To: Sonoma County Board of Supervisors and Boards of Directors for the Sonoma County Water Agency, Sonoma Valley County Sanitation District, Russian River County Sanitation District, Occidental County Sanitation District and South Park County Sanitation District
Department or Agency Name(s): County Administrator’s Office
Staff Name and Phone Number: Yvonne Shu 565-1739, Christel Querijero 565-7071
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
Project Labor Agreement Policy Amendment
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Recommended Action:
Recommended action
A) Authorize staff to amend the Project Labor Agreement Policy to provide for either a master agreement or a project-by-project agreement;
B) Authorize staff to amend the effective date of the amended Project Labor Agreement Policy to apply to projects that complete environmental review and receive project approval, either after a master agreement is approved by the Boards or after January 1, 2024;
C) Adopt an amended Project Labor Agreement Policy, with the following amendments:
i. Lowering the project cost threshold from $10 million to $1 million;
ii. Including the Sonoma County Water Agency, the Sonoma Valley County Sanitation District, the Russian River County Sanitation District, the Occidental County Sanitation District, the South Park County Sanitation District, and construction projects at the Sonoma County Fairgrounds, under the Project Labor Agreement Policy; and
iii. Including an exemption for projects constructed during a proclaimed local emergency or pursuant to Public Contract Code section 22050.
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Executive Summary:
The County adopted a Policy and Template Agreement in 2014 for the use of Project Labor Agreements (PLA) for County construction projects. At their July 18, 2023 meeting, the Board of Supervisors authorized staff to update the PLA policy with respect to the threshold amount, which entities are covered under the PLA, and an emergency response exemption. Board direction today regarding a) whether the PLA template should be a master agreement versus a project-by-project agreement, and b) what the effective date for the new policy should be, will be incorporated into the policy that will be adopted today.
Discussion:
Background
Project labor agreements are collective bargaining agreements negotiated for construction projects, typically between the County as the project owner and the local building trade unions. A PLA is a form of pre-hire agreement that sets the terms of employment for construction workers engaged in construction projects that contractors and subcontractors must adhere to during the entire construction project; the project labor agreement becomes part of the bid documents. Winning contractors are required to execute an agreement to be bound by the terms of the PLA. A PLA remains effective for the duration of the project.
At their July 18, 2023, meeting, the Board authorized staff to update the PLA policy as follows:
1 - Lower the PLA project cost threshold from $10 million to $1 million
Lowering the threshold amount will increase the number of future projects required to use a project labor agreement and is presumably expected to increase opportunities for local workers. With recent increases in construction costs due to labor shortages, inflation, and supply chain disruptions, the $1 million threshold will be applicable to more projects. Staff time for each PLA-covered project will increase, especially that of project leads and County Counsel, and additional lead time will be required before a project is bid. The associated cost increases and extended schedules are expected to be further exacerbated by a steep learning curve and expenses for outside counsel, as the County has yet to apply a PLA to a construction project and there is limited in-house expertise.
2 - Include the Sonoma County Fairgrounds, Sonoma Water, Sonoma Valley County Sanitation District, Russian River County Sanitation District, Occidental County Satiation District and South Park County Sanitation District in the PLA policy
Construction projects for the Sonoma County Water Agency (“Sonoma Water”), Sonoma Valley County Sanitation District, Russian River County Sanitation District, Occidental County Sanitation District, South Park County Sanitation District (collectively “the Districts”), and projects located at the Sonoma County Fairgrounds, will be subject to the PLA policy with this update. Similar to lowering the project cost threshold, including these entities will increase the number of PLA-covered projects and the associated cost and schedule impacts for each.
3 - Include an emergency response exemption
This update will remove the requirement of a PLA for construction projects related to the disaster and emergency response work during a proclaimed local emergency, and projects constructed pursuant Public Contract Code section 22050. This provision will allow the County, Sonoma Water and the Districts to move quickly to protect life, public health, and property when a disaster or other emergency occurs.
Local PLA’s
Santa Rosa City Schools (SRCS)
SRCS’s PLA, which they refer to as a Project Stabilization Agreement, was adopted in October 2021. With about a year of experience with their PLA, SRCS staff has said that it has been a positive experience overall. In general, the North Bay Building and Construction Trades Council has been a helpful partner and has been able to assign contractors to projects expeditiously. In rare cases, there has been a slight delay when a non-union, specialized contractor required additional time to understand and go through the PLA process. SRCS has a master PLA. SRCS staff time has decreased on as more time has elapsed since their PLA adoption.
City of Santa Rosa
The City of Santa Rosa’s PLA policy was adopted in October 2022, and negotiations on a master community workforce agreement (another name for a PLA) are being finalized. The negotiations for their master agreement have taken about nine months. The City’s PLA has a $500,000 project threshold and the City Manager has the authority to waive PLA requirements. The City’s PLA policy is guided by three objectives: 1) enhancing the City’s highly skilled local workforce and increasing access to apprenticeship programs to benefit diversity, equity, and broader inclusion in the workforce; 2) reducing the City’s carbon footprint by keeping the workforce local; and 3) creating positive economic impacts by reinvesting capital improvement funds through the local workforce. The City is currently considering how to evaluate the degree to which these objectives are being met through their PLA policy.
Today’s Discussion
Master versus Project-by-Project Agreement
The nature of a PLA is such that it is negotiated before a project is put out to bid. Previous attempts at individual PLA’s required months of negotiations and frequent meetings with labor advocates involving County Counsel, outside counsel and the project lead. In one instance, the negotiations were completed but the project did not progress, while in the other, a final agreement was not reached because the project was canceled.
A master agreement that would be applicable for future projects would front-load the negotiations process but decrease the counsel and staff time needed to negotiate a PLA for each individual project. However, a master agreement would remove any associated flexibility that could be needed for a specific project. An individual PLA provides the flexibility that may be needed for a project with unique requirements but would require negotiations for each project.
Staff recommends that the Board adopt a master PLA due to limited staffing resources but cautions that a master PLA, coupled with a significantly lower threshold, may still require more staff time than expected. A Master Agreement can be viewed in Attachment 1, and a Project-Specific Agreement can be viewed in Attachment 2.
Effective Date of New Policy
With projects currently in various pre-bid stages at the County, Sonoma Water and the Districts, staff recommends that the updated policy apply to projects that complete environmental review and receive project approval, either after a master agreement is approved by the Boards or after January 1, 2024. This will allow time for projects leads to communicate this change internally, adjust their timelines, and consult their respective counsels as needed.
Strategic Plan:
N/A
Racial Equity:
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
Yes
Staff used the Government Alliance on Race and Equity’s (GARE) Equity Toolkit to provide a general equity analysis and it was included with the 7/18/23 Board materials <https://sonoma-county.legistar.com/LegislationDetail.aspx?ID=6286189&GUID=74CE4E85-0530-4134-8D01-D7E3028117E6>.
Prior Board Actions:
§ 7/18/23: Authorized staff to update the PLA policy with respect to the threshold amount, entities covered under the PLA, and an emergency response exemption
§ 1/28/14: Adopted a Policy and Template Agreement for the use of Project Labor Agreements on future County construction projects over $10 million
Fiscal Summary
Narrative Explanation of Fiscal Impacts:
The number of PLA-covered projects is expected to increase with the lowered project threshold of $1 million, and this will affect project timelines, staff time, County Counsel expenses.
There is a potential for competition to be limited, especially for smaller construction projects, which may increase construction costs. For County staff, estimated internal and external counsel time in 2022 for discussions for the County Government Center was 80 hours, in addition to commensurate staff time from Public Infrastructure’s project lead. Note that this estimate is based on an incomplete discussion/negotiation for a revised PLA template, since the County Government Center project was postponed, so the total would likely be higher.
Narrative Explanation of Staffing Impacts (If Required):
N/A
Attachments:
Attachment 1 - PLA Policy Master Agreement
Attachment 2 - PLA Policy Project Specific
Related Items “On File” with the Clerk of the Board:
N/A