At the committee meeting on Dec. 6,
explained that past contracts had simply been amended and re-signed
up to now and had become cluttered. Since it seemed time to rewrite
the contract, the company also proposed a couple of changes.
EMC would like to combine the
engineering contract with the operation and management contract. The
engineering contract has been renewable every four years and is up
this April. The sewer plant operation and management contract has
been renewed every five years and is up in April 2006.
During the November meeting, sewer
committee chairman Benny Huskins questioned if EMC was meeting the
Prevailing Wage Act with all its workers in Lincoln.
Miller said that EMC has many
contracts like Lincoln's in Illinois and has examined the issue,
gathered legal counsel and believes the company is not required to
meet that standard for several reasons, but he said that he would
gather the exact information why and return with it.
Miller returned to address the two questions that emerged during the
- Why doesn't EMC have to pay all
workers prevailing wage?
- How can the city combine the
engineering and the sewage management contracts?
Prevailing Wage Act has a couple of tiers, he said.
- The act says that you need to be
engaged in construction of a public works.
We're doing operation and maintenance.
- There is a public utility
The city does not have to pay prevailing wage as a public entity.
We're a private company operating on behalf of the city, which
suggests the prevailing wage should not apply.
Just in case, Miller said, there is
added language in the contract that says that if it is determined
that EMC needs to pay prevailing wage, we'll pay it. It won't be the
He said that, should EMC be mandated
to begin paying prevailing wage, they would like a clause that would
allow them to sit down with the city to discuss options at that
time. The options would be numerous, including transferring
employees back to the city and keeping EMC as managers or, not
desired, but possibly even parting ways.
The second issue that Miller
addressed was how the city could combine the engineering contract
with the operation and maintenance contract. Currently the
engineering contract is a four-year term that comes due this May 1.
The sewer plant operation and maintenance contract is a five-year
contract that is not due to renew until next year.
[to top of second column in
Miller acknowledged that there is a
state statute that talks about contracts going with a mayor's term.
However, there is what is called the "special fund rule." It says
that a service funded by a proprietary fund, a fund that stands on
its own like the sewer fund does, may go beyond the mayor's term.
The sewer operation and maintenance are funded by the sewer fund.
On the other hand, the engineering
contract is not under the sewer fund. Miller said the contract has
language added that accommodates the different funding mechanisms.
The contract will read, "We looked to the sewer fund to pay for our
contract services, and if for some reason the sewer fund did not
have the appropriate amount in it, or if the money were not
appropriated, the city would have no obligation to pay our contract,
and it would become null and void."
Bates said that he has reviewed the
state statutes addressing contracts. He said that, generally
speaking, where funding is through yearly appropriations, payment
and contracts must be yearly, but there are exceptions for some
maintenance-type services that allow for multiyear contracts. This
is the type of service that fits that.
He said that the "special fund rule"
and the language that EMC is proposing enables them to create a
multiyear contract. The engineering will still be appropriated
annually out of the general fund. But EMC will look for only the
operation and maintenance costs to be met through the sewer fund to
keep the contract.
Huskins said that he would prefer to
renew the engineer's contract that is due this year for one
additional year, until May 1, 2006, when the EMC contract is up.
This gives the current mayor, if she is re-elected, or the next
mayor and the future administrations, a chance to make their own
Finance committee chairman Verl
Prather did not share the same view. He said, "Rather than go one
year here and one year there with possibly lots of companies, I
would like to stick with a company that does a good job and
continues to show that they're going to do that."
Prather suggested that further
discussion be held for a combined finance and sewage committee
meeting that would begin the contract negotiations. Even though it
is a committee meeting, Prather urged that all council members plan
The meeting is set for 6 p.m. on
Article on December