MEMORANDUM OFFICE OF COUNCILMEMBER ANDREA CARDENAS DATE: TO: FROM: SUBJECT:
May 9, 2023 City Manager, Mayor and City Councilmembers Councilmember Andrea Cardenas Report on findings and recommenda1ons from the Labor Rela1ons Ad-Hoc Subcommi<ee Background On March 28, 2023, the Chula Vista City Council approved the establishment of a Labor RelaLons Ad-Hoc SubcommiOee comprising of Deputy Mayor Jose Preciado, and Councilmember Andrea Cardenas. Since then, the subcommiOee has held a series of meeLngs with various stakeholders to discuss issues regarding safety condiLons and enhancements for traffic control workers, the potenLal need for a contractor transparency ordinance, and the process to adopt a citywide project labor agreement (PLA). Safety Enhancements RepresentaLves from Laborers Local 89 brought forward an issue relaLng to safety hazards affecLng workers performing traffic control duLes. They have requested that our City follow the lead of both the City and the County of San Diego who have recently began the process of addressing these issues through policy amendments. Contractor Transparency Ordinance JurisdicLons throughout San Diego County have recently adopted Contractor Transparency Ordinances to protect workers and promote transparency in relaLon to City construcLon and right-of way projects. For the City of Chula Vista, this would primarily mean that contractors would be required to disclose subcontractor informaLon on projects being permiOed by the City of Chula Vista and that both contractors and subcontractors are following legal, safety, and labor standards. Citywide Project Labor Agreement (PLA) In March of 2020 with 68% of the vote, the voters of Chula Vista approved ballot measure “E” rescinding the ban on the city to enter into project labor agreements and authorized the city to conduct such negoLaLons and agreements. Measure E removed inconsistencies between City laws, and state laws that generally operate to disqualify ciLes with anL-PLA laws from receiving state funding for local infrastructure projects.
Conclusion As a result of a series of meeLngs with interested parLes, and the supporLng documents we received, it is the recommendaLon of this commiOee that Council supports that a referral be made to the City Manager’s office for the following: - Draa a municipal code amendment to address safety condiLons and enhancements impacLng traffic control workers. - Develop a labor transparency ordinance to be consistent with similar policies across the County of San Diego, and idenLfy City needs for ordinance enforcement. - Formally engage in the process to develop a citywide Project Labor Agreement (PLA) with input from the San Diego Building and ConstrucLon Trades Council. AOachments: City of San Diego Staff Report RE: Transparency Ordinance Subcontractor Transparency Models Laborers Local 89 LeOer to Council, 01/06/2023 The City of San Diego Staff Report
DATE ISSUED: May 18, 2022 TO: City Council
FROM: Office of Mayor Todd Gloria SUBJECT: Contractor Transparency Amendment to the Municipal Code and Local Coastal Program Primary Contact: Jessica Lawrence Phone: (619) 236-7156 Secondary Contact: Elyse Lowe Phone: (619) 446-5423 Council District(s): Citywide OVERVIEW: The Contractor Transparency Amendment will implement California state Business and Professions Code requirements regarding licensing and insurance for contractors. The Contractor Transparency Amendment will amend the Municipal Code to implement and comply with state law while also working to promote transparency for construction permits and right-of-way permits by requiring contractors to disclose subcontractor information on projects permitted by the City of San Diego. The goal of this ordinance is to create a culture of safety and legal compliance citywide while ensuring that labor standards are upheld. This ordinance seeks to advance the protection of workers’ rights; end labor exploitation by rooting out labor violations and unqualified operators; protect law-abiding contractors; and provide economic justice in the contracting process. PROPOSED ACTIONS: Approve the proposed Contractor Transparency Amendment to the Municipal Code and Local Coastal Program. DISCUSSION OF ITEM: The Land Development Code (LDC) of the San Diego Municipal Code (SDMC) provides the City's regulations for the development and use of property within the City of San Diego and provides information on zoning, subdivisions, grading and other related land use activities. The LDC is updated
regularly through comprehensive updates that promote in-fill development and streamline the permitting process, and through single-issue or topic-specific updates as needed. The California Business and Professions Code Division 3, Chapter 9 requires all persons performing contracting work on any project valued at $500 or more in combined labor and material costs to be licensed by the Contractors State Licensing Board. Exceptions are made for property owners performing their own work, known as an “owner-builder.” These state law requirements are not currently reflected in the City’s Municipal Code. The proposed Contractor Transparency Amendment would codify the state regulations into the City’s Municipal Code and ensure that contractors and subcontractors have all required certifications, trainings, and insurance by amending Chapter 12, Article 9, Division 1. The new regulations will be codified as SDMC as Section 129.0121, “License and Insurance Requirements for Contractors and Subcontractors” and will apply to applications for building, electrical, plumbing/mechanical, demolition/removal, grading, public right-of-way and fire permits for the following development activities: • Residential and mixed-use development consisting of or involving twenty or more dwelling units, including single dwelling unit subdivisions. • Commercial or industrial development that proposes 20,000 square feet or more of tenant improvements or 20,000 square feet of additional gross floor area. • Any development that requires a Public Right-of-Way Permit. To demonstrate compliance with the regulations, the applicant will be required to provide the following: • A list of all project contractors and subcontractors that includes the following information for each contractor and subcontractor: o Valid worker’s compensation insurance information, including policy number and expiration date; o State contractor license number, license category, and license expiration date; o City business license number and expiration date; o State and federal tax identification numbers; and o Whether the contractor or subcontractor has any pending and/or prior enforcement actions for any state or federal labor violations or paid any penalties to a government agency related to the provisions of the California Labor Code. • For Public Right-of-Way Permits, the applicant shall also state whether the work to be performed requires safety certifications, safety trainings, professional certifications, or professional licenses. If any of these apply, the applicant shall provide the following: o A list of the certifications, trainings, and/or licenses required for the work; and
o Confirmation that the applicant’s employees or the employees of the relevant contractor, subcontractor, or agent have the required certifications, trainings and/or licenses, specifying the contractor, subcontractor, or agent if applicable. Applicants will be required to provide the information at the time of permit issuance. If the applicant is unable to provide the information prior to permit issuance, or in the event the permit holder adds or changes contractors or subcontractors following permit issuance, the applicant will be required to provide the information prior to the new contractor or subcontractor starting work. In the event that any of the required information changes for any of the contractors or subcontractors, the applicant will be required to provide the information prior to the contractor or subcontractor undertaking any further work on the project. Compliance with the Contractor Transparency Amendment will be enforced by the Development Services Department at the time of permit issuance and will document any submitted changes following permit issuance. Any work performed without satisfying the requirements of the regulations shall be deemed performed without the required construction permit and shall be subject to code enforcement actions and remedies. The Office of Labor Standards and Enforcement will provide additional oversight through a stakeholder working group. According to the Contractors State Licensing Board, unlicensed contractors lack accountability and have a high rate of involvement in construction scams. Additionally, unlicensed contractors are unfair competition for licensed contractors who operate with bonds, insurance, and other responsible business practices. In addition to enforcing the requirements of the California Business and Professions Code, the Contractor Transparency Amendment furthers the City’s commitment to transparency, safety, and accountability; protection of workers’ rights; rooting out labor violations and unqualified operators; and the protection of consumers and law abiding contractors. The Contractor Transparency Amendment was presented to stakeholder groups that included City staff in implementing departments, construction industry, building industry, labor and union stakeholders. Per SDMC Section 111.0107(a)(2), because the proposed amendments do not include amendments to the City’s zoning regulations, a review and recommendation by the Planning Commission is not required. The Contractor Transparency Amendment implements California state Business and Professions Code requirements regarding licensing and insurance for contractors. The Contractor Transparency Amendment will amend the Municipal Code to implement and comply with state law while also working to promote transparency for building permits and right-of-way permits by requiring contractors to disclose subcontractor information on projects permitted by the City of San Diego. The goal of this ordinance is to create a culture of safety and legal compliance citywide while ensuring that labor standards are upheld. This ordinance seeks to advance the protection of workers’ rights; end labor exploitation by rooting out labor violations and unqualified operators; protect law-abiding contractors; and provide economic justice in the contracting process. Therefore, staff recommends that the City Council approve the proposed Contractor Transparency Amendment to the Municipal Code and Local Coastal Program.
City Strategic Plan Goal(s)/Objective(s): The Contractor Transparency Amendment directly supports the Strategic Plan’s Priority Areas: Create Homes for All of Us, Protect and Enrich Every Neighborhood, and Foster Regional Prosperity by ensuring that residential, non-residential and infrastructure projects are constructed efficiently and safely by qualified contractors and subcontractors. Fiscal Considerations: None. Costs associated with implementation of this ordinance would be covered by project applicants. Charter Section 225 Disclosure of Business Interests: N/A; there is no contract associated with this action. Environmental Impact: The CEQA and Environmental Policy Section of the Planning Department has reviewed the Contractor Transparency amendments and have determined that this activity is not subject to CEQA pursuant to CEQA Guidelines Section 15060(c)(2) as the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment. Previous Council and/or Committee Actions: This item will be heard at the Land Use and Housing Committee prior to Council. Key Stakeholders and Community Outreach Efforts: Key Stakeholders include neighborhood and community planning groups, residents, property owners, business owners, and contractors, subcontractors and their workers. Jessica Lawrence Elyse W. Lowe Director of Policy Director of Development Services Subcontractor Transparency Models
This type of provision can be added to city code sections concerning right-of-way permits orconstruction permits, or changes can be made administratively to manuals, regulations, orforms. The practicalities of implementation can be just as important - issues such as forms, howinformation is stored in databases and if that information is accessible to the public, and what alocality’s resources are for inspections and permitting enforcement.
Subcontractors and safety in the public rights-of-way
(a) As a requirement of obtaining a Public Right-of-WayPermit, all applicants shall disclose tothe City prior to the issuance of the Permit the identity of each contractor, subcontractor, or agentthat will perform work authorized by the permit in the right-of-way, whether a sole proprietor,independent contractor, company, or other entity. If there are any changes to the entities that willperform permitted work in the right-of-way after submission, the applicant shall update the Citywith new information within 24 hours. (b) The applicant shall provide documentation demonstratingthat each contractor, subcontractor,or agent that will perform permitted work in the right-of-way is properly licensed to work in thestate and has legally required workers’ compensation coverage. The applicant shall verify if acontractor, subcontractor, or agent has any pending enforcement actions for California LaborCode violations. (c) The applicant shall state in its applicationwhether the work to be performed requires certainsafety certifications, safety trainings, professional certifications, or professional licenses(collectively, “certifications”). If so, the applicant shall specify the certifications required for thespecific work, and affirm that applicant’s employees or the employees of the relevant contractor,subcontractor, or agent have such certifications, specifying the contractor, subcontractor or agentif applicable. (d) A copy of the permit obtained shall be maintainedon the job site by the contractor or anyoneperforming work and it shall be made available for inspection upon request by any officer oremployee of the city. (e) Enforcement
a. Any work performed prior to satisfying therequirements of this Section shall bedeemed performed without the required permits. Failure to abide by the requirements ofthis Section shall result in (1) revocation of any permit issued by the City; (2) issuance ofa stop work order. b. Any violation of this Section shall be deemeda misdemeanor violation. Theapplicant shall pay applicable penalties or fines prior to the issuance of any new permit. c. The Office of Labor Standards has non-exclusiveauthority to enforce this Section.The OLSE will promulgate regulations regarding enforcement as necessary, including rules creating a mechanism for community organizations to file complaints andparticipate in enforcement.