fair wage --- a fair profit for my family and provide

10 for them and my community. So I can understand why they may

11 not want to turn that information in.

12 Let me offer up a couple ideas, that maybe it would

13 help take some political heat off of you all. I understand

14 this was brought up yesterday, and I applaud you for taking up

15 the issue of an opt-out policy. That is the most common sense

16 approach to this I've heard yet. Because, in my county --- and

17 I had this discussion with Representative Snyder, when she was

18 a County Commissioner, and I understand the issue of being in a

19 heavily unionized county. I've talked to some of my fellow

20 commissioners yesterday when I called about 35 commissioners

21 around the state to tell them about the bill that you all were

22 discussing yesterday. I understand that we are different. We

23 are all Pennsylvanians, but we are different from county to

24 county to county. We have different things that make up our

25 local economies. All I'm asking for is giving us the option in

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1 each of our own respective counties to take the political heat.

2 If we live in an area that does not have a heavily-unionized

3 workforce, then let us make that choice. We're the ones that

4 are going to come under fire as County Commissioners and

5 municipal leaders and school boards. So I appreciate the fact

6 that that was brought up. And if that doesn't come to

7 fruition, then at least please raise that threshold to

8 $190,000. And by all means, it's so important that we don't

9 have this --- have to have this discussion again in 50 years,

10 please tie it to some kind of escalator so that we don't have

11 to be back here and go through the many hearings that you all

12 suffered through.

13 I appreciate your time. I did want to share one

14 closing remark. There was a gentleman that was on our window

15 replacement project. His name was Joe, so we kind of hit it

16 off, and he was a good guy. And I'd see him every morning on

17 the way into the courthouse and talk to him. And I said, Joe,

18 you know, you normally made $15 an hour. On this project

19 you're going to make $30, which is the labor rate for that

20 particular project. I said, are you working any harder? And

21 you know, he kind of --- with a wink and a smile he said, no,

22 but it might take me a little bit longer on this one. We

23 shouldn't have to be in that situation as taxpayers. I'm here

24 representing my taxpayers today. So again, I thank you for

25 your time.

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1 CHAIRMAN BLOOM: Thank you very much to both

2 Commissioners. Question, Commissioner Wheeland, on the

3 projects you were discussing where you had a differential

4 between Davis-Bacon rates and Pennsylvania prevailing wage

5 rates, was there any difference in the quality of work between

6 those two rates that --- would the construction have been any

7 different whether it was paid at Davis-Bacon rates or

8 prevailing wage rates, or was it just more expensive for the

9 taxpayers under prevailing wage?

10 COMMISSIONER WHEELAND: Well, I believe the first

11 example, using Davis-Bacon and prevailing wage, is an ongoing

12 project right now, so --- and again, it's demolitions, ---.

13 CHAIRMAN BLOOM: So either way, the building's going

14 to be gone at the end of the day?

15 COMMISSIONER WHEELAND: That's correct.

16 CHAIRMAN BLOOM: It's just more expensive under

17 prevailing wage.

18 COMMISSIONER WHEELAND: And I believe the other one

19 is the regional airport that's yet to be constructed. But I

20 will tell you, as a further example, is I --- we had a pre-bid

21 conference for our landfill, and one of --- two of our fields

22 were closing, and we have to put a dirt --- like a yamaka on

23 top of it and then a --- then dirt on top of it, 24 inches of

24 dirt, to close those two fields. Pre-bid conference, our

25 engineers guessing that, because it does invoke prevailing

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1 wage, it will be about a $200,000 additional expense. Now, you

2 know, putting a piece of plastic down, I think we can take

3 everyone at that front table with a little bit of practice, we

4 could put a plastic sheet down and we could run 24 inches of

5 dirt overtop of it, and it's going to cost the citizens of

6 Lycoming $200,000. You know, we could certainly use $200,000

7 to go repair one of our older hundred structurally-deficient

8 bridges here in Lycoming County.

9 CHAIRMAN BLOOM: Thank you, Commissioner. And

10 Commissioner Kantz, as far as the project you talked about, is

11 there any difference in the quality of the work that would be

12 provided under prevailing wage versus the competitive bid or is

13 it just a much higher price to the taxpayers for the same exact

14 work?

15 COMMISSIONER KANTZ: It is obviously a much higher

16 price to the taxpayers. I can tell you --- I can give you an

17 example right now. We're doing a painting project on our

18 courthouse. It hasn't been painted for about 20 years. All

19 the trim around the third story, it's tough work. You know, I

20 particularly wouldn't want to be up there on some of those

21 lifts and ladders, but they're doing an excellent job. And

22 every day I go out front to look at it, and it just looks

23 incredible because it's just like a night-and-day change when

24 they --- when they finally scrape all that paint off and then

25 apply the new paint. These guys are on a prevailing wage

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1 project. It's a $79,000 project, which was not in my

2 testimony. It's evolving here as we --- as we actually speak.

3 And you know, it's a very --- as you can imagine, the painting

4 is very labor intensive. The paint is minimal cost, but the

5 total project is $79,000. And I haven't seen all the figures

6 yet because they're not in, but my guess is that, you know,

7 we're going to be in the $20,000 range of overage for

8 prevailing wage rates if they --- based upon the fact that if

9 they were doing a regular job, without prevailing wage, it

10 would have been about $20,000 less, is my guess, based upon the

11 numbers I've extrapolated from other projects, and I'm thinking

12 that's about what it's going to be.

13 These guys are all local workers. They're --- they

14 take pride in their work. In this particular job, half of them

15 are pastors part time and take a lot of pride in what they're

16 doing. And I mean, you can see the pride beaming from their

17 faces when they're up there and I'll yell up to them, you know,

18 and --- the quality of work is there regardless. You know, in

19 Snyder --- I don't know how your county is, but in my county we

20 all take pride in what we do. You know, we expect a fair wage

21 for fair work. And most of the people in my county, they give

22 more than 110 percent when they're out on their job. And I

23 know Representatives Culver and Keller know those folks just as

24 I do, and they can speak to that. But it's just an

25 overreaching requirement today to force taxpayers to pay more

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 23

1 than what they would need to pay.

2 CHAIRMAN BLOOM: You mentioned the painting project,

3 which you said it was obviously very labor intensive. And you

4 talked about some other projects. Do you have a sense for what

5 the typical range might be for some of these projects, what

6 percentage of the project is actual labor costs that are

7 directly affected by prevailing wage?

8 COMMISSIONER KANTZ: And again, that's why I pulled

9 out some of the percentages in my testimony. Every project's

10 different. You know, like I said, a masonry project, very few

11 materials. You're talking, you know, new --- new grout for

12 between the bricks. You're taking off the old cap stones,

13 you're putting them back on. You know, we had a stainless cap

14 that goes underneath it. There's not a lot of materials in

15 that $55,000 total price tag. Most of that work is labor. The

16 window project, completely different. You know, now you're

17 talking $1,200 to $1,500 per window at state contract prices.

18 You know, your labor to put them in is not nearly $1,200 per

19 window, because it's a --- you rip the old one out and you put

20 the new one in. It's pretty simple. So not nearly as much

21 labor intensive. So the percentage of savings was much, much

22 less on that job, 10.7 percent as opposed to the 27 percent I

23 mentioned in the --- in the recapping of the parapet walls,

24 where it's mostly ---.

25 CHAIRMAN BLOOM: So for some of those projects like

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 24

1 painting or the masonry projects, where labor is a big

2 component of the job, what kind of percentages are we looking

3 at in terms of what percentage of the project cost represents

4 the labor?

5 COMMISSIONER KANTZ: I would say in some of those

6 cases as much as 70 to 75 percent of the cost is labor. In

7 some cases, maybe a little bit more. You know, in Snyder

8 County, a living wage for my constituents is $14, $15 an hour.

9 Why would I want to pay them $30 to $35 an hour for doing

10 something they'd normally make $14 to $15 an hour for? They're

11 doing the same job.

12 CHAIRMAN BLOOM: Okay. Thank you. Representative

13 Cutler?

14 REPRESENTATIVE CUTLER: Thank you, Mr. Chairman.

15 Commissioner Wheeland, you had referenced the project that you

16 did where you had contributed $25,000, and essentially it

17 increased the cost by $15,000. We've had similar occurrences

18 in Lancaster County where we've had projects, libraries, you

19 know, other investments, where we've actually had groups turn

20 down county money or any kind of involvement because of the

21 treatment of prevailing wage rates. My first question is were

22 you the only participant that triggered that rate in that? And

23 then, have you ever had any experience with groups turning down

24 money because of the prevailing wage rates?

25 COMMISSIONER WHEELAND: Ironically, we just had one.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 25

1 There's a new YMCA that's going to be --- in fact, we just had

2 the groundbreaking last week, I believe. Great project. It's

3 on the Pathways to Health, our new Susquehanna Health campus.

4 A lot of synergy. A lot of help for the neighborhood that it's

5 going to be in. It's really going to benefit the whole county.

6 And boy, we really wanted to help them. And you know, we

7 really had to stay away. We had to get a little creative. You

8 know, they're going to pay for their sewer and water tap-on

9 fees. But you know, right there is a great example where, you

10 know, we could not help them without invoking --- without

11 driving up the overall cost, which, in today's world, they're

12 having trouble enough gathering up the money to construct such

13 a building. So yeah, there's a great example.

14 REPRESENTATIVE CUTLER: Thank you, Commissioner.

15 CHAIRMAN BLOOM: Representative Keller?

16 REPRESENTATIVE KELLER: Thank you for your

17 testimony, gentlemen. Just a couple things I'd like to discuss

18 here. Commissioner Wheeland, you actually, in your testimony,

19 included a little chart on the back of it.

20 COMMISSIONER WHEELAND: Yes, sir.

21 REPRESENTATIVE KELLER: And it has in Lycoming

22 County, and it has the prevailing wage. When you're talking

23 about what we pay for prevailing wages, this isn't only

24 speaking to the wage but also the wage fringes; is that

25 correct?

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 26

1 COMMISSIONER WHEELAND: That's correct.

2 REPRESENTATIVE KELLER : So you pay both of those

3 added together?

4 COMMISSIONER WHEELAND: That's correct.

5 REPRESENTATIVE KELLER: So you know, a plasterer

6 would make $27.91 plus $7.75. In that case, the fringes are,

7 you know, about a fourth. You know, a third and a fourth is

8 what the actual rate is. But some of these are much higher.

9 Do you know how they --- I mean, do you know how they determine

10 what the fringes are on these?

11 COMMISSIONER WHEELAND: That I do not know. I think

12 I would refer you back to the Pennsylvania Boroughs

13 Association, which I'm sure you've been in contact with them,

14 and they can explain it.

15 REPRESENTATIVE KELLER: I come from private

16 industry.

17 COMMISSIONER WHEELAND: At the bottom it has

18 estimated fringe benefits.

19 REPRESENTATIVE KELLER: I come from private

20 industry, and we have a formula for figuring our fringes. And

21 we pay training, we pay for health insurance, we pay for paid

22 vacations, and we pay for all these other things. And we

23 figured about 1.36 percent, you know, if you'd multiply that as

24 you would just in fringes. And I took the one up here, the

25 bricklayer. The fringes here would be like $40 an hour, and

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 27

1 I'm in the mid 30s, mid to high 30s, with 1.36. So here again,

2 people that are working, paying the taxes, to your point here

3 --- and I guess in my point I was just wondering about that.

4 I'm, more or less, making a statement now. From my experience

5 in paying --- you know, we talked about training and everything

6 else. In private industry, we had to do OSHA training. We had

7 to do all these kind of trainings. We trained our employees,

8 we provided a quality product, yet we did not overcharge for

9 these things. And I guess I just wondered, do you have --- do

10 they say anywhere on the website what they can pay with these

11 fringes?

12 COMMISSIONER WHEELAND: No, sir. Again, I'd have to

13 defer to the Boroughs Association statistician or ---.

14 REPRESENTATIVE KELLER: Maybe some of the people

15 later on can help us with that.

16 COMMISSIONER WHEELAND: I'll try to ---.

17 REPRESENTATIVE KELLER: Fair enough. Thank you.

18 COMMISSIONER WHEELAND: Or I can --- you know, if

19 you just contact me, I can fire some information back to you on

20 it.

21 REPRESENTATIVE KELLER: I appreciate that.

22 COMMISSIONER WHEELAND: But as far as fringes, I

23 know the county, whenever we, you know, make a hire, you know,

24 our rule is 30 percent fringes.

25 REPRESENTATIVE KELLER: And privately, which is 1.3.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 28

1 Commissioner Kantz, I do know of the project in the Snyder

2 County Courthouse, because I've driven by it several times on

3 my way around the district. And I do appreciate the fact that

4 the local governments are looking out for everybody, the

5 workers, the taxpayers and everybody. But you had mentioned

6 something, and I guess I just wanted to sort of circle back

7 around here. And it's a statement you made with the worker

8 when he said, well, I'm working on this one, it just might last

9 a little bit longer. I mean, I know it's sort of said that

10 way, but ---.

11 COMMISSIONER KANTZ: Sure. And it was said that

12 way. But you have to understand, he's an hourly laborer who's

13 just doing his job. In that case, it didn't affect the

14 taxpayer any more because we were on a bid. Who it affected,

15 it affected his employer at that point because he's getting

16 paid $30 an hour when normally he'd be making $15 an hour. So

17 guess what? If it takes him a half-hour longer every day for

18 kind of taking his time, that's coming out of the bottom line

19 of the employer, the company that's doing the bid for the

20 county. It's not costing the taxpayers any more on that bid,

21 because we have a solid bid. And the total price tag in that

22 case was $133,000. In that case, it's coming out of his

23 employer's pocket, to be fair. I mean, it's not costing the

24 taxpayers any more. We're already paying the prevailing wage

25 on that job. We're already getting hit with that overage cost

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 29

1 of $26,000 or whatever it was more. You know, it's --- in that

2 case, it's coming out of his employer's pocket.

3 REPRESENTATIVE KELLER: I have a question. If you

4 were doing work in your home, would you --- would you pay the

5 prevailing wage or would you pay the wage that's the market in

6 your area?

7 COMMISSIONER KANTZ: I would pay what the market

8 bears. And I mean ---.

9 REPRESENTATIVE KELLER: And you would get a

10 lower ---?

11 COMMISSIONER KANTZ: I mean, if my neighbor was

12 getting a kitchen, and I'm getting the same kitchen, it's like

13 he's paying $40,000, and I'm paying, you know, $25,000. It

14 doesn't seem really fair.

15 REPRESENTATIVE KELLER: Okay. Like I said, I just

16 wanted to sort of illustrate the point, make sure I understood,

17 you know, that that wasn't necessarily the case that it was

18 going to take more, but it could. And in that instance, it

19 actually would be harder to manage by the contractor. And I

20 think we have some contractors coming up. Maybe I'll save that

21 question for them. Thank you.

22 CHAIRMAN BLOOM : Representative Truitt ?

23 REPRESENTATIVE TRUITT: Thank you, Mr. Chairman.

24 First I just wanted to comment on the fact that earlier it was

25 kind of suggested that these hearings aren't very useful. And

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 30

1 I want to reassure you both that your time has been valuable.

2 One of the things that happens over the course of

3 many years is we get about a ten-percent turnover in the

4 legislature every two years. So I was looking at the group of

5 people on this panel, and there's --- almost all of us have

6 been here for about three years or less. And so it is useful.

7 AUDIENCE MEMBER: All the way back to 1962.

8 REPRESENTATIVE TRUITT: So it is useful to hold

9 these hearings periodically. And I, myself, had wondered why

10 we're having four hearings in one year. But it's also helpful

11 because, as I was driving up here today, I was noting to myself

12 the differences in this area versus the area that I come from.

13 Every area is different. So it's nice to get the local flavor

14 on issues like this. And sometimes, because of schedules and

15 other reasons, it's good to have multiple hearings so that we

16 can all get in and have the opportunity to hear these things.

17 And I want to thank you in particular. As I said, I

18 woke up this morning and I was thinking I've got a three-hour

19 drive ahead of me. Is this really going to be worth my time.

20 And I appreciate both of your testimony. But your point about

21 the differences between prevailing wage and Davis-Bacon is

22 something we haven't heard before in this series, and so that

23 was --- made it worth the three-hour drive up and the

24 three-hour drive back. So thank you for that.

25 The only question I have for both of you --- and you

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 31

1 may not have an answer for this, but it's something that I've

2 been digging into as we go through these hearings is, we'll

3 hear examples where we're going to pay a worker $15 an hour if

4 they're not on prevailing wage or $30 per hour if they are on

5 prevailing wage. And Representative Keller kind of touched on

6 this. Do you have an idea what that rolls up to in the end,

7 not just after benefits, but you've got the contracting firm's

8 profit and other expenses that all get rolled into it. So in

9 the end, that $15 an hour is probably going to get billed to a

10 municipality or a local government at $45 or $50 an hour. What

11 does the $30 an hour get billed to? Can you give us --- does

12 everything roll up to a hundred percent or is there --- do you

13 have any numbers --- not at the cost level, what the

14 individuals are being paid, but what the municipalities are

15 being billed?

16 COMMISSIONER KANTZ: I think it goes back to, again,

17 the area in which you live. If you're living in, let's say,

18 Berks County, not far removed from Philadelphia, where you have

19 a much higher cost of living and a much higher wage rate, and

20 whether or not --- I don't know if that's because of the

21 unions, you know, forcing those labor rates up over the years.

22 But the fact is it costs more to operate a business in

23 Philadelphia than it does in Selinsgrove, Pennsylvania, where

24 I'm from. You know, my cost of living is much less. My

25 constituents' cost of living is much less. And in theory ---

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 32

1 and in reality, their wages are much less as a whole. You

2 know, my --- in Centre County, the average household income is

3 about $44,000. Well, people in Philadelphia think that's

4 crazy. They probably think we're living in poverty in central

5 Pennsylvania when actually we live very well. And I wouldn't

6 trade it for the world because, in central Pennsylvania, we can

7 get by on $44,000 a year, average household income. So why

8 would we pay that worker what equates to $70,000 a year or

9 $60,000 a year, when $15 an hour is an average living wage in

10 central PA, not $30, which is where the labor rates are set

11 based upon, you know, the labor rates cumulatively from all the

12 urban areas of the state as well. They shouldn't calculate

13 into those prevailing wages. Me, personally, I don't think we

14 should have prevailing wage at all, but that's a whole other

15 issue.

16 CHAIRMAN BLOOM: Would you like to add anything to

17 that?

18 COMMISSIONER WHEELAND: Well, again, you know, as

19 County Commissioners, you know, we put a project --- every

20 project is different, you know. But to me, once again, it is

21 just so frustrating, you know. Probably everyone at that table

22 before me campaigned on the fact that you were going to spend

23 taxpayers' dollars wisely. You know, and it's just so

24 frustrating to me to have to have so many infrastructure

25 projects shelved that could be completed, not all of them,

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 33

1 obviously. Sometimes it's like peeing in the ocean and

2 expecting a result. Do you have --- you know, if you're in

3 Lycoming County, like I testified before, over a billion,

4 that's B, as in, boy, that's a lot of money, billion dollars'

5 worth of infrastructure projects, and just --- you know, the

6 only ones that we're able to afford --- and not, again, just

7 because of prevailing wage, but you know, there's so many more

8 of these projects. If it was just a moratorium on prevailing

9 wage that we could fund some other projects ---. We have

10 structurally-deficient bridges that we're going to have to

11 start --- I have a couple of them closed already. You know, we

12 could certainly use that $200,000 for pushing dirt around over

13 there to take care of that particular small

14 structurally-deficient bridge. But you know, it's just project

15 after project after project that has to be put on the shelf

16 because there's not enough money to go around. You promise to

17 spend taxpayers' money wisely, and this is not a good example.

18 Federal government has us beat.

19 REPRESENTATIVE TRUITT: And so fundamentally you're

20 saying that if you didn't have to pay quite so much on

21 individual projects, you would just do more projects. So we

22 would --- while some people would be earning less, we would

23 have more people employed, because it's not like you're just

24 going to take that money and stick it in the bank or something

25 like that. You're going to --- you have enough projects backed

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 34

1 up to put more people to work if you could spread the money

2 farther.

3 COMMISSIONER WHEELAND: Well, I told you that we

4 have a lot of projects that have to be shelved. We're going to

5 have to buy more shelves to put all these projects on because,

6 you know, as we ignore these infrastructure issues, you know,

7 it's not like you freeze frame them and nothing else starts to

8 wear out. I mean, it's a snowball that's picking up momentum.

9 And as we all know, when you roll a snowball, it collects and

10 it gets bigger. And that's what's happening with these

11 infrastructure projects. So again, I, you know, respectfully

12 request the consideration of a five-year moratorium on it so

13 that we can get this logjam of projects moving.

14 REPRESENTATIVE TRUITT: Thank you. Thank you, Mr.

15 Chairman.

16 CHAIRMAN BLOOM: Representative Snyder?

17 REPRESENTATIVE SNYDER: Yes. Thank you, Mr.

18 Chairman. And it is nice to see my former colleagues here.

19 For those of you that don't know, before I took office in

20 January, I served as a County Commissioner for nine years. And

21 Commissioner Kantz and I have had many conversations about

22 this, and we have agreed to agreeably disagree.

23 But I would just like to bring a little perspective

24 from my nine years of experience as a County Commissioner. And

25 it could be demographically different, and it could be about

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 35

1 geography, but I know there were many projects in my county ---

2 and Greene County is a small, rural county. And many times we

3 would have a project that we wanted to do, and we would factor

4 in labor costs, and we would factor in construction costs. And

5 we would have a budget that we knew would be workable, until we

6 had to get into the professional services end, and the

7 architectural needs and the engineering needs. And then those

8 costs took it off the charts. And you talk about shelving a

9 project. Commissioner Bloom, we had to shelve many projects

10 because, when we factored in the professional services, we

11 couldn't afford to move forward.

12 And we also had many projects that we did. And we

13 had contractors on the job that wouldn't submit their certified

14 payroll to see if they were paying prevailing wage. And many

15 times they weren't, and their workers didn't know they were

16 even entitled to prevailing wage on the job. That money wasn't

17 going back to the taxpayers. That money was going in the

18 contractors' pockets. So that's why I'm a little skeptical

19 about, even if we were to wipe out prevailing wage tomorrow,

20 whether or not it's going to save your taxpayers one cent. I'm

21 not convinced it will.

22 And my question to the two of you, my friends and

23 former colleagues, would you favor a cap on professional

24 services on a county level for engineering and architectural

25 fees?

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 36

1 COMMISSIONER KANTZ: One thing I did mention in my

2 testimony, Representative Snyder, is that we actually hired a

3 professional engineer for the county on all the projects that I

4 mentioned. So those costs were very minimal in the total scope

5 of things. And they were above and beyond the numbers that I

6 mentioned.

7 As far as the cap, I'm not sure how that would work.

8 I've never looked at it before because we haven't had exuberant

9 costs for engineering services. We've got a good local

10 engineer that treats us very fairly. And if they didn't, we'd

11 hire someone else. So I'm just trying to think of your first

12 point. Oh, you know, I don't know how it is in Greene County,

13 but in Snyder County we're required on prevailing wage jobs to

14 follow regulations. And the contractors must turn in complete

15 paperwork as to how much their workers made, what the fringe

16 benefits were. We have to do that --- I believe it's a law

17 that we have to do that, so we always have.

18 REPRESENTATIVE SNYDER: We did, too, but sometimes

19 the contractors weren't paying it, and we had battles on our

20 hands.

21 COMMISSIONER KANTZ: Well, I was going to say I

22 think that would then become a liability for your county.

23 REPRESENTATIVE SNYDER: It was.

24 COMMISSIONER KANTZ: Yeah.

25 REPRESENTATIVE SNYDER: And we ended up in

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 37

1 litigation many times. We had attorney fees, you know. I

2 mean, there's a lot to be considered.

3 COMMISSIONER KANTZ: I don't know. Maybe people are

4 a little more honest where I come from. We've never had that

5 problem, to my knowledge.

6 REPRESENTATIVE SNYDER: Those contractors might have

7 been from Snyder County. I'm kidding. I'm kidding.

8 COMMISSIONER WHEELAND: And if I could comment. I

9 know on our engineering --- our professional service agreements

10 in engineering projects that require engineers, you know, we

11 put all that out for bid. And boy a lot of starving engineers

12 out there. So we've been very successful in keeping our costs

13 very low on the engineering services for Lycoming County.

14 REPRESENTATIVE SNYDER: Okay.

15 CHAIRMAN BLOOM: Representative Galloway?

16 REPRESENTATIVE GALLOWAY: Thank you. Commissioner

17 Wheeland, Commissioner Kantz, first of all, thank you for your

18 notes of testimony today. Your time was wasted, that is not my

19 understanding. And thank you for your service. I just want to

20 go over a couple things quickly.

21 Mr. Kantz --- Commissioner Kantz, you mentioned a

22 class company in Snyder County. What was the name of that

23 company?

24 COMMISSIONER KANTZ: Glass company?

25 REPRESENTATIVE GALLOWAY: You mentioned a glass

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 38

1 company?

2 COMMISSIONER KANTZ: We did --- we did windows, a

3 window project.

4 REPRESENTATIVE GALLOWAY: Yes.

5 COMMISSIONER KANTZ: But that was a general

6 contractor that took care of the entire project. So they

7 purchased windows for our courthouse. I believe it was --- I

8 might be off on the number, but about 66 windows around the

9 outside of the courthouse. And that was part of their bid.

10 That was materials.

11 REPRESENTATIVE GALLOWAY: Okay. Do you agree that

12 if private contractors participated in submitting the wage

13 data, that prevailing wage could be lower?

14 COMMISSIONER KANTZ: I'm not sure how that would

15 work.

16 REPRESENTATIVE GALLOWAY: Well, people who don't

17 participate would submit their data. People who are paying

18 less in wages would submit their data. It would be a county

19 --- are you aware that non-union contractors don't submit data?

20 The prevailing wage data that you're using does not have

21 non-union contract data in it?

22 COMMISSIONER KANTZ: I guess I don't understand what

23 the benefit to them would be to submit that data.

24 REPRESENTATIVE GALLOWAY: I'm looking for the ---.

25 Again, I'm not --- I'm not here to belittle people.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 39

1 COMMISSIONER KANTZ: You're talking about a private

2 contractor; correct?

3 REPRESENTATIVE GALLOWAY: Correct.

4 COMMISSIONER KANTZ: Okay.

5 REPRESENTATIVE GALLOWAY: I'm talking non-union

6 contractors do not submit their wage data. I'm asking you if

7 they did submit their data, wouldn't prevailing wage be lower?

8 COMMISSIONER KANTZ: You're talking about a

9 prevailing wage job?

10 REPRESENTATIVE GALLOWAY: Yes.

11 COMMISSIONER KANTZ: Oh, well, in that case, I've

12 answered that question. All of our private contractors who do

13 prevailing wage work, must submit prevailing wage data on that

14 specific job. Representative Snyder and I just talked about

15 that. We've never had anybody not. Because if they weren't,

16 they wouldn't be following the regulations.

17 REPRESENTATIVE GALLOWAY: Who do they submit that

18 data to?

19 COMMISSIONER KANTZ: That is submitted through ---

20 to the County Commissioners Office on a county project.

21 REPRESENTATIVE GALLOWAY: You are aware that the

22 prevailing wage rate is not done at the county level; right?

23 COMMISSIONER KANTZ: Correct.

24 REPRESENTATIVE GALLOWAY: Correct. So what good

25 does it do to submit it to the county?

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 40

1 COMMISSIONER KANTZ: It's required to be submitted

2 to us as the customer.

3 REPRESENTATIVE GALLOWAY: Honestly, again, what I'm

4 trying --- trying to get at is if they submitted it to the

5 state, which is where the prevailing wage data comes from, the

6 only people submitting the data are union contractors. If

7 non-union contractors --- okay.

8 COMMISSIONER KANTZ: No.

9 REPRESENTATIVE GALLOWAY: Then we disagree.

10 COMMISSIONER KANTZ: No. No, you're asking --- if

11 we have a person --- a contractor doing our --- let's say our

12 window project, ---

13 REPRESENTATIVE GALLOWAY: They're submitting it to

14 you.

15 COMMISSIONER KANTZ: --- they're submitting it to

16 us, they're not union contractors, though, in our case, in our

17 county. We'd never have one union --- union shop bid on any of

18 our projects. They're non-union private workforce laborers.

19 They submit their prevailing wage data to the county, as

20 required by law, is my understanding. Maybe the law needs

21 changed. Of course, then that would be, I guess, your job to

22 take care of that one, but they do submit that data to us, as

23 required.

24 REPRESENTATIVE GALLOWAY: We talked about a

25 demolition project. It was kind of laughed at as we were

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 41

1 demolishing something. You are aware of the catastrophic

2 incident that happened in Philadelphia just a couple of months

3 ago where seven people died because the people doing the

4 demolitions were not qualified? You are aware of that; right?

5 COMMISSIONER KANTZ: Oh, sure.

6 COMMISSIONER WHEELAND: I think that gets --- I'm

7 the one that brought up the demolition project. And the county

8 --- it was a city project. The county worked very closely with

9 the city to do that. I will tell you that there was a very

10 diligent process as we picked out who was going to do --- or as

11 the city picked out who was going to do the demolition. You

12 know, they had to have a lot of information provided along with

13 a lot of insurance. A lot of experience had to be required.

14 In other words, although, you know --- you folks up front

15 there, I'm sure you could spread dirt with a little bit of

16 practice. Demolition is different. You know, I mean,

17 obviously you have to be qualified.

18 REPRESENTATIVE GALLOWAY: And I appreciate that.

19 I'm not trying to take into account --- I just want you to

20 understand that it was brought up in the context of quality of

21 work, and it's a difficult irony that we just went through one

22 of the worst catastrophes in demolition examples that just

23 happened just a couple months ago because of shoddy quality

24 work.

25 I need to go back to Commissioner Kantz. You keep

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 42

1 saying that they submit their data to you.

2 COMMISSIONER KANTZ: Uh-huh (yes).

3 REPRESENTATIVE GALLOWAY: They're not submitting the

4 data to the state. That's the whole point. That's why

5 prevailing wage is determined.

6 COMMISSIONER KANTZ: But you understand my point is

7 we're doing what we're required to do by law.

8 REPRESENTATIVE GALLOWAY: I know. I agree. I know.

9 I agree. But prevailing wage is determined at the state level.

10 It's done by contractors who submit their data. The only

11 person --- people submitting their data are union contractors.

12 COMMISSIONER KANTZ: Uh-huh (yes).

13 REPRESENTATIVE GALLOWAY: We agree. And you're

14 aware of that?

15 COMMISSIONER KANTZ: I would assume that's true.

16 REPRESENTATIVE GALLOWAY: And if everybody submitted

17 their data, wouldn't the prevailing rate be low? That's my

18 question. It's been my question since the beginning. You

19 don't think so?

20 COMMISSIONER KANTZ: I have no idea. If they're not

21 doing that, I can't make that guess.

22 REPRESENTATIVE GALLOWAY: One last question. It was

23 brought up over and over again passionately by Commissioner

24 Wheeland, and I appreciate this, because this is what is

25 happening in Harrisburg today, transportation, infrastructure.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 43

1 All right. The Governor is begging for a bill called Senate

2 Bill 1. Senate Bill 1 is a Republican bill passed by, I

3 believe, Senator Rafferty. Senator Yaw, the State Senator from

4 this district, voted for it. It's a $2.5 billion

5 infrastructure project. I supported it. I think Pam supports

6 it. Representative Snyder supports it. I'm ready to vote for

7 it. The Governor wants it. The Senate already passed it.

8 $2.5 billion to get these projects off the shelf. There's only

9 one group of people who oppose it who are stopping all of it.

10 Now, I'd like to go down the table right now and ask

11 everybody. You want these projects done. You asked for it

12 over and over and over again. You talk in your testimony about

13 state dollars that are dwindling. You can't go on with

14 infrastructure projects. You talk about bridges collapsing.

15 Who on this panel wants to vote for Senate Bill 1? The

16 Governor wants it. The Senate already voted yes. It's sitting

17 in their hands right now, sitting in the Committee. Who wants

18 to vote for it.

19 REPRESENTATIVE LUCAS: I think they'll get a chance

20 on Monday. I think they'll get a chance on Monday.

21 CHAIRMAN BLOOM: We're not --- we're not going to

22 get into speculation on how members are going to vote. Further

23 questions, Representative Galloway?

24 REPRESENTATIVE GALLOWAY: You want money for

25 infrastructure, you want money for transportation, then you're

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 44

1 going to need to convince the people on this panel to vote yes.

2 And so far, they told everybody, ---

3 REPRESENTATIVE TRUITT: Mr. Chairman.

4 REPRESENTATIVE GALLOWAY: --- including the Governor

5 and the Senate, ---

6 REPRESENTATIVE TRUITT: Mr. Chairman.

7 REPRESENTATIVE GALLOWAY: --- that we're not going

8 to vote for it. And they want Democrats to vote for it.

9 That's what they want. They've come to us and said, you know

10 what, ---

11 REPRESENTATIVE TRUITT: Mr. Chairman.

12 REPRESENTATIVE GALLOWAY: --- we want you to vote

13 for it. So it's a tax increase.

14 CHAIRMAN BLOOM: Mr. Galloway, ---.

15 REPRESENTATIVE GALLOWAY : It took me three hours to

16 get here, and I'm almost finished.

17 CHAIRMAN BLOOM: Mr. Galloway, inquiry from another

18 member.

19 REPRESENTATIVE GALLOWAY: They want us to vote for a

20 $2.5 billion tax increase so they can keep their pledge to not

21 raise taxes.

22 CHAIRMAN BLOOM: Mr. Galloway, will you please

23 suspend? I have an inquiry from another member.

24 Representative Truitt?

25 REPRESENTATIVE TRUITT: Mr. Chairman, I believe the

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 45

1 purpose of these hearings is to hear from testifiers and

2 collect data, not to make political points. And ironically,

3 Mr. Galloway started off by saying he wasn't going to be taking

4 cheap shots today, and that's all he's been doing.

5 REPRESENTATIVE GALLOWAY: That was a cheap shot.

6 Are you going to vote for the bill or not? The Governor would

7 like to know.

8 CHAIRMAN BLOOM: Thank you, Representative Galloway.

9 We're going to move on. Our time for these witnesses has

10 expired. I do want to advise both of you guys, and

11 Representative Galloway had a point about the contractor data,

12 if, in fact, the competitive data from non-union contractors is

13 --- if it's submitted to the state and it brings the prevailing

14 wage rate down, it might be an indication that the union

15 contractors submitting the data now do have higher prices than

16 the marketplace rates. So that might be helpful. There is a

17 bill that representative Delozier, one of my colleagues from

18 Cumberland County, has introduced that would, in fact, allow

19 the private contractors to enter that data into the state

20 system on a confidential manner, much like is done with the

21 Davis-Bacon data, to encourage them to do so. Right now

22 there's an issue with confidentiality, which detracts from many

23 of these contractors being willing to submit that data. But

24 it's a good point.

25 And I also wanted to just mention before you depart

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 46

1 the Local Option Bill. We just moved that out of committee

2 yesterday. And my understanding from the legislative

3 leadership is that's a bill that's going to be moving on the

4 fast track this fall in the legislature. So continue to

5 express your support for that, if you're so inclined. Thank

6 you both for your testimony. We need to move on to our next

7 witnesses.

8 COMMISSIONER KANTZ: Thank you.

9 COMMISSIONER WHEELAND: Thank you.

10 CHAIRMAN BLOOM: And that would be township managers

11 and supervisors, Mr. Fry, Mr. Horner and Mr. Burdett. And I

12 would encourage you, gentlemen, as well as the first set, if

13 you're able to summarize your testimony, that would be ideal.

14 And you can proceed in the order that you're listed on the

15 agenda. Mr. Fry?

16 MR. FRY: Okay. Thank you very much. And I

17 appreciate the opportunity to speak before this panel.

18 Listening to this last session, I really feel sorry for you

19 guys sitting up there. It's brutal. I can't believe it.

20 Listen, I got a question. How many of you of this panel have

21 ever been a township supervisor? I thought so. No disrespect.

22 You have to get out of your ivory towers and get down on our

23 level. I have a budget of $450,000 a year to run a township

24 that has a thousand residents that pay the bill. These people

25 bitch and complain --- and I will keep my language clean. They

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 47

1 say that we charge them $600, $700 a year for taxes. They

2 forget to look at the second line. The township part is

3 $17.45. What can I do with that? Nothing. Meaning prevailing

4 wage in our township level and the rural areas in central PA,

5 north PA, are less than our budget. We can't do a thing.

6 We're doing a project now only because, thank God, Marcellus

7 Shale. We're right in the midst of it. Our township has

8 received a lot of money to finally get ahead.

9 Our township roads are pie crust. Do you understand

10 what pie crust is? It is a tar and chip of two or three years

11 in a span of maybe five years, six years. They break up; they

12 go away. When the gas people came to our township, they worked

13 on our road for one week. We didn't know what they were up to.

14 We knew they were there. We want to bond our road. Okay. We

15 let them do it. Inside of a week in a rainy season, they had

16 bulldozers pulling the trucks through the road at two-feet

17 deep. Now, residents aren't going to go through that. They

18 can't figure out what in the world happened to the road, and

19 the supervisor allowed it to happen. We never had a book on

20 Marcellus Shale, what they do and how they do it. 500 trucks,

21 2,000 white pickups, and no regard for basically anything.

22 My point in the whole thing is when you're looking

23 at prevailing wage from a little, little township, it kills us.

24 We can never afford to do any problems. And the biggest

25 complaint that we have is the maintenance. Get prevailing wage

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 48

1 out of the maintenance side. Allow us to reconstruct a road

2 --- a pie crust road that needs milled is not widening the

3 road, it's not altering the width. All it's doing is

4 reconstructing the top. I'm going through that project right

5 now. And believe me, without prevailing wage, I could do more.

6 But I can't.

7 I am very appreciative that in our township I have

8 --- those many residents, I have 37 miles of road to take care

9 of. I have 25-year-old trucks. It doesn't work well, fellows,

10 at two o'clock in the morning, you try to go out there and get

11 your junk running to go out and plow and cinder the road. The

12 point is we can no longer sit back and let these roads

13 deteriorate, or we're going to grade them back to dirt, and

14 everyone will run on dirt. I had one paved road in our

15 township before the gas plant came. That's in pretty good

16 shape right now. But since they have come five years ago, we

17 have --- they have spent over $12 million in Cogan House

18 Township, a little, out-of-the-way township that nobody knows

19 about. Can you believe that? I'll bet PennDOT and Harrisburg

20 just shakes their head. Where in the world did they get that

21 much money to spend? Well, the gas companies did it for us.

22 Every road they done, did it complete, did it right with

23 engineers. We got wonderful roads now. I only have a couple

24 left that's not paved, and that's the one I'm stuck with. I

25 don't care. But I don't have a $1.2 million to fix it. So

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 49

1 what do I do when the residents sit in front of me and beat me

2 up? I don't have an answer. I need some relief. In our small

3 township --- I wish each and every one of you could come and

4 run a township for one month and see what little bit of money

5 you have to go for the whole year to budget things. Prevailing

6 wage in our little area is just not acceptable. Outside of

7 Philadelphia, I don't care about down there. I don't care

8 about anywhere. I care about our townships in Lycoming County.

9 I'm a business owner. Have been in the City of

10 Williamsport for 23 years. I got my rear-end handed to me on a

11 silver platter about two months ago on prevailing wage. There

12 was a project out. We bid it. Two bidders. The other guy's

13 price was 50-some thousand, mine was almost 90, and they looked

14 at me like I was totally incompetent. What in the world

15 happened to you? You're always competitive. It's prevailing

16 wage. How did that guy get it? He had a family. Didn't have

17 to pay it. Beat me up to death. So tell me there isn't ways

18 around prevailing wage. There are.

19 Let's say there's a contractor job out, needs ten

20 men. They should have ten men on it. So that contractor may

21 say, I'll pick seven of my best, put them on the job so I can

22 help absorb some of the cost and make a little more money on

23 that project. He isn't required to put ten out there. They

24 think they need ten, but they're only going to use seven or

25 eight. I've been on prevailing jobs. Believe me, before my

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 50

1 business, they would put you out there, but you're not out

2 there very long. And the first minute that they're not --- you

3 are not needed, you're out of there. Prevailing wage only

4 helps a few people in our area. Like on small projects there

5 might be eight or ten people. But it's not a month. It might

6 be a week if they reconstruct a road for us. It's not long

7 term. It's a shot in the arm, but it's not a very big shot in

8 the arm.

9 My neighbor works on a project right over here on

10 the hill, where they're excavating the hill. He's a mechanic.

11 $31 an hour he gets at prevailing wage over there. He works in

12 the garage, but it's the same work he's doing, basically

13 mechanicing, but it's for half the money, but he's still doing

14 a quality job. You talk about quality, quality, like in my

15 job, I would have done that job for about $50,000 or $60,000

16 that I previously talked about. And the quality of work would

17 have been the same because I do the same every job. The

18 quality in that case would not have been compromised.

19 So our point in this whole discussion, you got to

20 understand us little people out here. This is where it really

21 bites. I'm a member of the Lycoming County Planning

22 Commission. I'm Vice President of the Board of Supervisors in

23 the county. I own my own business. And I can tell you, you

24 see it every day. It is really to the point where the can is

25 getting pretty well dented from being kicked up and down the

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 51

1 street for three years. You cannot continue to allow this to

2 keep going. You have to give somebody some relief someplace.

3 A local contractor --- we had a salt and cinder shed bid come

4 out. Last year I called our local contractor. He come up and

5 gave me a price of $48,000 just to build a shed over cinders so

6 they don't freeze. This last spring --- this summer, we had a

7 bid at $77,000 due to prevailing wage. I didn't make the

8 rules. I had to abide by them. I wanted to get that local

9 contractor. I knew his quality of work. I've known him for 20

10 years. What would be wrong with getting him, and then I can

11 take the extra money and go do something else. That's the

12 whole key for us, me, opinion for me, down here on the lower

13 echelon, as a small township supervisor.

14 CHAIRMAN BLOOM: Thank you, Mr. Fry.

15 MR. FRY: Thank you.

16 CHAIRMAN BLOOM: Mr. Horner?

17 MR. HORNER: Thank you. You're the Chairman?

18 CHAIRMAN BLOOM: Sir.

19 MR. HORNER: Chairman Bloom, appreciate the

20 opportunity to give testimony. And I will --- I am the

21 township supervisor in Chapman Township, Clinton County, chair

22 of the Board, and also Vice --- First Vice President of the

23 State Association of Townships of Second Class and also the

24 chairman of the Executive board of PSATS. And we represent

25 1,455 municipalities. And basically I would echo --- I'll cut

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 52

1 my comments short because I echo the same comments the last

2 presenter mentioned.

3 We do support House Bill 796 and we would like to

4 see it amended to $189,000, the prevailing limit raised because

5 of the 1960 --- since the cost of living has changed since

6 1963. And we would also like to see --- we also support H Bill

7 --- House Bill 665, which would remove general maintenance work

8 off of our township roads, that we would have to make

9 prevailing wage on general maintenance. So basically that's

10 --- and as mentioned in my comments here, I do take care of a

11 small water company. And we have a serious problem with

12 leaking pipes, because it's an old system. And we cannot

13 afford the cost with prevailing wage involved to replace a lot

14 of this piping because of the high cost. And we're just

15 Band-Aiding it right now, just keeping it together to provide

16 water for our residents. And we have other projects that we

17 would like to do, but we just can't find the money. We're only

18 a township of 848 population. So that's basically it. You

19 have a copy of my total testimony here.

20 CHAIRMAN BLOOM: Thank you, Mr. Horner. And Mr.

21 Burdett?

22 MR. BURDETT: Yes. Thank you. My name's Bill

23 Burdett. I'm the Township Manager and Treasurer for Loyalsock

24 Township. Loyalsock is just east of the City of Williamsport,

25 a population of 12,000, and a large commercial area just ---

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 53

1 again, just to the east of the City of Williamsport.

2 I'm here to talk to you today about the effects of

3 prevailing wage on local governments. In Loyalsock Township we

4 have 66 miles of roadway to maintain. Most of it's paved. I

5 think all but about a mile-and-a-half of that is paved roadway.

6 And the impacts of prevailing wage on paving have been

7 significant. I think it was either 2007 or 2008 that a ruling

8 changed and paving and milling became --- or I guess the

9 classification changed from maintenance to construction, and

10 then we were required to use prevailing wages for those bids.

11 That year, our bids rose by 20 percent. And now everybody's

12 talking percentage, arguing, you know, is it 5 percent, is it

13 30 percent? I really don't think it matters if it's one

14 percent. Why does the state legislature want us to have to pay

15 more to maintain public roads?

16 In the State of Pennsylvania --- did a little

17 research. In our state, we are ranked 38th in the nation in

18 one study I researched. Two other studies, we were ranked 43rd

19 out of the nation in maintenance of our roadways. I think

20 that's something that the legislature needs to consider when

21 considering this. Shouldn't we be putting all the money that

22 we have available, which is never enough anyway, but shouldn't

23 we be putting all of that money available into maintaining our

24 roadways in the Commonwealth of Pennsylvania. If you do

25 nothing else, I urge you to work to reverse that decision.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 54

1 That would be the most important thing you could do for local

2 municipalities, is try to reverse that decision.

3 In addition, we do a lot of projects in Loyalsock

4 Township. We do a lot of large projects. Virtually none of

5 them are under $25,000. So the prevailing wage law applies to

6 anything that we bid out. I've been there 15 years. There may

7 have been one project that was under the $25,000, but it was a

8 community block grant project, which required it anyway.

9 I talked to our engineer, Larson Design Group.

10 They're a local firm here in the Williamsport area, and they

11 used a percentage of 20 percent on all projects. And what they

12 explained to me was explained to you earlier. It depends on

13 how much labor is on a job, but they --- when estimating costs,

14 they use about 20 percent for any project that is publicly

15 funded. And I guess what doesn't make sense to me --- I'm not

16 a political person, but what does not make sense to me is the

17 same engineering firm is going to design a building for a bank

18 or a hotel or high-rise office building. The same firm is

19 designing a senior center, a park, school, roadways, water and

20 sewer projects, and they go out to bid. Why are you --- it

21 just --- it seems backwards. The entity with money, the banks,

22 the entrepreneurs, which I'm not against business, they get a

23 break, but the taxpayers, through our municipalities, the

24 taxpayers pay more. And according to our engineer --- I didn't

25 make this up --- Larson Design Group estimates 20 percent more,

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 55

1 depending on how much labor and how much equipment is on a job.

2 So again, if we want to argue over the number, again, even if

3 it's two percent or five percent more, why do we make local

4 governments who are struggling pay more than what you make ---

5 you don't have any limits on private enterprise, so ---. Most

6 of my other comments have already been made. You've had a lot

7 of these hearings. I'm sure you've heard pretty much

8 everything else. And I'd be happy to try to answer any

9 questions.

10 CHAIRMAN BLOOM: Great. Thank you, guys. All good

11 testimony from all three of you. We have some questions from

12 the panel. Representative Keller?

13 REPRESENTATIVE KELLER: Thank you, gentlemen.

14 Appreciate your testimony. Just a quick question. I guess

15 I'll ask it for the whole panel. We have a bill that we just

16 brought out of committee yesterday, House Bill 1538, Senator

17 --- or not the Senator --- I just gave him a promotion, didn't

18 I --- Representative Miller's bill. If you were given the

19 choice to opt out of the Prevailing Wage Act for your

20 municipality, would you?

21 MR. BURDETT: Yes.

22 REPRESENTATIVE KELLER: How soon? Would it be

23 something that you'd wait that ---?

24 MR. BURDETT: Yesterday. Before we got our next

25 contract.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 56

1 REPRESENTATIVE KELLER: Thank you. I just have one

2 other question, and it's for Mr. Fry. You had mentioned that

3 you have your own business?

4 MR. FRY: Yeah.

5 REPRESENTATIVE KELLER: So you have employees?

6 MR. FRY: Yeah, five. I'm a small company.

7 REPRESENTATIVE KELLER: You're a small company?

8 MR. FRY: Yeah.

9 REPRESENTATIVE KELLER: Your fringes, what do you

10 believe your fringes --- your benefit rates?

11 MR. FRY: Don't go down that road. I have. I have

12 paid holidays, but I don't have health insurance because we

13 cannot afford it, unless Obama Care enforces us. And I don't

14 have that many employees. But I'm serious, I'm a small

15 business.

16 REPRESENTATIVE KELLER: So your people that are

17 paying the bill aren't getting any fringes?

18 MR. FRY: No, sir.

19 REPRESENTATIVE KELLER: Thank you.

20 CHAIRMAN BLOOM: Representative Cutler?

21 REPRESENTATIVE CUTLER: Thank you, Mr. Chairman.

22 Gentlemen, thank you for your testimony. Certainly appreciate

23 it. My question's actually for Mr. Fry. Mr. Fry, you

24 indicated that the gas companies have essentially rebuilt all

25 of your roads.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 57

1 MR. FRY: Correct.

2 REPRESENTATIVE CUTLER: Do you --- do you know what

3 wage rates they happen to pay?

4 MR. FRY: We were not advised of that because they

5 were doing it on --- in their own way, with another contractor.

6 Okay. We weren't privy to any of that ---

7 REPRESENTATIVE CUTLER: Okay.

8 MR. FRY: --- and they just come and done the work

9 and presented their information for us. And we really didn't

10 have a whole lot of say in that.

11 REPRESENTATIVE CUTLER: Quite all right. I was just

12 curious if you were happy with the quality.

13 MR. FRY: Very much. Very happy. And the thing is

14 with the gas companies, they say if it goes bad, we'll redo it.

15 And they have. They spent $3 million this spring repaving some

16 roads that really broke up over the winter. So they are true

17 to their word.

18 REPRESENTATIVE CUTLER: Very good. And I know we're

19 tight on time, so I'll --- if it's okay, I'll contact you

20 separately. Maybe we can get ahold of the gas companies. I'd

21 be curious to see if they, as a private company, pay prevailing

22 wage rates or not. Thank you, Mr. Chairman.

23 CHAIRMAN BLOOM: And Representative Truitt?

24 REPRESENTATIVE TRUITT: Thank you, Mr. Chairman. I

25 have more of a comment than a question. I just wanted to ---

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 58

1 when you asked that question have any of us been township

2 supervisors, the lack of hands was probably a little startling

3 to you. But I want to reassure you there are a number of

4 former township supervisors and township officials within the

5 General Assembly as a whole. One of the beauties of the

6 General Assembly is that it's made up of people with a

7 diversity of backgrounds. I, myself, I believe am the only

8 professional engineer in the General Assembly. And we have a

9 number of attorneys, a number of township supervisors, a number

10 of teachers. And that's kind of what makes it work, is we go

11 back, we take this testimony we have from you, we digest it,

12 and we go back and we'll talk to people who are former township

13 supervisors to get a deeper understanding of the issue. But

14 don't worry, you didn't offend us by asking that question. And

15 I want to thank all three of you for your testimony. It was

16 definitely worth the time. Thank you.

17 CHAIRMAN BLOOM: All right. Thank you, gentlemen.

18 And we'll have the next panel come up. Thanks again for your

19 testimony. And we're going to switch --- we have to --- we

20 have a scheduling conflict that's going to require a shift in

21 the schedule. If we could have our business representatives,

22 Jason Fink and Krystle Bristol, come up in lieu of the

23 education official, Dr. Knade. Thank you very much. And Mr.

24 Fink, if you want to proceed with your testimony.

25 MR. FINK: Okay. You all have a copy of it, so I

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 59

1 won't read it to you. I just wanted to point out --- first of

2 all, I'm Jason Fink, with the Williamsport/Lycoming Chamber of

3 Commerce. I also served as Executive Vice President for our

4 Industrial Properties Corporation here in Lycoming County. And

5 we have worked on a number of projects as a conduit for

6 financing of state-funded projects to be able to assist with

7 companies who are doing projects in the community, and we're

8 the ones who undertake the work on behalf of a public entity to

9 be able to assist --- for example, recently we worked on an IDP

10 grant. That's no longer a program within the Commonwealth, but

11 we're wrapping up the end of that. And it was to assist a

12 township that was having some industrial developments take

13 place. And that program funded an industrial --- or excuse me,

14 public works projects that were being impacted by industrial

15 development in the community. For example, where this project

16 was taking place was in the eastern end of the county,

17 Representative Everett's district. The township had a road.

18 The prior supervisor was speaking about pancaked roads, and

19 this was a road that was similar in nature. It was going to

20 need to be upgraded to deal with the increased traffic that was

21 going to be coming from this industry. They were bringing 600

22 jobs to the community. And their investment was being

23 leveraged towards this grant. The grant could have gone

24 directly to the company to aid them to assist the township.

25 However, the reason why they did not directly access that and

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 60

1 why it went to the Industrial Properties Corporation was

2 because of prevailing wage. The escalator on their $50 million

3 investment would have impacted it by another 20 percent.

4 You have projects like that that are taking place

5 that are impacting the private sector as well as the public

6 sector. And you know, as we sit here in this room right now,

7 if you're reading the local newspaper, in the Williamsport Sun

8 Gazette they're talking about this building right now that is

9 in dire need of work. You see water stains right there. They

10 have a new roof that needs to be done here. They don't have

11 money. You know, townships --- we're listening to townships.

12 You got multiple municipal leaders at all levels, school

13 districts as well, that are being impacted by the fact that

14 they don't have the money available. When you add another 20

15 percent on, like it or not, whether it's labor, whatever cost

16 it is, you know, there are ways to be able to do this.

17 From the chamber side of it, we're advocating you

18 take --- beyond the stuff that you're looking at right now, we

19 would recommend that you take and join the other age 18 states

20 who do not have prevailing wage. The fact of the matter is

21 those states are able to do it. They're able to take on public

22 works projects, to be able to do them properly, safely. And I

23 understand the fact that, you know, we have the need to make

24 sure that they are done quality as well as safely at the same

25 time. If they're able to do it, why can't Pennsylvania do it?

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 61

1 You know, we're not able to be able to complete,

2 which we've heard other municipal leaders speaking about the

3 fact that their hands are tied right now. Industry needs to be

4 able to have the public infrastructure to be able to continue

5 to do their work. They're paying the taxes. Why not

6 effectively utilize those taxes so that they're able to

7 maximize those public works projects so that we can see more

8 growth within the Commonwealth? Right now, you look at the

9 rankings of Pennsylvania, historically, you know, it doesn't

10 matter as a Republican or Democrat administration, we have

11 ranked very poorly at being able to attract new industry. And

12 the reason being is because --- one of the issues --- one of

13 the issues is the fact that we have a very strained

14 infrastructure, public infrastructure. If we were able to

15 dedicate more resources to be able to accomplish more of those

16 projects, everybody would win, not only the companies being

17 able to take on those projects, but ultimately they employ

18 people. Being able to get labor --- more opportunities to take

19 on more public works, being able to add another 20 percent

20 basically into those opportunities. So again, you have my

21 comments. And if there's any questions at the end ---.

22 CHAIRMAN BLOOM: Thank you, sir. And Ms. Bristol?

23 MS. BRISTOL: Good afternoon, Chairman Bloom,

24 Chairman Keller, and members of the House Labor & Industry

25 Committee. My name is Krystle Bristol, and I live in Troy

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 62

1 Borough, Bradford County. I am a councilwoman on Troy Borough

2 Council, the Chair of the General Government Committee. And

3 I'm also the full-time business manager at Bristol Excavating,

4 Incorporated, my family's small business. That's a trucking

5 and excavation company.

6 Thank you for this opportunity to testify. You all

7 have my submitted testimony, so I'll just paraphrase what I

8 have to say. First I'd like to share a history on our company.

9 It was started in 1989 by my father-in-law, Calvin Bristol.

10 And he started off working on his own. A few years later, he

11 hired several employees. And we've grown to 25-plus employees,

12 over a hundred pieces of equipment and trucks. And granted, a

13 lot of our success is due to the development of the Marcellus

14 Shale in our region, but prior to that, our work was generated

15 by municipalities, farmers that had received state grant money,

16 and school districts.

17 I would like to address the issue of compliance and

18 the administrative challenges that come with the current

19 prevailing wage law. When we bid a prevailing wage project,

20 the first thing we do is review the prevailing wage project

21 rate sheet. This document is usually about 14 pages long and

22 literally consists of 47 job classifications for building

23 projects and 25 job classifications for heavy and highway

24 projects. There are also five pages of classification

25 definitions to back up these classes so that, for example, an

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 63

1 employer can determine which of six labor classifications their

2 foreman would fall under.

3 If we are successful with our bid and are awarded

4 the project, we then have the weekly challenge of compiling

5 certified payroll reports. I'm the only employee that works in

6 our office except for my part-time assistant. On a weekly

7 basis, I execute payroll, employee benefits, accounts

8 receivables and payables, advertising, new-hire training,

9 safety initiatives, estimates, contracts and ensuring that we

10 are conforming with all the licenses and regulatory compliance

11 that comes with working in our type of industry.

12 I did a quick Google search before writing my

13 testimony and have found 48 other excavation contractors in

14 Bradford County alone. This confirms the fact that we have to

15 stay very competitive in our bidding. And we're able to do

16 that by keeping our overhead costs low, unfortunately at my

17 expense.

18 When we take on prevailing projects, certifying

19 payroll takes up a significant amount of administrative time

20 that could be more effectively used elsewhere. The following

21 paragraphs in my testimony cover several cost examples of

22 projects that we have bid based on prevailing wage and as a

23 private shop.

24 I'd like to spend the rest of my allotted time here

25 on the floor to address some of the questions that I heard from

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 64

1 the panel earlier in the day and by watching previous sessions

2 that were held. The first question is in regards to submitting

3 our wages to Labor & Industry. As I covered in my testimony,

4 we have very valuable administrative time in our office, and I

5 honestly have not had the chance to look up how to go about

6 submitting our private close shop wages.

7 My second concern that was addressed today is the

8 privacy concern. In Bradford County, those 48 contractors that

9 I mentioned, I don't think any of them have union shops. And

10 only a handful of them do bid on prevailing wage jobs. If Joe

11 contractor down the street knew what we were paying a truck

12 driver, it would make us a lot less competitive in our local

13 market.

14 Back to my point about the valuable administrative

15 time. In our industry, we are already overly regulated. In a

16 fleet of approximately 12 trucks, I have ICCTA, New York State

17 Highway Use Tax, waste hauler permits, motor carrier

18 registrations, PUC to comply with, United Courier

19 registrations, DOT, apportioned plates, filing 2290

20 information. And that's just on a fleet of ten trucks. You go

21 into excavation and grading of land, and you get into a whole

22 other area of regulation. And honestly, the last thing I need

23 is more forms to fill out and compliance. And it would,

24 admittedly, help us. I mean, it would help the wage base in

25 our area, but I think a lot of the other contractors are in the

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 65

1 same boat that I am.

2 The second issue that I would like to address is

3 work quality. The best way to ensure a high quality of work is

4 for the private owner to properly screen contractors through a

5 pre-qualification process, something that is not, to my

6 knowledge, required by the Prevailing Wage Act. However, most

7 project owners require the presence of surety bonds on

8 projects. I do think that is a requirement in the Prevailing

9 Wage Act, to ensure that the contractors pay their bills to

10 suppliers and complete the project in a satisfactory manner.

11 Most contracts also require a maintenance period of

12 a year or more. That may also be a requirement of the

13 Prevailing Wage Act. This is truly the most efficient way to

14 assure a project is completed successfully. Seeing as how

15 surety companies require a rigorous qualification process and

16 don't tend to bond contractors outside of their proven

17 capabilities, this takes the burden of researching contractors

18 off of the project or the municipalities as simply requiring a

19 bond.

20 Simply paying higher wages does not ensure a higher

21 quality of work. If that were the case, every time I needed to

22 hire an employee, I could just go through a stack of

23 applications and see who was making the most money at their

24 previous job without taking into consideration their references

25 and hire them solely on that fact. The fact is, is that

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 66

1 hundreds of projects are successfully completed every day for

2 private companies because the owner of the project take the

3 appropriate action to screen contractors and require

4 appropriate bonds.

5 My final point is that, in our area, prevailing wage

6 doesn't keep the work local. This is --- we're located here on

7 the New York State border, so contractors from out of state

8 frequently bid on our local projects using a prevailing

9 wage-based paycheck to entice employees to make a long, unpaid

10 commute to our backyard. No part of the Prevailing Wage Act

11 requires it to be locally based or have headquarters in

12 Pennsylvania. If these employees weren't guaranteed such a

13 high rate of pay, they would be a lot less willing to make such

14 a lengthy commute. Thank you.

15 CHAIRMAN BLOOM: Thank you very much. Question for

16 you, Ms. Bristol. And this is --- I don't know. This is not a

17 question I know the answer to. I'm just curious. Has your

18 company ever decided not to bid a project because of all this

19 bureaucratic burden of compliance with the Prevailing Wage Law?

20 Has that actually ---

21 MS. BRISTOL: Yes.

22 CHAIRMAN BLOOM: --- discouraged you from bidding?

23 MS. BRISTOL: Yes. We had a very large,

24 privately-held, commercial project this year, along with three

25 other medium-sized municipal projects that were held under the

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 67

1 Prevailing Wage Act. And we looked at bidding on another road

2 maintenance project actually in the Borough of Troy and did not

3 bid on it because it was prevailing wage, and we already had

4 our plate full with the other three that we had going on. For

5 me to do three separate certified payroll reports a week is

6 extensive.

7 CHAIRMAN BLOOM: So it would be fair to say that

8 municipalities, governmental entities, are literally getting

9 fewer bids on their jobs because of the Prevailing Wage Law.

10 So that, ultimately, it's a less competitive environment and

11 they may not be getting the best price?

12 MS. BRISTOL: Correct. Like I said before, there's

13 48 contractors in excavation in Bradford County alone, and I

14 can name five of them that actually bid on the prevailing wage

15 projects. So we do bid. We have a relatively high success

16 rate because there aren't very many contractors that are

17 bidding on it.

18 CHAIRMAN BLOOM: Thank you. And that's echoing what

19 Representative Truitt said earlier. We learn something new at

20 every one of these hearings. I have personally not heard that

21 type of testimony yet. And that's very important to know, and

22 I thank you very much for that.

23 MS. BRISTOL: Thank you.

24 CHAIRMAN BLOOM: Representative Keller?

25 REPRESENTATIVE KELLER: Thank you for your testimony. I

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 68

1 just have one quick question for Krystle. You had mentioned in

2 your testimony about the fringe benefits and what you do with

3 those. You put them into, I guess, a 401(k) for your

4 employees?

5 MS. BRISTOL: That's correct.

6 REPRESENTATIVE KELLER: Do you know what other items

7 that fringe benefits can be used for?

8 MS. BRISTOL: I do. This is a certified payroll

9 report that I fill out. And it actually says on the second

10 page what items they can be used for, medical or hospital care,

11 pension or retirement, life insurance, disability, vacation,

12 holiday or other. We actually do offer medical coverage to our

13 employees. It's not through a traditional group health. We do

14 more of a reimbursement program. And we can't count that

15 towards our fringe benefits. So we do put the whole amount in

16 their 401(k).

17 REPRESENTATIVE KELLER: The other categories, where

18 would I find out the information on when you can use other? I

19 mean, that, to me, can be a pretty broad category.

20 MS. BRISTOL: Obviously, I've never researched that.

21 REPRESENTATIVE KELLER: Okay.

22 MS. BRISTOL: Up until two years ago I'd like you to

23 know that we did pay our fringe benefits in cash. We paid them

24 right in their paycheck with everything else. And that is the

25 easiest way to do it, administratively speaking, but then

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 69

1 you're paying Social Security tax on it, Medicare tax on it,

2 not to mention Workers' Comp insurance goes through the roof.

3 So we did --- and we did that for years, probably ten years,

4 because it was just too much work to transition it into a

5 401(k). But we did do that in the end, and the employees

6 actually seemed to be happier with it being done that way.

7 REPRESENTATIVE KELLER: Thank you.

8 MS. BRISTOL: You're welcome.

9 CHAIRMAN BLOOM: Representative Truitt?

10 REPRESENTATIVE TRUITT: Thank you, Mr. Chairman.

11 First, I had a specific question. How many employees do you

12 have at your excavating firm?

13 MS. BRISTOL: Right now we have 25.

14 REPRESENTATIVE TRUITT: Twenty-five (25). And I ask

15 that question because it seems to me that the administrative

16 burden --- the smaller the company gets, the worse it gets. My

17 own engineering firm, when it peaked, I had eight employees.

18 So the kind of paperwork that you're talking about was a

19 nightmare for me because every minute --- I didn't have quite

20 enough paperwork to do to hire someone else to do it for me.

21 But every minute I spent doing it was a minute that I couldn't

22 spend or an hour I couldn't spend billing a client. And so

23 there's --- I don't know what the magic number is where that

24 starts to become palatable, but ---.

25 MS. BRISTOL: I think it is eight, to be honest with

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 70

1 you.

2 REPRESENTATIVE TRUITT: My second question is more

3 generic. It's for both of you. I don't know if you'll be able

4 to answer this question, but I'm wondering --- I think there's

5 a valid point about we have to try to get more accurate data to

6 determine what the prevailing wage rate is. But what I'm

7 trying to figure out is what's a reasonable way to get that

8 data without adding more burden to businesses. And I don't

9 know if either one of you have any --- have an opinion on the

10 fact. I would think that we're already, on other forms,

11 collecting enough data from businesses that we, as a state, if

12 we got somebody who was really good with a computer, should be

13 able to extract data from one form that you're submitting and

14 data from other forms that you're submitting and triangulate it

15 and figure that out. But do you --- I mean, do you think that

16 we have all the data that's necessary or is there a way that we

17 could streamline something to make that ---?

18 MR. FINK: You have unemployment compensation that

19 they're required to collect. You have that information right

20 there. But they --- I mean, you can speak to it more directly.

21 I don't handle it at our organization, but you have that

22 information that is reported by your businesses, actually all

23 organizations. And so, from that aspect, you should be able to

24 extrapolate that for what you're trying to achieve with this.

25 It's just I know, having dealt with state agencies on different

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 71

1 projects, there are firewalls or --- maybe not just firewalls,

2 there's just the inability to be able to speak on certain

3 projects. We, for example, had some questions regarding some

4 local tax issues and had thought we would be able to attain

5 that from the state. The county could not obtain that

6 information, even though it was a local county tax question to

7 the state to help address an issue. There are certain things

8 --- I don't know if that's something that legislatively is

9 prohibited, to be able to get that information. But I mean,

10 again, you all have the ability to make those changes if that

11 is. But the UC-2 form should be able to get you that

12 information.

13 REPRESENTATIVE TRUITT: UC-2, that's the one I was

14 trying to remember, because I haven't had employees for a few

15 years. Since I joined the General Assembly, it takes up

16 virtually all of my time. So I don't have any employees right

17 now. And I kind of remembered I'm listing by individuals how

18 much money they make so the state has that information. And I

19 was trying to remember if they knew the job classifications on

20 each of those people on that UC-2.

21 MS. BRISTOL: They do not. I absolutely complete

22 all of our payroll reports, so I'm very familiar with this

23 form. And I think that it would be complex. I don't think

24 that it would be something that you could do at the state level

25 with the way the form is now. It lists the name and Social

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 72

1 Security number and their total gross wage. You don't know

2 who's a truck driver or who's a laborer or who operates

3 equipment off of that form.

4 In addition, as a closed shop, our rates vary from

5 the open shop --- I'm sorry. As an open shop, our rates vary

6 from the closed-shop contractors. As I mentioned, I'm on

7 Borough Council, and all of our non-uniform and uniform

8 employees are in unions, and their wages are based off of their

9 job classification or title, whereas, at Bristol Excavating,

10 our pay, rate of pay, is based off of experience and, more

11 specifically, how long they've been with the company. So, for

12 example, if we hire a patrolman in the borough's police

13 department, that gentleman or woman would make one rate,

14 whether he was just starting or there for seven years. He

15 would get a cost of living increase, but that was the rate for

16 the classification, whereas, our operators, say, for a 15-ton

17 excavator can make anywhere from $15, if they're just coming

18 into the industry, or $30 an hour, depending on if they've been

19 with us for a few years and have a lot of experience. So to

20 break that down on a form is another reason why I haven't

21 looked into submitting my wages, because I wouldn't even know

22 how to go about that. We don't just have one rate for someone

23 that does one job.

24 REPRESENTATIVE LUCAS: Another way you could find it

25 out, too, would be through your audits and your Workmen's Comp,

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 73

1 but you would have a total --- you wouldn't have an hourly rate

2 where you wouldn't have a classification for the most part.

3 MS. BRISTOL: Right. I can break my payroll down by

4 classification, but it's not necessarily broken down in the

5 same way as it is on the wage sheets. It would be broken down

6 into grading or excavation of land or trucking or mixing off on

7 a drilling rate or clerical, but it still doesn't really match

8 up to what the prevailing wage rate classifications are.

9 REPRESENTATIVE TRUITT: Thank you.

10 CHAIRMAN BLOOM: Representative Cutler?

11 REPRESENTATIVE CUTLER: Thank you, Mr. Chairman.

12 Ms. Bristol, in regards to --- you had said the work class

13 definitions and the characteristics about how you would

14 categorize workers. How difficult is that to categorize

15 workers and what classification they might fall under?

16 MS. BRISTOL: To be honest with you, I have a lot of

17 business experience but just came to Bristol Excavating five

18 years ago because I thought it was going to be a nice, quiet,

19 part-time job. This is back when we had eight employees, prior

20 to Marcellus Shale. But anyway, once I started, I had no

21 familiarity with prevailing wage or how to do a certified

22 payroll report. And it was all self-taught. There wasn't

23 really anybody else in the area that knew how to do it because

24 the contractors weren't bidding on those types of projects.

25 But it's our family business, so we can't just not take a job

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 74

1 because I don't want to do paperwork for it. So when I was

2 sifting through these pages that I referenced when I first

3 started there and we bid on our first job, it took countless

4 hours of my time. Once you get it figured out, it's a lot

5 easier to do. But coming from someone with a business

6 background and didn't necessarily have any experience in

7 excavation trucking, it was very difficult.

8 REPRESENTATIVE CUTLER: In that regard, does the

9 state provide any kind of definitions at the state level, like

10 an excavator does this or a laborer does this?

11 MS. BRISTOL: I actually have the definitions with

12 me, if you'd like to review them. But it's basically 15-ton

13 equipment and higher is in one category, and then like the six

14 labor classifications that I said. There's a flag person, a

15 foreman. There's different --- pipe layer, pipe fitter.

16 There's different classifications under each category that you

17 have to make the determination as to what you --- what you have

18 each employee doing.

19 And then we have the challenge of 25 employees who

20 are used to working on private jobs that go into a prevailing

21 wage job and have to adjust the way that they fill out their

22 timecards appropriately so that I don't have to figure out what

23 they're doing every day and what job they're on.

24 REPRESENTATIVE CUTLER: And finally, what happens if

25 you misclassify one of those workers?

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 75

1 MS. BRISTOL: Actually, when I first started, what

2 we did was --- you're required by the Prevailing Wage Act to

3 post the rates. And we're also required to post the

4 definitions. And I would talk to the group of employees that

5 we were sending out on a job and say, you know, if you're doing

6 this, you're doing this, and I'd give them a little like cheat

7 sheet that would tell them what labor class to put on their

8 timecard. But I do require them to determine what class of job

9 they're working on, and they submit that to me. So I'm not

10 determining it for them.

11 We have been through two Labor & Industry audits

12 since I've been at Bristol Excavating. Everything's been good,

13 by the way. And we have talked about that before. You do have

14 to backpay an employee if you classify them wrong. So that's,

15 again, why we put the responsibility on the employees to tell

16 us what they're doing.

17 REPRESENTATIVE CUTLER: Thank you, Mr. Chairman.

18 CHAIRMAN BLOOM: Okay. Thank you, both. Excellent

19 testimony. Thank you. And we are now ahead of schedule. But

20 if our organized labor representatives, Mr. Sirianni and Mr.

21 Amoros, are ready, you guys can come on up. And please don't

22 be offended. I have to leave at three o'clock. So if you guys

23 are talking and I get up and leave, you know it's not anything

24 you said.

25 MR. SIRIANNI: It will be standard procedure; right?

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 76

1 No, no, I'm just kidding. No, no problem. We understand that.

2 CHAIRMAN BLOOM: So ---.

3 MR. SIRIANNI: We took time out of our busy

4 schedules, too. If someone could bring me my glasses from back

5 there. Wait. I have them. Never mind. I have them.

6 Couldn't see without them.

7 CHAIRMAN BLOOM: You can proceed at your leisure.

8 MR. SIRIANNI: Excuse me. Thank you, members of the

9 Committee. I understand that the two Chairmen couldn't be here

10 today, further commitments. And this has been a long, long

11 haul of hearings, and we thank the entire committee for

12 organized labor to have the opportunity to testify in front of

13 you on this important issue to all of our members who are

14 taxpayers in the Commonwealth of Pennsylvania.

15 My name is, again, Frank Sirianni, President of the

16 Pennsylvania State Building Trades Council. And I represent

17 113 local unions and 16 regional councils which collectively

18 encompasses 136 construction workers in the Commonwealth, which

19 is, according to L&I's statistics, a third of the construction

20 workers in this Commonwealth.

21 We have 3,500 signatory contractors, businesses,

22 that we work in conjunction with in this Commonwealth, and we

23 provide over $6.5 billion in healthcare benefits and over $40

24 billion in pensions and annuities to our members. So we're a

25 real integral part of the economic function of this

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 77

1 Commonwealth. The healthcare industry --- again, $6.5 billion,

2 that doesn't include co-pays or deductibles. So we're part of

3 everything that happens in every community, including all the

4 way up to --- what is --- is there another town before you

5 leave Pennsylvania up here? There's got to be one more town

6 before we leave the state; right? Anyone know what that town

7 is? No? Well, there's a nice college up there that we do a

8 lot of work on.

9 CHAIRMAN BLOOM: Mansfield?

10 MR. SIRIANNI: Mansfield, that's correct.

11 CHAIRMAN BLOOM: That's it, yeah.

12 MR. SIRIANNI: And it's a beautiful campus. And you

13 know, that's in the heart of the gas industry, which I've heard

14 a lot of testimony about. But before I go into some testimony,

15 which I'll try to give you some different information from the

16 other four hearings, we oppose House Bill 1538, House Bill 796,

17 and House Bill 665. I have sent each of you correspondence to

18 that effect. And we believe that there's a need for the

19 Prevailing Wage Act, as it stands, in the State of

20 Pennsylvania, as the majority of legislators in this

21 Commonwealth have for the past 52 years that we're discussing

22 the threshold increase about.

23 And I would like to say this for the record, that

24 there is absolutely nothing in any of those three pieces of

25 legislation that would guarantee one tax dollar savings,

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 78

1 taxpayer dollar savings, in the way they're written or the way

2 they're carried out. All it does was change a law that is

3 devised to protect both contractors and state --- Commonwealth

4 contractors and Commonwealth taxpayers to help prevent low-ball

5 contractors from taking tax dollars out of the State of

6 Pennsylvania or out of the local area. So we believe that a

7 strong prevailing wage is good for the construction worker,

8 good for the construction customer, the end user, the

9 community, and for the Commonwealth.

10 Cutting workers' wages, if that's what this thing

11 looks like it's going to --- I mean, if you're not going to cut

12 the material price, you're not going to cut the engineer price,

13 you're not going to put a cap on any of the construction

14 managers or any of the fees and services that are associated

15 with construction projects. And from the other hearings, when

16 we kept hearing from the boroughs, the townships, and the

17 county commissioners saying materials have gone crazy, oil

18 prices are high, we have to get rid of prevailing wage, well,

19 that's the wage. So we're looking at this --- it's a mechanism

20 to cut wages and the standards in areas where our contracts ---

21 contracts have been negotiated in the free market with private

22 companies in these markets. They're not negotiated with the

23 state or anyone like that. It's a free-market wage that's

24 negotiated in the market that is used, and our contractors work

25 in those areas. And they are not only participating in public

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 79

1 projects, but the majority of the work is in private work. And

2 that's how we maintain the prevailing wage, because we do the

3 majority of work that's reported on in those --- in those

4 surveys. And we do it on an annual basis.

5 Our companies are not afraid to let other companies

6 know what they pay an hour because we're proud of the fact that

7 our companies pay a good wage, pay good benefits, and we're not

8 trying to be the lowest and the cheapest and hide our rates so

9 we can --- so we can say, well, if no one knows, we'll get this

10 job because we can have a race to the bottom.

11 So in general, along with our benefit program, we

12 train over 8,500 --- right now, in a slow economy, we train

13 over 8,500 apprentices throughout each year. Now, you have to

14 understand that's over 75 percent of all the apprentices in the

15 Commonwealth of Pennsylvania. Okay. So the training and

16 education that we provide is monumental. We think that that's

17 the jewel of Pennsylvania, that those construction workers and

18 future business owners and estimators and engineers or ---

19 wherever they go after their training, because there are

20 programs where they get college credit for. You know, a lot of

21 our programs, you come out of a program, you have a two-year

22 Associate's degree. And you can go forward with that and

23 become a business partner or, you know, you can remain just

24 doing your craft, which a lot of people enjoy. And there's a

25 real benefit to craftspeople in this Commonwealth. And so when

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 80

1 you look at the --- we train over 75 percent of all the

2 apprentices in the state, in all walks of life, and over 90

3 percent just in the construction industry. There's no one that

4 comes close to what we do in training.

5 Now, I do not want to say for the record that there

6 aren't other good construction workers in the State of

7 Pennsylvania, because they're our future members. We want them

8 to come to us, join our ranks, so they can get the good

9 benefits and the good wages and all the things that we enjoy,

10 and retire with some dignity.

11 So, as I move forward, the next largest or closest

12 apprenticeship group to us has less than a thousand statewide

13 apprentices, so ---. And like I said, there's a lot going on.

14 You know, I really feel that cutting the standards or taking

15 the standards in the areas that have been established through

16 the past 50 years is pretty much --- I don't think you're

17 intending this, but I think it's an insult to the American

18 worker and to the construction worker especially because we're

19 devaluating what we think they're worth. We're devaluating

20 what we're perceiving a construction worker as. You know, I

21 called a --- I called a local plumbing company out of the phone

22 book the other day and I said, hey, can you send a plumber over

23 to my house, I've got a problem. And the first hour was $199,

24 okay. Every additional hour was $99. Now, I don't know, you

25 know, if you've called a plumber lately or whatever, glazer,

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 81

1 whatever, it's not our rate. And we've tried to establish that

2 through these hearings, that the prices you're being charged

3 --- when we were in Ferguson --- Ferguson Township, I think we

4 talked about the person that was called in to cut down a tree,

5 and Ferguson Township was charged $60 an hour. And they looked

6 at us and they said, how can you justify that? I said, we

7 can't. They went on to say the rate there for a guy who would

8 be cutting a tree is $18 an hour. So you know, I mean, there's

9 a lot of moving parts in this. And I don't think that, you

10 know, the legislator --- legislation's intent over the past 50

11 years was in any way trying to make the taxpayers or

12 construction workers in this Commonwealth suffer or have

13 reduced wages.

14 I would like to make some comments on the County

15 Commissioner's remarks from Lycoming County. First of all, the

16 County Commissioner in that area makes over $52,000 a year,

17 plus benefits. Plus benefits. Now, if you divide that by

18 20/80, even if he works full time, that's over $25 an hour.

19 He's telling us that the wage in that area is $14 an hour. So

20 why is he making $52,000 and $25 an hour? Why aren't we

21 addressing that? Okay. And I'd like to go a little bit

22 further. He told me that the other guy makes more than him, so

23 you know --- and I don't want to really, you know, go after

24 their wages and salaries. I think if they earn it, they earn

25 it. We earn it, we want it. And we want our tax dollars back.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 82

1 And if we can get them by working on a state-funded project or

2 a publicly-funded project, we should have it.

3 Okay. I heard another testifier, the gas companies

4 came in and fixed all the roads they destroyed. Wow, wasn't

5 that grand of them. They're not paying taxes on anything, you

6 know. They're not paying a wellhead tax like West Virginia. I

7 was in West Virginia last week, and they're laughing at us up

8 here. Hey, thanks for paying for the cracker plant we're going

9 to get down here. Shell's been talking to us, too. And you're

10 going to pay for it by not charging them tax. Unbelievable.

11 Unbelievable that I hear these things in other states. You

12 know, it's scary. And then we hear commissioners, township

13 supervisors, school boards, complaining they don't have money.

14 You're the guys that cut their funding in the last four

15 budgets. The budgets were reduced. They were reduced and they

16 were reduced, and they don't have the money. You're not voting

17 for a transportation bill. They would have the money to fix

18 their highways. Okay. So where is prevailing wage relevant on

19 this? It has such a minute place in all of this. Let's not

20 look at working people's wages and try to cut them. Let's try

21 to elevate the workers in Pennsylvania. Let's try to put them

22 on a pedestal because they're paying your salary. I think they

23 deserve a good wage, and I think you have an obligation to pay

24 them a good wage.

25 Jason Fink. Jason Fink. Are you still here, Jason?

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 83

1 I don't know. He took off. He gets $50,000 a year, and his

2 requirements fund a tax, the Hotel Tax in this area. He gets

3 50 grand. And I don't think 50 grand's the average wage here,

4 but it comes out of the Hotel Tax. He's only obligated to work

5 20 hours a week. And his boss gets 25 grand, and he doesn't

6 have any obligation on hours.

7 And you're talking about this job with the windows.

8 Why I happen to do windows. I'm a glazer. I'm a trained

9 glazer. I've done a lot of work in the glazing industry. So I

10 stopped the commissioner outside, I said what about that

11 glazing job? How does that --- do you have any glazing

12 contractors who bid on it? No, the general contractor did

13 that. I said, so did they have a subcontractor that was a

14 glazing contractor or who did they use? How'd they get --- I

15 said, were they better windows? Because the classification ---

16 as you were speaking --- excuse me, I don't mean to point, but

17 as you were speaking ---

18 REPRESENTATIVE CUTLER: That's all right.

19 MR. SIRIANNI: --- earlier, Representative, states

20 what a glazer is and what a glazer is paid on that project.

21 Well, they didn't use the right craft. And I don't know what

22 they paid, but there is no glazing contractor in Snyder County,

23 so they went to a general contractor. Did they misclassify the

24 worker? Do we actually see it in the bids? Did you ever see

25 any documentation from any of the bids on any of these jobs

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 84

1 that these people were coming and throwing in front of you? I

2 save 50 percent on my insurance. I use GEICO. Now, I could

3 tell you that every week, but whether or not I do save that,

4 it's just another advertisement. And we already went over the

5 fact that all those people are lobbying, and every one of them

6 who were here today were paid by the taxpayers to come in here,

7 you know. They were paid to come in here today on the

8 taxpayer's dollar, when they should have been out working

9 somewhere else, doing something else in the community, I

10 suppose. But maybe they feel that this is more important, to

11 cut their local workers' wages, which I'm assuming that's why

12 they were here. And I'm just so up to here with all of it, all

13 the rhetoric. Vote the bills. Vote the bills. We've said

14 that for three years because we believe that the legislature

15 has the right idea. They want the taxpayers to make money.

16 They want the taxpayers to have a good income. They want them

17 to get their taxes back in a paycheck. What's wrong with that?

18 I give up. Go ahead.

19 CHAIRMAN BLOOM: Thank you, Mr. Sirianni. I want to

20 just note for the record that I agree with Mr. Sirianni that we

21 ought to vote these bills.

22 MR. SIRIANNI: It's time. Let's stop the hearings,

23 the per diems, and all the runaround all over the state, the

24 hotel rooms, whatever the hell it's costing everybody here, and

25 lets get the bills voted on.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 85

1 CHAIRMAN BLOOM: Mr. Amoros?

2 MR. AMOROS: Well, good afternoon, Mr. Chairman. My

3 name is Abe Amoros. I'm the Legislative Director for the

4 Laborers International Union, 30,000 members strong throughout

5 the Commonwealth of Pennsylvania. We consider ourselves to be

6 a business-friendly union, with 23 locals throughout the

7 Commonwealth.

8 I will paraphrase my testimony because you've heard

9 it three times, but I do want to stress several things. First

10 of all, I want to preface my comments by saying that I was

11 rather disturbed that not a single elected official asked for

12 the passage of Senate Bill 1, which would address 5,543

13 structurally-deficient bridges in Pennsylvania, 10,000 miles of

14 road that need to be addressed immediately. Now, I understand

15 that that bill is going to come up for a vote next week as

16 well.

17 These are matters that are important to all

18 Pennsylvanians. I want to touch a little bit upon the human

19 factor. A lot has been said today about workers. A lot has

20 been said about their wages. And I want you to consider --- I

21 want you to consider that a sledgehammer operator who's working

22 ten hours a day, ten months out of the year, has more jarring

23 than an NFL linebacker, and I want you to think about his

24 wages. Does he deserve a fair wage, a liveable wage, one that

25 is family sustaining, good paying? Absolutely. Because you

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 86

1 have a qualified person, a skilled craftsman, who's had a lot

2 of training and a lot of experience in his craft and is

3 providing the very best in terms of the tax dollars. Municipal

4 officials understand that as well.

5 Without the prevailing wage, these contractors are

6 under no obligation, whether it's legal or moral, to pay their

7 workers a determined wage or a benefit. And I've said it

8 before, I'm going to say it again, I don't know of any

9 contractor who's going to pass along any tax savings. Just

10 like Frank said about the GEICO commercials. They're good

11 advertisements, they're great sound bites, but I don't see any

12 comparable data. I see no evidence of it.

13 And I am so glad that Representative Snyder talked

14 about what really is driving up the costs in some of these

15 instances. I had the opportunity to sit down with a planning

16 commissioner in Washington County who was complaining about the

17 fact that, before a small bridge --- we're talking about a

18 50-foot-long bridge, 90 feet wide, would have the necessary

19 approvals and permissions to go forward, you're looking at a

20 stack of paper three inches thick, worth over $100,000 just to

21 start. Why aren't we talking about that? Why aren't we

22 talking about the cost of materials as well? Why are we doing

23 this on the backs of our workers who make their living with

24 their hands and their backs? When it rains, they don't work.

25 When they don't work, they don't get paid. And they're only

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 87

1 out there nine or ten months out of the year, and then they

2 have to supplant their wages by going to the local Wawa to make

3 ends meet for their families. What an insult. What an insult.

4 And this being the fourth and final hearing, I also

5 want to talk about the training. Frank talked about it as

6 well. These are some of the best-trained individuals that we

7 have working on our public works projects in Pennsylvania.

8 They allow them to come under budget, on time and done

9 correctly the first time, without add-ons, without additional

10 revenue, without additional tax dollars going to fix things.

11 So what do we want? Do we want employees who are making ten

12 bucks an hour without any healthcare benefits out there, or do

13 we want qualified, skilled craftsmen with tons of experience

14 who can do the job correctly the first time?

15 Now, I'd like to call your attention in my testimony

16 to pages seven --- forgive me, pages four, because I do want to

17 say one more thing about training. One more thing about

18 training. Cutting the prevailing wage is a bad thing. A study

19 done in Utah found that 40 percent of training funds were

20 slashed, which led to a 15-percent increase in injuries. We

21 don't want that either. That's going to eventually cost us in

22 the long run in terms of emergency rooms, in terms of our

23 healthcare system. Why do we want to burden them? With all

24 this talk about Obama Care and being against it, why would we

25 want to burden our healthcare system? It makes absolutely no

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 88

1 sense. Frank said, one of the greatest values to taxpayers is

2 training through joint apprenticeship programs with little or

3 no cost to the taxpayer. The apprenticeship programs are under

4 the joint administration of the local craft union and the

5 signatory contractor group the members actually work for. And

6 these are intensive training programs. These are five or six

7 years long. Then they get certified, and then they're

8 qualified to work on these big projects and make the big bucks,

9 so to speak. And again, I want to get back to that point.

10 They're not working 12 months out of the year. The

11 construction season is limited. It's limited.

12 In Pennsylvania alone we have 121 building trades,

13 local unions with apprenticeship programs, that train nearly

14 8,000 registered apprentices. That's 8,000 more people at

15 least annually entering the middle class in Pennsylvania. We

16 have an obligation to ensure that these decent, hard-working

17 people are paid what they're worth. And they're paid what

18 they're worth based upon the surveys that are submitted to the

19 Pennsylvania Department of Labor & Industry. And if the

20 contractors --- if the contractors are complaining that they

21 don't have the necessary manpower, I mean, I don't know where

22 to go with that argument. If I'm going into a bank and asking

23 for a loan and they give me a stack of paperwork this thick, I

24 better fill out that paperwork. I can't say to that bank

25 manager I don't have the time to do this or this is too

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 89

1 difficult for me. I don't understand the logic there, folks.

2 I don't. I don't understand the logic. And if more

3 contractors were to submit information to the Department of

4 Labor & Industry, we may see some relief. But no one's doing

5 that. No one is doing that.

6 So I will end my comments by saying this. I, too,

7 hope that there is a vote on these bills. Let's put them up,

8 let's go yes or no on these bills so then the people of

9 Pennsylvania can see where you stand. And again, I want to

10 thank you. I know this has been rigorous for all of you, as

11 members of this Committee. I know that you're doing some

12 difficult work. And I empathize with the elected officials and

13 appointed officials. As a former elected and appointed

14 official myself in a third-class state, I know these issues are

15 not easy. But at the same time, I have to look out for

16 workers, because they're the ones that make these projects

17 happen correctly, done on time, under budget the first time,

18 which is a benefit to all taxpayers. So thank you to the

19 Committee. Thank you.

20 CHAIRMAN BLOOM: Okay. Well, I want to start off

21 because I've seen you guys a three of these four hearings.

22 You've been traveling all over the state. I want to thank you

23 and commend you for your commitment. You've done a lot of

24 traveling, and your members that you represent should be

25 pleased that you've gone to such great lengths.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 90

1 I have two quick questions for you. One, we keep

2 going back to this subject about the reporting of data. And I

3 agree there's a problem that the data is not being reported.

4 But isn't that also an admission that essentially we're paying

5 higher rates than we should be?

6 MR. SIRIANNI: Not necessarily.

7 MR. AMOROS: No, not necessarily.

8 MR. SIRIANNI: It's an unknown. It's an unknown.

9 Like I said, we negotiate those in the free market. We compete

10 against Kristy Bristol's company up here and other areas on the

11 same projects. You know, it's her company --- she stated she's

12 not bidding projects --- remember we were talking about small

13 companies. She said her plate's too full. So there's a lot of

14 jobs out there, so I --- you know, you can't have it both ways.

15 You know, either you're not bidding the projects because your

16 plate's full or because there's too much paperwork. Make up

17 your mind. I mean, you know --- also, you know, every county

18 that we have contracts in, we negotiate that with private

19 companies in the private sector. So those rates will be only

20 held in that --- we can't go into Lycoming County and ask for

21 $8 an hour, the same as Philadelphia. That doesn't work or ---

22 and it's not $8 an hour in Philadelphia. Don't get me wrong.

23 I don't want to say that, but ---.

24 COMMISSIONER BLOOM: It's bad down there.

25 MR. AMOROS: But it's a higher cost of living there,

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 91

1 and the market will reflect that. Those contracts are

2 negotiated in that area. The contracts in Warren County are

3 negotiated in Warren.

4 You know, we have people that work in these counties

5 and all your power plants --- you know, you see the smoke

6 stacks as you drive around and you get up to --- where is that,

7 Berwick, the new plants. Well, we built that. We do the

8 outages. We supply all your electricity. We tear those things

9 apart and put them back together so you can be comfortable.

10 And those are rates that maintain --- we have hundreds of

11 thousands of hours on those jobs. Those are prevailing rates.

12 You can't take a company that works two jobs in an area and say

13 that is the prevailing --- that should be averaged in because

14 it's a guy with a station wagon who's never done a job --- he

15 might have done, you know, two houses, but you want to average

16 him in on a commercial building or a store or a building that

17 has to last 50 years? A housing project is no way --- a house

18 and a home project is no way similar to a public project. Now,

19 there may be some little niceties here and there where they

20 overlap, but there's definitions for that.

21 We hear, you know, Davis-Bacon this. Well, okay.

22 Davis-Bacon threshold is $2,000. You want to go the other way

23 on that, but you want to go the other way on the wages, if the

24 wages are different. Or the average wage is this and --- you

25 know, you're mixing apples and oranges, and it's easy to do. I

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 92

1 mean, I do it with my kids all the time when I don't want them

2 to do something. It's very easy to just, you know, give them

3 one item here as an example and then parlay it over here to

4 another example, but ---.

5 CHAIRMAN BLOOM: Are you saying you'd be good if we

6 went to the Davis-Bacon threshold and the Davis-Bacon wages?

7 MR. SIRIANNI: No, I didn't say that. We have a

8 process in the State of Pennsylvania that supersedes that on

9 our state-funded projects. I'm in favor of that project --- or

10 process. I want to keep that process.

11 CHAIRMAN BLOOM: Okay.

12 MR. SIRIANNI: But you're mixing them up, not me.

13 CHAIRMAN BLOOM: I've only been here for three

14 years, so I'm not mixing them up. But my next question is, can

15 you ---?

16 MR. SIRIANNI: And I appreciate your openness in

17 these discussions. We've had side discussions where --- with

18 several of the legislators. And I don't want to sound too

19 negative up there because I don't cover this area as a business

20 agent for the glazing industry. There's Williamsport Glass up

21 here, as a union company, just so everyone knows, and you know,

22 they do a lot of work. They used to be the biggest house in

23 the area. So you know, there are local union shops up here.

24 So I don't want to --- you know, I hear all these people

25 saying, well, there's no union in my area, there's no union

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 93

1 jobs, there's no union businesses. We have over --- just from

2 the one council, we have over 75 glazing contractors, so ---

3 and they're spread out all over the --- half the state.

4 So I don't want to come across as too boisterous or

5 not being respectful to the Committee, because I'm just a

6 little tired. I'm tired of the same thing. As I told

7 Representative Keller, it's like Groundhog Day. It's the same

8 thing over and over again. And what's the purpose of that? Is

9 it a purpose for actually trying to get to the bottom of it?

10 We got to the bottom of it at the first meeting. The first

11 meeting we got to the bottom of it, and it's turned into a road

12 show where we can take it and use it for our advantages. Let's

13 say I'm using it for my advantage, to my members that live

14 here. Well, I didn't schedule the meeting, but we can say that

15 it is an advantage to me because they see what I do at my job

16 now. And I have to get elected just like you do, all of you.

17 You know, so, you know, are we working together on this so we

18 can all get reelected or --- you know, what are we doing here.

19 CHAIRMAN BLOOM: Well, 50 percent of our job is to

20 spend time with our constituents and groups like yourselves,

21 and we spent 50 percent of our time in Harrisburg. If we don't

22 spend enough time in the field, holding events like this ---.

23 MR. SIRIANNI: These hearings are post the votes

24 that you made. You already voted on these things, so what's

25 the purpose? You just voted yesterday on it, and here we are

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 94

1 again today. You already made your statement.

2 CHAIRMAN BLOOM: We're still gathering information

3 on this topic.

4 MR. SIRIANNI: So you can take your vote away?

5 CHAIRMAN BLOOM: There may be other bills.

6 REPRESENTATIVE CUTLER: There may be other bills.

7 CHAIRMAN BLOOM: Yeah.

8 MR. SIRIANNI: Well, they're all going to say the

9 same thing, cut wages, cut wages, get rid of prevailing wage.

10 A reform is a repeal in some fashion. You can say reform all

11 you want. But reform is repeal because you're going to

12 eliminate projects from the Prevailing Wage Act. The bill you

13 did yesterday was a repeal. For anybody who wanted to opt out,

14 that --- all the people that, you know, work on those projects,

15 they're at the mercy of low-ball construction contractors or

16 whoever's the cheapest.

17 You already have a Responsible Contractor Act in

18 this state. You already have the lowest bid process. You want

19 the best product for the best price, you know. And there's a

20 way to do that, and it's to create standards. And it's a

21 responsibility that every local government has. I know that

22 these local governments haven't been keeping up with the

23 responsibility just on the maintenance issue with the highways,

24 because they abrogated that with the memorandum from the

25 Department of Labor. But their responsibility was to follow

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 95

1 the law. And I say this again, they took an oath of office,

2 those county commissioners, those township supervisors, and

3 they didn't uphold the law as it was written. Now, I don't

4 know what the county commissioners did up here, whether they

5 did building projects without using --- utilizing that law,

6 even though it was still on the books, but they heard a rumor

7 from the Department of Transportation and said, well, look,

8 yes, maintenance. It's a $400 million project of paving all

9 the way up the mountain that is being --- going on right now

10 that I passed --- and by the way, that was a long stretch of

11 highway. They want to call that maintenance? And you know

12 what, there was only eight people working there. Where's the

13 cost in that? Eight people working two weeks, it's not a

14 billion dollars a year. It's such a minute portion of this

15 funding process and the expense of this state and the

16 municipalities. You know, it's just getting ridiculous. So

17 I'm the bad guy today, ---

18 CHAIRMAN BLOOM: No, you're not.

19 MR. SIRIANNI: --- you know. And I'm going to be

20 the bad guy from now on. You know, I'm --- we tell you guys

21 things and you don't listen to us. You go out and write a

22 report, you do an editorial the day after we leave, and you

23 take the opposite side of us. So what's the point of the

24 hearings? I got guys writing editorials that, you know, aren't

25 even involved in this, but they want to jump on the bandwagon

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 96

1 and say I'm saving taxpayers' dollars. Oh, by the way,

2 taxpayer, I'm cutting your wages, too, but I forgot to tell you

3 that, or I want to look at a cheaper wage for you, or I want

4 --- you know, I can remember the family values issue that the

5 Republican party stood for, family values, but that's when we

6 developed latchkey kids, because parents' wages dropped. They

7 didn't keep up to the standards. And parents had to work two

8 jobs, and then kids had to go to daycare centers. And then we

9 couldn't wait to get them into school so we didn't have to hire

10 a babysitter. Think about what you're doing.

11 CHAIRMAN BLOOM: Representative Keller?

12 REPRESENTATIVE KELLER: Thank you. I didn't know

13 that this time would ever come.

14 MR. SIRIANNI: I'm sorry, and I apologize. I really

15 didn't want to answer any questions when we started this whole

16 thing.

17 REPRESENTATIVE KELLER: Déjà vu all over again, I

18 guess. A couple of things. And I get --- I'm going to start

19 off talking about the testimony and a few things here that I

20 just feel that we need to correct because I know it's been said

21 that people are just throwing things out.

22 The school funding issue, we can discuss that at

23 another time, but there was stimulus dollars from the federal

24 government that went away. Okay. That's a fact.

25 MR. SIRIANNI: And plant costs have been cut by ---.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 97

1 REPRESENTATIVE KELLER: It's my turn, Mr. Sirianni.

2 MR. SIRIANNI: I'm sorry.

3 REPRESENTATIVE KELLER: Marcellus Shale, we don't

4 chare a severance tax, but we have income tax. Texas charges a

5 seven-and-a-half percent severance tax. They don't have the

6 income tax. If you compare 2010, where Pennsylvania produced

7 four percent of the gas that Texas did, and you go to the

8 Department of Revenue and you look at what we collected and

9 what Texas collected, and you divide it up by .04 to normalize

10 it, we would collect --- we would collect in excess of five

11 times what Texas collected. So other states --- we're not at

12 the bottom, we're not at the top, we're somewhere in the

13 middle. So I just want to collect --- correct those couple

14 things for the audience. Okay? This is my turn. I haven't

15 asked a question yet.

16 CHAIRMAN BLOOM: I was about to ask if you had a

17 question.

18 REPRESENTATIVE KELLER: I have a question, but I

19 think it's important for people to understand that we can get

20 --- you know, people can come here and say whatever they want.

21 The other people are getting accused of it.

22 MR. SIRIANNI: I'm not saying whatever I want,

23 because a lot of those wells are capped right now. There's

24 nothing coming out of them. The pipelines aren't finished.

25 REPRESENTATIVE KELLER: Mr. Sirianni, it's still my

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 98

1 dime. My constituents are paying for this microphone, and I'm

2 going to use it.

3 MR. SIRIANNI: And some of them are my members.

4 REPRESENTATIVE KELLER: I'm sure they are. But

5 anyhow --- and I have all the respect for all the workers in

6 the Commonwealth. As I said before, whether they are members

7 of a trade organization or not, they work very hard and they

8 produce quality work.

9 The prevailing wage --- it's the Prevailing Wage

10 Act. Nowhere in these bills does it say what we pay --- that

11 we have to lower anybody's pay. It simply says this is the

12 Prevailing Wage Act. You can use these, but you can pay the

13 people whatever they would like. So I have a couple questions.

14 You threw out some numbers on a plumber, $199 for the first

15 hour and $99 for every hour thereafter.

16 MR. SIRIANNI: Yes.

17 REPRESENTATIVE KELLER: Did you ask them how much

18 they're paying their plumber or was that their whole firm wage?

19 MR. SIRIANNI: I can tell you they're not paying

20 them $99 an hour.

21 REPRESENTATIVE KELLER: No. Did you ask them?

22 MR. SIRIANNI: No, I did not.

23 REPRESENTATIVE KELLER: So you got no concern for

24 what they were paying that guy to come in and do the work in

25 your house?

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 99

1 MR. SIRIANNI: Yes, I didn't hire them. I just took

2 it out of the phone book to find out what the cost was, you

3 know. So if you're paying $99 an hour here in the state and

4 for your plumbers, and they're only getting $22, someone's

5 making a lot of money on that.

6 REPRESENTATIVE KELLER: And they are on prevailing

7 wage, too, if they're not --- let me just keep going --- I'll

8 go over all, you know, the thoughts that I have. Talking about

9 wage surveys, there was one done by the Department of Labor in

10 '97, somewhere around that time, ---

11 MR. SIRIANNI: Two.

12 REPRESENTATIVE KELLER: Yeah, Governor Ridge.

13 MR. SIRIANNI: Two of them were done.

14 REPRESENTATIVE KELLER: Yeah, we did those. What

15 did we find in those?

16 MR. SIRIANNI: Well, the first one was found

17 unconstitutional.

18 REPRESENTATIVE KELLER: And why was that?

19 MR. SIRIANNI: Because it was flawed.

20 REPRESENTATIVE KELLER: And why was it flawed? Why

21 was it deemed to be ---?

22 MR. SIRIANNI: Because when they --- the basis that

23 was used is they didn't use all the data that was submitted.

24 REPRESENTATIVE KELLER: What data didn't they use?

25 MR. SIRIANNI: They didn't use any data from

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 100

1 projects that were also funded by the state.

2 REPRESENTATIVE KELLER: Okay. So they used private

3 wages?

4 MR. SIRIANNI: They used a portion of private wages.

5 And you know, you're talking since 1996. I can get you the

6 information and a copy of the court case. But I will tell you

7 this, it was found unconstitutional the way they did it. It

8 didn't comply with the law. So there was another survey done

9 in compliance with the law after that. And at that point none

10 of the contractors --- and they went through the Workers' Comp

11 contributions and the unemployment contributions. Everything

12 was signified as a contractor who paid into those was notified

13 of the survey, and they were asked to participate, and they did

14 not.

15 REPRESENTATIVE KELLER: Well, then I think it's time

16 --- I think we can all agree that the numbers would probably

17 turn out differently if we would do it again.

18 MR. SIRIANNI: Well, some of the people there would,

19 but I wouldn't.

20 REPRESENTATIVE KELLER: I guess another thing is we

21 talked a little bit about fringe benefits earlier. Kristy

22 Bristol, I guess was her name. Yeah, Krystle Bristol. She had

23 talked about other. What are the other things that you can use

24 the fringes for? She went through medical, pension ---.

25 MR. SIRIANNI: We don't list other on any of our

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 101

1 collective bargaining agreements. Why that category is there,

2 I am not sure. I do not make --- I did not make that form up.

3 That's been in existence for a long time. There's been some

4 changes in how the wages and benefits could be expended. As

5 she testified, at one point they gave everything in the wages,

6 and you weren't allowed to divide any of those things if you

7 did not have a bona fide health plan or pension plan. Those

8 things changed through the years. There's been test case with

9 the Department of Labor and challenged by some of the non-union

10 contractors through the years and some of the contractors

11 unions --- union contractors through the years, excuse me, how

12 those categories could be adjusted or reflect upon each other.

13 Other, you would have to ask the Department of Labor what they

14 allow for other.

15 REPRESENTATIVE KELLER: Okay. Well, if I worked for

16 you and I was a member of your organization, what would they be

17 used for?

18 MR. SIRIANNI: We don't use other.

19 REPRESENTATIVE KELLER: Okay. What do you use the

20 fringe benefits paid for, I guess is my question.

21 MR. SIRIANNI: Healthcare, pension and there is a

22 stipend for apprenticeship --- apprenticeships.

23 REPRESENTATIVE KELLER: So in other words, training

24 and that kind of thing?

25 MR. SIRIANNI: Yes. Yes. And the state finds that

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 102

1 that's necessary. And you know, that does fund a lot of like

2 the ABC programs. They take that money and they'll use that;

3 whereas, we do it out of our contractors and labor management

4 cooperation groups. Some of that would go to a union fund.

5 If, in fact, the union contractor was working on that, they

6 would be required to send that amount in. But our amounts a

7 lot of times are --- it depends on what local, what area you're

8 in. It could be significantly higher.

9 REPRESENTATIVE KELLER: I've never --- I've never

10 worked in a union atmosphere, so I'm asking. I don't know ---

11 MR. SIRIANNI: Sure.

12 REPRESENTATIVE KELLER: --- what these get used for.

13 I mean, I don't know about --- my wife is a union member, but

14 --- so I'm looking at things. And I'm not saying ---.

15 MR. SIRIANNI: If I may? You had a business before.

16 May I ask what it was?

17 REPRESENTATIVE KELLER: Actually, I worked in wood

18 products, manufacturing. I ran ---.

19 MR. SIRIANNI: Triangle?

20 REPRESENTATIVE KELLER: No, Conestoga Wood

21 Specialties.

22 MR. SIRIANNI: Oh, okay.

23 REPRESENTATIVE KELLER: And we actually had our ---

24 in our fringe benefits we did training and so forth like that.

25 MR. SIRIANNI: And like I said, there are other

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 103

1 programs. We don't have all the programs.

2 REPRESENTATIVE KELLER: Now, I understand some union

3 dues are a fixed amount and others are a percentage of pay, is

4 that correct, depending on your collective bargaining

5 agreement?

6 MR. SIRIANNI: Yeah. I haven't negotiated any

7 contracts for a long time. Every union has the right to vote

8 on how their dues structure is. It has --- there's a whole

9 list of federal laws that we have to comply with. And if you

10 want to take dues as a way to support your membership, those

11 dues --- it has to be voted on at a meeting by the membership

12 to approve it. They need 15 days' prior notice with a whole

13 list of --- whole list of things that we have to go through.

14 REPRESENTATIVE KELLER: So if I belong to and work

15 for one of your guys' union, how would my dues --- would it be

16 a factor of my salary? Would it be in a fixed cost? I mean, I

17 guess I'm just sort of wondering.

18 MR. SIRIANNI: Individual locals have different ---.

19 REPRESENTATIVE KELLER: Oh, individual locals? So

20 some of yours would have a fixed cost and some of them may

21 have ---?

22 MR. SIRIANNI: They may. They may.

23 REPRESENTATIVE KELLER: So the ones that would

24 have ---?

25 MR. SIRIANNI: But that's not other in the ---.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 104

1 REPRESENTATIVE KELLER: No, it's not. It's not

2 other, because I'm going --- I'm heading down another path now.

3 MR. SIRIANNI: Oh, okay.

4 REPRESENTATIVE KELLER: If I was union and I was

5 collecting as a percentage of pay, then I certainly would want

6 to see prevailing wage stay. I would have a vested interest in

7 making ---.

8 MR. SIRIANNI: We make the same amount whether it's

9 prevailing wage or not.

10 REPRESENTATIVE KELLER: No, a percentage of my pay.

11 If I'm making $15 an hour, you're going to get --- my union

12 dues are three percent, you're going to get three percent of

13 15. If I'm making $30 an hour, you're going to get three

14 percent of 30, which is more money.

15 MR. SIRIANNI: I don't know if they have caps on

16 them. But I'm also aware that, you know, that's how all

17 businesses work, such as if you charge for a product and you're

18 getting ten percent on every dollar that you earn, if you get

19 $2, you're getting ten percent on $2 rather than a dollar in

20 business; is that correct?

21 REPRESENTATIVE KELLER: So then ---.

22 MR. SIRIANNI: Am I understanding that ---?

23 REPRESENTATIVE KELLER: Well, no, because then by

24 paying a higher --- higher wage to the workers, we're actually

25 putting more money, taxpayer dollars, into the pocket of a

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 105

1 business owner then. Because if they would have made $10 an

2 hour, your --- I think the example you used, in State College

3 if you made $10 an hour and your markup was two percent, that

4 would be two percent on $10. If they're making $30, it's two

5 percent on that. And the taxpayer got no more value for that

6 dollar.

7 MR. SIRIANNI: My remarks on State College were ---

8 and it had to do with the top-tier person, like a construction

9 manager making five percent on every person, every craft that

10 was out there. And construction managers ---.

11 CHAIRMAN BLOOM: Mr. Sirianni, could you hold for

12 just a moment?

13 BRIEF INTERRUPTION

14 MR. SIRIANNI: So if you wouldn't mind repeating the

15 question.

16 CHAIRMAN BLOOM: Go ahead.

17 REPRESENTATIVE KELLER: I think we were talking a

18 little bit --- we were talking about --- and actually, I don't

19 have the --- I had actually gone back through the transcript of

20 that, and I think Representative Truitt asked the question. We

21 were talking about an employee that made $10 and another one

22 that makes $20 an hour. And of course, if your employer puts

23 their markup as three percent of the job, and I don't know if

24 that three percent was the actual thing, they'd mark --- three

25 percent on 20 is more than three percent on 10.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 106

1 MR. SIRIANNI: And my comments on State College were

2 that the state and the public bodies --- and many of these

3 public bodies receive economic stimulus money, too, to pave the

4 roads and all that, shovel-ready projects. And you know, I

5 look around and I go through a lot of these little villages and

6 towns and cities and I see the beautiful brick sidewalks, you

7 know, and the parking spaces that weren't completed because

8 they wanted them to have flowers and curbs. You know, we want

9 to have nice communities, you know, but you know, when it gets

10 down to the brass tacks of it, if you spent your money on that,

11 you don't have your money to repave the road.

12 So you know, where you put your money if you build a

13 brand new municipal building --- and it's okay to build

14 buildings. We like that, you know. But if you spend all your

15 funding that year on that and you don't have the money left

16 over and you're going to juggle it, then all of a sudden the

17 money stops coming down from the state government, the federal

18 government and all those things, that's when everybody starts

19 getting upset. And that's when people really don't want to

20 have to pay, you know, our wages or anybody's wages.

21 But the markup --- and the best time that our

22 Commonwealth, over the past two or three years --- and this is

23 what I said, would have been to do as many projects as they

24 could have at that time because you had a surplus of businesses

25 and a surplus of manpower available. So you're going to get

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 107

1 --- you know, we had companies across --- and I'm not talking

2 just about union companies because we talked to other

3 associations, and I go to other association meetings. There

4 were companies that were working for zero percent profit margin

5 then because they were just trying to keep their doors open.

6 And you know, that was the benefit. That was the time that

7 Pennsylvania and our budget should have been reinvested in the

8 infrastructure then, not waiting until it gets busy again and

9 the prices go up and gas prices go up and all the ---.

10 REPRESENTATIVE KELLER: But to invest in that, we

11 would ultimately have to go to the taxpayers and say we need

12 money to do it, ultimately. And that's who pays the bills.

13 MR. SIRIANNI: There's bonding. You can bond

14 projects. And you know, we bonded --- we bonded a $4.5 billion

15 bond for unemployment compensation bailout for all the

16 businesses, banks, insurance companies and everybody in the

17 State of Pennsylvania, and everybody voted for that.

18 REPRESENTATIVE KELLER: That actually impacted ---

19 that's not the subject here, but that actually impacted also

20 what gets taken off of the employee's check.

21 MR. SIRIANNI: Well, no. It was the food tax, and

22 that was the employer tax.

23 REPRESENTATIVE KELLER: Right. But if we didn't do

24 certain things, it would have impacted the employees, too.

25 MR. SIRIANNI: They wouldn't have got their tax

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 108

1 rates, so you gave them a tax ---.

2 REPRESENTATIVE KELLER: It would have affected

3 employees, too. I don't want to, you know, belabor ---.

4 MR. SIRIANNI: We may be mixing up issues. You can

5 bond highways, too, you know. There's nothing wrong with that.

6 CHAIRMAN BLOOM: Representative Keller, are you ---?

7 REPRESENTATIVE KELLER: I'm probably about done

8 here.

9 CHAIRMAN BLOOM: We're just getting a little behind,

10 but go ahead.

11 REPRESENTATIVE KELLER: I apologize. And I

12 appreciate the indulgence of the testifiers and of the

13 Committee. I guess the point I was trying to make, if union

14 dues are a fixed percentage --- or a percentage --- if they're

15 a percentage of what the salary is, it does benefit certain

16 parties to make sure --- because we got accused of wanting to

17 take money away. Well, if I'm --- if I'm a head of a union and

18 my dues --- and my dues are a factor of percentage of wage ---.

19 MR. SIRIANNI: Our dues are voluntarily voted on by

20 our memberships.

21 REPRESENTATIVE KELLER: All right. Now, I guess I'm

22 going to do another thing because you brought into the salaries

23 of the commissioners and everything, but what do you make a

24 year?

25 MR. SIRIANNI: I make $126,000 a year.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 109

1 REPRESENTATIVE KELLER: And if we divide that by

2 20/80 ---.

3 MR. SIRIANNI: I work more than 20/80.

4 REPRESENTATIVE KELLER: Well, I'm sure those

5 commissioners do, too. And I guess that's my point.

6 MR. SIRIANNI: I don't ---.

7 REPRESENTATIVE KELLER: Then that probably wasn't

8 fair, if you don't know that, to make that assumption. And I

9 guess ---.

10 MR. SIRIANNI: No, I said I hope --- I said I hope

11 they're working ---.

12 REPRESENTATIVE KELLER: So I guess ---.

13 MR. SIRIANNI: And again, my salary is set by my

14 members. They vote on that through notification. And I'm

15 probably on the low end of any of the lobbyists in this

16 Harrisburg area. Like, if you would look at the County

17 Commissioners lobbyists and their director --- and I'm really a

18 director, I'm not a lobbyist. I just look like one. I'm a

19 director and president of a council.

20 REPRESENTATIVE KELLER: And Mr. Sirianni, you play

21 one on TV right now; right?

22 MR. SIRIANNI: Yeah. And I'm going to have --- if

23 you guys keep this up, I'm going to have to join the Actors

24 Guild, so ---. So I want to say that my counterpart in the

25 township supervisors makes $230,000, plus bonuses, off the

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 110

1 taxpayers. Mine's not off the taxpayers. Mine's voluntary

2 contributions from my members.

3 REPRESENTATIVE KELLER: If they belong to that and

4 they're getting money through prevailing wage, some of that

5 ultimately is --- your pay comes from the prevailing wage jobs.

6 MR. SIRIANNI: So small.

7 REPRESENTATIVE KELLER: I guess I would just say

8 that.

9 MR. SIRIANNI: It would be --- you know what? I

10 could go have a Big Mac with --- or a Burger King Whopper

11 with ---.

12 REPRESENTATIVE KELLER: And I guess I just want to

13 say I don't want to be --- I don't want to be criticizing the

14 other electoral officials that are here. I'm sure they earn

15 their pay. I guess that's my point.

16 MR. SIRIANNI: I was just doing a comparison of

17 wages.

18 REPRESENTATIVE KELLER: Thank you.

19 CHAIRMAN BLOOM: Thank you, Representative Keller.

20 For the information of the members, I'm going to go out of our

21 customary order to accommodate the schedule of Representative

22 Cutler and take Representative Cutler next.

23 REPRESENTATIVE CUTLER: Yes. Thank you, Mr.

24 Chairman. I appreciate your indulgence. And like

25 Representative Bloom before me, I'm going to be leaving shortly

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 111

1 after my questions, so, please --- it's nothing that you guys

2 said. And I'll catch up with you at the Capitol.

3 Good news. I'm glad to hear that you're not a

4 lobbyist, because that means I'm not a politician, and we're in

5 good company.

6 MR. SIRIANNI: Well, I am a registered lobbyist.

7 But I'm also the president of the council, ---

8 REPRESENTATIVE CUTLER: Understood.

9 MR. SIRIANNI: --- so I do political activities on

10 behalf of the workers.

11 REPRESENTATIVE CUTLER: Like Representative Truitt,

12 I personally care for these hearings because this is my first

13 cycle on Labor, so there's a lot of new issues here. So I have

14 some --- what is probably some background information. If you

15 already covered this in other hearings in prior sessions, I

16 apologize.

17 In regards to your training centers --- and I had

18 the opportunity to visit my little carpenters and millwrights

19 and was very impressed with the programs they had. What pays

20 for that? Is that your dues money, is that some of your fringe

21 benefit money, or how does that work out?

22 MR. SIRIANNI: It's a voluntary contribution from

23 each hour worked by our members in conjunction with a benefit

24 from --- in conjunction with the employers through a Joint

25 Apprenticeship Training Committee, which is standardized by the

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 112

1 federal government, and the state Apprenticeship Committee.

2 REPRESENTATIVE CUTLER: Is that categorized under

3 fringe benefit or does that contribution come out of their base

4 wage or their primary wage? I'm just trying to understand the

5 mechanics here.

6 MR. SIRIANNI: Our base wage is our base wage. All

7 benefits are ---.

8 REPRESENTATIVE CUTLER: So that's a benefit then

9 under the fringe.

10 MR. SIRIANNI: Yes.

11 REPRESENTATIVE CUTLER: Okay.

12 MR. SIRIANNI: Well, we don't call it a benefit. We

13 call it a necessity.

14 REPRESENTATIVE CUTLER: Understood. Understood.

15 Are those fringe benefits taxed? I'll be honest, ---

16 MR. SIRIANNI: No.

17 REPRESENTATIVE CUTLER: --- I pulled the IRS

18 publication, and the list of exclusions was longer than the

19 rule, which is typical, I think. And you know, I saw the

20 exclusions for healthcare and HSAs and all these other things.

21 I didn't see like training centers and things like that exempt.

22 MR. SIRIANNI: All of our --- all of our trusts are

23 nontaxable.

24 REPRESENTATIVE CUTLER: Nontaxable, okay. Perfect.

25 Thank you. And again, this is information --- I know that

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 113

1 there's been a lot of talk about data collection. And I agree

2 with Representative Truitt and Galloway in that I think that

3 that's an important piece of the puzzle. Is that the reason

4 there's a difference between the federal Davis-Bacon laws and

5 the PA prevailing wage laws? Is there a difference in

6 reporting, and should we be looking to Davis-Bacon to get more

7 complete information, or is that --- is there something

8 entirely different, like they nationalize the rate as opposed

9 to localize?

10 MR. SIRIANNI: Well, when we were doing the

11 comparison --- another testifier did a comparison on those

12 rates. Some of those rates are 20-some years old.

13 REPRESENTATIVE CUTLER: Okay. So they haven't been

14 updated. When was the last time the prevailing wage was

15 updated? Do you guys know or ---?

16 MR. SIRIANNI: Annually. We submit our wages every

17 year.

18 REPRESENTATIVE CUTLER: All right. Perfect. This

19 is very helpful. Thank you.

20 MR. SIRIANNI: You scare me when I'm helpful.

21 REPRESENTATIVE CUTLER: I try to be agreeable, Mr.

22 Sirianni. Who fills out your paperwork for compliance? I know

23 that Ms. Bristol was here earlier. She does it for her shop.

24 Do you guys have folks in like the back office, so to speak,

25 for each of your organizations that does that?

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 114

1 MR. SIRIANNI: We monitor that, and we do try to

2 keep accurate records. But our contractors are required, the

3 same as the non-union contractors, to fill out the compliance

4 sheets.

5 REPRESENTATIVE CUTLER: Okay. So they're

6 responsible for what I'll call the first fill-out, and then you

7 all monitor ---

8 MR. SIRIANNI: We have access to them ---

9 REPRESENTATIVE CUTLER: --- and observe it, make

10 sure it's proper.

11 MR. SIRIANNI: --- either through them or through

12 the state, because that's public information.

13 REPRESENTATIVE CUTLER: Do you have any idea how

14 many of those you do per year and then how many full-time

15 employees you have to do that work?

16 MR. SIRIANNI: No.

17 MR. AMOROS: I don't off hand.

18 REPRESENTATIVE CUTLER: And I'm glad to follow

19 up ---.

20 MR. SIRIANNI: I don't even know that, you know, I

21 could come up with a number for you.

22 REPRESENTATIVE CUTLER: So that's somebody ---

23 that's basically absorbed through your normal ---

24 MR. SIRIANNI: We have administrative ---.

25 REPRESENTATIVE CUTLER: --- administrative overhead.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 115

1 Okay. Perfect. I'm almost done. Your workers --- Mr. Amoros,

2 I know you said, you know, they don't ---

3 MR. AMOROS: Right.

4 REPRESENTATIVE CUTLER: --- work when it rains.

5 Understood. I think that's common sense. And maybe you don't

6 have this information. Is there a typical wage year? I know

7 Mr. Sirianni broke up everybody's year. You know, 20/80,

8 that's the base, 40 hours per week. Do your members typically

9 work, on average, 40 hours a week, or is it slightly more,

10 slightly less, or does that depend on seniority ---

11 MR. AMOROS: It's typical, yes.

12 REPRESENTATIVE CUTLER: --- and a whole bunch of

13 other things?

14 MR. AMOROS: Well, it depends on the project as

15 well. It depends on the project and the time frame, of course,

16 and then the intangible factors such as weather. I mean, you

17 don't know whether or not you're going to get five or six days

18 of rain that are going to push the project back. So all of

19 these variables come into play.

20 REPRESENTATIVE CUTLER: Okay. And then how does

21 unemployment work into that? Let's say we get to wintertime.

22 There's no more, you know, paving, you know, after certain

23 dates and all of that. Do your folks collect unemployment?

24 And I'm assuming it's based off of what they worked when ---

25 like everybody else, when they were working.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 116

1 MR. SIRIANNI: Well, I'd like to address that. And

2 it's --- you know, the law was changed under Act 60, and the

3 qualifications have become more difficult ---.

4 REPRESENTATIVE CUTLER: With the quarters?

5 MR. SIRIANNI: Yeah.

6 REPRESENTATIVE CUTLER: Okay.

7 MR. SIRIANNI: Much more difficult for our members.

8 I can give you an example of one local in --- it's the

9 Boilermakers Local, and they do --- and it's in Pittsburgh.

10 And we're doing surveys right now to find out the impact on

11 that.

12 REPRESENTATIVE CUTLER: Okay.

13 MR. SIRIANNI: The Boilermakers Local right now out

14 there has 450 people unemployed that have worked throughout the

15 years and worked this past year. And 250 of them are now not

16 eligible for unemployment even though they paid into the fund.

17 And that's only one local, okay, out of 113. We haven't got

18 all the data in. And you know, if you have someone who's paid

19 in every paycheck, every year, you know --- and there's another

20 thing. You know, when we're doing comparisons, prevailing wage

21 you say hasn't been increased, the threshold, since '61. Well,

22 the employer contribution in unemployment has not been

23 increased since '86, you know. And we pay on every dollar. We

24 even offered to pay a higher amount for every hour that we work

25 to make sure our workers were eligible because it really

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 117

1 affected the seasonal workers. And construction workers are

2 seasonable workers. We don't even know the impact of that yet.

3 We'll know this winter when people have had the opportunity to

4 only work ten months out of the year, and their second highest

5 quarter might not be 50 percent of what they made in one good

6 quarter because they were fortunate enough to work on a highway

7 project where they got to work out in the hot sun from day

8 break to daylight to day break, having people run them over or

9 try to run them over or miss running them over, working out

10 there all night long, away from their family all night long,

11 because the highway can only be done at night. You know, I

12 mean think about this. You know how many days were over 95

13 degrees this year. Go out there and work in it?

14 REPRESENTATIVE CUTLER: I've worked in it.

15 MR. SIRIANNI: You know.

16 REPRESENTATIVE CUTLER: Yeah, I've been there, too.

17 I worked on a dairy farm.

18 MR. SIRIANNI: And you know what, you're really

19 using up people and throwing them away at the end of

20 construction careers because they're just beaten to death. Bad

21 knees, bad ankles, bad backs. According to our conversations

22 --- and Representative Keller and I --- farming is the most

23 dangerous.

24 REPRESENTATIVE CUTLER: Uh-huh (yes).

25 MR. SIRIANNI: Construction is the second most

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 118

1 dangerous. Give them a break. Read the sign on the highway.

2 Give them a break; pay them.

3 REPRESENTATIVE CUTLER: And I'd be interested in

4 that information once you're done collecting it, because I

5 think that's another important piece of the puzzle.

6 MR. SIRIANNI: We really feel that there should be

7 some hearings on it in the future if the statistics we are

8 seeing now keep on climbing. And you know --- and I think you

9 need to hear from the people, not us. You need to hear from

10 the people that have been damaged by that bill.

11 REPRESENTATIVE CUTLER: All right. And then I guess

12 the last one is more of a comment more than a question. It

13 just seems to me we've heard testimony again and again

14 regarding different municipalities, authorities, whomever, that

15 they would do more jobs if they didn't have to comply with

16 prevailing wage, if they had some kind of realignment, whether

17 it's the threshold --- you know, whatever it is, increasing the

18 data to normalize it or whatever. It just seems to me that it

19 would be better for more people to be working at more jobs and

20 kind of find that compromise that you were talking about in

21 regards to getting more people back to work, getting more

22 projects done, and really getting --- for me, it's an --- you

23 know, it's an efficiency argument, getting the most use out of

24 our tax money. And I --- you know, Mr. Amoros, you referenced

25 the transportation bill. I agree. I think it's an issue that

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 119

1 needs fixed. But you know, I sure wouldn't want to be sitting

2 in the AFLCIO boardroom when you guys are discussing this next

3 time, knowing that the private-sector unions were some of the

4 ones who helped tank the bill because of the supposed linkage

5 between liquor privatization and transportation. When you look

6 at that ---.

7 MR. SIRIANNI: That's the fourth person I heard

8 that's tanked it, and one of them was me at one point.

9 REPRESENTATIVE CUTLER: I haven't heard that about

10 you yet, Mr. Sirianni.

11 MR. SIRIANNI: Mike Strikely (phonetic) said I did.

12 MR. AMOROS: Other scenarios, Representative.

13 CHAIRMAN BLOOM: I think we should stay away from

14 who's at fault.

15 MR. SIRIANNI: Name calling.

16 CHAIRMAN BLOOM: That's really not the purpose of

17 these hearings.

18 MR. SIRIANNI: That's okay. We take that with a

19 grain of salt.

20 CHAIRMAN BLOOM: Okay. Thank you, Representative

21 Cutler. We're going to try to get back to our normal sequence

22 and balance things out. Representative Gallway --- or

23 Galloway? I'm sorry.

24 REPRESENTATIVE GALLOWAY: Back to the old sod,

25 Gallway. Haven't heard that in a while. First of all, good

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 120

1 afternoon.

2 MR. SIRIANNI: Good afternoon.

3 MR. AMOROS: Good afternoon.

4 REPRESENTATIVE GALLOWAY: Our name's Williamsport?

5 Punxsutawney, Groundhog Day. And this does appear to be the

6 last one, so I want to thank you for all your testimony over

7 --- not only the last couple months. I'm tired, too, to be

8 honest with you. My wife's already called me twice and asked

9 me where I'm at and when I'm coming home. And I keep telling

10 her I'm at a hearing on prevailing wage, and she said to me

11 today, you've been telling me that all summer. I don't know

12 what else to tell her at this point.

13 I do want to hear you. I think it would be helpful

14 at this point, after everything that's been talked about. And

15 to follow up on Representative Cutler's line of questioning

16 about the ease of difficulty about submitting wage data. Could

17 you just go a little bit further? I want to know what the

18 process is. You said you submit it once a year. Is that

19 normal? Do other people submit it more? Is it more difficult

20 for some, easier for others? Is there something we could do to

21 make it easier? Describe the process of submitting wage data

22 to L&I.

23 MR. SIRIANNI: It's as easy as taking your

24 letterhead, listing your job classifications. Like if you have

25 a --- let's say we're a non-union excavating company in the

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1 northern tier here and you have people that run heavy machinery

2 on heavy and highway. Well, there's a classification in the

3 Prevailing Wage Act, which they should be aware of because, if

4 they're working on prevailing wage jobs, they can see that. So

5 they can take their employees' wages and list them on a

6 category and say, okay, I paid my trackhoe or my paver,

7 whatever the employee does, such and such an hour and list

8 that. Then I have four laborers that work for me. I can list

9 their wages and I can take that and put it in an envelope and

10 mail it to the Wage and Hour Division in Harrisburg.

11 REPRESENTATIVE GALLOWAY: How long does that take?

12 MR. SIRIANNI: Well, they already have the data, so

13 they have to download it or at least have some --- it could

14 take as long as filling out an E-Verify form, about 10 minutes,

15 20 minutes, depending --- I don't know. I'm not an

16 administrator. I used to be an estimator, so I know that some

17 of these things --- if you're doing four things or five things

18 at a time and you're a small company, it could be a little

19 burdensome. But if you're a small company, you're not going to

20 be doing big projects. You're going to be doing middle-sized

21 projects or maybe even some county paving and some smaller

22 things.

23 I had the road paved behind my office last week, and

24 you know, I mean, it was three people. I'm sure the cost

25 wasn't labor that escalated that price. You know, it was like

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 122

1 a whole city block, and there was three people. Now, a lot of

2 it could have been subbed out to truck drivers who deliver the

3 stuff or whoever they bought the materials from might provide

4 it from Pennsy Supply, they'll come and drop it right for you.

5 There is a small charge for that. But they're not part of your

6 payroll. That's part of your bid. So it's not that hard. I

7 think it can be done. I think it's been asked to be done for

8 25 years, since the Ridge Administration. No one has ever

9 stopped anybody from submitting their wages. And if they're

10 embarrassed by them, that might be one reason. I'm not sure,

11 you know. And if it's a competitive thing, well, our --- our

12 businesses that were signatory have to compete out of that

13 market. They're not afraid to show what they're paying. And

14 they still are successful in the private sector. So I don't

15 think it's that difficult.

16 MR. AMOROS: I don't think it's a cumbersome process

17 at all, Representative. And of course, I've asked the question

18 why don't more contractors submit their wage data to the

19 Department of Labor & Industry. And what I've been told is

20 it's a competitive issue. They don't want to see whose backhoe

21 operator is getting 15 bucks an hour so they can pluck them

22 away for 18 bucks an hour. And what we don't talk about is

23 undocumented labor out there. Undocumented labor is not

24 getting a fair wage, obviously, because they're not supposed to

25 be working. So when you throw those things into the mix, you

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 123

1 see that --- first of all, it's not very cumbersome.

2 But secondly, what I want to hear is a way to fix

3 that. If it is that cumbersome, let's hear it from the

4 contractors. Let's come to some sort of discussion, a

5 dialogue, instead of just ignoring it. Because I mean, this

6 all boils --- the wage rate is the wage rate because of those

7 who participate and do things above board and provide the data.

8 That's what this is about.

9 MR. SIRIANNI: One other thing is it's the

10 prevailing wage rate and it's the Prevailing Wage Law. It's

11 not the average wage law. It's the wage that prevails, most

12 commonly used in that area. And if you don't submit it, it's

13 not the most commonly used.

14 REPRESENTATIVE GALLOWAY: One last quick question,

15 then we're done here --- I'm done. I've got to leave.

16 MR. SIRIANNI: Me, too.

17 REPRESENTATIVE GALLOWAY: Yeah. The other thing is,

18 besides the difficulty and the burdensome nature that was

19 described as far as submitting the data was it all comes down

20 to cost and savings. And does it or doesn't it? We've heard

21 that --- first of all, what is your --- what is the typical

22 labor cost on a project? What would be a number that would be

23 typical as far as the costs, the labor costs?

24 MR. AMOROS: Based upon the studies that I've seen,

25 Representative, we're looking at no more than --- we're looking

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1 at between 19 and 24 percent. And some estimates have even

2 been as low as 7 to 14 percent. But what I hear constantly is

3 30 percent average, which is mathematically impossible. And

4 what I heard today was even more mind boggling. I believe I

5 heard it's 75 percent.

6 REPRESENTATIVE GALLOWAY: I did, too.

7 MR. AMOROS: Again, look, I took math for poets in

8 college, so I'm not the greatest mathematician out there.

9 However, I can tell you that is just not feasible under any

10 circumstance under the sun, just none, none whatsoever.

11 REPRESENTATIVE GALLOWAY: Even if you cut out labor

12 completely?

13 MR. AMOROS: Exactly.

14 REPRESENTATIVE GALLOWAY: Nothing is.

15 MR. AMOROS: Nobody's working for free. Nobody's

16 going to work for free. You've got to pay the laborers.

17 You've got to pay the workers what they are worth. And again,

18 it goes back to looking at the real costs. You're looking at

19 cost of materials and you're looking at architectural and

20 engineering costs. And they're skyrocketing, and I believe we

21 need a healthy dialogue on that as well, sir.

22 REPRESENTATIVE GALLOWAY: Thank you very much.

23 Thank you all. I do have to head back to town.

24 MR. SIRIANNI: Abe has a funeral he has to go to, so

25 we can do one more question.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 125

1 CHAIRMAN BLOOM: Representative Snyder?

2 REPRESENTATIVE SNYDER: I really want to speak.

3 That's why I came here.

4 CHAIRMAN BLOOM: Okay.

5 REPRESENTATIVE SNYDER: I'll make it quick. I

6 wasn't able to go to the other hearings. Unfortunately, my

7 schedule didn't permit it, so I'm very thankful that you're

8 here today and very thankful for all the testifiers.

9 Contrary to what the township supervisor said, I

10 don't have to get out of my ivory tower, because I don't think

11 I've ever been in one. My husband was a lineman for 34 years

12 for a local power company, and here's what I know. He didn't

13 make his wages based on prevailing wage, but I know this. If

14 the power company was able to hire anybody to come in and fix

15 the lines, there would be a lot of dead workers and a lot of

16 people unable to turn the lights on.

17 MR. AMOROS: That's right.

18 REPRESENTATIVE SNYDER: The link of the

19 transportation bill and the liquor, that's one thing. I have a

20 different link that I'm concerned about. I want to see a

21 transportation bill passed. I truly do. But I have deep

22 concerns that if prevailing wage is gone and we pass the

23 transportation bill because I believe my first responsibility

24 as an elected official is the healthy, safety and welfare of

25 the people I represent. And I am not going to feel confident

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 126

1 that the contractors that are building our bridges are going to

2 be building them to the quality that this Commonwealth and the

3 people deserve. Thank you. Go ahead, Greg. It's all yours.

4 REPRESENTATIVE BLOOM: Thank you, Representative

5 Snyder. Representative Lucas?

6 REPRESENTATIVE LUCAS: Like I told you guys before,

7 general contractor for 30 years. Now, I agree with a lot of

8 things he said. This is the scope of work and specs for one

9 project, a 40-by-40 storage building for a school district.

10 MR. SIRIANNI: Yes.

11 REPRESENTATIVE LUCAS: Okay. Three sides, block

12 walls, metal trusses, flat roof. Nothing too fancy. This

13 right here, this part right here, is the paperwork for filling

14 out for that project, for the bid, for the bonding, for the

15 specifications, for all --- it's three-quarters of the book.

16 This is the scope of the work. A little project that we bid on

17 would have taken probably three weeks to work on. So I agree

18 with you, there's too much --- there's too much paperwork

19 involved. There's too much engineering you have to go through

20 and everything else. Those costs are just --- look at this

21 book. Okay. So I agree with you on a lot of --- on that.

22 This was, again, way above the threshold either way. It bid

23 out for a little over $300,000.

24 MR. SIRIANNI: Sure.

25 REPRESENTATIVE LUCAS: The project was never done

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 127

1 because the school couldn't afford it. We bid on this project,

2 and again, it was never done. But I just want to show you this

3 --- look at this thing.

4 MR. SIRIANNI: I know.

5 REPRESENTATIVE LUCAS: It's unbelievable.

6 MR. SIRIANNI: We agree. And my attorney advised me

7 never to ask a question I don't already know the answer to, but

8 I'm going to go out on a limb here. How many of those pages

9 pertain to prevailing wage?

10 REPRESENTATIVE LUCAS: Prevailing wage ---.

11 MR. SIRIANNI: Five?

12 REPRESENTATIVE LUCAS: I actually have it right

13 here. Let's see. You want it exact? One, two, three, four,

14 five ---.

15 MR. SIRIANNI: And that's basically just testifying

16 to rates?

17 REPRESENTATIVE LUCAS: Those are the rates, six.

18 MR. SIRIANNI: Six pages?

19 REPRESENTATIVE LUCAS: I don't have ---.

20 MR. SIRIANNI: You only have to look in there to

21 know what you're supposed to pay.

22 REPRESENTATIVE LUCAS: They don't have --- they

23 don't have the job --- they don't have the job classifications

24 in this particular one.

25 MR. SIRIANNI: So that's not so burdensome to a

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 128

1 borough or township to look at those five pages. And actually,

2 architects and the people bidding on it look at that because

3 they're going to know that they're responsible to pay those

4 rates on that project.

5 REPRESENTATIVE LUCAS: Right. This is how you bid

6 it.

7 MR. SIRIANNI: So anybody that's classified as a

8 worker or doesn't pay those rates is violating the law?

9 REPRESENTATIVE LUCAS: Correct.

10 MR. SIRIANNI: Correct. And that should be a crime.

11 In Pennsylvania it's not. There's over 30 contractors that

12 have been debarred that have never paid the proper wages since

13 they were found guilty for avoiding prevailing wage. And I

14 think it's incumbent on legislators to make sure that those

15 people who are committing white-collar crimes --- and you know

16 how that works. You've probably seen it in the industry. And

17 once we start correcting that, the taxpayer will be getting

18 what they're paying for. Right now they're paying for

19 something for the worker. It's for the worker to get that

20 wage. And they're not getting it. Somebody is sticking that

21 in their pocket.

22 REPRESENTATIVE LUCAS: Okay. Let me go on. The

23 last time we were here I asked a question about the bidding

24 process, where we start out and where you have to start paying

25 for bid bonds and bids and so on, and I got this information.

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 129

1 Zero to 9,999, a municipality can just write a check. They

2 don't have to do anything. From $10,000 to $18,499, they have

3 to have three quotes. They can be written, ---

4 MR. SIRIANNI: Telephonic.

5 REPRESENTATIVE LUCAS: --- they can be on the phone

6 or they could be --- they could be ---.

7 MR. SIRIANNI: May I interject there for a second?

8 REPRESENTATIVE LUCAS: Go ahead.

9 MR. SIRIANNI: This was an issue for 25 years that

10 we thought we could not support. And we had meetings with all

11 of the local government committees, the township supervisors,

12 the county commissioners and all that. They wanted to have the

13 ability on these smaller projects to --- up to 18.5 thousand

14 dollars to take three telephonic bids. We opposed that because

15 we thought it was in the best interest of the taxpayer for them

16 to be published somewhere, okay. And we didn't care where. We

17 said let's put them on DGS' website so everybody in the state

18 can see them, and you'll have more people bidding on them.

19 You'll have a better pool of contractors bidding on them. And

20 they wouldn't accept that.

21 So finally, last session, we thought in good faith,

22 and we worked with Senator Scarnati, Representative Keller, and

23 several other --- several other legislators, because the

24 figures that were thrown around --- the local governments did

25 not have to advertise for those bids. They could save $300

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 130

1 million a year across the board, including school districts and

2 all that. So we, as good citizens, said, okay, if we can save

3 them $300 million a year, we'll release the votes on those

4 projects. And you know what, it still wasn't enough. Got to

5 have more. Every time we turn around, we got to have more.

6 And now we have local governments not even

7 advertising for bids. No one knows what they're doing. They

8 can just call up and say, hey, Bill, you know, I got a job here

9 for 18.9. Can you do it for 18.5? Good, you got it. So you

10 know, that's kind of a thing we didn't really like because we

11 wanted our contractors to be able to see those projects in

12 print or on a website somewhere. Now it's all done --- no one

13 knows who gets them. No one knows who was called. So I think

14 that's problematic. But we went along with that in order to

15 help the boroughs, townships and county commissioners in their

16 plight of money that wasn't coming in anymore from higher

17 sources. I'm not going to say who again.

18 REPRESENTATIVE LUCAS: Okay. Then from $18,500

19 above the EFF competitive bid, sealed bids, ---

20 MR. SIRIANNI: Escalator ---.

21 REPRESENTATIVE LUCAS: --- sealed bids, bid bonds

22 and all the rest of the maintenance bonds and $25,000 and above

23 right now has to be prevailing wage.

24 MR. SIRIANNI: That's correct.

25 REPRESENTATIVE LUCAS: Okay. I just want to lay out

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1 for you a project, okay. And again, I worked construction 30

2 years. I live in a college town.

3 MR. SIRIANNI: Okay.

4 REPRESENTATIVE LUCAS: I hire a lot of college

5 students, ---

6 MR. SIRIANNI: Uh-huh (yes).

7 REPRESENTATIVE LUCAS: --- usually the wrestlers or

8 the football players, because they are really strong and very

9 competitive. I pay them $15. That's twice as much money

10 they'd make anywhere else for that summer job. So they're

11 happy to work for it. It costs me about 20 percent for my

12 Workmen's Comp, ---

13 MR. SIRIANNI: Unemployment.

14 REPRESENTATIVE LUCAS: --- my unemployment, which

15 none of them can collect, okay, and other things. So for a

16 thousand hours, it's going to cost me $18,000. Okay. Say

17 we're doing a roof job for a municipality, get a thousand hours

18 into it, I'm going to be there, my partner's going to be there,

19 we're going to hire three or four or five of these college

20 kids. We're going to pay out $18,000; we're going to get the

21 job done. All right. If that goes above prevailing wage,

22 which it would because I'm paying out $18,000 in labor, now I

23 have to hire roofers out of the union hall. And don't quote me

24 wrong. Roofing is a hard, hard job. I'm too fat and too old

25 to be crawling around like I used to up on a roof, but I've put

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 132

1 down thousands of square shingles. Okay.

2 I've got to hire the guys out of the union hall.

3 And there's no young roofers either, by the way --- or no old

4 roofers. I'm sorry, no old roofers, because it's too hard on

5 you. Okay. I'm going to pay them $23.65 an hour. And I'm

6 going to have to pay 20 percent on top of that for the things

7 we talked about. So I'm going to come out to $28,380 for that

8 same thousand hours. Now, on top of that I have to pay their

9 benefits. Now, their benefits I don't have to get taxed on. I

10 can send that into the union and they'll take care of that.

11 That's an additional $12,170. So I'm paying these union

12 contractors $40,550 for the same job that me and my wrestlers

13 did for $22,500 --- or for $18,000. So I'm saving $22,550.

14 There's no way I'm going to be charging --- I'm not going to

15 charge a municipality a union skill for basically college kids

16 who will do that, will still do the job, will still do the job

17 well.

18 Okay. Now, if I do the same job with my same crew,

19 with my wrestlers and football players, okay, I have to pay

20 them prevailing wage. I have to pay them the $23.65, plus the

21 $12.17 benefit, for a total of $35.82. Now, I have to pay 20

22 percent on top of that, because I have to pay the taxes on that

23 additional benefit money. So I'm paying a total of $42,984 for

24 the same labor I did for $18,000, the same exact crew. Now, my

25 guys would love it. Who would love it even more is the bar

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 133

1 owners in town when I give them their paycheck on Friday,

2 because they're going to go --- that's where they're going to

3 blow it all at. But that doesn't make any difference.

4 Okay. But what I'm saving --- what I'm saving with

5 the same exact crew is $24,984 for the same 1,000 hours of

6 work, with the same amount of crew that I'm doing. What you

7 guys keep on saying is that we're slashing prevailing wage.

8 Well, we're not slashing prevailing wage. I'm just having

9 someone else do the work and they're working for less money.

10 And these guys, that's --- to them, $15 an hour is a huge

11 amount of money for them, and we're --- they're still getting

12 the same exact product. Now, I wouldn't put those guys at a

13 nuclear power plant. Same exact product. I'll guarantee you

14 the same exact product. Okay. I wouldn't put those same guys

15 in a nuclear power plant, okay, doing work there, okay. But

16 for a job like this, they can do that. And I've saved that

17 municipality now almost $25,000 for the same job that they can

18 go on and do another project too. That's my argument.

19 CHAIRMAN BLOOM: Okay.

20 MR. SIRIANNI: I hear you and I understand what

21 you're saying. So let me tell you what's going on there, okay.

22 You're taking college students who come --- maybe they live

23 there. Maybe they don't live there. And maybe they're from

24 out of state. You know, I grew up in State College, and I saw

25 some of the same things happen. And those people are going to

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 134

1 grow up and move away. They're not going --- the roofers that

2 live there and raise their families and pay the school taxes

3 and all those things --- maybe a few of them will be, but I

4 think most people that go to Edinboro, are going to Edinboro

5 and then they're leaving. And I may be wrong. I don't know.

6 I don't know what the whole texture is up in Erie County, but

7 you know, I do go there. As a matter of fact, my father built

8 --- what's the golf course up there? Lake View Country Club.

9 He supervised that construction. I used to live in Northeast,

10 PA. I was born in Warren County.

11 But I can tell you this, in State College I could

12 call that --- you know, we have 30,000, 40,000 students there,

13 and they do stimulate the economy when they're there. But when

14 they're not --- when they're not in school, they're taking jobs

15 from local residents. And I used to call that the land of

16 little opportunity when I lived there, because when I lived

17 there it was hard to get a good-paying job because any student

18 that came into town would work for hardly anything. Beer, they

19 would work for beer if you asked them to. You know, they

20 really would. If you give them a keg, they'll do the same

21 thing. You know, go down to Carlisle. Go to Dickinson. You

22 know, they drink better than anybody down there. I used to

23 replace the windows every weekend, you know, from beer bottles

24 going through them and the parties they used to have.

25 So you know, do you want to build a community or do

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 135

1 you want cheap labor? Do you want to have citizens that are

2 going to remain in the area? Do you want your company to have

3 longevity or do you just want to keep churning people through

4 as they graduate? Or do you want to have people that are going

5 to grow up in Williamsport or Erie or wherever it is and

6 they're going to pat you on the back and say, you know what,

7 you've been a damn good State Rep, and I raised my family, and

8 you helped me do that, and my kids are now going to college

9 because I can afford to pay for them to go to Edinboro? You

10 know, every job they take from those local union guys that you

11 like to use --- and I'm really happy to hear you do use them

12 --- that's one less kid who can go to Edinboro University

13 because he doesn't get that job because you undercut the wages

14 there.

15 REPRESENTATIVE LUCAS: I didn't undercut the wages.

16 MR. SIRIANNI: Oh, no, you got cheap labor.

17 REPRESENTATIVE LUCAS: I didn't undercut the wages.

18 That's the labor cost that bears what goes on in that town.

19 Now, ---.

20 MR. SIRIANNI: So you're saying the union laborers

21 don't --- or union roofers don't work anywhere else?

22 REPRESENTATIVE LUCAS: The union roofers are working

23 in Erie on bigger projects. They aren't going to want to do a

24 little shingle job somewhere.

25 MR. SIRIANNI: But it's the prevailing wage. You're

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 136

1 just paying your people a different rate and maintaining the

2 standard for the area so the bigger projects and the local guys

3 keep a standard, what it should be, ---

4 REPRESENTATIVE LUCAS: Well, what I'm saying ---.

5 MR. SIRIANNI: --- rather than having students

6 coming in and undermining the ---?

7 REPRESENTATIVE LUCAS: What I'm saying is that those

8 jobs probably wouldn't get done if you had to pay prevailing

9 wage to get it done.

10 MR. SIRIANNI: Thank you.

11 CHAIRMAN BLOOM: Thank you, Representative Lucas.

12 We have one more testifier, who's been very patient.

13 MR. SIRIANNI: Thank you.

14 CHAIRMAN BLOOM: And I want to thank you both again

15 for coming back four times. It was really ---.

16 MR. SIRIANNI: We're always willing to talk aside

17 from this, though.

18 CHAIRMAN BLOOM: Very good.

19 MR. AMOROS: And thanks to the staff for doing all

20 the prep work. That goes unnoticed and should not. Thank you.

21 CHAIRMAN BLOOM: Thank you. Okay. Last but not

22 least, very patient Dr. Oscar Knade, representing the

23 Williamsport Area School District. Dr. Knade, I apologize.

24 We've made a number of adjustments to the schedule today to

25 accommodate folks that had to leave early, and you got the

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 137

1 short end of that. Thank you for sticking around for us.

2 DR. KNADE: Fortunately, I don't live too far away,

3 so I don't have a big traffic problem. Mr. Chairman and

4 members of the committee, I'm Oscar Knade. I'm the school

5 superintendent here in Williamsport for 20 years. And I'm now

6 engaged as a community volunteer primarily with Preservation

7 Williamsport. It's an organization that seeks to preserve the

8 rich architectural heritage of Williamsport and educate folks

9 about the value of preservation.

10 I believe you all have my written testimony.

11 CHAIRMAN BLOOM: Yes.

12 DR. KNADE: Let me just refer to a couple of points

13 because this hearing now is officially over, according to the

14 schedule. I won't keep you over time. I will point out a few

15 things with some testimony.

16 I was responsible for seven building projects during

17 20 years as superintendent of schools. And the previous

18 testimony to the contrary, applications of prevailing wage

19 costs the taxpayers of Williamsport Area School District about

20 30 percent more than they needed to. Enough said.

21 You have one bill out of the Committee, 796. I

22 think we got two bills --- three bills. I would hope that one

23 of them is 1191. Is it?

24 CHAIRMAN BLOOM: No.

25 DR. KNADE: No. Well, that's the best of the bunch

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 138

1 that you have before you here. And it's the one that does the

2 most to create the inequities that the Prevailing Wage Act ---

3 it affects us here in Williamsport.

4 We think that --- I think --- I'm not representing

5 the Williamsport Area School District, by the way. I've been

6 retired from that for 21 years. And I can tell you that during

7 those 20 years that I was superintendent, we paid the burden.

8 And I think two things or three things can be said about the

9 Prevailing Wage Act very briefly. One is it needs an increase

10 to the threshold consistent with some recognition that

11 inflation exists, whether it's $190,000, $500,000, whatever.

12 But $25,000 since 1963, no, that's not realistic.

13 Secondly, the threshold needs to be indexed. And

14 the CPI doesn't --- CPI affects the increased costs to a wage

15 earner of the things that they use. You need a Construction or

16 a Building Cost Index. And that should be built into the Act.

17 And I Googled it. Anybody can. And there's a host of

18 possibilities, one of them out of --- the Engineering News

19 Record published both the Building and the Construction Cost

20 Index. Let me tell you what that might have meant to some high

21 schools. I spent some of my retirement years working for an

22 architectural firm as an education facility planner. We did

23 feasibility studies. I have some experience in watching rise

24 of cost of school facilities. We built a high school in

25 Williamsport, created it in 1972, with an enrollment capacity

SARGENT'S COURT REPORTING SERVICE, INC. (814) 536-8908 139

1 of almost 2,500 students, and it's got 12 acres under roof, and

2 it cost $16 million to build. I completed it in 1972. From my

3 experience as an educational facility planner, I know that that

4 same building today would cost $110 million to $120 million.

5 Back in its time, 1972, your colleagues at that time referred

6 to it as the Taj Mahal and enacted limitations on how much you

7 could spend without a public hearing. So it goes.

8 My other part of the testimony has to do with

9 historic preservation. Williamsport has a nationally-certified

10 historic district consisting mostly of Victorian era homes

11 built during the period of time when Williamsport was regarded

12 as the lumber capital of the world. The lumber industry and

13 related industries made a lot of people in the city wealthy,

14 some of them very, very wealthy. They built fabulous mansions

15 along west Fourth Street and West Third Street. And if you

16 have the time sometime, drive in that historic district and

17 look at those mansions. Some are in the process of being

18 restored. Many of them are badly degraded, however. During

19 the 1930s, when we had the Great Depression, a lot of the

20 stained glass windows were sold out. They were cut up into

21 apartments and rooming houses. The fixtures for the ceiling

22 were all sold off. One of those houses, the house built by

23 Edwin A. Rowley, did not experience that type of degradation.

24 The third owner was the Diocese of Scranton. They

25 bought it at a fire sale price from the previous owner in 1932,

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1 and it became a convent for sisters who would teach across the

2 street at St. Joseph's School. The sisters took care of the

3 place. It's a gem. It looks like it did when they took it

4 over. Very little change. Original floor, original

5 wainscoting. We had to do some excavation work, but that

6 building is owned now by Preservation Williamsport and a

7 foundation that --- whose mission I described to you earlier.

8 We would like to do some work there and have done some work

9 there. At one time, one of your former colleagues, State

10 Representative Chappelli secured --- helped us secure a DCED

11 grant, $90,000, with which we were going to both paint the

12 exterior and replace the amosite in the carriageway with brick

13 pavers. We had bid the job earlier, got some quotes, we

14 applied prevailing wage, then the contractor was selected. And

15 it cost us $90,000 to do $60,000 worth of work. It didn't

16 include the painting. It included only the driveway work.

17 What I'd like to propose for you is another

18 amendment to the existing bill or something you might deal with

19 independently. We'd like to do a kitchen project. We would

20 like to restore the kitchen to its original state, make it look

21 authentic, the way the rest of the house does. Figure it costs

22 about $70,000. And I have looked into getting a Keystone

23 Historic Preservation Grant from our own Pennsylvania

24 Historical Museum Commission. There's some limitations. One

25 is that the maximum award is $25,000. Two, needs a 50/50 cash

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1 match. And three, it's prevailing wage --- it's applicable to

2 the Prevailing Wage Act because it exceeds $25,000 in costs.

3 We haven't gotten it done.

4 What I'd like to suggest --- and we don't go around

5 looking for a private batch because the owners --- the

6 potential owners told me, well, if this is a prevailing wage

7 job, a third of my money is going to go for an artificial wage.

8 This doesn't happen here. So what I'd like you to do is

9 consider amending the --- a bill using language from the

10 Keystone Grants eligibility guidelines, who may apply, I'd like

11 you to amend a bill to exempt non-profit organizations and

12 public agencies that own and support a publicly-accessible

13 historic property listed or eligible for listing in the

14 National Register of Historic Places or that own and support a

15 contributing historic property to a National Register historic

16 district, which is what we are. That would make it a lot

17 easier for non-profits to do the kinds of jobs they need to do

18 to further their mission of historic preservation in the

19 Commonwealth and especially in Williamsport. That's what we'd

20 like you to do.

21 That's the only testimony I have to offer. If you

22 have the ability --- I know the mind can absorb only as much as

23 one can endure. You've been here a long time, so if you have

24 questions I'll be pleased to entertain them.

25 CHAIRMAN BLOOM: Thank you. First I just wanted to

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1 give you some good news, that, you know, we do have a bill in

2 the pipeline by one of my colleagues from the district right

3 next to mine in Chester County to allow historic properties and

4 land conservancies to opt out of the Prevailing Wage Act, much

5 like we've had a bill to let school districts opt out of

6 prevailing wage or we've had bills to let municipalities.

7 There's a lot of different things in the pipeline. That's one

8 of the things that the prior testifier had alluded to. He

9 wondered why he was here testifying when we've already voted on

10 some bills. But there's still more in the pipeline. And what

11 you've described is one. And I'm sure Representative Milne is

12 probably going to look for opportunities to amend his bill onto

13 something else, as things work their way through.

14 Do you have a question, Greg? Do you have any sense

15 of how many other organizations like yours might be out there

16 that would benefit from the legislation that you described?

17 DR. KNADE: No, I don't know with any degree of

18 certainty. But it would even help municipalities in a sense

19 that --- I know in the Borough of Jim Thorpe, for example, they

20 took over the abandoned mansion. I'm not exactly sure when it

21 was completed. But as a municipality, they're a non-profit, of

22 course. But if they try to enhance or improve that facility

23 individually, they've got a Prevailing Wage Act problem.

24 Representative Milne's bill would take care of that, make it go

25 away.

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1 CHAIRMAN BLOOM: Okay.

2 DR. KNADE: And we have historic district ---

3 Bellefonte is nearby. They have a historic district and homes

4 that are on the National Register of Historic Places.

5 CHAIRMAN BLOOM: Do you happen to know if projects

6 like that, if they receive any federal funding, are they

7 subject to Davis-Bacon rules?

8 DR. KNADE: Usually their federal funding does not

9 come down for those. I've talked to two Representations,

10 Representative Marino most recently, who represents this

11 congressional district here. He said he'd love to be able to

12 do something for me, but we don't have --- we can't do earmarks

13 anymore.

14 CHAIRMAN BLOOM: And then finally, just in terms of

15 the extra costs associated with prevailing wage, I'm wondering

16 where you would rank that among the various cost concerns that

17 school districts have. Let's say, money that goes to cyber

18 charter schools versus prevailing wage versus who knows what

19 else, where does prevailing wage rank?

20 DR. KNADE: Prevailing wage does not rank high among

21 the ones that you just described probably because not every

22 school district is doing school construction work. And with

23 the freeze on plant projects initiated by the Corbett

24 Administration, they're not going to be doing any in the near

25 future. There are no plant improvements being processed. Only

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1 what was already in the pipeline and had passed a certain level

2 of approval, those projects may proceed. So prevailing wage is

3 going to be less and less a problem. It's going to be

4 employment that's going to be a bigger problem, because

5 construction work for school projects won't have any. I would

6 say cyber education tuition, the amount of money that school

7 districts have to pay for cyber is unrealistically --- it's

8 unreliable it's not predictable, and it's outrageously high.

9 CHAIRMAN BLOOM: So you're saying that, of the

10 different entities that could benefit from prevailing wage

11 reforms, you would see greater benefit to historical

12 organizations at this point than school districts?

13 MR. KNADE: Yeah. If they were exempted,

14 absolutely, or even if the threshold was increased to a level

15 consistent with what inflation would have done with the $25,000

16 threshold established in 1963. I think that's about $189,000

17 or something like that, not $100,000 that's proposed in 796.

18 But municipalities would benefit.

19 We have a swimming pool in the City of Williamsport

20 that needs repaired. It isn't going to get repaired. And it's

21 a neighborhood that needs recreational opportunity, more

22 recreational opportunities. I don't know what the cost of that

23 swimming pool would be to fix, but it probably could escape

24 prevailing wage in the city.

25 But the James V. Brown Library, which receives some

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1 funding from Lycoming County through a Dedicated Library Tax

2 needed to do a new roof, they're stuck. They're going to have

3 to pay. They're not exempt. They're going to pay prevailing

4 wage for that new roof, so --- and the roofing --- somebody

5 talked about roofing salaries earlier in testifying. They're

6 nowhere near the salaries that are paid in this local county.

7 See, part of our problem, and that's why I suggested

8 like 1191 might be the solution, get the wage rates for the

9 county in which the work is being done. That's what the

10 Prevailing Wage Act is intended to mean. But if a given trade

11 doesn't have a negotiated wage rate in Lycoming County, the

12 secretary has to go someplace to find that wage rate, and

13 sometimes it's in Philadelphia or Pittsburgh.

14 CHAIRMAN BLOOM: I agree. Well, thank you, Dr.

15 Knade. Again, I appreciate your patience. The hearing ran a

16 little bit longer than scheduled. But it's tough. We always

17 have to try to give every member their fair shake. But thank

18 you very much for your time and ---

19 DR. KNADE: You're welcome.

20 CHAIRMAN BLOOM: --- for coming here today.

21 DR. KNADE: You're welcome.

22 CHAIRMAN BLOOM: Just, I guess, for the record we

23 should note that we've also received written testimony that was

24 submitted from Joe Reighard, the Supervisor of Gamble Township

25 in Lycoming County, and from Kathy Swope, the Regional Director

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1 of the Pennsylvania School Boards Association and the President

2 of the Lewisburg Area School District Board of Directors. And

3 unless there are any objections, that will conclude the meeting

4 --- or the hearing for today, and thank you all for your

5 interest.

6 MEETING ADJOURNED AT 4:17 P.M.

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