Title
Recommendation to Authorize the City Manager to Execute an Amendment to the Existing Citywide Project Stabilization Agreement for Public Works or Improvement Contracts Providing for a Three (3) Year Renewal and Options for Subsequent Annual Renewals. (City Manager/City Attorney 310)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The City of Alameda (City) and the Building and Construction Trades Council of Alameda County (BTC) entered into a three-year project stabilization agreement (PSA) beginning January 2017 (see Exhibit 1). The PSA ensures that construction projects contracted out by the City have an adequate supply of qualified, skilled craft workers; mitigates risk of labor disruptions on City projects; and works to promote local hiring. The PSA expires in January 2020. City staff seeks the City Council’s approval to extend the PSA for an addition three (3) year term (see Exhibit 2).
BACKGROUND
Between 2011 and 2016, the City Council on multiple occasions discussed and directed staff to negotiate a PSA with BTC. BTC is the labor group that represents construction workers in the geographic area, which includes the City.
One important purpose of a 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 public projects.
PSAs and other related agreements, such as Project Labor Agreements and Community Benefit Agreements, are negotiated between a public entity, developer or general contractor, and the building trades unions, in this case represented by 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:
• Binds all contractors and subcontractors on the job to uniform work rules applicable to their construction craft workers;
• Guarantees against lockouts, strikes or other labor disruptions;
• Establishes binding procedures for resolving labor disputes that may arise during the term of the PSA;
• Establishes various mechanisms for labor and management cooperation on matters of mutual interest and concern such as productivity, quality of work, safety and health; and
• Establishes requirements that a public entity deems beneficial to the community, such as the promotion of employment of local residents on covered construction projects.
Various cities, including Berkeley, Concord, Oakland, and Pittsburg, have PSAs covering certain public works projects performed by outside contractors.
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 members. In fact, the law prohibits such provisions as discriminatory against non-union workers. The construction craft workers are hired, however, according to the referral procedures of the applicable union.
The existing PSA applies to City-led construction contracts with estimated project value over $1,000,000.
In the last three years, nine construction contracts have been awarded subject to the PSA:
• Annual sidewalk repairs (FY 2017/18-FY 2021/22);
• Cross Alameda Trail (CAT) through Jean Sweeney Open Space Park (June 2017);
• Jean Sweeney Open Space Park, Phase A (October 2017);
• Cyclic sewer, Phase 14 easement sewer rehabilitation (February 2018);
• Cyclic sewer, Phase 15 (September 2018);
• CAT from Main Street to Constitution Way (November 2018);
• Annual resurfacing (FY 2019/20-FY 2023/24);
• Resurfacing of portions of Otis Drive and Pacific Avenue (May 2019); and
• Encinal boat launch facility (July 2019).
DISCUSSION
The following provides a summary of the key provisions of the existing citywide PSA:
• Scope of Project. The PSA applies to public works and improvement projects awarded by the City estimated to cost over $1,000,000. Examples include sewer, street, park, recreation and other public capital improvement and facility projects.
Extended Term. The PSA has been in effect for three (3) years and is proposed to be renewed for an additional three (3) year term.
• Work Rules. All contractors and sub-contractors awarded contracts by the City that are covered by a PSA are required to execute the PSA and comply with its provisions, including making contributions towards health care, vacation, pension and apprenticeships established by the relevant craft union Master Labor Agreement. The PSA does not require the workers to be union members. Workers are hired, however, through the applicable union referral procedures.
• No Strikes - No Lockouts. BTC and its affiliate craft unions agree through the PSA that there shall be no strikes, work stoppages, picketing or other actions that advise the public a labor dispute exists or cause a slowdown of work of any kind for any reason. In addition, lockouts by contractors are prohibited.
• Local Hire. The PSA establishes a goal that residents of the City and Alameda County (Local Residents) will perform 25% of all hours worked on projects subject to s\a PLA on a craft-by-craft basis.
Staff’s experience has been that the existence of a PSA has worked efficiently on City projects and enhanced the City/trade working relationship such that if a unique project was to be constructed, the City and trades could work effectively through any difficulties In addition, staff is not aware of any strikes, lockouts, or labor disputes on any of these projects. The PSA expires on January 17, 2020 unless extended.
ALTERNATIVES
• Authorize the City Manager to enter into an amendment to the existing PSA providing for a three (3) year renewal term and options for subsequent annual renewals.
• Provide direction to staff to allow the PSA to expire and negotiate further.
FINANCIAL IMPACT
The financial impact of adopting a PSA is challenging to ascertain as it is difficult to attribute project cost impact-positive or negative-solely to the presence of a PSA. Staff’s experience over the past three (3) years is that while construction costs are higher than anticipated, these increases are likely attributed to the robust economy and high demand for construction services, not necessarily the existing PSA.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
No environmental review is required, as a PSA is not a "project" pursuant to California Environmental Quality Act (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)).
CLIMATE IMPACTS
There are not ascertainable impacts on the emissions of greenhouse gases attributable to this action.
RECOMMENDATION
Authorize the City Manager to execute an amendment to the existing citywide project stabilization agreement for Public Works or improvement contracts providing for a three (3) year renewal term and options for subsequent annual renewals.
CITY MANAGER RECOMMENDATION
The City Manager recommends approval. The amendment has been approved by Building and Construction Trades Council of Alameda County (BTC).
Respectfully submitted,
Liam Garland, Public Works Director
By,
Liam Garland, Public Works Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Original Agreement
2. Amendment to Agreement
cc: Eric Levitt, City Manager