Renderings of the proposed Civic Center project.
UPDATE | A protracted negotiation between the City of Long Beach and a union representing city employees currently assigned to the Civic Center came to a close last night, as the city council voted to initiate the city’s “last best final offer,” which will contract out about 12 jobs once the new Civic Center is up and operational.
The negotiations between the city and the International Association of Machinists and Aerospace Workers (IAM) have been a point of contention since they began in September of 2015. The city asserts that maintenance, custodial and security positions at City Hall need to be contracted out to Johnson Controls Inc. (JCI) to ensure that the facilities at the new Civic Center are returned to the city at or above the facility condition index score agreed to in its contract with Plenary Edgemoor to develop the new Civic Center.
The IAM refuted that claim, stating that not only is it unnecessary to contract those jobs out, but that doing so would result in the loss of union jobs in the city. IAM Western Territory Representative Richard Suarez, who has led the negotiations for IAM, maintained his stance that the agreement would not prevent the city from eliminating positions not currently allocated to the Civic Center.
“The city’s LBFO only promises to protect the displaced employees specifically assigned to city hall,” Suarez said. “It does not protect other employees who will inevitably be displaced as a result of reassignment of city hall employees.”
The union requested a fact-finder to intervene after the city voted to approve the contracting out of about 12 jobs late last month. The results of that inquiry, which were made public last week, sought to strike a balance between the city’s position and that of the IAM. The report stated that the city should not contract out the custodial worker positions currently assigned to the Civic Center, instead, it could implement a supervisor role to ensure that day-to-day work met the specifications of JCI.
It also found that the city should not contract out additional security positions as the security officer positions would have no impact on the FCI of the building at the time its handed back to the city after the 40 year contract comes to a close.
In her dissent to the findings of the fact-finder, Human Resources Director Alex Basquez wrote that the FCI could be compromised by having only a supervisor overseeing the basic maintenance of the facility, because a lack of communication with JCI could lead to larger infrastructure repairs arising. She noted that the contract for the Civic Center required complete control of operations and maintenance in order for it to work.
“The FCI warranty does not depend on degrees of effect,” Basquez wrote. “Instead, it requires complete control over the direction and execution of O&M services, or it will not work. PECP cannot warrant the condition of facilities for 40 years, if it does not control and direct all O&M services performed on those facilities over those 40 years.”
City Manager Patrick West said the city had already made concessions to keep on six of the current security officer positions at the Civic Center, and the vote by the council would not affect that previously reached agreement. Keeping these positions, as well as the contracting out of two additional security jobs, will cost the city about $410,000 annually, according to city estimates.
The report from the independent fact-finder was an advisory document and the council maintained its power to vote into effect either the recommendations made in the report or the staff's recommendations to go forward with its initial offer. The unanimous decision last night will reassign roughly 12 full-time-equivalent (FTE) jobs from the Civic Center to other positions throughout the city.
Once the city’s 40-year agreement with Plenary Edgemoor ends, the positions will be re-assigned to the civic center. Those moves are set to become effective once the new civic center is completed in 2019.
PREVIOUSLY: New Civic Center Maintenance Contracted Out as Union Questions Legality
On 04/20/16 | The building services for the yet-to-be constructed Civic Center were formally awarded to Johnson Controls Inc. last night, as the Long Beach City Council voted unanimously in favor of the motion after months of negotiations with union representatives who had tried to secure such jobs for existing city employees.
The outsourcing of the jobs was part of the overall negotiations with Plenary/Edgemoor Civic Partners (PECP), the firm that partnered with the city to design and build the new Civic Center after a bidding process was conducted in the wake of the current structure being deemed seismically unsafe. The jobs included in the contract with JCI include maintenance, custodian and security jobs currently held by Long Beach city staff.
At the end of the 40-year lease in which Long Beach will effectively be a tenant, PECP is required to hand over the facility with no less than a “B” condition based on a Facility Condition Index. The contract with JCI provides the city with 24-hour services to the facility with provisions to withhold up to $7,000 a day if issues go unfixed past agreed to time frames.
Last night’s move is projected to save the city about $122,000 annually according to estimates from the city’s financial team.
The process was conducted through a Proposition L study—a law passed in 1979 that allows private contractors to take over city workers’ positions if they can perform the job “as efficiently, effectively and at an estimated lower cost to the city.” The process requires a two-thirds approval from the city council.
Negotiations with the International Association of Machinists and Aerospace Workers (IAM), which started last year and persisted over 11 meetings, ended in an impasse last week. Intervention from a neutral fact finder was deemed necessary.
The vote was taken as an end-of-the-month deadline approached, and city officials stated the city had entered “operational necessity” to execute the contract or risk losing the terms of pricing agreed to with PECP and JCI for the services. With last night’s meeting being the last council meeting in the month of April, the vote needed to happen last night, according to city staff, to avoid financial ramifications.
“Given all those factors, we do expect that if we do not close by the end of April, there will be significant increases in price in terms of interest rate fluctuations and the contract that we have with our partner,” Modica said.
The timing of the vote was questioned by Richard Suarez, a western territory representative for IAM, who said that the fact finder’s report was subject to review and vote by the city council, however, that report won't be concluded until early May.
He claims the city’s requests to forego the fact-finding process under the grounds that it conducted fact-finding during the negotiation process was shot down by a ruling from the California Public Employment Relations Board.
Suarez said asking PECP for an extension on the negotiations and fact finding to be carried out to its end would not have imperiled the project, and assertions to the contrary are false.
“I don’t know any entity that would walk away from a $535 million project," he said.
“We had the fact finding and now their position is ‘because fact finding isn’t meeting our deadline, we don’t have to comply with the law,’” Suarez said. “That’s, in essence, what he [City Attorney Charles Parkin] said last night.”
While Suarez had yet to confer with the IAM legal representation, he expects the council’s vote to be challenged in court, as it may have broken a provision of the Meyers Milias Brown Act. The portion he refers to requires a hearing of the fact finder’s report before the council prior to a vote.
He said the premise of contracting out in the first place was done based on inflated numbers from city staff. He backed up his claim by noting that when the IAM pushed to have its armed security that currently watches over the facility remain in place—a battle IAM won—city staff showed no change in its amount to PECP and JCI for security services.
Suarez said staff noted that the savings provided by the city continuing to provide its own security were offset by the initial contract being “undervalued” by the exact monthly figure the city currently pays for security.
“The city’s financial expert that was involved with the negotiations with JCI said ‘that was absorbed because they found that when they re-did the numbers they were $15,000 shy before,’” Suarez said. “And they said that with a straight face.”
JCI will provide security detail in addition to the city’s current security presence, but they will not be the same caliber as those who are trained by and in constant contact with the Long Beach Police Department, Suarez said. He noted the original provision to have unarmed guards was brought before the council just weeks after the terrorist attack in San Bernardino.
Long Beach budget manager Lea Eriksen said that asking for a delay or extension would have impacted the the financing of the project, possibly as a whole, as every delay offsets interest costs that were calculated into the initial contract. The idea that JCI employees are better suited to look after the new Civic Center is a position she said has never been articulated, but having control over an investment is a common request for a group like PECP.
"It was more about the control of the company. JCI, because they’re obligated by a condition of the overall deal and the financing of the project, any financier would want to make sure that the asset they’re paying for is being maintained," Eriksen said. "They needed to have control over the employees."
Suarez and the city also differed on the fate of the existing employees, as they’ll have to be reassigned once the Civic Center becomes operational and JCI staff move in.
The ordinance mandates that no current city staff currently assigned to the Civic Center through June 2019 “shall be reduced in hours, position, duties, or compensation as a result of the execution of the contract.”
Suarez took this to mean that once they’re reassigned, the department they’re reassigned to will have to budget for an additional job or, in a more likely case, reduce its current payroll to make room.
"What they’re saying is ‘Richard is a custodian at the Civic Center; we won’t need Richard at the Civic Center any more so we’re going to put Richard in another open custodian position in the city doing the same work with the same pay,'" Suarez said. "If Richard goes to the airport and Richard is up here on the seniority list, the airport isn’t getting a budget for a new custodian. They’re not being budgeted for an additional Richard on the payroll. The lowest guy at the airport in the custodial pool gets laid off."
Eriksen said that’s not necessarily true. The city currently contracts out other department’s services to firms outside the city and it can simply not renew those contracts to make room for the employees being displaced from the civic center. She also noted that of the approximately 12 positions that will need to be relocated, only about eight or nine of the full-time equivalent jobs will need to be reassigned.
"Nobody is going to lose their job. Either there would be an opening or we would have to create a position," Eriksen said. "One of the things is that we actually currently do contracting out of some of the maintenance of some of the city’s facilities. We have years to plan for this, so potentially we would just not renew a contract with an outside vendor and instead have a city employee do the work."