Wage rate rules at issue for borough

Posted: Wednesday, November 17, 2010

The Kenai Peninsula Borough is taking the lead to try and change Alaska state statute regarding Little-Davis Bacon wages for public construction projects.

"That legislation is antiquated and it's costing us dearly as tax payers and consumers," said Gary Knopp, Kenai Peninsula Borough Assembly president.

The Little-Davis Bacon Act has not been adjusted since its creation 1972 when the prevailing wage rate was required for public construction projects in excess of $2,000, he said.

"Our request is to change the limit from $2,000 to $50,000 and we're also asking the Legislature to define maintenance and construction," Knopp said.

As a contractor himself, Knopp said that paying the wage rate on projects more than $2,000 could be really expensive.

"When you're a small employer you pay all the benefits out in normal hourly wage," he said.

So one of his employees could be making $56 an hour but costing him $82 to $85 an hour, when you figure in all the benefits and insurance required.

Also, "to comply with the Department of Labor's requirements is very time consuming," he said.

He said the state's outdated Little Davis-Bacon Act is a detriment to the borough because the requirements are "really limiting public participation in the process."

Knopp submitted a written resolution to the Alaska Municipal League to be considered at its conference in Juneau this week and, if supported by the league, will become a recommendation to the governor.

"This is an issue I've been pursuing for about a year and a half now," he said.

A resolution in support of the Little Davis-Bacon Act changes will be coming before the borough assembly at its Dec. 7 meeting.

"We still have a lot of hurdles to jump," said Sue Wilcox, borough Mayor Dave Carey's chief of staff.

The Little Davis-Bacon revised project threshold has come up before the Legislature but failed the last time it was introduced, she said.

According to Wilcox, the Alaska Municipal League put language supporting the changes in its 2011 draft policy statement over the summer.

Getting support from other communities for the Little Davis-Bacon revisions is crucial for the Legislature, and Wilcox has petitioned government bodies in Anchorage and the Matanuska-Susitna region to support them.

If all goes well in Juneau, she said, it will be a jumping off point to discuss the updates with Alaska communities and the legislators.

"The current statue really does prohibit small business from participating in borough contracts," Wilcox said.

That was something Kenai City Manager Rick Koch was concerned about, as well.

"There are a number of small contractors in and around the Kenai Peninsula that choose not to be involved in contracts because of the administrative burden," he said.

Knopp said he's hoping to pursue the issue in Juneau with the support of Alaska Municipal League, but even with that it might still be a challenge.

"It's an uphill battle," Knopp said. "I don't know if we'll be successful."

Brielle Schaeffer can be reached at brielle.schaeffer@peninsulaclarion.com.

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