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The obligation to contribute to union pension funds or membership dues can make <br />participation by non-union contractors impractical. <br />The primary benefit of PLAs is the reduced risk of costly work stoppages. PLAs can also <br />provide access to high-quality labar forces organized by established trade divisions. By <br />establishing upfront agreement between unions and contractors, PLAs may also increase <br />the likelihood that prevailing wage requirements will be adhered to. <br />The primary downside of PLAs is increased project cost. Added costs may result from <br />increased wage and benefit obligations as all project work, including delivery of <br />materials and other traditionally non-union services, must adhere to union terms. <br />Additional costs may also occur in the form of project delays. For complex projects, <br />negotiation of a PLA can take several months and requirements to reach an agreement <br />can potentially bring the development process to a standstill. <br />The use of a PLA may also increase "cost risk" even when actual cost increases may be <br />small because limiting the pool of contractors that can bid on a job, can reduce the <br />certainty of receiving competitive prices. The impact of this issue varies by trade, but <br />can be most pronounced for smaller, specialty trades where finding a critical mass of <br />qualified bidders can be challenging when non-union firms are excluded. One other <br />downside of PLAs is their inconsistency with local hiring objectives as PLAs can create <br />amore challenging bidding environment for local, non-union contractors. <br />4a. Potential Compromises to PLAs: Public agency policies pertaining to PLAs vary <br />from those requiring execution of a full agreement to a less rigorous requirement to <br />negotiate in good faith. A compromise position used by the City of Union City requires <br />developers to quantify the cost impact of employing union contractors. Under this type of <br />policy, a City could potentially mandate execution of PLAs only if the cost impact is less <br />than a given percentage increase. At a minimum, this policy ensures that unions will have <br />a chance to meet with developers and negotiate labor terms. <br />A second compromise option would be to require good-faith negotiations and, in the <br />event of a failure to reach an agreement, provide a clear report on the issues of dispute. <br />For example, a Disposition and Development Agreement for a housing project initiated <br />by the Mid-Peninsula Housing Coalition included the following clause in addition to a <br />requirement to attempt to negotiate a PLA: <br />"If the Developer cannot negotiate a mutually acceptable Project Labor Agreement, <br />the Developer shall submit a draft of all terms, either agreed to and/or disputed by <br />the Parties, to the Agency for its review and direction. Upon continued due diligence <br />good faith negotiations, if Developer cannot negotiate a mutually acceptable Project <br />Labor t~greement, the Developer shall have no further obligations..." <br />Although this type of requirement does not ensure execution of a PLA, it increases the <br />likelihood that labor and the developers will discuss relevant terms and at least reach <br />agreement on some issues. <br />3 <br />