The Metropolitan Sewer District’s $1.6 billion construction and maintenance project – the first phase in the district’s $4.7-billion system overhaul – will create more than 25,500 jobs over the next four years, according to an MSD-commissioned impact study.
But will those jobs go to low-income families who will see their sewer bills double in the next four years because of the project?
At a recent MSD Board of Trustees meeting, the St. Louis City NAACP proposed a plan to ensure job training, education and employment for unemployed, low-income minorities and women.
“It is essential that the economic opportunities be quantified and we measure how effective MSD is in delivering the benefits to the disenfranchised,” said Adolphus Pruitt, president of the St. Louis city NAACP.
In the June 5 election, St. Louis County and City residents voted 85 percent in favor of the $945 million bond issue, which will allow MSD to fix the system’s environmental hazards and raise sewer bills gradually.
With the bond issue’s approval, residents will see their wastewater bills increase monthly from $28 to $43 by July 1, 2015.
The higher rates will adversely affect lower-income families, unless MSD offsets the costs through subsidies, said Don Phares, professor emeritus of economics and public policy at University of Missouri–St. Louis. Construction jobs tend to pay about 1.4 times more than the average medium-low paying job, he said. Creating employment opportunities among low-income families would be another way to indirectly take the pressure off the cost increase, he said.
The $945 million bond goes towards the first phase of the district’s mandated $4.7-billion overhaul. In June 2007, the State of Missouri and the United States Environmental Protection Agency (EPA) filed a lawsuit against MSD – in part because untreated sewage was flowing into the Mississippi River. In August 2011, the EPA announced a settlement agreement that calls for MSD to spend $4.7 billion over the next 23 years to eradicate over 350 sewer overflows.
NAACP’s Community Benefits Agreement
The $945 million in construction alone will generate more than 17,000 jobs and boost the local economy by nearly $2.2 billion over the next four years, according to the MSD-commissioned study completed by Jack Strauss, chair of economics and director at the Simon Center for Regional Economics at Saint Louis University in April 2012.
For the past several months, the NAACP has worked with MSD to come up with a way to ensure that residents will not be paying higher rates without seeing the benefits of upcoming job opportunities. At the June 14 MSD board meeting, the NAACP presented a proposed Community Benefits Agreement with 10 principal terms.
“It incorporates living wage law requirements, first-source hiring and a strong MBE/WBE business support program that addresses the most significant impediment for M/WBEs’ growth – bonding and access to capital,” Pruitt said.
The NAACP partially modeled the agreement after the program that Los Angeles International Airport created in 2006 during its large-scale expansion. The agreement’s guiding points came out of MSD’s ongoing stakeholders meetings, which the district has held for a year.
With the downturn in the economy, many apprenticeship programs in the construction industry decreased their in enrollment – making it nearly impossible for young African Americans and minorities to obtain employment in these fields. The proposed agreement includes a provision for MSD to fund pre-apprenticeship and apprenticeship programs. On top of that, MSD must also require general contractors, suppliers and other project vendors to commit by contract to hire people from the apprenticeship programs and from the “target community” (local, unemployed, low income, minorities and women).
The agreement would also allow MSD to use union and non-union workers on the project and to implement long-term contracting goals for minority- and women-owned businesses.
These points received opposition from the labor representatives at the June 14 meeting.
Jeff Aboussie, executive secretary-treasure at St. Louis Building & Construction Trades Council, said it’s more cost efficient to allow the unions to regulate their own training programs rather than creating additional programs.
“The unions have the ability to ramp up or ramp down their training programs as needed, at no cost to taxpayers,” Aboussie said.
Months before, Aboussie and other trade representatives argued that there were not enough trained African Americans to increase the minority participation goals in the district’s contracts and workforce.
“They said it would be dangerous to increase minority participation because they didn’t have enough trained black folks,” Pruitt said. “Now all of the sudden, they can ramp up apprentices as necessary and trained black folks exist. When problems arise, we pop up just like that.”
The proposed agreement would also obligate MSD to establish an internship program at MSD facilities for public school students. The internship would be similar to a STEM program (science, technology, engineering and math) and give hiring preference to participants. An MSD-funded scholarship program would also be a part of this program.
MSD’s EPA reviews would be open to community groups through the agreement.
And most powerfully, the agreement would have the judicial teeth of enforcement through injunction or otherwise. From suppliers to architects, every entity involved in this project will have a contractual relationship with MSD with private enforcement rights, Pruitt said.
“The Community Benefits Agreement we propose is enforceable through injunctive relief, thus giving the community the ability to ensure that benefits are actually delivered,” Pruitt said. “In exchange, we are prepared to agree to support the project through the approval process, to refrain from lobbying against it, and release legal claims regarding the project. Each party can enforce the other side’s promises.”
