Labor Dept Wage Rate Reversal

Spurs Scrutiny Of Council Member’s Memo

By John Voket

Legislative Council representative Po Murray said this week that in her elected capacity, it was her responsibility to look into constituent concerns about whether the town and Fairfield Hills developer Peter D’Amico were planning to honor Connecticut’s prevailing wage law.

In May 2008, Ms Murray requested the state Department of Labor’s (DOL) Wage and Workplace Standards Division investigate whether the hybrid development project to demolish a building and install parking at Fairfield Hills violated the fair wage statute.

Subsequent correspondence between the state and the town ultimately resulted in a five-month review, and the reversal of a June 2008 ruling from the labor department that initially found that the project was not subject to prevailing wages.

Prevailing rate consists of a base rate and a fringe benefit rate, which the Connecticut Conference of Municipalities refers to as an unfunded state mandate requiring municipalities to pay “prevailing wages” on certain public or state funded construction projects.

This prevents state and local projects being bid to obtain the lowest possible price because all firms that bid on the project must meet wage and benefit guidelines set by the state. The CCM says these pay rates tend to be almost identical to union scale.

Several sources in the local commercial construction industry have said paying prevailing wages generally increases labor costs. And Town Attorney David Grogins has said mandated prevailing labor rates could be as much as 30 percent higher.

About three weeks prior to Ms Murray’s memo to the DOL, Newtown First Selectman Joe Borst announced that Mr D’Amico, who was in the process of completing the Newtown Youth Academy at Fairfield Hills, expressed interest in working out an arrangement to complete the demolition work, parking lot and landscape construction associated with his project and with future municipal projects at FFH.

Mr D’Amico was seeking the opportunity to step in with his own capital, and fund the improvements through a leaseback program with the town. The Board of Selectmen unanimously approved entering into an amended lease agreement with Mr D’Amico June 18, 2008, to handle the additional improvements.

Ms Murray, who is a co-founder of the Independent Party of Newtown, provided a copy of her original memo — dated May 29, 2008 — to The Newtown Bee.

The letter to state Wage and Workplace Standards Director Gary Pechie says: “I am a member of the Legislative Council in the Town of Newtown and I am writing to ask the Wage and Work Place Standard division of the Department of Labor to provide a ruling on whether or not the CT Prevailing Wage Law could be violated in a possible construction project on the Fairfield Hills Property in Newtown.”

Ms Murray concluded her request by stating, “I look forward to receiving a ruling on this matter so that we can be certain that the town would not be placed in a situation to pay prevailing wage after the fact when funding may not be available to do so.”

On September 8, 2008, Mr Pechie wrote to the town attorney saying that Mr D’Amico’s proposed developments would be subject to the prevailing wage law.

The next day, the town attorney fired back that he objected to the reversal.

On February 5 of this year, the DOL dispatched a follow-up letter to the town stating its Workplace Standards Division had “carefully analyzed [a] substantial number of documents”; it concluded that the demolition of Greenwich Hall and construction of the adjacent parking lot “is clearly covered” by prevailing wage law.

The town attorney told The Bee he still “disputes the DOL findings.” (This correspondence and other associated documents are available online at newtownbee.com.)

“We’ve got two letters from the DOL clearing this project from prevailing wage requirements,” he said. “This demolition and parking lot [development] are part of a lease for a private piece of property.”

Shortly after Ms Murray made her request to the state, she drew the ire of several council members, and her actions were characterized by council Chairman Will Rodgers as “whistle blowing on your own town.” After receiving a copy of Ms Murray’s email to the state, Mr Rodgers said her request clearly implied she was acting on behalf of the council.

“It was clearly the implication,” Mr Rodgers said. “She should have been aware of this, and in my opinion, she was aware.”

Ms Murray said in a letter to the editor this week (see page A9) that, “the Legislative Council had advised me Fairfield Hills-related concerns are my own and not the concern of the [council], so I contacted the state to seek clarification.” And she denies it was her letter that prompted the state to reopen its file on the D’Amico proposal, and to eventually reverse its decision about applying prevailing wages to the job.

Ms Murray, who is serving her first term in elected office, said she was admonished by Mr Rodgers for her actions, but defended them by saying there is no written guidelines directing council members on how to address concerns to the state.

“I still can’t find [a written policy] on it anywhere,” she stated during a follow-up call. “But it’s my responsibility as a Legislative Council member to address this issue.”