The purpose of this report is to request City Council approval of the Project Labor Agreement and Maintenance Agreement for the Magnolia Power Project.

Project Labor Agreements (PLA) are designed to manage the uncertainties and complexities of large-scale construction projects, to the mutual benefit of all the contracting parties. Two major past projects that utilized PLAs are the Metropolitan Water District's Eastside Reservoir and the Intermountain Power Project.

Generally, a PLA is a pre-hire collective bargaining agreement negotiated between the project owner, project manager or general contractor and an appropriate labor organization, usually an area or State Building and Construction Trades Council for the purposes of advancing the economical and efficient completion of the construction project.

The typical PLA includes a no-strike, no lockout clause and procedures for quick settlement of any problems or disputes that might develop during a project. Consequently, PLAs eliminate hidden costs and cost overruns by eliminating unexpected wage demands or disputes during the life of the project.

The use of a PLA as a construction management tool has been upheld by both the United States Supreme Court in Building Trades Council v. Associated Builders and Contractors (1993) 507 U.S. 218 and the California Supreme Court in Associated Builders and Contractors v. San Francisco Airports Commission (1999) 21 Cal. 4th 352.

The State Building and Construction Trades Council of California and the Los Angeles/Orange County Building and Trades Council requested that SCPPA and the City of Burbank enter into a Project Labor Agreement and a Maintenance Agreement for the Magnolia Power Project.

The Project Labor Agreement is the typical PLA discussed earlier in this memo. The Agreement prohibits strikes and lockouts (see Section 6) and provides for a grievance procedure that includes binding arbitration (see Section 8). The contractor on the Project must use labor from the appropriate craft union. Work performed by employees of either SCPPA or the City of Burbank is excluded from the scope of the Agreement. The general contractor and all subcontractors must agree to the provisions of the PLA.

The Maintenance Agreement applies to all planned outage maintenance, major overhauls, and other maintenance work performed on the Project that is contracted out to a contractor. Work performed by the employees of SCPPA and the City of Burbank, technical work, warranty work, and work performed under the PLA is excluded from the scope of the Maintenance Agreement. Contractors and subcontractors must agree to the provisions of the Agreement. As with the PLA, the Maintenance Agreement contains a no strike, no lockout clause (see Section 6) and a grievance procedure that includes binding arbitration (see Section 8).

The Burbank City Attorney's Office and the attorney for the labor organizations negotiated these agreements. The two most important concessions made by the labor organizations were the exclusion of work done by employees of SCPPA and the City of Burbank from the scope of the Agreements and the acknowledgement in Section 1.3 of the PLA that SCPPA and Burbank retain the right to control and coordinate all project construction work.

The Magnolia Coordinating Committee and Southern California Public Power Authority (SCPPA) Board of Directors have previously approved these agreements.

RECOMMENDATION: It is recommended that the City Council adopt the Resolutions entitled: A Resolution Of The Council Of The City Of Burbank Approving The Project Labor Agreement For The Magnolia Power Project and A Resolution Of The Council Of The City Of Burbank Approving The Project Maintenance Agreement For The Magnolia Power Project.

cc: Ronald E. Davis, General Manager, BWP