Bor. of Schuylkill Haven v. Prevailing Wage Appeals Bd.

• Decision Date: 25 August 2010
• Citation: 6 A.3d 580
• Parties: BOROUGH OF SCHUYLKILL HAVEN, Petitioner v. PREVAILING WAGE APPEALS BOARD, Respondent.
• Court: Pennsylvania Commonwealth Court

6 A.3d 580

BOROUGH OF SCHUYLKILL HAVEN, Petitioner

v.PREVAILING WAGE APPEALS BOARD, Respondent.

Commonwealth Court of Pennsylvania.

Argued March 16, 2010.

Decided June 30, 2010.

Publication Ordered Aug. 20, 2010.

Reargument Denied Aug. 25, 2010.

Mark Semanchik, Frackville, for petitioner.

James A. Holzman, Deputy Chief Counsel, for intervenor, Bureau of Labor Law Compliance.

BEFORE: PELLEGRINI, Judge, and BROBSON, Judge, and KELLEY, Senior Judge.

OPINION BY Senior Judge KELLEY.

The Borough of Schuylkill Haven (Borough) petitions for review of an order of the Pennsylvania Prevailing Wage Appeals Board (Board) that denied the Borough's grievance challenging a determination of the Department of Labor and Industry's Bureau of Labor Law Compliance (Bureau). The Bureau's determination concluded that the Borough's Sanitary Sewer Manhole Maintenance Project (Project) is subject to the Pennsylvania Prevailing Wage Act (Act).¹

Prior to September 28, 2007, the Borough issued an invitation for public bids on the Project (then titled the Manhole Rehabilitation Project). In conjunction therewith, the Borough requested from the Bureau the Pennsylvania prevailing wages for the Project, which the Bureau issued on September 11, 2007. Thereafter, on September 27, 2007, the Borough cancelled the opening for this bid solicitation.

Prior to October 5, 2007, the Borough issued a second invitation for bids for the Project. The Borough re-titled the Project as the Manhole Maintenance Project, and the second bid solicitation did not listas a requirement the payment of Pennsylvania prevailing wages.

The Borough's correspondence with the Bureau characterized the Project's work as including: the cleaning of manholes and surface preparation as necessary for the correct application of rehabilitative materials; the replacement of manhole access covers, frames and steps; the installation and/or replacement of manhole inserts and risers; the relining of the interior portion of manhole risers and/or the filling of manholes with either micro-silicate or epoxy, and; manhole bench and flow channel rehabilitation. Reproduced Record (R.R.) at 58a. The Project's estimated cost was $250,000.00.

By letter dated July 1, 2008, the Bureau determined that the Project was subject to the Act, and that thus Pennsylvania prevailing wages were required, based in part upon the documents submitted by the Borough. R.R. at 61a-65a. In its July 1, 2008 Determination the Bureau reasoned, in relevant part, that the Project did not constitute maintenance work which would be excluded from the Act's prevailing wage payment mandate, but rather constituted repair work that was subject to the Act. Id.

The Borough subsequently filed a grievance under the Act on July 24, 2008. The Board thereafter received briefs on the issues from the Borough and the Bureau, and held oral argument on the matter. By Decision and Order dated April 7, 2009, the Board denied the Borough's grievance, and upheld the application of the Act to the Project. The Borough then timely petitioned this Court for review of the Board's order, and the Bureau intervened.²

In reviewing a decision of the Board, this Court's scope of review is limited to determining whether constitutional rights were violated, whether the Board committed an error of law, and whether necessary findings of fact are supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa.C.S. § 704; Butler Balancing Co., Inc. v. Department of Labor & Industry, Prevailing Wage Appeals Board, 780 A.2d 840 (Pa.Cmwlth.2001).

The Borough presents two issues for review, which we have reordered in the interests of clarity: 1.) whether the Board erred in concluding that the Borough failed to meet its burden of proving that the scope of work did not change the size, type, and extent of the manholes, and 2.) whether the Board erred in concluding that the evidence of record supported the conclusion that the Project's work involved a replacement of 75-80% of the manholes, and thusly constituted non-maintenance work subject to the Act.

The Board, in its Decision in this matter, aptly stated the applicable law:

The Act's purpose is to protect workers on public projects from substandard wages by ensuring that they receive the prevailing minimum wages. Ferguson Electric [Co., Inc.] v. Foley, 115 F.3d 237 (3d Cir.1997). By guaranteeing such protection, the legislation helps to insure the employment of skilled craftsmen on the job. Keystone Chapter of Associated Builders & Contractors, Inc. v. Department of Labor & Industry , 414 A.2d 1129 (Pa.Cmwlth.1980). The Act has been recognized as a remedial statute that is to be liberally construed to affect its purposes.

Kulzer Roofing, Inc. v. Department of Labor & Industry , 450 A.2d 259 (Pa.Cmwlth.1982). Any exceptions to its remedial provisions are to be narrowly construed. DiLucente Corp. v. Pennsylvania Prevailing Wage Appeals Board, 692 A.2d 295 (Pa.Cmwlth.1997). The burden of proof in a grievance proceeding is on the grievant. 34 Pa.Code § 213.8(j).

Section 5 of the Act fundamentally requires that "[n]o less than the prevailing minimum wages ... shall be paid to all workmen employed on public work." 43 P.S. § 165-5. The term "public work" is defined in [S]ection 2(5) of the Act as:

Construction, reconstruction, demolition, alteration and/or repair work other than maintenance work, done under contract and paid for in whole or in part out of the funds of a public body where the estimated cost of the total project is in excess of twenty-five thousand dollars ($25,000), but shall not include work performed under a rehabilitation or manpower training program.

43 P.S. § 165-2(5).

Our Supreme Court has derived a four-prong test from [S]ection 2(5) to determine the Act's applicability. Pennsylvania National Mutual Casualty Insurance Co. v. Department of Labor & Industry, 715 A.2d 1068 ( [ ] 1988) ( Penn National ). Specifically, the Penn National court summarized the components of [S]ection 2(5) as follows:

(1) there must be certain work;

(2) such work must be under contract;

(3) such work must be paid for in whole or in part with public funds; and

(4) the estimated cost of the total project must be in excess of $25,000.

[ Id. at 396-397,] 715 A.2d at 1074.

R.R. at 79a-80a.

Pursuant to Section 2(3) of the Act, Pennsylvania prevailing wages are not required for work that constitutes "maintenance work," defined as "the repair of existing facilities when the size, type or extent of such facilities is not thereby changed or increased." 43 P.S. § 165-2(3); Borough of Youngwood v. Pennsylvania Prevailing Wage Appeals Board, 596 Pa. 603, 947 A.2d 724 (2008). A "facility" has been held to be the entire building or structure or its component parts. Kulzer. In the matter sub judice, the characterization of the Project's work as either maintenance or repair work under the Act, and the Act's concomitant applicability and/or inapplicability, form the crux of this appeal.

As noted, the Borough asserts that the Project is comprised of the rehabilitation of sanitary sewer manholes, which rehabilitation includes the installation of new risers or replacement thereof, the replacement of manhole covers and frames, the replacement and installation of manhole steps or ladders, and the application of epoxy riser linings and full cement manhole linings. The Board, in its Opinion, accepted the Borough's description in its Findings of Fact. R.R. at 78a-79a. The Borough further asserts that the Project's work did not change the size, type, and extent of the manholes addressed. R.R. at 18a-19a.

The Borough argues that the Project's scope is mere maintenance work of a type similar to work that has been determined to be a lesser or minor form of repair. The Borough first attempts to distinguish this matter from the facts of Youngwood,Kulzer, and Borough of Ebensburg v. Prevailing Wage Appeals Board, 893 A.2d 181 (Pa.Cmwlth.2006), in which our Courts held that the Act applied to the workrespectively at issue therein, and upon which precedents the Board relied in its conclusions.

In Youngwood, in which the Supreme Court expressly stated the general axiom that maintenance work is to be considered a lesser or minor form of repair, a street resurfacing project involved the physical removal of several inches of road surface, the subsequent treatment of the roadway, and the complete resurfacing thereof with several inches of new material. The Supreme Court concluded that this work involved construction, reconstruction, demolition, alteration and/or repair work, and did not collectively involve only the minor repairs that constitute maintenance work. Thusly, the Supreme Court concluded that the resurfacing project was subject to the Act.

In Kulzer, this Court determined that the word "facilities" in the Act's definition of maintenance work refers to a facility which is partially overhauled or patched. Therein, a reroofing project which changed or increased the size, type or extent of the roof at issue was held to constitute repair work, and not maintenance, under the Act.

In Ebensburg, this Court rejected an argument that concrete sidewalk and curb replacement should be found to be exempt from the Act as maintenance. Therein, the Borough of Ebensburg planned to replace deteriorated sidewalks and curbs with in-kind replacements, and as such, asserted no change in the size, type or extent of the subject of its project.

The Borough argues that the scope of repairs in Youngwood, Kulzer, and Ebensburg are all distinguishable from, and greater than, the scope of the instant Project. The Project's scope, as characterized by the Borough, is more similar to that of pothole repair upon a street, or the fixing and sealing of a roof leak, which maintenance work does not require the removal of the whole facility. The Borough further emphasizes that in Butler Balancing Co., this Court concluded that maintenance work refers to the repair of existing...