An alderman is pressing officials to consider levying the maximum fine of $500,000 if a contractor fails to meet local hiring goals on the Robert Crown Community Center project.
Alderman Robin Rue Simmons, 5th Ward, is also calling for a change in the system so penalties for non-compliance in the future aren’t delayed until the end of a project.
At the Dec. 18 meeting of the City’s Minority, Women & Evanston Business Enterprise (MWEBE) Development Committee meeting, Ald. Simmons took note that the contractor, Bulley & Andrews, is still falling far short of the City’s goal of 15% hiring of local residents for work on the massive capital development project, which is nearing completion at Main Street and Dodge Avenue.
Under the firm’s contract with the City, if a contractor or subcontractor should fail to meet the total percentage of resident work hours for any reason – if no waiver was given – the City may impose a fine up to 1% of the approved project price.
In this case, the fine amount would come to roughly $500,000 if the project comes in at the $50-million-plus range, as projected.
“The problem is Bulley and Andrews has not met our City goals or our compliance for diversity in local employment,” Ald. Simmons said. “They’re at somewhere between 6% and 75, and we have a 15% minimum.
“My support in the project originally was that we would have substantial local employment opportunities and contracting opportunities. That hasn’t happened, but unfortunately we can’t collect a penalty until final completion, which is sometime in the summer,” she said.
“There’s not much we can do about it now except enforce the maximum penalty, which would be a $500,000 penalty to Bulley and Andrews, and that’s the direction I gave our staff at the Committee … that we can use it in our local MWEBE fund. Hopefully, we can use that to strengthen our local work force.”
City code does allow the City to impose a penalty up to 1%, Hitesh Desai, the City’s Chief Financial Officer and City Treasurer, confirmed during the discussion at the meeting.
However, up to now, “on the LEP [Local Employment Program] only the non-compliant portion has been applied,” said Mr. Desai, in discussion at the meeting.
For example, If the firm achieved 10% compliance by the end of the project, the penalty would be pro-rated against the 15%, totaling less than $170,000.
“I think that is our practice, not necessarily our law,” responded Ald. Simmons.
The alderman also called for what she called a “progress penalty,” fining contractors for failing to comply at different stages of the project rather than at the end, the City’s current practice.
Were the City able to put in a penalty structure, with a contractor facing penalties at the quarter or one third stages of the project, “that that will make them restructure how they contract and employ for the next stage of work, I promise you,” she told Committee members, according to a tape of the meeting.
“My hope is,” she said, after, “that we can change our policy so that we have more meaningful compliance, that developers have to really consider our goals before they participate in our process. I understand that it may deter some developers, but that’s okay, that’s a loss I would be willing to take if we get developers that are willing to honor our local hiring and our diversity in contracting goals in the City of Evanston.”
Residents have been pressing City officials about the need to hold the contractor responsible on the hiring issue, noting staff cited Bulley & Andrews record on minority hiring and commitment to a local employment program as a factor for its selection on the project.
In February 2018, City staff recommended that Bulley & Andrews be awarded the project over nine other firms, though its $41.5 million bid was more than $11 million over that of Walsh Construction, the low bidder.
Since then local activists have pointed to the ballooning cost of the project, now projected at $54 million as a major concern, saddling the City with debt costs of more than $3 million a year over nearly 25 years, with no identifiable revenue source to pay for the project.
In presentations to Council members and construction meetings, Bulley & Andrews representatives have spoken of outreach efforts to recruit local residents, as well as minority-owned, woman-owned, and Evanston-based vendors for the project.
At the City Council Administration & Public Works July 8 Committee meeting, Joel Klahn, a company representative, told aldermen that over the course of the pre-construction and construction phases that, out of the 13 different unions reached out to, seven had no workers residing in Evanston and two had only one.
“So that represents one of the challenges we’ve had in hitting that 15%,” he said at the time, “and drives our discovery of a more limited labor pool of Evanston residents than we understood there was before.”
But local activists have not accepted that argument.
Contractors can use other strategies to bring residents into the project, such as hiring them as apprentices, said Bennett Johnson, the City’s former NAACP head.
“The problem is that they’ve [Bulley & Andrews] been ‘going along to get along’ rather than doing something real,” he said.
In the meantime, he pointed to the lost opportunity for the City on what has been termed the largest capital project in recent Evanston history.
“Fifty million dollars coming into the City and going back out,” he said. “If they had gotten more minorities and local people involved, that money would have gone into the City.”
Ald. Simmons said the union issue, if the case, is something the developer and union need to work out.
“Either way it creates a great opportunity for us to strengthen our local work force and to work with the local unions so that we can increase our union participation and our skilled work force here in Evanston.”
In striving for compliance, “I see it as an opportunity for us to strengthen our economy, our work force, which will then strengthen families, build neighborhoods, and then we’re back to that “Most-Livable-City” City,” she said, referring to the slogan the City has adopted as part of its mission statement.