Another Potential Setback for Fair and Open Bid Competition: Palmdale Water District Will Look at Repealing Project Labor Agreement Ban

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Kevin Korenthal of KOREN Communications in Santa Clarita – a former Government Affairs Director for the Los Angeles/Ventura Chapter of Associated Builders and Contractors (ABC) – has tipped me off that construction unions are pushing hard for the repeal of a resolution passed by the Palmdale Water District Board of Directors in October 2010 that prohibits the district (based in the City of Palmdale, in Los Angeles County) from requiring its contractors to sign Project Labor Agreements (PLAs) with unions.

Mr. Korenthal is a reliable source of information and well-connected among water district officials in northern Los Angeles County; he ran for the board of directors of the Castaic Lake Water Agency in 2010. He lost after a blistering election featuring massive campaign expenditures against him by the International Brotherhood of Electrical Workers (IBEW) Local No. 11 in Los Angeles, both directly to his opponent and through its independent expenditure committee, “Working Californians for Clean, Safe, and Affordable Water Against Korenthal for Director of Castiac Lake Water Agency, Division One, 2010.” He was also a witness to all of the Project Labor Agreement antics at the Palmdale Water District since January 2007, which I summarized in this October 27, 2010 blog posting on the www.thetruthaboutPLAs.com web site.

The defeat of two incumbent water board members in the 2010 election has led to this new local legislative effort to bring down the Fair and Open Competition resolution. Here is Item #7.1 on the April 25 meeting agenda for the current Palmdale Water District Board of Directors

Reconsideration and possible action on Resolution No. 10-20 Amending Appendix M, the Bid Procurement and Change Order Policy, of the Rules and Regulations of the Palmdale Water District to Include Provisions Prohibiting the Requirement of Project Labor Agreements and Other Anticompetitive Measures Except Where Otherwise Required by State or Federal Law. (Director Dizmang)

I am posting below the text of the letter that Kevin Korenthal has emailed to the Palmdale Water District Board of Directors:

From: Kevin D. Korenthal
Sent: Monday, April 23, 2012 1:53 PM
To: Palmdale Water District Board of Directors
Subject: Palmdale Water District Item 7.1 Reconsideration of Open Competition Policy

Honorable Board Members of the Palmdale Water District:

I want to begin by introducing myself to those of you who I have not already met or communicated with. I am a 30 year resident of nearby Santa Clarita and have strong family, political and business ties to the communities of Palmdale & Lancaster.

For the past 6 years I have been intimately involved in union construction-related issues around the state of California. Among my duties in this area have been general government affairs for the Merit Shop trade association of Associated Builders & Contractors Los Angeles/Ventura/Kern County Chapters and most recently, the staff leader of the ABC-CCC, a non-profit cooperation committee devoted to studying and commenting on Prevailing Wage issues in CA. Today I represent non-union contractors and their workforces at large through my Public Relations and Government Affairs consulting firm. As you might imagine, this advocacy does not pay very well but I press on with this work because deep study of the issues has convinced me that it is important for elected officials and the public at large to know the truth about discriminatory policies like Government Mandated PLAs.

In 2007 I participated with a group of local contractors, elected officials and other trade associations in a campaign to rescind a legitimately discriminatory policy that limited how an electrician working on City of Palmdale projects may have received his/her training. This policy would have discriminated against electricians that learned their craft in the military, in a trade technical school or by the passing down of skills from one generation of contractor to the next. See the original policy here and the replacement policy here.

I have also been involved in the PLA discussion at the Water District since the issue was first raised by labor-supported board members in October of 2006. The attached article from today’s Antelope Valley Press goes into further detail about the background and my involvement in this issue culminating in the vote to require open bidding on District Projects in 2010.

The current discussion about Government Mandated Project Labor Agreements and policies that discourage them is really more about the ability of local municipalities like The Palmdale Water District to make decisions about District issues that have a fundamental effect on ratepayers and taxpayers. Local municipalities around California have weighed the cost of certain labor-driven policies like PLAs, and have determined that they are not in the best interest of their constituents. The communities of Chula Vista, Oceanside and San Diego County have all voted in favor of Open Competition ballot initiatives. The Palmdale Water District joins Orange County, The City of Fresno, Placer County and Stanislaus County in approving open competition resolutions/ordinances at the board level.  In response, the Democrat-controlled Legislature in Sacramento has sought to tie the hands of municipalities that enact such policies.

California Senate Bill 922, one of dozens of Pro Labor Bills signed by Governor Brown in mid-2011 says in unambiguous language that communities that require construction projects be bid openly and free of union requirements will not be eligible to receive state funding participation. SB 922 is not, as its supporters in Labor have described it, permission for contractors to use PLAs on public works construction projects. Contractors already have the right to use PLAs. The discussion we have before us relates to the mandate by government that construction contractors winning bids on Public Works projects must use a PLA. This issue is about government picking winners and losers in the public works contracting arena.

(Editor’s Note: see my post about the history and ramifications of Senate Bill 922 here.)

Opponents of the Fair and Open Competition Resolution have pointed to SB 922 as verification that demanding open bidding is somehow discriminatory to unionized workers. This claim is false in that union and non-union contractors are always free to bid and win or lose regardless of whether or not the municipality uses PLAs. The question has always been and continues to be; is it in the best interest of the taxpayers and ratepayers to require non-union contractors – who pay prevailing wages and benefits – to mix their workforce with unionized workers, pay into the union pension and health program and require their workers to pay union dues. After an open debate on the subject that lasted several hours, the Palmdale Water District voted to make it the policy of the district that it will leave it up to the winning contractor to decide if a PLA will be used.

In my comments Wednesday evening, I will be referring frequently to the 2011 lawsuit that the Building Trades filed against YOUR water district following the vote on the Resolution. In it, the Building Trades lawyers contend, but do not prove, that the absence of the ability of a municipality to require the use of a PLA is tantamount to discrimination. The court, having a wide breadth of both adjudicated and media-related study materials to refer to decided that in fact, no such discrimination has been proven. The court dismissed the suit with an invitation to labor to prove their claim of discrimination in a future lawsuit.

So are the Building Trades now setting the stage to build a case of discrimination by letting projects go to bid under the Open Competition Resolution? No. They are abandoning the judicial route and are instead using their perceived majority on the current PWD board to have the Resolution rescinded. Their argument for the rescission being the very same from the lawsuit that the judge did not find evidence for and for which the building trades are completely unwilling to have put to the test.

The reason for this is simple. It is much easier for labor to spread campaign dollars around and change the make-up of a board that enacts policies it does not like then it is to prove in a court of law that what they say is true.

Not only are policies against the use of Government Mandated PLAs not discriminatory, but it is the Government Mandated PLA itself that discourages non-union contractors from bidding on projects thus disenfranchising the family of workers that those contractors employ.

I thank you for your time and look forward to continuing this conversation Wednesday evening.

Respectfully,

Kevin D. Korenthal
KOREN Communications

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