Thanks to one of our members in the Southern Tier, ABC caught wind of talks of attaching a PLA to the Binghamton-Johnson City Joint Sewage Treatment Plant. While initially estimated to be a $150 million dollar project, cost estimates have been rising, with some saying it could potentially cost upwards of $250 million dollars. You can imagine how much more this would cost taxpayers with a PLA. Projects with a PLA attached have been shown to cost 12-18% more, on average, than those without. By these estimates, taxpayers would expect to pay anywhere from $30 million-$45 million more for this project with a PLA attached.

To begin educating taxpayers and officials on the perils of PLA's, we drafted a letter to the Binghamton City Council, who is one of the principal municipalities with jurisdiction over spending on this project.

October 2, 2015

To: Members of the City of Binghamton Common Council

Re: Binghamton-Johnson City Joint Sewage Treatment Plant

Dear Members of the Council:

On behalf of the more than 400 members of the Empire Chapter of Associated Builders and Contractors, and specifically the more than 100 members in Central NY & the Southern Tier, I’d like to offer you some information on an upcoming vote. The vote is of crucial importance not only to the taxpayers of your district but to the small businesses and hundreds of workers in the City of Binghamton and in Broome County.  

Let me get straight to the point: a Project Labor Agreement (or PLA) on the new Joint treatment Sewage plant is a bad idea. While I’m not sure of your familiarity with these costly agreements, I wanted to share with you a few concerns we have with PLA’s. As administrators of over $150 million dollars of taxpayer money, I’m sure you would like to be as educated as possible when making decisions of this enormity.

What Is A Project Labor Agreement

Project Labor Agreements are formal contracts that typically mandate labor terms for the size and scope of the work. They dictate not only where to acquire the labor force but also mandate the work that each person will perform. With these antiquated requirements, many merit shop contractors will not bid on PLA projects. The results are diminished competition and increased costs. Further, PLA’s have also been known to create significant delays on construction projects. With the ambitious timeframe on the completion of this project, this would have a disastrous impact.

Impact on Local Businesses

A number of local contractors in the Greater-Binghamton area have already expressed grave concern about the possibility of a PLA being attached to this enormous project. The mere fact that their employees who live, work and pay taxes in the region will not be able to work on the project is an abomination. Please don’t get sidetracked by arguments that “local labor” is guaranteed on the project.  Local sometimes simply means that the wages and benefits are going into the local union office.

Impact on Taxpayers

In addition to increasing the cost of construction in general, in order to implement a PLA a study needs to be conducted. The studies, depending on who’s picked to perform the study, can cost in excess of $25,000. That’s a great deal of money that could be used elsewhere, either to help hold the line on taxes or to invest in City infrastructure.

At ABC, our goal is to help you by giving information that will help save you time and money. With that, you can find numerous academic studies that have shown that projects with PLA’s attached increase costs, on average by 12-18% when compared to similar projects without a PLA. You can find much of that information at www.TruthAboutPLAs.com.

Hudson Valley Rejects PLA

Across the state, administrators of public funding are rejecting PLA’s due to the increased costs associated with them. Recently, the Kingston Central School District rejected a PLA after a study concluded, “….that limiting construction bids could add between $4.73 million and $11.18 million to the project cost,”(Kingston Times, June 12, 2015). This was the right and responsible decision for the school district and the entire community.

We encourage you to do your due diligence with regard to administering these funds. Given the dwindling tax base in Binghamton, the imposed 2% tax cap, and the need to stretch every dollar a bit further, the last thing you as an elected want to be accused of is wasting taxpayer money.  Executing a PLA study and then applying it to this project will be a monumental waste of money and one that the taxpayers will not soon forget.

If you need any further assistance, please do not hesitate to contact me at (585) 967-2133 or via e-mail, Sampson@abcnys.org.

Sincerely,

Brian Sampson
President, Associated Builders & Contractors Empire State Chapter