Businesses To Quinn Re Wage Reporting by CelesteKatz

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									June 29, 2012

The Honorable Christine Quinn
Speaker, NYC Council
250 Broadway
New York, NY 10007

Dear Speaker Quinn:

As business owners in the affordable housing industry and MWBEs, we adamantly oppose the
underpayment of workers in all instances, and fervently support every effort by government to
weed out dishonest actors.

However, Intro 730, a bill that’s been touted as the solution to enforce fairness and
accountability in the affordable housing arena, will not ensure fair wages or guarantee greater
transparency. Rather, this bill will impose a tremendous and overwhelming administrative
burden on us – local, small, and medium-sized businesses – threatening our survival and ability
to compete in the market.

We depend on the affordable housing industry for our livelihood and that means we have the
utmost interest in ensuring the integrity of our business. The wage reporting mandates in Intro
730 will not prevent bad actors from participating in the industry – after all, the onus is on the
employer to report the underpayment of its workers. What 730 will do is decimate our ability to
compete with the largest affordable housing developers who will be able to absorb the vast costs
imposed by this bill.

For a typical affordable housing project, the reporting expenses would add an additional
$200,000 in administrative costs: one administrative staff person for the general contractor at
$50,000 including benefits, and $15,000 for a part-time accounting staff person for every 3 of 30
subcontractors on a project. The amount is beyond what most well-established general
contractors can afford, let alone a small business. Intro 730 will effectively prevent local, small,
and medium-sized businesses from competing for affordable housing contracts.
New York City builds 200 affordable housing projects every year, meaning the implementation
of this bill would cost $40 million annually when estimating 200 projects at $200,000 each. That
accounts for nearly 10% of the Department of Housing Preservation and Development’s (HPD)
capital budget at a time when the need for affordable housing is greater than ever. !
With the survival of our businesses hanging in the balance, we urge you to reexamine the impact
of Intro 730’s current wage reporting requirements and to work with us to develop legislation
that achieves a collective objective of ensuring the highest level of integrity in the affordable
housing industry. Eliminating the ability of medium and small sized firms to compete for
projects will not achieve this end. We have assembled a list of actions that we believe will have a
greater impact on keeping actors in our industry honest and accountable. Our recommendations
are as follows:
   •   Increase enforcement through the New York State Department of Labor (DOL) and the
       New York City Department of Investigation (DOI). The DOL is obligated to investigate
       all accusations of worker underpayment. The DOI has authority to bar a contractor under
       credible investigation from beginning a new project until the accusations are resolved.

   •   Implement random wage surveys through the New York State Department of Labor to
       identify wage rates for a representative sample of affordable housing projects. We know
       from previous studies of the industry, that affordable housing developers pay a living
       wage or far better; additional surveys of the industry will allow for a more complete
       picture of wage rates on affordable housing projects.
   •   Develop a plan to identify and prevent bad actors, whether they are developers,
       contractors or subcontractors, from participating in affordable housing projects. The
       overwhelming majority of businesses in affordable housing are honest employers.
       Working with HPD, a more effective system can be established for weeding out any bad
       actors to streamline the work of honest employers.

We believe that these recommendations present effective opportunities for safeguarding the
affordable housing industry, without the destructive consequences the current Intro 730 bill will
have on the ability of small and medium businesses to survive in the field. We hope that you, as
Speaker, will consider these amendments to the wage reporting requirements in Intro 730, given
the profound impact this bill will have on the future of our businesses, families, and

Thank you for your consideration.


Donovan Anderson                                    Shaun Covington
Anderson Flooring                                   Covington Realty Services, Inc.

Ralph Barone                                        Maikel Cuesta
Barone Steel Fabricators, Inc.                      Dynamic Electric

Aubrey Arscota                                      Bob Cummins
Ajosta Services Inc.                                Guardsman Elevator Co

Thomas Campbell                                     Guy Delia
Thorobird Companies                                 Casa Building Materials

Isaac Chazbani                                      Lavington Edwards
Katz and Son Metal Fabricators                      ENT-ERR Construction Inc.

Richard Chen                                        Sandra Erickson
Kiska Solutions Inc.                                Sandra Erickson Real Estate, Inc.
David Fung                              Manuel Martinez
Metal & Glass Solutions                 Alliance for Progress

Peter Gioello                           Emerald Merchant
Amber Lite Electric Corp.               G & F Drywall

Bruce Gunther                           Gilvandro Nascimento
More Air Mechanical                     GMN Painting Pro.

Karim Hutson                            Gene O'Reily
The Genesis Companies/GP Construction   MC&O Masonry

Kendrick Jobe                           Simone Peel
Jobe Development Corp.                  New World Contracting Enterprises

Peter Kaplow                            Andrea Phillips
Rockaway Contracting                    Annandale Contracting Corp.

Andrea Kretchmer                        David Rodriguez
Kretchmer Companies                     JB Security Inc

Nancy Lepre                             Shamas Sarwar
Avante Contracting Corp.                Shamas Contracting Co., Inc

Alan Levitt                             Dan Shuster
Big Apple Fire Sprinkler Co             DV Group LLC

Chris Mallouras                         Beatrice Sibblies
Alpha Construction                      BOS Development

Tony Marinello                          Michael Simmons
Electrical Design Management            Malmek Glass Contracting Inc

Mike Mourounas                          George Stanislaus
FirstLine Contracting Inc.              Stanislaus Construction
Meredith Marshall                       Wing Kan Wong
BRP Development                         Brooklyn West Supply


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