Dave Reid

M.O.R.E. Ordinance Approved by F&P Committee

By - Mar 23rd, 2009 11:23 am
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The controversial M.O.R.E ordinance which had been sent to committee at the previous Common Council meeting was further debated at this Finance & Personnel Committee meeting.  After further research by the Department of Administration they updated the fiscal note to include one full time position to manage the legislation.  Alderman Michael Murphy referenced his efforts at the Common Council meeting to move this ordinance to committee was quick to point out that “I think I was right because there are more changes being made.”

Much of the debate regarding this ordinance has revolved around whether or not the prevailing wage requirements will add cost, how many projects would be impacted, and is this an acceptable policy.  Although Rocky Marcoux, Commissioner of the Department of City Development, stated that “there are very few TIFs that would of been impacted” he went on to say that if a developer doesn’t current pay prevailing wages that “yeah, it will cost more money.”  Despite indicating this could impact some TIF projects he later added that “its clearly a policy decision and it is an investment in the city’s workforce.”  Throughout the meeting there was some discussion regarding how many TIFs that this would actually of impacted over the past five years.  Martha Brown, from the Department of City Development, indicated that seven or 1/3 of the TIF projects over the past five years would of been subject to prevailing wage requirements, but that normally those were the projects for large employers such as Manpower.  She indicated that with the infrastructure exception the prevailing wage requirements won’t impact the vast majority of TIF projects.  Martin “Wally” Morics, City of Milwaukee Comptroller, speaking in reference to TIFs that would be impacted by this resolution, stated that “those costs get passed on to you [City of Milwaukee]” but that “it is a policy choice.”  Additionally, he requested a tracking system be implemented to determine if this does add cost to future projects so that ways to improving the ordinance could be implemented.  At one point during the meeting Alderman Bauman asked “are we even close to our debt limit for TIF financing?”  The response was that the City of Milwaukee utilizes only 48% of the debt limit, but if the city were to cross 60% that could negatively impact the city’s bond rating.  He went on to mention the eight hour workday, forty hour week, and the Davis Bacon law as evidence that mandates have helped create the middle class and won’t necessarily hurt the City of Milwaukee.

Again a long list of developers and representatives of the business community spoke out against the ordinance, and although the list of speakers in support was less than at the previous meeting it’s likely they recognized a large turnout wasn’t needed as the ordinance had broad committee support.

Mike Fardy, Chief Operating Officer of Inland Companies, argued against the prevailing wage requirements stating that the additional cost could make buildings harder to rent because it comes down to “what can the end user afford to pay for rent.”  He also stated that “it’s very competitive out there” and that this could make it harder to recruit to the City of Milwaukee.

Barry Mandel, President of Mandel Group, argued that “it will materially decrease the number of development projects in the City of Milwaukee.”  He pointed to Mandel Group’s most recent project, the Corcoran Lofts, and explained that one line item change to prevailing wages would add $290,000.  The point wasn’t that this project would be impacted, but to show what a change would do to the cost of a project.

]Philup Schultz, Managing Partner at Horizon Development Group, claimed that if the Aloft project had been a full prevailing wage site that would of added about $2 million to the project cost.  He flatly stated “had that been a prevailing wage job, it would not of gone forward.”

Carla Cross, President of Cross Development Group, suggested that the new Residents Preferences Program (“RPP”) level would be difficult to meet saying “to raise it up to 40% will be a challenge.”  Despite being a cosponsor Alderman Bob Bauman questioned the RPP levels saying “to go from 25 to 40 overnight, I’m not sure is doable.”  Alderman Murphy added in reference to the RPP requirement that “I wasn’t going to support this legislation if it was the CBDG [Community Block Development Grant] boundaries.”  The RPP requirements although higher than in the past now includes all unemployed or underemployed citizens of the City of Milwaukee which is significantly larger pool to draw from than the former smaller CBDG boundaries allowed.

Speaking in support of the proposed ordinance Ken Wheeler, Pastor of Cross Lutheran Church, emphatically stated that “the reality is that if we do not invest in our citizens we will invest in them on the downside.”

Alderman Bauman wrapped up his statements saying “there have been provisions in this legislation that have been removed,” and that “these so called mandates are in my view what essentially created the country that we have today.”  This file was approved and will now go before the full Common Council.

Categories: Real Estate

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