Fringe Benefit

Eight months ago, when the Santa Fe City Council unanimously passed new rules mandating that contractors for large city construction projects work closely with organized labor, it stayed largely under the radar.

But now, as the guidelines officially go into effect this week, some contractors and pro-business organizations are crying foul, prompting city councilors to reconsider the provision. They argue that, rather than protecting workers' rights, the new provision—known as a community workforce agreement, or CWA—is merely a sop to unions.

"I'm hearing that this is going to cost the city money," Councilor Ron Trujillo tells SFR. "If this is going to cost us more than it's going to help, then where are we going as a city?"

Modeled after similar rules that operate in cities like Los Angeles and Oakland, the CWA remained relatively uncontroversial until late last month, when the city started preparing for a $1.4 million project to build office space in the Railyard's Market Station building.

The CWA applies only to city-funded construction jobs of more than $500,000. The city has seven construction projects slated for the CWA, totaling nearly $15 million—less than half the total bond monies approved by voters and the city council in the past year. They include broadband expansion and the Southwest Activity Node Park.

The CWA works like this: of the first 40 employees hired, 20 must be hired through a union. The other 20 can be hired in any way, but they're required to sign up with a union for the duration of the project. Each additional employee also must be hired through a union.

Construction wages wouldn't necessarily change, as contractors would still be required to pay the "prevailing wages" set by the state Department of Workforce Solutions. Unions would simply make sure those wages are paid out properly. But the rules could discourage some contractors from bidding on large-scale city projects, potentially making the projects slightly more expensive for taxpayers by reducing the number of options the city has to choose from.

"There's a big limitation on number of union contractors that bid," Eric Enfield, president of Architectural Alliance Inc., tells SFR. "I think that's going to lead to a higher price."

At the same time, Enfield says that big public projects attract bidders no matter what. Enfield looked into the Market Station project but decided not to bid because at least a dozen other architects were interested. He adds that even though public projects generally pay more, he usually stays away from them because they're heavily regulated.

Santa Fe Chamber of Commerce Executive Director Simon Brackley, who opposes the measure, says that the struggles of the local construction industry are reason enough for the city to reconsider the CWA. He adds that Albuquerque has more unionized construction workers than Santa Fe, which could mean a loss of local money to another community.

"If you look around town, you'll see projects that have stalled," Brackley tells SFR. "We want to stop that trend."

(Still, the CWA must abide by the city's local preference rules, which give local contractors a 10 percent advantage during the bidding process.)

The CWA would also require every employee working on a large city project to pay union dues, which vary based on wage and profession. To New Mexico Business Coalition President Carla Sonntag, the mandate marginalizes workers while enriching unions. She estimates that more than 95 percent of construction companies in the state are nonunion.

"They're not union because they don't want to be in a union," Sonntag tells SFR. "It's very prejudicial, in our mind."

But nailing down an accurate percentage of the state's unionized construction workers isn't easy. New Mexico Building and Trades Council President Ray Baca says that Sonntag's estimate includes contractors on small projects that may take only a few people to complete. He adds that his organization, a statewide alliance of craft unions, represents between 7,500 and 8,500 workers in the commercial and industrial construction industry.

According to the Associated General Contractors of America, approximately 45,000 construction workers are employed in New Mexico (approximately 11.5 percent are unemployed).

Mayor David Coss, who played a big role in getting the council to approve the CWA back in February, says that much of the resistance to the CWA is part of an effort to undermine organized labor. Coss, a former local union president himself, says he "believes in partnership" and that the city's cooperation with the unions is on par with that of other organizations like the Chamber of Commerce and Creative Santa Fe.

"There's a giant anti-union bloc in the country, and they get real upset when somebody tries to work with unions," Coss tells SFR.

At least one Santa Fe contractor thinks the new rules are worth a shot. Peter Brill, president of Sarcon Construction Corporation, says he hires his employees solely through construction unions because their members learn proper skills and safety through sponsored apprenticeships. The CWA, he says, would encourage more of this in Santa Fe.

"A trained and skilled workforce is critical," Brill tells SFR. "If the CWA achieves that goal, we're all for it."

Santa Fe Reporter