With the signing of a memorandum of understanding this week by San Francisco Mayor Ed Lee and San Mateo County Board of Supervisors President Carole Groom, the city’s new – and controversial – local hire ordinance has opened its doors to San Mateo County construction workers. The agreement now allows contractors working on San Francisco public works projects located in San Mateo County to hire an equal number of workers from the two counties.

The MOU, which still needs to be approved by both boards of supervisors, is a reciprocity agreement that ends a dispute between the counties by creating “a level playing field for San Mateo County residents working on construction projects in the county funded by San Francisco,” reports Jerry Hill, a state assemblyman who authored an anti-ordinance bill in response and will now tuck that away.

As I reported in early April, the ordinance, championed by SF Supervisor John Avalos, requires that firms working on major city construction projects hire a minimum number of San Francisco residents. Beginning this year at least 20% of those working on construction projects must be San Francisco residents and by the year 2016 at least 50% must be San Francisco residents. Businesses that violate the law can be fined. 

The most contentious part of the ordinance is the requirement that San Francisco's ordinance apply to construction projects up to 70 miles outside of city limits, impacting neighboring Bay Area counties.

Hill responds in a press release: “With San Francisco scheduled to award $27 billion in public contracts during the next decade, this provision would have impacted the ability of San Mateo County residents to work on construction projects in their county, including the San Francisco International Airport, the jail in San Bruno, Hetch Hetchy waterworks and other facilities on the peninsula. In the next 18 months alone, San Francisco is scheduled to spend $77 million on 20 projects at SFO, which is located in San Mateo County.” 

So the geography issue has been solved for now. As I’ve heard from industry sources, the potential for abuses – and higher project costs – still remains with these kinds of laws. We shall see.