SELMA – After reviewing the contract they’ve entered into with local construction unions to build a new police station, Selma’s City Council is realizing they are obligated to stick with the agreement even though it’s driving the cost of the project up.
The City has already spent $749,482 on various costs related to the project and since they rejected the only bid they did receive, they must now start the bidding process all over again. It will likely cost from three to 10 percent more - from $2 million to $2.6 million - than the first estimate of $7.95 million received in 2016.
In an update at the Jan. 22 Council meeting, City Manager Teresa Gallavan said the unions they’ve entered into a professional labor agreement (PLA) with are unwilling to exit the contract. The PLA was agreed to by the Council in March 2018 and requires the City to hire only union workers and pay their benefits to build the police station. That agreement is what’s driving the cost of the project up and several construction firms have come forward to say it’s the reason they declined to even put in a bid on the station.
“We’ve looked at ways to allow the city to exit that agreement, or to amend it, so it would not have quite the stringent impact that it does now driving costs up,” Gallavan said. “However, there is no exit clause to that agreement for the city. There is no termination clause in it and the unions have not been willing to amend the agreement or agree to an exit clause for the city.”
Gallavan presented other options to build the station with modular buildings; however the PLA requires that even that work be done with more expensive union workers. Using modular buildings would actually wind up costing from $2.5 million to $3 million more than the original estimate, she said. Plus, it would take another three to nine months to redesign the station and would result in a facility that would last 10 to 50 percent less than a traditional building.
“The agreement does apply to any station project that we develop. Whether we go out to bid with a revised scope of work, or completely redesign the project and make it a modular project, the PLA still applies and that has financial impacts on the cost of the project.”
Vanir Construction was hired in February 2018 to manage the station’s construction. Vanir manager Jerry S. Avalos said at the meeting that other cities, such as Corcoran, saved money by building their police stations with modular buildings. However, Selma’s labor agreement required that all laborers working on the project would have to be paid union wages.
“The PLA, the way it’s written right now, the reason you don’t get the savings on the modular is because not only would your on-site required to be union, but anything done off-site would be required to be union.”
In August 2018, Seals Construction put in a bid of $7.95 million to build the police station. Concerned that would exceed the $8 million budget they have for the project, Council sought to lower costs by reviewing the labor agreement and revising the station to include different options to save from $300,000 to $450,000.
Although the idea of completely redesigning the station to make it smaller has been suggested, Assistant City Manager/Finance Director Isaac Moreno said that would only result in more engineer’s fees and make the building so small it would be outgrown sooner than later.
“If you lower the square footage, it will take you back into a redesign which could cost $150,000 to re-engineer. The square footage you currently have, you’d be downsizing a good chunk where room for expansion for future years just wouldn’t be there. It would hinder the useful life of the project [and] you’d eventually outgrow it.”
Before council voted, Nicole Goehring, a director with Associated Builders and Contractors from Northern California, proposed that Council rescind the March 2018 decision and rebid the station without the PLA. She reasoned that any lawsuits from the unions wouldn’t cost as much as the additional millions it will cost in union wages.
“If you rebid without the PLA, you’ll probably save money. I can’t imagine legal challenges you’d have would cost $2 million. Please consider that option and do the right thing for the people of this community. It’s a great project for them, let them build it.”
Goehring predicted that bidding the project again with the PLA will simply result in the same, if not more expensive, bid offers.
“Or you’re going to have contractors from out of the area which doesn’t help Selma residents get construction jobs.”
The Council unanimously voted to move forward by bidding a revamped police station project that included the union labor requirement, but did not seem happy about the decision.
Mayor Scott Robertson said the plan at least was to not ask for additional taxes to build the station.
“We’re not going for more taxpayer money on this. We’re going to find it elsewhere.”
Gallavan said they’d have to either dip into its $3.47 million general fund reserve, or get funds from the Measure S fund which is currently $741,011 or from the Ambulance Services fund which is $4.66 million.
Mayor Pro Tem Louis Franco said when the Council first agreed to the PLA, they were convinced it would open up job opportunities to local residents.
“It was presented to us as a great economic boost that would bring careers to our local residents. It sounded fantastic and like a win-win situation. When we had the discussion in March and not one entity came forward to say this would prevent us from bidding or drive the cost up.”
Councilman Jim Avalos called the predicament a learning experience but thought it was best to rebid the station again with the labor agreement rather than face legal action from the unions.
“You learn as you go in life. Unfortunately in this situation, we have to move forward on this issue and go on. We will have to do what we have to do. Let’s put it out to bid and I think we’ll have more people on this round.”
Councilman John Trujillo said rather than point fingers over the previous decision he’d rather focus on getting the station built and looking for the funds to complete the project.
“The community of Selma needs a new police department. Either good or bad, what we did in the past, we need to move this along. Delays are costing us money. Let’s rebid this and all five of us need to look for the money.”
Selma resident Colleen Nelson was one of three residents recently appointed to sit on the Measure P oversight committee. The taxpayer dollars raised through the measure are what will partially pay for the new police station. She’s concerned that the same bidding requirements will simply result in an uncompetitive process and high cost.
“If you put it out to bid again with the PLA and get one or two maybe to bid and it comes back, like it did last time, way too high for our ability to pay, then what do we do? I don’t see how it’s going to be any different. As someone who sits on the oversight committee, I don’t think the bids are going to come back any different. In fact, I think they’ll come back even higher.”
Gallavan said City staff would have bid documents ready “in the next one to two weeks. If we go back out to bid with this revised bid, it’s our hope we’d have more competition and that would help contain cost.”