Tag Archive for City of Stockton

Unions Pressured City of Stockton to Mandate Project Labor Agreement on Federally-Funded Street Paving Project

On July 26, 2016, the Stockton City Council voted 6-1 to require businesses to sign a Project Labor Agreement with unions for construction contracts over $1 million. Stockton had recently emerged from bankruptcy and its city council was eager to begin sending its revenue to the unions again. (See “Stockton Has Its Bankruptcy Exit Plan in Place – Time for Project Labor Agreement!“)

The City of Stockton Project Labor Agreement lasts for three years. But as of March 15, 2017, the Project Labor Agreement mandate has not been included in any bid specifications for city contracts.

This frustrates the leadership of the San Joaquin Building Trades Council. Why lobby a city council for a Project Labor Agreement – against stiff opposition and public criticism – if it doesn’t translate into control of public contracts?

Unions finally had enough in November 2016, when the City of Stockton advertised for bids for a $3.3 million street resurfacing program on Pacific Avenue. The project was fully paid for with federal funds disbursed through the California Department of Transportation (Caltrans). It did not include a requirement for the winning general contractor and its subcontractors to sign a Project Labor Agreement.

According to union representatives and other supporters of the policy, government-mandated Project Labor Agreements compel contractors to employ local trade workers (even though technically and in practice Project Labor Agreements implement unenforceable “goals” and “commitments”). Federal law prohibits a local government such as the City of Stockton from imposing statutorily or administratively imposed state, local, or tribal geographic preferences in the evaluation of bids or proposals for contracts involving federal highway transportation funds.

For example, see Code of Federal Regulations, Construction and Maintenance, title 23, sec. 635.110(f)(1). It is presumed that local or other geographic-based labor hiring preferences are not directly related to the bidder’s performance of work in a competent and responsible manner and may have adverse impacts on competition. For example, see Geographic-Based Hiring Preferences in Administering Federal Awards, 80 FR 12092 (March 6, 2015).

Local governments such as the City of Berkeley recognize that federal funding means that Project Labor Agreements cannot be used in bid specifications. See the City of Berkeley Staff Report for Community Workforce Agreement Exemption – James Kenney Seismic Retrofit Project (May 24, 2016).

Below, reported to the public for the first time, is the story of how this resurfacing project was delayed and jeopardized as unions sought a Project Labor Agreement mandate on it. This timeline is based on public records. The City of Stockton redacted some material from what it provided as a response to a records request, but enough was obtained to show what happened.

November 9, 2016

The City of Stockton posts a Notice Inviting Bids for “FFY 2015-2016 STREET RESURFACING PROJECT” with a bid deadline of December 1, 2016. The description of this project: “Phase I is done in the winter months of year 2017. The scope of work in Phase I includes extruded curbs, stamped concrete in median islands, ADA wheel chair ramps, truncated domes, two bus pads at BRT stops, removal and re-installation of curb, gutter, and sidewalk. Construction of Phase I is dependent on availability of funds with the City of Stockton. Phase II is done in the summer months of year 2017. Phase II scope of work includes base failure repairs, crack sealing, pavement patching/peeling, pavement grinding, installing electrical traffic detector loops and detector hand holes, 2 asphalt concrete overlay and striping.” The project includes a requirement for contractors to pay state prevailing wage rates to workers. The engineers’s estimate is “below $3.3 million.”

November 10, 2016

The Secretary-Treasurer of the San Joaquin Building Trades Council sends an email to city staff asking why the City of Stockton did not include a Project Labor Agreement* mandate for contractors in the bid documents for the street resurfacing project. Staff indicates uncertainty on how to respond.

*The Project Labor Agreement is officially referred to by the City of Stockton as a “Community Workforce and Training Agreement” (CWTA). This sounds more pleasing than “Project Labor Agreement.”

November 14, 2016

The law firm of Adams, Broadwell, Joseph & Cardozo – representing the San Joaquin Building Trades Council – sends an email to city staff warning that the unions will “subject the city to an enforcement action for failure to comply with the requirements” of the Project Labor Agreement.

November 15, 2016

City of Stockton staff cancels the Notice Inviting Bids for the street resurfacing project and decides to consult with Caltrans to clarify what the restrictions are for various local mandates on federally-funded projects. Staff choses not to respond to the union demands, pointing out that “debating with them is pointless.”

November 16, 2016

City of Stockton staff informs a Caltrans official that the city has a local contractor preference and a local worker preference in its municipal code, as well as a supplemental policy requiring contractors to sign a Project Labor Agreement that requires contractors to get workers from unions. Staff refers to a Caltrans notice that warns local governments not to use local hiring preferences on federally-funded projects.

In addition, staff recognizes that the Project Labor Agreement is a “political hot potato” and Caltrans needs to understand they are dealing with a Project Labor Agreement, not just a local hire ordinance. “It contains a component of local hire, but it is much more than that.”

Staff indicates that a negative response from Caltrans will be scrutinized by the unions. “If it takes them a long time to decide, so be it.”

At this point the interests of the people of Stockton are subverted by the union demand for monopoly control of the contract.

November 22, 2016

Staff discusses a response from Caltrans (not provided as a public document) stating that the City of Stockton cannot require contractors to sign the city’s Project Labor Agreement for the federally-funded street resurfacing project.

November 23, 2016

Staff still insists on “a response in writing” from Caltrans “that provides references to back up their position as well as legal contacts.” Meanwhile, staff is again warned not to respond to union representatives about the project. “This project is on hold. Everyone please stop seeking information. This is a very sensitive subject at this point.” Staff also expresses concern that the delay is jeopardizing federal funding for street resurfacing.

November 29, 2016

Staff says the city attorney needs to be included in discussions with Caltrans. “This is how important the [Project Labor Agreement] issue is.”

A Caltrans official tells staff that “Caltrans will comment about the federal/state instructions for using Local Hiring Preference but will not comment on the [Project Labor Agreement]…If agency does not follow the federal instructions then may lose funds.”

December 6, 2016

The Caltrans official again responds to the City of Stockton request for guidance, saying the question has been answered. “If city does not follow the required federal procedure for every project, city will lose federal funds.”

March 7, 2017

The City of Stockton publishes a new Notice Inviting Bids for FFY 2015-2016 Street Resurfacing Project (Pacific Avenue from Rivara Road to March Lane and Thornton Road from El Camino Avenue to Rivara Road) with a bid deadline of March 30, 2017. The description of this project: “The scope of work includes base failure repairs, pavement patching/leveling, pavement grinding (cold plaining), installing electrical traffic detector loops and detector hand holes, 1.5 and 3 asphalt concrete overlay, re-striping, extruded curbs, stamped concrete in median islands, ADA wheel ramps, truncated domes, two bus pads at BRT stops, removal and re-installation of curb, gutter and sidewalk.” The bid documents do NOT include a mandate for a Project Labor Agreement. The engineers’s estimate is “below $3.2 million.”

SOURCES

City of Stockton – Union Demands Project Labor Agreement Apply to Pacific Avenue Street Resurfacing – Key Documents

City of Stockton – Union Demands Project Labor Agreement Apply to Pacific Avenue Street Resurfacing – All Documents

City of Stockton Bid Documents for Pacific Avenue Street Resurfacing – 1st Try

City of Stockton Bid Documents for Pacific Avenue Street Resurfacing – 2nd Try

State Water Agency Is First to Implement State Punishment for California Local Governments Banning Project Labor Agreements

In 2011, California Governor Jerry Brown signed into law Senate Bill 922, which nullified current and future “fair and open competition” ordinances that prohibit California counties and (general law) cities from entering into contracts that require construction companies to sign Project Labor Agreements with unions as a condition of work.

Along with the subsequent Senate Bill 829 enacted in 2012, Senate Bill 922 also prohibited the state from providing funding for construction projects to any charter city with a “fair and open competition” charter provision or ordinance. Because the 121 California cities with a charter have a degree of authority over their municipal affairs, the state legislature cannot directly nullify local contracting policies: it can only withhold funding to such cities as a financial disincentive. (To send an extra belligerent message to uppity cities seeking to evade the costly union political agenda, the State Building and Construction Trades Council of California and its member unions and allied organizations helped convince voters in Costa Mesa, Escondido, and Grover Beach to reject proposed charters on the November 2012 ballot.)

Now the the State Water Resources Control Board (State Water Board) appears to be the first state agency to implement SB 922 and SB 829. At its July 23, 2013 meeting, the State Water Board will consider a resolution to adopt a Clean Water State Revolving Fund (CWSRF) Program Preliminary Funding Commitment (PFC) for the bankrupt City of Stockton to proceed with the $3.25 million Tuxedo Avenue Sewer Rehabilitation Project, by funding half of the project by forgiving principal on existing debts to the Clean Water State Revolving Fund loan program.

The proposed resolution includes a list of conditions, which includes a statement that “the City shall provide an opinion from the City’s counsel, documenting that counsel has reviewed the financing agreement, and confirming the following…

iv. There is no provision or other legal impediment to the City’s authority or discretion to adopt, require, or utilize a project labor agreement that includes the tax payer protection provisions of section 2500 of the California Public Contract Code;

Of course, the condition includes the false and extraneous reference to “taxpayer protection” meant to portray Project Labor Agreements as something fiscally responsible rather than something that cuts bid competition for the benefit of construction trade unions.

Note that the Clean Water State Revolving Fund (CWSRF) loan program is federally-funded, meaning that the SB 922 and SB 829 restrictions are actually applying to federal funds distributed by the state. California received about $147 million of the $2.1 billion appropriated for the program in fiscal year 2010.

Incidentally, no one on the State Water Resources Control Board has any obvious connections to trade unions.

California Cities That Filed for Chapter 9 Bankruptcy – You May Copy and Alter These Photos of City Halls

When writing a blog post or web site article about cities in California that have filed for Chapter 9 bankruptcy, you can use the photos below to illustrate your story.

City of Stockton

The City of Stockton filed a petition for chapter 9 bankruptcy relief on June 28, 2012, and the petition was accepted on April 1, 2013.

City Hall - Stockton, California - Chapter 9 Bankruptcy

Stockton City Hall

Stockton City Hall

Stockton City Hall

City of San Bernardino

The City of San Bernardino filed a petition for chapter 9 bankruptcy relief on August 1, 2012, and the petition was accepted on August 28, 2013.

San Bernardino City Hall

San Bernardino City Hall (yes, there is a smiley ball in front as “public art”)

San Bernardino - City Hall

San Bernardino City Hall

City of Vallejo

The City of Vallejo filed a petition for chapter 9 bankruptcy relief on May 23, 2008, and the petition was accepted on September 5, 2008. It was released from bankruptcy on November 1, 2011. A November 2, 2013 op-ed by a departing Vallejo City Council member in the Sacramento Bee (Vallejo Poised to Make Same Financial Decisions that Led to Bankruptcy) and an article in the November 2, 2013 Vallejo Times-Herald (Two Years Later, No One Predicts Bankruptcy II,… But) indicate the city’s long-term finances remain shaky.

Vallejo City Hall

Vallejo City Hall

Vallejo City hall

Vallejo City Hall

Town of Mammoth Lakes – Bankruptcy Never Accepted

The Town of Mammoth Lakes filed a petition for chapter 9 bankruptcy relief on July 3, 2012, primarily because it lost a lawsuit filed by a developer and was liable for $43 million. The Bankruptcy Court put the town and the developer in a successful mediation process, and the petition was dismissed on November 16, 2012.

No photos available yet.