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HomeMy WebLinkAboutRS04-Redevelopment Agency \ RmI".. OPMENT AGENCY...&u.ST FOR LISSION/COUNCIL A:ION Glenda Saul, Executive Director Subject: PREVAILING WAGES em: Dept: Date: Redevelopment Agency May 2, 1986 Synopsis of Previous Commission/Council action: 1/13/86 Open Hearing -- Directed agency staff to seek proposals for study and to ascertain practices of other Redevelopment Agencies. e Received City Administrator's report. Received two proposals for prevailing wage study. Continued to March 3, 1986. Instructed staff to confer with State College to propose a prevailing wage study. 3/3/86 3/17/86 4/7/86 Continued to March 17, 1986. Continued to April 7,1986. Continued to May 5, 1986. Recommended motion: (COMMUNITY DEVELOPMENT COMMISSION) . Motion authorizing and directing Agency Counsel to prepare an agreement between the Community Development Commission and the Data Gathering Center, California State University, for consultant services, Prevailing Wage Rate Study, and authorizing the execution thereof by the Chairman and Secretary of the Agency. d~^-4/ .~..<A.~UL_ - Signature Contact person: Glenda Saul/Sandy Lowder FUNDING REQUIREMENTS: Amount: $ n/a Phone: 383-5081 Ward: All Project: All Date: May 5, 1986 Supporting data attached: YES No edverse Impact on City: eCil Notes: Agenda Item No. Rs - Lj . CI'" OF SAN BERNARDI. - REQU" FOR COUNCIL AC..4bN . . . 75-0264 STAFF REPORT A proposal has been prepared by California State College to study the Prevailing Wage issue. Mr. Shel Bockman from the College, indicated he would need until the end of April to present an intelligent and effective proposal. He evaluated the information he received from the unions and other sources. The original target date for the proposal was the end of March, 1986, but it took longer than anticipated. Mr. Bockman stated that the time and effort put into the proposal is just as important as the study process since he has to gather information in the same manner. The proposal was received on Friday, May 2, 1986, and is attached hereto for review. The estimated cost is $25,000 and will be completed within 90 days after the execution of the agreement. 860G '. . . . . . . ***************** . ORA F T ***************** THE CITY OF SAN BERNARDINO'S PREVAILING WAGE STUDY: A PROPOSAL , ~ lE@~~W[E IDJ MW 2 - 1986 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, CA PREP ARED BY RESEARCH AND DATA GATHERING CENTER CALIFORNIA STATE UNIVERSITY, SAN BERNARDINO . . . INTRODUCTION ~ . The following proposal Includes the Research and Data Gathering Center's re- search design and budget for the City/Agency's prevailing wage study. THE RESEARCH DESIGN The research oroblem and objeetives: ,As the result of discussion with various interested parties, and review of relevant documents, the Research and Data Gathering Center understands the re- search problem to be: What would be the short/long term effects of changing current City/Agency policy, which requires prevailing wages be paid on all City/Agency contracts, to a polley which would require prevailing wages be paid only when required by state/federal statues on : . A. Fami~y income and standard of living of union/non-union construction workers in the city. B. The City's ability to attract new developers and to promote additional development by those developers already situated in the community. C. Minority-owned, women-owned, and other small businesses. D. City/Agency budgets. E. The social and economic well-being of the general community. In light of the research problem, the Research and Data Gathering Center proposes that the following research tasks be undertaken. Research Task 1: The examination of the rate of comDliance with the Dresent Dreva il imr wa~e clause. In order to ascertain how the proposed change in prevailing wage policy would . affect the stipulated research objectives, it is first necessary to determine insofar as possible the congruence between present policy and practice for those past/current . . . . . ~ . contracts which would have been affected by the proposed policy change. For in- stance, if the compliance rate, i.e., between policy and practice, is quite low, then the proposed change in policy would by definition have very little &ocial and/or economic impact on the stipulated research objectives, other than to make explicit what is, in fact, already taking place. More specifically, if developers/contractors are not, in fact, paying prevailing wages, then the proposed change in policy would produce little social and economic effect. On the other hand, the proposed study would still have merit, for it would provide data by which the City/Agency could eval~te the implications of current practices. However, if the compliance rate is found to be significantly high, then the proposed policy change would be increas- ingly likely to produce economic and &OCial consequences. The Research and Data Gathering Center therefore proposes that the first re- search task involve the determination of the past/current compliance rate(s). Ideally, this rate would be calculated by comparing (using a sampling of relevant . contracts) actual wages paid with the prevailing wage rate at the time of the con- tracts. If this approach is not feasible (i.e., if the contracts and relevant informa- tion are unavailable), the Research and Data Gathering Center will interview various knowledgeable parties - union officials, developers, contractors, agency per- sonnel, etc. - in an effort to construct an anoroximate rate of compliance. It is en- visioned that this latter procedure will yield two or three different approximate rates of compliance. Research Task #2: The collection of ieneral backlround data. In order to obtain critical background material for this project, the Research Data Gathering Center will conduct in-depth interviews with representatives of various interest groups affected by the proposed policy change, and will gather and review relevant secondary data on prevailing wages and open shop rates. Repre- . sentatives from other cities which have moved from prevailing wages to open shop rates will be surveyed for their views as to how the proposed policy change would - 2 - . . likely affect the stipulated objecti ves. . In addition, ~ acknowledged experts in prevailing wage/open shop rates will be interviewed for their views concerning the . proposed policy change. Research Task '3: The estimation of the relative and absolute mll2tlitude of labor costs in RDA-Soonsored orojeets that would be affected QY the pPQoosed oolicy change. As a preliminary step in the analysis of the impact of the proposed policy chang~ on family income of construction workers, the Research and Data Gathering Center will examine a sample of recent RDA projects to estimate construction labor costs as a percentage of total project costs. In addition, the Center will gather and . review secondary data to determine the annual aggregate dollar values of RDA- related projects in each of the last ten years. . Research Task '4: The comDarison of QpE!n shop and orevailirur rates as to their probable social and economic imoact under various ~rowth scenarios. Employing standard statistical and analytical techniques, various growth scenarios (low, moderate, and high growth) for RDA-financed activity in five year increments to the year 1996, will be produced. As part of the scenarios, the likely amount of construction dollars and the percent of wages represented by contracts which would come under the proposed policy change will be estimated. The scenarios will be used to compare open shop rates and prevailing rates, adjusted by the rate of compliance, for their likely effect on the stipulated research objectives. Note: these scenarios will involve qualitative as well as quantitative analysis. More specifically: (a) The fiscal impact multiplier concept will be used to estimate, under different scenarios, how increased (or decreased) construction household spending will likely affect retail sales, employment and, ultimately, ag- . gregate community income. - 3 - . . . '. (b) Under different scen!!s, prevailing wa!open shop amined to determine union/non-union local household income. D R AFT -.- rates will be ex- (c) Under different scenarios, prevailing wage/open shop rates will be inves- tigated for their likely affect on the relative participation of union/non-union labor in RDA projects. Interviews with developers and union officials will be an integral part of this qualitative assessment. (d) Under different scenarios, prevailing wage/open shop rates will be ex- amined for their likely impact on mlnority-owned and women-owned businesses, on rates ff women and minority participation in RDA sponsored projects, and, ul- timately, on the economic and social well-being of minority-owned and women-owned businesses. (e) The structure of the City's budget will be examined to isolate the revenue and cost categories affected by the change in the level of aggregate local construc- tion household income. Using empirical estimates the dollar impact of open shop rates/prevailir.g wage on specific revenue and cost categories and on the overall City budget will be projected. (f) Under different scenarios, prevailing wage/open shop rates will be com- pared to determine their probable impact on the RDA budget. (g) Under different scenarios, prevailing wage/open shop rates will be com- pared to determine their probable impact on the City's ability to attract new developers and to promote additional development by those developers already situated in the community. (h) Under different scenarios, prevailing wage/open shop rates will be com- pared for their probable impact on the City's competitive edge with other cities in the Inland Empire - e.g., business lost to other communities due to uncompetitive labor costs. - 4 - . . . - - . ~ . . Reseal'~h TASk '5: A ease study of l'eoresentative eonstMJetion nro'eels in SAn Bernardino's Redevelopment 81'e8S. This analysis will compare how prevailing wages/open shop rates would affect and impact specific projects. Reseal"Ch Task '6: The ~iol~i~al comoonent. Under different scenarios, prevailing wage/open shop rates will be compared for their probable impact on the demographic composition of the City and on the qual~y of life of the general community. As part of this analysis, the various economic scenarios will be examined for their probable impact on community struc- ture and social process, quality of family life, and the occupational and social . mobility of those involved in the construction industry. Research Task '7: The Final ReDOrt The final report will entail various options concerning prevailing wage/open shop rates available to the City/Agency, and the probable economic and social con- sequences attendant each choice. - 5 - . . '. . . . e PBBVAILIlfO WAOB STUDY COST BRRAKDOWH TASK I PUNCTION COST 1. Goal articulation 1,000 2. O~aining secondary data and data adjustment 1,925 350 Hours @ $5.50 per hour 3. Economic analysis 5,000 4. Sociological-analytical questionnaire eOlllltruction 2,500 5. Research assistant 2,000 , . 6. Final report preparation including data analysis, and comput~r simulation 8,750 e 7. Telephone, postage 500 8. Indirect costs (15. of 1 - 7) 3,251 TOTAL COSTS 14,928 e