UPDATE: see coverage of the meeting by Lisa Vorderbrueggen of the Contra Costa Times newspaper in “Political Blotter: Politics in the Bay Area and Beyond:”
Was that a Rat on Contra Costa Boulevard? – Contra Costa Times – May 18, 2012
This morning I went to a meeting of the Contra Costa Taxpayers Association featuring a presentation by Erik Bruvold, the President and CEO of the National University System Institute for Policy Research, based in San Diego. This institute describes itself as “a groundbreaking economic think tank that promotes high quality economic, policy, and public-opinion research to improve the efficiency and effectiveness of local governments.”
Bruvold is the lead author of “Measuring the Costs of Project Labor Agreements on School Construction in California.” Published in July 2011, this study is the most comprehensive statistical assessment ever done about the fiscal impact of government-mandated Project Labor Agreements (PLAs), with a sample size five times larger than any other study. The study takes into account several potential cost variables overlooked in earlier PLA studies, and it was reviewed for its credibility and accuracy by economists at The Keston Institute for Public Finance and Infrastructure Policy at the University of Southern California.
It was appropriate for Bruvold to make a major public presentation in Contra Costa County, located in the San Francisco Bay Area with a population of 1.1 million. For 20 years, Contra Costa County has been a hotbed of political and legal battles over government-mandated Project Labor Agreements. In fact, in some ways Contra Costa County has been a national leader in the union strategic effort to use government-mandated Project Labor Agreements as a tool to gain market share of taxpayer-funded construction.
For example, the Contra Costa County Board of Supervisors was the first government in California to require contractors to sign a Project Labor Agreement for a public project (the Contra Costa Regional Medical Center in 1994 – see background here). In 2001, the Contra Costa Building and Construction Trades Council and the City of Richmond (in Contra Costa County) joined the Building and Construction Trades Department, AFL-CIO in a court challenge to President George W. Bush’s Executive Order 13202 prohibiting federal funding on construction projects on which governments require contractors to sign Project Labor Agreements with unions as a condition of work. (The D.C. Circuit Court of Appeals rejected the lawsuit in Building and Construction Trades Department AFL-CIO v. Allbaugh, No. 01-5436.)
The Contra Costa Taxpayers Association describes itself as “a non-profit, non-partisan organization dedicated to promoting accountable, cost-effective and efficient government and opposing unnecessary taxes and spending.” This organization has long opposed government-mandated Project Labor Agreements – not surprising when the study “Measuring the Costs of Project Labor Agreements on School Construction in California” indicates a 13-15% increased cost of construction when the bid specifications of school districts require contractors to sign a PLA.
Obviously this study irks union officials. Several dozen union picketers and an inflatable rat balloon were in front of the Hyatt House in Pleasant Hill to greet the 93 meeting attendees.
In addition, two union officials (Aram Hodess, who is a California Apprenticeship Council commissioner and business manager of UA Plumbers and Steamfitters Local 159, and Kevin VanBuskirk, who is a business representative of the Sheet Metal Workers Local No. 104) were handing out this double-sided flyer at the front door of the hotel.
I felt Bruvold did an excellent job in explaining the following: (1) his institute spent a year collecting and confirming data from school districts, state governments, and the McGraw-Hill publishing company, (2) his institute’s study is exceptional for its large sample size and its effort to account for numerous potential variables, (3) California has rigid school construction standards that minimize cost variables and allow for reasonable comparisons, and (4) a weakness of the study is that it’s impossible to completely disentangle the increased costs of Project Labor Agreements from the increased costs of construction at the Los Angeles Unified School District. Bruvold also rebutted the argument that cost differences were the result of different government-mandated construction wage rates (so-called prevailing wages).
A bunch of union people attended the meeting and asked questions afterwards. Bruvold remained calm and objective throughout his presentation. He declined to speculate much on why school construction costs more under a Project Labor Agreement and why school construction costs more at the Los Angeles Unified School District.
I’ll tell you what I think. School construction costs more under a Project Labor Agreement because non-union contractors generally refuse to bid on projects with a PLA, and subcontractors generally refuse to participate in bids. Less competition means higher costs.
This common sense observation is confirmed by studies done by the Beacon Hill Institute at Suffolk University on school construction in Massachusetts, Connecticut, and New York, as well as anecdotal evidence from 15 projects across the country bid both with and without a PLA.
I contend that school construction costs more at the Los Angeles Unified School District because of what I call the “Urban Corruption Variable.” In fact, I encourage someone to commission the National University System Institute for Policy Research to perform the same research but try to isolate the Corruption Variable and rank the waste, fraud, and abuse at the state’s school districts from best to worst. Contact Erik Bruvold here to inquire about the cost of performing this study.