Project labor agreement not a good deal for school district, analysis finds

Paul Padalino. (Photo: Dan Barton)

Paul Padalino. (Photo: Dan Barton)

The Kingston school board has decided against a project labor agreement (PLA) for the $137.5 million “Second Century” Kingston High School renovation plan. An engineer’s study for the district found that limiting construction bids to union contractors could add between $4.73 million and $11.18 million to the project cost.

A little over a month after being hired to conduct a study of the viability of a PLA, consulting forensic engineer and Cornell professor Paul G. Carr said that potential savings in wages by eliminating non-union contractors from bidding on the project would be dwarfed by the likelihood of higher bids to cover the benefits for union workers, legal administrative costs and other fees.

The project, to be completed in two separate phases due to state aid constraints, could save between $191,539 and $632,227 in labor costs with a wage-setting agreement, Carr found. But Carr’s study concluded that increases of up to $3.02 million in heating, ventilation, air conditioning, and plumbing would be likely for union contractors’ employee benefits. A further $2.98 million could be lost by eliminating competitive non-union bids. Carr also determined that delaying the work due to begin this summer at the Kate Walton Field House could result in a $191,773 loss.

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Superintendent Paul Padalino said that Carr’s estimates were not a guarantee, but we rather based on the professional’s review of past projects of similar scope. “No one has a crystal ball,” Padalino said. “How do we know this? We don’t. [Carr] did his best to do the research and show the board data from past similar projects. But it really is hard to say.”

Initially, the school board opposed a PLA study, but reversed the decision last spring following numerous comments from local labor union members who disputed concerns that a limiting the construction bids would eliminate competition and drive costs up. Superintendent Padalino said he was withholding his recommendation until the study was complete.

“There’s a lot of talk and misunderstanding out there that we’re trying to avoid a PLA, or at least I am,” Padalino said back in April. “If the study comes back and says that they’re going to save us money, entering into a PLA would be my recommendation. If we can see real savings, I think my track record here looking at our financial situation, it’s proven that where we can find savings and we can find efficiencies, we do. We can guess and people can make statements, but by law we need a study to enter into [a PLA].”

This week, Padalino said he was pleased the study was completed in time to move forward with project work due to begin this summer. “One of my biggest concerns was just getting it done,” Padalino said. “We didn’t want to end up behind the eight-ball with bidding. The longer we would have had to wait, the possibility of an escalation was there. Prices don’t tend to go down. They go up.

“And really, the lost time of not being able to mobilize some of the construction crews over the summer, and do some of the asbestos abatement that we have to do in the summer because with students in the building during the school year we can’t do it then. Those were things that if we didn’t get them done this year, they would have been held until next year. Now we can move forward.”

School board Trustee James Shaughnessy was, however, skeptical of the report. Shaughnessy said he felt he knew what the outcome would be even before Carr’s June 4 presentation at a special meeting of the school board. “Dr. Carr put a lot of effort into his study,” Shaughnessy said. “However, it was designed from the start to produce a negative finding. As I predicted when we hired him, he concluded that a PLA would result in fewer bidders, and this would result in higher bid prices.

“This conclusion overwhelms any possible savings,” added the former school board president. “There are studies that don’t support his finding. Dr. Carr fails to consider the other factors may impact the number of bidders and deviation from estimates. The bidding history during Kingston’s Excel project from 2008 to 2010 supports the conclusion that the general economic environment has a significant impact on bidders — from a booming economy to the Great Recession in a span of two years.”

Padalino said he wasn’t playing favorites with the project. “As I’ve said from the start, it makes no difference to me who builds this building as long as it gets done the way we want it to for our students,” Padalino said.

Following Carr’s presentation, trustees voted to release Carr’s study to the public.

In March of this year, the capital project was reduced in scope from 420,000 square feet to 360,000 square feet, and the proposed date of completion was pushed back to 2023 from August 2018. School officials said the changes were necessary when a funding issue left them having to figure out how best to complete the renovation without exceeding the dollar amount approved by voters in December 2013.

There is one comment

  1. gerald berke

    Mr Padalino seems to have some serious cracks in his foundation as a superintendent… not long after he takes a brand new project, finds it is already over budget, has to cut back on the deliverables, and slips the date out 5 years (!) he comes up with this:
    Superintendent Paul Padalino said that Carr’s estimates were not a guarantee, but we rather based on the professional’s review of past projects of similar scope. “No one has a crystal ball,” Padalino said. “How do we know this? We don’t. [Carr] did his best to do the research and show the board data from past similar projects. But it really is hard to say.”
    Really? “It’s hard to say”.
    This project might turn out well. But Mr. Padalino words suggest a rather uncertain and imprecise management style: pushing for funding, begging for understanding, and wanting points for himself and his associates for “doing their best” instead of simply doing the planning up front and holding everyone, including himself, to their schedules and predictions.

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