Anchorage School Board sides with unions in dispute over use of apprentice labor on quake repairs

Anchorage School Board members have rejected a request to temporarily waive a requirement to use apprentice labor on district construction projects — a decision school district staff say could jeopardize as much as $100 million in federal and state funds that could help pay for repairs to school damage caused by the November 2018 earthquake.

However, those concerns may be overstated, according to a Federal Emergency Management Agency official who spoke about the situation Wednesday.

“I think in this specific case we’ll be able to work with the school district,” said Trevor Stanley, acting branch chief of public assistance for FEMA Region 10, which oversees Alaska, Idaho, Oregon and Washington.

At issue is a policy adopted by the board late last year that requires contractors to allocate 15% of project hours to apprentice labor on district projects costing $100,000 or more. Apprentices are paid workers who receive on-the-job training under the supervision of more experienced tradespeople.

The policy was put in place by the board to create more opportunities for students to become involved in the trades. It drew strong support from local labor unions when it came before the board last year. But the school district had warned that the policy could conflict with FEMA guidelines for which projects are eligible for disaster funding.

At its regular meeting Tuesday, the board voted 5-2 against granting the waiver, which would have applied only to earthquake recovery projects that are potentially eligible for FEMA reimbursement. Board members Alisha Hilde and Elisa Vakalis voted in favor of granting the waiver; Andy Holleman, Dave Donley, Margo Bellamy, Deena Mitchell and board President Starr Marsett voted against.

The decision goes against the advice of Superintendent Deena Bishop as well as the district’s highest-ranking staff members, FEMA lawyers consulting with the district and two independent law firms that examined the issue on the district’s behalf.

At Tuesday’s meeting, Hilde argued the board should listen to the opinions of its professional advisers rather than adhering to the apprenticeship requirement.

“I’m not willing to risk public money to pay for this policy,” she said.

But speaking by phone Wednesday from FEMA Region 10 headquarters in Washington state, Stanley said the federal rules are in place to keep down costs. Though he hasn’t yet reviewed the specifics, Stanley said the apprenticeship requirement doesn’t generally appear to add additional costs, so it’s not likely to run afoul of federal rules that require a competitive bidding process.

“It’s unlikely the apprenticeship requirement would make anything necessarily (non-eligible), but we would still have to look more closely at cost reasonableness,” he said.

There was no public testimony for or against the waiver request at Tuesday’s meeting, but at the Jan. 7 board meeting it drew testimony in opposition from Rep. Zack Fields, D-Anchorage, as well as representatives from the AFL-CIO, the IBEW and the International Union of Painters and Allied Trades.

On Tuesday, Donley and Holleman spoke against the waiver request, which they said is unnecessary. Donley quoted a Jan. 7 letter sent from FEMA to U.S. Sen. Lisa Murkowski, R-Alaska, assuring the senator the district’s apprenticeship policy “would not bar the school district from receiving federal funds.”

“That’s pretty straightforward,” Donley said.

That advice is in conflict with what’s been given to the district by members of FEMA’s Procurement Disaster Assistance Team, which is made up of lawyers tasked with advising local governments on federal procurement guidelines. In a report to the district, the team flagged the apprenticeship policy as potentially interfering with provisions in federal law requiring “full and open competition" on construction projects.

Bishop acknowledged the FEMA policy doesn’t specifically ban the use of apprentice labor. However, she also said the district’s own lawyers agreed the policy could impact the competitive bid process and therefore might run afoul of federal law.

“It is about the narrowing of the competition,” Bishop told the board.

District officials are worried that if FEMA decides the district isn’t in compliance with federal law, the feds could decide not to reimburse millions of dollars the district plans to spend on earthquake rebuilding and mitigation projects.

Anchorage School District consultant George Vakalis told the board the district currently has $54 million in projects that could qualify for federal disaster reimbursement. There’s an additional $50 million in grants the district is potentially eligible for that also could be affected, meaning more than $100 million could be at risk by not waiving the policy, he said.

Vakalis said there are currently other hurdles facing the district when it comes to disaster reimbursement — notably a federal requirement that the district get earthquake insurance if it receives FEMA reimbursement funds to rebuild damaged facilities. But the district is hopeful the insurance requirement can be waived.

“We’ve still got a long way to go,” he told the board.