Ebensburg v. Prevailing Wage Appeals Bd.

• Decision Date: 16 February 2006
• Citation: 893 A.2d 181
• Parties: BOROUGH OF EBENSBURG, Petitioner v. PREVAILING WAGE APPEALS BOARD, Respondent.
• Court: Pennsylvania Commonwealth Court

893 A.2d 181

BOROUGH OF EBENSBURG, Petitioner v. PREVAILING WAGE APPEALS BOARD, Respondent.

Commonwealth Court of Pennsylvania.

Argued October 18, 2005.

Decided February 16, 2006.

Blair V. Pawlowski, Ebensberg, for petitioner.

James A. Holzman, Deputy Chief Counsel, Harrisburg, for respondent.

BEFORE: LEADBETTER, J., and LEAVITT, J., and FLAHERTY, Senior Judge.

OPINION BY Senior Judge FLAHERTY.

The Borough of Ebensburg (Ebensburg) appeals from an order of the Prevailing Wage Appeals Board (Board) denying a grievance filed by Ebensburg with the Board. The Board determined that Ebensburg's curbing and sidewalk replacement project (Project) is subject to the Pennsylvania Prevailing Wage Act (Act), Act of August 15, 1961, P.L. 987, as amended, 43 P.S. §§ 165-1-165-17. The Department of Labor and Industry, Bureau of Labor Law Compliance (Bureau), as intervenor, has filed a brief in support of the Board's final decision and order. We affirm.

Ebensburg, a public body under Section 2(4) of the Act, 43 P.S. § 165-2(4), contracted for the removal and replacement of entire sidewalks and curbing on West Lloyd Street in Ebensburg at an estimated cost of $159,600.00 Ebensburg did not add curbing or sidewalks where none previously existed. The cost for the removal of the curbing and sidewalks was paid by Ebensburg. Ebensburg informed property owners along West Lloyd Street that they would be assessed the actual bid price for the new sidewalk along their frontage and property owners were required to remit payment to Ebensburg for the cost of the sidewalk along their frontage. Ebensburg itself is the owner of several properties along West Lloyd Street that were involved in the Project.

On August 5, 2004, Daniel L. Penatzer, Ebensburg Borough Manager, sent a letter to Daniel Gioiosa, Labor Investigation Supervisor with the Bureau, outlining Ebensburg's position that the Project did not require prevailing wages under the Act. In a letter dated August 11, 2004, Mr. Gioiosa replied that the Project did require prevailing wages under the Act. Ebensburg then filed a grievance with the Board concerning Mr. Gioiosa's letter.

In an order dated April 18, 2005, the Board denied Ebensburg's grievance. The Board concluded that the complete removal and replacement of sidewalks is reconstruction work, and not maintenance work, for the purposes of Sections 2(3) and 2(5) of the Act. The Board further found that Ebensburg had not met its burden of proving that the combination of the in-kind replacement of curbing with the sidewalk reconstruction work in a single contract, otherwise meeting the requirements of Section 2(5) of the Act, qualified for exemption as maintenance work. The Board concluded that the funds paid to Ebensburg through the assessments of property owners, and used for the reconstruction of sidewalks, constituted the funds of a public body within the intendment of Section 2(5) of the Act. The Board refused to divide the Project into sidewalk and curbing portions or into prevailing wage and exempt prevailing wage portions. Rather, the Board concluded that reconstruction involving the removal and replacement of a sidewalk and curbs, done under a single contract having an estimated total cost in excess of $25,000.00, and which contract is paid for in part with the funds of a public body, qualifies as "public work" under Section 2(5) of the Act, and all workmen engaged in the underlying Project must be paid the prevailing wages as determined by the Secretary of Labor and Industry, regardless of whether their work is devoted to the sidewalk or curbing portions. Ebensburg appealed the Board's determination to this Court.¹

Ebensburg requests this Court to decide whether the Board erred in determining that the Project was not exempt "maintenance work" within the meaning of the Act or, in the alternative, whether the Board erred in determining that the Project was not divisible into non-exempt sidewalk reconstruction and exempt curbing maintenance portions. Ebensburg also argues that the Board erred in determining that the Project was paid for entirely with public funds.

First, the purpose of the Act is "to protect workmen employed on public projects from substandard pay by ensuring that they receive the prevailing minimum wage." Kulzer Roofing, Inc. v. Department of Labor and Industry, 68 Pa. Cmwlth. 642, 450 A.2d 259, 261 (1982).

Section 5 of the Act requires that "[n]ot less than the prevailing minimum wages... be paid to all workmen employed on public work." 43 P.S. § 165-5. The term "public work" is defined in Section 2(5) 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). The Act defines "maintenance work" 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). Thus, if the work contracted is maintenance work, it is not "public work" and is not governed by the Act. None of the other types of work mentioned in Section 2(5) is defined in the Act or its regulations.

Ebensburg first argues that the Board erred in finding that its curb and sidewalk project was not exempt from the Act asserting it was maintenance because Ebensburg relied on a Memorandum of Understanding (MOU) between the former Department of Justice/Department of Labor and Industry and the Department of Transportation.² The MOU defines "maintenance under the Act as replacement of curb in kind but also defines new curb as not maintenance and, in a combination job, if a substantial portion of the job (more than 15%) is not maintenance, the entire job is not maintenance."³ Also reconstruction is not maintenance. Sidewalks are not mentioned. R.R. at 17a and 38a. The Board found that the Ebensburg project was a reconstruction project and as such, was not covered by the MOU which only defined maintenance under the Act. Even under the terms of the MOU the entire project is not maintenance if a substantial portion of the job, that is, more than 15%, is not maintenance. The Board found that Ebensburg as the moving party had the burden of proving that sidewalks were fifteen percent or less of the Project in order for the job to be determined as maintenance and in fact, Ebensburg failed to carry its burden of proving what percentage of the job was completed as sidewalks or curbs. We agree.⁴

The Board felt this case was analogous to Henkels & McCoy, Inc. v. Department of Labor &...