Amending project labor agreement discussion put on hold in Cloquet
The City Council tabled a decision to change the city's current code requiring private projects to enter in project labor agreements if they receive any public funding.
CLOQUET — City councilors decided Tuesday, March 7, they need more time to evaluate a decision on whether to change the code requiring private projects to enter into project labor agreements if they receive public funding.
The motion to table the decision was made by Councilor Sheila Lamb and approved by a 5-2 vote, with Mayor Roger Maki and Councilor Kerry Kolodge dissenting.
Lamb said she is finding issues with changing the code, as it feels like a "he said, she said"
"I know the amount of union workers that reside in Cloquet. In my mind, that is my first obligation is to those who live here," she said. "I need some evidence to know exactly how many of our union workers may have a reduction in income."
The proposal was initially brought to the council by the Cloquet Economic Development Authority on Feb. 7.
Holly Hansen, the city's community development director, said the need for amending the requirement came from comments she has heard from developers and businesses who are not interested in starting projects that would require them to enter into an agreement.
The city's project labor agreement requires public projects costing over $175,000 to enter into an agreement. This requirement extends into private projects as well as long as they are receiving public funding in some capacity for their projects.
The city or EDA's financial assistance on private projects is gap funding, and Hansen said it is always the minority financing to incentivize and assist private projects.
Hansen said while she can't name any specific companies due to confidentiality agreements, entering into agreements can affect a company's bottom line on a project, which could lead to the project not coming to fruition.
In the Feb. 7 work session, Hansen said numerous businesses and developers have informed the EDA that they will not sign the agreement because they want full project management.
The proposal to remove the agreement from private projects would also change to offer an incentive for a private project to use an agreement.
Under the current proposal, a private project opting to use an agreement could get an additional 15% to its funding from the city or EDA, something Hansen said could actually increase the use of agreements in private projects.
Hansen added that since its start in 2017, there have been no agreements used by private projects in the city.
City Administrator Tim Peterson said the change would hopefully be an economic driver for the community.
On concerns about losing job opportunities for local laborers, Peterson rebuked the claim, reiterating that there have been no private projects in the city using an agreement.
"There can't be a reduction in wages from zero projects," he said. "That is where we stand today."
Before the council made its decision, Maki opened up the discussion to those in attendance to voice their concerns about the topic.
Andrew Campeau, president of the Duluth Building & Construction Trades Council, said unlike what has been presented, there are consequences to removing agreements from the city.
"Projects performed without PLAs are subject to work stoppages, labor disputes and open to door to industry problems," he said.
Dan Olson, vice president of the same council, said no one reached out to the trade council to discuss the changes.
Both of the trades council representatives said they would like to have a meeting or work session with city staff and the council to clear up issues.
Campeau said he believes this can be a partnership and will be available to meet with the city.
Lamb said she hopes that by working with the unions the council can "put the issue to rest for a very long time."
Moving forward, councilors Iris Keller and Elizabeth Jaakola said they would like to see a meeting for the two sides to work out the issues, as well as data to back up claims.