It's complicated; Debate over city labor agreements continues

Iris Keller, the newly appointed Ward 3 Cloquet city councilor, peppered city officials with questions Tuesday as she played catchup on the complicated issue of project labor agreements in the city of Cloquet.

"You've been busy with the ins and outs of this for six years," Keller said to the other councilors.

Largely informational and fairly short, there was no vote at the meeting Tuesday. Instead, there was a first reading of a proposal to eliminate the requirement for private businesses to sign a PLA if they access $175,000 or more of city funds.

Instead of mandating a PLA, the Economic Development Authority wants the city to incentivize the business owner by allowing the EDA to add 15 percent to the gap financing amount if a private project utilizes a PLA.

The council will likely vote after a second reading on March 7.

The PLA requirement makes sense for public projects, but is hampering private business investment in Cloquet, EDA members told councilors two weeks ago. (Read that story in the Feb. 17 issue.)

"If we do change this, are there going to be any kind of consequences?" Keller asked.

Community development director Holly Hansen said no.

"Because there have been zero private PLAs pulled since 2017," she said, noting that private businesses are reluctant to hand over control of a project. In contrast, the city has completed more than 20 projects using a PLA over the same period of time.

What exactly is a PLA?

Project labor agreements are collective bargaining agreements between building trade unions and contractors that govern terms and conditions of employment for all craft workers - union and non-union - on a construction project. The labor agreement is between an owner and a regional building trades council, in Cloquet's case, the Duluth Building and Construction Trades Council. While the Cloquet PLA no longer requires workers to belong to a union, it does require employers to pay the agreed-upon wage, and pay into the union's trust fund during the project, money that remains in the trust fund at the end of the project.

"I'd like to keep the jobs local," Keller said.

City attorney Bill Helwig said the PLA doesn't guarantee local jobs.

"The PLA that we have right now ... guarantees the city of Cloquet is supporting regional labor, but there's no guarantee that local Cloquet laborers will be on any city project because the laborers all get assigned out of Duluth," he explained.

Helwig pointed out that a person on a private project without a PLA could pick and choose as much local labor as they desired, union or non-union.

There were more questions, but again, no vote on the issue - that is set for March 7.

The council also heard a first reading of an ordinance that would remove a requirement that ATV owners buy a $10 city permit each year. That will also be on the March 7 agenda.

Police chief Derek Randall said the city is actually losing money on the permits, and noted that officers can work with dispatch to search for state-issued ATV permits or vehicle identification numbers more easily than local permits.