The truth about project labor agreements

Much has been written lately about project labor agreements, but it is important to take a step back from the rhetoric and get down to the basics. What are PLAs? Who uses PLAs? What local projects have used PLAs? What value do PLAs create for taxpayers and the local San Diego community?

PLAs are used in both the public and the private sectors. Companies such as Toyota, General Motors and Wal-Mart regularly use PLAs to mitigate risks on complex construction projects when building their facilities. Likewise, public agencies also regularly use PLAs as a way to protect taxpayers from risks stemming from complex construction projects, such as project delays, hazardous working conditions, strikes and lockouts, cost overruns, and poor quality of construction.

Not only do PLAs protect local taxpayers on public projects by preventing the risks mentioned above, but PLAs also create high-quality middle-class jobs that can be accessed by local workers, who in turn pay back into local taxes and spend their wages on local businesses. By ensuring that local tax dollars are reinvested to benefit local communities, PLAs also provide access to career pathways for war veterans in San Diego through programs such as “Helmets to Hardhats.” PLAs are a “win-win-win” for the general public, workers and businesses.

Project labor agreements have been successfully used in the United States for many decades, with the earliest examples of PLAs used to build the Hoover Dam and the Shasta Dam in the 1930s. Project labor agreements are agreements between the project’s construction manager or general contractor and the Building Trades Council and its member unions. The agreements are signed before the start of a project and are designed to set clear expectations for all stakeholders regarding management rights, dispute resolution processes, percentage of total workers to be hired locally (local hire) and other work rules.

By establishing clear, predictable rules for a project, and by preventing strikes and lockouts, PLAs create substantial cost savings to the public and/or private project owner. PLAs also ensure that there will be skilled workers on the job sites who can deliver high-quality work that is on time, on budget and completed with the highest safety standards. In addition, by ensuring that high-quality work is done up front, this significantly cuts down maintenance and repair costs over the long term.

Some of the San Diego region’s most recognizable structures have been built under a PLA. The complexity and scale of the projects listed below emphasize the value of PLAs, which help to coordinate multiple contractors, subcontractors, workers and construction managers under one agreement so that construction work can flow safely, smoothly, efficiently and with the highest building standards.

The San Onofre Nuclear Generating Station was built under a project labor agreement with Bechtel Construction Corporation. Petco Park, the home of the San Diego Padres, was constructed under a project labor agreement with Ballpark Builders, a joint venture between union contractors Clark Construction and Nielsen Construction and nonunion contractor Barnhart Construction. The Otay Mesa Generating Station and an SDG&E peaker plant in Escondido were built under the auspices of PLAs during the energy crisis in the early 2000s, bringing much needed additional power to the electrical grid for San Diego County. The San Diego County Water Authority’s Emergency Water Storage Project is currently utilizing a PLA that was negotiated more than a decade ago between construction manager Parson Construction and the San Diego Building Trades Council. This expansive project included construction of the 318-foot-high Olivenhain Dam, the 24,000-acre-foot Olivenhain Reservoir, pipelines connecting the reservoir to the Water Authority’s second aqueduct and Lake Hodges. It included a pipeline connecting San Vicente Reservoir to the second aqueduct, raising the San Vicente Dam by at least 54 feet to provide additional water storage and five new pump stations. These projects employed both union and nonunion workers and contractors.

Last, but certainly not least, are the projects funded by San Diego Unified School District’s Prop. S, a $2.1 billion bond measure for Green Repairs and Renovations for our schools. The district and the Building Trades Council are utilizing a project stabilization agreement (PSA — similar to a project labor agreement) on projects more than $1 million throughout the life of this bond program. A July 3 presentation by district staff showed a savings of approximately $10 million on projects completed to date, with more than 560 local San Diegans hired to work under this agreement so far.

Given these challenging economic times, it is important to make every public (and private) dollar invested count. Substantial budget savings come from project labor agreements with Building Trades unions. The unions’ efficiencies in work delivery, project coordination, safety standards, and work force training and deployment are just a few of the benefits to taxpayers and our community.

The value of PLAs goes far beyond financial savings due to economies of scale; the projects serve as fertile training grounds for preparing and training the skilled workers who will continue to build quality construction projects in San Diego. During the construction of the Olivenhain Dam and Reservoir, the Building Trades Council created a pre-apprenticeship program that trained at-risk youth, welfare to work recipients and others in basic building trades concepts. During the eight-week course, students upgraded their math skills, learned about work ethics and received assistance in applying for apprenticeship programs with the Building Trades’ affiliate training programs. Many of those pre-apprentices are journey-level workers today, supporting themselves and their families without the public assistance on which they once depended. These are high-quality jobs, with solid training, health benefits and fair wages. They provide career opportunities for young San Diegans, who can then reinvest their money in their families and their communities. These are the kind of strong middle-class jobs that have a positive ripple effect on the entire local economy.

The impact of PLAs is widespread and benefits the community far beyond just creating high-quality jobs. When workers have health insurance, for example, they and their families don’t use emergency rooms for basic health care as often, which saves money for everyone. Study after study confirms that local dollars earned by local workers stay within the local economy, providing a benefit to our community.

Recently, the Associated Building Contractors released a study it funded trying to discredit project labor agreements and the PSA with the school district. The ABC contractors say these agreements are costly, yet San Diego Unified School District outcomes have shown that exactly the opposite is true. The ABC did not look at any San Diego projects, which calls into question the political motivation of this organization.

Opinions and political rhetoric don’t save tax dollars — project labor agreements do. The proof is in the bottom line — on time and under budget means saving taxpayer dollars. It is the credo of The Building Trades — Value on Display, Every Day.

Tom Lemmon is the business manager of the San Diego County Building and Construction Trades Council AFL-CIO.

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