Title
Recommendation to Authorize the City Manager to Enter into a Citywide Project Stabilization Agreement on Public Works or Improvement Contracts Valued at Over $1,000,000 Awarded by the City of Alameda with the Building and Construction Trades Council of Alameda County. (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Recommendation to Authorize the City Manager to Enter into a Citywide Project Stabilization Agreement on Public Works or Improvement Contracts Valued at Over $1,000,000 Awarded by the City of Alameda with the Building and Construction Trades Council of Alameda County
BACKGROUND
Over the last six years, the City Council on multiple occasions has discussed and directed staff to negotiate a project stabilization agreement (PSA) with the Building and Construction Trades Council of Alameda County (BTC). The BTC is the labor group that represents construction workers in the geographic area which includes the City of Alameda. This evening staff is recommending a Citywide PSA on public works or improvements contracts valued over $1,000,000 awarded by the City of Alameda. The overall purpose of a Citywide PSA is to ensure that construction projects contracted out by the City have an adequate supply of qualified, skilled craft workers working under uniform work rules. In addition, a PSA can mitigate the risk of labor disruptions that would adversely affect the construction progress and timely completion of a given project.
PSAs and other related agreements, such as Project Labor Agreements and Community Benefit Agreements, are agreements negotiated between a public entity, developer, or general contractor, and the building trades unions, in this case represented by the BTC. A public entity can require a contractor to agree to utilize a PSA as a condition of entering into a construction contract for a public work with the public entity. Typically, PSAs contain the following provisions:
• All contractors and subcontractors on the job are bound to uniform work rules applicable to their construction craft workers;
• Guarantees against lockouts, strikes or other labor disruptions;
• Binding procedures are established for resolving labor disputes that may arise during the term of the PSA;
• Various mechanisms for labor and management cooperation are established on matters of mutual interest and concern such as productivity, quality of work, safety and health; and
• Requirements are established that a public entity deems beneficial to the community, such as the promotion of employment of local residents on the covered construction projects.
PSAs are different from, and in addition to, prevailing wage requirements that require workers to be paid a minimum wage set by the State of California. All public works or improvement projects awarded by the City are already subject to prevailing wage requirements. Additionally, a PSA does not require all workers to be union workers; in fact, the law prevents such discrimination against non-union workers. The construction craft workers are hired, however, according to the referral procedures of the applicable union.
The proposed PSA recommended by staff applies only to City led construction contracts and does not apply to public/private projects with developers or other private entities. While there have been a number of discussions of a PSA policy for public/private projects in the City, that issue will be deferred for further discussion between the City staff and the BTC.
In the Bay Area, staff was able to identify two municipalities, the Cities of Berkeley and Concord, which have citywide PSAs. Some Bay Area school districts, community college districts and counties, such as Contra Costa County and Alameda County also have PSAs for their contracted out construction projects. Generally, PSAs are most often used in connection with large-scale, complex, multi-year projects.
Staff hired Bay Area attorney, Michael Vlaming, who has experience and expertise in negotiating PSAs with the Building Trades unions to support the staff in the planning, development and negotiation of the proposed PSA.
DISCUSSION
The recommended PSA is attached as Exhibit 1. The following provides a summary of the key provisions of the recommended Citywide PSA:
1. Scope of Project. The PSA will only apply to public works and improvement projects awarded by the City of Alameda estimated to cost over $1,000,000. Examples include sewer, street, park, recreation and other public capital improvement and facility projects. Multiyear contracts that have aldeay been awarded by the City are excluded.
2. Term. The PSA will be in effect for a term of three years at which point it will be reviewed and considered by both parties for extension or renewal with modifications, if appropriate.
3. Work Rules. All contractors and sub-contractors awarded contracts by the City of Alameda for over $1,000,000 are required to execute the PSA and comply with its provisions, including paying of benefit contributions towards health care, vacation, pension, and apprenticeships, established by the relevant union Master Labor Agreement. As stated above, a PSA does not require all workers to be union workers. Workers are hired, however, through the applicable union referral procedures.
4. No Strikes - No Lockouts. The BTC and its affiliate craft Unions agree that there shall be no strikes, work stoppages, picketing or otherwise advising the public that a labor dispute exists or slowdown of work of any kind for any reason. In addition, lockouts by the contractors are prohibited.
5. Local Hire. The PSA establishes a goal that residents of the City of Alameda and Alameda County (Local Residents) will perform 25% of all hours worked on a project subject to the PLA on a craft-by-craft basis. If the Local Resident is also a High School graduate of Alameda Unified School District those hours will count double toward meeting the goal. In addition, it is agreed that there will be a goal that residents of the Alameda Point Collaborative (APC) at Alameda Point will perform 15% of all apprentice hours worked on a project covered by the PSA and that all APC participants must have successfully completed a pre-apprenticeship program that meets the requirements of the BTC.
6. Joint Administrative Committee. The BTC and City will each designate three individuals to participate on the Joint Administrative Committee (JAC) and shall meet regularly and as needed to resolve any issues by majority vote with such resolutions to be final and binding on all signatories to the PSA.
If approved by the City Council this evening, the BTC will obtain signatures of all affiliate members of the PSA. Only upon obtaining signatures from all affiliate Unions listed in the attached PSA, will the City Manager execute the PSA.
FINANCIAL IMPACT
The financial impact of adopting a PSA is difficult to ascertain. It is difficult to attribute project cost impact-positive or negative-solely to the presence of a PSA. Generally, the published research on this issue has reached different conclusions and has been, contested by interested groups; it suggests that PSAs may increase project costs above prevailing wage by 5 to 15 percent, especially on smaller projects. Staff’s investigation of Berkeley’s experience echoes this result on its smaller projects. Cost increase may be caused by lower competition, as smaller or less sophisticated contractors may choose to opt out of bidding on a project because they do not want to comply with a PSA, or they are simply unfamiliar with such agreements. Groups supporting PSAs argue that the presence of a PSA facilitates a smoother construction process by stabilizing relations between labor and contractors, which keeps a project on-time and on-budget.
ENVIRONMENTAL REVIEW
No environmental review is required, as a Project Stabilization Agreement is not a "project" under CEQA. CEQA Guidelines, section 15378 (b). The Policy, if adopted, would concern a governmental fiscal activity that does not involve a commitment to any particular project (section 15378 (b)(4)) and/or if adopted, it would be an administrative activity of government that will not result in direct or indirect physical changes to the environment (section 15378 (b) (5)).
RECOMMENDATION
Authorize the City Manager to enter into a Citywide project stabilization agreement on public works or improvement contracts valued at over $1,000,000 awarded by the City of Alameda with the Building and Construction Trades Council of Alameda County.
Respectfully submitted,
Jennifer Ott, Base Reuse and Transportation Planning Director
By,
Jill Keimach, City Manager
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibit:
1. Project Stabilization Agreement for the City of Alameda