Tag Archive for Project Labor Agreements

Watsonville City Council Imposes Requirement for Construction Contractors to Sign Project Labor Agreement with Unions

The City of Watsonville (in Santa Cruz County) has become the second city in Northern California (after Berkeley) and the sixth city in California to enact a blanket policy requiring its construction contractors to sign a Project Labor Agreement with unions as a condition of work. On October 8, the Watsonville City Council voted 5-1 (with one absence) to impose the union-backed policy as an ordinance for all projects of $600,000 or more.

Councilwoman Trina Coffman-Gomez was the only vote against the Project Labor Agreement ordinance. Please thank Councilwoman Coffman-Gomez via this web site. (Councilwoman Nancy Bilicich, who voted against the ordinance in its first reading at the September 24 meeting, was absent from the October 8 meeting.)

The $600,000 project cost threshold for the policy was a compromise. Staff had proposed a threshold of $1 million for the policy, but union officials demanded a lower threshold of $250,000, as noted in a September 10, 2013 staff report to the city council:

The Santa Cruz and Monterey Building and Trades Council have recommended a project cost of $250,000 or more to initiate the use of PLA’s for City projects. The rationale is that with a smaller cost threshold, more projects would be included under the PLA program, which would lead to more union memberships and a stronger apprenticeship program.

After the policy was approved 5-1 (with one absence) in its first reading at the city council’s September 24 meeting, union officials provided the city council and staff with a draft Project Labor Agreement.

Construction unions have tried in the past to convince the Watsonville City Council to enact policies that discourage Merit Shop contractors from bidding on city contracts. At an October 8, 2002 meeting, the city council voted 5-2 for a union-backed discriminatory apprenticeship ordinance. In 2004, unions demanded but did not get a a Project Labor Agreement for the Watsonville Civic Center – a 186,000 square foot building for city offices, Santa Cruz County Superior Courts, a library, an Agricultural Workers History Museum, and private lease space. As leverage, the Carpenters Union Local No. 505 filed a petition with the California Department of Industrial Relations for a prevailing wage coverage determination on an adjacent parking garage already under construction.

The Watsonville City Council is reportedly dominated by a local political machine led by Democrat Assemblyman Luis Alejo, who used to serve on the city council. His wife is now Mayor pro Tempore. There are seven individual council districts in this city of about 50,000 people, and city council members tend to be elected with 1000 votes or less. In the November 2012 election, the candidates for four city council seats ran unopposed.

News Coverage

Watsonville Council: Projects Over $600,000 to Require Union AgreementSanta Cruz Sentinel – October 8, 2013

Council Approves Union-Friendly OrdinanceWatsonville Register-Pajaronian – October 9, 2013

Watsonville City Council: Want City Project Work? Pay Bribes – California Political News & Views (blog) – October 9, 2013

Watsonville Mulls Pro-Labor Public Works Ordinance – Santa Cruz Sentinel – October 1, 2013

Evading Public Accountability: Four Recent Project Labor Agreements on Government Projects Without a Vote

In the past 12 months, government officials in California have helped to arrange backroom deals with building trades unions to require construction companies to sign a Project Labor Agreement as a condition of working on four publicly-funded projects.

  1. California High-Speed Rail Initial Construction Segment
  2. San Diego Convention Center Phase 3 Expansion
  3. New Sacramento Kings Arena
  4. New San Diego County Central Courthouse

Project Labor Agreements imposed on these four projects were developed under the pretense of being independent decisions of private parties within a design-build contract or public-private partnership. Elected or appointed officials of the government agencies did not deliberate or vote on these labor agreements. Yet in all four cases listed above, representatives of the applicable public agency played a key role in arranging the union deal.

For more information, see my September 17, 2013 www.UnionWatch.org article California Construction Unions Circumvent Public Scrutiny of Project Labor Agreements.

Eight Steps to Alleviate Taxpayer and Contractor Outrage About Project Labor Agreement on Planned New Sacramento Kings Arena

On Monday, September 9, 2013, I began circulating a memo entitled “Eight Steps to Possibly Alleviate Taxpayer and Contractor Outrage about the Backroom Deal for a Project Labor Agreement on Construction of the Sacramento Kings Arena.”

I independently put together eight reasonable, constructive steps toward a solution based on my long experience with construction labor issues and government affairs. Not surprisingly, no one cares: “politics is corrupt,” as one resigned person told me. Nevertheless, I’ve fulfilled my moral obligation to ordinary Kings fans in the Sacramento region who pleaded with me to work something out so the team can stay.

To allow this Project Labor Agreement to remain on the arena and tell construction company owners to stand down for “the common good” will create a precedent that will end up giving unions control of every major construction project in the Sacramento region and possibly in the state. Knowing that no one will have the guts to criticize the deal in public, developers and public agencies will simply acquiesce to a Project Labor Agreement with unions to avoid their interference through objections and litigation under the California Environmental Quality Act (CEQA).

Here are my proposed eight steps, classified in three categories:

I. For the Taxpayers

1. Trust funds affiliated with construction trade unions (such as pension funds, labor-management cooperation committees, etc.) must reduce the public funding obligation for this project by 10 percent by investing $25.8 million in the arena project.

II. For Preservation of Principles of Good Government

2. The complete Project Labor Agreement (aka Community Workforce and Training Agreement) with addenda shall be released to the public immediately, that is, by 5:00 p.m. on Wednesday, September 11, 2013.

3. The Sacramento City Council shall vote on ratifying the Project Labor Agreement (aka Community Workforce and Training Agreement) after a public hearing at a city council meeting before October 1, 2013. To ensure that the People and the representatives of the People are adequately informed about the issue, the public hearing shall assign 10 minutes each for supporters and opponents of the proposal to make formal presentations.

III. For Fair and Open Competition and Freedom of Choice for Workers

4. The Project Labor Agreement shall include a provision that allows a contractor and its employees to maintain their own existing fringe benefit programs if those programs are equivalent or better than the union programs, instead of forcing that contractor to make employer payments to union-affiliated trust funds and depriving employees of benefits from such contributions made on their behalf.

5. The Project Labor Agreement shall allow the contractor to comply with Title 8, Section 230.1 of the California Code of Regulations and request apprentices from any program authorized and approved by the Director of the California Division of Apprenticeship Standards to provide on-the-job training to construction trade workers in Sacramento County.

6. The Project Labor Agreement shall allow for transparency concerning mandatory payment of union dues and fees by trade workers by including an appendix that indicates the exact cash amount of dues and fees, such as initiation fees, that would be requested of any journeyman or apprentice for any trade that is working under the terms and the conditions of the Project Labor Agreement.

7. The Project Labor Agreement shall allow “core workforce” employees of contractors not signatory to a union Master Labor Agreement to choose whether or not to pay union dues and fees.

8. The Project Labor Agreement should include language exempting the contractor from employer withdrawal liability if the employer made all of the required contributions to the union pension fund during the period it was covered under the agreement.

The Great Resurrection of 2013! Elected Board of Sacramento City Unified School District Schedules Vote on Dormant Project Labor Agreement

It’s the Great Resurrection of 2013! Someone remembered the ancient Project Labor Agreement implemented for construction at the Sacramento City Unified School District funded by borrowed money authorized by bond measures approved by voters in 1999 and 2002.

September 12, 2013 Board Meeting
6:30 p.m. Open Session


See the original 2005 version of this Project Labor Agreement: Sacramento City Unified School District Project Labor Agreement Measures E and I. Also, see the 2009 extension of this Project Labor Agreement: Sacramento City Unified School District Project Labor Agreement Measures E and I Amendment. According to the staff report there will be another Project Labor Agreement implemented for future district construction, presumably for projects funded by borrowed money authorized by Measures Q and R, approved by voters in November 2012.

If the Sacramento City Unified School District required its construction contractors to sign a Project Labor Agreement as a condition of work, why not follow this outstanding example of fiscally responsible government and impose a Project Labor Agreement on the Sacramento Kings Arena? There will certainly be a show in support of Project Labor Agreements at the board meeting on Thursday, September 12.

The Coalition for Fair Employment in Construction has issued an appropriately cynical press release about the scheduled vote to extend the Project Labor Agreement at Sacramento City Unified School District.

September 9, 2013
Contact: Eric Christen, (858) 431-6337
Sacramento School Board Schedules Sham Vote on Dormant Project Labor Agreement as Media Stunt
Creates Forum for Union Officials and Union-Backed Politicians to Defend Kings Arena Deal

Today the Coalition for Fair Employment in Construction accused the elected board of the Sacramento City Unified School District of engineering an unnecessary forum for Sacramento union leaders and union-backed politicians to promote Project Labor Agreements.

“Board members of the Sacramento City Unified School District suddenly saw a desperate need to extend a dormant Project Labor Agreement for four months?” asked Eric Christen, executive director of the Coalition for Fair Employment in Construction.

“This silly vote is about the Sacramento Kings arena, not about helping children to learn how to read and write.”

The September 12 school board agenda includes an item to extend for four months a Project Labor Agreement implemented in 2005 for long-completed construction programs funded by Measure E (1999) and Measure I (2002). A staff report indicates plans for a new Project Labor Agreement for future construction, which will be funded by Measures Q and R (2012).

The proposal is obviously under consideration within a larger political context.

On September 4, a public extravaganza at Downtown Plaza organized with unions by Mayor Kevin Johnson’s office to celebrate a Project Labor Agreement on the new Kings arena was undermined when opponents of the union deal exercised their First Amendment rights and showed up to challenge the government propaganda.

“Behind the scenes, everyone acknowledges that the mayor’s press conference for the Kings Arena Project Labor Agreement was a public relations disaster,” said Christen. “One veteran Sacramento political consultant emailed us to say ‘What transpired on Wednesday was one of the best impromptu media events I’ve seen in many years.’”

“Both supporters and opponents of public funding for the Kings arena were disgusted by the political payoff to the unions. Union leaders need a public forum to regain control of their message. They’ve chosen the Sacramento City Unified School District – not a government renowned for its outstanding management and high degree of fiscal responsibility.”

The Coalition for Fair Employment in Construction will oppose the Project Labor Agreement resolution.


Response of Eric Christen of Coalition for Fair Employment in Construction to Sacramento Bee Article “Downtown Arena Deal Creates Unlikely Alliances”

The Sunday, September 8 Sacramento Bee newspaper includes an article “Downtown Arena Deal Creates Unlikely Alliances” that makes this observation:

The prospect of a new arena at Sacramento’s Downtown Plaza has caused political foes to unite and groups with opposing philosophies to occupy common ground. Unions and business groups have joined in support of the project, while some left-leaning Democrats find themselves aligned with conservative anti-tax and anti-union interests.

The Dayton Public Policy Institute blog would obviously be labeled as part of “conservative anti-tax and anti-union interests.” But the label is simplistic and based on outdated political paradigms.

I would contend that these new alliances are simply a symptom of a fundamental political realignment going on in the United States and California, in which populist movements on the Left and Right are unifying against the establishment that holds up the structure of Crony Capitalism. The old Republican versus Democrat dichotomy is fading away.

But that is an issue I’ll address at another time (probably in www.FlashReport.org). For now, I provide below – without my editorial comments – an email from Eric Christen, executive director of the Coalition for Fair Employment, to the two Sacramento Bee reporters who wrote this article.

From: eric christen
Sent: Sunday, September 08, 2013 8:38 AM
To: Dale Kasler; Ryan Lillis
Cc: xxxx; xxxx; xxxx; xxxx; xxxx; Kevin Dayton; xxxx; xxxx; xxxx; xxxx; xxxx
Subject: Regarding Your Piece in Today’s Bee

Your article is pretty good and interesting on many levels but it really fails on three: First, because we fight for the right of all workers (85% of whom locally are union-free) to work on projects and thus oppose PLAs does not make us “anti-union.” That’s the third article that trope has now been used Dale and Ryan and it’s getting tendentious. I have union board members. Now a group that proposes PLAs as a way to discriminate against union-free workers, that group is in fact anti-merit shop and anti-competitive. Interesting how ones ideology allows certain groups to be framed using certain language while exempting others.

Secondly the Bee still has yet to fully connect the relationship between the PLA and union greenmail. Greenmail is where unions use CEQA to hold up projects until such time as the owner “agrees” to a PLA. Then all the union environmental concerns magically go away. This is implied by Mr. Thatch in the last part of the article but it is deserving of its own stand alone article. It is absurd that with Steinberg’s bill on the verge of being passed this week that exempts this project from CEQA delays that this paper has not written on this issue. I mean really?

Lastly, why would you allow two people (Thatch & Ken Jacobs, that latter nothing but a union mouthpiece working for a union “think tank”) to say something as silly as “this would be built union-only anyway” but not call us to get the other side? It is such a silly statement I’m embarrassed they actually said it. If it would be built union-only anyway then why the PLA that forces non-union workers to pay union dues and into union pensions? But even more obvious is the fact that right up the road the $1 BILLION airport project is being built with union and non-union labor and has no PLA. In other words projects of this magnitude (and larger) get built all over America and California without PLAs and with non-union labor. When PLAs are used, which is rare because they are an irrational business decision, their sole intent is to keep big non-union guys like Bergelectric, Rex Moore Electric, and Helix Electric from getting work. They are welfare for a few unions who simply can’t compete for a variety of reasons.

The parts of the article that deal with Mayor Johnson (I like him) and Mark Freidman (a real gentleman) are in fact interesting. I understand why they think they needed to make this deal with union bosses just as I’m sure they understand why I need to stand up for the rights of my people. What I don’t get at the end of the day is what leverage they thought the unions had on this project that would force them to agree to a deal that will only make this project more expensive. Would the unions seriously greenmail this project thus opening themselves up to untold derision and legislative action? Really? Was it just because Steinberg and his ilk said there had to be a PLA? This is the $64,000 question here, a question that cannot be answered seriously with “We needed the PLA to stop strikes and bring the project in on time.”

I hope the Bee will more fully cover the PLA itself and provide historical context as well as how CEAQ conflates with this whole issue. CEQA reform is needed because greenmail is symptomatic of the economic distortions that infect this state and make it an economic laughingstock. PLAs are another one of those distortions and, again, they are related.

As far as what we intend to do we will be holding a press conference soon that will make it very explicit. We view this issue as not just about an arena but about the railyards, the work around the arena, the new Sacramento courthouse, Delta Shores, etc. In other words we are looking big picture and realize that PLA proponents will stop at nothing to keep workers out of a job simply because they don’t belong to their group. That bigotry will be fought by CFEC vigorously and in a non-linear manner.

Remember, we aren’t the bad guys here. We are reacting to actions being taken against us. If the shoe were on the other foot and unions were somehow being targeted those targeting them would not be safe in their homes or places of business, and everyone damn well knows it.

We are different. We just show up at your event and borrow your microphone for a minute or two.


The Coalition for Fair Employment in Construction web site is www.opencompca.com.

The “Steinberg bill” giving a CEQA break to the Kings arena project is Senate Bill 743.

Ken Jacobs is affiliated with the University of California Miguel Contreras Labor Program.

Factions and the Proposed New Sacramento Kings Arena – The Situation Today (September 6, 2013)

In the eastern suburbs of Sacramento, you’ll find a dedicated fan base for the Sacramento Kings professional basketball team. You’ll also find a sizable number of conservatives and libertarians who dislike unions and crony capitalism. (That’s why Tom McClintock is able to represent this area in Congress.) Some people would identify with both groups.

As I’ve gone about my mundane business in this region over the past two days, I’m surprised to hear so much talk from these two groups about the planned Sacramento Kings arena and the union Project Labor Agreement deal announced on Wednesday for the construction of the new arena in downtown Sacramento. Ordinary people are paying attention to this issue in the newspapers, on local radio and TV news, and on local news and sports talk shows.

Here’s a general summary of what I’m hearing from the suburban fan base for the Kings:

  1. We want our only major league professional sports team to stay in Sacramento. It would be nice to have a revitalized downtown central city to visit, free of rundown buildings and devoid of people loitering and living on the street. “I won’t take my kids downtown because of that,” a female Kings fan said to me this morning.
  2. No one is fooled by Mayor Kevin Johnson’s obligatory talking points about the union deal. It was a political payoff to get the arena built. Ideally, everyone should have a fair chance to compete for work on the arena. It isn’t going to happen now.
  3. Please work out a solution so the arena can move forward without being derailed by this vicious new controversy over the labor deal. We need to keep the team here.

Here’s a general summary of what I’m hearing from the suburban conservatives and libertarians:

  1. Why is Government giving money to billionaire investors and professional athletes? How were these rich people (the so-called “One Percent”) able to get subsidies from city parking revenue?
  2. Professional basketball is corrupt and so are Sacramento politicians and union bosses. Of course unions will get the work from their cronies.
  3. Please kill the project as it stands now. It would be a service. People need to say “no” to doing business in this way – it’s destroying our state and country.

Within the City of Sacramento itself, there are a few more vocal factions: (1) people on the Left who resent how the city leadership is using public resources and spending so much time and money to keep a professional basketball team at the expense of other civic priorities; (2) small business owners and business leaders who seek a prosperous downtown and are willing to compromise and make undesirable deals with special interest groups to make it happen; and (3) residents who think the proposed financing plan for the new arena will be a fiscal disaster for the city.

Then, of course, there are activists in the local construction trade unions who love what’s happening. They get guaranteed work on a glamorous project that can be used to promote Project Labor Agreements on more public and private construction projects in the future.

Sacramento Mayor Kevin Johnson announces Project Labor Agreement for new Kings basketball arena on September 4, 2013.

Sacramento Mayor Kevin Johnson announces Project Labor Agreement for new Kings basketball arena.

Their arrogance about their victory has not helped matters. The mayor’s September 4 press conference at the Downtown Plaza in Sacramento to celebrate union control of construction with a Project Labor Agreement ended up being a public relations fiasco for union officials and the Kings ownership. Instead of being a quiet political payoff, it was a divisive, high-profile political payoff that disgusted area residents.

Nevertheless, the press conference achieved its true purpose of putting union lobbying pressure on Southern California Democrats and Bay Area Democrats in the state legislature to support Senate Bill 743. Forty-eight hours after the press conference, State Senate President pro Tem Darrell Steinberg won a vote in the Assembly to “gut and amend” Senate Bill 743 and transform it into a bill that gives the planned Sacramento Kings arena some special breaks from the California Environmental Quality Act (CEQA).

The state’s leading environmental groups objected to SB 743, but most Assembly Democrats voted for the amendment: it passed 46-21. Republicans generally opposed SB 743 and demanded a roll call vote on this bill, which was placed among a long series of proposals approved by the Assembly through voice vote.

Overlooked in this controversy is that no one seems to have a copy of an actual signed Project Labor Agreement or even a draft of the agreement. The Sacramento City Council never discussed it and never voted on it. The public has no way to verify any of the rhetoric about its alleged benefits. But it doesn’t matter: it’s about political payoffs for the greater good.


Today’s the Day: Union Project Labor Agreement Announced for Construction of New Sacramento Kings Arena

Protest of Sacramento Kings Arena PLA

UPDATE: Critics of the Project Labor Agreement for the new Sacramento Kings arena were aggressive and pierced the orchestrated public relations message advanced by politicians and union officials at Sacramento Mayor Kevin Johnson’s September 4 press conference.

Here’s a YouTube video of an excerpt from the press conference.

News Coverage:

Union Deal on Downtown Sacramento Arena Prompts Protest – Sacramento Bee – September 5, 2013

Sacramento Makes Deal to Use Union Labor to Build ArenaSacramento Business Journal – September 4, 2013

Kings, Mayor Announce Union Deal for New Downtown Arena – KFBK News 1520 AM – September 4, 2013

Kings Arena Labor Agreement: Union Wages, Local Workers, No Strikes – Capitol Public Radio – September 4, 2013

Nonunion Labor Groups Outraged By Sacramento Kings Arena Deal – KOVR CBS 13/CW 31 – September 4, 2013 (KOVR also ran a positive story that unions and their political friends anticipated today: Sacramento Kings Arena Deal Would Create Up To 3,500 Jobs)

Worker Groups Clash Over Sacramento Arena Jobs – KCRA NBC 3 – September 4, 2013

Labor Deal Reached for New Sacramento Arena – KTXL FOX 40 – September 4, 2013 (video is the positive story that unions and their political friends anticipated today, but there is another story about opposition to the Project Labor Agreement that is not yet posted on the KTXL FOX 40 web site)

Labor Agreement Struck to Build Arena (starting at 2:35) – ABC 10 – September 4, 2013 (generally the positive story that unions and their political friends anticipated today, with about 30 seconds at the end about opposition to the Project Labor Agreement)

September 4, 2013 – 8:45 am: Sacramento Mayor Kevin Johnson, representatives of Turner Construction, union officials, and other dignitaries and community leaders will announce today at noon in downtown Sacramento that construction companies will have to sign a Project Labor Agreement with unions as a condition of working on the new Sacramento Kings basketball arena.

The announcement is being made as California State Senate President pro Tem Darrell Steinberg is gutting and amending a bill to give special breaks from CEQA to Sacramento Basketball Holdings LLC, the developer of the planned new arena for the Sacramento Kings professional basketball team.

Project Labor Agreements can increase costs of projects because of reduced bid competition. For example, see the 2011 study from the National University System Institute for Policy Research (in San Diego): Measuring the Cost of Project Labor Agreements on School Construction in California. It reports that “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.”

It appears that reporter Steve Large with KOVR Channel 13 (CBS) News in Sacramento was the first to break the story, at 10:43 pm on September 3, 2013:

Sacramento Kings Owners Finalizing Labor Agreement With Unions For Arena Construction

Here’s a press release just issued by the Coalition for Fair Employment in Construction:

September 4, 2013
Contact: Eric Christen, (858) 431-6337

Coalition for Fair Employment in Construction Condemns Union Project Labor Agreement for Taxpayer-Funded New Sacramento Kings Arena
Gut-and-Amend CEQA Exemption Bill is the Reason for Today’s Announcement

Sacramento – The Coalition for Fair Employment in Construction (CFEC) – a 15-year old California-based organization dedicated to opposing Project Labor Agreements – declares the Project Labor Agreement for the new Sacramento Kings arena as “a waste of taxpayer money and a payoff to unions to avoid baseless complaints and lawsuits under the California Environmental Quality Act (CEQA).”

“We have known for years that unions would target the Sacramento Kings arena for a monopoly on construction,” says Eric Christen, executive director of the Coalition for Fair Employment in Construction since 1999. “Today is the official announcement of this costly and discriminatory union deal for a publicly-funded project.”

Christen charges that the announcement about the Project Labor Agreement is happening TODAY (September 4, 2013) because California State Senate pro Tem Darrell Steinberg is gutting and amending a bill to give special breaks from the California Environmental Quality Act (CEQA) specifically for the arena.

“Steinberg needs union lobbyists and Democrats to push through his special CEQA exemption bill,” Christen said. “Requiring construction companies to sign a Project Labor Agreement with unions locks up majority support in the legislature for this special interest bill.”

Knowing the threat of a Project Labor Agreement on the arena, an alliance of business associations and taxpayer groups led a campaign in 2011 to qualify a ballot measure in the City of Sacramento to prohibit Project Labor Agreements on taxpayer-funded public works projects. Petitions were submitted to the city in December 2011, but the measure failed to qualify because of an unusually high number of invalid signatures.

Christen vows that the Coalition for Fair Employment in Construction will make the unions and the Sacramento Kings billionaires accountable to taxpayers and people who park downtown. “Opponents of taxpayer funding for this arena just found an aggressive new ally today.”

Today’s PLA announcement by Turner Construction will take place at noon at Cesar Chavez Plaza in downtown Sacramento Downtown Plaza Piazza court near Macy’s, K Street between 4th Street and 5th Street. CFEC will be on hand to make sure the voices of Sacramento’s workers, apprentices, contractors and taxpayers are heard.


Here are some of my tweets about the announcement of the Project Labor Agreement:


Here are various articles about the Project Labor Agreement threat for the Kings arena:

How Are Unions Funding Opposition to a Vote on Public Funding of the New Sacramento Kings Arena? – www.LaborIssuesSolutions.com – August 10, 2013

Request for Proposal for Prime Contractor for New Sacramento Kings Arena Refers to Project Labor Agreement with Construction Unions – www.LaborIssuesSolutions.com – July 10, 2013

The Union Quest for a Project Labor Agreement on a New Sacramento Kings Basketball Arena: Part One – 2006 – www.LaborIssuesSolutions.com – January 21, 2013

Out of Nowhere: Project Labor Agreement and Community Benefit Agreement Tacked on End of Motion for New Sacramento Kings Basketball Arena – www.TheTruthaboutPLAs.com – March 9, 2012

City Council Endorses PLA for Sacramento Arena Project – State Building and Construction Trades Council of California (web site) – March 7, 2012

Pay to PLA? Local Ballot Measures Aim to Curb Union Power on Public ProjectsSacramento News & Review – August 18, 2011

Union Fight Already Brewing on New Kings ArenaSacramento Bee – June 16, 2011

How Are Unions Funding Opposition to a Vote on Public Funding of the New Sacramento Kings Arena?

A few construction trade unions have joined a Sacramento-based political committee and have made or pledged contributions to this committee to ensure that citizens in the City of Sacramento don’t get to vote to derail the city’s arrangement with the owners of the Sacramento Kings professional basketball team to build a new arena.

As I most recently reported in Request for Proposal for Prime Contractor for New Sacramento Kings Arena Refers to Project Labor Agreement with Construction Unions, contractors will probably be required to sign a Project Labor Agreement with unions as a condition of working on the arena construction. Unions have been waiting for the opportunity to build a new arena for many years, and they are intent on seeing it built – under a union monopoly.

An August 1, 2013 article in the Sacramento Bee (PAC Pushes Sacramento Arena Vote but Won’t Say Where It Is Getting Money) reported that an organization called DowntownArena.org revealed the source of “nearly $15,000” of contributions received or pledged for a campaign opposed to a ballot initiative that would stop the arena arrangement. This group consists mainly of local business groups (including construction trade associations) and unions.

Meanwhile, many ordinary citizens in Sacramento (and the surrounding region as well) are unhappy with the idea that the city will borrow $212 million for construction of the $448 million arena by selling bonds, with the principal and interest paid back through fees on people who park in downtown Sacramento. A law firm in Southern California that has represented the former owners of the Kings has reportedly funded a campaign (STOP – Sacramento Taxpayers Opposed to Pork, aka Stop Arena Subsidy) to collect signatures on petitions to qualify a ballot measure that would stop it. The initiative would prohibit the City of Sacramento from spending public money on a professional sports arena without approval of a majority of voters in an election.

Apparently based on information provided by the executive director of Region Builders, a trade association that established the DowntownArena.Org campaign, the Sacramento Bee article states that the “International Brotherhood of Electrical Workers donated $2,500.” Under the article, a list of donors includes “National Electrical Contractors Association/International Brotherhood of Electrical Workers: $2,500.”

The first reference is simply a union (with no local affiliation indicated), but the second reference combines a union AND a construction trade association. A contractor trade association and a union would not be making a joint contribution if the money came from their PACs or from their general operating budgets.

To confuse matters, the DowntownArena.org web site lists “IBEW Local 340” and “National Electrical Contractors Association (NECA) of Sacramento” separately (not jointly) as supporters.

I’m wondering if the donor is actually the NECA/IBEW Northern California Labor-Management Cooperation Committee (LMCC). Why is the distinction important?

  1. If money comes from the union PAC and/or the association PAC, it means the source of the money to DowntownArena.org is voluntary political contributions from either union members or contractors to a state-regulated Political Action Committee. These PACs have detailed reporting requirements.
  2. If money comes from the general operating expenses of the union and/or the association, it means the people running the organizations simply made a decision to send some of their income or assets to DowntownArena.org. The right to do this under state election law is quite limited.
  3. If money comes from the NECA/IBEW Northern California Labor-Management Cooperation Committee (LMCC), it means the source of the money to DowntownArena.org is employer payments mandated in collective bargaining agreements that are sent by contractors to a trust fund authorized under the obscure federal Labor-Management Cooperation Act of 1978. These LMCCs are generally unregulated and have few reporting requirements. It’s easy to get this money – the employer payments are even incorporated into state prevailing wage rates.
  4. It’s even possible that the money came from another trust fund managed by NECA and IBEW and authorized under the Employee Retirement Income Security Act (ERISA).

I suspect the donor of the $2500 is the NECA/IBEW Northern California Labor-Management Cooperation Committee (LMCC). But no one will know until February 2014, after DowntownArena.org submits its semi-annual report to the Fair Political Practices Committee. I’ll update this post at that time.

Project Labor Agreement Negotiations Fail, Government Transparency Is Restored, Ferry Agency Resumes Fair and Open Bid Competition

Fair and open bid competition on a $22 million ferry project funded by California taxpayers was preserved after unions would not agree to provisions proposed by the San Francisco Bay Area Water Emergency Transportation Authority for a Project Labor Agreement. Background about the failed union negotiations was revealed when a government affairs representative for non-union construction trade associations pointed out how the agency board planned to discuss the negotiations out of public view in closed session, in violation of state law.

A short time schedule contributed to the failure of Project Labor Agreement negotiations. On May 1, 2013, the City of Vallejo, the San Francisco Bay Area Water Emergency Transportation Authority, and the private developer Lennar Mare Island (LMI) issued a joint press release announcing a new $22-million maintenance, administration, and passenger facility to be built on Mare Island, a part of the City of Vallejo that was the Mare Island Naval Shipyard until 1996.

Despite its potential for prosperity based on a beautiful Bay Area water location and climate, its historic and heritage districts, and its Mare Island redevelopment, the City of Vallejo has been troubled. It filed for Chapter 9 municipal bankruptcy in 2008, primarily because of excessive commitments to its public employee unions. The city’s political leadership is notorious for catering to the interests of labor unions. Construction trade union officials have lobbied elected officials to ensure that contractors must sign Project Labor Agreements as a condition of working on major public works construction in Vallejo, whether the projects are built by Solano County, the City of Vallejo, the Vallejo City Unified School District, or the Solano Community College District.

This new project – now known as the North Bay Maintenance and Operations Facility – was an obvious union target. At the May 23, 2013 meeting of the WETA board of directors, the agency’s executive director informed the board that Ben Espinoza, president of the Napa-Solano Building and Construction Trades Council, had contacted her about the upcoming contractor bidding for the ferry facility. Union officials wanted the WETA board to require construction companies to sign a Project Labor Agreement with the Napa-Solano Building and Construction Trades Council as a condition of working on it.

According to the May 23, 2013 WETA board meeting minutes, the executive director told the board that the unions’ “preferred language was currently under review and that she would keep the Board informed on the status of the item.” In response to a question from one board member asking how the agency would implement the Project Labor Agreement, the executive director said that the agency would meet with union officials to negotiate an agreement for the board to approve at its June 2013 meeting. If a final agreement was not ready when the agency released bidding information for the project, the agency would subsequently add it through an addendum.

Agency negotiations with the unions had to be completed quickly. The project would be funded in part by State Transportation Improvement Program (STIP) funds obtained for the City of Vallejo through the Solano Transportation Authority. In order to use the STIP funds allocated to this project, the San Francisco Bay Area Water Emergency Transportation Authority would have to award the contract no later than August 31, 2013.

At the June 27, 2013 meeting, despite the opposition of the Northern California Chapter of Associated Builders and Contractors, the WETA board unanimously voted for a resolution requiring construction companies to sign a Project Labor Agreement. The resolution authorized the agency to modify a draft Project Labor Agreement within 24 hours for inclusion in the bid specifications.

Following the meeting, the executive director of the agency added a modified draft Project Labor Agreement to the July 3, 2013 bid specifications for the project. The Request for Proposals noted that “The final PLA will be released in an addendum to this RFP upon execution by the parties, which we anticipate will occur no later than 10 days prior to the date that proposals are due. A PLA acknowledgement form is also included in this RFP as a form required for submission.”

Here is the text of the Water Emergency Transportation Authority – North Bay Operations and Maintenance Facility – Draft Project Labor Agreement as included in the July 3, 2013 bid specifications. Figuring this would be a done deal, I dutifully added it to the list of Copies of All Project Labor Agreements on California Government Projects (1993-2013) on the www.LaborIssuesSolutions.com web site. I would ultimately have to remove it.

A few weeks later, the first posted July 18, 2013 meeting agenda for the board of the San Francisco Bay Area Water Emergency Transportation Authority (created on July 12, 2013) did not refer to any Project Labor Agreement negotiations. But a revised meeting agenda (created on July 15, 2013) included a closed session item to discuss the agency’s Project Labor Agreement negotiations with the Napa-Solano Building and Construction Trades Council.

A July 15, 2013 letter from the WETA executive director to the Napa-Solano Building and Construction Trades Council president explains the negotiating difficulties leading to this item. Here are some key excerpts:

We have a funding deadline that requires us to be in contract no later than the end of August or we lose significant funding for the North Bay Maintenance and Operations Facility project. We released an RFP for the Phase 1 work two weeks ago that includes the PLA in unexecuted format. However, we cannot go to award of a contract without having finalized the agreement and having it fully executed.

Based on your legal counsel’s representation, it would appear that I have no alternative other than to go to my board at its meeting this Thursday and advise them we will have to pull the PLA from the procurement set. If you think further discussions would be productive, given that I have a limited ability to make further changes, please get back to me immediately. We need to resolve open issues no later than the end of the day on Wednesday…

Please get back to me immediately if you see value in further discussions. Otherwise I have no option other than to advise the WETA board to delete the PLA from the North Bay Operations and Maintenance Facility project procurement.

On behalf of Western Electrical Contractors Association (WECA), Air Conditioning Trade Association (ACTA), and the Plumbing-Heating-Cooling Contractors Association of California (CAPHCC), Richard Markuson submitted a July 16, 2013 letter to WETA pointing out that discussion of the Project Labor Agreement negotiations in closed session was a violation of the California Ralph M. Brown Act, a law meant to insure government transparency and accountability.

The agency changed its plans. Created on July 16, the revised July 18, 2013 meeting agenda was “corrected” to place the Project Labor Agreement in open session as an “urgency item for consideration.”

At the July 18 WETA board meeting, representatives of the Northern California Chapter of Associated Builders and Contractors (ABC) and the Western Electrical Contractors Association (WECA) called for the agency to negotiate certain provisions into the Project Labor Agreement so that Merit Shop contractors would not be discouraged from bidding. But more stunning was the infighting among representatives of various trade unions, which revealed why the discussion was originally intended for closed session.

A representative of the Northern California Carpenters Regional Council spoke against the Project Labor Agreement in its current draft form. The Sheet Metal Workers Local Union No. 104 and the Teamsters union also opposed the draft language.

WETA’s executive director recommended that the board dismiss the Project Labor Agreement. After a month of negotiations, the agency could not reach an agreement with the Napa-Solano Building and Construction Trades Council. The attorney with Thompson Coburn law firm negotiating the Project Labor Agreement on behalf of WETA was resisting inclusion of off-site hauling (to and from the job site) and off-site fabrication in the Project Labor Agreement because he believed including these activities would violate the National Labor Relations Act (NLRA).

Meanwhile, the law firm of Weinberg, Roger and Rosenfeld, negotiating the Project Labor Agreement on behalf of the Napa-Solano Building and Construction Trades Council, has historically upheld a strict model of a Project Labor Agreement that includes off-site work and militantly rejects any provisions that acknowledge the existence of a non-union construction sector. Speaking on behalf of the unions, Sharon Seidenstein of Weinberg, Roger and Rosenfeld even objected to WETA changing a provision to allow apprentices to be dispatched from any state-approved apprenticeship program (including programs operated by companies or non-union Unilateral Apprenticeship Committees), rather than exclusively from a program operated by a union-affiliated Joint Apprenticeship Training Committee (JATC).

WETA’s legal counsel asked the union lawyer for case studies to back her position, which she was unable to do because reportedly no party has yet challenged the inclusion of off-site hauling (to and from a job site) or inclusion of off-site fabrication in a Project Labor Agreement. WETA board members tried to convince union representatives to accept the draft Project Labor Agreement and even recommended limiting apprentices on the project to those from union programs. In the end, the WETA board voted that if the unions did not sign the draft Project Labor Agreement by close of business on July 19, 2013, contractors would not be required to sign a Project Labor Agreement to work on Phase 1 of the project.

On July 19, 2013, unions informed the agency that it would not sign the Project Labor Agreement, and the agency removed the requirement from the bid specifications through an addendum. State taxpayers will now benefit from fair and open competition on this project.

News Media Coverage:

Labor Agreement Could Be in Place for New Ferry Facility on Mare IslandVallejo Times-Herald – June 27, 2013

WETA Adopts Disputed Labor Agreement for Vallejo Ferry Facility – Vallejo Times-Herald – June 28, 2013

Vallejo Ferry Hub Accord in Jeopardy – Vallejo Times-Herald – July 27, 2013

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.