REPORT TO THE CITY COUNCIL
FROM: SCOTT L. MOZIER, PE, Director
Public Works Department
BY: WILLIAM C. HERR, Assistant Director
Public Works Department, Construction Management Division
SUBJECT
Title
***BILL B-25 - (Intro’d July 20, 2023) (For adoption) - Amending Section 4-117 to the Fresno Municipal Code relating to National Targeted Hiring in contracts for any Public Work of Improvement not covered by a Project Labor Agreement and increasing median income levels for National Economically Disadvantaged Area (Subject to Mayor’s Veto)
Body
RECOMMENDATION
It is recommended that the Council amend Section 4-117 to the Fresno Municipal Code (FMC) relating to National Target Hiring in Contracts for any Public Work of Improvement not covered by a Project Labor Agreement
EXECUTIVE SUMMARY
On April 21, 2016, the Council adopted National Targeted Hiring (NTH) requirements into Section 4-117 of the Fresno Municipal Code. Recognizing that the City of Fresno awards numerous contracts to private firms to construct Public Works of Improvement, these changes to the FMC sought to advance the interests of the City by encouraging employment and training opportunities to create a trained workforce for safe construction of any Public Work of Improvement to mitigate the harms caused by geographically concentrated poverty, unemployment and underemployment in economically disadvantaged areas throughout the United States, including in the City of Fresno. By using provisions of this FMC section, it allowed the City to use local, state, and federal funds to promote hiring of workers in economically disadvantaged areas across the nation.
On September 29, 2021, the City entered into a Community Workforce Agreement with the Fresno, Madera, Kings and Tulare Counties Building and Construction Trades Council, also known as a Project Labor Agreement (PLA). The PLA covers work with an Engineer’s Estimate for construction costs in excess of $1,000,000. The National Targeted Hiring ordinance is still in effect for Public Works of Improvement under $1,000,000, but the 2016 ordinance adopted by the Council did not include a cost-of-living adjustment for the $35,000 average median income threshold listed in the NTH ordinance. This has resulted in NTH compliance becoming infeasible as income levels have risen over the past seven years. Staff is therefore returning to Council with a recommendation to introduce an amendment to the ordinance to redefine a National Economically Disadvantaged Area with the average median income level under $55,000 rather than $35,000, and for the threshold to be adjusted each year on July 2nd to the nearest $1,000, increasing with the Consumer Price Index (CPI). This will allow for the NTH ordinance to be effective and to achieve the desired goal.
BACKGROUND
As noted in the April 21, 2016, report to Council, areas throughout the United States have experienced both historically high rates of unemployment and underemployment, including the City of Fresno which has been experiencing substantially higher rates of unemployment than other areas of the United States. The City of Fresno continues to face poverty in southern and central Fresno neighborhoods as generational concentrations of poverty continue to hurt our local economy.
The City desires to increase the number of pathways to technical education training programs in areas across the United States. More recently in September 2021, the City entered into the Community Workforce Agreement with the Building Trades Council in an effort to build upon those pathways to careers as journey-level, skilled construction tradespeople.
The April 2016 Council action amended the FMC to require the City of Fresno to incorporate NTH provisions on all Contracts for any Public Work of Improvement in excess of $200,000, adjusted annually on the first of July to the nearest $1,000 in response to changes in the National Consumer Price Index. These provisions obligate Contractors to follow targeted hiring procedures, including an obligation to make reasonable good faith efforts, as defined in the implementing Administrative Order, to meet specific hiring requirements for Nationally Targeted Workers, as defined in subsection (c).
“National Economically Disadvantaged Area” is currently defined by the following:
A zip code outside of the City of Fresno that includes a census tract, or portion thereof, in which the median annual household income is less than $35,000 per year, as measured and reported by the U.S. Census Bureau in the most recent U.S. Census; or
A zip code, or any portion of, which falls inside the City of Fresno, the average median income of which census tracts is less than $35,000 per year, as measured and reported by the U.S. Census Bureau in the most recent U.S. Census.
Staff is recommending that the Council amend this provision of the NTH ordinance to update the threshold from $35,000 per year up to $55,000 per year, to bring this current for 2023, and to have this threshold automatically increase on July 2nd of each year by the Consumer Price Index (CPI) adjustment, rounded to the nearest $1,000.
All other provisions of the NTH ordinance as previously adopted by the Council will remain in effect. The mandatory participation level for National Targeted Workers is currently 40% of the total construction project worker hours.
For projects covered by the Community Workforce Agreement (Project Labor Agreement), the NTH Ordinance provisions do not apply.
ENVIRONMENTAL FINDINGS
This is not a project for CEQA purposes.
LOCAL PREFERENCE
This proposed FMC ordinance amendment does not provide a direct local preference as defined by our current FMC.
FISCAL IMPACT
There will be no impact to the General Fund from the recommended action. Full costs for each capital improvement project, including compliance with the NTH ordinance during the construction phase, are included in the adopted budget for the City of Fresno.
Attachment(s):
Ordinance