Modesto Municipal Code Art. 7 Local Hiring Preferences in Public Works Contracts

(a) The City Council finds and declares as follows:

(1) The unemployment rate in the City has generally been higher than in the State of California as a whole. The average annual unemployment rate in the City between 2018 and 2021 was seven and sixty-six one hundredths (7.66) percent. During the same time period, the average annual unemployment rate for the State of California as a whole was six and sixty-nine one hundredths (6.69) percent.

(2) Statistics indicate that the City's higher unemployment rate correlates to a higher number of families living in poverty and to a higher crime rate.

(3) Expanding the employment base by implementing a local hiring preference in public works contracts within the City and Stanislaus County will benefit the region as a whole.

(4) The City spends significant amounts in contracting for services and in constructing improvements to real property or to existing facilities. The funds used in contracting for those services are derived, in part, from taxes, fees, and other revenues of local businesses in the City. To the extent possible, such funds should be placed back into the local economy.

(5) The construction industry is a potential path to stable employment and is, therefore, a critical opportunity to connect residents with economic opportunities.

(6) A local hiring preference in public works contracts will aim to provide job opportunities to City and Stanislaus County residents, expand the region's employment base, lessen the drain on public assistance resources, and reduce the City workforce's pattern of commuting outside the region for employment.

(b) The purpose of this article is to improve the local economy by:

(1) Increasing the local workforce base by decreasing unemployment and thereby enhancing and retaining job skills; and

(2) Increasing local spending power, which will result in a stronger, more self-reliant economy.

(Ord. No. 3744-C.S., § 2, effective 4-7-22)

The provisions of this article shall not apply under any of the following circumstances:

(a) When a state or federal law or regulation applicable to a particular public works contract prohibits a local hiring requirement;

(b) When a particular public works contract utilizes grant funding, where the conditions of the grant prohibit a local hiring requirement;

(c) When the City, in its sole discretion, determines that a contract is necessary to respond to any emergency which endangers the public health, safety, or welfare;

(d) When the City, in its sole discretion, determines that a suitable pool of qualified individuals who are local residents does not exist for a specific public works contract; and/or

(e) When the estimated cost of the construction of the public works contract is less than five hundred thousand dollars ($500,000.00).

(Ord. No. 3744-C.S., § 2, effective 4-7-22)

Except as otherwise expressly set forth herein, the following words and terms as used in this article shall have the following meanings:

(a) "Construction work hours" means the total hours worked on a public works contract by qualified individuals, whether those individuals are employed by a contractor or subcontractor.

(b) "Contractor" means any of the following:

(1) Any person or entity who submits a bid as the prime entity to the City for a public works contract.

(2) Any person or entity who provides labor and/or materials for the City pursuant to a public works contract.

(c) "City" means the City of Modesto, California.

(d) "Days" means calendar days unless otherwise specified.

(e) "Local resident" means an individual who is legally domiciled, as defined by Elections Code section 349(b), in Stanislaus County immediately preceding the date of the notice of solicitation or bid advertisement by the City. An individual's domicile is his or her one and only true, fixed, and permanent home and principal establishment. An individual shall verify his or her domicile upon request of the contractor or City by producing satisfactory documentation such as a rent/lease agreement, utility bills, a valid state-issued driver's license or identification card, or any other similar and reliable evidence.

(f) "Public works contract" has the same meaning as set forth in Section 1307 of the City Charter, as amended or supplanted.

(g) "Qualified individuals" means any and all skilled and unskilled workers, including but not limited to, work site foremen, journeymen, technical engineers, apprentices, construction trainees, and construction helpers. Qualified individuals also include any and all other workers appropriate for construction activities regardless of level of skill.

(h) "Subcontractor(s)" means any person or entity that assumes, by secondary contract, some or all of the obligations of a contractor.

(Ord. No. 3744-C.S., § 2, effective 4-7-22)

(a) Every contractor submitting a bid to the City for a public works contract shall agree to make a good faith effort to hire qualified individuals who are local residents in sufficient numbers so that, with respect to such public works contract, no less than twenty-five (25) percent of the total construction workforce, including the subcontractor workforce, measured in construction work hours, is comprised of local residents.

(b) A "good faith effort" means a contractor will take all of the following or similar actions to recruit and maintain local residents as part of the construction workforce:

(1) Contact local recruitment sources to identify qualified individuals who are local residents;

(2) Advertise for qualified individuals who are local residents in trade papers and newspapers of general circulation within the City and the County of Stanislaus, or by equivalent electronic means, unless time limits imposed under the applicable public works contract relative to the commencement and/or completion of work do not permit such advertising; and

(3) With respect to any portion of a public works contract to be performed by a subcontractor, identify subcontractors whose workforce includes qualified individuals who are local residents.

(c) Every contractor shall complete and sign, under penalty of perjury, a certification of good faith effort to hire local residents, on the form provided in the City's bid package, and shall submit the same with its sealed bid no later than the date and time of the bid opening.

(d) A contractor shall include in each and every subcontract relating to a public works contract, a provision whereby the Subcontractor agrees to make a good faith effort to hire qualified individuals who are local residents. A contractor shall be responsible for a subcontractor's compliance with the provisions of this article.

(e) The City Purchasing Manager, or his or her designee, shall prescribe rules, regulations, and procedures relating to the application, administration, and interpretation of the provisions of this section. Such rules, regulations, and procedures shall be consistent with the provisions of this section and may specify details and forms to be used.

(f) If in the sole discretion of the City, the City finds that a contractor has failed to make a good faith effort to use local residents in the course of performance of any applicable public works contract pursuant to the requirements of this article, the City may deem the contractor in breach of contract. In the alternative of any other available legal remedies, the City may require that contractor to develop a written plan to recruit qualified individuals who are local residents as a method of complying with the requirements of this article. If the contractor fails to comply with a written plan described by this section, the City may, at its sole discretion, deem the contractor non-responsible in the evaluation of future public works contract bid opportunities.

(Ord. No. 3744-C.S., § 2, effective 4-7-22)

This article does not limit the contractor's or the subcontractor's ability to assess the qualifications of prospective workers, and to make final hiring and retention decisions. No provision of this article shall be interpreted so as to require a contractor or subcontractor to employ a worker not qualified for a position in question, or to employ any particular worker.

(Ord. No. 3744-C.S., § 2, effective 4-7-22)

(a) Nothing in this article alters the City's obligation to award a contract to the lowest bidder. The City may declare a bid to be nonresponsive under the provisions of this article for good cause including, but not limited to, the following circumstances:

(1) If a contractor fails to complete and sign, under penalty of perjury, the certificate of good faith effort to hire local residents and/or fails to submit the same with its sealed bid no later than the date and time of bid opening; or

(2) If a contractor, or a subcontractor listed by a contractor, fails to comply with the good faith effort requirements set forth in 8-3.703.

(Ord. No. 3744-C.S., § 2, effective 4-7-22)

During its performance of a public works contract, a contractor shall keep an accurate record on a standardized form showing the name, place, of residence, trade classification, hours employed, proof of a qualified individual status, per diem wages and benefits, or each person employed by the contractor on the specific public works project, including full-time, part-time, permanent and temporary employees. A contractor shall require each subcontractor performing work pursuant to a public works contract awarded by the City to the contractor to maintain records of the same information for the subcontractor's workforce and shall require each subcontractor to provide a copy of such records to the contractor upon the contractor's request. A contractor shall make the records and documents set forth in this section available to the City, upon request, within five (5) business days.

(Ord. No. 3744-C.S., § 2, effective 4-7-22)

All forms required under this article shall be attested to as true as to the information set forth therein and shall be submitted under penalty of perjury.

(Ord. No. 3744-C.S., § 2, effective 4-7-22)

From time to time, and at its sole discretion, the City may monitor and investigate the compliance of any contractor and/or subcontractor with respect to the requirements of this article. The City shall have the right to engage in random inspections of job sites, subject to the construction schedule and safety concerns. Each contractor and subcontractor shall allow representatives of the City, in the performance of their duties, to engage in random inspections of job sites and to have access to the employees of the contractor and subcontractor and the records required to document compliance with this article. The City shall establish a procedure for City monitoring of compliance with this article and to address allegations of noncompliance. The City shall have sole authority over the administration of this article.

(Ord. No. 3744-C.S., § 2, effective 4-7-22)