Agenda Item   

AGENDA STAFF REPORT

 

                                                                                                                        ASR Control  09-001761

 

MEETING DATE:

10/27/09

to:

Orange County Clerk of the Board

legal entity taking action:

Board of Supervisors

SUBMITTING Agency/Department:

Supervisor Moorlach  

Department contact person(s):

Prof. Mario Mainero, (714) 628-2518 

 

 

 

 

CATEGORY: Discussion

 

SUbject:

Ordinance regarding Public Contracts

 

 

 

 

 

RECOMMENDED ACTION:

RECOMMENDED ACTION(S)

 

·                    Read Title of Ordinance.

 

·                    Order further reading of the ordinance be waived.

 

·                    Consider the matter.

 

·                    Direct ordinance be placed on agenda for the next regularly scheduled Board meeting for adoption.

 

·                    At the next regularly scheduled meeting, consider the matter, and adopt the ordinance.

 

 

 

SUMMARY/BACKGROUND:

SUMMARY:

 

An Ordinance of the County of Orange, California, adding Sections 1-8-3 and 1-8-4 to the Orange County Codified Ordinances to preserve competition and prohibit the requirement of Project Labor Agreements in certain County Public Contracts, except where otherwise required by State law.

 

BACKGROUND

 

On January 11, 2000, the Board of Supervisors voted 3-0-2 to pass a Resolution requiring a “Construction Stabilization Requirement Agreement,” also known as a Project Labor Agreement (PLA), on all public works projects. PLAs require contractors bidding on public works contracts to enter into agreements that set forth the terms and conditions of working on a construction project to which the employer, construction unions, and contractor are signatories. In effect, it required that all public works contracts utilize union labor.

 

The articulated purpose of the agreement was purportedly to ensure that no labor stoppages occurred on the covered projects. In exchange for this, the general contractor on each covered project was required to abide by union rules and pay union wages.

 

The agreement applied to (1) general public works construction contracts greater than $225,000 and (2) specialty public works construction contracts greater than $15,000 awarded by the County. 

 

Only those public works contracts that received federal funding were eventually made exempt, due to Executive Order 13202 signed by President Bush on February 17, 2001.

 

The agreement was to continue in effect until December 31, 2005. It would have automatically renewed on that date for an additional five years (i.e. through December 31, 2010) UNLESS one of the parties gave notice to terminate the agreement no later than 90 days prior to the expiration date.

 

On December 21, 2004, the Board voted 4-1 to give notice of the termination of the agreement. It did so, according to the Agenda Staff Report, because “the field of qualified bidders for public works construction projects has been reduced by the agreement, because many qualified contractors will not bid on those projects.”

 

PLAs are still a staple of a number of local governments and, as demonstrated in 2000, could still be instituted again. However, some local governments have chosen to abolish them, some by charter amendment. The problem with PLAs was alluded to in the ASR directing the sending of a Notice of Termination in 2004: they are anti-competitive and discriminatory, in that they tend to reduce the number of contractors willing to bid on public works projects to those who are willing or able to incur the higher costs of union labor. This in turn drives up the cost to the taxpayer of these projects, which reduces the number of public works projects that can be performed and indirectly places budgetary pressure on other agencies of County government.

 

This action would enact an Ordinance barring the County of Orange, and any other agency for which the Board of Supervisors acts as the governing authority (such as the Orange County Flood Control District, the Orange County Housing Authority, and the Orange County Development Agency) from entering a contract or requiring a contractor on a public works project to do any of the following: (1) execute, or become a party to, an agreement between organized labor, on the one hand, and the County or the Contracting Party on the other; (2) become a signatory to a collective bargaining agreement; or (3) require its employees to join a union, or pay dues or make contributions to a union or union benefit fund.

 

The only exceptions to this prohibition are those mandated by State or Federal Law. For example, State law currently allows certain public works projects to be built using a design-build contract, but requires PLAs or similar agreements as part of the contract. Such a requirement would be unaffected by this Ordinance.

 

With an Ordinance in place, it would be far more difficult for a future Board of Supervisors to require such a contract, as had been done in the past. Such a Board would have to publish a proposal to repeal the Ordinance, and would have to explain to taxpayers why it was in their best interest to do so.

 

 

EXHIBIT(S):

Proposed Ordinance

 

COUNTY COUNSEL REVIEW: