Anchorage School Board votes for construction monopoly by labor unions

By DAVID BOYLE

The Anchorage School Board voted to create a construction monopoly controlled by labor unions, limiting competition on construction projects over $1 million to those companies hiring union labor.

The policy, “Community Work Agreement,” is the same thing as a project labor agreement that requires all workers to be hired through union halls; non-union workers must pay union dues and pay into union pension plans; and union rules are applied to the project.

Non-union contractors may not compete competitively on a project that requires a Community Work Agreement. As a result, there are fewer project bidders and project costs go up due to a lack of competition. In addition, this policy change will lead to companies from the Lower 48 gaining contracts that previously would have gone to Alaska non-union contractors.  

This has nothing to do with hiring union workers because they have higher wages. The Davis-Bacon law requires that “prevailing wages” be paid for any publicly funded projects.  Both union and non-union workers benefit from the same wages.

There was significant opposition from the non-union construction industry. One contractor stated there are seven mechanical insulation contractors licensed in Anchorage. Only one is union, so that company will get the contract by default. This is sole-sourcing by definition and would increase project costs substantially.

Stephen Rowe testified that he is a union contractor opposed to this CWA policy. He depends on non-union workers as well. Rowe has worked on 15 Anchorage school projects worth more than $80 million. Rowe said, “I will make more money if you pass this. But that’s not the right thing to do.”

The only construction entity invited to participate in the discussion during an earlier work session was Local 341, the Laborer’s.  Others, such as the Associated Builders and Contractors and the Associated General Contractors, were not invited; only union input was accepted. 

Thomas Roth, chief operations officer, for the Anchorage School District, noted the district has a responsibility for transparency and other construction organizations should have been invited to participate in the discussion. 

The Beacon Hill Institute studied 52 Connecticut school construction projects from 2001-19. It found that community work agreements or project labor agreements increased costs by nearly 20 percent — an increase of $89 per square foot.

 The CWA policy can be expected to increase school construction costs for the current $111 million bond that is on the ballot to be mailed to voters on March 14.

This policy also does not align with the “equity policy” the board recently implemented. More than 75 percent of Alaska’s contractors are non-union and the policy discriminates against these companies and their workers, many of whom are minorities and Anchorage taxpayers. This policy discriminates against women-owned and minority-owned construction companies that are non-union, a violation of the ASD anti-discrimination policy.

Superintendent Deena Bishop stated that the district was strongly opposed to this policy because it will substantially drive up construction costs. She noted that the board has a fiduciary duty to get the best value for the taxpayers’ money.

Board president Margo Bellamy moved to table the policy until more information was available from the construction industry that opposed the bill in their written testimony. She was concerned with discrimination against minority construction companies. Her motion failed with 6 voting “no” and only Bellamy voting “yes”. 

Board member Andy Holleman then paraphrased House Speaker Nancy Pelosi’s, “We have to pass the bill so that you can find out what is in it.”  He said, “We are going to have to watch carefully as it goes forward to see if it’s really doing what we want.” He made it clear he wanted to pass the policy that night.

Motions to raise the $1 million threshold failed. The $1 million threshold means practically all construction projects will include a CWA, be non-competitive, and cost taxpayers more. 

The CWA was approved by a vote of six to zero, with member Dora Wilson abstaining due to her job as the Community Outreach Manager for IBEW Local 1547. Even conservative board member Dave Donley, formerly associated with Local 341, voted for the CWA policy.

Here is a link to the written testimonies (14 opposing, 2 supporting).

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