HomeMy WebLinkAbout11/13/2018 Item 14, Christen (2)
Christian, Kevin
From:ericchristen <ericdchristen@gmail.com>
Sent:Tuesday,
To:Pease, Andy; Christianson, Carlyn; Rivoire, Dan; Gomez, Aaron; Harmon, Heidi
Cc:White, Kelly; Dietrick, Christine; CityClerk; Johnson, Derek; Grigsby, Daryl;
nwilson@thetribunenews.com; news@ksby.com; letters@newtimesslo.com
Subject:Here is our email re PLA from July again and my response to Councilmember
Christianson's comments
Importance:High
From: ericchristen <ericdchristen@gmail.com>
Sent: Thursday, July 19, 2018 9:03 AM
To: Christianson, Carlyn
Cc: Harmon, Heidi; Gomez, Aaron; Pease, Andy; Rivoire, Dan; E-mail Council Website; Johnson, Derek;
nwilson@thetribunenews.com
Subject: A detailed response to Vice Mayor Christianson's email to me regarding SLO's Project Labor
Agreement vote.
Carlyn,
Thank you for your response. If you don’t mind I am cc’ing the entire council and key staff in this reply because
I view it as an opportunity to shed some light on the issue of Project Labor Agreements in general, and the
City’s situation in particular.
What I will do is respond to your email point by point with your comments posted first followed by my
responses in red.
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First some background. CFEC was created 20 years ago to oppose Project Labor Agreements (PLAs). They
were and are viewed as such an intrusion into the contracting process that my founding (and current) board of
directors, comprised of both union and union-free contractors, decided a new entity dedicated solely to
fighting PLAs was required. CFEC is part of a much broader coalition of California construction
stakeholders that stand opposed to PLAs.
Each Friday, as part of our efforts, we view hundreds of public agendas via the internet looking for agenda
items dealing with PLAs. This is how we came across your agenda item last week.
What is most frustrating about having to stumble upon this is the fact that PLAs are not only a radical change
to the way you conduct your contracting business, but they are also the most controversial issue facing the
construction industry. Understanding this you would think that an entity that takes its fiduciary responsibility
to its ratepayers and taxpayers seriously would do some research on this issue. Conducting a 5 minute Google
search would have revealed just how extensive opposition to PLAs is. 24 states have banned their use. 11
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Entities in California have done so including all 6 that have placed the issue before their voters. In 2012 the 8
largest city in America, San Diego, voted 58-42% to ban their use. This lopsided defeat for PLA proponents
occurred despite them outspending us $1.5 million to $1 million. We won every precinct and every
demographic, including union households. All this in a city that is 23% Republican. When the people are
presented with both sides of this issue they choose overwhelmingly to reject their use. Yet despite all of
this not one entity that opposes PLAs was given any notice of this issue being placed on the agenda. Your local
Builders Exchange, which has been outspoken on the issue of PLAs for years, was not given any notice of this
issue being placed on the agenda. The Associated Builders and Contractors, the Associated General
Contractors, the Western Electrical Contractors Association, let alone CFEC, none of these groups were
contacted about this issue and invited to speak. But we know that PLA proponents were well aware of it
coming before the council, after all they more than likely asked for it to be, something we are seeking to find
out with the Public Records Act Request we have submitted. This is astonishing.
That said, we are aware of it now and we are working with local stakeholders to make sure this blatant form of
discrimination and waste is not put into effect either on your waste water treatment plant or any other city
project in the future. In California 86% of the construction workforce chooses to wake up on a daily basis and
work for union-free. They should not be treated as second class citizens for making this choice.
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To your email:
From: Christianson, Carlyn <cchristianson@slocity.org>
Sent: Wednesday, July 11, 2018 9:22 AM
To: ericchristen <ericdchristen@gmail.com>
Subject: Re: Regarding the union PLA you're discussing at tonight's Study Session
Hi Mr. Christen,
Thanks for writing the Council. The staff actually did a great job of presenting pros and cons, While I am sure
that staff did an excellent job the reality is this is not their bailiwick. They have not spent 20 years compiling
extensive data on the downside of PLAs and why they are a terrible decision for a public entity to
undertake. This is why groups like CFEC exist and why what should have occurred would have been a work
session where both sides could present this issue with extensive questions and answers from
councilmembers following the presentations.
and some of the concerns we are hearing just don't seem realistic for our local situation, and some of the
benefits pushed by supporters don't seem realistic either, to be frank. It's a mixed bag. With prevailing wage
the law in SLO, significant cost concerns probably aren't really there, for instance. Prevailing wage has
nothing to do with the PLA issue nor its impact on price increases associated with PLAs. Prevailing wage
being paid to workers is the law of the land. “Cost concerns”, as the most comprehensive study ever
conducted on PLAs shows, arise because PLAs result in fewer contractors bidding work with a PLA on
them. Furthermore the list of subcontractors who submit bids to the general contractors who do end up
bidding your work is also reduced thereby impacting, in an unseen way, the number of companies who
simply don’t bid your work to begin with. Those that are left bidding know that with a PLA there simply will
not be some usual market participants participating and the bids that are submitted with inflated numbers.
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Why won’t contractors, both general and subcontractor, who would other-wise bid your project, not bid it
with a PLA thus decreasing the bid pool and thereby helping to increase your costs? Simple. PLAs, for no
other reason than to discourage non-union bidders from bidding PLA work, are forced under the PLA to do
the following:
1. They are limited to using, at most, 6 of their own employees at all. Anyone beyond that must come
from a union-hiring hall which means that contractors that have a work force they trust and have a
relationship with must be put on unemployment while workers the contractors have no relationship
with will now be “employees”. Furthermore the 6 employees that are allowed under the PLA are not
the first 6 employees the contractors could use. They are allowed one of their employees, then they
are forced to hire a union employee from the hiring hall, then one of their employees, then one from
the hall and back and forth until the employer has used 6 of their employees at which time, again, all
employees must be union. Question: Why does a union-free firm have to engage in this practice?
What purpose does their serve except to discourage a union-free frim from bidding the job at all?
Isn’t this akin to the Lakers going into a playoff game and just before tip-off having half their team
swapped out for players from another team that the team has no relationship with, and then be
expected to be competitive in the game?
2. All workers must pay union dues. This means that even though the non-union firm’s employees do
not belong to a union they must pay approximately $1,000 out of their first paycheck to a private
entity that they don’t belong to. Question: Why are workers forced to pay into a private entity that
they otherwise have no desire to join? What does this have to do with “local hire” or building a
project?
3. All workers must pay into union health, welfare and pension plans even though they, by law, already
have such plans they are paying into under their current employment. Furthermore these monies are
almost certainly going to be LOST to the employees as union vesting requirements are AT LEAST 5
years and often times 10 years. This is a form of wage theft that robs workers of over $20 per hour
while they are working under the PLA covered project. Attached is a breakdown showing exactly
how this occurs. Question: Why is this provision in a PLAAT ALL but for the fact PLA proponents wish
to either discourage union-free firms from bidding the work or will benefit from this “breakage”
money that will be sent to underfunded union pension plans understanding that it will not be
enjoyed by the employees who make the contribution?
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4. Only union apprentices are allowed to work under PLAs. This means that young men and women
who happen to be in state and federally certified union-free apprentice programs are not allowed to
pursue work on projects paid for with their tax dollars. Question: Why would this explicitly
discriminatory provision be included in any agreement, at all?
You may reply “Well that is not our intent at all and that these are impossible to explain provisions that will
not be allowed under our PLA.” The problem here is that you are not actually negotiating with local unions
but with AFL-CIO in Washington D.C. and they will simply not allow for any of these provisions to not be
included in a PLA they sign off on. This is why we say that when you have read one PLA you have read them
all. They are templates that have entities names changed and little else.
One thing that was clear is that a PLA really does seem to be able to get more locals hired than other types of
agreements. Our staff spent a lot of time talking to other jurisdictions with both good and bad
experiences. Actually PLAs do no such thing. It is illegal to mandate that people from certain areas be hired
ahead of people from other areas. Ask your staff. This is why the best that a PLA can do is to offer “goals”
and “targets” when it comes to “local hire” with no consequence and no penalty for failing to achieve these
goals. Below is the language from a recent PLA (you’ve seen one you’ve seen them all) that shows just how
toothless the “local hire” provision is. Question: What are the local hire results of past projects you have
undertaken? Is this really an issue for you at all or is this a solution to a non-existent “problem” where
“local hire” is just a smokescreen used by PLA proponents to sell an otherwise unpalatable “agreement”,
whose real intent, again, is to discriminate? What is your data on “local hire”? If this really is a problem are
there other ways you can go about trying to rectify it instead of engaging in a radical change to your bidding
practices?
Here is the extent of the “local hire” issue in the City of Santa Ana’s PLA. In a FIFTY FOUR PAGE DOCUMENT
the issue is given TWO paragraphs, that, again, states only that a “best effort” will be made but that even
this efforts goal is to hire 30% locally. Really?
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Section 3. 5 Employment of City Residents
3.5.1 The Unions and Contractors agree that, to the extent allowed by law, and as long as they possess the
requisite skills and qualifications, the Unions will exert their best efforts to
refer and/ or recruit sufficient numbers of skilled craft "Local Residents" as defined herein, as well as Veterans,
to fulfill the requirements of the Employers. In recognition of the fact that the
City and the communities surrounding Project Work will be impacted by the construction of the Project Work,
the parties agree to support the hiring of workers from the residents of these
surrounding areas, as well as Veterans, for Project Work. Towards that end, the Unions shall exert their best
efforts to encourage and provide referrals and utilization of qualified workers
residing in those U. S. Postal Service zip codes which overlap all of the City of Santa Ana, as set forth in
"Attachment B" attached hereto, as well as Veterans, regardless of where they reside. If
the Unions cannot provide the Contractors in the attainment of a sufficient number of Veterans and Local
Residents from within the first tier zip codes, the Unions shall exert their best efforts
to then recruit and identify for referral Local Residents residing within Orange County.
3.5.2A goal of 30% of the total work hours shall be performed from workers residing within the areas described
in Section 3.5.1, as well as Veterans, regardless of where they reside
The County had a fantastic experience in doing the solar projects during the recession with the use of PLAs by
their general contractors, and it truly saved our county from the worst of the recession effects, a real success
story. Really? What were those “successes”? What specific empirical data was given to you to justify this
radical change in the way you conduct business? Were other projects built during this time without a PLA
also successful? What were the county’s projects compared to in order to determine a “success” vs a
failure? Have you read the PLA that covered that project? Is this the type of PLA you support? That anecdote
aside, these are very different times where there are more jobs in the construction industry than there are
employees. Public entities are finding it hard to get the number of bidders they need to bid work as it is.
Imagine what a PLA will do to an already tight labor market. Question: Has the City contacted its local
contracting community and surveyed them to see what effect a PLA would have on their desire to bid your
work? If you have not you could model your survey after the East Bay Municipal Utility District’s PLA survey
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or the San Jose Unified School District’s survey, both of which found a FIFTY PERCENT REDUCTION IN
POTENTIAL BIDDERS should a PLA be used. (see attached) Can we count on you to conduct such a survey?
Sheriff Parkinson's office and others also testified as to the usefulness of PLAs to increase job opportunities for
many of our locals of all kinds. I fully acknowledge that there can be a bad PLA, but I also know that there are
successful examples too. What experience does the Sheriff’s office have with PLAs? With construction?
What would the impact of a PLA be on the local resident that is not, again, part of a union? 86% of the local
construction workforce is union-free, do they count in this equation? As for “bad PLAs” and “successful
ones”, again, all PLAs are the same with regards to content and with regards to outcome.
What we've directed staff to do is to attempt to negotiate a PLA with the trades that focuses on local hire,
with possible exemptions to protect various small contractors (as you mention) and other specific jobs already
specified (such as quality inspectors), and with the city generally retaining the ability to control for
schedule, costs and quality. Again, there are no “negotiations” with local trade unions. There is the standard
PLA template that they are given from AFL-CIO national and that is what you will sign. Here is a typical
PLA from a community college in California. The key discriminatory provisions in this PLA are non-
negotiable. That said, why would “various small contractors” need to be exempt from a PLA? Is there
something about a PLA that is unfair to small contractors? If a PLA is unfair to small contractors why
wouldn’t it then follow that it would be unfair for medium and large contractors? Herein lies the admitted
problem with PLAs: They are a political solution to a non-existent problem that is brought forth by powerful
special interest who seeks to gain an advantage over less politically powerful groups and individuals in a
community.
In other words, a PLA that works for the city to accomplish what we want--getting as many local people hired
as possible, union or non-union. If a recession hits due to China tariffs, the impending closure of Diablo Canyon
or other reasons (all quite likely) then we will be glad for this action. This project is going to bid soon. There
are more jobs in America right now that people to fill them. Again, in the California construction industry
there has never been a labor market as tight as this one. You as an elected official are charged with dealing
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with the known, and this the known. By implementing a PLA you have made an already tight labor market
even tighter by reducing the number of contractors who will bid your work. As for “local hire” again, as you
read above, a PLA does nothing to guarantee local hire, something the city has not even demonstrated is a
problem in the first place. IF hiring local workers is the rai·son d'ê·tre for the PLA then we would be glad to
work with you and local stakeholders to put a legal document together that addresses this issue.
And if the trades can't agree to what the city wants by October, staff is instructed to drop the PLA negotiations
and just use simple contractual language with our bidders for a local hire preference--so there is major
incentive for the trades to come to agreement. If they won't or don't, then that will be that, we're not going
to drag this out. Why is only one special interest group allowed to sit down with staff and negotiate
anything? Would you do this for any other group or just this politically powerful group? This is where
citizens cynicism towards politicians comes from. A politically power special interest group that spends a
great deal of money to get people elected comes to those same people once they are elected and asks for
special favors, which, in this case, they are granted after ONE MEETING on a highly controversial issue that
opponents were given no equal time to present on. That group is then allowed to privately “negotiate”,
behind closed doors, an “agreement” that will allow them to attain an advantage in the market place over
their competitors via implicit and explicit discrimination while diminishing the value of taxpayer dollars.
This would not be allowed for in any other circumstance. Why is it being allowed to occur here?
The later part of this statement is also troubling. If staff could just “create contractual language” for bidders
to increase local hire why on earth is there a need for a controversial and divisive PLA to be negotiated at
all?
Question: What does the city want in the PLA? Are there a list of non-negotiables? Where these spelled out
at the city council meeting and if so could I please see them? Do they include not forcing workers on the job
who are non-union to pay into union pension plans they won’t benefit from? Do they include allowing state
and federally certified apprentice programs that happen to be union-free to be recognized?
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I know you will be disappointed in the Council's action, but I also hope I've given you some details that address
at least some of your concerns. I am not disappointed I am stunned that in 2018 in California there are still
those who seek to pit one group against another for political purposes. I am stunned that there are groups
who are still viewed as “the other” simply because they are not part of a politically powerful and visible
special interest group. I am stunned that a Mayor of a city in America could say the following with so little
self-awareness as to how it would sound if the favored group she supports were replaced by any other
group:
“I am very much in support of the project labor agreement,” said Mayor Heidi Harmon. “We have a lot of
opportunity to stand up for and stand with working people in our communities and this really speaks to that...
Unions are generally a force for good, a force for a more equal and fair society in general.”
“Working people”? What about the 94% of the working people in America that do not belong to a union?
What about the 86% of the local and California construction workforce that does not belong to a union? Do
they count? Are they not a “force for a more equal and fair society”?
I have laid out a very specific point-by-point rebuttal to your email to me citing statistics and including a
great deal of data regarding this issue. The proper place to have had this done would have been in a public
meeting where the community could have been properly informed on this issue and where both sides were
given an equal chance to be heard. But that did not occur.
That said it is still not too late to do the right thing. What can be done?
1. The City can conduct a survey of local contractors and previous bidders to see what effect a PLA will
have.
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2. The City can open up “negotiations” on the PLA to include all stakeholders (contractors, unions,
contractor associations like the SLO Builders Exchange, the Chamber, etc.)
3. The City can make its non-negotiables, such as not forcing a worker who already has an established
benefit package to pay into a union plan and allowing all state and federally approved apprentices to
work, you can make those public.
4. The City can present the local hire numbers on your previous projects that demonstrate this is an
issue to begin with.
CFEC and others in the industry who stand in support of fairness and equality stand ready to help you build
a successful project.
Sincerely,
Eric Christen
Executive Director
Coalition for Fair Employment in Construction
www.opencompca.com
Read more here: https://www.sanluisobispo.com/news/local/article214777120.html#storylink=cpy
Thank you for writing,
Carlyn
Carlyn Christianson
Vice Mayor
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City of San Luis Obispo
Office of the City Council
990 Palm Street, San Luis Obispo, CA 93401-3249
E cchristianson@slocity.org
T 805.781.7122
C 805.550.9320
slocity.org
From: ericchristen <ericdchristen@gmail.com>
Sent: Wednesday, July 11, 2018 3:11:42 AM
To: Harmon, Heidi; Christianson, Carlyn; Gomez, Aaron; Pease, Andy; Rivoire, Dan; E-mail Council Website
Cc: jtarica@thetribunenews.com;nwilson@thetribunenews.com; sfinucane@thetribunenews.com
Subject: Regarding the union PLA you're discussing at tonight's Study Session
Council Members.
Tonight you will be studying the issue of Project Labor Agreements (PLAs). PLAs are the most divisive
issue facing the construction industry in California and have no place in our state. PLAs are exclusionary and
force non-union workers to lose up to $20 per hour from their paychecks.
PLAs create barriers for local, minority and women-owned construction employers and their employees from
participating in building their community because they contain provisions that do not allow for the full
utilization of their own workforces.
Furthermore, studies show these types of agreements increase project costs – anywhere from 10-30% above
prevailing wage because they restrict competition. Open competition is healthy and increases quality. It levels
the playing field and local money is invested into the community.
And finally, PLAs exclude the men, women, and veterans who have chosen to enter into state approved,
unilateral apprenticeship training programs in pursuit of a construction career from the opportunity to work
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and gain the invaluable on-the-job training experience that provides stability for them, their family and their
community.
For these reasons, we strongly oppose Project Labor Agreements.
What is a Project Labor Agreement (PLA)?
An exclusionary labor agreement that discourages the vast majority of local contractors and small
business owners from competing on and winning construction projects
Introduced as a tool to local school, city, county, state and federal officials by State and Local Building
and Construction Trades Council Representatives
Almost Every Construction Trade Organization opposes PLAs
Opposed: In Favor:
Air Conditioning and Trades Association Building Trades
American Subcontractors Association
California Subcontractors Association
American Road Builders and Transportation Association
Asian American Contractors Association
Associated Builders and Contractors
Associated General Contractors
Black Contractors Association
Bay Area Black Contractors Association
Californians for the Advancement of Apprenticeship & Training
Golden State Builder's Exchanges
Independent Roofing Contractors of California
Independent Electrical Contractors Association
Kern Minority Contractors Association
National Association of Minority Contractors
National Association of Women in Construction
Painting Decorating Contractors Association
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Plumbing and Heating Contractors of California
Western Electrical Contractors Association
Independent Electrical Contractors Association
Concerns for non-union workers
th
Union dues requirement for non-union workers on or after 8 day (less money on pay-check)
Companies are forced to lay off productive non-union workers
Requires payment into union pension programs in which workers may never vest
Requires payment into union health & welfare program in addition to the mandated Affordable Care
Act.
Non-union apprentices cannot learn their trade and work on these jobs in their own communities
Concerns for the Anaheim Union High School District
This issue was never discussed when your $244 million bond was being sold to voters.
PLAs are routinely used in bankrupt cities like Vallejo and fiscally mismanaged school districts like the
West Contra Costa Unified School District and the Los Angeles Unified School District
Federal regulations prohibit the “local hire” requirements contained in PLAs. Section 200.319
“Competition” of the Electronic Code of Federal Regulations states “The non-Federal entity must
conduct procurements in a manner that prohibits the use of statutorily or administratively imposed
state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those
cases where applicable Federal statutes expressly mandate or encourage geographic preference.”
Negotiations can take up to two years adding delays and legal fee expenses up to $200,000.
It costs money to administer a PLA. The related professional services add to the expense.
Riverside Community College District: $1,800,000 before they abandoned their PLA
City of Pinole: $328,000 annually
San Diego City School District: $1 million annually
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PLAs are exempt from DIR enforcement of prevailing wage requirements
As a result of SB 854, as of July 1, 2014, the DIR launched a new Public Works Contractor Registration
Program. Contractors wishing to bid on public works will need to register and submit a non-refundable $300
annual fee. The public works contractor registration fee pays for all DIR administration and enforcement of
prevailing wage requirements.
o Exemptions: As of April 1, 2015, and even after January, 1, 2016, the following projects are
exempt from the requirement to have contractors and subcontractors furnish certified payroll
records (CPRs) to the Labor Commissioner:
Projects covered by qualifying project labor agreements
Concerns for the taxpayers
Reduction of bidders and increased costs
$39M Pinole-Hercules Wastewater Treatment Plant Expansion
10 bidders pre-qualified for the Project
8 bidders present for mandatory job walk
2 bids received and opened on 12/10/15
Bids came in at 8% and 22% above engineer’s estimate of $39M
Increased Costs
$68M SMUD Corporate Headquarters Remodel bid with a PLA was rejected because it came in nearly
$30M over the budget with just two bidders.
Alameda County Hall of Justice project delayed and over budget
o Local business participation under PLA. 60% goal, 2.58% achievement
o $111,966,000 contract is now $122,384,711
o Change in substantial completion date by 61 calendar days from 2/15/17 – 4/17/17
Cost of Golden 1 Center jumps by millions | The Sacramento Bee
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What do studies say?
EBMUD conducted PLA survey of its union and non-union contractors
100% said PLAs increase costs
64% said PLAs were a disincentive to bid
Increased costs of 13-15% on California School Construction (July 2011 study released by the National
University System Institute for Policy Research)
No studies exist that show PLAs save money
11 entities in California have banned the use of PLAs including the cities of Fresno, San Diego, Chula Vista,
Oceanside and El Cajon (see attached)
City of Berkeley PLA One-Year Status Report
316 total workers employed on CWA-eligible projects
4 Berkeley residents
96 East Bay Green Corridor residents
35 Alameda County residents
Reports of concerns about a “displaced core workforce” from small contractors at pre-bid meetings to
comply with local hire requirements
Increased engineer’s estimates in order to allow for the higher bid prices
Solutions
Continue bidding without PLA and keep FAIR and OPEN competition
ALL sides should be represented in any negotiations
Allow for ALL state approved apprentices to work on the project
Allow contractors to hire their entire CORE workforce
Allow contractors to pay health and pension benefits into their employees ‘OWN plans to care for
them and their families
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Use an alternate bid approach
Rebid the project WITHOUT a PLA if there are three bidders or less on project
Set a HIGH Local Hire goal that benefits the workers in the community
Establish metrics for PROPER PLA compliance, accountability, and transparency
Americans overwhelmingly reject PLAs
In September 2009, nationally known pollster Frank Luntz surveyed Americans about taxpayer funded
bidding procedures. 88.5% said they preferred a “fair, open, and competitive bidding process.” 12%
felt that unions should have the exclusive right to the work.
25 states have banned PLAs outright.
In California 11 entities have banned PLAs and every time the issue has been brought to the voters
they have overwhelming rejected PLAs.
Summary
Project Labor Agreements (PLAs) creates barriers for local, minority and women-owned construction
employers and their employees from participating in building their community because they contain
provisions that do not allow for the full utilization of their own workforces.
Furthermore, studies show these types of agreements increase project costs – anywhere from 10-30% above
prevailing wage because they restrict competition. Open competition is healthy and increases quality. It levels
the playing field and local money is invested into the community.
And finally, Project Labor Agreements exclude the men, women, and veterans who have chosen to enter into
state approved, unilateral apprenticeship training programs in pursuit of a construction career from the
opportunity to work and gain the invaluable on-the-job training experience that provides stability for them,
their family and their community.
For these reasons we strongly oppose the proposed Project Labor Agreement for your school construction
bond.
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Additional PLA Educational Material for your review
In California, only 18.1% of the private construction workforce belongs to a union. State Building and
Construction Trades Council representatives, AFL-CIO affiliates, introduce Project Labor Agreements as a
tool to local school, city, county, state and federal officials to exclude non-union workers.
More information about PLAs can be found at www.thetruthaboutplas.com.
Link to recently produced video about Project
Below are studies that show cost increases for public works projects on which contractors are required to sign
Project Labor Agreements:
1. Here is the study released in mid-July 2011 from National University’s Institute for Policy Research (based
in San Diego), with significant review from other economists :http://www.thecostofplas.com. This study
concludes that costs are 13 to 15 percent higher when California school districts build a school under a Project
Labor Agreement. In inflation-adjusted dollars, a Project Labor Agreement is associated with costs that are
$28.90 to $32.49 per square foot higher. (In my opinion, this is the most comprehensive study ever conducted
on the costs of Project Labor Agreements.) The study is also attached.
2. Two examples of projects in California bid without a Project Labor Agreement and then with a Project
Labor Agreement. The Burckhalter Elementary School in Oakland Unified School District went from
eight bidders to three bidders and the low bid increased 24 percent; the City of Pasadena’s Glendale Power
Plant had a net loss of one bidder and the low bid increased more than 15 percent. The winning contractor
declared that the higher bid was “100 percent due to the PLA.”
3. The Beacon Hill Institute at Suffolk University in Massachusetts has published studies comparing school
construction costs in the Boston area, in Connecticut, and in New York State with and without PLAs. The
studies conclude that Project Labor Agreements increased bid costs by 14 percent in the Boston area, by
almost 18 percent in Connecticut, and by 20 percent in New York State.
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Here is a link to the Boston study :www.beaconhill.org/BHIStudies/PLApolicystudy12903.pdf
Here is a link to the Connecticut
study:http://www.beaconhill.org/BHIStudies/PLA2004/PLAinCT23Nov2004.pdf
Here is a link to the New York
study:http://www.beaconhill.org/BHIStudies/PLA2006/NYPLAReport0605.pdf
4. A December 11, 2007 presentation by the California Department of Industrial Relations to the Director’s
Advisory Committee on Public Works included results from a study by Leland Saylor Associates (a California
construction cost analysis and management firm) indicating that 8+ bidders reduces cost 10-20%, 6-7 bidders
reduces cost 0-10%, 4-5 bidders increases cost 0-10%, 2-3 bidders increases costs 10-25%, and one bidder
increases costs 25-100%. This would seem to conform with classical economic theory (and common sense)
that more competition results in lower costs. See attached DIR slides.
5. Government-Mandated Project Labor Agreements: The Public Record of Poor Performance (2014
Edition)
Summary of PLA Research (2014 Edition) The Impact of Government-Mandated Project Labor
Agreements (PLAs): A Review of Key Reports and Studies (2014 Edition) (pdf) highlights excerpts from
studies pertaining to common points of contention during PLA debates. Arecord of PLA construction projects
experiencing an unfortunate pattern of cost overruns, reduced competition, delays in construction,
construction defects, safety problems and diversity issues. It is a key resource to find failed government-
mandated PLA projects in your community, illustrating why anti-competitive and costly government-
mandated PLAs are nothing more than a bad solution in search of a problem.
6. Government Funded Study Finds PLAs Increase Costs and Offer Limited Value (June 2009)
A June 2009 study conducted by property and construction consulting firm Rider Levett Bucknall prepared
for the U.S. Department of Veterans Affairs (VA) Office of Construction and Facilities Management found that
PLAs would likely increase construction costs by as much as 9 percent on three of the five construction
markets (Denver, New Orleans and Orlando) in which the VA is planning to build hospitals.
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Project Labor Agreements – Impact Study for the Department of Veterans Affairs
7. Santa Cruz Metro Transit District Metrobase Project: 6 of 8 unresponsive bidders. Project bid September
12, 2012. Project not awarded until December 2012.
1) The project has nearly 1M in change orders (the project award was 13M)
2) In one of the narratives there is mention of contractor errors
3) There appears to be over $150,000 + in added architectural costs caused by delay in project completion
4) There is a spread sheet showing over $900,000 in added costs for delays
5) They needed to hire a new construction manager to oversee the errors and delays at a cost of 1.5M
6) The Owner's budget has increased by over 4M
7) Completion will be one year past contracted completion date (original was Dec, 2014, new is Fall of 2015)
8. Actual case studies in the Monterey County market demonstrate that a PLA will result in fewer local jobs
not more. Without Project Labor Agreements, 56% of the money spent stays in the local economy. With PLAs,
only 10% does.
9. Disastrous bid results under the Contra Costa Community College District PLA.
A. Contra Costa College New College Center
a. Bid results 10.2% over low engineer’s estimate of $45M
b. General Contractor from out of county
c. Only 2 subcontractors from Contra Costa County
d. 1 out of state contractor
B. Los Medanos College Student Services Remodel
a. Bid results 9.8% over high engineer’s estimate of $15M
b. General Contractor from out of county
c. Only 2 subcontractors from Contra Costa County
10. $26M is the cost of PLAs at West Contra Costa USD to fund three updated construction bids for projects
at Kennedy High, El Cerrito High and Coronado Elementary. This37% increase over the $44.8 Million allocated
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by Measures J, D & E is the cost of government-mandated Project Labor Agreements (PLAs). WCCCUSD has
had a PLA in place since 2000. Learn more. Also see attached CC Times Article: Pricey school construction
spending at WCCUSD.
11. Oxnard Union High School District new Rancho Campana High School bid coming in 20% over
estimates. The cost of the project had been estimated to be $49 million while the price tag now stands at $58
million. GC blames PLA. Latest projected cost is $78.2M.
12. South San Francisco school starts amid construction project
When school started the fifth grade classrooms had not been completed due to construction delays. The
district says part of the construction delays at Buri Buri Elementary School was due to roofing materials that
didn't arrive on time. In fact, this is not the only school in the district that's behind in construction.
The district has used up all the funds from the $162 million bond for school improvements and ran out. It
moved $10 million from its general fund to complete projects because of increased costs.
South SFO has been using Project Labor Agreements since 2011.
13. EBMUD conducted a survey of its union and non-union contractors who bid district projects about
Project Labor Agreements.
a. 100% said PLAs increase costs
b. 64% said PLAs were a disincentive to bid
14. Southwestern Community College National City Higher Education Center project failed to garner the
required 3 bidders for the following trades and rebid them PLA-free:
· BP 01 – Surveying (Prof licensed surveyor)
· BP 02 – Final Clean (B or D-63)
· BP 03 – Earthwork & Site Demo (A or C12 & C21)
· BP 04 – TI Demo (C-21)
· BP 06 – Masonry (C-29)
· BP 10 – Misc Metals & Stairs (C-51)
· BP 11 – Non-Lab Casework (C-6)
· BP 14 – Sheet Metal (C-43)
· BP 18 – Flooring (C-15)
· BP 24 – Elevator (B or C-11)
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· BP 25 – Fire Protection (C-16)
See District Website for ALL project information
Please do the right thing and postpone this vote until you can do your due diligence.
Eric Christen
Executive Director
Coalition for Fair Employment in Construction
www.opencompca.com
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