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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 1 Section Name: STUDY SESSION Account Number: 10-1311 File ID: 25-10615 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: City Manager's Office
MEETING DATE: November 17, 2025
SUBJECT:
Community Workforce Agreement for City Capital Projects — Direction RECOMMENDATION:
Provide direction on a Community Workforce Agreement for San Mateo and guiding principles for potential negotiations.
BACKGROUND:
The San Mateo County Building and Construction Trades Council (SMCBCTC) requested during public comment at the August 18 City Council meeting that the City enter into a Community Workforce Agreement with them. During Reports and Announcements, the Council then directed staff to research CWAs for the earliest possible future Study Session. This report presents an overview of CWAs from Bay Area public agencies, discussion of the potential provisions in a negotiated CWA, a recommended process for considering adoption of a CWA, and recommended guiding principles for CWA negotiations.
Overview of Community Workforce Agreements
CWAs and Project Labor Agreements (PLAs) are agreements between one or more labor organizations and a public agency that establish the terms and conditions of work for the construction of one or more capital projects. CWAs differ from PLAs in that CWAs generally apply to all agency projects that meet certain criteria, whereas PLAs apply to a single project.
CWAs/PLAs are negotiated agreements that are unique to each agency or project. CWAs are typically crafted to achieve some form of social policy goals through criteria for local hiring and/or access to apprenticeships. Most CWAs/PLAs include the following standard elements:
• Standards for wages and benefits;
• Provisions that prohibit workers from engaging in strikes, work stoppages, slowdowns, and other dispute mechanisms;
• Requirements that contractors hire workers who are referred from union hiring halls except for minor exceptions for “core workers”;
• Requirements that non-union workers pay dues or fees to the applicable union while employed on the project; and,
• Dispute and grievance resolution procedures.
CWAs/PLAs differ from traditional collective bargaining agreements in that collective bargaining agreements are between the individual craft unions and contractors/contractor organizations, while a CWA/PLA is between a consortium of different craft unions and the public agency awarding a construction contract. CWAs are included in the bidding documents for construction projects with a requirement that all contractors and subcontractors who are awarded construction contracts must comply with the provisions of the CWA. CWAs supplement or supersede existing collective
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bargaining agreements between the individual craft unions and contractors but essentially require compliance with the master labor agreements (MLAs) of all craft unions.
Initially, PLAs primarily covered extensive construction projects, such as San Francisco International Airport (SFO, 1995) and the Port of Oakland (1999), where the value of the covered work exceeded $1 billion. More recently, jurisdictions began applying CWAs/PLAs to projects of significantly less value. Also, recent PLAs typically cover multiple projects in a single PLA, either by listing covered projects or by setting a minimum dollar threshold for covered projects (as small as $500,000 - $1 million).
Discussion
In preparation for this Study Session, staff interviewed representatives from other public agencies, and reviewed CWAs, staff reports, and Council presentations from multiple agencies and municipalities. Table 1 provides a listing of municipalities and one county reviewed to date.
Table 1: Peer Municipal Agencies Researched
Berkeley Dublin Daly City Foster City
Hayward Mountain View San Mateo County Watsonville
Staff also reviewed published CWAs/PLAs from SamTrans, San Bruno Park School District, SFO, San Francisco Public Utilities Commission (SFPUC), and the San Mateo County Community College District (SMCCCD).
Staff’s research of CWAs at other agencies revealed a variety of opportunities, challenges, and provisions that inform the City’s process. The experiences of these other agencies are reflected in the discussion below regarding provisions and exemptions.
Negotiated Provisions of CWAs/PLAs
In addition to the previously mentioned standard provisions of CWAs/PLAs, there are several elements of CWAs/PLAs that are typically negotiated. These range from the types of projects covered to benefit structures and local or targeted hiring.
Provided below are some of the key elements staff identified that would likely be included in a negotiation process.
Project Criteria
Many CWA/PLAs include provisions that exclude projects of less than a specified value or certain types of projects or work.
Table 2 provides a partial summary of project thresholds established by other agencies in the Bay Area.
Table 2: Agency Project Thresholds
Agency Project Threshold
Berkeley (2020) $500,000
Daly City (2026 execution) $1,000,000
Mountain View (2024) Project Specific Approach with five Learning Projects San Bruno Park School District (2020) Measure X funded Projects San Francisco Airport Commission (2024) Terminal, West Field, and Infrastructure Improvement Project
San Francisco Public Utilities Commission (2007) Water System Improvement Project San Mateo County (2025) $3M – 2026, $2.5M - 2027, $2M – 2028, $1M + CPI – 2029
San Mateo County Community College District (2007) Project Specific Approach with Nine Learning Projects
San Mateo County Transit District South Base Battery Electric Bus Charging Infrastructure Project
San Jose (2022) $1,050,000 +Annual CPI
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Santa Clara Valley Water District (2022) $2,000,000
Watsonville – (2014) $600,000 (rescinded 11/5/2025)
Table 3 provides base exclusions provided by SMCCLC. The peer agencies we reviewed have typically negotiated exclusions beyond the base agreement exclusions provided in the SMCBCTC template. Table 4 provides examples of the types of agreement exclusions that have been negotiated and the respective agencies.
Table 3: SMCBCTC Base Agreement Exclusions
Template Exclusions
Dollar threshold for applicable projects with 5-year term No termination clause
Table 4: Peer Agencies Negotiated Exclusions
Peer-Negotiated Exclusion Examples
Excludes work performed by Agency employees
Excludes maintenance projects/work
Excludes certain types of work: paving projects, complex infrastructure projects requiring certain licensed trades, water and wastewater projects, Utility projects, etc. Exclusions for Federal, State, or other agency review/approval authority that prohibits CWA terms, which is usually related to grant funding
If only one bid is received, the project can be rebid without the CWA provisions Identifies specific projects, or dollar threshold for applicable projects, with 3–5-year term Termination clause with 90-day notice
Project thresholds and exemptions can be important for the following reasons:
•Ensuring smaller contractors/subcontractors have opportunities to bid on City projects: Based on other agencies’ experiences, smaller contractors and subcontractors are hesitant to bid on projects that are subject to a CWA/PLA.
Smaller contractors are more likely to be local nonunion firms, and many have little or no experience complying with the provisions of such agreements. Many smaller contractors have a standing workforce, and PLAs generally make it difficult or impossible to use non-union contractors’ existing workforce. This is a particularly significant issue for specialized contractors, and contractors where English is a second language. Smaller, non-union contractors also view the obligation to pay into union trust funds for pension and health as a disadvantage because (1) it is on top of benefits they already pay, and (2) it effectively reduced the cash paid to employees under prevailing wage laws. In addition, the administrative burden of documenting compliance with the agreements can be significant, and small firms may be less likely to have the staff to support the effort needed.
Lack of interest is often particularly acute with subcontractors, which are often small, specialized and/or disadvantaged firms.
•Ensuring the City’s projects, especially pavement, utility, or other time-sensitive projects, are not delayed or become too expensive due to a lack of bids from responsive responsible contractors: CWAs bind both contractors and subcontractors awarded City construction contracts. Nearly all the City’s construction contracts include subcontractors; therefore, even if the prime contractor is willing to comply with the CWA, they can only submit a bid if they can find the subcontractors (including small and/or specialized subcontractors) they need for their team.
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As part of staff’s initial research into how project criteria (dollar thresholds and exemptions) may affect bid results, staff reviewed the City’s bid results since 2019, capturing one year before the pandemic, during the pandemic, and the most recent results.
Table 5 summarizes the City’s public works projects with bids that exceeded $2 million since 2019, including the number of bidders and subcontractors for each project. Attachment 1 provides the list of individual projects summarized in Table 5 with the low bid dollar amount and categorized by type of public works project (facilities, parks, stormwater, sewer, streets, and transportation).
Table 5: City Bid History for Projects over $2 million* Year No. of
Projects
No. of
Bidders
(Low–high)
Average
Bidders/
Project
No. of Sub-
contractors**
(low-high)
Average Sub-
contractors/
Project***
2019 9 3-10 5.4 0-7 3.6
2020 3 3-6 4.3 4-7 5
2021 0 N/A N/A N/A N/A
2022 7 1-7 3.9 2-6 3.7
2023 5 3-6 4.6 2-7 5
2024 4 2-5 3.5 1-5 3.3
2025 6 3-14 5.2 4-17 6.7
*Some Clean Water Program projects have been excluded from this data set because the program did not follow the City’s standard bidding process
**Number of subcontractors (subs) for the lowest responsible bidder *** Bid openings in 2025 to date
Key findings from the City’s bid history are as follows:
109 total projects were advertised to the public, 34 bids were over $2,000,000 with the following project type breakdowns
o14 Streets or Transportation (PW)
o15 Clean Water Program (PW)
o2 Playground Improvements (Parks)
o1 Stormwater (PW)
o2 Facilities (PW)
Clean water program projects were generally the only type of project to exceed $10,000,000. There were seven projects that exceeded $10,000,000.
Aside from two major playground improvement projects with bids over $2,000,000, the Parks and Recreation Department generally had project bids between $50,000 to $275,000 for routine tree pruning and maintenance services. These contractors were sole providers and did not have any additional subcontractors. In recent years, the City’s streets and transportation projects have attracted a strong level of contractor interest, with as many as ten or more firms submitting bids on some projects. This high level of participation reflects a competitive bidding environment and suggests that the City’s current contracting process remains attractive and accessible to qualified contractors.
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Overall, the City’s engineering cost estimates have been closely aligned with actual construction bids, averaging within a few percent across all projects. Some larger variation occurs within individual projects, but that is expected given differences in scope, site conditions, and complexity of the projects.
In our research, we found that other agencies had experienced some issues with bidding projects, where in some years the projects only received one bid, and/or the bids received were 10% - 40% higher than the engineer’s estimate. Although it is not uncommon for that to occur from time to time on the City’s projects, there is no discernible trend in since 2019.
Bidding Responsiveness
To address the potential outcome of no or single bids on a project, some CWAs include provision(s) allowing the agency to rebid the project without the requirements of a CWA. Such a provision might also be triggered if poor bid results due to the CWA lead to bids significantly exceeding the Engineer’s Estimate.
Double Benefits
A typical component of CWAs/PLAs is the requirement that contractors pay various benefit contributions required under the unions’ collectively bargained agreements, whether the contractor employees are union or nonunion. A nonunion contractor will be required to pay the benefits portion of its nonunion workers’ wages to the union benefits plan even if they already have their own benefits program in place and even if the nonunion contractor’s workers may never be entitled to the benefits. This is referred to as the payment of “double benefits,” and it places nonunion contractors at a financial disadvantage when it comes to submitting bids as those costs become incorporated into increased project costs.
Wages are a less significant issue because contractors performing the City’s public works projects are required to pay prevailing wages. However, PLAs have the effect of reducing the portion of prevailing wage paid to employees because a larger portion of the total prevailing wage is devoted to trust fund payments. Prevailing wages are determined by the California Department of Industrial Relations (DIR) and are usually based on rates specified in collective bargaining agreements. All projects are required to register with the DIR to prove they are paying prevailing wages, except for new construction, alteration, installation, demolition or repair projects under $25,000 and maintenance projects under $15,000.
Use of Core Workers
CWAs/PLAs traditionally establish the requirement to use union job referral systems for much of the labor required on the project rather than a standing workforce employed by the contractor. The various trade union signatories operate “hiring halls,” and the hiring halls refer workers to the employers/contractors. One element that is typically negotiated in a CWA is authorization for a nonunion contractor or subcontractor to use a limited number (generally five at most) of members of its existing workforce (“core workers”) on a project in addition to workers from the hiring hall. Most agreements that allow the use of core workers include a requirement that one worker from the hiring hall be employed for each core worker used.
The difficulty utilizing standing workforce employees, the requirement to use employees from the hiring hall with whom the contractors are unfamiliar, and the limitations on the use of core employees can be a disincentive to bidding for some contractors, including small and minority-owned contractors, that maintain a standing workforce or have provided specialized training to employees.
Sole Operator/Small Operator Carveout
Another provision sometimes included in CWAs/PLAs are exemptions (“carve-outs”) for sole proprietors, small contractors, or other targeted firms that the agency does not want to exclude from bidding. Such exemptions are often capped at a maximum percentage of the contract amount.
Duration of Agreement
Of the regional peers’ CWAs reviewed by staff, agreement durations are between three and five years. This allows sufficient time to review the effectiveness of the CWA/PLA and evaluate outcomes, while also providing an opportunity to negotiate a new CWA that addresses any lessons learned in terms of achieving the City’s policy objectives and resolving
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any unintended consequences. Often Building Trades Councils propose “evergreen” clauses in PLAs, providing for automatic rollovers upon expiration unless the legislative body affirmatively opts not to continue the PLA.
Local Hire/Apprenticeships
In exchange for establishing CWAs, agencies have requested that the CWA give preference to local residents (“local hire”) when referring workers to the contractor/employer and/or create new apprenticeship positions for residents or focus on “Targeted workers” who are disadvantaged. Agreements with targeted hiring provisions require contractors to target hiring percentages for certain categories of individuals for projects. Examples include residents of the agency or graduates from local schools, veterans, public assistance recipients, at-risk youth, survivors of human trafficking, or individuals emancipated from foster care, formerly incarcerated, homeless, or who are unemployed for a year and/or low income. A review of the local hire and targeted hiring performance in peer agencies’ CWAs indicates that local hire goals can be challenging to meet, especially if stacked.
Apprenticeship and pre-apprenticeship targets appear to be more achievable. Apprenticeships typically focus on percentage goals but could be negotiated on a per-individual basis for a defined incremental dollar value of the project. In the latter situation, CWA peer agreements could require that contractors hire one new apprentice for the first $1 million, as determined by the Engineer’s Estimate. Above an additional dollar threshold, contractors would be required to hire an additional apprentice. In addition, agreements usually establish a minimum percentage of apprentice hours worked on a project.
Examples
The County of San Mateo and the City of Mountain View were selected as examples due to their recent experience implementing CWAs/PLAs in a post-COVID bidding environment. Both the County of San Mateo and the City of Mountain View have comparable capital budget capacities and deliver projects of similar type and scale. San Mateo County also draws from a similar pool of local and regional contractors, making their project examples particularly relevant should the City of San Mateo proceed with its own CWA implementation efforts. Additionally, as seen in Table 2 above, there are generally two types of CWAs negotiated, one focuses on a dollar threshold for projects, and the other being project specific that focuses on a set number of projects and a learning period. The County of San Mateo and the City of Mountain View provide examples of each CWA form.
Also provided below are some lessons learned from the City’s Wastewater Treatment Plant (WWTP) PLA and the City of Watsonville’s PLA, which is currently under renegotiation. Though Watsonville is a smaller city with a different set of geographic and demographic characteristics, there may be some lessons to be learned from this example.
San Mateo County’s CWA
The San Mateo County Building and Construction Trades Council and affiliated unions would apply to County public works projects awarded over a five-year term, beginning July 1, 2026, with an engineer’s estimate or cumulative bid amount above the following monetary thresholds:
• $3 million or more for projects awarded on or after July 1, 2026 • $2.5 million or more for projects awarded on or after July 1, 2027 • $2 million or more for projects awarded on or after July 1, 2028 • $1 million or more for projects awarded on or after July 1, 2029, with this threshold adjusted annually thereafter based on the California Construction Cost Index
The City of Mountain View’s CWA
While the County of San Mateo focused on dollar thresholds to determine which projects qualify for the CWA requirements, the City of Mountain View’s CWA commits to a project specific approach in which the CWA requirements will apply to five specific projects.
Mountain View’s CWA covers all phases of the following projects:
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1. Shoreline Boulevard Bus Lane and Utility Improvements
2. Shoreline Boathouse Café Expansion
3. Public Safety Building
4. Plymouth/Space Park Realignment
5. Charleston Transit Corridor
Wastewater Treatment Plant (WWTP) PLA – Lessons Learned The only real project experience that the City of San Mateo has with PLAs is on the WWTP Upgrade and Expansion Project, which is still in progress today. There were several lessons learned on this project that could be considered as part of future negotiations if staff is directed to proceed.
The WWTP PLA did not detail the reimbursement for eligibility for craft parking fees or bridge tolls, so it defaults to the union agreements to determine what needs to be covered by the prime contractor. If this is not detailed more clearly, it could add cost to future projects if there is insufficient nearby parking, because additional fees or busing may be needed to accommodate the subcontractors. The time to walk from the available parking is also included in the hourly wage, which can cut down on production time for the workday. The references to other union agreements need to be clear that the CWA is the controlling document so that it supersedes the union agreements.
There were challenges in finding local union workers for certain trade work that had the necessary certifications or experience. It would be helpful to allow more flexibility for the prime contractor to look at additional union halls in the region to get the workers needed.
The challenges in finding qualified union workers also highlight the lack of data available from the unions that identifies the trade workers‘ availability, certifications, safety training, etc. Additional reporting requirements would help the City evaluate the benefits of the CWA and provide metrics to consider in future negotiations. There is certain work related to the overall project that could be considered for exclusion from the union labor requirements. If the prime contractor is not a union member, allowing them to do certain activities related to construction maintenance and site cleaning would be beneficial. Some examples would be stormwater controls, solid waste handling, temporary bathroom maintenance, maintenance of the on-site equipment and laydown areas, etc. A similar consideration would be to allow a percentage of the work to not be union labor, such as an 80/20 split.
Watsonville PLA
The Watsonville PLA provides useful information because on November 5, 2025, a PLA that had been in place since 2014 was repealed by the City Council. The PLA applied to all capital projects that had a dollar value of $600,000 or more; however, staff were finding that it had become difficult to get sufficient bids on projects, and they were significantly more expensive than the design estimates. Staff had proposed raising the threshold for projects to $1,500,000 and limiting the type of projects the PLA covered. It appeared that one of important considerations in negotiations is the type of project that the PLA applies to. In this case, the City Council directed staff to diligently work with the Trade Council to get another PLA in place as soon as possible.
Staff’s main takeaway from this example is that it could benefit San Mateo to get additional data through a learning period before setting a dollar threshold or identifying the applicable projects. That way the data could more easily support negotiating the terms of a PLA with the Trade Council and ensure the City can analyze the benefits to San Mateo residents.
Dollar Threshold Approach Compared to the Project Specific Approach Staff’s research indicates that the administration of a CWA is very time-intensive, with some agencies employing dedicated staff to administer their programs. In addition to staff required to document contractors’ compliance with agreement provisions, CWAs typically require the creation of a Joint Administration Committee (JAC) partially comprised of City staff that meet regularly to monitor projects under construction. Administration of a CWA would likely require the addition of at least one new staff position with subject matter expertise and a third-party administrator (TPA). The TPA would manage the on-boarding and support of contractors as well as the tracking and monitoring of community benefit goals like local hire and apprenticeship.
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The advantage of starting with the project specific approach with a set number of designated projects is that it will allow staff to focus on a smaller number of projects of higher value and see how it affects costs especially due to sub-coverage issues, and whether it bends the curve on creating new local apprenticeships. Additionally, it will give staff an opportunity to assess the workload impacts prior to entering into future discussions to include more projects. It will also allow staff to complete thorough data collection and analysis to better understand the benefits and challenges a CWA presents. These subject matter experts can provide data-driven reports to show lessons learned and how best a CWA can benefit the San Mateo community and inform future agreement iterations.
Staff’s Recommended Guiding Principles for CWA Negotiations If the Council directs staff to enter into negotiations for a CWA, staff has a recommended list of guiding principles for negotiations geared toward ensuring the CWA benefits the City of San Mateo, and its businesses and residents to the maximum extent possible.
Recommended Guiding Principles
Whether the City settles upon a dollar threshold or a learning period, require union reporting to allow for a data- driven approach so the City can analyze the benefits to the San Mateo community and act responsively. Provide flexibility to look beyond the San Mateo labor pool when there is a clear evidence-based need to do so. Include provisions that prioritize the efficient use of staff resources, including those related to CWA administration and project delivery (e.g., pre-job meetings).
Ensure the City’s capital projects will continue to be delivered in a timely and cost-effective manner by allowing alterations to CWA requirements when there are too few bids or bids are significantly more expensive than estimated.
Ensure that competition and disputes between labor and building trades organizations (e.g., carpenters unions and labor unions) are handled by these parties directly rather than facilitated by the City. The CWA should not impact the City’s ability to use outside sources (e.g., grants) to fund projects. Include a termination clause to allow flexibility should there be significant job or market shifts affecting City projects, or other reasons to terminate the CWA.
Provide staff the authority to negotiate with the SMCBCTC/unions on a CWA that ensures all the guiding principles are represented.
Next Steps
Staff is seeking feedback on the following questions:
1. Should staff attempt to negotiate a CWA with the SMCBCTC? Or
If the answer to Question 1 is yes:
2. Does Council concur with the recommended guiding principles for attempting to negotiate a CWA?
3. Should the City pursue a project specific approach based on a number of projects or a dollar threshold approach? If it’s a project specific approach, should it start with 5 projects? If it’s a dollar threshold approach, should the threshold begin at $5 million, $3 million, or $2 million? BUDGET IMPACT:
There is no direct fiscal impact to exploring a CWA.
ENVIRONMENTAL DETERMINATION:
This item is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
NOTICE PROVIDED
All meeting noticing requirements were met.
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ATTACHMENTS
Att 1 – Project Bid Summary 2019 – Present (updated 11/14)
STAFF CONTACT
Zachary Reda, Senior Management Analyst
[email protected]
(650) 435-0823
Christina Horrisberger, Assistant City Manager
[email protected]
(650) 435-0010
Matt Fabry, Public Works Director
[email protected]
(650) 522-7309