Burlingame City Council February 7, 2022
Approved Minutes
1 BURLINGAME CITY COUNCIL
Approved Minutes
City Council Study Session Meeting on February 7, 2022
1. CALL TO ORDER
A duly noticed meeting of the Burlingame City Council was held on the above date via Zoom Webinar at 6:00 p.m.
2. ROLL CALL
MEMBERS PRESENT: Beach, Brownrigg, Colson, O’Brien Keighran, Ortiz MEMBERS ABSENT: None
3. STUDY SESSION
a. PRESENTATION ON PROJECT LABOR AGREEMENTS (PLAS)
ACA Spansail explained that the City Council requested that staff organize a study session regarding Project Labor Agreements. He stated that the purpose of the presentation is to analyze PLAs for large public contracts in the city, and to understand the legal and procedural impacts that may accompany their use. He noted that this is not an exhaustive study of all potential impacts of a PLA, nor is it an endorsement or repudiation of using these agreements in the future.
ACA Spansail stated that the presentation would not go into any detail about private development agreements within the city. Instead it would focus on public contracts.
ACA Spansail reviewed the definition of a PLA. He explained that a PLA is a project labor agreement that is also known as a community workforce agreement. This is a type of pre-hire collective bargaining agreement between a developer (or public agency), labor unions, and contractors.
ACA Spansail stated that he thought the best way to discuss PLAs is to review the 5 Ws:
• Who is a party to a PLA
• What does a PLA control
• Where are PLAs often used
• When is a PLA entered into
• Why are PLAs used (or not used) for public projects
Burlingame City Council February 7, 2022
Approved Minutes
2 ACA Spansail first reviewed the “Who”. He explained that there can be many parties to a PLA, but nearly all public agency PLAs will include: public agency (as developer), labor unions, and contractors. He stated that these are the negotiating parties. He added that once PLAs are negotiated, any contractors bidding on a City project would also agree to be bound by the terms of the PLA for the duration of the project.
ACA Spansail next reviewed the “What”. He explained that at PLA is a negotiated contract. Therefore, no two PLAs will be the same. However, most PLAs will include terms covering the following:
• Uniform wages
• Hiring procedures
• Worker benefits including fringe benefits like health insurance • Management rights
• Overtime pay
• Hours
• Work stoppages (strikes)
• Dispute resolution
• Working conditions (including schedules)
• PLA administration
ACA Spansail stated that these are not the only terms that can be included in the PLAs, but they are the ones most often included. He explained that most PLAs also include the percentage of project workers that are local and a lot of agreements will include apprenticeship programs.
ACA Spansail reviewed the “Where”. He explained that government-mandated PLAs are most often used for very high dollar value projects, or for all projects over a certain monetary threshold. He stated that while exceptions exist, threshold-based PLAs are generally used by large entities (San Francisco, San Jose, Sacramento), and project-based PLAs are generally favored by smaller jurisdictions.
ACA Spansail explained that in California, there are typically two types of PLAs that are used by governments:
• Project specific PLA – PLA is used on a specific and high dollar project. Once the project is over, the PLA ceases to exist. Examples of where these types of PLAs are used include new large buildings and major infrastructure upgrades
• Threshold PLA – These PLAs apply to all projects over a specific dollar amount. These are most often seen in larger cities.
ACA Spansail explained that San Francisco was one of the most recent cities to pass a threshold base for PLAs. He stated that in 2019, San Francisco passed the “Citywide Project Labor Agreement Ordinance,” which requires contractors in “Covered Projects” to:
• Use trade appropriate union hiring halls to hire workers and apprentices, and; • Pay fringe benefit contributions on behalf of workers directly to appropriate Union Trust Fund programs.
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3 ACA Spansail stated that under the San Francisco Ordinance, a “Covered Project” is a San Francisco Public Works or Parks and Recreation project with an estimated project value exceeding $1 million. He noted that certified local business enterprises are eligible for an exemption on projects up to $5 million.
ACA Spansail discussed smaller jurisdictions and PLAs. He explained that PLAs have not been used to the same extent in smaller jurisdictions around the Bay Area. However, threshold-based PLAs have been used in Berkeley, San Leandro, Hayward, Alameda, Martinez, and Concord.
ACA Spansail reviewed examples of PLAs in San Mateo County:
• Caltrain’s Peninsula Corridor Electrification Project (2015) • Half Moon Bay’s City Library Project (2016)
• South San Francisco’s Civic Center Plaza Project (2019) • City of San Mateo’s Wastewater Treatment Plant Upgrade and Expansion Project (2019)
He noted that these are all high dollar value projects, and the PLAs only lasted the length of the project.
ACA Spansail reviewed the “When”. He stated that PLAs are undertaken in the pre-hire phase of a project.
He explained that PLAs are negotiated before a project is bid. He noted that all bidders on a PLA project agree to be bound by the terms and conditions of the PLA through submission. He added that the PLA administration will continue throughout the life of the project or projects.
ACA Spansail reviewed the last W, “Why”. He stated that no two PLAs are the same, and therefore the reasons for and against their use is highly individualized to a specific project or series of projects. However, it is helpful to analyze the advantages and disadvantages that have been cited by those well-versed in their use.
ACA Spansail reviewed the advantages and disadvantages that were cited for PLAs by Gerald Mayer in his 2010 U.S. Congressional Research Service.
Advantages to PLAs
• A PLA provides uniform wages, benefits, overtime pay, hours, working conditions, and work rules for work on major construction projects
• A PLA provides contractors with a reliable and uninterrupted supply of workers at predictable costs for wages and benefits. PLAs prohibit strikes and lockouts. Because local unions are generally members of a national union, a union can recruit workers both locally and nationally. • A large project is easier to manage if there is a PLA. Instead of dealing with several unions that may have different wages and benefits and whose contracts may have different expiration dates, contractors must deal with a single collective bargaining agreement. • Because labor costs are predictable and because a PLA makes it easier to manage a large project, a PLA helps ensure that a project will be completed on time and on budget. • A PLA may help train workers by requiring contractors to participate in apprenticeship and training programs.
• A PLA can improve worker safety by requiring contractors and workers to comply with project safety rules.
Burlingame City Council February 7, 2022
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4 Disadvantages to PLAs
• PLAs can increase costs. Because a PLA sets standard labor costs and work rules, nonunion contractors cannot win bids based on lower costs. Nonunion contractors may choose not to bid on projects that are covered by a collective bargaining agreement. The result may be fewer bids and higher costs.
• If a PLA requires contractors to hire workers through a union hiring hall, contractors may not be able to use their own workers.
• If a contractor is able to use his own workers, the workers may have to join a union and pay union dues. If a contractor has to pay into a union pension plan, the employees may not be on the project long enough to vest in the plan.
• Nonunion contracts may operate more efficient worker training programs. • Instead of apprenticeship programs for a fixed duration, nonunion contractors can train workers for specific tasks.
• The Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) enforces federal wage, overtime, and other labor standards and either the federal Occupational Safety and Health Administration (OSHA) or states with their own plans enforce workplace health and safety standards.
ACA Spansail explained that staff is requesting City Council direction on:
• Whether further discussion should be scheduled regarding PLAs. • If so, what additional information should staff include in that presentation?
Mayor Ortiz asked about single project PLAs and how cities decide which projects should utilize a PLA.
ACA Spansail stated that it is usually only seen on the very high dollar projects. He gave examples of $30 million projects.
Councilmember O’Brien Keighran stated that the City doesn’t undertake too many large projects. She asked why a PLA wasn’t utilized for the Community Center. Parks and Recreation Director Glomstad stated that by the time PLAs were discussed for the new Community Center, it was a little late in the game, and it would have delayed the project.
DPW Murtuza stated that the Parks and Recreation Department undertook an analysis of the advantages and disadvantages of entering into a PLA for the new Community Center.
Griffin Structures Vice President John Hughes spoke about his company’s work as the construction management firm on the new Community Center project. He explained that by the time the City considered utilizing a PLA, the project would have been delayed at least six months. Instead, he explained that in the process of pre-qualifying the contractors to bid on the project, the City inserted language that a company would receive additional points for being a signatory to a union.
Mr. Hughes stated that without a PLA, the City is already required to pay prevailing wages for all the work that is done on a project. He noted that this is almost identical to the wages that are established in a PLA.
Burlingame City Council February 7, 2022
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5 Councilmember O’Brien Keighran asked if the City moves forward with PLAs, will it limit the number of businesses that will bid on a project. DPW Murtuza replied in the affirmative.
Councilmember Colson asked when staff anticipates another $50 million City project. She noted that she wasn’t including Broadway Grade Separation as that project wasn’t wholly under the City’s control. City Manager Goldman stated that she was unsure that the City has a $50 million project in the future. She discussed the need to upgrade City Hall but didn’t think that would cost $50 million. She added that last year when the topic of PLAs had come up, it was in reference to the Town Square project, which is a much smaller project.
Councilmember Colson stated that Burlingame School District has issued $100s of millions in bonds and is building all over the city. She asked if they are utilizing PLAs. City Manager Goldman stated that she didn’t know.
Councilmember Colson stated that she believed San Mateo Union High School District utilized PLAs. ACA Spansail replied in the affirmative.
Councilmember Beach thanked staff for the presentation. She stated that she was glad that the City was having the conversation about PLAs. She noted that it was a missed opportunity to not have this conversation prior to the new Community Center being built.
Councilmember Beach stated that prevailing wage on public land is required by law. However, she noted that retirement and health benefits are not required by law. She asked if she was correct that a PLA could require healthcare options for the workforce. ACA Spansail replied in the affirmative.
Councilmember Beach asked if she was correct that PLAs don’t require union labor. ACA Spansail replied in the affirmative.
Councilmember Beach stated that the Council received information prior to the meeting from the Labor Council that discussed successful PLAs. She noted that ACA Spansail had mentioned several of them but added that Millbrae’s Recreation Center also utilized a PLA. She asked how these projects were going.
DPW Murtuza stated that he spoke with South San Francisco’s Public Works Department. He discussed their issues with the PLA including the initial difficulty of setting up the PLA, the cost and time it took to administer the PLA, and delays to the project.
Councilmember Beach stated that in reading up on PLAs, she learned that they are utilized because they create a lot of predictability, prevent strikes, and make sure that the workforce is taken care of with good benefits.
Vice Mayor Brownrigg stated that one of the potential benefits of a PLA is the ability to prevent wage theft.
He noted that the Council worked to include language regarding wage theft in the Community Center project. He asked if the language proved successful on the Community Center project. Mr. Hughes replied in the affirmative. He noted that the contractor the City is using is a signatory to the union. As a result, the contractor is effectively bound by union requirements that would usually be established in a PLA. He
Burlingame City Council February 7, 2022
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6 added that a majority of the contractor’s subcontractors are union based. Moreover, the State requires that every contractor submit certified payroll records every month.
Mr. Hughes stated that prevailing wages doesn’t just establish wages; it also establishes the equivalent of health insurance premiums, fringe benefits, and training, etc.
DPW Murtuza stated that in cases where subcontractors and individuals have submitted claims to the City that they aren’t being paid the prevailing wage, the City will withhold funds from the contractor until the matter is settled.
Mayor Ortiz asked if he is correct that the City would negotiate a PLA with unions. ACA Spansail replied in the affirmative.
Mayor Ortiz asked if he was correct that when staff discussed non-union personnel being included on PLA projects, it would be hard to get the unions to agree to that. ACA Spansail stated that it would be the City’s responsibility to request this if the Council felt it was important. He added that the City could also ask for other groups to be used like the nonprofit Helmets to Hardhats.
Vice Mayor Brownrigg stated that the PLA doesn’t require union labor; instead it requires that a non-union shop adhere to the requirements of the PLA. ACA Spansail replied in the affirmative.
Mayor Ortiz opened the item up for public comment.
Mark expressed support for PLAs and asked the City to consider adopting a policy that would incorporate PLAs into City projects. (comment submitted via [email protected] ).
Bart expressed support for PLAs and asked that the City utilize them for future projects. (comment submitted via [email protected]
).
David Mauro stated that the PLA negotiations with South San Francisco went well, and he disagreed with DPW Murtuza’s characterization of that PLA. He asked that the City consider utilizing PLAs.
Rich Koenig voiced support for PLAs.
Mayor Ortiz closed public comment.
Councilmember Beach stated that a public works project on public land should have multiple benefits. She explained that one of the benefits should be making sure that the individuals working on the project have healthcare and retirement benefits. She added that she thought it was beneficial to the City to have local hiring requirements included in the PLA. She discussed creating opportunities for apprenticeships and hiring of women and people of color.
Councilmember Beach thought the City should explore a PLA pilot program for the Town Square project.
Burlingame City Council February 7, 2022
Approved Minutes
7 Vice Mayor Brownrigg discussed different pieces written about PLAs. He stated that there are benefits to having union workers on the job site. He expressed shock at the fact that in one year, union contractors invested $230 million in apprenticeship programs and generated 15,000 apprentices, while private contractors invested $28 million and generated 420 apprentices.
Vice Mayor Brownrigg stated that he wasn’t sure a PLA was beneficial to the City but thought it was a good idea for the City to further explore this option.
Councilmember Colson stated that the City doesn’t have any high dollar projects on the books. She thought a further exploration of the topic should be reserved until such a project is on the horizon.
Councilmember O’Brien Keighran discussed the great work that was being done on the Community Center.
She stated that she believed that if the system was working and ensuring workers prevailing wages and union benefits, she didn’t know if it should be messed with.
Councilmember O’Brien Keighran concurred with Councilmember Colson that this conversation could be tabled until a large project was on the horizon.
ACA Spansail asked if Council wanted an immediate follow up on this topic, or if the Council wanted to wait until a project of a certain dollar amount comes forward.
Councilmember Beach thought a PLA should be explored for the Town Square project.
Mayor Ortiz stated that he disagreed with Councilmember Beach because he believed that project was too small.
Vice Mayor Brownrigg concurred that PLAs should be done on a project by project basis for larger dollar amount projects. He asked staff to circulate a sample PLA.
Councilmember Colson stated that if the City doesn’t have a $25 million project, she didn’t think there was a need to utilize staff time on something that wouldn’t come to fruition for several years.
Mayor Ortiz suggested having the Council look at setting policy for very large projects above $20 million.
Vice Mayor Brownrigg stated that if the Council is setting a $15 to $20 million bar for utilizing PLAs then there was no need to study this item until a project at that level presents itself.
Councilmember O’Brien Keighran concurred with Vice Mayor Brownrigg.
Mayor Ortiz stated that this topic would be tabled until a larger project was on the horizon. He thanked staff for their work on this item.
Burlingame City Council February 7, 2022
Approved Minutes
8 4. ADJOURNMENT
Mayor Ortiz adjourned the meeting at 7:09 p.m.
Respectfully submitted
/s/
Meaghan Hassel-Shearer, City Clerk