Private Development Workforce Standards/Community Workforce Agreements on Public Projects

On Tuesday, April 3rd the San Jose Council approved a Private Development Workforce Standards/Community Workforce Agreement (CWA) as negotiated by Mayor Sam Liccardo (Liccardo Memo & Exhibits A&B attached). The Private Workforce Standards/CWA’s were drafted in response to a proposed labor-sponsored ballot measure mandating Project Labor Agreements on all future private residential development projects over 100 dwelling units and private commercial projects over 100,000 square feet. The April 3rd action was to give direction to the administration to craft an ordinance reflecting Mayor Liccardo’s negotiated Private Development Workforce Standards & Community Workforce Agreements (CWA), returning to council for adoption in approximately 60 days. Councilmembers Johnny Khamis, Lan Diep and Dev Davis did not support the motion to approve by Councilman Raul Peralez.

BIA Bay Area worked with The SVO (San Jose Chamber of Commerce) and various business organizations and private business representative to submit additional recommended language to better define “public subsidy” and minimize the potential for future challenges by labor or others that private development projects benefit from a public subsidy due to fee reductions, waivers or other government actions. Additionally, the SVO letter recommended modifications suggested by AGC and other business representatives regarding local hire, authorized apprenticeship programs and prevailing wage criteria (SVO letter attached). The Mayor and council majority did not accept the additional language nor recommended language modifications contained in Councilmember Johnny Khamis’s April 31 memo (Khamis letter attached). Highlights of Mayor Liccardo’s negotiated agreement with labor are listed below.

1. Private Development Workforce Standards - will apply only to private development projects that receive a public subsidy i.e., land or money, or in narrow circumstances, where it grants a fee or tax reduction for reasons other than those fee reductions necessary to make a subcategory of projects financially viable. Investments by the City for purposes such as affordable, rent-restricted housing, or nearby public-serving infrastructure (traffic signals or off-ramps) will not trigger the Workforce Standards provision.
2. Community Workforce Agreements (CWA’s)/Public Works Projects - will apply only to City-funded capital contracts greater than $3 million – increasing annually with CPI (excluding City Capital Maintenance Projects………such as street repaving.
3. Capital Bond Measure – A bond measure of up to $300M listing a set of highest-priority capital projects will be coordinated and placed on the November 2018 ballot.
4. Best-Value Contracting - Revision of “lowest responsible bidder” Charter language to provide the City with better flexibility to avoid hiring poor-performing contractors on city capital projects