Union Abuse of California Environmental Quality Act (CEQA) Exposed in Petaluma

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In my June 24, 2014 article in UnionWatch.org entitled Union Abuse of California Environmental Laws Goes On, Unabated, I report on my exposure of construction union “greenmail” against the Basin Street Properties Riverfront Mixed-Use Project to the Petaluma Planning Commission. As usual, getting a Project Labor Agreement on construction is apparently the purpose of the relentless union objections under the California Environmental Quality Act (CEQA) to the development.

The Planning Commission approved the project on a 5-0 vote. It now goes to the Petaluma City Council, where unions will likely continue to threaten the developer with CEQA complaints.

Here are the four sets of objections so far:

Union Request for Extension of Public Comment Period for Initial Study/Mitigated Negative Declaration – June 26, 2013

Union Objections to Initial Study/Mitigated Negative Declaration – July 25, 2013

Union Objections to Draft Environmental Impact Report – February 6, 2014

Union Objections to Final Environmental Impact Report – June 24, 2014

“Uncancel the Meeting!” First California Bill to Mandate Project Labor Agreement Was Backroom Deal: Public Discussion Needed

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Here’s an email I sent this morning (June 23, 2014) to the Monterey County Board of Supervisors about the need for openness and transparency concerning the state-mandated Project Labor Agreement provision in Assembly Bill 155, which authorizes the Monterey County Water Resources Authority to use design-build procurement for the interlake pipeline project. I propose that the board’s Legislative Committee “uncancel” its June 30 meeting to discuss AB 155.


From: Kevin Dayton
Subject: Board of Supervisors: Request to “Uncancel” and Convene 6/30 Legislative Committee Meeting – AB 155 and Project Labor Agreement
Date: June 23, 2014 at 12:19:22 PM PDT
To: Monterey County Board of Supervisors

Dear Monterey County Board of Supervisors:

Assemblyman Luis Alejo has gutted and amended Assembly Bill 155 to become an “urgency” bill to authorize the Monterey County Water Resources Agency to use the design-build procurement procedure in bidding the interlake pipeline project. That bill includes a provision never-before included in a design-build authorization bill that requires the design-build entity to enter into a project labor agreement with construction trade unions that will “bind all of the contractors performing work on the project.”

See June 19, 2014 report: Monterey County Water Resources Agency: Target of First State-Mandated Project Labor Agreement

A Project Labor Agreement requires a construction company to pay employee fringe benefits into union-affiliated trust funds, obtain most or all journeymen and apprentice workers through the applicable union hiring hall dispatching system, and requires workers to pay union dues and initiation fees. Government-mandated Project Labor Agreements institute favoritism for unions and unionized contractors. Project Labor Agreements are an unnecessary bid specification that discourages bid competition and increases costs of public works construction for taxpayers.

Your Legislative Committee has not discussed design-build authorization for the Monterey County Water Resources Agency, nor Assembly Bill 155, nor the government-mandated Project Labor Agreement. And inexplicably, the next meeting of the Legislative Committee scheduled for June 30 is now cancelled!

June 30 Legislative Committee Cancellation Notice

May 19 Legislative Committee Agenda (no reference to design-build authorization for MCWRA)

On behalf of the Western Electrical Contractors Association (WECA) and other construction companies and trade associations, I ask you to convene a Legislative Committee meeting on June 30 with AB 155 on the agenda for discussion.

Do you believe your constituents should have the opportunity to comment on AB 155 in a public forum in Monterey County? Surely representatives of construction trade associations, unions, and water customers should be able to provide remarks on this highly-controversial issue in a public forum, so that the Board of Supervisors is able to deliberate adequately and make an informed decision on AB 155 and a government-mandated Project Labor Agreement.

Right now the People of Monterey County have no idea what led to the inclusion of the first government-mandated Project Labor Agreement in a California legislative bill meant to benefit them. Shouldn’t the justification be out in the open?

See Monterey County Legislative Committee Role, Responsibilities & Policies

Let’s bring this state government mandate out into the open, so the People and their representatives on the Board of Supervisors can evaluate whether or not it provides the best quality work at the best price. Please convene your Legislative Committee on June 30 to discuss the Project Labor Agreement mandate in AB 155

Kevin Dayton
President and CEO
Labor Issues Solutions, LLC

Monterey County Water Resources Agency: Target of First State-Mandated Project Labor Agreement

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On June 3, 2014, the Monterey County Board of Supervisors voted to proceed with a plan and $500,000 in funding to construct a $25 million pipeline between the Lake Nacimiento and Lake San Antonio reservoirs that will allow more storage of water for the Salinas Valley. A few days later, Assemblyman Luis Alejo, who represents the Salinas Valley, gutted the contents of his Assembly Bill 155 and inserted language that authorized the Monterey County Water Resources Agency to use the design-build procurement method for bidding the interlake pipeline project.

Because of the drought, AB 155 is designated as an “urgency” bill that will take effect immediately when the Governor signs it. A two-thirds vote in the Assembly and Senate is required to pass an urgency bill.

But what immediately attracted attention was this provision in AB 155:

(2) If the agency does award a design-build contract as authorized under paragraph (1), it shall do the following:

(C) Ensure that the design-build entity selected for the project enters into a project labor agreement that will bind all of the contractors performing work on the project.

This is the first state mandate for a California local government to require its construction contractors to sign a Project Labor Agreement with unions, and whoever arranged the plot was able to keep it unnoticed until AB 155 was amended. Reportedly the phrase “Project Labor Agreement” was uttered once during discussion of the pipeline project at the June 3, 2014 Monterey County Board of Supervisors meeting, to the visible satisfaction of the head of the Monterey/Santa Cruz Building and Construction Trades Council, who was in the audience.

I went to the June 18, 2014 meeting of the Salinas River Basin Management Planning Committee of the Monterey County Water Resources Agency to ask the committee to seek the removal of the Project Labor Agreement mandate from AB 155. (The meeting agenda included a report from the agency’s general manager on the status of the interlake pipeline project.)

By this time, the business community in the Salinas Valley was aware of the state-mandated Project Labor Agreement as a condition of design-build procurement. A representative of the Salinas Valley Water Coalition complained that the Project Labor Agreement in AB 155 was never discussed in a public forum despite changing the Agency’s bidding process. A representative of the Monterey County Farm Bureau also expressed concern that the mandate was never discussed in a transparent manner. He said “politics is changing this” and the agency was “taking what Sacramento dishes out.”

The committee discussed the Project Labor Agreement at length. Some committee members objected to the language and noted that it had been inserted without local deliberation or even knowledge. One board member asked staff what other special interests in Sacramento were planning to “latch onto the bill” and said “We shouldn’t just roll over on this one despite the threat.”

Staff acknowledged that the Project Labor Agreement mandate was added to the bill to neutralize opposition to AB 155 from the State Building and Construction Trades Council of California. One board member who seemed to be fully aware of what happened claimed the union mandate was necessary in order to fast track the bill and the project. He said the agency would lose seven to twelve months and would not be “shovel-ready” for grants: “Without union support, we can’t do it. It’s too late to push back; it really is.” He also reported that the head of the Monterey/Santa Cruz Building and Construction Trades Council said unions would oppose the bill unless a Project Labor Agreement was in it. He also claimed that Republicans would vote for AB 155 even with the Project Labor Agreement in it, so the threat of derailing passage of the bill with one-third opposition was not real.

The committee did not take action because the Project Labor Agreement was not on the agenda, and it did not schedule a special meeting to take action. The committee will discuss the Project Labor Agreement at its July 9 meeting, at which time the committee will know if AB 155 will fail or be signed into law. The Monterey County Board of Supervisors is supposed to vote again on the pipeline project on July 29, 2014.

Resistance Continues to Union Campaign for Labor History Curriculum in Public Schools

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A June 15 article by Stephen Singer, an Associated Press reporter based in Connecticut, reports on the continued campaign by labor unions (particularly teachers’ unions) to enact laws encouraging or requiring public schools to teach a biased version of labor history in public schools. Connecticut has been one of the states targeted for this legislation.

Unions Push State Legislatures for Labor History Courses – Fox News via Associated Press – June 16, 2014

Of course, California is the center of the push for labor history in public schools. As one of the few people who track this movement from a critical viewpoint, I’m quoted in the AP article.

Here are some of my writings on labor history requirements in public schools:

How Will Students Celebrate Labor History Month in California Schools?www.UnionWatch.org – December 31, 2012

Soon, a Whole Month to Subject California Students to Union Propaganda in the Classroom - www.LaborIssuesSolutions.com – April 14, 2012

Opposition Letter to California Assembly Bill 2269 (Labor History Month) – April 12, 2012

Labor History in Public Schools: Unions Get ‘Em While They’re Young – article in journal Government Union Review – (Volume 21, Number 1) 2004.

California High-Speed Rail Proving to Be Key Issue for November 2014 Elections

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On June 10, 2014, the U.S. House of Representatives voted on an amendment to a transportation appropriations bill to prohibit federal funds from being used for high-speed rail in the State of California or for the California High-Speed Rail Authority. It was offered by Congressman Jeff Denham (R-California), chairman of the Subcommittee on Railroads, Pipelines and Hazardous Materials of the U.S. House Committee on Transportation and Infrastructure.

The amendment passed 227-186. See Congressional Record – Roll Call #288.

Six Democrats voted YES on the amendment. Four were from California. Why did they vote YES?

California’s Ten Most Vulnerable Democrat Members of Congress and Their June 10, 2014 Votes on Cutting Off Federal Funding for California High-Speed Rail

California Ten Most Vulnerable Democrat Members of Congress and California High-Speed Rail Vote

Debate on the Amendment (from the Congressional Record)

Source: http://beta.congress.gov/congressional-record/2014/06/10/house-section/article/H5212-2

Amendment Offered by Mr. Denham

Mr. DENHAM. Mr. Chairman, I have an amendment at the desk.

The Acting CHAIR. The Clerk will report the amendment.

The Clerk read as follows:

At the end of the bill, before the short title, insert the following:

Sec. __. None of the funds made available by this Act may be used for high-speed rail in the State of California or for the California High-Speed Rail Authority.

The Acting CHAIR. The gentleman from California is recognized for 5 minutes.

Mr. DENHAM. Mr. Chairman, this is a very simple amendment. Again, it reads: “None of the funds made available by this Act may be used for high-speed rail in the State of California or for the California High-Speed Rail Authority.”

As chair of the Subcommittee on Railroads, Pipelines, and Hazardous Materials, I am a big supporter of high-speed rail. I have seen some of the greatest high-speed rail in other countries, and here, even in the United States, we are going to see the first high-speed rail in Texas and then in Florida–two projects that are moving forward with private dollars.

Yet, in California, in 2008, we passed Proposition 1A, which was a guarantee to the voters that a $33 billion project would not only be built but would be built on time, with equal parts of funding from the State voters, from the Federal Government, hopefully, and then from the private investors. Today, 5 years later, after $3.8 billion in stimulus funds for shovel-ready projects were dedicated to this, still not one shovel is in the ground. It is a project that has been held up in court. The $9.95 billion cannot be used, and there are no private investors.

So the question is: Why should the Federal Government be putting more money into a project that is nonexistent today?

It is a project that, even by its own definition, is $32 billion short, not in the project, but in the initial operating segment, which is guaranteed to the voters to be completed. This is a project that has grown out of control. When they found out that they were in default in April, rather than fixing the problem, they committed to next year’s budget, utilizing $250 million in cap-and-trade funding.

There is a reason the judges have struck this down to this point, and there is a reason that voters wanted to have this go back before them: it is a project that has no end in sight. Again, no shovels have been put into the ground even though the Federal Government has obligated $3.8 billion–money that could be used for other priorities. Today, we are in a situation. With a $32 billion shortfall, there is no proposal from the President to fill that gap, and there is no proposal from the Governor to fill that gap. Yet there is the hope that the Federal Government will continue to find new money to throw at something that is nonexistent.

This doesn’t meet the Prop 1A guarantee. There is no State match, and the cost has more than doubled. Again, the jobs that have continued to be talked about for the last 5 years are nonexistent.

Mr. Chairman, I would urge an “aye” vote on this amendment. We have got to stop this train wreck.

I yield back the balance of my time.

{time} 1530

Ms. LOFGREN. Mr. Chairman, I rise in opposition to the amendment.

The Acting CHAIR. The gentlewoman from California is recognized for 5 minutes.

Ms. LOFGREN. Mr. Speaker, on behalf of the California Democratic congressional delegation, I rise in opposition to this amendment.

This misguided amendment would prohibit additional Federal investment in California’s high-speed rail project. As we know, California is in the midst of constructing the Nation’s first truly high-speed rail system.

[[Page H5215]]

The project was approved by a strong majority of California voters in 2008 because we Californians know that high-speed rail is the most effective and environmentally sustainable way to increase mobility across the State.

Now, the project is already creating jobs for Californians. In fact, more than 70 firms that have committed to performing work on this project have offices in the Central Valley, and many of these firms, happily, are veteran-owned.

In San Jose, the California high-speed rail project is already providing immediate benefits by investing $1.5 billion in the Caltrain Modernization Program. This program will create over 9,500 jobs, over 90 percent in the San Francisco Bay area.

Now, the government’s independent watchdog, the GAO, conducted an extensive audit of the project. And you know what? They gave high marks to the authority’s business plan for high-speed rail.

Members of Congress are right to conduct proper oversight of infrastructure projects across the country. However, regardless of your views on the merits of this project, I think most of us would agree that attempting to kill a single project through the appropriations process is bad public policy and sets a horrible precedent.

I would note that electrified trains are really part of the future. China already has 5,000 miles of high-speed rail, and they intend to double that. Spain has 1,600 miles of high-speed rail, and they are building more. More than a dozen other countries have their own successful high-speed rail systems. Even Morocco is building a high-speed rail system. But we don’t have anything in the United States except for what California is doing.

I would note that California is almost always on the leading edge of progress for our country. We are leading in energy conservation. We are leading in alternative energy, and we have the best public university, the University of California, in the entire United States. We always lead.

Now, it is important that the State of California has identified an ongoing source of funds to support high-speed rail, and that is the cap-and-trade funds. Is that appropriate? Yes, it is, because the cap-and-trade funds are generated through energy conservation, and the high-speed rail system is going to help move Californians in an environmentally suitable way.

It is important to be visionary here. You know, when we started building the interstate highway system, when the first mile of highway was built, we didn’t know that 50 years later we would still be identifying interstates to build.

We need to begin with high-speed rail in California. California is behind this project. The California Democratic delegation is behind this project.

I urge my colleagues to reject the amendment, put our neighbors back to work, and allow California to continue building the Nation’s first true high-speed rail project. We will all be proud of that project as it nears completion.

Mr. Chairman, I yield back the balance of my time.

Mr. LaMALFA. Mr. Chairman, I move to strike the last word.

The Acting CHAIR. The gentleman from California is recognized for 5 minutes.

Mr. LaMALFA. Mr. Chairman, I rise in support of Mr. Denham’s amendment.

High-speed rail has been a boondoggle in California pretty much since day one. The voters, when they had it presented in front of them as Prop 1A in the 2008 election, they were shown a $33 billion project that would connect San Francisco to Los Angeles with a continuous high-speed rail project.

What we found out, within 3 years, was after the price went up initially $45 billion, that a true audit turned out it would be $98.5 billion. After that, the Governor real quick decided to change the project and use the connectivity of the Bay Area and Los Angeles, their local systems, to make up for it, which is illegal under Prop 1A. It has to be continuing from San Francisco to LA. You can’t use local transit systems under Prop 1A.

So now what we see is that they were able to downsize the cost to only $68 billion over what the voters, by a 52 percent, not an overwhelming margin, merely 52 percent, approved.

They were sold a bill of goods. That is why we shouldn’t spend another Federal dollar or State dollar which enables–the Federal dollars enable the State dollars to be spent. We need to stop that here until they come up with a real plan that shows the financing.

They haven’t shown the financing yet. We can identify $3 billion worth of Federal money, $9.95 billion worth of State money, approximately $13 billion for a project in the downsized illegal form that is only $68 billion, they say.

Where does the other $55 billion come from?

They have no idea. There is no private sector money. There is no more Federal money that is going to happen, other than the $3 billion that has been captured from the stimulus package of a couple of years ago.

We need to take that money and channel that into something else that we need to do desperately, such as our transportation infrastructure which we are speaking about here this week. Or in California we have a desperate need for water supply during our drought, instead of a boondoggle which is going to pave through a bunch of our ag land in California, as well as important other infrastructure.

What do we hear about it?

Oh, it is going to save CO2. It is going to be a panacea for global warming. You know, for 30 years it won’t even help toward this project of global warming. Instead, part of their plan is they are going to have to plant trees to offset the construction of high-speed rail because it is going to have a higher CO2 footprint than what we already have.

It is boondoggle after boondoggle. We talk about jobs. These aren’t real jobs. The numbers have been inflated since day one. They tried to tell us 3 years ago that it was going to cause a million new jobs for California.

When we finally pinned them down in a State committee, they said, well, that means a million job years. It turns out to be it might be 5,000, 10,000 jobs under construction, not a million jobs. It is deceit after deceit.

We need to plow this money that we have federally back into something that would help our transportation infrastructure in California or in the Nation, help build water supply, anything but this project here, which is full of deceit and empty promise after empty promise.

Mr. Chairman, I yield back the balance of my time.

Mr. PASTOR of Arizona. Mr. Chairman, I move to strike the last word.

The Acting CHAIR. The gentleman is recognized for 5 minutes.

Mr. PASTOR of Arizona. Mr. Chairman, I rise in opposition to the amendment, and I yield to the gentlewoman from California (Ms. Lofgren).

Ms. LOFGREN. I thank the gentleman from Arizona. I just wanted to make a couple of quick points. First, it is easy to be a critic and it is hard to be a builder. The high-speed rail project is a big project, it is difficult to do, but we are going to get it done.

Sometimes I wonder, when people say don’t do high-speed rail, how they plan to deal with the millions of additional Californians that are anticipated to clog our roads and need transportation infrastructure.

It has been suggested by dispassionate engineers that we would need at least two or three additional airports in California. We would need several, as many as five, additional lanes, north-south, in the middle of California to match the capacity of high-speed rail.

How are we going to do that?

Do we think that that is not going to be expensive?

The alternative to high-speed rail is not nothing. That is impossible for a State as vibrant as California, with an economy as booming as it is, and a future as bright as we have.

I would note also that the idea that it is inappropriate to use cap-and-trade funds, I just simply disagree with. California is among the first in the Nation, I would say, and it has got wide approval in the State, to do this cap-and-trade system, to bring down carbon emissions. Funds will be generated through that project. Some of those funds will go to this very worthy project. So I disagree very much with this amendment. I don’t believe that we will be successful–my God, I hope we are not–in stopping this visionary project that is going to allow the State of California to continue to prosper and for transportation north-south needs to be met into the future.

I thank the gentleman for yielding.

Mr. PASCRELL. Mr. Chairman, I yield back the balance of my time.

The Acting CHAIR. The question is on the amendment offered by the gentleman from California (Mr. Denham).

The question was taken; and the Acting Chair announced that the ayes appeared to have it.

Mr. DENHAM. Mr. Chairman, I demand a recorded vote.

The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further proceedings on the amendment offered by the gentleman from California will be postponed.

4th Edition Published: Guide to Prevailing Wage Policies in California’s 121 Charter Cities

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The fourth edition of Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions? has been released by the California Construction Compliance Group. If you want to free your city from costly state mandates imposed by special interests at the state capitol, you need to consider asking your fellow citizens to enact a charter or asking your city council to exercise its local authority under a charter.

The 121 California cities that operate under a charter (a local constitution granting “home rule” authorized by the California constitution) have the right to establish their own policies concerning government-mandated wage rates (“prevailing wages”). Cities can apply these policies to public construction contracts receiving funding solely from the city or private construction contracts receiving funding solely from the city.

The new edition is 115 pages. Here’s the Table of Contents:

  • Background on Charter Cities, Public Works Construction, and California’s State-Mandated Construction Wage Rates
  • Examining the Right of Charter Cities to Establish Their Own Policies Concerning Government-Mandated Construction Wage Rates
  • Under What Authority Does a Charter City Exempt Its Local Construction from State-Mandated Construction Wage Rates?
  • The Prevailing Wage Exemption Is Legal: the California Supreme Court Ended Five Years of Legal Uncertainty and Upheld the Constitutional Right of Charter Cities to Establish Their Own Prevailing Wage Policies
  • There Are Many Good Reasons for a Charter City to Avoid State Laws Concerning Government-Mandated Construction Wage Rates
  • The Term “Prevailing Wage” Is a Misnomer That Deceives California Citizens
  • State-Mandated Construction Wage Rates Now Include Fees for Union Programs
  • “Public Works” Now Encompasses Much More than Government Projects
  • Laws Imposing Costly State-Mandated Construction Wage Rates Also Impose Duties on Local Governments Such as Notifications, Monitoring, Recordkeeping, Legal Interpretation, Compliance, and Enforcement
  • The State Maintains a Sunset Provision That May Require Volunteers to be Paid State-Mandated Construction Wage Rates in the Future
  • Charter Cities Can and Do Adopt Many Kinds of Policies for Government-Mandated Wage Rates on Purely Municipal Construction
  • Studies and Anecdotes Show High Costs of State-Mandated Construction Wage Rates
  • How Is the State Retaliating Against Charter Cities That Set Their Own Policies Concerning Prevailing Wage Mandates? Senate Bill 7
  • The Specific Status Of Policies Concerning Government-Mandated Construction Wage Rates In California’s 121 Charter Cities
  • Summary of Findings
  • City-Specific Data (for the 121 charter cities)
  • Political Analysis And Considerations 76 Ten Categories of Cities Recently Involved with Decisions Involving Charters and Government-Mandated Construction Wage Rates
  • Recent Political Dynamics of Charter Consideration at the City Level
  • Who Opposes Charters, and What Are Their Messages and Tactics?
  • Strategies for Exempting Your Charter City from State-Mandated Construction Wage Rates
  • Waiting for the California State Legislature to Reform State-Mandated Construction Wage Laws Is a Futile Exercise – It Is Not Going to Happen
  • Understanding the Debate Over State-Mandated Construction Wage Rates: Governor Pete Wilson’s Mid-1990s Reform Proposals
  • Understanding the Debate Over State Prevailing Wage Rates: A Legislative Analysis of Senate Bill 7 (2013)
  • California Charter Cities and State Prevailing Wage Mandates in 2013 – A Compilation of More than 150 News and Opinion Articles
  • For More Information

Read the fourth edition of Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions?

The People Express Frustration and Outrage about California High-Speed Rail in Comments about 2014 Business Plan; Read All Comments

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What were the comments submitted to the California High-Speed Rail Authority about its 2014 Draft Business Plan? Here’s what was submitted through April 10, 2014, when the board approved the draft (with some minor changes) to be sent to the California State Legislature. I classified the comments based on three perspectives: critical, concerned, and supportive.

Critical

The People

General Public Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Experts

Robert Allen Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Michael Brady Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Morris Brown Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Alain Ethhoven Comments – California High-Speed Rail Authority 2014 Draft Business Plan

William Grindley Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Kathy Hamilton Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Ted Hart Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Evan Porteus Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Mark Powell and Ted Hart – California High-Speed Rail Authority 2014 Draft Business Plan

William Warren Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Organizations

Citizens for California High-Speed Rail Accountability (CCHSRA) Comments – Realistic View of California High-Speed Rail Authority 2014 Business Plan

Citizens for California High-Speed Rail Accountability (CCHSRA) Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Rail Passenger Association of California and Nevada Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Western Electrical Contractors Association (WECA) Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Local Governments and Elected Officials

Kings County Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Concerned

Experts

California High-Speed Rail Peer Review Group Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Local Governments and Elected Officials

Mike Antonovich (member of Los Angeles County Board of Supervisors) Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Santa Clarita City Council Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Caltrain Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Railroads

Union Pacific Railroad Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Supportive

Organizations

California Transit Association Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Californians for High-Speed Trains Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Local Governments and Elected Officials

Cathleen Galgiani (California state legislator) Comments – California High-Speed Rail Authority 2014 Draft Business Plan

City of Anaheim Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Burbank-Glendale-Pasadena Airport Authority Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Eco-Rapid Transit Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Los Angeles County Metropolitan Transportation Authority Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Transbay Joint Powers Agency Comments – California High-Speed Rail Authority 2014 Draft Business Plan

The People

General Public Comments – California High-Speed Rail Authority 2014 Draft Business Plan

Studies About Impact of Prevailing Wage Laws on San Francisco Bay Area Cities Are Not Trustworthy

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Union officials are livid about the continuing defiance of California’s charter cities. For example, the City of Palo Alto continues after 33 years to exercise its right under the California Constitution to maintain its own policy concerning government-mandated wage rates on municipal construction contracts and private projects receiving city financial assistance.

Intellectuals have recently intervened with scholarship meant to educate the unlearned in Palo Alto about the need to submit to the authority of the wise and venerable California state legislature. But don’t be fooled: just because people with higher degrees are churning out studies doesn’t mean these studies are reliable.

In April 2011, the union-oriented think tank Working Partnerships USA published an “Economic Policy Brief” entitled Economic, Fiscal and Social Impacts of Prevailing Wage in San Jose, California.

In response to that study, I had my own analysis published in August 2013:

Report Defending State-Mandated Construction Wage Rates (“Prevailing Wage”) As Beneficial to Taxpayers Not a Credible Tool For Decision Makers

In October 2012, the union-oriented academic journal Industrial Relations: A Journal of Economy and Society published an article entitled The Effect of Prevailing Wage Regulations on Contractor Bid Participation and Behavior: A Comparison of Palo Alto, California with Four Nearby Prevailing Wage Municipalities.

In response to that study, I had my own analysis published in April 2014:

University of Utah Study on Government-Mandated Construction Wage Rate (“Prevailing Wage”) Policies in Five California Cities: Not a Reliable Tool for Policymakers

I write about my analysis of the University of Utah study in an April 22, 2014 article in www.UnionWatch.orgJournal Article on Prevailing Wage Debunked, But Only Outside Academia

Revised: A Timeline of Activity Concerning What Will Be $9.95 Billion Borrowed through Proposition 1A Bond Sales for California High-Speed Rail

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UPDATE – April 13, 2014: I’ve added information at the bottom of the chart below based on two additional Official Statements issued by the State of California since I wrote the original article.

“Long-Term Bonds Outstanding” for California High-Speed Rail Prop 1A remained at $703,530,000 as of September 1, 2013 but dropped (for the first time) to $623,705,000 as of February 1, 2014.

I presume some of the money borrowed by the State of California through these bond issues is being used to fund the “connectivity projects” authorized for $950 million in a part of Proposition 1A (now California Streets and Highways Code Section 2704.095):

2704.095. (a) (1) Net proceeds received from the sale of nine hundred fifty
million dollars ($950,000,000) principal amount of bonds authorized by this
chapter shall be allocated to eligible recipients for capital improvements to
intercity and commuter rail lines and urban rail systems that provide direct
connectivity to the high-speed train system and its facilities, or that are part of
the construction of the high-speed train system as that system is described in
subdivision (b) of Section 2704.04, or that provide capacity enhancements and
safety improvements. Funds under this section shall be available upon
appropriation by the Legislature in the annual Budget Act for the eligible
purposes described in subdivision (d).

SB 1029 (enacted in July 2012) appropriated $819,333,000 for state, regional, and local agencies other than the California High-Speed Rail Authority to help fund connectivity projects. (Note: this does not include the $1,100,000,000 appropriated for “bookend” projects, which includes $600,000 to electrify and update the Caltrain rail system and $500,000 to upgrade unspecified rail systems under a Southern California Memorandum of Understanding with the California High-Speed Rail Authority.)

Some questions to which I don’t know the answers:

  1. Why did the amount for “Long-Term Bonds Outstanding” go down between September 1, 2013 and February 1, 2014?
  2. How was the California State Treasurer able to issue bonds under Proposition 1A before the state legislature appropriated money in July 2012?
  3. Have any of the proceeds from Prop 1A bonds been spent on “bookend projects?” What happens if some of the $1.1 billion appropriated for “bookend” projects is spent but doesn’t become part of the California High-Speed Train System in the end? Will that money be transformed into connectivity funding?

Are the $1,274,000,000 in appropriations listed below for “Connectivity?” Or are they for “Bookends?” (Only $950,000,000 Can Be Spent Outside of High-Speed Train Service)

$706,000,000 Peninsula Corridor Joint Powers Board (Caltrain) - Electrification Installation of an electric rail system that phases out diesel trains and blends the Caltrain system with the high-speed rail line. With matching funds, total spending is $1.456 billion.
$42,000,000 Peninsula Corridor Joint Powers Board (Caltrain) - Advanced Signaling System: Communications Based Overlay Signal System (CBOSS) Positive Train Control (PTC) Project Design, installation, testing, training and warranty for an intelligent network of signals, sensors, train tracking technology, computers, etc. on the Caltrain Corridor to meet mandated federal guidelines. With funds from BART and the Santa Clara Valley Transportation Authority, total spending is $231 million. This work began in September 2013.
$26,000,000 Santa Clara Valley Transportation Authority (Caltrain) - Advanced Signaling System: Communications Based Overlay Signal System (CBOSS) Positive Train Control (PTC) Project Design, installation, testing, training and warranty for an intelligent network of signals, sensors, train tracking technology, computers, etc. on the Caltrain Corridor to meet mandated federal guidelines.
$500,000,000 Southern California Memorandum of Understanding Regional rail projects that improve local networks and facilitate high-speed rail travel to Southern California. Projects will be selected by local transit agencies, in conjunction with the High-Speed Rail Authority, and state funding will be matched by additional investments to make the total investment in these projects $1 billion.

Original Post – May 13, 2013: It seems that 99.999% of Californians are unaware of how, when, and how much the State of California has borrowed for California High-Speed Rail by selling bonds to investors. My requests at two board meetings of the California High-Speed Rail Authority to be open and transparent about the details of the bond sales – even to the point of having an agenda item at each meeting dedicated to the topic – have been ignored, of course. Their strategy is to keep the public and the news media uninformed, probably because the details are not comforting.

It appears the California State Treasurer has sold about $700 million worth of Proposition 1A bonds to date. While early bond sales for California High-Speed Rail appear to be segregated from bond sales for other purposes, recent sales suggest that California State Treasurer Bill Lockyer was correct when he said the high-speed rail bonds were “mixed together” with bonds for other purposes. That was his response to my questions at the California League of Bond Oversight Committees annual conference on May 10, 2013. Someone in the bond industry told me this mixing was “unusual,” but perhaps we’re misunderstanding what’s going on.

People have asked me how the state was able to sell California High-Speed Rail bonds before the legislature and governor first authorized the sale of bonds in July 2012. I do not know.

I have not been able to figure out how much in interest has been paid so far, where the money was obtained to pay the interest so far (perhaps appropriations for the California High-Speed Rail Authority from the General Fund?), and the current debt service on the bonds.

Basically, we’re all ignorant peons left in the dark by the forces that control everything.

Here’s a preliminary timeline of activity concerning bond sales for California High-Speed Rail, with links to source documents. It’s nothing great, but it’s a step in the right direction for people to fill in the blanks and try to figure out what’s going on. If you see a mistake or know something to be added to it, please let me know.

Amount Borrowed Through Bond Sales (Principal, Does Not Include Interest) Date and Action Link to Source Documents
$0 August 26, 2008 – Governor Schwarzenegger signs into law Assembly Bill 3034, which puts the “Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century” (Proposition 1A) on the November 4, 2008 California ballot. According to the bill, the state would borrow $9.95 billion through bond sales in order to “encourage the federal government and the private sector to make a significant contribution toward the construction of the high-speed train system.” Borrowed money would be available for the California High-Speed Rail Authority to spend under specified conditions and criteria for planning, land acquisition, design, engineering, and construction. The California High-Speed Rail Authority would be required to pursue and obtain other private and public funds, including, but not limited to, federal funds, funds from revenue bonds, and local funds. The California State Treasurer would sell the bonds as authorized by an appointed California High-Speed Passenger Train Finance Committee under terms and conditions specified in committee resolutions. Bonds could have a maturity period as long as 40 years. The committee would consider program funding needs, revenue projections, financial market conditions, and other necessary factors in determining the term for the bonds to be issued. Each year, the state would collect taxes and fees for the General Fund that would pay principal and interest to bond investors. In addition, the board of the California High-Speed Rail Authority could request a loan from the Pooled Money Investment Board to make a loan against the amount of authorized but unsold bonds. Assembly Bill 3034 - Proposition 1A
$0 November 4, 2008 – 52.7% of California voters (including 78.4% of San Francisco voters) approve Proposition 1A. November 2008 Election Results
$0 January 16, 2009 – the High-Speed Passenger Train Finance Committee approves Resolution I under the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the principal amount not to exceed $32,010,000. The committee also approved Resolution II under the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, authorizing the issuance of State of California High-Speed Passenger Train Refunding Bonds in the aggregate principal amount outstanding not to exceed $32,010,000. January 16, 2009 Minutes - Resolution I - Resolution II
$0 February 1, 2009 – Long Term Bonds Outstanding State Public Works 2009
$0 April 6, 2009 – “The High Speed Rail Authority had been financed via a commercial paper issue.” April 6, 2009 Minutes
>$0< April 15, 2009 – the High-Speed Passenger Train Finance Committee approves Resolution III under the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, (i) amending the provisions of Resolution I authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the principal amount not to exceed $32,010,000, and (ii) authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the principal amount not to exceed (a) the principal amount unissued under Resolution I of $32,010,000 and (b) an additional principal amount not to exceed $448,790,000, for a total principal amount not to exceed $480,800,000. The Committee also approves Resolution IV under the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, authorizing the issuance of State of California High-Speed Passenger Train Refunding Bonds in the aggregate principal amount outstanding not to exceed $480,800,000. April 15, 2009 Minutes - Resolution III - Resolution IV
$90,045,000 April 22, 2009 – the California State Treasurer sells $90,045,000 of Safe Reliable High Speed Passenger Train 21st Century Series A Build America Bonds, Federally Taxable.CDIAC Number: 2009-0940 Standard & Poor’s Rating: A Moody’s Rating: A2 Fitch Rating: A –Term: 30 years Rate: VAR%

At the August 6, 2009 board meeting, the Authority executive director noted that this money was a piece of a $4-5 billion state bond sale and would be used by the Authority in FY 2009-10.

2009 Annual Report
$90,045,000 July 1, 2009 – Long Term Bonds Outstanding 2009 Treasurer Publication
$90,045,000 August 1, 2009 – Long Term Bonds Outstanding Official Statement
$90,045,000 October 1, 2009 – Long Term Bonds Outstanding Official Statement
$258,395,000 October 8, 2009 – the California State Treasurer sells $168,350,000 of Safe Reliable High Speed Passenger Train 21st Century Series B Build America Bonds, Federally Taxable. CDIAC Number: 2009-1481 Standard & Poor’s Rating: A Moody’s Rating: Baa1 Fitch Rating: BBB Term: 30 years Rate: 6.933% 2009 Annual Report
$258,395,000 January 20, 2010 – the High-Speed Passenger Train Finance Committee amends Resolution III with resolution V and Resolution IV with Resolution VI. These two resolutions reflect changes to the General Obligation Bond Law that became effective January 1, 2010, and other technical amendments. January 20, 2010 Minutes - Resolution V - Resolution VI
$258,395,000 February 1, 2010 – Long Term Bonds Outstanding Official Statement
$258,395,000 June 30, 2010 – Long Term Bonds Outstanding Official Statement
$258,395,000 October 1, 2010 – Long Term Bonds Outstanding >Official Statement
$309,060,000 November 19, 2010 – the California State Treasurer sells $50,665,000 of Safe Reliable High Speed Passenger Train 21st Century Series C, Federally Taxable.CDIAC Number: 2010-1714Standard & Poor’s Rating: A-Moody’s Rating: A1Fitch Rating: A –Term: 30 yearsRate: 7.438% 2010 Annual Report
$410,050,000 November 22, 2010 – the California State Treasurer sells $100,990,000 of Safe Reliable High Speed Passenger Train 21st Century Series D. CDIAC Number: 2009-1695Standard & Poor’s Rating: A-Moody’s Rating: A1Fitch Rating: A-Term: 30 yearsRate: 5.133% Official Statement - see earlier Official Statement
$410,050,000 June 30, 2011 – Long Term Bonds Outstanding 2011 Annual Report
$410,050,000 September 21, 2011 – High-Speed Passenger Train Finance Committee approves Resolution VII, which amends Resolution III authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the principal amount not to exceed $480,800,000, and (ii) authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the principal amount not to exceed (a) the principal amount unissued under Resolution III of $70,750,000 and (b) an additional principal amount not to exceed $59,250,000, for a total principal amount not to exceed $130,000,000. The Committee also approves Resolution VIII under the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, authorizing the issuance of State of California High-Speed Passenger Train Refunding Bonds in the aggregate principal amount outstanding not to exceed $540,050,000. September 21, 2011 Minutes - Resolution VII - Resolution VIII
$410,050,000 August 1, 2011 – Long Term Bonds Outstanding Official Statement
$499,285,000 October 25, 2011 – the California State Treasurer to sell $91,225,000 of Safe Reliable High Speed Passenger Train 21st Century bonds as Series E. Official Statement
$499,285,000 November 1, 2011 – Treasurer Lockyer Comments on Revised High-Speed Rail Business Plan. November 1, 2011 Press Release
$499,285,000 January 1, 2012 – Long Term Bonds Outstanding Official Statement
$499,285,000 February 1, 2012 – Long Term Bonds Outstanding Official Statement
$499,285,000 June 30, 2012 – Long Term Bonds Outstanding 2012 Annual Report
$499,285,000 July 18, 2013 – As required under Proposition 1A, Governor Jerry Brown signs into law Senate Bill 1029, which appropriates $2,609,076,000 in Proposition 1A funds plus $3,240,676,000 in federal funds for the first operating segment of the High-Speed Rail between Madera and Bakersfield, $1,100,000,000 for “Bookend” funding, $106,000,000 to CalTrans for capital improvement projects to intercity and commuter rail lines and urban rail systems that provide direct connectivity, and an appropriation of $713,333,000 for “Connectivity” funding. Senate Bill 1029 (2012)
$499,285,000 February 1, 2013 – Long Term Bonds Outstanding Official Statement
$499,285,000 March 18, 2013 – California High-Speed Rail Authority approves Resolutions #13-03 and #13-04 requesting the California High-Speed Passenger Train Finance Committee to authorize the sale of $8,599,715,000 in bonds. Resolution #13-03 - Resolution #13-04
$499,285,000 March 18, 2013 – the High-Speed Passenger Train Finance Committee approves Resolution IX and Resolution X to authorize sale of $8,599,715,000 in bonds. Resolution X
$499,285,000 March 29, 2013 – the High-Speed Passenger Train Finance Committee previously adopted Resolution III authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the Principal Amount Not to Exceed $480,800,000 (“Resolution III”) and Resolution VII authorizing the issuance of State of California High-Speed Passenger Train Bonds or Commercial Paper Notes in the Principal Amount Not to Exceed $130,000,000 (“Resolution VII”). As of March 29, 2013, the State had issued $100,990,000 State of California High-Speed Passenger Train Bonds, Series D, currently outstanding in the principal amount of $99,000,000 (the “Resolution III Bonds”) pursuant to Resolution III. $38,775,000 remains in principal amount of bonds or commercial paper notes under Resolution VII, and the Committee now desires to authorize the issuance of bonds to refund any bonds issued from time to time under Resolution VII (the “Resolution VII Bonds”). Resolution XI
$538,060,000 April 11, 2013 – the California State Treasurer to sell $38,775,000 of Safe Reliable High Speed Passenger Train 21st Century bonds as Series F. Official Statement
$703,530,000 April 11, 2013 – the California State Treasurer to sell $165,470,000 of Safe Reliable High Speed Passenger Train 21st Century bonds as Series G. Official Statement
$703,530,000 September 1, 2013 – Long Term Bonds Outstanding Official Statement
$623,705,000 February 1, 2014 – Long Term Bonds Outstanding Official Statement

As Predicted! Unions Target Sacramento Kings Arena Ancillary Development Using California Environmental Quality Act (CEQA)

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Here’s an email I sent to the City of Sacramento Planning and Design Commission about the Sacramento Central Labor Council’s interference in the proposed approval of the Final Environmental Impact Report (FEIR) for the Entertainment and Sports Center (the new Sacramento Kings basketball arena). The Planning and Design Commission will consider recommending city council approval of the EIR at its April 10, 2014 meeting. (See meeting agenda for more information.)


From: Kevin Dayton
Sent: Wednesday, April 09, 2014 10:54 PM
To: City of Sacramento Planning and Design Commission
Cc: City of Sacramento planning staff
Subject: Planning & Design Commission: Speak Out at 4/10 Meeting Against “Greenmail” – Unions Exploiting CEQA for Economic Objectives on ESC – Kings Arena

Dear Members of the City of Sacramento Planning and Design Commission:

According to an article on the Sacramento Business Journal web site today (Union Group Makes Noise Over Development Around Arena – April 9, 2014), the Sacramento Central Labor Council is demanding that the Planning Commission extract the ancillary development from your proposed approval of the Environmental Impact Report under the California Environmental Quality Act (CEQA) for the Entertainment and Sports Center Special Planning District (SPD).

Unions threatening to use CEQA as a tool to extract economic benefits such as labor agreements is no surprise to anyone who has followed proposed developments in the Sacramento region over the past 15 years. Look at the history of environmental review for these projects:

  • Sacramento Railyards
  • Sutter Medical Center Expansion
  • Promenade at Natomas
  • Greenbriar
  • Delta Shores
  • Township 9
  • Metropolitan Hotel
  • West Roseville Specific Plan
  • Roseville Galleria Expansion
  • Rio del Oro in Rancho Cordova
  • Placer Vineyards
  • Regional University Specific Plan
  • Roseville Energy Center
  • Cosumnes Power Plant

This new threat from the Sacramento Central Labor Council was expected. I wrote a comprehensive article published in www.UnionWatch.org on March 11, 2014 predicting how the Entertainment and Sports Center Final Environmental Impact Report would be targeted with union CEQA objections as a strategy to get a union Community Benefit Agreement/Project Labor Agreement on ancillary development. (See text below.)

Most of the development partners targeted in this union CEQA greenmail attempt will lay low and wring their hands hoping this costly CEQA exploitation can be settled somehow without raising costs to the point that it jeopardizes the entire project. But as members of the Planning and Design Commission, you have the authority and the responsibility of service to the public to investigate the objectives of these CEQA complaints.

At the April 10, 2014 Planning and Design Commission meeting, please ask the union representatives and their lawyers the following questions:

  1. What does the City of Sacramento and Sacramento Basketball Holdings (SBH) need to do to resolve your concerns about the environmental impact of the ancillary development around the new Entertainment and Sports Center (aka Sacramento Kings Arena)?
  2. Does a Community Benefit Agreement or Project Labor Agreement have to be part of any settlement to relieve your environmental concerns?
  3. Do you believe backroom deals such as this one to end union CEQA objections against the San Diego Convention Center Phase 3 Expansion are an appropriate way to resolve environmental concerns? (Link to email outlining the deal between the Mayor of San Diego and the head of the San Diego-Imperial Counties Labor Council, AFL-CIO)
  4. Who will you designate to negotiate any settlements with the City of Sacramento and Sacramento Basketball Holdings (SBH)?

For a project of such importance for the Sacramento region, the ulterior motives of groups that identify shortcomings under CEQA need to be examined and aired for the public good. Thank you for the courage to investigate and expose this scheme. See you at the meeting.

Kevin Dayton
President and CEO
Labor Issues Solutions, LLC

 

How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 3

by KEVIN DAYTON on MARCH 11, 2014 · LEAVE A COMMENT

This is Part Three, explaining how unions may attempt to win control of the construction and permanent jobs at the ancillary development around the arena. Part One explained the background of how construction trade unions have already obtained a monopoly on the construction workforce for the arena itself. Part Two explained the union plot to monopolize the service jobs at the arena.

Factions in the Construction Industry: Trusting Pragmatism Versus Principled Cynicism

Leaders of the Sacramento regional construction industry were on the sidelines as the new ownership of the Sacramento Kings basketball team privately negotiated a Project Labor Agreement with trade unions for construction of the new downtown arena. Yet construction business associations such as Associated General Contractors (AGC) and Associated Builders and Contractors (ABC) still supported the city’s plan for the arena.

In a pragmatic decision, these construction associations took the risk to trust that private developers for buildings near the arena will not require their contractors to sign Project Labor Agreements. This development will supposedly include 475,000 square feet of office, 350,000 square feet of retail and commercial space, up to 550 new residential units, and up to 250 hotel rooms, for a grand total of as much as 1.5 million square feet. Up to 11,000 jobs would result.

In exchange for acquiescing to the Project Labor Agreement on the arena, these associations expect fair and open competition for adjacent projects within the city’s Entertainment and Sports District. TheSacramento Bee reported this perspective expressed at a January 27, 2014 rally of contractors and union leaders in support of the arena:

John Cooper of Associated General Contractors said his group, which represents both union and nonunion builders, supports the arena project. “We see an opportunity for huge leaps and bounds when it comes…to job creation,” said Cooper, the AGC’s regional manager.

But Cooper said he’d “pull my support” if the ancillary development – a hotel, retail and more – isn’t open to all bidders. He said “I’ve been assured” there won’t be a project labor agreement covering this ancillary development, like there is for the arena itself.

Political consultant Chris Lehane, who is part of The4000′s leadership, said it’s “premature to ask those questions” about how the ancillary development would be built.

“Our focus right now is to make sure we get those 11,000 jobs,” Lehane said.

A handful of electrical contractors objected vehemently to this arrangement. They felt that allowing unions to have a monopoly on construction of the basketball arena would set a precedent for other major projects in the region. In addition, they did not trust union leaders or the politicians backed by union leaders to resist such a lucrative target once it was definite.

Dissenting from the major trade associations, these contractors individually provided enough campaign funding to revitalize a floundering signature-gathering campaign on petitions for a ballot measure for voters to establish a city charter provision requiring voter approval of a public subsidy for an entertainment or sports facility. Arena supporters feared – and arena opponents expected – that Sacramento voters would approve this check and balance against the proposed $258 million public subsidy for the basketball arena.

Enough signatures were collected to qualify the petition for the June 2014 ballot, but the city clerk disqualified the petitions because of numerous technical errors. The campaign then sued to overturn the city clerk’s decision, but a Sacramento County Superior Court judge agreed with the city clerk’s judgment and also ruled that the city charter could not be amended in this manner.

Can Unions Resist Grabbing More Work Through CEQA Greenmail?

Which of these two positions among bickering groups of contractors will be proven right? One possible indication of the future is an ultra-last-minute attempt by unions to amend a last-minute bill in the California State Legislature providing certain breaks to the arena and surrounding development from the California Environmental Quality Act (CEQA), the primary tool of unions to extort concessions from private developers. (This practice is known as “greenmail.”)

Late in the 2013 session, Senate President pro Tem Darrell Steinberg (D-Sacramento) amended Senate Bill 743 to make some minor modifications to the California Environmental Quality Act and “expedite judicial review of the entertainment and sports center project” for the Sacramento Kings basketball team. Despite some griping from Left and Right, SB 743 passed 56-15-7 in the Assembly and 32-5-2 in the Senate. This occurred early in the evening of the last day of the 2013 session.

As the midnight deadline for legislative action approached, Assembly Bill 852 mysteriously appeared on the Assembly floor, courtesy of Assemblyman Roger Dickinson (D-Sacramento). This bill supposedly made technical corrections to SB 743, passed earlier in the evening.

Reportedly a specific individual senior staffer for the Assembly Republican Caucus became suspicious of the bill and investigated it. This staffer realized that it was some sort of union scheme to remove the CEQA breaks for development around the downtown Sacramento arena.

The Sacramento Bee described what happened next:

In a final flare of end-of-session drama, Assembly Republicans led the defeat of a last-minute labor-inspired cleanup bill related to legislation passed earlier in the evening to hasten the building of a new arena in downtown Sacramento.

Assembly Bill 852 surfaced late on Thursday evening, after both houses had passed Sen. Darrell Steinberg’s SB 743 to streamline the construction of a new arena for the Sacramento Kings. AB 852 was cast as a minor cleanup bill, making just a small change to the arena bill by further restricting which projects could be exempted from some environmental review.

It was requested by labor unions, Steinberg said, who feared that other businesses would get in on the streamlined environmental review procedures intended for the arena.”The concern from labor was that Wal Mart and the big box stores could potentially take advantage of that part of (SB) 743 to get an exemption,” he said.

The 2013 legislative session wrapped up in anger and partisan rancor as the Assembly Republican leadership refused to support AB 852 and accused the Democrats of trickiness. The bill only received 28 votes in the Assembly, and the legislature adjourned for the year with SB 743 intact.

Of course, there was no plan for a Wal-Mart next to the Kings arena. But the distaste of the Left for Wal-Mart provided a politically-potent rationale to “fix” SB 743. An article in Salon provided a perspective on SB 743 otherwise neglected by the news media:

Along with special exceptions for a new stadium for Sacramento’s basketball team, the new law restricts some grounds for CEQA lawsuits. “It’s going to give much more leeway to big companies to just come in and ram these projects through,” said James Araby, who directs the Western States Council of the United Food & Commercial Workers union…

The UFCW and Wal-Mart – and allies on both sides – faced off with particular fury not long before the final SB 743 vote, as legislators considered language labor argued was needed to stop the bill from becoming a loophole for unchecked Wal-Mart expansion…

[Assemblymember Lorena] Gonzalez, a former labor council secretary-treasurer, told Salon that in fights with Wal-Mart, “one of the only tools we’ve been able to use is CEQA, and specifically the traffic impact of Wal-Mart.” Following what she called “massive lobbying by the Chamber of Commerce” and “mainly by Wal-Mart,” the labor-backed amendment failed.

An official with the union-aligned Planning and Conservation League acknowledged in the article that “We all know that Wal-Mart is one of the biggest targets of CEQA lawsuits.”

Is it likely that the amendments backed by the United Food & Commercial Workers union will reappear at the last minute in a budget trailer bill or some other gut-and-amend bill in 2014? Of course it is, and every union will benefit from ending the CEQA break.

More evidence that unions will use environmental laws to target the ancillary development around the Kings arena comes from comments submitted to the City of Sacramento concerning the Draft Environmental Impact Report for the Entertainment and Sports District. As noted in Part 2, the UNITE HERE Local Union No. 49 submitted objections to the report along with remarks about wanting to retain and represent service workers at the new arena.

In addition, a group called Sacramento Coalition for Shared Prosperity submitted objections in conjunction with a demand for a “Community Benefits Agreement” that developers must sign for ancillary development. That agreement, modeled on the L.A. Live Community Benefits Agreement for development around the Staples Center, could guarantee “union jobs” for hotels, restaurants, janitors, parking attendants, and construction trade workers, among various occupations.

Perhaps the biggest threat to the downtown arena is the possibility that SB 743 is unconstitutional and that the arena doesn’t even qualify under the criteria in SB 743. If a court agreed with either of these claims, the environmental review would probably need to start from the beginning.

How will the Sacramento Kings basketball team ownership and the City of Sacramento respond to these costly union demands, packaged with the grounds for potential environmental lawsuits? If unions exploit the weakness of SB 743, they may get the whole package – provided the resulting cost increase allows the Entertainment and Sports District to get built in the first place.

The Three-Part Series: How a Basketball Arena Would Expand the Unionized Workforce in Sacramento

 

1. See How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 1 (how construction trade unions have already obtained a monopoly on the construction workforce for the arena)

2. See How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 2 (how unions are likely to win representation of the food and service workers at the new downtown Sacramento arena)

3. See How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 3 (how unions will likely target the ancillary development around the arena)

Sources

 

Union Leaders and Building Contractors Rally in Support of Arena – Sacramento Bee – March 11, 2014

UNITE HERE Local 49 comments on Draft Environmental Impact Report

Sacramento Coalition for Shared Prosperity comments on Draft Environmental Impact Report

California Senate Bill 743

California Assembly Bill 852

Legislature Rejects Late Night Attempt to Tweak Kings Arena Bill – Sacramento Bee – September 12, 2013

Very Sneaky, Walmart: How The Mega-Retailer Rolled Back California Regulations – Salon – October 14, 2013

Regional Sports and Entertainment Facilities in the Urban Core Attract Costly Political Meddling: Sacramento Kings as a Case Study – www.FlashReport.org – December 16, 2013

After Seven Years, California High-Speed Rail Still Lacks Comprehensive and Credible Plan for Financing System

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The California State Senate Transportation and Housing Committee held an informational hearing on March 27, 2014 entitled “Toward a World-Class Passenger Rail System in California:  Evaluating High-Speed Rail’s Potential for Success.” (See agendabackground information, a report from the California Legislative Analyst’s Office, and the video of the hearing.)

Of greatest concern to committee chairman Mark DeSaulnier (D-Concord) was the lack of a comprehensive and credible plan for financing the system in the California High-Speed Rail Authority Draft 2014 Business Plan.

Some things never change!

I have saved this old email from Governor Arnold Schwarzenegger’s office forwarding an opinion piece published in the May 4, 2007 Fresno Bee. In it, he claims to support High-Speed Rail but doesn’t want to provide significant money for it in the 2007-08 state budget because “there is still no comprehensive and credible plan for financing the system.” He compares the speculative nature of funding sources for High-Speed Rail with the well-outlined plan for complete funding of projects authorized in a proposed water bond – a ballot measure that has never come before California voters.

See the phrases highlighted in bold font below.


From: governorsofficeofexternalaffairs@gov.ca.gov

Date: Fri, 4 May 2007 08:57:45

Subject: Must Build High-Speed Rail

 

Fresno Bee: State Must Build High-Speed Rail

Governor Arnold Schwarzenegger

As the recent Bay Area freeway collapse illustrated — and as a recent Bee editorial correctly pointed out — Californians need and deserve a diverse array of transportation options. I absolutely believe high-speed rail should be one of those alternatives.

A network of high-speed rail lines connecting cities throughout California would be a tremendous benefit to our state.

Not only would its construction bring economic development and the creation of hundreds of thousands of new jobs, but once completed, we would also see improvements to our air quality, reductions in greenhouse gas emissions, congestion relief on our highways and greater mobility for people living in the Valley and other areas of our state currently underserved by other forms of transportation.

Yet it’s been more than 10 years, and the state has already spent more than $40 million in initial planning for the rail line. But there is still no comprehensive and credible plan for financing the system so we can get construction under way.

The High-Speed Rail Authority, the commission in charge of developing a plan for high speed rail in California, estimates the cost of building the system to be more than $40 billion.

Yet so far, the only financing party identified with specificity is the state, which the Authority proposes float a $9.95 billion bond. The remaining 75% of the project cost, or more than $30 billion, has yet to be identified with any specificity or confidence.

Before asking taxpayers to approve spending nearly $10 billion plus interest, it is reasonable to expect the authority and its advisers to identify with confidence where we will find the remaining $30 billion.

A perfect example of what I’m talking about is my $5.9 billion water infrastructure package. By using a public-private partnership approach, we’ve identified a plan that lays out exactly how we are going to pay for every piece of the proposal, from the reservoirs to the groundwater storage to fixing the Delta to our conservation efforts.

For the reservoir portion, the estimated building cost is $4 billion. We’ve proposed $2 billion in general obligation bonds for the public portion and $2 billion in lease revenue bonds to be paid for by the water users themselves, i.e. water agencies, irrigation districts, cities, etc. And to ensure that this funding materializes, we are requiring that contracts be in place to pay for the lease revenue bonds before public dollars are spent on the projects.

Identifying the exact funding sources for large transportation projects is more problematic, which is why we need the authority to come up with a well-thought out financing proposal before moving forward.

I want to commend the authority for its great progress so far in completing the necessary environmental studies and identifying future rights-of-way that we would need to acquire.

Yet even the authority’s executive director, Mehdi Morshed, says the longer the state waits to build a high-speed rail network, the more expensive it will get. I could not agree more.

That’s why I have directed my recent appointees to work with the authority and its financial advisers to develop a comprehensive plan for financing the project in its entirety, so we can make high-speed rail a reality in California once and for all.

Last year, my administration increased funds for the authority to continue its work, and this year, my budget proposes additional funding.

I am willing to explore multiple approaches in order to fund the balance and execute this project — whether through federal grants, local participation, vendor support, co-development opportunities, public-private partnerships or any other realistic financing plans in which the authority expresses confidence.

I look forward to working with the authority and reviewing its proposal as soon as possible.

But let me be clear: I strongly support high-speed rail for California, and especially for the San Joaquin Valley. Increasing the Valley’s transportation options, especially after voters passed Proposition 1B to repair Highway 99, would better serve the region’s growing population and enhance the Valley’s critical importance to our state’s economy.

The promise of high-speed rail is incredible. Looking forward to the kind of California we want to build 20 and 30 years from now, a network of ultra-fast rail lines whisking people from one end of the state to the other is a viable and important transportation alternative and would be a great benefit to us all.

With a responsible plan in place, we can feel secure in delivering high-speed rail and bringing greater opportunity — and a brighter future — to all Californians.

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Background

Governor Schwarzenegger had initially included only $1.2 million in his original proposed 2007-08 state budget to keep the California High-Speed Rail Authority operating. (The California High-Speed Rail Authority reportedly had requested $103 million.) The Los Angeles Times reported in the April 29, 2007 article State Puts Brakes on Bullet Train Plan that “Schwarzenegger’s budget would reduce the authority to an office with no more than six full-time employees — without the 75 consulting firms with 300 employees it has now. Outside contracts would need to be canceled, route planning put on hold and environmental and engineering work frozen.” He also proposed again postponing the 2008 ballot measure to authorize bond sales.

Environmental and transit groups criticized this. They claimed he was betraying a commitment to reduce greenhouse gas emissions through Assembly Bill 32, the Global Warming Solutions Act of 2006 that he signed into law.

In the end, the budget signed by the Governor included $1,159,000 for support of the High-Speed Rail Authority.

California High-Speed Rail 2014 Draft Business Plan Doesn’t Depict Project Labor Agreement Accurately or Usefully

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By law, every two years the California High-Speed Rail Authority needs to prepare a “business plan,” which includes publishing a draft at least 60 days before final publication so that the public can review it and submit comments to the Authority about it. The Authority is required to “take into consideration comments from the public hearing and written comments” before publishing the final business plan. It is required to approve the final business plan at a board meeting and publish it by May 1, 2014.

My article California High-Speed Rail Business Plan Misrepresents Project Labor Agreement posted on March 18, 2014 in www.UnionWatch.org identifies ten distortions of just one paragraph of the 2014 Draft Business Plan. That paragraph describes the Authority’s “Community Benefits Policy,” which was implemented for construction through a Project Labor Agreement (“Community Benefit Agreement”) with the State Building and Construction Trades Council of California.

The Western Electrical Contractors Association (WECA), Plumbing-Heating-Cooling Contractors Association of California (CAPHCC), Air Conditioning Trade Association (ACTA), and Associated Builders and Contractors (ABC) – San Diego Chapter have already submitted comments to the California High-Speed Rail Authority based on my post about how the 2014 Draft Business Plan depicts the Project Labor Agreement:

March 20, 2014 Comments to California High-Speed Rail Authority on Project Labor Agreement.

I analyzed the provisions of the Project Labor Agreement in detail in my January 11, 2013 post in www.LaborIssuesSolutions.com entitled Analysis of the Phony Community Benefits and Other Provisions in the Union Project Labor Agreement for the First Segment of California’s High-Speed Rail. I also explained the origins of the Project Labor Agreement in my April 29, 2013 post entitled Newly Obtained Documents Reveal Which Elected Official Was the Catalyst for the Project Labor Agreement on California High-Speed Rail: Fresno Mayor Ashley Swearengin.

Here is the final version of the Project Labor Agreement:

Project Labor Agreement with Unions for California High-Speed Rail

To submit comments on the depiction of the Project Labor Agreement or other aspects of the California High-Speed Rail 2014 Draft Business Plan, go to High-Speed Rail Authority Releases Draft 2014 Business Plan.

Unions and the Sacramento Kings Arena: The Three-Part Series in www.UnionWatch.org

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A new “Entertainment and Sports Center” planned for downtown Sacramento is intended to keep the Kings professional basketball team from moving to another city. A non-binding term sheet approved by the Sacramento City Council on March 26, 2013 indicated a $447 million cost for construction of the arena, to be supplemented by a $258 million public subsidy funded primarily by a city arrangement involving parking revenue.

This project will be a financial bonanza (as well as a public relations triumph) for unions, union-affiliated fringe benefit trust funds, and labor-management cooperation committees. My three-part series in www.UnionWatch.org entitled “How a Basketball Arena Would Expand the Unionized Workforce in Sacramento” provides the best public explanation available about how unions have schemed and will likely scheme to gain control of as many jobs as possible through construction and operation of the arena and surrounding development.

  • Part One explains the background of how construction trade unions have already obtained a monopoly on the construction workforce for the arena itself.
  • Part Two explains the union plot to monopolize the service jobs at the arena.
  • Part Three explains how unions may attempt to win control of the construction and permanent jobs at the ancillary development around the arena.

In addition, my December 16, 2013 article in www.FlashReport.org entitled Regional Sports and Entertainment Facilities in the Urban Core Attract Costly Political Meddling: Sacramento Kings as a Case Study provides a broader perspective on the ideological agenda grafted onto this new sports and entertainment facility:

…the arena is entangled in idealistic schemes that impose significant financial and logistical costs. Progressive community activists recognize the potential of the downtown arena as a social engineering project. They can get away with using the arena as a vehicle to change the world because so many ordinary people and influential business and community leaders seem to want it at any cost…[business leaders] have to align themselves with leftist political leaders and organizations to secure the Kings arena in a downtown location.

Of course, unions will transfer some money collected through their representation of workers at the downtown arena district to their various in-house political operations and to the Democratic Party in the Sacramento region. This money may hasten and solidify the ongoing transition of Congressional seats, state legislative seats, and local government seats in the Sacramento suburbs from Republican to Democrat control.

In the long term, elected officials will need to figure out how to pay off the bond debt for the Entertainment and Sports Center (and the remaining debt from what is now Sleep Train Arena) if revenue projections for parking aren’t realized by the City of Sacramento. Political pressure will be on the suburbs to share in this cost:

Be vigilant for an ambitious politician from the City of Sacramento to propose some sort regional tax or fee system, perhaps implemented through the Sacramento Area Council of Governments (SACOG), the regional metropolitan planning organization.

As Vote Nears on Binding Term-Sheet for Sacramento Kings Arena, Sacramento City Council to Repeal an Open Government Policy for Contracts

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UPDATE: The Sacramento City Council ended up keeping the 10-day posting requirement for contracts greater than $1 million. Here’s an excerpt from the editorial Don’t Pull Back on Open Government in the March 12, 2014 Sacramento Bee:

Safeguarding open government is a constant struggle. Backsliding can happen easily if people aren’t vigilant…Yet there was a proposal before council members to kill the 10-day rule for big contracts – at least until The Bee’s editorial board starting nosing around and a local watchdog group raised a stink.

Tuesday night, the council said it would keep the “sunshine” rule, and several members spoke in favor of transparency. But even the prospect of backtracking was disturbing, and the timing was curious, to say the least. It only fed suspicions that the city is trying to ram through the downtown arena deal.

As watchdog group Eye on Sacramento pointed out in a Monday letter to council members, next month they are to consider the final financing agreement for the planned downtown arena. It’s a deal that could use as much public and media scrutiny as possible, given how important the project is for the city and how much taxpayers have at stake. Last March, the council was criticized for making a mockery of transparency by approving the current arena “term sheet” only three days after it had been made public.

The group Eye on Sacramento probably prevented the Sacramento City Council from repealing the policy without controversy. See the group’s alert letter, below.


One week before the annual “Sunshine Week” to recognize and promote open and accessible government practices, the Sacramento City Council has an item on its March 11, 2014 meeting agenda to repeal its policy that all agreements greater than $1,000,000 shall be posted on the city’s website and be made available to the public at least 10 days prior to council action (unless waived by a 2/3 vote of council).
See the staff report: Council Rules of Procedure.

The item is disguised on the city council meeting agenda as the innocuous-sounding “Pass a Resolution approving the Council Rules of Procedure.” I’ll admit looking at the agenda on Friday, March 7 but not recognizing this as anything significant. They fooled me.

The City of Sacramento did not fool Craig Powell of the watchdog group Eye on Sacramento. He sent this email to the city council and other Sacramento leaders this afternoon:

From: Craig Powell
To: Sacramento City Council and Others
Sent: 3/10/2014 3:38:40 P.M. Pacific Daylight Time
Subj: EOS Objects to Repeal of the 10-Day Sunshine Rule on $1MM+ City Contracts

Dear Mayor Johnson and Members of the City Council,

We are writing to express our strongest possible objection to the proposal before you tomorrow evening to gut the current city council rule that requires that all city contracts involving more than $1 million be posted on the city’s website and be made available to the public at least 10 days before the council takes action on such contracts.

This 10-day posting/disclosure rule is commonly known as the city’s “Sunshine Rule” and was adopted to assure that the public and the media have adequate time to review and provide feedback to you on the terms of major city contracts before you vote on them (Council Rules Chapter 7, Section E-2-d; http://sacramento.granicus.com/MetaViewer.php?view_id=21&event_id=2435&meta_id=412675 ).

The council’s adoption of the Sunshine Rule has been the single most important upgrade in city government transparency in the past 20 years.

Had the Sunshine Rule been in place when the city was considering approval of its 20-year exclusive, no-bid prime garbage contract with BLT Enterprises (now Waste Management) in 2010, it is unlikely that such an unfair and grossly burdensome contract would have been imposed on hapless city utility ratepayers.  Because the Sunshine Rule was not in place at the time, the egregious city/BLT Enterprises contract was jammed through late at night during the final session of the term of the city council with zero public or media awareness or analysis.  The Sacramento County Civil Grand Jury has castigated the city for both the atrocious terms of the BLT contract and the shady circumstances under which it was approved (Grand Jury, 2011-2012 Reports, page 39; New Tab).

The proposed draft of the new council rules proposes that the Sunshine Rule apply in the future only to city labor contracts – which are already covered by the current Rule since every city union contract involves more than $1 million.  Gutting the Sunshine Rule would return us to the council’s bad old days when it all too often provided de minimis notice to the public and the media of the terms of large contracts that have a lasting and major financial impact on the city.  That is simply unacceptable.

How can you expect the citizens of Sacramento to trust the city council and city government when you are taking active steps to hide from them the details of major city contracts?  When you intentionally change the rules so you can provide inadequate public notice of the terms of major contracts you only breed public cynicism and suspicion over what it is you are trying to hide from the public.

For example, is it sheer coincidence that this move to gut the council’s Sunshine Rule is occurring just three weeks before you are set to approve a massive public subsidy of a new sports and entertainment facility, set for April 1st?  Somehow we doubt it.

There has been no showing whatsoever of any need to water down the Sunshine Rule.  The council already has a relief valve in place in cases of exigent circumstance: the council, by a 2/3rds vote, can choose to waive the 10-day posting requirement.

We can only surmise that some council members are seeking to gut the Sunshine Rule now in order to deprive the public and the media of a reasonable opportunity to review the several hundreds of pages of legal documents that will comprise the “arena deal.”  We can only conclude that you don’t want the public and the media to have adequate time to review the documents, determine the impacts and provide citizen feedback to you, their elected representatives.

If you approve this rule change tomorrow evening you will be sending a clear signal that you want to keep the public and media in the dark for as long as possible about the final terms of the arena deal and deprive them of the time needed to adequately review the final deal and provide informed feedback to the council. No council member voting to gut the Sunshine Rule could ever again creditably claim to be supportive of transparency and openness in city government.

We beseech you: please show a higher level of respect for your constituents and reject this misguided effort to gut the city’s Sunshine Rule.  Thank you.

Very truly yours,

Craig Powell, President
Phone: (916) 718-3030
cc:  Mr. John Shirey, City Manager
Ms. Shirley Concolino, City Clerk
Mr. James Sanchez, City Attorney
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Project Labor Agreement Is Top Concern at Contractor Outreach Event for Sacramento Kings Arena

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Sign for Contractor OutreachToday (March 6, 2014), the City of Sacramento, the Sacramento Kings ownership, and construction manager Turner held a contractor outreach meeting to “start a conversation” with companies interested in potential work opportunities in building the new $447 million Entertainment and Sports Center in downtown Sacramento. More than 250 people registered for the event, and many attendees had to stand in the back of the room.

Line for Contractor OutreachA substantial number of these companies were construction-related firms. I overheard several conversations in which contractors were discussing the requirement to sign a Project Labor Agreement with unions as a condition of work. People were unsure about what this union deal meant for their companies if they won a contract.

Crowd at Contractor OutreachI suspected that the formal presentation at the contractor outreach meeting would evade references to the more reprehensible provisions of the Project Labor Agreement (aka “Community Workforce and Training Agreement”). I also expected that copies of the Project Labor Agreement would not be provided to attendees of the meeting. (Six months after the deal was announced by Sacramento Mayor Kevin Johnson at a September 4, 2013 press conference, the public still does not have access to the union deal.) And in fact the outreach event did not provide copies of the Project Labor Agreement. During the question-and-answer period, I asked when the Project Labor Agreement would be available for the public to see. Attendees were told that it will be on a web site soon, perhaps in a few weeks.

For those curious in knowing more about this minor little issue, a handout was provided at a table at the far side of the meeting room. It had a “Fact Sheet” on one side and answers to “Frequently Asked Questions” on the other side. This handout was referenced by a representative of Turner during his presentation and by the head of the Sacramento-Sierra’s Building and Construction Trades Council during the question-and-answer period.

But the most effective and honest handout at the event was distributed by the Coalition for Fair Employment in Construction. Any contractor at the outreach event who read this handout would learn much about the Project Labor Agreement and the politics behind it.March 6, 2014 - Sacramento Kings Arena Contractor Outreach Flyer - Project Labor Agreement - Front

March 6, 2014 - Sacramento Kings Arena Contractor Outreach Flyer - Project Labor Agreement - Back

News Coverage

Sacramento Makes Court Push to Get Control of Former Macy’s Men’s Store – Sacramento Bee – March 6, 2014 (last paragraph reports on workshop and protest against union deal)

Contractors Attend Kings Build Arena Workshop – FOX 40 News (Sacramento) – March 6, 2014