Minutes Exhibit B
Port Commission Regular Meeting
of January 26, 2016
Commission-Public-Records

From:                Jerry Dinndorf 
Sent:                   Tuesday, January 12, 2016 4:12 PM
To:                    CommissionPublic-Records
Cc:                      Soike, Tina
Subject:                 Draft Construction Labor Relations Resolutrion
Attachments:            BPPC Draft PLA Comments 010516.docx; Draft_Resoiution on Construction Labor v2
policy changes in red (2) JD REVS 010616.docx

Categories:               Public Comment

Please distribute the attached memo and Resolution mark up to the Commissioners and in the
meeting record when this item comes before them. Can you tell me the schedule for action on this
item? Thank you.

Jerry Dinndorf Seattle District Manager
AGC OF WASHINGTON
Tel 2062840061 I Direct 206.812.4853] www.agcwa.com

THE AGC OF WASHINGTON 2016 ANNUAL CONVENTION > CLICK HERE TO CONNECT!











x
,
x

i
i
i

i



z
i
i

i
,


January 8, 2016

To:   Ralph Graves

CC:  Port of Seattle Commission
Ted Fick, CEO
David Freiboth, Senior Director of Labor Relations
David McFadden, Managing Director Economic Development.

From: Jeff Arviso, Co-Chair, AGC/POS Best Practices Committee

Ref:  Draft Construction Labor Relations Resolution

Ralph:

in response to your request to review the referenced resolution the AGC of Washington
members of the AGC/Port of Seattle Best Practices Committee and other AGCWA
members knowledgeable of Project Labor Agreements (PLA) have prepared a marked
up copy of the draft policy you provided with our recommended changes highlighted in
yellow (Attached). A summary of our marked up comments is provided below.

General Comments
As you know AGC member contractor companies have extensive experience with PLA's
both locally and nationally and have a good understanding of when a PLA is required.
Their experience is that PLA's are most effective when reserved for large complicated
projects of long duration with multiple trades and significant labor hours of work. The
criteria for determining when to use a PLA should result in this outcome.

The previous policy developed by the AGO/Port of Seattle Best Practices Committee for
when to implement a PLA for public work recognized that not every project merits a
PLA. The vast majority of Port projects including apprenticeship and inclusion
requirements have been readily accomplished using standard Port procurement
contracts.

With regard to the implementation of PLA's, a long standing issue for our members is
the Port negotiates the tabor agreements with the Unions without contractors present at
the table yet they must implement rules for which they have had no say. AGC members
have been negotiating Master Labor Agreements with Unions for decades and have the
knowledge, history and experience to negotiate a fair agreement to meet the needs of a
specific project; The negotiation of any future PLA's should include contractor
representation.

As far as expansion of PLA requirements to private work on Port property, it will likely
have a number of consequences:

0  PLA's are known to be problematic for small contractors including women and
minority firms, who are mostly open shop, seeking to bid on projects since they
must conform to'union work rules. A low dollar threshold for the consideration of
using a PLA and expanding the scope of PLA's to private work will further reduce
the number of project where they have the ability to successfully compete.

Further, it will likely negatively impact the Port's goal of creating greater diversity
in its commercial retailers at Port properties by increasing their improvement or
expansion costs.

.  The Port itself should carefully consider the PLA impacts on the commercial
value of its leases. Developers will respond to PLA requirements (costs) by
seeking concessions elsewhere. For this reason, the Seattle Housing Authority
made the decision not to require a PLA for projects built by developers on land
sold by the authority. They recognized it would reduce the value of the land and
they wanted to maximize the sale price in order to build as much public housing
as possible.

Summary of Marked Up Comments
Port Public Works Projects
Evaluate the applicability. "Fiscal Responsibility" should be highlighted as one of the
critical elements to emphasize in determining whether to utilize a PLA in order to help
small change
ensure projects are delivered at a reasonable cost. We recommended a
in this language.

Project complexity...The language here should be the same as used in the previous
policy; Project size, duration and complexity.

Project presents specic safety. . .We do not understand how a PLA better addresses
safety concerns. Every project, PLA or not must have a safety plan in place.

Other considerations... The number of labor hours by trade is a critical factor in
determining the need for a PLA as well as for the calculation of apprentice and potential
priority worker requirements.

For contracts of... if there is to be a default value at all it should be 100 million dollars
or greater and a minimum duration of 2 years. PLA's are not cost effective for projects
of lower value and less duration.

Further, the lower the default value, the more difficult it becomes for Open Shop
Contractors, particularly, women and minority contractors who are smaller and mostly
open-shop to compete for the work. Union work rules, representation fees, core worker
requirements and payment into Union health and benefits trusts as contained in the
North Satellite Arrival Terminal PLA present barriers that make it      for these
difficult
companies to become a successful bidder on a project
Consider the benets... As you know Seattle has implemented a Priority Hiring
Program and the Port has this requirement on the North Satellite Arrival Terminal.
AGC contractors working on City projects report that not all trades enthusiastically
support this requirement and it'Is getting increasingly difficult to meet the requirements
for qualified workers due to lack of availability

As part of AGC's participation in developing the Seattle program, we calculated the
labor hours available for all City projects in 2014 and concluded that there were not
'
enough hours by trade to support the preferred entry requirements of the program for
apprentices from economically distressed zip codes.
We strongly support the objective of creating more opportunities for disadvantaged
workers but for the program to be successful, it must include the Port, the City and
Sound Transit.

The port would be prudent to demonstrate the value and assess the cost of this
unknown program before including it in any of its future public works projects let alone
expanding it to private work. (These comments apply to the following two sections as
well.)

Projects Paid by Tennent Reimbursement
Encourage... A60 is concerned about the expansion of the Public Works Act
requirements such as prevailing wage into areas that may not be covered by the law.
We believe this invites arguments regarding the use of PLA's on private projects and its
attendant prevailing wage rate requirements for work on Port property.

if the private entity is responsible for procuring and employing the contractor to perform
the work, they should have the flexibility to choose procurement and labor practices that
best suit their business practices for accomplishing the work which could include the the
use of a PLA. They should not perceive an obligation to use a PLA as a condition for
securing or renewing the lease.

Require the payment... Provisions "requiring" the payment and reporting of prevailing
wages should be clarified. It is understood that payment of prevailing wages is required

by law on Public Works jobs but that may not be the case on leased property. If the
payment of prevailing wages wili be required, it should be clear that it is a contractual
requirement and does not constitute an agreement by the parties that the Public Works
Act applies as a matter of law.

Projects Constructed on Port Property at the Full Cost of the Tenant.
State the Port's support... This shouid apply only for projects greater than $100 million
dollars with a duration of 2 years or more.

Require of proposers...This shouid only be a requirement if the developer chooses to
proceed with a PLA.

Evaluate the (labor measures) plans... Developers will consider this as a de facto
requirement for winning the project and adjust their proposal accordingly or choose not
to participate at all. The result will be a smaller return for the Port then might have been
realized without the encouragement of a PLA.

New section 4... Currently the Port negotiates the PLA with the unions absent the
contractor yet the contractor is responsible for carrying out requirements in the PLA for
which the contractor has had no say in developing. Often these requirements are
contrary to or exceed provisions in our Master Labor Agreements negotiated by AGC
with the unions. If it is determined it is in the best interests of the Port to impose a PLA,
the port needs to inciude the prime contractor at the table selected to perform the work.

Item Number:
Meeting Date:


Draft Resolution No. nnnn

A Resolution     ofthe Port of Seattle Commission directing practices for construction
labor for projects located on property of the Port.

WHEREAS, the Washington State Legislt   in 1911 authorized local
voters to create publicly owned and manag       districts as independent 
government bodies run by directly elected
acquire and manage resources that promote t

WHEREAS, constructed tran atlon, industr
facilities such as terminals, roads, her                    ~  ar
7"?  king garages
and warehouses are critical to accomplish:                    nd economic
development missions;
1'
WHEREAS, expanding          rations as well as need for



tition  and provide fair access to


I program success depends also on availability of a
nstruction labor workforce;

ensure construction WOI p ace safety;

WHEREAS,  to meet labor supply needs and to ensure equality of
opportunity the construction labor workforce should encourage participation by
women and minorities;

WHEREAS, for timeiy and efficient delivery of construction projects the
Port has an interest in avoiding work stoppages;

'
WHEREAS, apprenticeship and pro-apprenticeship programs play a key role
both in providing access for individuals aspiring to good construction jobs and in
of the
supplying sufficient trained and capable labor to meet the construction needs
Port and other public and private facilities owners;
'
WHEREAS, RCW 39.12 requires the payment of prevailing wages on all
public works contracts of government entities such as the Port;

WHEREAS,                           for
some projects constructed on Port property are contracted
by the Port under the provisions of RCW 39.04 and   r applicable statutes, some
prOJects are contracted for by Port lease tenant
reimbursed by the Port and some are constructed

L Formatted- Highlight
1 'L
'"
(NLRA), 29 U.S.C., provide a means    ligning the inter
,
bor uni

NOW, THEREFORE, 
Port of Seattle as follows:

1.

Formatted: Highlight






meme

Formatted: Highlight



f value greater than $49
L..
the default assumption Wlll be_1n favor?)

________________________________________ _\,\
s
c.  Commisswn approval is needed to employ a PLA. \
d.  Require the payment and reporting of prevailing wages per RCW and State \
'

2

Department of Labor and Industries requirements.
e.  Establish in contracts and PLAs appropriate apprentice hiring goals.
f.  Establish in contracts and PLAs appropriate aspirational women and
minority apprentice hiring goals.
o . 

2.  For construction contracts paid for entirety or in part by the Port through
tenant reimbursement or other means, the Port shall:


....______.._______.._.._..< 
elsewhere.]
hiring goals.
d. Encourage the establis                       Amtppriate


3. For construction contrac
tenants, the Po   all:


,
.
.                       RI=e_oLuii;e_J




.. r  implementing
any at all of the
ntoth'eflease with the winning proposerthe 
ures in their proposal




Formatted: Indent: Left: 1.25", No builets or
numbering
H
;'                                                                                          Formatted: Htghllght               W

APOPTED by the Port Commission of the Port of Seattle at a duly noticed
meeting thereof, held this     day of              and duly authenticated
, 2015,

in open session by the signatures ofthe Commissioners voting in favor thereof and
the seal of the Commission.