SR 07-26-2011 4ACity Council Meeting: July 26, 2011
Agenda Item:
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Study Session Regarding Local Hiring Opportunities
Recommended Action
Staff recommends that the City Council review. the information on local hiring and
provide feedback regarding potential options for implementation.
Executive Summary
At its meeting on September 28, 2010, Council asked staff to investigate options for
encouraging or requiring hiring of local residents for development projects. This report
provides the Council with information regarding the City's work in local hiring, practices
implemented by other cities, and options for the Council to consider in establishing a
local hiring program in Santa Monica.
Background
The City of Santa Monica has long-standing policies that support low- and moderate-
income employees in their pursuit of job training, placement, and livable wages. As
discussed below, the City has initiated and implemented a number of programs to
further this goal.
Through its Living Wage Ordinance adopted in 2005, the City has required contractors
with City contracts over $54,200 to pay their employees no less than a living wage,
currently set at $13.54 per hour. The City has also adopted a Labor Peace Policy
applicable to those leases subject to Bayside and Pier Leasing Guidelines, as well as to
City leases with the Viceroy Hotel and Ocean Park Community Corporation, to protect
the employees working in its leaseholds.
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The City provides direct financial assistance to several non-profit organizations and City
programs that specifically serve Santa Monica's low- and moderate-income residential
workforce. In FY 2010-11, the City granted and budgeted a total of $1,747,096 to seven
organizations that provide some kind of job training to their clients. Chrysalis, whose
primary mission is to provide employment placement services, was granted $277,430 to
directly support placement of Santa Monica residents in employment. Chrysalis placed
420 individuals in permanent secure employment. In addition, the City operates the
Trades Intern Program, a collaboration among the Maintenance Management Division,
Human Services Division, and Santa Monica Malibu Unified School District's Regional
Occupation Program. The Program provides paid training to low-income Santa
Monica residents between the ages of 18 and 30 to acquire skills that will prepare them
for future employment in the skilled trades. Current enrollment is 13, with typical
enrollment of the intensive, two-year program at 9 to 11 residents annually. Of the eight
interns who either graduated or left the program during FY 2010-11, four secured
employment in a construction trade and two found employment in other fields.
The program cost is over $737,000 per year. A brief overview of the seven programs is
described in Attachment A.
Additionally, the City has directly influenced hiring decisions through conditions imposed
by development agreements (DAs), which are monitored by designated staff in the
Planning and Community Development Department. Of the 16 DAs approved by the
City between 1981 and 2010, four DAs incorporated local hiring policy language that
resulted in the hiring of 22 Santa Monica construction workers (11 each for the Lantana
East and Lantana South developments) and 25 Santa Monica permanent employees (at
the .Sheraton Delfina development.) The hiring requirements in the fourth DA, with
Agensys, are not yet active. The effective dates and local hiring requirements
incorporated in these DAs are summarized in Attachment B. Currently, a total of six
larger DAs and nine small to medium-sized DAs (generally in the 40,000-60,000 square
foot range) are in the pipeline for consideration by the City Council.
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Discussion
Local Hiring Strategies and Practices Used by Other Cities
Following Council's September 28, 2010 request for information regarding local hiring
policies and programs, staff researched a variety of cities' local hiring programs and
focused on best practices in Berkeley, East Palo Alto, Los Angeles, Pasadena,
Richmond, San Francisco, and, outside of California, Milwaukee, Wisconsin.
Attachment C provides an overview of the seven cities' programs.
Local hiring programs generally require developers and contractors benefitting from the
use of public funds to target a percentage of the jobs (created through construction or
new business operations) toward local residents, to ensure that those residents benefit
from the economic development and reinvestment occurring in their community. The
practice of reserving recruitment opportunities for a specified time period solely for local
residents is known as "first-source hiring" and is the cornerstone of many programs.
The cities above have tailored their programs to meet their communities' unique
circumstances, implementing a range of program components and enforcement
mechanisms that vary in terms of their intensity. The basic components fall within the.
following categories:
Type and size of projects that are subject to a local hiring requirement
Local hiring requirements are generally imposed on projects benefitting from public
funds (both private development and local public works projects), as well as publicly
funded contracts for services and leases of publicly owned space or facilities.
The requirements are typically applied based on a minimum cost of a public works
project or a minimum amount of public investment in a private development. Among
the programs staff researched, some also encourage participation by private
developments that do not receive public assistance. With one exception, none of
the programs require participation by private developments that do not receive public
assistance. In the exceptional case, participants are required only to make good-
faith efforts to hire locally. Among the programs surveyed, the minimum applicability
to public works ranges from $1 to $400,000, while the minimum applicability to
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publicly assisted private developments ranges from $1 invested to $1 million
invested.
• Program elements
Job Tvoes and Numbers and Duration of First-Source Requirements: A key local
hiring program element is the type and number of jobs that developers or contractors
are required to make available to local residents. Cities may require that
developers, contractors or lessees set aside a certain number or percentage of
construction or permanent jobs, or both, for first-source hiring. The duration of the
local recruitment process, as well as the duration of the program requirements
beyond the initial contract terms, varies based. on the program. Among the
programs surveyed, the percentage of jobs on any project covered by first-source
hiring requirements ranges from 15 percent to 50 percent, and the duration of first-
source hiring "local reservation" periods range from three days to 14 days.
Outreach .and recruitment: Required activities may include job fairs, partnerships
with first-source hiring partners, or a developer or city's establishment of a project-
specificfirst-source hiring program.
• Program enforcement and administration
Definition of compliance: Some programs require developers, and contractors to
make good-faith efforts to hire locally, while others require strict compliance with
first-source hiring procedures and practices in order to satisfy the requirement that a
good faith effort was made to achieve targeted goals. None of the programs
impose penalties if the percentage of jobs set aside for first-source hiring is not filled
by local employees. Rather, penalties are imposed for failure to follow required
procedures and practices. This distinction reflects the fact that even if a developer,
contractor or lessee does an extraordinary job with outreach and partnerships, there
may not be any local workers with an interest in the job and the necessary skills to
fill the job. However, through outreach, partnerships and an early application period
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during which only local residents can apply, there is anticipated to be a higher
likelihood of success in hiring a local applicant.
Monitoring and enforcement: Compliance activities range from minimal follow-up by
cities that require only good-faith efforts to strict monitoring, enforcement, and
penalties to ensure that first-source hiring practices are being followed explicitly.
Penalties can include monetary sanctions, termination of contracts, suspension or
revocation of construction or occupancy permits, and legal proceedings.
Commensurate with an increased level of monitoring and enforcement is an
increased commitment of city and development/contractor time and financial
resources.
Administration: The cost of administering a local hiring program reflects the desired
level of monitoring and compliance activities, the number of projects participating in
the program and whether job referral services are provided by the city or a city-
funded agency. Among the programs surveyed, administrative costs range from
minimal for the "good-faith effort" programs to extensive, as in the case of San
Francisco, which has a staff of eight compliance and liaison officers.
Programs that rely on good-faith efforts by developers and contractors tend to be less
restrictive, require minimal enforcement, are generally expected to have less of an
impact, and may produce uncertain outcomes because monitoring is less precise.
Under these programs,. developers or contractors might be encouraged to recruit locally
for a short period of time for a percentage of jobs, to conduct some locally focused
recruitment activities, and to report to the city on an annual basis. Basic recruitment
and outreach initiatives include participation in local job fairs, partnering with existing job
placement programs in the area, and referring residents to training programs and pre-
apprenticeship and apprenticeship programs.
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Summary of Programs From Other Cities
Berkeley, CA
The City of Berkeley provides an example of a local hiring program that casts a wide
net. Berkeley adopted a local hiring ordinance in 1988 and incorporates local hiring
conditions in its development agreements. Berkeley requires public works projects over
$100,000 and private development of more than 7,500 square feet to sign afirst-source
agreement and participate in afirst-source hiring program. The Agreement requires
participants to advertise locally for three days prior to advertising job opportunities to the
general public. While the developer or contractor has the sole discretion to make all
hiring decisions, developers and contractors must use the local workforce development
program for recruitment and referral, and must document reasons why a local candidate
was not selected. Berkeley also requires developers to include covenants in their
leases that require future tenants to take part in the local hiring program for permanent
jobs.
Despite the requirements, developers and tenants need only make a good faith effort to
hire locally and are not tied to specific numeric goals. City staff monitors and reviews
participant records to determine compliance. Penalties for non-compliance may include
cancellation of a participant's contract with the city in whole or in part, and ineligibility for
future city contracts for a period of no more than-one year. The Berkeley program
budget for administration of its local hiring is minimal, requiring only a 0.25 FTE position.
The designated staff member alerts the workforce organizations (used by
developers/contractors to find qualified residents to fill job vacancies) when there is a
new hiring agreement in place, processes first-source hiring agreements with
developers, coordinates with other city departments to ensure that they are aware of the
developer's local hiring requirements, and reviews reports from the workforce
organizations. Currently, there are 20 agreements in place and Berkeley works with
four workforce organizations for job referral services. Berkeley requires each public
works project to contribute one percent of its budget to its First Source Hiring fund. The
workforce organizations are partially funded by the City of Berkeley.
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Pasadena, CA
The City of Pasadena requires public works contractors and developers receiving any
financial assistance from the city to hire local residents for a minimum percentage of
construction-related payroll if contractors will be adding new workers to supplement
their core workforce. The number of jobs covered by first-source hiring is negotiated on
a case-by-case basis. Contractors not receiving any City assistance who voluntarily
participate in local hiring may receive a partial rebate of the local construction tax.
For larger construction projects, Pasadena requires that the contractor retain a jobs
coordinator to seek out and identify qualified applicants. For contractors using union
labor, the contractor is required to request the union to make a good faith effort to
dispatch local residents to the job. The City encourages non-union contractors to seek
qualified workers from the federally-funded Foothills Workforce Investment Board
(FWIB), a regional division of the California Investment Board that is staffed by City of
Pasadena employees. The City also has entered into agreements with non-profit
organizations who have committed to help the City expand its database of qualified
workers. Using these resources, Board staff will even make the arrangements for
candidate interviews with the contractor.
Richmond, CA
The City of Richmond requires any City public works project over $100,000, and any
private project receiving more than $100,000 in public subsidy, to apply first-source
hiring practices to 30 percent of the construction and permanent jobs. This requirement
remains in effect on private projects for one year for each $100,000 in assistance, but
not less than three years or more than ten years. Civil penalties can be one percent of
the contract amount, or $1,000, whichever is greater, for each working day of non-
compliance.
Milwaukee, WI
The City of Milwaukee's program requires developers and contractors to give
preference to residents over non-residents when filling a job vacancy and to use
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emerging businesses for a specific percentage of the contract amount. Milwaukee
generally requires that 40 percent of the worker hours for public works construction jobs
and private projects receiving $1 million or more in direct financial assistance from the
city be performed by low-income Milwaukee residents. In addition, the program requires
that Milwaukee-based businesses receive a five percent bidding advantage, that
construction jobs maximize the number of apprentices hired (recommended on a trade-
by-trade basis), and that contractors use the city-operated "First-Source Employment
Program" prior to hiring from the general public. Developers are required to prepare
and submit quarterly reports to the city. Sanctions for non-compliance can include
imposition of additional remedial measures related to local hiring, withholding of
contractor payment, suspension or termination of contract, or being barred from bidding
on future City projects. Monetary penalties may range from $2,000 to $5,000. The
program is funded by Milwaukee's general fund and the local workforce investment
board, an independently operated workforce and employment assistance program.
Milwaukee does not require developers to contribute to the program's operation.
East Palo Alto, CA
East Palo Alto's first source hiring and local business enterprise programs were first
adopted in 1996. City-assisted developments with construction contracts over $50,000
are required to subcontract 30 percent of the work to small local businesses and ensure
that 30 percent of all work-hours in each trade are performed by residents of the city, or
demonstrate a good faith effort to achieve that goal. To demonstrate a good faith effort,
business tenants in developments that received financial assistance from the city are
required to advise the city six months prior to the start of recruitment of the number and
requirements for up-coming jobs, and initially for asix-week period, and thereafter for a
ten-day period, recruit locally and make an effort to contract with small businesses for
services. Participants in local hiring are required to submit reports quarterly. Penalties
for non-compliance range from $1,000 to 10 percent of the value of the project. East
Palo Alto may take other disciplinary actions, including terminating .the contract,
.suspending or revoking the construction or occupancy permit, or declaring the covered
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entity ineligible for participation in future City public works contracts or Redevelopment
Agency projects for three years or until other restitution has been completed.
A review of the East Palo Alto program in 2005 discussed its limited success with
construction jobs because the union requirements in the construction trades limit the
number of apprentices who may be hired. Additionally, the report noted that many
applicants for permanent jobs lacked adequate English language skills, had criminal
records or faced other barriers to employment.
San Francisco, CA
San Francisco's earliest local hiring program was established in 1996, while an updated
ordinance approved on March 25, 2011, has been billed as one of the country's most
aggressive local hiring ordinances that applies to locally funded contracts. The
ordinance mandates strict compliance with local hiring procedures within each
construction trade on city-funded projects. The program requirements are phased in
over time, with the intent that 50 percent of construction hours will be subject to local
hiring requirement in the program's seventh year. In addition, contractors with public
contracts over $1 million are required to prepare local hiring plans and use the city's job
referral program. Contractors not meeting the requirement face financial penalties,
including sanctions for falling short of the local hiring requirement as well as financial
incentives for exceeding the local hiring requirement. Incentives are also offered to
contractors for sponsoring apprentices and for entering into direct entry agreements
with apprenticeship programs. A provision in the ordinance targets the hiring of
"disadvantaged workers", including residents from communities with unemployment in
excess of 150 .percent of the city average, as well as single parents, those receiving
public benefits, and those without a GED. San Francisco's program uses an array of
policy tools and mandates to achieve its hiring goals, but the program is new and its
effectiveness has not yet been tested.
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Los Angeles, CA
The City of Los Angeles' local hiring policy covers public works as well as
redevelopment projects. In both cases, the city or redevelopment agency enters into
project labor agreements with the consortium representing union trades.
The consortium commits to exert its best effort to identify job applicants residing in the
City's targeted neighborhoods. Contractors are required to hire local residents for at
least 30% of the construction work hours and a portion of the apprentice hours on each
project. To do this, they must identify a local jobs coordinator that will work with unions
and other related organizations to develop an applicant list. If contractors follow the
local hiring process but cannot reach the goals, they would still be in compliance if they
demonstrated a good faith effort, including hiring a jobs coordinator, documenting jobs
requests, adhering with appropriate referral waiting periods and providing reasons for
not hiring residents. However, if they do not follow the process, penalties may include
liquidated damages.
Selecting a Strategy: Policy Tools for Local Hiring
The following policy tools have been used to establish local hiring requirements:
Development Agreements
Development agreements (DAs) are contracts negotiated between developers and a
city to govern land uses, development criteria, and other terms and conditions of
approval of a development project. The City of Santa Monica has used DAs to include
local hiring practices. One of the main advantages of using a DA is that the hiring
requirements can be made to be project-specific and can be flexible to address the
specific needs of the residents that will be targeted to work within the industry providing
the jobs in the development. A disadvantage of relying upon DAs is that they cover only
a subset of all development projects.
Community Benefit Agreement
A Community Benefit Agreement (CBA) is a project-specific, legally enforceable
contract between a coalition of community groups and a developer. The agreement is
enforceable by the coalition group that is a party to the agreement, unless the CBA is
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attached to a public development agreement, in which case the public entity would
enforce the provisions of the CBA. The fundamental difference between a DA and CBA
is that CBAs include only public benefit commitments. Neighborhood coalitions in Los
Angeles have negotiated CBAs for very large projects in their communities. For
example, an agreement between Los Angeles World Airports and a coalition of 22
community groups regulates local hiring aY LAX. The agreement covers a wide array of
jobs at the airport, including approximately 300 retail and food service vendors, airline
employees, service contractors, baggage handlers and other jobs on the tarmac. Local
hiring requirements are incorporated into all new lease and contract agreements and
are applied to renewals as existing agreements expire. Implementation began late in
2006 and is ongoing. In another example, the City of Los Angeles, the LACRA and the
developer of the North Hollywood Redevelopment Mixed-Use Project entered into a
CBA that provided for several community benefits, including a customized job training
program, first-source hiring program and referral system. The CBA required the
developer to use a local community group, the Valley Jobs Coalition, to make job
referrals. CBAs are best-suited to projects that are much larger than those anticipated
to occur in Santa Monica. Additionally, community coalitions must be well financed and
have the resources to retain attorneys and other experts to assist in the negotiating
process with the developer.
Project Labor Agreements
Local entities have used Project Labor Agreements (PLAs) when the focus of the local
hiring program is construction jobs. PLAs are intended to promote efficient construction
operations and provide for the orderly settlement of labor disputes and grievances
without strikes or lockouts, thereby promoting the public interest through the timely and
economical completion of projects. The City of Los Angeles Department of Public
Works, a frequent user of PLAs, has such an agreement with the Los Angeles/Orange
Counties Building and Construction Trades Council. The PLA requires the unions to use
best efforts to recruit and identify residents living in targeted zip codes for entrance into
their. labor/management apprenticeship programs and to seek referral of eligible
workers via the City's designated job coordinators. The public works contract with the
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contractor includes a goal to fill at least 30% of total work hours by local residents. If the
union cannot refer an eligible worker within 48 hours, the contractor must apply to-one
of several community based organizations for referrals. The City provides contractors
with Good Faith Local Hiring Guidelines. In the. event neither the union nor the
community-based organization is able to refer an eligible local hire after 48 hours, the
contractor is free to obtain a worker from any other source.
The benefit of a PLA is that the union is guaranteed work on a project for its members in
return. for helping the public entity fulfill local hiring goals. This can work well in
communities with higher valued projects and larger areas to draw upon for qualified
workers. However, in smaller communities with a limited number of residents in the
construction trades, a PLA may limit competition among contractors and contractors
may find it difficult to fill skilled positions with qualified workers.
Ordinance
Most of the local hiring initiatives researched have been passed by local ordinances
which codify the mandates (requiring local hiring for a given number of hours,
establishing the threshold for project participation, specifying the kinds of jobs that are
subject to the requirements, etc.). One of the main advantages of local hiring
ordinances is that they can apply to a broader range of projects than those that. are
addressed through DAs. A disadvantage of an ordinance is that it may be difficult to
address the particular opportunities and constraints of individual developments and
projects.
Policy Options for Local Hiring in Santa Monica
As noted above, Santa Monica has negotiated local hiring requirements in several of its
development agreements, yet these requirements have not been part of a
comprehensive program. The Sheraton Delfina Development Agreement was required
to advertise in the community for 30 days, with anon-enforceable goal of having no less
than 80 percent of the hotel's employees be Santa Monica residents. The Lantana East
and Lantana South DAs asked that the developer make reasonable efforts to implement
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a first-source referral system for the first two years after the project was completed.
And finally, the Agensys DA encourages the project owner to advertise locally and
facilitate the hiring and training of apprentices from the local neighborhood for the first
seven years after the project is completed. These agreements rely on good faith efforts
and reporting. In anticipation of the DAs currently in the pipeline and the variety of City-
funded and public works projects that are forthcoming, the City now has an opportunity
to expand its ability to encourage local hiring through a more strategic program.
The Santa Monica economy has a large array of industry types with an employment
base of 73,372 jobs and 6,553 businesses, according to 2009 California Employment
Development Department (EDD) data. The top five industries providing the largest
number of jobs during Fiscal Year 2009/2010 are listed below in Table 1:
NAICS Sector Title Annual Average Employment
Accommodation and '; 11
260
-Food: Service ,
Professional, Scientific,,
and Technical 10,223
Health Care and Social $ 247
Assistarice'
Information ` 7,976
Retail Trade ~ -. 7.766
Annual average employment for construction jobs is 1,681 (2.3 percent) and ranks as
number 13 in Santa Monica's total employment base.
According to 2010 US Census Data and EDD Labor Market Information, Santa Monica's
total population is 89,736, of which 56,800 are in the labor force and 10.5 percent
(5,900) are unemployed. The labor force includes City residents age 16 years or older
who are employed, unemployed but looking for work, and workers whose place of
employment may be in Santa Monica or outside the City. Overall, about one-third (32.2
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percent) of the City's resident labor force works at jobs located in Santa Monica and the
balance work outside the City..
While Santa Monica's population is generally higher income and more educated than
other Los Angeles County cities (median income in Santa Monica is $67,062 compared
to $54,467 for LA County and 55 percent of Santa Monica residents over the age of 25
have a bachelor's degree or higher compared to 24.9°/o in LA County), Santa Monica
still has pockets of poverty. Of the 44,000 households in Santa Monica, 30 percent are
defined as low-income households.
In order to develop policy alternatives, the following issues should be considered:
1. If the City would like to expand its commitment to local hiring, should it consider a
local hiring requirement for public works projects, private developments receiving
public assistance, private developments subject to development agreements, or all
private developments? Should projects be subject to the requirements only if they
exceed a certain size or value? Considerations include:
® While expanding the application of local hiring requirements is expected to
increase opportunities for Santa Monica residents to work in the City, staff costs
and. administrative burdens will vary depending on what types and size of
projects are required to comply with a local hiring program. Staff was unable to
locate any studies that definitively identified the increased costs associated with
local hiring requirements, so it is difficult to assess the significance of the impacts
absent a specific program. Requirements that relate to local hiring during
construction may be difficult to fulfill due to the relatively number of Santa Monica
residents who work in the construction trades. If the City were to subject many
projects to local hiring requirements; and many projects were under construction
concurrently, the first-source hiring procedures could have relatively low levels of
success. In addition, contractors usually retain a core crew of workers who they
use on their jobs. The number of new hires needed for a covered project may be
few.
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• Depending upon the project and the economic climate, there have been
occasions when only a limited number of contractors bid on a project. Public
works projects subject to local hiring policies may increase contractors' overhead
and administrative burdens and cause delays in procuring labor, though the.
requirements are not expected to increase labor costs as most City contracts are
already covered by prevailing wages. The additional burdens and potential
delays may. increase costs for public works and further reduce the number of
bidders for City projects.
• The City rarely provides financial assistance to private developments, other than
affordable housing developments. Similar to public works projects, the
requirements could create new burdens and cost impacts for affordable housing;
reducing the reach of limited affordable housing dollars.
• As stated previously, development agreements allow the City the greatest
flexibility to tailor local-hiring practices to address specific projects and can be an
effective tool in requiring new development to provide a direct jobs benefit.
2. Which program components should the local hiring program include?
The following local hiring program components reflect varying levels of program
intensity:
• Advertise locally for a specific period of time before advertising to the general
public
• Interview Santa Monica residents for a specific period of time before
interviewing non-Santa Monica residents
• Consult with anon-profit organization to refer eligible applicants for jobs
• Sponsor or participate in local job fairs
• Provide a bidding advantage for Santa Monica-based businesses
• Strictly follow first-source hiring procedures with quantifiable targets
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Within the varying program components, additional decisions must be made that will
affect the intensity of the program. There are also economic and labor market factors to
consider in designing program requirements. For example, placing greater program
requirements such as requiring some new commercial tenants to recruit, hire, track, and
report on the residency of their employees could create an administrative burden. It
could also create two classes of leasable space in Santa Monica, putting first-source
hiring buildings at a competitive disadvantage in the leasing market because of the
additional administrative requirements on commercial tenants. If the City were to
require contractors, developers and commercial tenants to meet defined targets for the
number of Santa Monica resident-employees (rather than requiring them to follow
defined first-source hiring procedures), it could impose an unreasonable requirement
because it may be difficult to find Santa Monica residents who are interested in every
available position and possess the necessary qualifications.
Examples of variability in program components include
• The length of time that a developer or contractor will be required to advertise or
recruit locally
• Whether there is a requirement for a partnership with a referral organization as a
contractual obligation paid by the contractor or the City
• How the number or types of jobs reserved for local residents is derived: based
on the composition of the existing workforce in the City, goals for the future
composition of the workforce, or negotiations with developers on a case-by-case
basis
• Whether the program targets construction or permanent jobs
• The length of time that the local hiring requirement is effective: initial hiring only,
for specified periods tied to amount of public assistance received or a negotiated
period, or for the life of the project.
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3. Should there be benchmarks to show progress with compliance of local hiring
requirements, as well as sanctions for non-compliance? If so, what kind?
A local hiring program may include measureable benchmarks against which progress
can be measured. Such measures may include verification that jobs were advertised
locally for the required period, demonstration that local applicants were interviewed
during the required period and reasons if they were not selected, and monitoring to
measure how often local residents were retained on a job. Other cities have included
the following sanctions in their programs:
• Monetary penalties
• Repayment of financial incentives provided by the City
• Revocation of leases or certificates of occupancy
• Ban from participation in future City projects
4. Should the Local Hiring program offer an opportunity to pay in-lieu fees that could be
used to support local organizations engaged in workforce development and
placement?
Developers or contractors could find it more feasible to pay a fee in lieu of taking on the
responsibility for local hiring. Funds collected could be granted to agencies that provide
employment training and placements. Alternatively, local hiring requirements could
include a fee that helps fund agencies that provide employee training and job referrals.
5. How could the City manage the cost of administering and monitoring a local hiring
program?
If the City were to adopt a program that involves good-faith hiring efforts by developers
as well as minimal monitoring and enforcement, the City may be able to absorb the
administrative effort with existing staff. However, if the City decides to implement a
more robust program that includes regular monitoring and enforcement and job referral
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services, new costs will be incurred. These costs could be off-set by requiring covered
developments to pay fees. In addition, some of the program elements, in particular job
referral services, would likely be managed more effectively by contracting with
workforce development and placement organizations. The City could contract for these
services or developers and contractors could be required to contact with job referral
agencies.
6. Should the local hiring program be targeted to a subset of Santa Monica residents,
such as low-income residents or residents of a specific neighborhood?
Some cities have targeted program requirements toward specific populations within the
jurisdiction. While such targeting can provide assistance to those with the greatest
need, it could be very difficult to implement in a smaller jurisdiction such as Santa
Monica, where the working population is already small, and further targeting would
result in a very small pool of potential job targets.
Next Steps
If Council wishes to implement broader local hiring initiatives within development
agreements, staff will prepare draft language for consideration in upcoming
development agreements.- If Council wishes to implement local hiring requirements that
cover public works contracts,. leases of City property and facilities, City-assisted
developments such as affordable housing, or a broader range of proposed development
projects, staff will return to Council with recommended ordinance language and an
assessment of budgetary impacts.
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Financial Impacts & Budget Actions
There are no financial impacts associated with the discussion; however, implementing a
broad and robust local hiring program would likely require on-going City financial
support.
Prepared by: Donna Rickman, Senior Administrative Ahalyst
Elsa Trujillo, Senior Development Analyst
Ap Forwarded to Council:
Andy Agle, Director Rod Gould
Housing and Economic evelopment City Manager
Attachments:
Attachment A: Current City programs related to job placement and training
Attachment B: Local hiring requirements in existing Santa Monica DAs
Attachment C: Overview of local hiring programs in other cities
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CURRENT CITY PROGRAMS RELATED TO 1OB PLACEMENT AND TRAINING-Attachment A
tmployment t'rogram for a. The program provides Grant Award: $240,744
Homeless and Low-Income comprehensive employment
individuals assistahce4d Santa Monica
homeless. individuals and low-
. HUD Supportive Housing income residehts'
Program ' b. Provides job development and case
Grant Award: $36
686
,
management services to :expand
employment opportunities fdc 70
homeless persons:per year, with the
overall :goal of helping participants
achieve housing stability and
increase self-reliance. The 2011-15
funding will be through the General
Fund.`.
Servwes for Youth and - This program provides social services,. Grant Award Total:
'Families ;cultural arts, and enrichment. activities to "$307,532
at risk youth ages 16 24 in Santa
Monica..Services inclutle case
'management, counseling and support
.'groups, employment readiness and
placement; leadership development,
community events, tutoring and
musiclfilm production.' Of the 180 youth
served, 157eceived employment related
"services.
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management and support services. to
navigate the college system for "at-risk"
Santa Moitica students with a focus. on
Pico neighborhood youth. Services.
include tutoring, financial aid, childcare
assistance,ttuition waivers, socialservice
referrals, instruction aides, and
employmeht and career'services. :'
Total $1,747,096
Santa Monica Development Agreements-Attachment B
c October 24, 2004 to 11' Residents' Placed in :' March 13, 2007 to CoverageSJobs at the project site
Santa Monica Development Agreements-Attachment B
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it and not Target job applicants First: Ocean Park and-Pico
rent. !Neighborhood residents; Second:`other City residents.
'Recruitment and outreach:
•90 days'priorto hotel opening, contact community
organizations such as the Ocean Park Community
Organization and the Pico Neighborhood Association
and hold a neighborhood meeting in each community.
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positidhs.
Goal: 80°/a of employees to be Santa Monica residents.
Minority, disabled, armed forces veterans, and women
',hires are encouraged
Monitoringi Annual reporting on percentage of hotel
employees who are City residents:-
Term: Through the length of the DA
2
OVERVIEW OF LOCAL HIRING PROGRAMS IN OTHER CITIES
Berkeley Pasadena to and
LACRA Richmond Milwaukee East Palo Alto San Francisco
Ordinahce. x x "x x z.. x
Policy TOOI ': Development Agreement x
Project LaborAgreement - x
Public Works Project $100,000 $1 $1 $100,000 $1 $50,000 $400,000
Private bevelo
ment Based on public financial benefit $1 $500,000 $100,000 51,000,000 $50,000
p Based on size or discretionary approval x x
` Closedlocal advertisingperiod x x ' x x-
Use local referral agency'. x x x x x x
' Jobtrainingorapprenticeships x x x x, x x
Programflements Incentives x* x**
'' Construction jobs x 15% 30% 20%.. 40% 30% 20-50%
' Permanent7obs x : 30% 30%
Biddingadvantage for local companies x x
Document reasons residents weren tselected x x
Compliance '. Advertising; local referral; training assrequired in plan x x x x x x x
Regular reporting x x x x x ;.' x
Good faith x x x x x x x
Enforcement Goals met
Penalties x x x x x x x
* construction tax rebate for those private developments not receiving public benefits that chose to participate in the local hiring program
** f nancial or non-financial incentive for those contractors exceeding goal