Breakthrough: City of Portland commits to build union, and use minority workers and contractors

By DON McINTOSH, Associate Editor

The City of Portland is about to try out a new kind of project labor agreement on public construction contracts. The 23-page “Model Community Benefits Agreement” approved Sept. 5 mandates that on future City construction projects, unions will represent workers, and women and minority workers and contractors will have expanded opportunities. The community benefits agreement, approved in a 5-0 vote, was developed in nearly two years of meetings among unions, minority contractors, pre-apprenticeship training programs, and city officials, and will apply to projects of over $15 million.

The agreement sets goals:

• At least 18 percent of the work will be performed by minorities, and 9 percent by women, and the targets apply both to journeymen and apprentices;
• At least 20 percent of the work on contracts of over $200,000 (and subcontracts of over $100,000) will be performed by apprentices;
• At least 20 percent of the hard construction costs will go to women-owned, minority-owned and “disadvantaged” businesses, and joint ventures with minority and women-owned businesses will get a preference of up to 5 percent in bidding on contracts; and
• At least 30 percent of the workforce will be hired from areas identified by the U.S. Small Business Administration as “historically underutilized business” zones, census tracts that include downtown Portland, inner Southeast and Northeast Portland, and the Lents, and Cully neighborhoods in outer Southeast and Northeast, as well as areas of Gresham, Hillsboro and western Clark County.

In the new community benefits agreement, contractors agree to abide by the terms of union contracts, and to use union hiring halls. Except in this case, nonunion contractors that are state-certified as “disadvantaged business enterprises” are allowed to use some of their existing “core employees” — those who’ve worked the equivalent of seven months full-time work in the previous 18 months — with no requirement that the workers become union members or that the employer provide union benefits. However, the contractors have to document that their health and fringe benefits are comparable to the union benefits. And new hires would have to come through union hiring halls.

Meanwhile, the community benefits agreement spells out that unions will represent all workers on the project — whether they’re members or not. Accordingly, even nonunion contractors will deduct union dues — whether or not workers are union members — to cover union costs of collective bargaining, contract administration, and grievance processing.

The agreement also commits unions and contractors to use a veterans employment program known as Helmets to Hardhats. And it mandates that managers, supervisors, and owners be given “cultural competency” training.

Significantly, it dedicates 1.5 percent of City construction budgets to help women and minority workers and contractors get ready for the job:

• 0.25 percent will pay to monitor and enforce the agreement, overseen by a committee composed of representatives from labor, management, and community groups;
• 0.75 percent will go to Worksystems Inc. to award grants to pre-apprenticeship training programs that focus on training women and minorities; and
• 0.50 percent will pay for “technical assistance and business support” for women- and minority-owned contractors, such as that provided by the Hispanic Chamber of Commerce and the Metropolitan Contractor Improvement Partnership. [A disparity study by the City showed that out of $660 million in City contracts over the five-year period ending mid-2009, minority-owned businesses accounted for 0.6 percent, and women-owned businesses 1.9 percent. Women- and minority-owned businesses got 140 of the 547 contracts over that period, but most were relatively small. The technical assistance fund would help them scale up to be better positioned to handle bigger contracts.]

Calling the community benefits agreement “1.5 percent for equity,” former Portland city commissioner Jim Francesconi likened it to Oregon’s “1 percent for art” mandate, in which a portion of public building costs is dedicated to public art.

Francesconi, now an attorney, was hired by Operating Engineers Local 701 and Pacific Northwest Regional Council of Carpenters to develop the community benefits agreement. Groups including the Columbia Pacific Building and Construction Trades Council, pre-apprenticeship training programs like Oregon Tradeswomen Inc., Constructing Hope, Portland Youthbuilders, and Construction Apprenticeship & Workforce Solutions (CAWS), also had a hand in crafting the agreement.

The City Council resolution which enacted the model agreement declares that the City has “a compelling governmental interest in ensuring that it is not a participant, either passive or active, in perpetuating the effects of past or present discrimination.”

Maurice Rahming, immediate past president of the Oregon chapter of the National Association of Minority Contractors, explains that in the past, construction contractors didn’t hire women and minorities. Racial and gender disparity continued after overt discrimination ended, Rahming says, in part because sons tend to follow fathers into careers in construction. And access to these jobs matters a great deal, because journeymen can earn $39 an hour or more plus benefits — depending on the trade — on public construction jobs that are subject to state and federal prevailing wage laws.

The community benefits agreement is a breakthrough, Francesconi told the Labor Press, for several reasons: It’s the first time in Oregon that a government has required project labor agreements on its construction projects, and it represents a new unity between unions and minority communities.

Nonunion contractors have often defeated proposals for project labor agreements, Francesconi said, by forming alliances with minority contractors or community members and arguing that unions don’t work well with minorities. [pullquote]“Minority contractors have been pitted against the unions as if they’re opposing sides of an argument. This agreement says, ‘You know what? We’re not on opposing sides.’” — Maurice Rahming[/pullquote]

“Here the opposite has happened,” Francesconi said. “Minority contractors and community representatives want a relationship with the unions, and advocated for this project labor agreement. And the unions went a long way to provide training and support for minority and women workforce and minority businesses, and carved out this exception for disadvantaged minority- and women- owned businesses where they didn’t have to join the union.”

Rahming, who is both a black business owner and a signatory contractor with IBEW Local 48, agrees: “Minority contractors have been pitted against the unions as if they’re opposing sides of an argument. This agreement says, ‘You know what? We’re not on opposing sides.’”

To test run the community benefits agreement, City Commissioner Randy Leonard offered up two Water Bureau projects that are already under way: the Kelly Butte reservoir replacement, and the Interstate Maintenance Facility renovation. The Kelly Butte project — to replace the 10-million-gallon above-ground steel tank with a 25-million-gallon reinforced concrete underground reservoir — had already been awarded to Hoffman Construction, but the City is modifying that contract. In the Interstate Maintenance Facility Renovation, the City will construct a 28,000-square-foot LEED Gold building to replace a 1925 building that rates poorly for seismic and fire safety and disabled access. An adjacent 38,000 square foot building will be built in a second phase.

The day the community benefits agreement was approved, City Council chambers were packed to the edge of the second-floor gallery with 175 people who turned out in support, most wearing red T-shirts made by CAWS bearing the slogan, “community benefits for all.”

Portland Mayor Sam Adams told the crowd the community benefits agreement is about “taking another step to become a city of the most equal opportunity for all Portlanders.”

Doug Tweedy, executive secretary-treasurer of the Pacific Northwest Regional Council of Carpenters, commended the City Council for being the first agency to “step up to the plate and do the right thing.”

“Opportunity is what this is all about,” he said. “The disparity within our workforce and our contracting community is documented and does exist.”