A state labor group has expressed concern that Washington County officials are not including prevailing wage measures in road-use agreements with oil and gas companies, but local officials say they are following the opinion of the Ohio Supreme Court.
As more oil and gas companies move into eastern and southeastern Ohio to drill for fossil fuels trapped in the Marcellus Shale, concerns continue to be raised about maintaining county and township roads as the heavy equipment moves over them, potentially causing damage.
Mike Engbert, marketing representative for the Laborers' District Council of Ohio, recently protested agreements made between the Washington County Commissioners and the oil and gas companies because the agreements should reflect prevailing wage laws, he said.
According to its mission statement, the Laborers' District Council of Ohio's goal is to help contractors and unions to supply the most experienced and best trained workers for projects across the state. The council also supports fair wages, benefits and retirement security for all workers.
"We're a help to county officials with prevailing wage," Engbert said. "We've had pretty good response thanks to bringing all this to light."
Engbert said reaction across the state has been somewhat mixed when it comes to adding prevailing wage for companies on Roadway Use Maintenance Agreements (RUMAs). A RUMA is a document all parties involved must sign off on that promises to repair damages to infrastructure, roads and bridges or replace them all together, in most cases using the company's team to handle replacement or repair.
About the Davis-Bacon Act
In the 1920s, contractors found they could pay African-American workers less than white employees, and submit lower bids.
An Alabama contractor won a contract in 1927 from the Veterans' Bureau to construct a hospital in Long Island, N.Y., with his low bid aided by importation of African-American workers from the south.
Congressman Robert L. Bacon introduced a bill to require payment of prevailing wages on federal projects. He said the workers "were herded onto this job, they were housed in shacks, they were paid a very low wage, and . . . it seems to me that the federal government should not engage in construction work in any state and undermine the labor conditions and the labor wages paid in that state."
President Herbert Hoover signed the Davis-Bacon Act on March 31, 1931.
Engbert said he met with Washington County Prosecutor Jim Schneider, who also serves as attorney for Washington County and the townships, in December about including the prevailing wage in the already-completed RUMA for work being done in Adams Township, but nothing changed.
"A couple of months later, they (Washington County) do another RUMA with PDC Energy," Engbert said. "It's unclear to me why (it did not include prevailing wage information)."
Bill Hutchinson, business manager for the Parkersburg-Marietta Building Trades, AFL-CIO said prevailing wage is important to skilled trades and the public.
"Prevailing wages keep skilled workers qualified through the trades, and apprenticeships are self-funded," he said.
The wages also help drive the local economy, keep out low-wage contractors and protects the economy so workers can rely on a decent wage and benefits, he said.
Ohio's prevailing wage rate is determined by the director of the Ohio Department of Commerce and is paid to the skilled trades, such as pipe fitters, carpenters and electricians, according to the Ohio Division of Industrial Compliance. It's based on the basic hourly rate of pay, the rate of contribution irrevocably made by a contractor or subcontractor to a trustee or third person pursuant to a fund, plan or program and the rate of costs to the contractor or subcontractor which may be reasonably anticipated in providing fringe benefits.
Historically, Hutchinson said, roving bands of workers would come into a community and do work for next to nothing, hurting the community.
"If you're willing to work for less, you can get about any job going," he said.
The disagreement between Washington County officials and the laborers' district council centers around three recent sources on prevailing wage law.
Attorney General Mike DeWine, in an advisory opinion issued Sept. 19, 2012, said the oil and gas companies need to follow prevailing wage laws and include it in contracts (RUMAs).
"I told my clients (Adams and Waterford townships) that if these companies are wanting to build new roads or make improvements to roads (for example, upgrading gravel to paved), such a contract entered by a government would require prevailing wage language," Schneider said.
Engbert said 13 eastern and southeastern Ohio counties have followed DeWine's opinion and included prevailing language in their oil and gas contracts. Those counties include Monroe, Noble, Muskingum and Guernsey.
The Ohio Supreme Court issued a related decision in Northwestern Ohio Building & Construction & Trades Council v. Ottawa County Improvement Corp. in 2009.
The case involved a purchase of land, building and office equipment for private retail with a mix of public and private money. However, during the building's renovation, only private funds were used.
In a unanimous 7-0 decision, the Ohio Supreme Court ruled the requirement to pay prevailing wages applies only when a public authority, including an institution, spends public funds to construct a public improvement constructed by or to benefit a public authority. The court determined the project was not a "public improvement" because (1) the renovation work was financed solely by private funds and (2) the project was not completed by or for any public authority.
The Ohio Supreme Court said if some private entity makes a public improvement without the expenditure of public funding, then prevailing wage doesn't need to be followed, Schneider said.
"I understand (the council's) argument," Schneider said. "DeWine was talking about new roads."
Ohio's prevailing wage law is spelled out in Section 4115 of the Ohio Revised Code, the payment of wages and benefits to skilled trades on public improvements,
Washington County Engineer Roger Wright said Denver-based PDC Energy has been developing two drilling sites at Waterford Elementary School in Waterford Township
Waterford Township has no prevailing wages in the contract because, if road damage occurs, PDC's engineers will figure out a plan of repair using its money and employees.
If they turn these roads over to them without it, there are no guidelines as to how to repair the road, such as the base has to have a certain depth, Hutchinson said. He questioned what would happen six months later if the repairs don't hold up and the oil and gas company already has cleared out.
"There is no hard reason why they (Washington County Commissioners) chose not to follow the attorney general's opinion," Engbert said. "We have no say in the matter. We are just here to serve as signatory contractors. People get wary when you get changes to RUMAs while under development."