Council OKs bill mandating union labor for city projects valued at least $2M

A bill requiring the city to hire unionized workers for major construction jobs valued at least $2 million won a 7-2 approval from the Honolulu City Council Wednesday despite lingering concerns from contractor groups.

Council members Brandon Elefante and Heidi Tsuneyoshi voted no. Members Carol Fukunaga and Ann Kobayashi voted yes, “with reservations.” The measure now goes to Mayor Kirk Caldwell, who has not signaled whether he will sign it, veto it, or let it become law without his signature.

Bill 37 would require the city to negotiate community workforce agreements (a form of public labor agreements) with unions for contracts valued at $2 million and that fall under the definition of a “large-scale public works project, including any police, fire, emergency services, erosion, rock-fall mitigation, roads, stormwater or sewage infrastructure, and pump station projects.”

The proposal has divided the state’s construction industry, with major unions lobbying hard for it and contractor associations working just as hard to get it shot down.

The original bill, as introduced by Councilman Joey Manahan, would have applied to projects valued at $250,000 or more. But in an apparent effort to appease opponents the threshold was changed to $1 million-plus in the draft that was up for a final vote Wednesday. The threshold was upped a third time, to $2 million-plus, before the measure passed.

If it becomes law, it would take effect May 30, 2020.

Manahan said requiring the agreements would ensure local workers get hired first for city jobs. He noted that the contractors for Aloha Stadium improvements were brought in from the continental U.S. during an economic downturn that affected the construction industry throughout the nation. Community workforce agreements bar unions from striking or other labor actions, thus eliminating the possibility that projects could be delayed, he said.

The bill would apply to less than 20% of all city public works projects, “and only projects that are deemed critical and need to meet strict construction deadlines,” Manahan said. Work on the Neal Blaisdell Center and Honolulu Zoo are not considered critical and wouldn’t require the agreements, he said.

Tsuneyoshi urged colleagues to defer the decision, saying there were too many unanswered questions. “I think we need more time to further refine this bill,” she said.

The bill was initiated by the state’s most politically influential construction labor organizations — the Hawaii Construction Alliance and the Hawaii Building and Trades Council, which said the measure is a way to help ensure competent and local workers are used at city jobs, and that it will create a more efficient work environment.

But contractor organizations, including the General Contractors Association of Hawaii and Associated Builders and Contractors, warned that it would reduce the number of firms available for city jobs, thus leading to higher bids and project costs. They also argued the bill was unnecessary because many of the safeguards it purports are already in state law.

But Ryan Kobayashi, a representative of the Hawaii Laborers’ Union Local 368, said requiring unionized workers will not cost more because state law mandates that the city pay both union and nonunion workers prevailing wages.

“If the non-union (contractor) is complying with this prevailing wage scale, it would not raise the cost to the city or the city taxpayer because … on a city project they would be subject to the prevailing wage scale,” Kobayashi said. “This bill is about the workers, not the unions.”

Ana Tuiasasopo, a representative for the Operating Engineers Union No. 3, said requiring project labor agreements “will ensure that projects get finished on time and on budget.” Rather than discriminate against nonunion contractors and their employees, they would “make sure that we’re all on the same playing field,” Tuiasasopo said.

A key concern raised by contractors is what happens with fringe benefit contributions they would be forced to make to unions, even if their workers who earned those benefits wouldn’t be eligible to receive them if they weren’t union members long enough to be able to be vested.

Frances Kama-Silva, president of Henry’s Equipment Rental and Sales, said after Wednesday’s vote that she will need to reassess the future of her company if the bill becomes law. The company, which has between 20 and 25 employees, does general contracting work, and she estimated 95% of the company’s jobs are city or state projects for such things as road paving and demolition.

“We were union at one time, we were voted out of the union by our workers,” Kama-Silva said. “For some people it’s fine, but we’re a small company. It didn’t work for us.”

Reggie Keanu, a road construction foreman for Jas. W. Glover, said he and his crew chose to work for a company that isn’t unionized. “I do not understand why the city is trying to change or interfere with that. Why are you telling me I have to now join a union, pay dues, or give them my pension money to be able to work on city projects?”

Gary Kurokawa, chief of staff for Caldwell, said while the administration supports community workforce agreements, it’s concerned that the bill states the mayor “shall” negotiate a workforce agreement with a union.

Kurokawa said there’s language in the bill that may be in conflict with state procurement laws and city attorneys are assessing the situation.