Apprenticeship Utilization Ordinance
December 15th, 2014
Issue: Qualified Worker Shortage
• Average Age of Construction Worker: 41 (Bureau of
Labor Statistics)
• Shortage of 4.7 Million Workers with Certificates in 2018
(Georgetown University)
•80% of Association of General Contractor (AGC)
membership reports having trouble finding craft worker
positions. (2014 Workforce Development Survey)
82% of local Association of General Contractor membership
believes craft workers in local area is insufficient to meet
construction demand in next 12 months
Major Upcoming Publicly Funded Programs
• Street Levy Projects
• Riverfront Park Master Plan
Implementation
• Integrated Clean Water Plan
Implementation
One Potential Workforce Shortage
Solution: Apprenticeships
• Combination of classroom instruction and on-thejob training
• State-approved programs allow workers to earn
certificates & journey-level status = higher wages &
nationwide mobility.
• Spokane Community College partners with 19
different state-approved craft programs.
• Empower local workers to start the next Garco, Max
J Kuney Construction, Shamrock Paving, Inland
Asphalt Company etc.
Apprenticeship: Jobs & Prosperity
• 90 to 1 Return on Investment Ratio (total net
benefit of $300,000+)
• 23 to 1 Taxpayer Return on Investment Ratio (total
benefit of $80,000)
• Apprenticeship completers earned median earnings
of $64,000 according to Washington Employment
Security Department
Proposed Ordinance:
Apprenticeship Utilization Requirement on
Public Works Projects
Apprenticeship Utilization
Year 2015: 5% on $350,000 &
above projects
Year 2016: 10% on $350,000
& above projects
Year 2017: 15% on $350,000
& above projects
• Can be waived by Utilities
Director
• Penalties associated for
non-compliance/breach of
contract
• Waiver decision appealable
to Hearing Examiner
• 10% goal of Veteran
apprentice utilization.
Other Cities & Organizations with
Apprenticeship Utilization Requirements
• WSDOT
• Eastern Washington
University
• Spokane Public Schools
• Edmonds Washington
• Seattle Washington
• Vancouver Washington
• Shoreline Washington
•
•
•
•
King County
Snohomish County
Port of Seattle
Sound Transit
Fiscal Impact to City of Spokane
• A general compliance officer was added to the 2015
Budget. This position will assist in implementation
of this law. The Compliance Officer will also be used
by the Administration on other issues such as
enforcing Responsible Bidder laws.
• Apprenticeship programs have been determined by
the State Office of Financial Management to have
no fiscal impact. (HB 1023/SB 5393)
• PFD utilized apprentices on their bond project and
met the public’s expectations on budget.
Original Staff Concerns
• Requested longer time for implementation
(Recommendation accepted – 6 month delay in
going into effect)
• Concerned about lack of apprentices
(Recommendation accepted – phased in utilization
% requirement)
Original AGC Recommendations
• Should not apply to smaller • AGC contends there is not
subcontractor who may
enough apprentices to hit
have small crew.
the 15% initially.
(Recommendation
(Recommendation
Accepted)
Accepted – phased in %
utilization requirement)
• Raise $$ Threshold
(Recommendation
Accepted – Increased
$150,000 )
Claim: “there’s not enough apprentices
right now to meet the % utlitization
requirements”
Local Apprenticeship Availability
• 60 Construction Equipment Operators (Western
States)
• 24 Construction Equipment Operators (Construction
Industry Training Council)
• 40 Construction Equipment Operators (Inland
Northwest AGC)
• 65 Electrical Workers (IBEW Local 73)
• 145 Iron Workers (Iron Workers Local 14)
• 13 Cement Masons (Cement Masons Local 72)
• 40 Plumbers/Pipefitters (UA Local 44)
Local Apprenticeship Availability
Continued…
• 100 Laborers (NW Laborers Apprenticeship
Committee)
• 26 Painters (Eastern Wash./Northern Idaho
Painters & Allied Trades)
• 17 Boilermakers (Boilermakers Local 242)
• 60 Sheet Metal Workers (Northeast
Wash./Northern Idaho Sheet Metal
Apprenticeship Committee)
Claim: “This additional regulation will
make it harder for contractors bidding on
city projects”
In reality, companies have been required to abide by
utilization requirements such as other city or state
apprenticeship programs or disadvantaged business
enterprises or be found disqualified to bid on City of
Spokane projects since 2011.
Spokane Municipal Code 07.06.520 B(5)
“Supplemental Responsibility Criteria”
Claim:
“this ordinance won’t create any jobs”
The point of this ordinance is not to create jobs, but
to create educational opportunities for apprentices
– the craft workforce of the future.
It will create the skills and experience necessary for a
person to compete in a competitive job market
globally or right here in Spokane.
Claim: “this ordinance will displace current
workers”
The intent of this ordinance is to not displace workers.
The intent is for apprentices to compliment a work
crew.
Apprenticeship utilization is about building a future
workforce by embedding new workers with
experienced workers. Both must be present on the
job for the program to work.
Claim: “this ordinance will drive up bids on
projects to account for the penalties”
The State of Washington requires cities to award
projects to the lowest responsive bidder.
2014 Engineering Service Public Works bids have
come in on average 19% under City Engineering
estimate.
With the reduction in labor costs by using
apprentices, we anticipate bids will continue to
come in below City Engineering Estimate.
Claim: “this ordinance requires companies
to use union programs”
1. Businesses can start their own apprenticeship
program through Labor & Industries.
2. Businesses are not required to sign any labor
agreement to participate in a union state-approved
apprentice program.
3. There are approximately 300 sponsored programs
across the state – union and non-union programs
that any business can utilize.
Examples: Northwest Laborers Apprentice Committee
(union), Inland Northwest AGC Operators AC (nonunion)
Claim: “Apprentices often quit their
program before they complete it”
This is true. “Because apprenticeship programs can
last many years, a significant number of people do
not reach the finish line. However, even those who
exit early still show wage gains from the skills they
acquired.”
2015 Workforce Training Results - Washington State
Workforce Training and Education Coordinating
Board
Claim: “companies from Portland & Seattle
will come in and take work from local
contractors – reduces competition”
Any company who wins a bid on a public works
contract over $350,000 will be required to use the
apprentices. This includes any contractor in the
United States. The apprenticeship requirement is
applied equitably.
2014
Public Works $ to Spokane County
Companies: $1,126,616
Public Works $ to Companies Outside
City of Spokane: $15,439,805
Projects over $350,000 - 2014
• Silo Digester at Riverside Park - $11.3 million (IMCO
General Contractors Inc, Ferndale Washington)
• 8th Ave/Chandler St. Transmission Main Reroute $887,816 (Halme Construction, Davenport
Washington)
• Francis, Division to East City Limits I.T.S. - $648,366
(Arc Electric & Lighting Corporation, Spokane
Washington)
• City-wide Heat Applied Thermoplastic Pedestrian
Crosswalk Markings - $394,796 (Hicks Striping &
Curbing Inc, Brooks Oregon)
Projects over $350,000 – 2014 cont.
• 2014 Residential Chip Seal Projects - $496,669 (Poe
Asphalt Paving, Inc, Post Falls Idaho)
• 9th Ave/Pine Street Reservoir Repainting - $1.88
million (HCI Industrial & Marine Coatings, Inc,
Vancouver Washington)
• Lincoln Heights Reservoir Relining - $480,524
(Layfield Environmental Systems Corporation., El
Cajon California)
• Fish Lake Trail from UPRR Junction to Scribner Rd. $478,250 (Spokane Rock Products., Spokane Valley
Washington)
Apprentices/workers have as much right
to seek a wage and work experience on a
City project, as a Contractor does to bid
on the project, perform the contract and
reap a profit.
1. The City buys construction services based on
contracting best practices.
2. We update these best practices to reflect new
information, market adjustments, or to emphasis
an important best-value contracting principle.
3. Apprenticeship is considered a significant part of
best-value contracting.