Unions push for local-hire incentives

Unions push for local-hire incentives

July 26th, 2009 by Matt Wilson in News

Some local unions are asking the Chattanooga City Council to give incentives to contractors who use mostly local workers for city contract work.

Council Chairman Jack Benson said that's unlikely.

The proposal will come before the council's Legal and Legislative Committee on Tuesday, but Mr. Benson said it was "just exploratory."

"I can't foresee that it'll get past an informational status," he said.

Under the proposal, companies that employ 70 percent or more of their work force from in and around Chattanooga and participate in a registered apprenticeship program could win contracts even without placing the lowest bid.

That's because the city, when considering such companies' bid, would reduce the amount between 5 percent and 10 percent. Then, once the contract is awarded, the company would be paid the amount of the original bid before officials factored in the reductions.

Jimmy Rodgers, attorney for the Chattanooga Building and Construction Trades Council and the Chattanooga Area Labor Council, among other local unions, said the proposal should not be viewed as "a union matter."

"There's an economic benefit to the city of Chattanooga in making sure that its city taxpayer dollars are utilized, that they are reinvested to the maximum extent possible," he said. "Sometimes, the reinvestment of city dollars may, in fact, be more fruitful if the city pays more money upfront."

Roger Tuder, executive director of the Associated General Contractors of East Tennessee, said he doesn't understand the need for a city policy to favor local contractors.

"We already have a level playing field and a competitive environment," he said. "All contractors ask for is an opportunity to fairly compete for any public contract, but this proposed ordinance takes that away."

Mr. Tuder argued that the proposal could lead other cities to pass similar ordinances and "effectively shut out our companies seeking business there."

Mr. Rodgers said that argument focuses only on "protecting a business or two or three."

"I think the focus ought to be on the citizens of Chattanooga and whether they're being provided jobs by their city taxpayer money," he said.

Richard Rose, an attorney who serves as the chairman of the legal committee for the Associated General Contractors of East Tennessee, said he believes the ordinance doesn't comply with municipal bidding laws. He said the law requires competitive bidding and the proposal makes the process unequal.

Councilwoman Carol Berz, who gained substantial union support during this year's election campaign, called the proposal "almost like an affirmative action for local labor."

She said she thinks the proposal should be given a full hearing but stopped short of saying she would support it.

"I'm getting lobbied by all sides," she said.

From July 1, 2008, to Feb. 21, 2009, Ms. Berz's campaign received $20,000 from unions and political action committees.

The Tennessee attorney general's office has issued opinions stating that limiting bidding to a certain geographical area and giving preference to minority businesses is not allowed under state law.

Likewise, the University of Tennessee's Municipal Technical Advisory Service has issued recommendations that cities not award bids based on local preference.

But Sid Hemsley, a consultant for MTAS, said he could not remember encountering a proposal like the one being discussed in Chattanooga.