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Home My WebLink About8.1 City Labor Guidelines: STAFF REPORT C I T Y C L E R K DUBLIN CITY COUNCIL File # [~,~$';~-~ ~ ; '^ DATE: December 1, 2009 TO: Honorable Mayor and City Councilmembers FR~M: Joni Pattillo, City Manager SUBJECT: City Council Direction Regarding Study of City Labor Guidelines Prepared By: Sfephen Muzio, Associate Attorney EXECUTfVE SUMMARY: The City Council approved, as a high priority_ objective for Fiscal Year (FY) 2009-2010, a study of the City's labor guidelines on both City projects and private development. The City Council will receive a brief presentation from staff and provide additional input and clarification of its objective to enable staff to complete the study. FINANCIAL IMPACT: The City's Fiscal Year (FY) 2009-2010 budget inc4uded .100 hours of City Attorney time for preparation of the report. RECOMMENDATION: Staff recommends that the City Council: 1) receive Staff presentation; and 2) provide direction on the study of City labor guidelines that is part of the City's FY 2009-2010 Goals and Objectives. mi By City Attorney v' Revie Assistant City Manager 4 COPY TO: , '~ , ,. ~a 1 IT~M NO:` . ~:, ~ ' ge °~- '~ - . . . ~- C~ DESCRIPTION: At its June 23, 2009 meeting, the City Council approved a high priority goal to "study ...Labor Guidelines on both City projects and private development (i.e., pre-qualification, project labor, apprentice programs, etc.)." Staff is seeking additional input and clarification from the City Council so that it can proceed with preparing the study. Ultimately, the study will analyze the City's legal authority to impose labor guidelines on both public .projects and private development, and the pros and cons of doing so. In preparing the, study, staff plans to engage the construction industry stakeholders (labor unions, construction industry groups, and the development community). The study will analyze whether, and to what extent, various proposals may legally be implemented and the potential costs and benefits to the City of implementing the proposals. The study will also look at the impact of similar policies in other cities, and make recommendations regarding the next steps required to implement any policies the City Council may choose to pursue. Below is a brief description of the items raised in the Goal's text, as well as a few related concepts that the City Council may wish to have staff examine. Pre-Qualification Standards Ordinarily, cities are required to award contracts on public works to the lowest responsible bidder. (Public Contract Code, § 20162.) Public Contract Code section 20101 establishes a process whereby a city can exclude prospective bidders that do not meet the city's standards, a process known as prequalification. Section 20101 provides, in part, that cities "may require that each prospective bidder for a contract complete and submit to the entity a standardized questionnaire and financial statement in a form specified by the entity, including a complete statement of the prospective bidder's experience in performing public works." The statute requires that cities utilizing a prequalification process must develop a uniform system of rating bidders on the basis of the completed questionnaires and financial statements, and must determine both the minimum requirements permitted for qualification to bid, and the type and size of the contracts upon which each bidder may bid. Prequalification questionnaires may request certain information regarding prior compliance with the state's prevailing wage law, though the scope of such requests is limited in certain respects, with regards to violations of the prevailing wage law committed by subcontractors. The Legislature's stated intent in adopting Section 20101 was to ensure a means for local agencies to "evaluate the ability, competency, and integrity of bidders on public works projects." Other than the ability to request information regarding compliance with the prevailing wage law, prequalification is not directly linked to labor guidelines. Nonetheless, staff plans to include a detailed analysis of the prequalification process in the study. The State Department of Industrial Relations has drafted some model forms which may be helpful in analyzing prequalification. Project Labor Agreements The text of the goal refers to "project labor," which staff believes refers to project labor agreements. Project labor agreements ("PLAs" or sometimes called project stabilization agreements) are a category of agreement between construction project managers and their workers. PLAs are designed to eliminate delays due to labor strife, to ensure a steady supply of skilled labor, and to establish a contractually binding means for resolving worker grievances. PLAs can either involve public or private projects. The terms and provisions of individual PLAs .~ vary greatly. Generally, they are pre-hire collective bargaining agreements that are signed before a project is begun, and before workers are hired to build the project. PLAs generally include an agreement by the trade union signatories to not conduct any strikes or work stoppages, while contractors and subcontractors agree to not conduct any lockouts during the project. PLAs have historically been utilized in the context of highly complex construction projects that require a broad range of different skills such as earthmoving, masonry, electrical wiring and installation of heating and cooling systems. PLAs can contain a variety of provisions, including ones that: require new employees to pay union dues in return for the union's representation of employees' interests; require contractors to use a local, centralized union job referral system; require that a certain number of union apprentices be utilized in the project; establish management rights including hiring, transfer, discipline and discharge of employees; establish uniform work schedules; establish work rules and regulations; and establish dispute resolution procedures to resolve employee, contractor and other disputes. One limiting factor in the utilization of PLAs by cities is the National Labor Relations Act ("NLRA"). The NLRA is a federal law that generally preempts certain kinds of local labor regulation activities, though an exception has been carved out in case law for situations where a local government entity acts in its proprietary capacity to protect or advance its proprietary interest in a project or transaction. A city acts in a proprietary capacity when it is an owner, investor or financier, provided that the scope of the actions it takes are specifically tailored to its designated proprietary interest. Without having done significant research, it is our understanding that this means that the City could require PLAs on its own public works projects, but that the City could not require PLAs on purely private development. If so directed by the City Council, staff would include in the study a detailed analysis of the City's authority to require PLAs on public and private projects. Apprenticeship Programs The Goal references the study of apprenticeship programs. As noted above, some PLAs contain requirements relating to the hiring and utilization of union apprentices. However, staff is unaware of other means cities may use to encourage or establish apprenticeship programs outside of that context. Staff would request that the City Council provide further guidance as to the kinds of apprenticeship programs it would like studied. Other Labor Guidelines In the initial analysis, Staff has not attempted to identify other labor guidelines that could be imposed on city projects and private development. However, the City Council may desire that the study look at other labor guidelines beyond those discussed above. For instance, some cities require contractors to make good faith efforts to hire a certain percentage of residents (so- called local hire laws). The City Council should provide direction on any other labor guidelines that it would like included in the study. Depending on the scope of any additional direction from the City Council, Staff expects to be able to complete its study by spring, 2010. NOTICING REQUIREMENTS/PUBLIC OUTREACH: ~'a~,~ ,., A copy of this Staff Report was mailed to Chris Stampolis, Director, Community Education & Government Relations, Laborers' Union, Local 304. As it prepares the study, Staff plans to engage the construction industry stakeholders (labor unions, construction industry groups, and the development community). The mechanism for doing so has not yet been determined. ATTACHMENTS: None. ~'~~~, `