Harbor leaders on Monday approved an agreement that would favor local union hiring on two phases of the $1.3 billion Middle Harbor project, but held off on a similar type of agreement that would apply to future construction projects at the Port of Long Beach.
The Long Beach Board of Harbor Commissioners voted unanimously to support implementing a project labor agreement with the Los Angeles/Orange County Building Trades Council on Phases 2 and 3 of Middle Harbor, a series of construction projects valued at about $300 million. Middle Harbor is a project that fuses two aging terminals into a megaterminal capable of handling 3 million container units.
After nearly 5 months of negotiations between city staff and labor unions, City Council voted unanimously to pass a comprehensive five-year project labor agreement (PLA) that will carry out an estimated $28 million in annual projects over the length of the contract, with a stated goal of hiring nearly half of the required workforce locally.
Nearly 400 supporters from the International Brotherhood of Electrical Workers (IBEW) showed up in support of the passage of the PLA, forcing staff at City Hall to divert overflow to the library where the meeting could be watched on television. They wore custom-made shirts just for the event and held signs that read “PLA = JOBS”.
Also in attendance for the passage of the historic PLA were Congressman Alan Lowenthal and Congresswoman Janice Hahn as well as clergy members from the community who helped channel the voice of the community to the council’s chambers.
“This is really about making sure Long Beach workers are prepared for work and will get work in this city with construction projects,” Lowenthal said. “That’s just exactly what this city should be doing.”
Hahn, speaking about her time spent as a Los Angeles City Councilwoman, noted the 9 PLAs passed by LA since 2001. The Congresswoman called the labor agreements beneficial because they provide taxpayers with a better project in the end, due to the fact that they’re carried out by union workers, who after acquiring the “skills to pay bills,” put out a better product because of their connection to the city.
“These are folks that really care about their community, they’re invested in their community,” Hahn said. “I think PLAs really mean the taxpayers get their money’s worth from these publicly-funded projects.”
The motion eventually passed by a 7-0 vote, but not before a nearly 4 hour long process that included a lengthy public comment section, where numerous supporters of the PLA voiced how it would positively affect them going forward.
The agreement approved by the council will cover all projects entered into by the City over $500,000 that are subject to State, federal or other funding restrictions, but will exclude the agreements entered into for the new Civic Center and the Belmont Plaza Pool, “right-of-way” projects, those typically performed by city employees or those entered into by Charter-Commissioned departments. It also prohibits work stoppages or lock-outs during the contract to ensure that covered projects are completed without disruption.
Also included are provisions for a goal of 40 percent local hires based on the total hours worked on a project and a goal of ten percent of the hires coming from “disadvantaged workers,” targeting veterans and those 70 percent below the lower living standard income level. The PLA also incorporates a partnership between Long Beach City College and the Pacific Gateway Workforce Investment Network to provide pre-apprentice training to ensure that Long Beach residents will be ready to take those jobs when they become available.
“All of this has really made a customized PLA for all of us,” said First District Councilwoman Lena Gonzalez, the maker of the motion who has been deeply involved in the negotiation process. “And I think in addition to that, working with our Long Beach City College to create that pipeline, making sure that Pacific Gateway creates that connection with our community, to ensure that folks are actually getting to work with Long Beach is very important.”
Not everyone was excited about the council’s intent to approve the agreement, however. Eric Christen, executive director of the Coalition for Fair Employment in Construction (CFEC) criticized the local-hire mandate, calling it illegal. Christen added that the fact that the PLA applies to multiple contracts over the course of five years is a direct violation of the 1993 Boston Harbor U.S. Supreme Court decision. He also questioned why the agreement had not been made public, a statement that was later refuted by city staff.
“I understand the desire not to have something that’s so implicitly and explicitly discriminatory brought out into the public in the light of day for all to see because it has provisions in it that are explicitly and implicitly discriminatory and that will increase your costs,” Christen said.
The PLA is subject to annual review from a joint administrative staff committee composed of representatives from the trades and the city, which will monitor the progress of the agreement, provide data to the council and act on suggestions the council makes regarding possible amendments to the PLA. Although city staff acknowledged they weren’t able to definitively say if the agreement would be fiscally positive or negative for the city, they did estimate that the annual monitoring cost, based on an industry standard between .07 and 1.33 percent, would run around $280,000 annually.
Third District Councilwoman Suzie Price said that the cost of getting people on the “economic ladder" can’t be fairly quantified, and that even if the PLA increases construction costs they could very well be outweighed by workers being paid what they’re expected to get paid and for residents of the city developing careers they might not otherwise have had.
“I think it’s a beneficial investment in our residents that we can’t accurately measure, at least not today and at least not in the short term,” Price said. “But it’s an investment worth making.”
Scrutinizing the data that’s due back to the council annually was the crux of Price’s friendly amendment that was ultimately passed. Wanting flexibility as the city approaches uncertain financial times, Price called for a full council review after year three of the contract, where they will be able to present suggestions to the joint administrative staff to clean up any deficiencies that are noticed after a few solid years of data gathering.
“It’s an opportunity for us to work with our partners to make tweaks and adjustments if we need to at the 3-year mark,” Price said. “We may need to make tweaks to stimulate local economy, it allows us to evaluate our project labor agreement.”
The city entered into its first large-scale PLA in 2009 with the council’s approval of the Middle Harbor project, adding several other agreements since then, including the contracts for the Long Beach Airport, Gerald Desmond Bridge Project and the more recently, the approving of a bid to Plenary Edgemoor to build the new Civic Center. Mayor Robert Garcia outlined this process that preceded last night’s vote, calling it a great day for the city.
“I’m proud to have been here and voted in favor of all of those project labor agreements because I believe the project labor agreements provide a consistent level of quality, they’re able to give back so many more ways in what the community receives from the work and the investment you all do in the community,” Garcia said.
LONG BEACH >> Public construction contracts totaling an estimated $28 million annually could go to unions under an agreement the City Council will consider this week.
Last November, council members voted to direct City Manager Pat West to negotiate with the Los Angeles/Orange Counties Building and Construction Trades Council on a project labor agreement for city projects costing more than $500,000.
The five-year deal returning for approval Tuesday would be the most extensive in the state. A staff review found no similarly-sized California governments using project labor agreements at a $500,000 level, though Berkeley and Contra Contra County use thresholds of $1 million.
Long Beach, CA (April 3, 2015)
By George Economides
For a Long Beach City Council that claims to be business friendly and wants to help small business, it sure seems like it is talking out of both sides of its collective mouth.
This Tuesday, April 7, councilmembers plan to vote on a project labor agreement (PLA) measure that will effectively eliminate small contractors from having any chance of receiving a city contract of $500,000 or more unless they employ union workers. Under the guise of improving local hiring, this move appears to be nothing more than a reward to unions for throwing hundreds of thousands of dollars at councilmembers during recent elections.
The measure, originally brought forward in July and November of last year, has four solid votes from pro-union Councilmembers Lena Gonzalez, Robert Uranga, Al Austin and Rex Richardson. A likely fifth vote (needed for passage) may be Vice Mayor Suja Lowenthal. Mayor Robert Garcia can nix the measure using his veto power, forcing the measure to find one more vote. (A two-thirds vote is required to override the mayor’s veto.)
This measure is certainly anti-business and sends the wrong message to the business community. Mayor Garcia is trying to woo firms to locate to Long Beach, but he cannot have it both ways. Either he wants to lay out the red carpet to attract businesses or not. In fact, what’s the purpose of forming a Long Beach Economic Development Commission if the mayor doesn’t oppose measures such as these?
While reports throughout the country indicate PLAs result in cost overruns and higher construction costs to taxpayers, the city staff report nails it by saying staff is “unable to make a determination as to the impact of a PLA on the bid cost of construction or number of bids received.” That blank-check approach is not how citizens want their government to operate.
During a November council meeting discussion on PLAs, 3rd District Councilmember Suzie Price correctly challenged her colleagues when she said, “I have a problem voting on a contract that we don’t know what the fiscal impact is going to be.” When competition is reduced and labor and administration costs are increased, as occurs with PLAs, it should not be difficult for councilmembers to understand that the overall cost of a project would be higher.
According to recent data from the U.S. Bureau of Labor Statistics, just 13.9% of the 2014 U.S. private construction workforce belonged to a union. Which means PLAs discriminate against the other 81% of construction workers who would work on projects if it were not for a PLA.
A July 2011 study of construction projects at California schools by the National University System Institute for Public Policy in La Jolla found that “PLAs are associated with higher construction costs. We found that costs are 13 to 15 percent higher when school districts construct a school under a PLA. In inflation-adjusted dollars, we found that the presence of a PLA is associated with costs that are $28.90 to $32.49 per square foot higher.” The study reviewed 551 school projects, of which 65 were built using PLAs. (Here is a link to the complete study)
Interestingly, just about all the pluses pro-union councilmembers point to as reasons to support a PLA, including hiring locally, can be accomplished without a PLA. So can apprenticeship and training programs. And as far as wages go, the city staff report says: “. . . the city already requires prevailing wages on all public works projects and prevailing wage tracks closely to union wages.” That is further proof that this measure is all about rewarding unions for money given to help get these councilmembers elected.
The biggest question for councilmembers should concern the local hiring issue. While the language says unions must make their “best effort” to hire locally, there is no guarantee and no tracking mechanism to ensure unions don’t simply hire their “friends” from other cities.
Lastly, this is a further example of unions and those they elect taking advantage of a weak business community that is failing to speak out on issues such as this.
Long Beach is about to become a serious union town and residents should be paying attention.
The city has always had deep union roots with residents passing a ground-breaking, union-backed measure in 2012 that forced hotels to either allow unionization or pay workers at least $13 an hour. Then, there’s the Longshoremen and Teamsters who have taken a strong place in the city’s blue collar workforce.
Now it looks like some of the city’s pending construction contracts worth about $250 million will be funneled to unions, including $103 million for the Belmont Aquatics Center.
Last month the Long Beach City Council voted 6-2 to negotiate with the Los Angeles and Orange Counties Building and Construction Trades Council on some of its most lucrative projects for years to come.
These contracts, known as project labor agreements, are derided by some as pushing out nonunion workers and praised by others for bringing high-paying jobs for locals and preventing work stoppages.
Some cities in California, such as Chula Vista, have gone so far as to ban such agreements, raising the ire of unions up and down the state.
In the typical PLAs, unions and the government entities agree on hiring terms and conditions for a project.
And, although these contracts don’t restrict who can bid on a project, they can require nonunion workers who are employed on a project to go through hiring halls and pay union health care and pension benefits.
Unions, which have been losing strength nationally for decades, see PLAs as an important growth mechanism.
And in Long Beach they are being embraced as a way to bolster job opportunities in disadvantaged communities and help build up apprenticeship programs.
The agreement in Long Beach would apply to all projects over $500,000 with the goal of hiring 30 percent of workers from within the city. It would cover a five-year period and renew automatically each year unless one party cancels the contract.
Union-backed council members Lena Gonzalez, Roberto Uranga and Al Austin carried the measure. But Gonzalez, who introduced it, bristled at some attempts by council members Stacy Mungo and Suzie Price to take a deeper look at the cost of these agreements. Outgoing council member Patrick O’Donnell, long a stalwart for union interests, called for the city attorney to work it out with the unions and leave the details for later. The council must still approve any final contract and it’s slated to hear an update on negotiations later this month.
But Mungo and Price’s concerns are very real and should be taken seriously. A union contact generally means a higher cost to taxpayers. This shouldn’t be a rush job and there should be no handouts, especially when the city is looking at big deficits because of rising state pension costs. It raises too many questions in a city where unions so strongly influence political campaigns and even policy.
But that didn’t seem to bother some of the union members who packed the council chambers in support of the contract. Ron Miller, executive secretary of the Los Angeles/Orange Counties Building & Construction Trades Council, suggested that the city will find money somewhere in its budget to pay for compliance officers.
Maybe Miller is right, but the city’s costs should be clear from the beginning because taxpayers will be on the hook for years to come.
The powerful umbrella group of unions – the Los Angeles County Federation of Labor – threatened to delay construction of Inglewood’s NFL stadium if its terms were not met by Thursday afternoon. That was the deadline for the union to submit the signatures it was collecting over the past few weeks that could have required a citywide vote on the stadium.
After announcing an agreement with stadium developers shortly before the deadline, labor has quickly gone from stadium adversary to ally.