Oregon City Council on Jan. 12 approved bids for the construction of a two million gallon water tower on Lallendorf Road.
CB&I Constructors, Inc. of Sewickley, Pennsylvania, bid $3,427,200 for mechanical and electrical services for Contract A General and Mechanical, including alternate bid A, and TAS Inc., of Toledo, bid $111,100 for Contract B electrical and instrumentation.
Councilman James Seaman raised concerns about whether local labor will be used in the project.
“Will we get our payroll income tax from these people? That’s very important to the community. I’m just looking at the mechanism used to make sure we get that. If they’re independent contractors, that’s not too good. Nothing’s taken out of their pay check. They have to pay later on. But they don’t live around here. That’s potentially a problem. Whenever you have non-local workers, this is a problem that comes up more so than if there are local people working on a project,” said Seaman.
Mayor Marge Brown insisted independent contractors pay taxes. She had spoken to an independent contractor for BP Refinery who was from Wauseon.
“They do pay taxes,” she said.
Independent contractors from outside the state, said Seaman, could be more difficult to keep track of.
“We’re talking about Pennsylvania, Indiana, Kentucky. It’s further away. When someone is still in the greater northwestern Ohio area, it makes it easier,” said Seaman.
“Even if they are independent contractors,” said Brown, “we still collect tax money. Even if they lived in Florida and came up here for six months or two weeks, we collect taxes.”
“Tell me how you’re going to collect it?” asked Seaman.
“The company would have to be responsible,” she said, and the city would get a list of all the workers.
Seaman said independent contractors don’t pay their taxes until the end of the year.
“The independent contractor gets a gross statement – he pays no state, federal or city income tax. By the end of the year, he has to reconcile that,” said Seaman.
Councilman Mike Seferian said there is always the risk of non-payment of taxes.
“But that’s not the intent of this company,” he said.
“We’ve seen over the years there are even local people who don’t pay their taxes,” said Tom Hays, city attorney. “One of the incentives for paying your taxes is to track down folks. There’s also the sharing of income tax among the state, local and federal governments to help with that issue of tracking people.” He added that it was “a prudent idea” to check on out-of-state contractors
“The risks are inherent in any project,” said Councilman Clint Wasserman. “But I think we have safety measures built in already. When dealing with a situation like this, you just have to put your trust in those policies that you’ve implemented and see them to fruition.”
Dom Viletto, of CB&I, said at a meeting the week before that the company pays prevailing wages and uses subcontractors.
Council also approved the $142,000 bid of ARCADIS, of Toledo, to provide construction engineering and resident project representation during construction of the water tower. And the $19,777 bid of Dixon Engineering and Inspection Services for the welding and painting during the construction of the tower.