HomeMy WebLinkAbout2025/10/13 - ADMIN - Agenda Packets - City Council - Study Session
AGENDA
OCTOBER 13, 2025
6:00 p.m. Study session – Council Chambers
Discussion items
1. Prevailing wage discussion
2. Developer business practices
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Meeting: Study session
Meeting date: October 13, 2025
Discussion item: 1
Executive summary
Title: Prevailing wage discussion
Recommended action: No formal action at this time. Review and discuss the information and
provide staff direction.
Policy consideration: Does the city council wish to consider enacting wage requirements for
development projects in St. Louis Park?
Summary: In January 2025, staff provided an initial review in response to a council requested
study session on prevailing wage. That review offered background information on prevailing
wage requirements and scheduled the topic for discussion during the Housing and
Neighborhood-Oriented Development system.
Several metro-area cities have enacted prevailing wage ordinances in recent years, with
approaches that vary widely in scope and enforcement. As the council considers whether to
adopt a prevailing wage ordinance or policy in St. Louis Park, it will be important to clarify
desired outcomes, carefully evaluate potential impacts, and consider how different approaches
align with the city’s strategic priorities and goals.
To support this discussion, staff has compiled information and data to inform council’s
deliberations and assist in determining next steps.
Financial or budget considerations: If the city council directs staff to develop a prevailing wage
ordinance, the fiscal impact will depend on the scope and requirements of the ordinance.
Additional staff may need to be hired to implement, administer and enforce the ordinance. If
contractors and subcontractors are required to submit weekly certified payroll to the city, the
purchase and ongoing service costs for an electronic tracking system could cost up to $20,000
or more in the first year and $5,000 to $20,000 annually thereafter. Such an ordinance or policy
may increase the requests, and calculated need, for public financial assistance to development
projects required to comply with the ordinance. Additionally, if applied to city contracts,
prevailing wage requirements are estimated to increase overall project costs by 10–15%. Legal
fees for ordinance development and enforcement may also be incurred. Due to these costs,
implementation of any new policy should be aligned with the budget process so that
departments have the staff and resources needed to meet the new standards.
Strategic priority consideration: St. Louis Park is committed to being a leader in racial equity
and inclusion in order to create a more just and inclusive community for all.
Supporting documents: Discussion
Prevailing wage ordinance comparison chart
Prepared by: Karen Barton, community development director
/interim building and energy director
Reviewed by: Amelia Cruver, finance director; Jay Hall, public works director;
Deb Heiser, engineering director; Mike Okey, operations superintendent
Approved by: Kim Keller, city manager
Study session meeting of October 13, 2025 (Item No. 1) Page 2
Title: Prevailing wage discussion
Discussion
Background: Several council members submitted a request for a study session to discuss the
potential adoption of a prevailing wage ordinance in St. Louis Park. The request noted that both
state and federal laws require employees working on certain state and federally funded
construction and public works projects to be paid wage rates comparable to those paid for
similar work in the local area. The request noted that several metro-area cities—including St.
Paul, Brooklyn Park, Bloomington and Richfield—have adopted prevailing wage ordinances in
recent years. The request also suggested that the absence of a local requirement could attract
more non-compliant developers to the city.
As part of the request, staff was asked to review how other cities have structured their
prevailing wage ordinances and to provide recommendations for consideration in St. Louis Park.
Staff completed an initial review and recommended that this topic be scheduled for discussion
at a city council study session during the Housing and Neighborhood-Oriented Development
system in Fall 2025.
Present considerations: Prevailing wages set minimum standards for hourly compensation for
each type of work in a defined area and include some combination of actual pay and benefits.
The inclusion of benefits distinguishes prevailing wage from minimum wage, which only sets a
minimum standard for the actual rate of pay. Under Minnesota’s prevailing wage requirements,
wages and benefits can be combined in any way provided they meet or exceed the set
prevailing wage rate.
In contemplating adoption of a prevailing wage ordinance, there are a number of policy, fiscal
and practical considerations, including balancing equity and workforce benefits against higher
costs and administrative burdens, while considering regional competitiveness, legal context and
long-term city goals.
Key factors to consider
1. Economic impact
• Project costs: How much will labor costs rise, and what impact will that have on the
number of projects the city or private developers can feasibly complete?
• Tax base and growth: Will higher costs reduce private investment, housing affordability
or economic development?
2. Workforce and labor market
• Fair wages: Does the council view ensuring industry-standard wages as a priority for
equity and worker protections?
• Skilled labor supply: Will prevailing wage attract more experienced workers, reducing
delays and increasing project quality?
• Union vs. non-union balance: How will the ordinance affect the local contractor
landscape (unionized vs. open shop)?
3. Equity and community benefits
• Local hiring: Does the policy improve opportunities for local workers, disadvantaged
groups, or underrepresented trades?
• Multiplier effect: Will higher wages result in more local spending and economic
circulation?
Study session meeting of October 13, 2025 (Item No. 1) Page 3
Title: Prevailing wage discussion
• Alignment with city values: Does the ordinance reinforce stated goals around equity,
workforce development, or job growth?
4. Fiscal considerations
• Public financial assistance: Will increased development project costs also increase the
requests for public financial assistance from the city and Economic Development
Authority (EDA)?
• City budget: How will increased project costs affect capital improvement plans,
operating budgets, and tax and/or fee requirements?
• Administrative costs: What staffing and/or technology investments are needed for
monitoring and enforcement?
• Opportunity costs: Could requiring prevailing wages mean fewer projects funded (e.g.,
fewer miles of road, fewer housing units)?
5. Legal and regulatory context
• State and federal law interaction: How do state and federal prevailing wage laws apply
to city-funded projects, and would the local ordinance expand or duplicate existing
requirements? For example, projects that receive significant state or federal funding are
often subject to state or federal prevailing wage laws. Multi-family housing
developments receiving low-income housing tax credits are required to adhere to
prevailing wage laws. Most city-led road and infrastructure projects receive state and
federal funding which also require adherence to prevailing wage laws.
• Scope and Definitions: Will the ordinance apply to city contracts, to private
development receiving city subsidies, or all development projects?
• Enforceability: Are there clear mechanisms for monitoring, penalties, and dispute
resolution?
6. Competitiveness and development climate
• Regional comparison: How do policies in nearby jurisdictions compare, and could the
requirement have unintended consequences relating to investment in the community?
• Targeted vs. broad application: Should prevailing wage apply to all projects, or only
those above a certain dollar threshold, or those receiving significant public support?
7. Practical implementation
• Thresholds and exemptions: Should small projects or certain types of development
(e.g., affordable housing) be exempt?
• Compliance infrastructure: Will the city need to hire additional staff or third-party
monitoring firms?
• Education and outreach: How will the city ensure contractors, developers, and workers
understand the rules? What training will need to be provided to developers to utilize
compliance systems?
Wage comparisons for construction trades workers in the Minneapolis/St. Paul metro area
In starting the discussion, it is helpful to understand typical wages, union packages, and
prevailing wage rates across major construction trades in the metro area. State prevailing wage
rates for state supported projects in Hennepin County range from $43-$60 per hour, plus fringe
benefits of $20-$35 ($65-$90 total) for most categories, with lower wages around $30 for
certain trades with less experience required. A chart and a graph comparing these wages
follows:
Study session meeting of October 13, 2025 (Item No. 1) Page 4
Title: Prevailing wage discussion
TRADE Typical Market
Wage
(Bureau of Labor
Statistics:
Minneapolis)
Local Union
Package (Wage
+ Fringes)
Prevailing Wage
Commercial
(Hennepin Co.)
Prevailing Wage
Highway/Heavy
(Region 09)
Construction
Laborer common
$29.82 $71.26 $68.13 $72.85
Operating
Engineer (power
equip op)
$35.58 $76.68 $75.95 $71.91
Electrician (inside
wireman)
$47.42 $94.89 $78.00 $77.00
Ironworker
(structural)
$46.15 $84.53 $74.5 $75.25
Carpenter $30.70 $74.21 $70.25 $69.80
Cement mason $32.10 $72.95 $71.60 $72.20
Truck driver
(construction)
$29.25 $68.47 $65.80 $66.50
Pipelayer $30.5 $73.10 $72.40 $73.00
Study session meeting of October 13, 2025 (Item No. 1) Page 5
Title: Prevailing wage discussion
Considering the lowest typical market wage rate for a construction laborer in the metro area of
$29.82 per hour, that individual is able to afford a $1550 monthly housing payment. This is
equivalent to just over 60% Area Median Income (AMI) rent for a one-bedroom apartment:
$29.82 per hour = $62,026 per year or $5,169 per month
30% of the gross monthly income for a housing payment = $1551 per month
Metropolitan Council 60% AMI rent = $1489 for a one-bedroom unit
According to the MIT living wage calculator, $22.98 per hour is the hourly rate that
an individual with no children living in Hennepin County must earn to support themselves,
working full-time, or 2080 hours per year.
Pros and cons of requiring prevailing wage
Pros of requiring prevailing wages
1. Worker fairness and standards
o Ensures construction workers receive fair, industry-standard wages and benefits.
o Helps maintain a skilled, stable workforce.
2. Quality of work
o Higher wages can attract more experienced workers, which may result in higher-
quality construction and fewer project delays or defects.
3. Local economic benefits
o More money in workers’ pockets typically stays in the local economy (housing,
food and services).
o Supports middle-class jobs and can reduce reliance on social assistance programs.
4. Consistency with public investment goals
o Aligns with city values when public subsidies, incentives or land are used for
development.
o Demonstrates accountability to taxpayers that projects benefit the broader
community.
5. Level playing field
o Prevents developers from undercutting bids by using low-wage labor, which can
undercut responsible contractors.
Cons of requiring prevailing wages
1. Higher project costs
o Labor costs can increase significantly (10–30% depending on the project), which
may raise the total cost of development.
2. Fewer projects may pencil out
o Developers might back away from projects if profit margins shrink, especially in
borderline financial deals.
o Could reduce overall private investment in the city.
Study session meeting of October 13, 2025 (Item No. 1) Page 6
Title: Prevailing wage discussion
3. Reduced affordability of housing/commercial space
o Higher costs could translate to higher rents, sale prices or lease rates.
o May reduce the number of affordable units or limit public benefit features
developers can offer.
4. Administrative complexity
o Requires monitoring, compliance checks, and potential enforcement actions.
o Can slow project approvals and add to administrative workload.
5. Competitive disadvantage
o If neighboring cities don’t require prevailing wages, developers may choose to
build elsewhere with lower costs.
6. Barrier to entry for disadvantaged business enterprises (DBEs) including minority and
women-owned business
o Prevailing wage rates may disadvantage small, emerging and historically
underrepresented businesses that operate with tighter margins and limited
access to capital.
o These businesses may lack the infrastructure to manage complex wage
compliance, payroll reporting and union interactions.
o The result can be a concentration of public contracts among larger, more
established (often non-minority) firms.
o Small firms may simply opt out of bidding altogether, reducing competition and
reinforcing racial disparities in public contracting.
Types of additional costs for the city
If the prevailing wage requirements are extended to private development agreements, the city
itself could face several additional costs related to enforcement and administration, even if it is
not directly funding the project:
1. Staffing and administration
o Hiring or assigning staff to review certified payrolls, conduct site visits and track
compliance.
o Training staff on state and federal prevailing wage laws and enforcement
procedures.
2. Monitoring and auditing
o Costs of reviewing payroll records submitted by developers and/or contractors.
o Conducting random or complaint-based audits of wage compliance.
o Possible use of specialized software to manage reporting and tracking.
3. Legal and enforcement
o Legal review of agreements to ensure enforceability.
o Handling disputes, appeals or litigation related to wage violations.
o Drafting and managing enforcement mechanisms (e.g., penalties, withholdings).
Study session meeting of October 13, 2025 (Item No. 1) Page 7
Title: Prevailing wage discussion
4. Third-party services
o Contracting with outside labor compliance firms to monitor projects.
o Independent investigations or audits if complaints arise.
5. Delays and administrative overhead
o Added time to project approvals and monitoring may slow development
timelines, creating indirect costs for city staff and developers.
6. Community outreach and education
o Costs of educating developers, contractors and subcontractors about
requirements.
o Ongoing communication to reduce noncompliance and confusion.
Prevailing wage ordinances in other jurisdictions
Several metro-area cities—including Bloomington, Brooklyn Park, Minneapolis, St. Paul and
Richfield—have adopted prevailing wage ordinances in recent years. These ordinances vary in
scope, thresholds, and enforcement mechanisms.
• Bloomington
o Adopted: June 2024.
o Applies to: Projects receiving $175,000 or more in city financial assistance (including
loans, grants, TIF, abatements, tax credits, bonds and other forms of support). Applies
to both city-led and private projects.
o Enforcement: Contractors and subcontractors must pay prevailing wages and submit
weekly certified payrolls via LCPtracker. A city compliance officer conducts weekly on-
site worker interviews. Violations can result in misdemeanor charges, fines, back pay
or contract termination.
o Recent developments: The city is considering amendments to exempt smaller housing
projects (under 20 units), projects with fewer than eight units, projects funded only
through “pass-through” sources and projects with unique circumstances. Developers
have raised concerns about cost impacts, with some estimating increases of 15–20%.
• Brooklyn Park
o Adopted: May 2024.
o Applies to: Projects receiving $50,000 or more in city financial assistance. Includes
both city and private projects.
o Enforcement: Contractors must collect weekly certified payroll records and provide
them upon request. The system is complaint-based, with a city compliance officer
investigating reported violations. Penalties can include misdemeanor charges, back
wages and fines.
• St. Paul
o Adopted: January 2023 (updated from a prior policy with higher thresholds).
o Applies to: All city contracts totaling $100,000 or more, and any private projects
receiving $100,000 or more in city financial assistance. In practice, this low threshold
means the ordinance applies to nearly all city-supported projects, including small
business and housing loans.
Study session meeting of October 13, 2025 (Item No. 1) Page 8
Title: Prevailing wage discussion
o Enforcement: Contractors must submit weekly payrolls through LCPtracker. The city
employs a “living wage team,” including a compliance coordinator, who conduct site
visits and monitor compliance.
o Implementation challenges: Emerging developers and smaller contractors may struggle
with the LCPtracker system, adding barriers to participation. Staff note that the policy
requires significant administrative resources and extensive compliance tracking.
• Richfield
o Adopted: September 2020.
o Applies to: Projects costing $300,000 or more that involve city/HRA funds. Applies to
both city projects (streets, utilities, buildings, parks) and private projects with city
financial assistance.
o Enforcement: Contractors must maintain weekly certified payrolls and provide them
upon request. Complaints are referred to the Minnesota Department of Labor and
Industry, though the city reserves the right to investigate. Penalties may include
misdemeanor charges, contract delays or cancellations, and withholding or reduction
of Tax Increment Financing (TIF) payments.
• Minneapolis
o Applies to: Projects with city investment over $50,000, with exemptions for certain
types of development agreements.
o Enforcement: Requires use of LCPtracker and significant staff oversight for compliance
and exemption requests.
• West St. Paul
o Applies to: Projects over $50,000 in value. Only applies to private projects receiving
grants, TIF, bonds, loans or business subsidies. Other types of assistance may be
exempt. Considering changes to make ordinance apply to both public and private
projects; but to include a “public benefit” waiver, that provides compliance
alternatives.
o Enforcement: Ordinance is currently complaint-based; proposed revisions include
addition of an escrow to pay for investigations.
Other Jurisdictions
• Minnesota Housing – Applies prevailing wage requirements to projects receiving $500,000
or more in loans or $200,000 or more in grants, as well as projects allocated Low Income
Housing Tax Credits (LIHTC). Enforcement is through the State of Minnesota Department
of Labor and Industry. Although Minnesota Housing is a state agency and is operating
under state prevailing wage requirements, it is relevant to city prevailing wage
requirements.
Please see the attached chart to view a visual comparison of the above prevailing wage
ordinances and requirements.
Study session meeting of October 13, 2025 (Item No. 1) Page 9
Title: Prevailing wage discussion
Alternatives to requiring prevailing wage
The city could also consider other options or conditional approaches instead of a prevailing
wage requirement.
1. Living wage or minimum wage standards
o Instead of full prevailing wage, require contractors to meet a city-set minimum wage
or “living wage” standard for workers.
Simpler to enforce, but provides less wage protection than prevailing wage.
2. Apprenticeship and training programs
o Mandate participation in state-approved apprenticeship programs or require
developers to fund training opportunities.
Builds a skilled workforce pipeline without directly raising wage costs.
3. Incentive-based approach
o Instead of requiring prevailing wage, offer incentives (e.g., density bonuses,
expedited permitting, reduced fees) for developers who voluntarily commit to
higher wage standards.
4. Targeted requirements
o Apply wage or labor standards only to projects that receive substantial public
subsidies, land, or tax incentives, rather than to all private development
5. Compliance assistance instead of mandates
o Provide voluntary guidelines, training, or partnerships with trade associations to
encourage fair labor practices without adding enforcement costs.
Legal considerations:
While prevailing wages are generally only required for state and federally funded contracts,
cities can implement prevailing wages on city-funded contracts or contracts to which the city is
a party and pursue compliance within statutory limits. The legal path to adopt a prevailing wage
policy or ordinance is clear when there is a financial incentive/investment made by the city (i.e.,
tax increment financing or affordable housing trust fund loans/grants). Outside of these
parameters, the path is less clear.
If the city decides to pursue implementing prevailing wages, it should do so via ordinance and
not through a zoning condition, criteria or requirement, including development contract
conditions.
Summary:
Requiring prevailing wages can help ensure fair compensation for workers, promote higher-
quality construction, and align public-private partnerships with community goals around
equitable economic growth. Such policies may also support a stable local workforce and reduce
the risk of undercutting by low-wage contractors.
However, prevailing wage requirements can also increase overall project costs, potentially
affecting financial feasibility, housing affordability and commercial development. They may
Study session meeting of October 13, 2025 (Item No. 1) Page 10
Title: Prevailing wage discussion
create unintended challenges for small, emerging or disadvantaged business enterprises (DBEs)
and could make the city less competitive relative to jurisdictions without such requirements. In
addition, these requirements introduce compliance and monitoring responsibilities for both
developers and the city, which may lead to project delays, added review steps, increased staff
workload, and higher carrying costs for developers.
It is also important to note that many projects already fall under state or federal prevailing
wage requirements. Multi-family housing developments using low-income housing tax credits
(LIHTC) and most city-led road and infrastructure projects that rely on state or federal funding
are already subject to prevailing wage laws. As a result, enacting a city level prevailing wage
ordinance may add administrative responsibilities and costs without substantially expanding
the number of projects covered.
There are a number of options for the council to consider relating to wage requirements as
detailed in the chart below:
Wage Requirement Options
Option Cost Impact Enforceability Community Benefit
Prevailing Wage
Requirement
High – raises labor
costs 10–30%+
Strong but requires
significant
monitoring and
enforcement
Ensures fair pay,
supports skilled
workforce, broad
economic benefit
Apprenticeship /
Training
Requirement
Low direct wage cost;
requires contractor
participation or
funding
Clear reporting,
easier to enforce
Builds long-term
workforce capacity,
supports trade
careers
Incentive-Based
Standards (voluntary
with perks*)
Flexible – developer
chooses to
participate
Light monitoring of
incentive compliance
Encourages better
labor practices
without mandate;
impact varies
Targeted Application
(only for subsidized
projects)
Moderate – limited
to projects receiving
city/EDA financial
assistance
Easier since fewer
projects are covered
Aligns public
investment with fair
labor standards,
limits city exposure
Voluntary Guidelines
/ Partnerships
Low – minimal direct
cost
No formal
enforcement
Promotes awareness
and best practices,
but limited impact
*Type of perks would need to be determined
Study session meeting of October 13, 2025 (Item No. 1) Page 11
Title: Prevailing wage discussion
Depending on the path the council chooses, cost impacts to the city, developer and taxpayers
will vary. Below is a summary of potential cost impacts:
Potential Cost Impacts
Cost Category Examples Who Bears the Cost
Staffing and Administration Staff time or new positions
for payroll review, site visits,
compliance tracking
City (direct staffing costs)
Monitoring and Auditing Certified payroll review,
audits, compliance software
City (unless monitoring fees
are passed to developer)
Legal and Enforcement Contract drafting, disputes,
litigation, penalties
enforcement
City (legal staff/consultants);
some costs may be
recoverable from developer
Third-Party Services Labor compliance
consultants or auditors
Developer (if required in
agreement) or city (if
contracted directly)
Project Delays and Overhead Longer approvals, added
coordination, slower
timelines
Shared (city staff time +
developer project delays)
Education and Outreach Training for contractors,
guidance documents,
communication
City
Additionally, if the council elects to include city projects under the prevailing wage ordinance or
policy, this could potentially add an additional 10-15% to project costs.
Staff recommendation:
After reviewing prevailing wage ordinances adopted by other metro-area cities and evaluating
potential fiscal and administrative impacts, staff recommends that the city council consider
alternative approaches to supporting fair wages rather than enacting a full prevailing wage
ordinance.
While prevailing wage ordinances promote fair compensation and worker protections, they also
introduce substantial costs and administrative responsibilities. Based on regional experience,
adopting a local ordinance would likely increase city project costs by 10–20%, add monitoring
and compliance staffing needs, and require ongoing investment in payroll tracking systems.
These costs could reduce overall project feasibility, create affordability challenges for housing
and commercial developments, and add barriers for small, emerging and disadvantaged
business enterprises (DBEs).
Moreover, many projects in St. Louis Park already fall under state or federal prevailing wage
requirements—including most city-led infrastructure projects and multifamily housing financed
with Low-Income Housing Tax Credits (LIHTC). A city-level ordinance would therefore overlap
with existing requirements, adding administrative complexity without significantly expanding
coverage.
Study session meeting of October 13, 2025 (Item No. 1) Page 12
Title: Prevailing wage discussion
Instead of enacting a prevailing wage ordinance, the council could direct staff to explore more
targeted strategies that support fair wages and local workforce development while limiting
administrative and cost impacts.
If the council wishes to proceed with a prevailing wage ordinance, staff recommends beginning
with a limited-scope, threshold-based approach. This framework would allow the city to align
with regional practices while minimizing administrative burden, cost escalation and unintended
impacts on smaller or affordable housing projects.
• Applicability threshold – Apply prevailing wage requirements only to projects receiving
$250,000 or more in direct city financial assistance (e.g., TIF, tax abatement, grants,
loans). This higher threshold reduces impacts on smaller developments and routine city
projects.
• Project types covered – Limit coverage to city-funded capital improvement projects
(e.g., roads, utilities, public buildings) and private development projects receiving city
financial incentives above the threshold.
• Exemptions – Provide exemptions for:
• Affordable housing projects with fewer than 20 units
• Projects funded exclusively with pass-through funds from state or regional
agencies (e.g., Metropolitan Council, State of Minnesota, Hennepin County,
Watershed Districts, conduit bonds)
• Projects under the dollar threshold
• Enforcement model – Use a complaint-based system supplemented by periodic spot
checks. Require contractors to maintain certified payroll records and submit them upon
request. This limits administrative costs while still creating accountability.
• Administrative costs – By avoiding mandatory use of certified payroll tracking software
(e.g., LCPtracker) and limiting proactive monitoring, the city would reduce startup and
ongoing costs for compliance administration. However, the city would incur costs for a
consultant to investigate any complaints as well as legal costs for enforcement if
needed, varying based on the number and scope of the complaints received.
• Cost impacts – Based on regional comparisons, staff estimates a project cost increase of
approximately 8–12% for projects subject to the ordinance.
This approach balances ensuring fair wages and protecting workers with the need to maintain
project feasibility and affordability. It also reduces the risk of deterring smaller developers and
affordable housing projects while aligning with practices in peer cities such as Richfield and
Brooklyn Park.
Next steps:
Depending on council direction, staff will return with draft program options and cost estimates
for further consideration.
Prevailing Wage Ordinance Comparison Chart
Jurisdiction Threshold /
Applicability
Projects
Covered
Enforcement /
Monitoring
Penalties /
Consequences
Estimated
Project Cost
Impacts
Required City Investment
Notes / Recent Changes
Bloomington
$1 city
assistance,
$175,000+
project cost
City and private
projects (roads,
utilities,
municipal
buildings, etc.)
Weekly certified payroll
via LCPtracker;
compliance officer
conducts site interviews
Misdemeanor
charges, fines, back
pay, contract
termination
15–20% increase
(developer
estimates)
High level of city investment
required. Two full time
employees (FTEs) for
compliance monitoring, site
visits and legal. Payroll tracker
software $20k+ in the first year
and $5k-$20k+ ongoing
software and training costs.
Considering exemptions for
small housing projects of <8
units and for projects with
pass-through grants & conduit
bonds. Also considering a
broader set of exemptions for
mid-size housing projects and
for projects with unique
circumstances.
Brooklyn Park
$50,000+ in
city financial
assistance
City and private
projects
Contractors maintain
weekly certified payroll;
records provided upon
request; complaint-
based enforcement
Misdemeanor
charges, back wages,
penalties
Likely 10–15%
increase (based
on wage
differential, not
formally studied)
Lower level of city investment
required. Consultant fees or .5
–1 FTE to investigate
complaints. Legal fees for
drafting the ordinance and
enforcement actions as
needed.
Minimal proactive
monitoring—enforcement
triggered only by complaints.
St. Paul
$1 city
assistance,
$25,000+
project cost
Nearly all city
projects,
including small
business and
housing loans;
<8 units housing
exempt
Weekly payroll via
LCPtracker; dedicated
“living wage team” with
compliance staff and site
interviews
Back pay, fines,
contract remedies
10–15% increase
for most projects
High level of city investment
required. Several FTE for
compliance monitoring, site
visits, and legal. Payroll tracker
software $20k+ in the first year
and $20k+ ongoing software
and training costs. Legal fees
for drafting of the ordinance
and enforcement actions as
needed.
Ordinance established 1973.
Recent changes established a
low threshold so it applies to
very small projects;
burdensome for small
contractors; requires
significant staff resources.
West St. Paul $50,000
Private project
receiving city
grants, TIF,
bonds, business
subsidy.
Complaint-based
enforcement
Withhold payments to
developer; project
default; legal
remedies
10-15% increase
to project costs
Lower level of city investment
required. Consultant fees or .5
–1 FTE to investigate
complaints. Legal fees for
drafting the ordinance and
enforcement actions as needed
Considering applicability to
public projects; and addition
of enforcement tools including
a required escrow; and a
public benefit waiver for
projects that benefit the
public interest
Study session meeting of October 13, 2025 (Item No. 1)
Title: Prevailing wage discussion Page 1ϯ
Jurisdiction Threshold /
Applicability
Projects
Covered
Enforcement /
Monitoring
Penalties /
Consequences
Estimated
Project Cost
Impacts
Required City Investment
Notes / Recent Changes
Richfield
$300,000+ in
total project
cost with
city/HRA funds
City projects and
private projects
only where
City/HRA is not
party to
construction
contract
Contractors keep weekly
payroll; provide upon
request; complaints
referred to Minnesota
Department of Labor
and Industry (DLI)
Misdemeanor
charges, contract
delays/cancellations,
withholding
/reduction of TIF
10–12% increase
(less than others
due to higher
threshold and
lighter
enforcement)
Lowest level of city investment
required due to complaint
referral to DLI for enforcement.
Some legal costs for
enforcement.
Less direct city monitoring;
most enforcement via DLI.
Minneapolis
$50,000+ in
city
investment
City projects
with direct
financial
assistance; some
exemptions
Payroll via LCPtracker;
staff review of
exemptions and
compliance
Back pay, penalties,
contract remedies
10–15% increase
to project costs
High level of city investment
required. Several FTE for
compliance monitoring, site
visits, and legal. Payroll tracker
software $20k+ in the first year
and $20k+ ongoing software
and training costs. Legal fees
for drafting of the ordinance
and enforcement actions as
needed.
Requires significant staff
oversight for exemptions and
monitoring.
MN Housing
Loans ≥
$500,000 or
grants ≥
$200,000;
LIHTC projects
Housing projects
with MN
Housing
financing
Prevailing wage enforced
through MN Housing
requirements
Penalties tied to
financing agreements
10–15% increase
to project costs
(reported by
developers)
State level staff monitor
compliance for state
investments by MN Housing.
Applies broadly to state-
supported projects, including
those with MN Housing funds.
09/15/2025
Study session meeting of October 13, 2025 (Item No. 1)
Title: Prevailing wage discussion Page 1ϰ
Meeting: Study session
Meeting date: October 13, 2025
Discussion item: 2
Executive summary
Title: Developer business practices
Recommended action: Review and discuss the attached decision nodes and guardrails
document.
Policy consideration: None.
Summary: In response to council members’ desire to better understand the flexibility and
boundaries in the formal decision-making processes in relation to development projects, staff
prepared a decision matrix detailing the council’s role when presented with certain land use
and financial assistance decisions. This matrix is intended to provide a framework for the
council to better understand their role in the decision-making process when development
projects come before them for consideration.
This matrix was provided to the city council in a written report on April 28, 2025, noting that a
comprehensive discussion surrounding these decisions, developer business practices, and
avenues to address council concerns relating to proposed development projects would occur
during the housing + neighborhood-oriented development system later in the year.
Staff will present the decision nodes and guardrails matrix and pyramid of discretion to the
council at the city council study session for discussion and questions.
Financial or budget considerations: None.
Strategic priority consideration: St. Louis Park is committed to providing a broad range of
housing and neighborhood oriented development.
Supporting documents: Decision nodes and guardrails document
Prepared by: Karen Barton, community development director
Approved by: Kim Keller, city manager
DECISION NODES AND GUARDRAILS
To assist council members in understanding flexibility and boundaries in formal decision-making processes, specifically related to
development projects, staff has compiled the following matrix as a guide.
Action Item Role of Council/EDA Decision-making factors Additional considerations Guardrails
Land use decisions
Conditfonal
use permit,
variance,
subdivision
Determiner of whether the city
code has been met
Has the applicant met the city
code/zoning ordinance?
This is a quasi-judicial role.
Council/EDA is limited to making a
decision based on whether or not
the proposal meets the applicable
city codes/ordinances.
Council has limited discretfon.
When the council acts on a
request, it must be based on
findings of fact.
Zoning or
subdivision
ordinance,
planned unit
Development
(PUD)
Legislatfve decision where the
council has a high degree of
discretfon to determine whether
the proposed PUD conforms to
the city’s Comprehensive (Comp)
Plan and ordinance and to
determine whether the
proposed zoning ordinance
amendment conforms to the
city’s Comp Plan.
A simple majority (Four
affirmatfve votes) is required.
Exceptfon: when rezoning a
residentfal property to
commercial or industrial use, five
affirmatfve votes are required.
Is the project in alignment with
the code? (staff detail this in staff
report)
Does the project satfsfy the city’s
established policy goals? (i.e.:
inclusionary housing,
sustainability) (staff detail this in
staff report)
Are the objectfons to the project
based on relevant land use or
zoning criteria?
Does the proposed project
advance the city’s adopted
strategic prioritfes? (staff detail
this in staff report)
By design, the PUD process gives
the city a great deal of discretfon
(the PUD process is a rezoning).
The PUD process has been used
primarily (if not exclusively) for
redevelopment projects where
straight zoning would not work as
well. However, the council’s
discretfon should be utflized in
determining whether the intent of
zoning codes are being met.
Council isn't expected to be
experts in land use and zoning; it
is staff's job to provide them with
the informatfon to make informed
decisions.
Staff provides a thorough and
comprehensive evaluatfon of
each project which is detailed in
the staff report to council/EDA
with supportfng documentatfon
to provide council with a solid
foundatfon to make
determinatfons based on the
criteria noted; including
informatfon obtained through the
public process – public input and
planning commission
recommendatfons.
Study session meeting of October 13, 2025 (Item No. 2)
Title: Developer business practices Page 2
Action Item Role of Council/EDA Decision-making factors Additional considerations Guardrails
Council should be cognizant of
treatfng similar
applicatfons/requests similarly.
If council wishes to impose
certain conditfons or refuse a
project, the conditfons/refusal
should be clearly stated,
rooted in the decision-making
factors outlined, and based on
established facts, not
allegatfons, neighborhood
sentfment or unverified
informatfon.
Comprehensive
Plan
Amendments
Policy decision with wide
discretfon.
4/5 majority (5 affirmatfve votes)
required.
Is the decision justffied according
to procedures, rules and laws?
Does the decision promote public
health, safety and general
welfare?
Does it provide a positfve result?
Is it consistent with
other provisions of the
city’s Comp Plan?
Ensure a safer, more pleasant, and
more economical environment for
residentfal, commercial, industrial
and public actfvitfes.
Prepare the community for
antfcipated desirable change.
Reduce private and public
expenditures.
Planning Commission must hold a
public hearing on an amendment
and make a recommendatfon in a
tfmely manner to the city council.
Must conform to Metropolitan
(Met) Council regional system
plans.
City must obtain authorizatfon
from Met Council to place the
plan amendment into effect.
Decisions cannot be arbitrary or
capricious.
Study session meeting of October 13, 2025 (Item No. 2)
Title: Developer business practices Page 3
Action Item Role of Council/EDA Decision-making factors Additional considerations Guardrails
Financial assistance decisions
Tax Increment
Financing
(TIF) awards
Decision-maker on whether
awarding TIF is in the best interest
of the city.
Does the request adhere to the
adopted TIF policy and other city
policies (i.e., inclusionary housing
policy, green building policy,
diversity, equity and inclusion (DEI)
policy) and legal constraints?
(staff detail this in staff report)
Does the council wish to expand
the city’s TIF portiolio?
Does the proposed project
advance the city’s strategic
prioritfes?
Is the applicant being treated
similarly to other projects
regarding TIF award decisions? If
differently, is there a factual
reason for the actfons?
If council wishes to impose
restrictfons or requirements that
are not currently in the TIF policy,
the policy should be amended.
Council should be cognizant of
treatfng similar
applicatfons/requests
differently. If the council wishes
to impose certain conditfons or
refuse a project, the
conditfons/refusal should be
clearly stated, rooted in the
decision-making factors outlined,
and based on established facts,
not allegatfons, neighborhood
sentfment or unverified
informatfon.
The TIF policy can be amended to
include new restrictfons or
requirements – that said, each
policy consideratfon must be
vetted.
Affordable
housing trust
fund (AHTF)
Decision-maker on whether
awarding AHTF funding is in the
best interest of the city
Does the request adhere to the
adopted AHTF policy and other
city policies (i.e., inclusionary
housing, green building, DEI) and
legal constraints? (staff detail this
in the staff report)
Is there adequate funding
available in the AHTF? (staff detail
this in staff report)
If the council wishes to impose
restrictfons or requirements that
are not currently in the AHTF
policy, the policy should be
amended.
Council should be cognizant of
treatfng similar
applicatfons/requests
differently. If the council wishes
to impose certain conditfons or
refuse a project, the
conditfons/refusal should be
clearly stated, rooted in the
decision-making factors outlined,
and based on established facts,
not allegatfons, neighborhood
Study session meeting of October 13, 2025 (Item No. 2)
Title: Developer business practices Page 4
Action Item Role of Council/EDA Decision-making factors Additional considerations Guardrails
Does the proposed project
advance the city’s adopted
strategic prioritfes?
Is the applicatfon being treated
similarly to other projects
regarding AHTF award decisions?
If differently, is there a factual
reason for the actfons?
sentfment or unverified
informatfon.
The AHTF policy can be amended
to include new restrictfons or
requirements – that said, each
policy consideratfon must be
vetted.
Study session meeting of October 13, 2025 (Item No. 2)
Title: Developer business practices Page 5
Staff analyze and vet projects for compliance with city codes, policies, and strategic prioritfes prior
to bringing them to the city council. The council has varying levels of discretfon and authority as
described in the table above and depicted in the image below.
Source: League of Minnesota Citfes webpage. https://www.lmc.org/resources/planning-and-
zoning-101/
Study session meeting of October 13, 2025 (Item No. 2)
Title: Developer business practices Page 6