02-11-2020 Work Session AgendaW O R K S E S S IO N W O R K S E S S IO N
B AR TH O LO MEW R O O M
FE B R U ARY 11, 2020
5:45 P M
C all to order
1.C onsider opti ons for prevailing wage, redevelopment contractual obligation to follow labor laws and labor
trafficking prevention.
A djournment
Auxiliary aids for individuals with disabilities are available upon request. R equests must be made at least 96
hours in advance to the C ity Clerk at 612-861-9738.
AGENDA SECTION:Work Session Items
AGENDA ITEM #1.
WORK S E S S ION
2/11/2020
RE P O RT P RE PA RE D B Y: B lanca Martinez Gavina, E xecutive A nalyst
D E PA RTM E NT D IRE C TOR RE V IE W:
O TH E R D E PA RTM E NT RE V IE W:
C ITY M A NA G E R RE V IE W: K atie Rodriguez
2/7/2020
I T E M F O R WO RK S E S S I O N:
Consider options for prevailing wage, redevelopment contractual obligation to follow labor laws and
labor trafficking pr evention.
E X E C UT IV E S UM M ARY:
The work session will detail the following:
Summary of key terms
Background on prevailing wage in the C ity of Ric hfield
Summary of existing research
Synthesis of examples from c ities on prevailing wage, redevelopment c ontrac tual obligation to follow
labor laws and the use of labor trafficking prevention methods
Staff recommendation
Next Steps
T he City of Richfield is required to pay a prevailing wage for any projects that are funded with
state, and federal (government) revenue. T he Richfield City Council is considering expanding the
prevailing wage requirements to non-government funded projects to better support the City of
Richfield’s economy and enhance the local standard of living.
Before adopting any policies, polic ymakers need to understand the implications of prevailing wage against
local, state, and federal projec t c ontrac t requirements and the impact on city resources.
Options for proposed polic y enhanc ements inc lude:
Prevailing Wage
The Davis-Bacon and Related Ac ts, apply to c ontrac tors and subcontractors performing on federally funded
or assisted contrac ts in exc ess of $2,000 for the c onstruc tion, alteration, or repair (including painting and
decorating) of public buildings or public works.
Costs to the city are medium-high due to the need for oversight, implementation, and ongoing
enforcement. T he research was inconsistent making it difficult to predict the increase cost if any in
future contracts and the administrative costs of enforcement.
Limitations include increased costs and lack of staff expertise to enforce the prevailing wage
requirements. Based on initial research, Director Asher recommended including a prevailing wage
requirement for any project over $300,000. T hough the starting point of $300,000 seems reasonable
to expand a prevailing wage requirement for projects that are not already required, the initial range
should consider costs of implementation and ongoing enforcement.
Redevelopment contractual obligation to follow labor laws
Development Agreements can be written to inc lude:
- a developer c ommitment to c omply with all federal, state and loc al labor laws;
- a requirement that the developer provide documentation of proper payment to all c ontrac tors, subc ontractors
and project laborers prior to the issuance of a C ertificate of C ompliance, and;
- an ac knowledgement that failure to comply with the above points would result in a default of the development
agreement and c ould result in a penalty (such as non-issuanc e of TI F Note, or, if the TI F Note has already
been issued, delay ing, reduc ing and/or ceasing TI F Note pay ments.
Costs to the City are medium to high as the HRA could inc ur legal costs in conc luding developer is in default
of c ontract and/or in withholding funds;
Limitations include:
- Developer may be unaware of all subcontrac tors and suppliers;
- Staff does not have the c apac ity to conduct site visits to determine if there are workers who are excluded
from the list;
-May set an unrealistic expectation that staff is monitoring and blame assigned to staff if not followed.
-Language would only be valid until a Certificate of C ompletion were issued onc e all contractual obligations
have been met (usually within 18 months of conclusion of c onstruc tion).
Protection from labor trafficking
Many cities around the c ountry, including the neighboring city of Minneapolis, are passing ordinanc es aimed
to protect laborers from labor exploitation by contractors and subc ontractors.
Labor trafficking is defined as “the severe form of trafficking in persons,” and “the rec ruitment, harboring,
transportation, provision, or obtaining of a person for labor or servic es, through the use of forc e, fraud, or
coerc ion for the purpose of subjec tion to involuntary servitude, peonage, debt bondage, or slavery.
Costs are minimal as there are only additional requirements for contractors to post signs in construction
zones.
Limitations are the lack of resources to investigate labor and human trafficking cases. Cities
around the country are increasing labor and human trafficking public awareness by providing signs
in establishments, city projects and other venues. T he signs alert employees and patrons to
remedies and protections related to labor and human trafficking.
D IRE C T I O N NE E D E D :
Staff is seeking direction on next steps to take in 1) Prevailing wage implementation 2) R edevelopment
contractual obligation to follow labor laws 3) H uman Trafficking awareness and prevention
B AC K G RO UND INF O RM AT IO N:
A.H IS TOR IC AL C ON TEXT
See executive summary.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
Prevailing wage, c lawbac k provision and labor trafficking protec tions aligns with the C ity of Ric hfield's
objective to: "C ultivate a healthy, local economic environment that values the City ’s small businesses and
promotes living wage jobs."
C.C R IT IC AL T IMIN G ISSU E S:
Consider options to make progress on a 2020 C ity Goal.
D.F IN AN C IAL IMPAC T:
Further research on enforcement and implementation costs will be presented at the work session.
E.L E GAL C ON S ID E R AT ION :
Staff have worked with Attorny Tietjen on proposed options.
ALT E R N AT IV E (S ):
The City Council c ould reject or modify recommended options to implement additional prevailing wage
requirements, redevelopment c ontrac tual obligations provisions and increased labor traffic king awareness.
P R IN C IPAL PAR TIE S EXP E C T E D AT ME E T IN G: