Tag Archive for Project Labor Agreement

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

Copies of All Project Labor Agreements Implemented in 2016 on California Government Projects

Copies of All Project Labor Agreements Implemented in 2016 on California Government Projects

COUNTY GOVERNMENT AGENCY PROJECT or PROJECTS (with link to PLA)
1 San Francisco Bay Area Bay Area Rapid Transit (BART) Bay Area Rapid Transit (BART) Project Labor Agreement Policy – 9 Major Projects in Next 5 Years
2 San Francisco Bay Area San Francisco Bay Area Water Emergency Transportation Authority (WETA) San Francisco Bay Area Water Emergency Transportation Authority Downtown San Francisco Ferry Terminal Expansion Project Labor Agreement
3 San Francisco Bay Area San Francisco Bay Restoration Authority San Francisco Bay Restoration Authority Project Labor Agreement Policy
4 Alameda Fremont Unified School District Fremont Unified School District Project Labor Agreement
5 Alameda Alameda Unified School District Alameda Unified School District Project Labor Agreement
6 Alameda City of Hayward City of Hayward Project Labor Agreement Policy
7 Alameda Oakland Unified School District Oakland Unified School District Project Labor Agreement – 2016-2021
8 Contra Costa City of Brentwood City of Brentwood Library Project Labor Agreement
9 Contra Costa City of Concord City of Concord Project Labor Agreement – All Work Over $750,000
10 Fresno City of Fresno Transformative Climate Communities Project Labor Agreement
11 Los Angeles Long Beach Community College District Long Beach Community College District Project Labor Agreement
12 Los Angeles Port of Long Beach Port of Long Beach Project Labor Agreement – All Work
13 Monterey County of Monterey/Monterey County Water Resources Agency Monterey County Water Resources Agency Interlake Tunnel Project Labor Agreement
14 San Diego Grossmont-Cuyamaca Community College District Grossmont-Cuyamaca Community College District Project Labor Agreement
15 San Diego Sweetwater Union High School District Sweetwater Union High School District Project Labor Agreement
16 San Francisco San Francisco Public Utilities Commission San Francisco Public Utilities Commission Sewer System Improvement Program and Auxiliary Water Supply System Project Labor Agreement Extension 2016
17 Santa Clara County of Santa Clara Santa Clara County Project Labor Agreement Policy – Reduce Threshold from $10 Million to $2 Million
18 Santa Clara County of Santa Clara Santa Clara County Main Jail North Cell Hardening Project Labor Agreement
19 Santa Clara Santa Clara Valley Transportation Authority Santa Clara Valley Transportation Authority Project Labor Agreement Policy
20 San Joaquin City of Stockton City of Stockton Project Labor Agreement

Citizens Bond Oversight Committees Make Recommendations on Project Labor Agreements

My November 5, 2015 article published at www.UnionWatch.org entitled Will Citizens’ Bond Oversight Committees Crumble Against Union Power? outlines the history of Citizens’ Bond Oversight Committees in reviewing and making recommendations on proposed Project Labor Agreements at California school and community college districts.

What’s the latest addition to this history? On November 12, 2015, the Citizens’ Bond Oversight Committee for the Grossmont-Cuyamaca Community College District voted 7-1 to recommend against a proposed Project Labor Agreement for a $398 million bond measure. Here is the text of the resolution:


The Citizens Bond Oversight Committee for the Grossmont-Cuyamaca Community College District approved the following recommendation at a special meeting on Thursday, November 12, 2015 by a vote of 7 in favor of the motion, one opposed to motion, and one recused as follows:

Recommendation:

The CBOC has reviewed the concept of a Project Labor Agreement (PLA) and recognizes why some responsible and fully capable companies may choose not to bid certain projects if a PLA is required as part of the GCCCD construction contract. We believe that a PLA, if implemented with Proposition V, would discourage competitive bidding and may increase costs, impact how the bond money is used, and undermine the District’s efforts to maximize bond revenues and achieve cost savings. Also, it is apparent that under a PLA, local non-union workers (especially apprentices) will not be treated equally in comparison with union workers which would constitute a violation of the Board’s prior Bond resolution. Furthermore, evidence was presented to the CBOC indicating that without the use of a PLA, no significant problems occurred on the previous Proposition R bond projects and none are expected to occur on the Proposition V projects. Therefore, there is no substantial taxpayer interest that could reasonably require the District to establish a PLA for all of the Proposition V projects.

For these reasons and in order to maintain voter confidence of the District, the CBOC recommends that the Board of Trustees does not continue with its plan to require construction companies to sign a PLA or negotiate a PLA for Proposition V projects. Furthermore, we recommend that the District be open and transparent on future bond measures and tell the voters if a PLA is being considered at some point prior to the ballot going before the voters. We believe it irresponsible to implement a PLA based on the language in the current Bond.

###

Abuse of the California Environmental Quality Act (CEQA): 25 Fake Groups

My July 31, 2015 article in www.UnionWatch.org lists 25 alleged community-based grassroots environmental organizations that in actuality are front groups for labor unions. There are surely more fake groups not yet identified.

These organizations object to environmental reviews of proposed projects until the project owners agree to sign a Project Labor Agreement (PLA) with unions to bind all construction contractors and their building trades employees. This abuse of environmental laws is called “greenmail” and has been going on in California since the late 1980s.

Labor unions are a prominent opponent of legislative proposals to change the California Environmental Quality Act (CEQA) to end exploitation of this law to achieve economic objectives unrelated to environmental protection. CEQA is a labor law, used to organize workers into union representation when the National Labor Relations Act (NLRA) doesn’t provide enough firepower.

Read the article California Unions Masquerade as Community-Based Environmental Groups – www.UnionWatch.org – July 31, 2015

 

California Bill Would Allow Contractors and Workers to Maintain Their Existing Health Insurance Under a Project Labor Agreement

Assemblyman Jim Patterson (R-Fresno) has introduced Assembly Bill 842 in the California legislature. Here is the Legislative Counsel’s digest of this bill:

AB 842 “would provide that a contractor that bids on or has been awarded work covered by a Project Labor Agreement that provides health care coverage to workers on the project that is the subject of the agreement, that includes essential health benefits, as described in the PPACA [federal Patient Protection and Affordable Care Act], and that provides evidence of that coverage to the entity awarding the contract, is exempt from a requirement to pay into a trust or custodial benefit plan for health and welfare or similar benefits for those workers an amount equal to the amount that the contractor would have been required to pay into that trust or custodial benefit plan for health care costs for those workers.”

In other words, a non-union employer that has a bone fide health insurance benefit program equivalent to or better than what is offered by the applicable multi-employer union-affiliated trust for the same trade in the same geographic region does not have to pay the health insurance component to the union trust fund. It can make employer payments to the company health insurance program on behalf of its employees. The company does not need to pay to both the union program and ALSO its own company program (the costly “double payments” dilemma) so that its employees can maintain their existing health insurance.

What does this mean in practice? The Salinas Taxpayers Association took a position in support of AB 842 because the bill was relevant to Project Labor Agreement controversies in Salinas. Here is the Salinas Taxpayers Association letter on Assembly Bill 842:

Salinas Taxpayers Association - Support AB 842 - Project Labor Agreement Equivalent Fringe Health Benefits - April 15, 2015

Salinas Taxpayers Association - Support AB 842 - Project Labor Agreement Equivalent Fringe Health Benefits - April 15, 2015

 

Several of the more than 200 government-mandated Project Labor Agreements imposed in California have included such language for not just health insurance but for ALL legitimate fringe benefits. One prominent example is the San Diego Unified School District. A Project Labor Agreement administrator was given the authority to determine if non-union contractors provided equivalent benefit plans. (Below, see the relevant language from the Project Labor Agreement.)

Note that unions (as well as labor compliance programs or personnel) monitor contractors that claim equivalent fringe benefit plans. Unions have also challenged decisions of PLA administrators concluding that non-union contractors have equivalent benefits. Two examples at San Diego Unified School District:

The United Union of Roofers, Waterproofers and Allied Workers Local Union No. 45 went after A Good Roofer, Inc. because the company did not submit its fringe benefit package to the Project Labor Coordinator for evaluation to determine if it was equivalent or better than the union package. The Roofers union demanded that A Good Roofer, Inc. pay employee fringe benefits (as designated in the union collective bargaining agreement) to the applicable union trust funds, along with interest, costs, and liquidated damages. See SDUSD PLA Grievance – A Good Roofer, Inc.

The San Diego County Building and Construction Trades Council went after the San Diego Unified School District claiming it improperly determined under Section 5.2 of the Project Labor Agreement that Standard Electronics had a fringe benefit program equivalent to the program administered by the International Brotherhood of Electrical Workers (IBEW) Union Local No. 569. See SDUSD PLA Grievance SDUSD & Standard Electronics.

Here is the language from the San Diego Unified School District Project Labor Agreement:

Section 5.2 Benefits. (a) Contractors shall pay contributions to the established employee benefit funds in the amounts designated in the appropriate Schedule A; and make all employee ­authorized deductions in the amounts designated in the appropriate Schedule A: provided, however, that the Contractor and Unions agree that only such bona fide employee benefits as accrue to the direct benefit of the employees (such as pension and annuity, health and welfare, vacation, apprenticeship, and training funds) shall be included in this requirement and required to be paid by the Contractor on the Project; and provided further, however, that such contributions shall not exceed the contribution amounts set forth in the applicable prevailing wage determination.

Unless otherwise required by law, Contractors who have fringe benefits for their core workforce equal to or better than those designated in the Schedule A do not have to pay the fringe benefit contribution designated in the Schedule A on the core work force and may utilize their own fringe benefits. The Project Labor Coordinator will be responsible for determining whether the benefits are equal to or better than those designated in the Schedule A’s. Contractors must submit their fringe benefit packages to the Project Labor Coordinator for evaluation prior to bidding. Contractors may only take credit against the prevailing wage in accordance with the Prevailing Wage Statute and the difference between the hourly cost, if any, of the fringe benefit provided and the hourly cost of the applicable fringe benefit portion of the wage determination must be paid to the worker as wages. Benefits designated in the Schedule A will be paid on all employees dispatched by the Union.

(b) Where applicable, the Contractor adopts and agrees to be bound by the written terms of the applicable, legally established, trust agreement(s) specifying the detailed basis on which payments are to be made into, and benefits paid out of, such trust funds for its employees. The Contractor authorizes the Parties to such trust funds to appoint trustees and successors’ trustees to administer the trust funds and hereby ratifies and accepts the trustees so appointed as if made by the Contractor.

(c) Each Contractor and Subcontractor is required to certify to the Project Labor Coordinator that it has paid all benefit contributions due and owing to the appropriate Trust(s) or fringe benefit programs prior to the receipt of its final payment and/or retention. Further, upon timely notification by a Union to the Project Labor Coordinator, the Project Labor Coordinator shall work with any Contractor or Subcontractor who is delinquent in payments to assure that proper benefit contributions are made, to the extent of requesting the District or the prime Contractor to withhold payments otherwise due such Contractor, until such contributions have been made or otherwise guaranteed.

This example shows that Assembly Bill 842 proposes a feasible policy. In fact, AB 842 could be expanded to encompass ALL bone fide fringe benefit plans and not just health insurance. Nevertheless, expect the State Building and Construction Trades Council of California and individual unions to oppose the bill.

Public Needs to Be Informed About Project Labor Agreement for Measure L Projects at Cuesta College

Here’s my email to the Cuesta College (San Luis Obispo Community College District) elected board of trustees and top administrators regarding the sneaky effort to require its construction contractors to sign a “Project Labor Agreement” with unions as a condition of working on projects funded by Measure L. In November 2014, 62.6% of voters authorized the district to borrow $275 million for construction projects by selling bonds to investors.


Subject: Public Needs to Be Informed About Project Labor Agreement for Measure L Projects at Cuesta College
From: Kevin Dayton
Date: February 2, 2015 at 2:42:59 PM PST

Dear Cuesta College Board of Trustees:

I haven’t been able to find any official information provided to voters before Election Day about the plan of Cuesta College to require construction companies to sign a “Project Labor Agreement” with unions as a condition of working on projects funded by Measure L.

To try to alert taxpayers, students, and other interested parties about the Project Labor Agreement plan, I have provided concise information about it to various media entities, including the San Luis Obispo Tribune, KSPY, KCOY, KEYT, KVEC News/Talk 920, the Tolusa Press newspapers, CalCoastNews.com, New Times SLO, the Cuestonian, and Paso Robles Daily News. See below.

Since you had a representative of the Tri-Valley Building and Construction Trades Council make a presentation to the board after Measure L passed, I suggest you invite some local construction company representatives to make a presentation, so that you have a range of viewpoints on this highly-controversial and costly proposal. Were local construction trade associations informed about the December 10 Project Labor Agreement presentation?

Also, shouldn’t Cuesta College officially inform ordinary citizens about the Project Labor Agreement plan, since they will be paying back the principal and interest on the borrowed money obtained through bond issues? I don’t see any News Releases from Cuesta College about it.

Kevin Dayton
President and CEO
Labor Issues Solutions, LLC

———
EXAMPLE

From: Kevin Dayton
Subject: Cuesta College board mtg 2/4 – proposal for union monopoly on construction funded by Measure L
Date: February 2, 2015 at 11:55:28 AM PST
To: xxx

Cuesta College board of trustees is discussing at its February 4 meeting whether its construction contractors should be required to sign a “Project Labor Agreement” with the Tri-Valley Building and Construction Trades Council as a condition of working on projects funded by Measure L.

http://www.boarddocs.com/ca/cuesta/Board.nsf/goto?open&id=9T2V5K7C869E

This plan was kept quiet until 62% of voters approved the bond measure last November. Then the construction unions were invited to make a one-sided presentation about Project Labor Agreements:

http://www.boarddocs.com/ca/cuesta/Board.nsf/goto?open&id=9R3RYG704625

Project Labor Agreements cut bid competition and raise construction costs for the benefit of unions. Here is a 2011 study from the National University System Institute for Policy Research: “Our research shows that PLAs are associated with higher construction costs. We found that costs are 13 to 15 percent higher when school districts construct a school under a PLA.”

http://www.nusinstitute.org/assets/resources/pageResources/Measuring-the-Cost-of-Project-Labor-Agreements-on-School-Construction-in-California.pdf

Your readers might be interested in this proposed policy. Voters had no idea last November that this union plan was going to happen.

Kevin Dayton
President and CEO
Labor Issues Solutions, LLC

Arguing Against a Project Labor Agreement Policy with a $500,000 Project Cost Threshold in the City of Martinez

Below is an email I sent today to the Martinez City Council and top staff regarding their vote tonight on instituting a Project Labor Agreement policy for all city projects over $500,000. Here is the staff report for the agenda item: Policy on Project Labor Agreements.


From: Kevin Dayton
Subject: Agenda Item #5: Project Labor Agreement Policy for “large, complex construction projects” costing $500,000 – warning about litigation
Date: November 19, 2014 at 9:35:40 AM PST

Dear Martinez City Council:

Tonight you will consider a Project Labor Agreement policy for “all City construction projects awarded by the City with a bid amount of more than $500,000 (the “Threshold”).”

According to the proposed resolution, this threshold will encompass “certain large, complex City construction projects involve numerous contractors and employees in different trades.” According to the proposed resolution, the purpose of this policy is the city’s recognition that “it is essential that construction on such projects proceed without the labor disruptions that can occur on projects both from external labor relations problems and from the frictions that often arise when a large number of contractors and their employees work in proximity to one another on a job site.” The resolution also adds that “in the private sector, project labor agreements have been used for years on large, complex construction projects” and “in the public sector, project labor agreements have been used successfully by the County of Contra Costa and other public entities in Contra Costa County for hospital, reservoir, wastewater, and other large, complex construction projects.”

You may be aware that this language has to be included in the resolution because that’s the basis in the National Labor Relations Act to justify a Project Labor Agreement. “Favoritism for contractors that are signatory to collective bargaining agreements in the construction trades” is not a legal purpose for a Project Labor Agreement, despite what anyone claims.

There’s a good chance you’ll be sued if you vote for this policy tonight. I recommend you delay a vote on the policy until you have a report prepared by an outside consultant clearly and thoroughly outlining the following:

1. What is a “large, complex construction project?”

2. What is a “large number of contractors and their employees?” Is it five employees or 736 employees? Is it five contractors or 23 contractors?

3. What is “proximity to each other?” Within spitting distance?

4. Speaking of spitting, what are some of the “frictions” that arise when people are working together to build a project, and what are the basic and immediate causes of those frictions?

5. When does the City of Martinez plan to build an airport, reservoir, or hospital for $500,000? (Note: this would be a valuable service for entities that are spending billions of dollars on similar large, complex construction projects.)

6. What are the recent or anticipated labor disruptions that this policy would prevent? Please indicate the controversies and the parties that caused the disruptions. (Note: this would be a valuable service for union contractors unaware that their unions plan to disrupt upcoming work.) The list of upcoming labor disruptions should include any planned incidents of “the unions and their members, agents, representatives, and employees” endeavoring to “incite, encourage, condone, or participate in any strike, walkout, sit-down, stay-in, boycott, sympathy strike, picketing, hand-billing, work stoppage, work slowdown, or other labor disruption or unrest.”

7. Please provide examples of workers outside of a Master Labor Agreement or Project Labor Agreement who have recently disrupted projects.

8. Please provide examples of workers covered by a Project Labor Agreement who have recently disrupted projects, and describe how those disruptions were resolved.

Here is a link to a report entitled From Peace to Absurdity – The Emergence of Cost Thresholds and Multi-Project Coverage for Project Labor Agreements in California: Shifting the Purpose from Labor Peace to Cutting Merit Shop Competition. I can email this to you directly as a PDF attachment if you want it in that format.

Please regard this email as Exhibit One and the report linked above as Exhibit Two for any future litigation.

Kevin Dayton
President and CEO
Labor Issues Solutions, LLC
(916) 439-2159

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

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

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

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.

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

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