The Cloquet City Council on Tuesday, April 20, presented the first reading of a new ordinance that, if passed, will effectively eliminate project labor agreements in the city.
Since 2017, the city has been implementing PLAs in all city construction projects, requiring contractors to abide by certain terms, such as timelines, working conditions and budgets.
The proposed ordinance to eliminate PLAs comes as a result of pending litigation against the city involving the enforcement of the agreements, which previously prohibited non-union contractors from working on city projects.
The council has since removed the union security portion of the city’s PLA, but city staff believe that further action is necessary to avoid future legal issues.
“Lawsuits against the city directly impact the city’s taxpayers as the costs for defense and potential damages are passed on to them through property tax levies,” read the staff request for council action. “Staff believes it is in the best interest of those taxpayers and the city as a whole to resolve, at least in part, the current and potential future lawsuits in this way.”
The request also emphasized the limitations surrounding PLAs, explaining that many contractors refuse to work under a labor agreement, which eliminates competition and raises project costs.
The request also claimed that past success stories were largely due to proper project management, not PLAs.
While some claim the agreements have a negative impact on city funds and residents, others argue PLAs are essential for providing local job opportunities and maintaining project costs.
“When you guys are voting against PLAs, that is a direct attack against your local responsible skilled labor,” Daniel Gilbert, union business agent for International Union of Operating Engineers Local 49, said.
Gilbert argued that PLAs are essential for local governments, emphasizing that they ensure projects are completed on time and within budget.
Duluth Building and Construction Trades Council President Craig Olson echoed Gilbert’s ideas, emphasizing that the main legal issue with Cloquet’s agreements was that they contained a union security portion, which has since been removed.
He called the plaintiff’s point in the current lawsuit against the city “moot,” and explained that even if lawsuits continue, city insurance should stop them from affecting taxpayers.
According to Olson, PLAs work to ensure that local contractors can find local jobs.
“They keep taxpayers' money in the community,” he said. “(They) keep our people working.”
Dan Olson, business manager and financial secretary and treasurer for the Laborers International Union of North America Local 1091, claimed that PLAs do not cost taxpayers more money and do not deny work to any specific contractors.
However, former construction sales employee Lee Anderson argued the opposite, calling PLAs “a bad deal for the taxpayers of Cloquet” and sharing that he has had nothing but bad experiences when dealing with the agreements.
Both parties agreed that the issue is not union versus non-union, but rather deciding what is in the best interest of city residents.
City councilors are set to vote on the proposed ordinance at a meeting May 4.