Updated 11/7/16 at 4:41 p.m.

An ordinance that established a prevailing wage for City and County of Denver contractors has not seen any significant change in more than a half century, other than a process to exclude violators from doing city work projects, which has not banned a single company.

That is likely to change. The City Council’s Finance and Governance Committee’s recently recommended that the full Council approve several changes to the ordinance, with guidance from Denver Auditor Timothy O’Brien.

Having prevailing wages set by local, state or federal government entities helps prevent large employers – such as those entities – from dominating and having an undue influence on wages paid, O’Brien said. The ordinance changes would apply to work done on any city-owned or leased properties.

Denver first adopted such an ordinance in 1950, but it hasn’t been significantly changed or amended, O’Brien added, so disputes develop when employees are not paid correctly, which can lead to expensive litigation and having fewer contractors available while violators continue to work for the city and enforcement is difficult.

Bringing things up to date, “bad actors” not wanted

A 17-member work group included representatives of industry, labor and the City and County of Denver to help create clear and concise rules that removed outdated and ambiguous terms, and align enforcement with the city’s contracting process, O’Brien said.

Fines would be increased from $20 to $50 a week per violation when remediation is not made within 30 days of a notice of violation and escalating fines of up to $5,000 for repeat and flagrant offenders, he added.

The city’s debarment panel – created about 10 years ago to decide if violating companies and contractors should be barred from doing business with the city – would be restructured so debarment could actually occur, O’Brien said.

“Right now that panel is made up of four people and it takes three votes to disbar,” he noted. “To our knowledge, Denver has never had a successful disbarment.”

“I can’t believe this whole time we haven’t even pulled anyone by the ear, let alone took their wings away,” City Councilman Paul Lopez said.

“This isn’t just about levying fines or debarment,” O’Brien said. “There are times when a carrot won’t work, though, and you need to have a stick. There may be some bad actors, but we want to look forward with this, not backward.”

Lopez said in his 9 years on Council, he’s aware of four firms “that I know their work is sub-par and their work practices are deplorable, but we haven’t had the right tool to keep them from being able to access taxpayer dollars” by doing more city work projects.

Councilwoman Robin Kniech agreed.

“It galls me to see contractors we are litigating against because of their bad work bidding other jobs,” she said. “There should at least be a time out.”

Contractors also have no appeals process except district court, O’Brien said, so the recommendation is to allow hearing officers to be involved in appeals.

“That should give a quicker remedy to what can be reasonable differences of opinion,” he added.

Another recommendation would clear up the “muddled” roles of the auditor’s office and Career Service Authority in prevailing wage enforcement, O’Brien said. That authority would create all wage classifications, the working group would consider and recommend them for adoption by the city and the auditor’s office would enforce proper prevailing wages.

Industry, labor support changes

Taryn Edwards, senior vice-president of Saunders Construction and a working group member, called the effort a positive experience.

“For the first time in about 50 years, industry and labor came together on this and I think you will have an amazing ordinance that can be followed outside Denver,” Edwards told the committee. “This is something to be celebrated.”

Rusty Gonzalez, president of the Hispanic Contractors of Colorado, said he represented 140 construction services firms, 120 of which are small businesses.

“A lot of the problems that arise will come from small businesses, not intentionally but we make mistakes,” he said. “This ordinance will address how we can correct those mistakes.”

Kurt Steenhoek, business manager for Plumbers Local 3, told the committee that “At the end of the day, when you get these changes in place, you will make the city more efficient.”

Howard Arnold, business manager for Pipefitters Local 208, said the recommended fines and penalties were “clear and concise, up to and including debarment to help discourage the bad actors and folks who try to game our system.”

Dave Davia with the Colorado Association of Mechanical and Plumbing Contractors, said companies need to know their risks, along with a predictable process, “and there were pieces of that missing before.”

“What you see here is something we all rallied behind,” Daug added. “What you don’t see are some things labor wanted and some things construction companies wanted. So you’re seeing the art of collaboration and negotiation.”

This story has been corrected to reflect that Colorado Association of Mechanical and Plumbing Contractors Dave’s last name is Davia, not Daug. We apologize for the error.