Non-unionized building contractors and their employees showed up in force at Wednesday’s City Council Budget Committee meeting to voice objections about a bill that would prevent them from bidding on any city construction contracts valued at $250,000 or more.

Jonathan Young, president of the Associated Builders and Contractors Hawaii chapter, said 4,500 contractors — about two-thirds of the state’ contractors — would be barred from bidding or working on city contracts if the bill becomes law. “Discriminating against the majority of contractors in the state of Hawaii is wrong.” Young also said the state Procurement Code bars the city from enacting laws that regulate the procuring of contractors.

Despite the concerns, the Budget Committee voted to advance the bill for further discussion. It will likely next be heard at the full Council’s next meeting Aug. 7 in Kapolei.

Bill 37 requires the city to negotiate for any contract valued at $250,000 or more with union contractors.

Bill 37 was initiated by several influential construction union groups including the the Hawaii Construction Alliance and the Hawaii Building and Construction Trades Council. Both organizations’ names are listed under the definition of “union” in the bill.

Gino Soquena, executive director for the Hawaii Building and Construction Trades Council, said the best-trained construction workers are in unions, resulting in better safety records. The bill ensures more local construction workers can stay in Hawaii instead of moving away, he said. A section of the bill states contractors would need to make it a goal to hire 80% local area residents.

Additionally, Soquena said, bids on contracts help with “the economy and efficiency of construction projects.”

Geoffrey Chu, business development manager for Oceanic Companies, said he’s spent 43 years in the construction industry, about half of that time as a unionized worker, the other half for “merit shop contractors.” Chu said unionized workers for government jobs results in more costs for taxpayers.

“The cost of … unionized contractors is definitely higher, which relates to higher project costs to the taxpayers,” he said.

Chu said his company currently has about $80 million of general contract or subcontract work with the city, the majority of which is on wastewater plants and pump stations. “The city by far is our largest client, dollar-wise,” he said. “More than 50% of our subcontractors are unionized and we get along,” he said. “Why does the city try to fix what’s not broken?”

Joe Ferrara, general manager of Consolidated Painting, warned, “If you go ahead with this here bill, what you’re going to do is you’re going to limit the amount of contractors who can bid on it — from 100% of the contractors you’ll go down to 20.” For a specialty contractor such as himself, the pool will drop to less than 1%, he said. “The costs will skyrocket.”

Gladys Quinto Marrone, CEO of the Building Industry Association of Hawaii, submitted written testimony opposing the bill. She suggested that only contracts valued at $10 million or more should be required to use union labor.

Council Budget Chairman Joey Manahan, who introduced the bill, said the goal of the bill “is to achieve and promote efficient and high quality construction, improved city service and ensure a steady supply of labor on propriety construction projects.”

After the meeting, Manahan said the bill will likely be vastly reworked given the strong opposition raised. He acknowledged that attorneys with the Department of Corporation Counsel also raised questions about whether the Council has the authority to enact bills regulating procurement.

Gary Kurokawa, Mayor Kirk Caldwell’s chief of staff, said the administration supports the bill’s intent but wants to study it more.