Supervisors consider requiring contractors to do more local hiring just as the UC hospital breaks ground in Mission Bay
It's no secret that San Francisco's construction industry is going through hard times, a situation that translates into lost opportunities for working class San Franciscans. But that bad situation is being made worse by contractors on local projects hiring workers from outside the city.
Recent studies reveal that under the city's First Source program, which requires contractors to make "good faith efforts" to reach the goal of hiring 50 percent of their workers from within the city, San Francisco has failed to meet its goals on publicly funded projects.
Sup. John Avalos has introduced legislation that seeks to address this shortfall by requiring contractors to meet the city's hiring goals or face fines. But some union leaders whose members don't live in San Francisco are grumbling that the proposal is not workable.
Local unemployed workers are expressing support for the Avalos legislation, as they step up efforts to get UC San Francisco to commit to local hiring plans at its $1.5 billon Mission Bay hospital construction site, which lies a Muni T-Third ride away from some of the city's most economically distressed neighborhoods.
And now everyone is anxiously wondering where Mayor Gavin Newsom will land on the legislation and on UCSF's hiring goals in what may be his last weeks as chief executive of San Francisco.
As of press time, Newsom was running neck-to-neck with Abel Maldonaldo in the lieutenant governor's race, leaving voters uncertain whether Newsom will be mayor in January or second-in-command statewide — a promotion that would land him a seat on the UC Board of Regents but shift his primary allegiance from the City and County of San Francisco to the entire state of California.
When Avalos stood outside City Hall last month and announced his proposal to mandate local hiring on publicly-funded construction projects, he was joined by Sups. Sophie Maxwell and David Campos, Board President David Chiu, community advocates, construction contractors, neighborhood leaders, and union members.
"My legislation will ensure that San Franciscans have a guaranteed shot to work on the city's public works projects and that the local dollars invested in public infrastructure will be recycled back into San Francisco's economy and local communities," Avalos said.
Avalos' legislation came in the wake of two reports confirming that local construction workers were having a hard time getting work. A report that Chinese Affirmative Action and Brightline Defense released in August estimated that only 24 percent of workers on publicly funded sites are local residents.
And a report released by L. Luster and Associates in mid-October, at the behest of the Redevelopment Agency and Office of Economic and Workforce Development, found that only 20 percent of workers hired at 29 publicly funded construction projects in the past year were local residents.
Avalos' legislation would mandate assessment of liquidated damages against contractors and subcontractors who fail to meet minimum local hiring requirements and establish monitoring, enforcement, and administrative procedures in support of this policy. It would phase in these requirements over three years, starting at 30 percent the first year.
Avalos noted that his legislation was developed through a series of meetings with city agencies, the Mayor's Office, labor and building trade unions, the environmental community, neighborhood advocates, contractors, local hiring advocates, and unemployed workers. And he vowed to keep the roundtable approach.
Patrick Mulligan, financial secretary of Carpenters Local 22, told the Guardian that his union, whose members are specific to San Francisco, generally supports local hiring. "But there are some general concerns with the legislation," said Mulligan, who has lived his whole life in San Francisco and got his first job through a local hiring program. "We have standing contractual agreements with contractors, so whatever legislation gets passed, it will have to be meshed with the existing situation. If these were boom times, people might see it differently. But it's hard times at the union hall."
Mulligan also lamented the lack of process for the community to vet whether UC has a local hiring plan at construction projects that impact their neighborhood. "But contractors want the best workforce they can get. And in lean times, they can afford to be more selective and don't necessarily want to include training time on the job," he said. "But we feel that it's inappropriate for contractors to bring their entire crew from outside of town."
Michael Theriault, secretary-treasurer of the San Francisco Building and Construction Trades Council, told the Guardian that Avalos' legislation was unworkable because construction workers cannot afford housing in San Francisco and too few qualified workers live in the city.
"We take workers from San Francisco into our apprenticeship program constantly, but they get to a certain point in their careers and find that the city builds well on the low-end and the high-end, but doesn't build workforce housing. So they end up in Antioch, Vallejo, Fairfield, and Modesto, and commute back in," Theriault said. "That problem has not been addressed by the city, and it's at the root of why local hiring programs aren't working."
Newsom spokesperson Tony Winnicker said the mayor "supports stronger local hire requirements" even as he expressed concerns with Avalos' proposal. "We'll continue to work with the supervisors, the building trade unions and the community on legislation that achieves both realistic and legally enforceable local job guarantees for city projects," he said.
Winnicker noted that the city already supports local hiring through CityBuild and the San Francisco Public Utilities Commission. "But we believe we can do better," he added.
Avalos, whose legislation is scheduled for a Nov. 8 hearing of the board's Land Use and Economic Development Committee, said he sees his proposal as a starting point. "We'll see where it ends up," Avalos told the Guardian. "We could pass legislation that wants 50 percent local hiring next year, and it would probably get vetoed and it wouldn't be realistic. So we have to phase it in and make sure we are creating a system that is going to push the trades to be more inclusive of local residents."
Meanwhile, unemployed workers — some in unions, others not — continue to protest the lack of a local hire plan at UCSF's $1.5 billion Mission Bay hospital project, which is funded through debt financing, philanthropic gifts, and university reserves.
"We want to make sure folks get trained and everything that's necessary, so there is no dispute," Aboriginal Blacks United member Alex Prince said at an Oct. 27 protest at the Mission Bay site. The protest came one month after Newsom wrote to UCSF Chancellor Susan Desmond-Hellmann noting that the hospital was breaking ground "just as continuing high unemployment rates were devastating the city's most distressed communities,including neighborhoods impacted by the Mission Bay expansion."
"There are estimates that up to 40 percent of the members of our local construction trade unions are currently out-of-work," Newsom wrote. "It would be helpful if you could share the commitments that UCSF has made on the issue of local hiring, particularly around employing residents of San Francisco's most distressed communities in southeast San Francisco, and the results of those efforts to date." Winnicker said UCSF has not yet responded.
Barbara French, UCSF's vice chancellor for university relations, told the Guardian that UCSF is working to evaluate hiring needs for phase of the project, talking to the unions, and intends to make its findings public in December.
"We have had a voluntary local hiring policy since 1993," French said, confirming that in the past 17 years, the university has reached a 12 percent local hire rate on average. "Sometimes it was 7 percent, sometimes it was 24 percent ... Our [goal] is to reach a number that is beyond what we reached before but which is realistic."
Recently French told community-based organizations that UCSF hadn't signed a contract with the contractor at its Mission Bay hospital project, didn't have the permits yet, and that the recent community celebrations didn't mark the start of active construction at the site.
French said general hiring at Mission Bay will begin in December. "We don't get any city funds at this site, so our commitment is voluntary. But we feel very strongly that we have to reach out," she said.
Avalos acknowledged that UC is not under San Francisco's jurisdiction and can't be compelled to do more local hiring. "But we know that they are doing a critical amount of building and investing taxpayer dollars, and that this land use impacts the surrounding community. So it makes sense that we have local hire legislation and access to serious end-use jobs at the hospital."