Stalemate at MSD

As city and county clash on “responsible bidder” law, $3.2 billion sewer project looms

Jun 5, 2013 at 9:39 am
click to enlarge Plans to resurface the Lick Run Creek in South Fairmount were halted following county commissioners’ funding hold.
Plans to resurface the Lick Run Creek in South Fairmount were halted following county commissioners’ funding hold.


t $3.2 billion and an estimated 15- to 20-year time frame for completion, Cincinnati’s project to retrofit and replace its sewers is one of the most expansive in the city’s history. But the sewer project, which is part of a mandate from the federal government, is now facing major hurdles as the city and county dispute how contracts for the project should be awarded and whether the government should be more involved in dictating how contractors train their employees.

Most recently, the Hamilton County Board of Commissioners put an unprecedented funding hold on all sewer projects until Cincinnati changes its “responsible bidder” law, which City Council unanimously passed in June 2012 and modified in May this year. Democratic Councilman Chris Seelbach, who sponsored the law and its modifications, is meeting with Republican Commissioner Chris Monzel on June 6 to negotiate a solution. If the dispute isn’t resolved, it could end up in court.

Critics oppose the law’s apprenticeship program and pre-apprenticeship fund requirements, while supporters argue the law helps create local jobs and train local workers. 

But for the city and county, the issue goes deeper, culminating in disagreements over how the Metropolitan Sewer District (MSD) is structured and whether the agency can truly function under city operation and county ownership as it does today.

City officials say the agreement between the city and county explicitly allows Cincinnati to set standards for projects and contracts. County officials disagree, claiming the county has ultimate authority over contracting rights. 

At the heart of the issue is the current set-up for MSD, which Republican Commissioner Greg Hartmann calls far from ideal.

“It’s an incredibly challenging utility to run when the county has to fund the utility … and the city operates it,” he says. “You can’t separate ownership and operation and be successful.”

Hartmann says he’s confident the city and county can move past the problems. But to do that, Seelbach says the county needs to be willing to make concessions, especially since the latest modifications to the law — including an exemption for contracts less than $400,000, which exempts half of all contracts for the sewer project — were effectively concessions to businesses and the county following feedback about the original law.

For the county, the bulk of the problem resides in the requirements for apprenticeship programs, which train workers in specific trades. Under the law, employers are only eligible to contract with MSD if they have apprenticeship programs that have graduated at least one person a year for the past five years.

To Seelbach and union supporters, the apprenticeship requirements are crucial for providing and accrediting local job training. But opponents, backed by major business groups and the county commissioners, say the requirements are too much.

Hartmann claims the requirement “discriminates against non-union contractors” because “apprenticeship programs are unique to union shops.” He also argues it’s not the government’s role to tell employers how to train workers.

Seelbach says the law is not taking sides with or against unions. In his view, the law doesn’t play favorites at all. 

“The purpose of this is to go beyond all of the rhetoric of job creation and actually help people in our city get construction jobs,” he says.

John Morris, president of the Ohio Valley Associated Builders and Contractors (ABC), says some of his organization’s non-union apprenticeship programs qualify, but he claims it’s been more difficult to graduate apprentices in some trades because of the recent economic downturn.

The five-year requirement is at the core of the dispute over the law, but Seelbach doesn’t accept Morris’ explanation. He says a good program should be able to graduate at least one person a year, and weakening the requirement would weaken the city’s job training efforts.

The law also requires contractors to keep their apprenticeship programs within the same trade as the work being done. So if an employee is doing electrician work, he must get an electrician apprenticeship.

Morris says the requirement is an example of government overreach that forces workers into certain trades. But Seelbach argues the requirement puts people into apprenticeship programs for jobs that are actually being offered at the time of the apprenticeship.

Morris says ABC isn’t opposed to “responsible bidder” laws, but the organization prefers Ohio’s standards over Cincinnati’s. 

The state already accredits apprenticeship programs under certain requirements, including 2,000 hours of on-the-job training and 144 hours a year of technical instruction. But the purpose behind Cincinnati’s law, as Seelbach puts it, is to go beyond already established standards to ensure quality.

A separate portion of the law requires MSD contractors put 10 cents for each hour of labor into a pre-apprenticeship fund.

Supporters argue the pre-apprenticeship programs provide applicants — who they say are typically the “disenfranchised,” such as ex-offenders and minority groups — with an opportunity to learn basic skills such as math and reading to move onto an apprenticeship program.

But opponents call the fund requirement a tax that contractors will pass on to taxpayers through higher rates in contracts.

How much the fund will cost is so far disputed. Morris says it will cost contractors $2 million to $3 million over 15 to 20 years, with a majority of the cost coming during the sewer project’s busiest first five to 10 years. Citing MSD estimates for the cost of labor, Rob Richardson, regional manager of Laborers’ International Union of North America, says it will cost $1.5 million.

Still, Richardson points out that even under Morris’ estimate, the cost is at most 0.1 percent of the $3.2 billion sewer project.

Despite the many moving pieces involved, the city and county agree a resolution is needed soon. With a federal mandate looming, Cincinnati and Hamilton County are under pressure to begin work on the area’s sewer systems as soon as possible.

“We have a consent decree to comply with,” Hartmann says. “Having lawyers involved right now will only drive up costs and delay the project, which is something we can’t have happen.” ©