ARTICLE
Along California’s Central Coast, July is a time for trips to the beach, evening concerts at the Boardwalk, and backyard BBQs. Meanwhile, percolating behind the closed door of local government (taking time off during the month), city and county staff are working on policies and programs that will see the light of day in August and September. Many of these proposed policies and programs will have a short term and long term impact on our communities. Let’s start with some good news. Lookout Santa Cruz business journalist, Jessia Pasko reports that the Monterey Bay Housing Trust is planning a $800,000 predevelopment loan to the City of Santa Cruz downtown library and affordable housing project. We’ve covered this project from its inception when the voters of Santa Cruz County passed a countywide library bond in 2016. The money comes from the Monterey Bay Housing Trust, a revolving loan fund sponsored by the Monterey Bay Economic Partnership (MBEP) and Housing Trust Silicon Valley in conjunction with the latter’s TECH Fund. Established in 2017, the HTSV TECH Fund works with the high-tech sector, large employers, and philanthropists to spur investment in affordable housing. It’s raised over $118 million to finance more than 5,600 homes throughout the greater Silicon Valley area. Back in 2015, I was a moderator at MBEP’s conference that focused on housing. I asked the MBEP leadership to consider inviting a member of the Housing Trust of Silicon Valley to be on that panel. Linda Mandolini, the President & CEO of Eden Housing agreed to participate on that panel. During the panel discussion, I asked Linda how Silicon Valley is addressing housing and she replied that in 2000, the tech titans of Silicon Valley got together to establish a housing trust fund to help spur the financial support for housing projects. https://housingtrustsv.org The concept was simple: the trust fund became a revolving loan program where funds were made available to individuals who needed the downpayment to buy a house. The funds were provided on the premises, and once the home was sold, the down payment loan would be returned to the housing trust, the revolving fund of money that could be used again and again. Over the years, the Housing Trust of Silicon Valley extended the funds to affordable housing projects to increase housing production and reduce upfront costs. To the credit of the MBEP board, they jumped on the concept and established a partnership with the Housing Trust of Silicon Valley and established the Monterey Bay Housing Trust. More than 120 affordable homes were funded in Santa Cruz! Part of an overall vision for downtown Santa Cruz, the Downtown Library & Affordable Housing Project is jointly developed by For the Future Housing and Eden Housing. Some unknown news has been in quiet discussions for several months. At the Santa Cruz County Board of Supervisors (BOS) meeting on June 25, 2024, the BOS moved to accept and file a status report on the Project Labor Agreement Pilot Project and take related actions. The Recommended Actions were threefold: 1) Accept and file a status report on the Project Labor Agreement Pilot Project; 2) Defer consideration of Project Labor Agreement Pilot Program until discussions with the Monterey/Santa Cruz Building and Construction Trade Council, the Nor Cal Carpenters Union, and other stakeholders are complete and 3) Direct staff to return on or before September 10, 2024, to present or defer consideration of the Proposed Pilot Project Labor Agreement, Project List, and the County’s Project Labor Agreement Pilot Program. Absence from the conversation was broader communication with the local contractors who do business with the county. I understand that the county staff is reaching out to local construction companies, many of which are small family-owned businesses. I haven’t seen the results of those conversations but hopefully, their input will be included in the follow up county staff report. Back in 2020, the Chamber was involved in coordinating earlier discussions when the Santa Cruz City Council was in the early stages of initiating a PLA. We helped set up multiple meetings with the city council, city staff, and local construction companies which eventually led to the city staff dropping the proposed PLA. This county proposal is moving forward where Santa Cruz County is potentially ready to form a ‘pilot program’ somewhat as a test model. According to the initial Staff report, “Based on direction from the Board to explore a Project Labor Agreement Pilot Program (Pilot), staff have developed a draft Pilot Project Labor Agreement (PLA) template and are currently in discussions with the Monterey/Santa Cruz Building and Construction Trades Council (Trades Council) and other stakeholders (not specifically identified). The draft PLA was developed based on direction from the Board, a review of PLAs approved by other jurisdictions, and conversations with State associations and union and non-union contractors that have completed projects for the County over the last five years. Staff will return to the Board for consideration of the proposed Pilot after discussions with the Trades Council, the Nor Cal Carpenters Union, and other stakeholders regarding the Pilot PLA are complete.” Now, the question is how a pilot PLA will work. That is open for debate. The Labor Unions will argue that the PLA provides for better working conditions where union workers meet all the labor standards required of a public sector project. Where are those union workers located, and which union shop do they report to? Many of those union workers are not local residents of Santa Cruz County. The union shop may be in Monterey County, Santa Clara County, and other counties outside the region. There are many examples where a municipality used a PLA that caused over-bids. Here are a couple of examples: In the City of Watsonville: At the April 26, 2022, meeting, the City Council adopted Resolution No. 73-22 (CM), approving the plan specifications and calling for bids for the Water Well No. 4 Pump Station, Project No. WA-22-005. Bids were opened on February 9, 2023, at 2:00 pm. Only one bid was received, and the results are summarized below: Contractor: Mountain Cascade, Inc. (based in Livermore, in Alameda County) Total Base Bid: $6,050,950 Engineer’s Estimate: $4,000,000 Staff reviewed the proposal and determined that the bid received was approximately 51% higher than the engineer’s estimate and budget planned for the project. Staff will re-evaluate the project scope and rebid the project. The City of Hollister (City) requested a 4-month time extension for the period of contract award for the Construction (CON) phase of the City of Hollister 2022 City Wide Slurry Seal Project. Notably, the City Council's approval of the Project Labor Agreement and Community Workforce Agreement (PLA and CWA) in December 2023 required extensive legal documentation and review processes by relevant authorities. This new process for the City requires projects of over $250,000 to be part of the PLA and CWA. With confidence in the project's progression, the City sent out the project to bid by May 2024. At the June 18, 2024, city council meeting, I understand the Hollister City Council recommended approval of the only bid that the city received for the citywide slurry project. There were local companies in the region that declined to participate because of the PLA. The Chamber represents dozens of small businesses in the construction industry and only a couple of the contractors have both union and non-union workers. The majority of the construction companies are non-union. If the County sets up a pilot PLA, the likely result will be local small businesses will not be allowed to submit a bid. I hope the Board of Supervisors takes this matter into consideration in the deliberation of the “proposed pilot PLA.”
Along California’s Central Coast, July is a time for trips to the beach, evening concerts at the Boardwalk, and backyard BBQs. Meanwhile, percolating behind the closed door of local government (taking time off during the month), city and county staff are working on policies and programs that will see the light of day in August and September.
Many of these proposed policies and programs will have a short term and long term impact on our communities. Let’s start with some good news.
Lookout Santa Cruz business journalist, Jessia Pasko reports that the Monterey Bay Housing Trust is planning a $800,000 predevelopment loan to the City of Santa Cruz downtown library and affordable housing project. We’ve covered this project from its inception when the voters of Santa Cruz County passed a countywide library bond in 2016.
The money comes from the Monterey Bay Housing Trust, a revolving loan fund sponsored by the Monterey Bay Economic Partnership (MBEP) and Housing Trust Silicon Valley in conjunction with the latter’s TECH Fund. Established in 2017, the HTSV TECH Fund works with the high-tech sector, large employers, and philanthropists to spur investment in affordable housing. It’s raised over $118 million to finance more than 5,600 homes throughout the greater Silicon Valley area.
Back in 2015, I was a moderator at MBEP’s conference that focused on housing. I asked the MBEP leadership to consider inviting a member of the Housing Trust of Silicon Valley to be on that panel. Linda Mandolini, the President & CEO of Eden Housing agreed to participate on that panel. During the panel discussion, I asked Linda how Silicon Valley is addressing housing and she replied that in 2000, the tech titans of Silicon Valley got together to establish a housing trust fund to help spur the financial support for housing projects. https://housingtrustsv.org
The concept was simple: the trust fund became a revolving loan program where funds were made available to individuals who needed the downpayment to buy a house. The funds were provided on the premises, and once the home was sold, the down payment loan would be returned to the housing trust, the revolving fund of money that could be used again and again. Over the years, the Housing Trust of Silicon Valley extended the funds to affordable housing projects to increase housing production and reduce upfront costs.
To the credit of the MBEP board, they jumped on the concept and established a partnership with the Housing Trust of Silicon Valley and established the Monterey Bay Housing Trust. More than 120 affordable homes were funded in Santa Cruz! Part of an overall vision for downtown Santa Cruz, the Downtown Library & Affordable Housing Project is jointly developed by For the Future Housing and Eden Housing.
Some unknown news has been in quiet discussions for several months. At the Santa Cruz County Board of Supervisors (BOS) meeting on June 25, 2024, the BOS moved to accept and file a status report on the Project Labor Agreement Pilot Project and take related actions. The Recommended Actions were threefold:
1) Accept and file a status report on the Project Labor Agreement Pilot Project;
2) Defer consideration of Project Labor Agreement Pilot Program until discussions with the Monterey/Santa Cruz Building and Construction Trade Council, the Nor Cal Carpenters Union, and other stakeholders are complete and
3) Direct staff to return on or before September 10, 2024, to present or defer consideration of the Proposed Pilot Project Labor Agreement, Project List, and the County’s Project Labor Agreement Pilot Program.
Absence from the conversation was broader communication with the local contractors who do business with the county. I understand that the county staff is reaching out to local construction companies, many of which are small family-owned businesses. I haven’t seen the results of those conversations but hopefully, their input will be included in the follow up county staff report.
Back in 2020, the Chamber was involved in coordinating earlier discussions when the Santa Cruz City Council was in the early stages of initiating a PLA. We helped set up multiple meetings with the city council, city staff, and local construction companies which eventually led to the city staff dropping the proposed PLA.
This county proposal is moving forward where Santa Cruz County is potentially ready to form a ‘pilot program’ somewhat as a test model. According to the initial Staff report, “Based on direction from the Board to explore a Project Labor Agreement Pilot Program (Pilot), staff have developed a draft Pilot Project Labor Agreement (PLA) template and are currently in discussions with the Monterey/Santa Cruz Building and Construction Trades Council (Trades Council) and other stakeholders (not specifically identified). The draft PLA was developed based on direction from the Board, a review of PLAs approved by other jurisdictions, and conversations with State associations and union and non-union contractors that have completed projects for the County over the last five years. Staff will return to the Board for consideration of the proposed Pilot after discussions with the Trades Council, the Nor Cal Carpenters Union, and other stakeholders regarding the Pilot PLA are complete.”
Now, the question is how a pilot PLA will work. That is open for debate. The Labor Unions will argue that the PLA provides for better working conditions where union workers meet all the labor standards required of a public sector project. Where are those union workers located, and which union shop do they report to? Many of those union workers are not local residents of Santa Cruz County. The union shop may be in Monterey County, Santa Clara County, and other counties outside the region. There are many examples where a municipality used a PLA that caused over-bids. Here are a couple of examples:
In the City of Watsonville: At the April 26, 2022, meeting, the City Council adopted Resolution No. 73-22 (CM), approving the plan specifications and calling for bids for the Water Well No. 4 Pump Station, Project No. WA-22-005. Bids were opened on February 9, 2023, at 2:00 pm. Only one bid was received, and the results are summarized below:
Contractor: Mountain Cascade, Inc.
(based in Livermore, in Alameda County)
Total Base Bid: $6,050,950
Engineer’s Estimate: $4,000,000
Staff reviewed the proposal and determined that the bid received was approximately 51% higher than the engineer’s estimate and budget planned for the project. Staff will re-evaluate the project scope and rebid the project.
The City of Hollister (City) requested a 4-month time extension for the period of contract award for the Construction (CON) phase of the City of Hollister 2022 City Wide Slurry Seal Project. Notably, the City Council's approval of the Project Labor Agreement and Community Workforce Agreement (PLA and CWA) in December 2023 required extensive legal documentation and review processes by relevant authorities. This new process for the City requires projects of over $250,000 to be part of the PLA and CWA. With confidence in the project's progression, the City sent out the project to bid by May 2024. At the June 18, 2024, city council meeting, I understand the Hollister City Council recommended approval of the only bid that the city received for the citywide slurry project. There were local companies in the region that declined to participate because of the PLA.
The Chamber represents dozens of small businesses in the construction industry and only a couple of the contractors have both union and non-union workers. The majority of the construction companies are non-union. If the County sets up a pilot PLA, the likely result will be local small businesses will not be allowed to submit a bid. I hope the Board of Supervisors takes this matter into consideration in the deliberation of the “proposed pilot PLA.”