HomeMy WebLinkAboutItem 7.2 CWA Themes, Data, and Negotiation TermsItem 7.2:
Review of Community Workforce
Agreements: Themes, Data, and
Proposed Negotiation Terms
July 21, 2020
Background
•2019: BTC approached the City about
establishing a CWA on certain capital
improvement projects.
•December 3, 2019: City Council report
introducing general concepts and key provisions
of CWAs.
–Council directed staff to undertake additional
research, interview agencies with experience
negotiating and administering CWAs.
Report on Agency Outreach
•Staff conducted a series of meetings with various
agencies that employ some form of a CWA:
–City of Berkeley
–City of Hayward
–Lowe Consulting
–Port of Oakland
–EBMUD (negotiated CWA, not fully executed)
•Identified five common, key themes that arise in the
negotiation and administration of CWAs.
Theme 1
Each agency witnessed an increase in project costs
after the CWA, at least some of which is likely
related to the CWA.
Theme 1: Each agency witnessed an increase in project costs
after the CWA, at least some of which is likely related to the
CWA.
•Hayward Example:
–18% ($850,000) increase in project cost.
•EBMUD contractor survey:
–CWAs reduce competition by reducing pool of contractors willing to bid.
•Direct costs of admin./compliance:
–~0.5% of project costs, commensurate with community benefits.
Potential Term &
Condition:
Waiver or partial waiver of
CWA provisions if project
does not receive a set
minimum number of bids or
bids exceed a given
percentage over the
engineer’s estimate.
Theme 2
The Bay Area’s tight labor market means union
hiring halls are nearly empty, resulting in project
delays because contractors are unable to fill
positions.
Theme 2:The Bay Area’s tight labor market means union
hiring halls are nearly empty, resulting in project delays
because contractors are unable to fill positions.
•CWAs require use of
union labor, some “core
workers.”
•Constraints in tight labor
markets.
•Impacts on project
delivery.
–Hayward Public Library
delayed over 600 days in
part to this issue.
Potential Term &
Condition:
Allow contractors to
bypass core worker
provisions if they are
unable to fill a role from
the hiring hall within a
specified amount of time.
Theme 3
Local hire provisions in CWAs have not met
agency goals for a variety of reasons. However,
CWA provisions requiring the use of local
apprenticeship programs (and certain categories of
apprentices) have the potential to develop a much-
needed pipeline of skilled labor to support the Bay
Area’s ongoing growth and meet local job-creation
goals.
Theme 3:Local Hire Performance and Apprenticeship
Potential
•Hayward and Berkeley
missed targets, while BART
and Alameda County GSA
met or exceeded targets.
•Functional issues with
current arrangements.
•Success requires commitment
of contractor on front end.
•Economic dynamics further
complicate such provisions.
Potential Term &
Condition (1):
Given lack of policy
success, the City Council
may not wish to direct
staff not to seek a local
hire provision.
Theme 3:Local Hire Performance and Apprenticeship
Potential, 2
•Apprenticeships already mandated by State law.
•No thresholds for retaining apprentices.
–AC Transit BRT: one new apprentice for every 20,000 labor hours for a min. 1,000 labor hours.
•Success requires concerted recruiting and outreach.
•No existing MC3 programs within the Tri-Valley, but others in the County serve the area.
Potential Term &
Condition (2):
•Set minimum number of hours
worked for apprenticeships.
•BTC to develop, for approval
by the City, an educational
outreach program that details
how the trades will work with
the school district and larger
community to recruit
residents for pre-
apprenticeship programs.
Theme 4
Administrative burdens of CWAs impact agencies
and contractors, particularly smaller contractor
firms.
Theme 4:Administrative burdens of CWAs impact agencies
and contractors, particularly smaller contractor firms
•CWAs require dedicated staff
for administering agencies
and contractor firms.
–May be achieved through third-
party administrators.
•Administrative burdens can
dissuade smaller contractor
firms from bidding
altogether.
•Berkeley example: immigrant
owned electrician firm.
Potential Term &
Condition:
Include a carve out for small
businesses, releasing them
from the requirements of
the CWA to ensure the
agreements promotes
rather than precludes
smaller contractors from
bidding and receiving work.
Theme 5
Equity issues remain regarding union fringe-
benefit contribution requirements by non-union
contractors and employees.
Theme 5:Equity issues remain regarding union fringe-benefit
contribution requirements by non-union contractors and
employees.
•CWAs require contractor
employer payments to union
benefit trust funds, regardless if
they are union or non-union.
•Benefits may not materialize for
workers due to vesting
thresholds, lack of benefit
portability.
•Non-union contractors'
financial disadvantage due to
“double benefit” payments.
•No agency has resolved this
issue.
Potential Term &
Condition:
Craft approach in which non-union
contractors have the option to pay
into the union trust funds or
contribute to the contractor’s own
benefit plans so long as those
benefits are equal or greater than the
applicable prevailing wage.
CIP Vendor and Project Analysis
•Analysis includes only the labor and construction
costs of the projects.
–Excludes purchases of physical assets, equipment, and
payments to other governmental and utility agencies
•Most awarded projects were completed by union or
contractor teams that included both union and non-
union subcontractors.
•The City overwhelmingly utilizes union contractors
for capital projects.
Breakdown by Project (FY16-20)
Breakdown by Projects Projects Percentage Awarded
Value Percentage
Union 18 62%$30,265,403 51%
Non-Union 5 17%$2,546,130 4%
Partial Union/Non-Union 6 21%$26,164,606 45%
Total 29 100%$58,976,139 100%
Breakdown by Vendor (FY16-20)
Breakdown by Vendor
Type Count Percentage Awarded
Value Percentage
Union 16 62%$52,087,859 88%
Non-Union 10 38%$6,888,280 12%
Total 26 100%$58,976,139 100%
Next Steps
•Staff is seeking feedback and direction on CWAs, particularly the following:
–(1) Does the City Council wish to direct staff to initiate negotiations with the BTC?
•If so, then:
–(2) What community benefits (Local Hire, Apprenticeships, etc.) would the City Council want to obtain from a CWA?
–(3) Does the City Council have feedback on the potential terms and conditions included in this Staff Report? Are there other terms or conditions the City Council would like to see incorporated?
Potential Terms and Conditions Summary
1. Negotiate for provisions that allow the waiver or partial waiver of CWA provisions if a
project does not receive a set minimum number of bids, or if all bids exceed a given
percentage over the engineer’s estimate.
2. Seek a provision that allows contractors to bypass core worker provisions if they are
unable to fill a role from the hiring hall within a specified amount of time.
3. For a City CWA, Staff has insufficient labor data to recommend a local hire goal. Given
the lack of policy success of such provisions, the City Council may wish to direct Staff not to
seek a local hire provision if it pursues a CWA.
4. Set minimum number of hours worked for apprenticeships. BTC to develop, for approval
by the City, an educational outreach program that details how the trades will work with the
school district and larger community to recruit residents for pre-apprenticeship programs.
5. Include a carve out for small businesses, releasing them from the requirements of the
CWA to ensure the agreements promotes rather than precludes smaller contractors from
bidding and receiving work.
6. Craft approach in which non-union contractors have the option to pay into the union
trust funds or contribute to the contractor’s own benefit plans so long as those benefits are
equal or greater than the applicable prevailing wage.