A vote by the Forest Lake Area School Board has been questioned by some who believe it gives certain contractors an unfair advantage when bidding on the district’s upcoming facility projects.
On Jan. 7, during a regular meeting of the Forest Lake Area School Board, board members in attendance voted unanimously to accept a project labor agreement for all construction work to be done on various district buildings via the recent bond that voters approved in November 2015. However, district officials did not post a legally required 30-day notice in the newspaper to let the public know that the vote was to take place, which nullified the Jan. 7 vote. A notice has since been placed, and a new vote is scheduled for April 7. That upcoming vote has garnered controversy as two sides of the issue have let their voices be known.
A project labor agreement is a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project. Before any workers are hired on the project, construction unions have bargaining rights to determine the wage rates and benefits of all employees working on the particular project and to agree to the provisions of the agreement. The terms of the agreement apply to all contractors and subcontractors who successfully bid on the project and supersedes any existing collective bargaining agreements. In essence, a non-union shop would be required to sign what is, for all intents and purposes, a union contract for any specific job that includes a PLA.
Forest Lake-based contracting firm Vinco, Inc., a non-union shop, recently constructed the Forest Lake City Center building and also worked on the latest solar panel project with the school district. CEO Steve Anderson said that he won’t pursue a bid with a PLA in place.
“It is correct that I could sign the agreement with the union for this specific project,” Anderson said. “However, that also means that we have to abide by the wage scale that is put in place by the union. This basically takes away the opportunity for us non-union contractors to bid at our own labor rates.”
Anderson said that he has had conversations with other non-union shops, and many also have no intention of putting in a bid on a PLA-enforced project.
“Nobody wants to sign those agreements, so it comes down to eliminating competition on projects,” he said. “With a PLA in place, you are cutting out 75 percent of the construction workers in Minnesota.
These unions have been trying to get our guys to sign on for years. This PLA is simply a tactic to protect jobs for union members and an attempt to get the non-union guys to sign up.”
However, Executive Secretary of the St. Paul Building and Trades Council Don Mullin said that the PLA benefits the district as well, not just unions.
“There are a large number of benefits to having a PLA in place,” Mullin said. “With this PLA in place, we are saying that we want to make sure that our school is a safe place for everyone and that we are working with a highly skilled and well-trained workforce in order to complete that objective.”
Mullin rejects the theory that non-union shops are being essentially cut out of the bidding process when a PLA is involved.
“We want to even the playing field across the board and allow everyone to participate,” he said. “Without a PLA in place, the bidding process would be lopsided. The non-union shops could pay their guys as much or as little as they choose, and that could drastically affect their bid. What the district is saying with this PLA is that as a community, we have leveled the playing field.”
One recent high profile case regarding PLA’s took place in Farmington, where, in a room packed with more than 150 local community members, the school board rejected a PLA requirement for upcoming school repair projects by a 4-1 vote on March 14. Associated Builders and Contractors of Minnesota and North Dakota’s Director of Government and Public Affairs Adam Hanson testified at that meeting. ABC represents merit shop contractors. A merit shop is a firm or organization whose employees have chosen to perform hiring, promotion, salary adjustments, bonuses and termination based on the laws of the state and federal government, along with the individual’s ability to accomplish the tasks assigned to them by their employer. Merit shops are also referred to as open or non-union.
“We want to level playing field and not promote one group or trade over another,” Hanson said. “Some contractors would basically be required to completely upend their business and how they run their business in order to work a PLA job. Therefore, many of the non-union shops simply refuse to bid.”
Hanson said that with fewer people bidding, the bids themselves become less competitive, and therefore the cost is higher. A study published by the National University System Institute for Policy Research and underwritten by ABC examined 126 school construction projects, 12 of which were under a PLA. That study determined that the costs associated with PLA projects were 9 to 15 percent higher.
Some current school board members spoke to defend the initial January vote that would have allowed for a PLA.
“The upgrades to our buildings will need to last for 30 to 50 years so it is really important that the work is consistent and high quality,” School Board President Rob Rapheal said in an email. “In the past, we’ve had a good relationship with union trades which has resulted in quality, reliable work for the district. This PLA shows that we take our responsibility of getting this building project right very seriously.”
Board member Luke Odegaard also spoke highly of the PLA process but added that he was glad to get information from all sides.
“We’ve had good relationships with union labor in the past, and they’ve helped us with other projects and it has worked out well,” he said. “We need consistency, as a lot of it is timing-based as far as when we need things completed, and I believe this PLA is good for that. I did get an email from Adam Hanson with some information from the other side of this equation, and I was very glad to be able to have the information. I am no expert in the construction trade, so it is good for me to get as much information as possible from those who work in the industry.”
The Forest Lake Area School Board will vote April 7 on whether or not to allow for a PLA on upcoming construction projects throughout the district. There will be a time for public comment on any agenda item during the unscheduled visitor’s portion of the meeting. Hanson plans to be on hand to represent ABC, and Anderson, who also spoke during last month’s school board listening session, plans to speak on behalf of Vinco.