Title
Adopt a Resolution to Approve and Authorize the City Manager to Execute an Agreement to Extend the Term of the Community Workforce Agreement with the Alameda County Building and Construction Trades Council and its Affiliated Local Unions Governing Labor Procedures for City Construction Projects by One Year
Staffreport
COUNCIL PRIORITY
• Economic Development
• Infrastructure
SUMMARY
On June 15, 2015, the City Council approved adoption of the Community Workforce Agreement (CWA) negotiated with the Alameda County Building and Construction Trades Council (BTC) and its affiliated local unions to govern labor procedures for City construction projects valued at or above $1,000,000. The Agreement set in place policies and goals related to the hiring of San Leandro residents to work on City construction projects and the hiring of San Leandro residents into the signatory unions’ apprenticeship programs. The agreement has been extended three times since it officially started in 2016.
RECOMMENDATIONS
Approve and authorize the City Manager to execute a side agreement to extend the term through January 1, 2027 of the CWA with the BTC, which governs labor procedures for City construction projects valued at or above $1,000,000.
BACKGROUND
The basic provisions of the CWA agreement with the BTC are as follows:
Covered Work: The work covered under the CWA includes all on-site construction, demolition, alteration, painting or repair of buildings, structures, landscaping, temporary fencing and other related activities for the projects that is within the craft jurisdictions of one of the signatory unions and that is part of the projects, including pipelines, site preparation, survey work, and demolition.
The agreement does not apply to projects for which there is a prohibition, exclusion or other limitation imposed because of a grant requirement, funding source agreement, or other agreement that creates a risk to the City of any repayment or return to source of any funds received.
Construction contracts that are governed by the CWA are still subject to competitive bidding laws and prevailing wages; the City is required by law and its own ordinances to select the lowest responsive and responsible bidder.
Minimum Cost Threshold: The CWA applies to City construction projects where the Engineer’s estimate or bid value exceeds $1,000,000.
Labor Peace: For all projects covered by the CWA, BTC agrees that there will be no strikes, sympathy strikes, work stoppages, picketing, hand billing, or slowdowns of any kind, for any reason, on the projects, at a project job site or at any other City facility.
Union Hiring Hall and Impact on Non-Union Contractors: Contractors working on covered projects are required, when filling craft job requirements, to utilize and be bound by the registration facilities and referral systems authorized by the signatory unions, commonly referred to as the union hiring hall. The agreement does not prohibit non-union contractors from bidding on projects. However, the CWA allows non-union contractors to use no more than five of their own employees and only if those workers are San Leandro residents and an equal number of union workers are also retained by the contractor. This is known as the “Core Worker” provision. Non-union “core” workers hired under this provision are still required to register with the union hiring hall and the non-union contractor is required to pay into the union trust fund, covering health and pension benefits for these workers.
Local Hire and Apprentices: The agreement requires contractors to hire one San Leandro resident as a New Apprentice for the first $1 million of the bid amount. A New Apprentice is defined as a San Leandro resident who is indentured in a State of California approved apprenticeship program that is a joint labor-management apprentice program for no more than twenty-four months. Thereafter, for every $5 million of project monies, the contractor is required to hire one additional new San Leandro apprentice. The intent of the clause is to increase pathways for San Leandro residents into the building trades. Each San Leandro apprentice must work at least 10% of the project duration to be counted toward the goal.
The CWA sets a total San Leandro resident participation goal of 30% for each project, and for each trade on the project. After the contractor uses the Unions’ hiring hall procedures and if qualified workers from San Leandro are not available, workers who reside in Alameda County can be hired to make up the difference between actual San Leandro resident participation and the 30% goal.
Analysis
Since the implementation of the CWA, City Council has awarded 22 projects that were governed by the CWA, with a total value of approximately $80 million. There have been no labor strikes, slowdowns, or interruptions on projects covered under this agreement. Based on the values of these 22 projects: 26 San Leandro apprentices were required and 26 San Leandro apprentices participated. Overall participation by San Leandro residents averaged approximately 13% whereas participation by Alameda County residents (including residents of San Leandro) averaged approximately 37%.
The current agreement expires on January 1st, 2026. If the City and BTC do not extend the agreement, projects bid after that date will not be subject to the provisions of the agreement and the City will not incur costs of administration.
The City could negotiate new terms or a revised agreement; however, staff has not done the research necessary to effectively negotiate terms at this time. Therefore, staff recommend a one-year term extension to allow time to conduct analysis and negotiate modifications to the terms of the agreement. Staff has reached out to BTC with this recommendation.
Current Agency Policies
• Place San Leandro on a firm foundation for long-term fiscal sustainability
• Advance projects and programs promoting sustainable economic development, including transforming San Leandro into a center for innovation
• Maintain and enhance San Leandro’s infrastructure
Previous Actions
• On February 10, 2015, the City Council held a Work Session to review options related to the adoption of a potential CWA and receive feedback from stakeholders
• On April 20, 2015, the City Council adopted Resolution No. 2015-086, appropriating $100,000 in one-time funding for outreach and implementation of a CWA
• On June 15, 2015, the City Council adopted Resolution No. 2015-104 and approved the CWA that was negotiated with the Alameda County BTC and its affiliated local unions to govern labor procedures for City construction projects valued above $1,000,000
• On May 16, 2016, staff provided an update on implementation of the CWA
• On December 5, 2016, staff provided an update on the first year of projects constructed under the CWA
• On December 17, 2018, the City Council adopted Resolution No. 2018-161 and approved a twelve-month extension of the original terms of the CWA
• On December 16, 2019, the City Council adopted Resolution No. 2019-203 and approved a two-year extension of the original terms of the CWA
• On September 16, 2024, the City Council adopted Resolution No. 2024-115 and approved a two-year extension of the CWA
Committee Review and Actions
• At meetings on March 17, 2015 and April 21, 2015, the City Council Finance Committee discussed the CWA and indicated support for bringing the item back to the City Council for adoption
• On March 7, 2017, staff updated the City Council Finance Committee on the implementation of the CWA and subsequent impact on City projects
• On December 5, 2018, staff updated the City Council Facilities and Transportation Committee (FTC) on the ten projects awarded under the first term of the CWA
• On December 4, 2019, staff updated the City Council FTC on the negotiations and recommendations for a potential next term of the CWA. The committee accepted the recommendations and noted that San Leandro Unified School District should be part of the partnership with the BTC, particularly as an integral part of the pipeline to the pre-apprentice programs
• On May 3, 2023, staff updated the City Council FTC on the status of the CWA and proposed changes for the next agreement term
Legal Analysis
The City Attorney’s Office reviewed the proposed side letter and approved it as to form.
Financial Impacts
The cost of administration of the provisions of the CWA is estimated at $220,000 each year. This cost includes cloud-based reporting software, education and outreach during bidding, evaluation of bids for compliance, monitoring and tracking monthly contractor performance, evaluating good faith effort documentation, and reporting to City Council. The cost is paid by project-specific Capital Improvement Program accounts funded from many sources including the General Fund and the Water Pollution Control Plant Enterprise Fund.
There is also a cost for contractors to comply with the agreement; however, their administration costs are not listed separately in the bids and are therefore unknown.
Extending the agreement commits the City to continue covering these costs for any covered project bid during the next year. Additionally, there will be staff and consultant costs to prepare for and to negotiate terms of a revised agreement.
There are sufficient funds available in the FY 2026 and FY 2027 adopted budgets to cover the cost of administration of the provisions of the CWA as-is.
ATTACHMENT
A: Resolution - Extend CWA
PREPARED BY: Tiffany Curotto, Public Works Administrative Manager, Public Works Department