Exhibit B
Minutes Exhibit B Port Commission Regular Meeting of January 26, 2016 Commission-Public-Records From: Jerry DinndorfSent: 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.
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