Tag Archive for Proposition Z (San Diego Unified School District November 2012)

Union Operatives Infiltrate Office of San Diego Mayor Bob Filner to Push Costly and Burdensome Prevailing Wage Mandate for City Contracts

As of today, San Diego Mayor Bob Filner says he will remain in office despite women accusing him of sexual harassment. For the mayor, this is the most damaging of several recent scandals that include a mysterious trip to Paris, a generous complimentary refurbishing of the mayor’s office reception area, and alleged demands for payments in exchange for project approval.

While some of Mayor Filner’s staff have resigned in recent weeks, other people are coming into his administration to fill the power vacuum. And who better to become entrenched in this scandal-ridden administration than union officials?

Jennifer Badgley, Director of Special Projects and Labor Affairs

Apparently the mayor has brought on a former (or current) professional organizer and political director of San Diego’s International Brotherhood of Electrical Workers (IBEW) Local Union No. 569. Jennifer Badgley has recently become the “Director of Special Projects and Labor Affairs” for Mayor Filner, according to her Linked In profile.

Jennifer Badgley – San Diego Mayor’s Office and IBEW Local Union No. 569

According to a lobbying report filed by the IBEW Local 569, Badgley had lobbied Mayor Filner and staff on a few issues during the second quarter of 2013 (April 1 to June 30), including “good green local jobs and career pathways for local workers,” Community Choice Aggregation, and “responsible construction and development,” including on the San Diego Convention Center Expansion. She also “sat in with business” concerning a “potential San Diego energy project.”

She arrived just in time! A vote at the San Diego City Council is scheduled on July 30, 2013 to adopt a union-backed ordinance proposed by Mayor Filner to require construction companies with city contracts to pay wage rates (“prevailing wages”) set by the State of California. Since 1980, the City of San Diego has exercised its authority as a charter city to issue contracts for most purely municipal projects without state-mandated wage rates, as a result saving money for taxpayers. Filner’s proposal would submit the City of San Diego to state law regarding wage rates on public works projects.

Circumstances have now allowed the mayor’s Director of Special Projects and Labor Affairs to be the coauthor of a July 16, 2013 propaganda memo to the San Diego City Council arguing why city taxpayers should pay more for construction and why the city bureaucracy should be entangled in $250,000 worth of monitoring and enforcement of cumbersome unfunded state mandates per $100 million spent on construction. Some of the highlights of this memo:

  • It disparages the city’s Office of the Independent Budget Analyst, which issued a Review of Proposal to Require Compliance with the State’s Prevailing Wage Laws on All City Public Works Projects. The review estimated a cost increase of 5 to 10 percent on projects and noted “the likely trade off in the form of higher capital project costs and the resulting impact to infrastructure programs which are a high priority for the City.”
  • It claims that the state exempts volunteers from prevailing wage requirements, but doesn’t note that the exemption has an expiration date and that certain unions have objected to this exemption.
  • It cites and provides text of the 2010 Azusa Land Partners v. Department of Industrial Relations California appellate court decision that expanded prevailing wage to certain private housing developments, but it doesn’t mention the much more relevant 2012 California Supreme Court decision in State Building & Construction Trades Council of California v. City of Vista. Unions lost this case badly when the California Supreme Court upheld the right of charter cities to establish their own policies concerning government-mandated wage rates for purely municipal contracts.
  • It reports that “staff presented this proposal to construction industry stakeholders at their quarterly meeting on June 20, 2013,” apparently through a presentation by Murtaza Baxamusa, City of San Diego, Office of the Mayor, Special Advisor for Public Policy. (See more about Baxamusa below.) The association representatives at the meeting were reportedly delighted about the proposal; of course, the groups listed as attending the meeting represent and provide contract negotiation and administration services to companies that choose to be bound under the requirements of union collective bargaining agreements. They have a financial interest in government increasing project costs.

Such an rigid approach to public policy as reflected in Badgley’s memo is consistent with her history of advancing the union agenda. In the summer of 2009, at a time when 20% of IBEW Local 569 members were unemployed, Badgley expressed pride in what she identified as her greatest accomplishment: derailing the plan of Gaylord Entertainment to build a $1.2 billion hotel and convention center in Chula Vista because the company wouldn’t sign a Project Labor Agreement guaranteeing 100% of the construction trade work to unions. A July 6, 2009 profile on the now-defunct San Diego News Network web site reported her perspective as part of an interview to reveal her “journey” as she sought to “create broader social change.”

Badgley is or was married to Tefere Gebre, the executive director of the Orange County Labor Federation, AFL-CIO, who is expected to become the next Executive Vice President of the national AFL-CIO. In 2012 he proclaimed The Truth About the Right-Wing’s Latest Scheme to Punish Workers in Costa Mesa, and in 2009 he decried “The assault on Orange County by Colorado-based zealot Eric Christensen (sic) and Supervisor John Moorlach.” Gebre caused a stir in August 2007 when he sent Eric Christen of the Coalition for Fair Employment in Construction a bizarre email claiming that he saw Christen “on TV as a gay whitehouse corspondent.” (sic)

Murtaza Baxamusa, Special Advisor for Public Policy

Murtaza Baxamusa used to churn out policy reports for the union-backed Center on Policy Initiatives in San Diego. He was a founder of the phony Middle Class Taxpayers Association, which advocates for union-backed initiatives that increase costs to taxpayers. In 2011 he was hired as Director of Planning and Development for the San Diego County Building Trades Council Family Housing Corporation. The San Diego County Building Trades Family Housing Corporation contributed $85,000 to the November 2012 campaign to pass Proposition Z, a $2.8 billion bond measure with a Project Labor Agreement for the San Diego Unified School District. It’s unclear if Baxamusa is still employed at the union housing corporation.

Mayor Bob Filner’s Support for the Union Political Agenda

Bob Filner, the Mayor of the City of San Diego, has long supported the political agenda of construction trade unions. Eric Christen of the Coalition for Fair Employment in Construction wrote in an opinion piece in Voice of San Diego on July 20, 2007 that Filner had “an almost canine affection for doing the unions’ bidding.”

In 1999, then-Congressman Filner recognized Art Lujan of the San Diego-Imperial Counties Labor Council, AFL-CIO for his leadership in the San Diego labor movement. He noted that “Art successfully secured a Project Labor Agreement with the County Water Authority resulting in over $700 million in construction projects throughout the next eight years.” This was the first government-mandated Project Labor Agreement in San Diego County.

As a member of Congress in 2007, Filner blamed Chula Vista Mayor Cheryl Cox for the decision of Gaylord Entertainment to withdraw its proposal to build a $1.2 billion hotel and conference center on the Chula Vista Bayfront. Unions were threatening to block the project with environmental objections unless the company signed a Project Labor Agreement to build the project. Filner apparently felt that Cox should have pressured Gaylord to give the unions what they wanted.

A letter to the editor in the July 15, 2007 San Diego Union-Tribune explained Filner’s political attack:

So now the finger-pointing begins. And the show is being led by Rep. Bob Filner, who demonstrated political grandstanding at its finest by swooping in to defend the unions. How much has he been involved in this process before now? And without demonstrating any personal effort in advancing the project, how does he justify a self-appointed role as the arbiter of who did what wrong?

In 2010, Filner wrote a letter on Congressional stationery (in apparent violation of U.S. House of Representatives ethics rules) to the Chula Vista Chamber of Commerce telling them to oppose Proposition G. Prop G was a “fair and open competition” ballot measure to enact an ordinance prohibiting the City of Chula Vista from entering into contracts that required construction companies to sign a Project Labor Agreement as a condition of work. Filner claimed that it would be a “fool’s errand” to obtain federal funding for the City of Chula Vista if voters approved Proposition G. On June 6, 2010, 56% of Chula Vista voters supported Proposition G, and Filner subsequently played the fool and continued to send federal money there.

Of course Filner supported the Project Labor Agreement that the board of the San Diego Unified School District imposed on $4.9 billion in construction (not including state matching grants) approved by voters as Proposition S in 2008 and the subsequent Proposition Z in 2012. And citing arguments from the International Brotherhood of Electrical Workers (IBEW), he wrote letters to the U.S. Department of Energy in 2009 and 2010 opposing Sempra Energy’s construction of an electricity transmission line between Mexico and San Diego County.

And notably, he recognized Murtaza Baxamura in 2012 in the Congressional Record. Now Baxamura is on his staff, pushing for government-mandated construction wage rates.

Foolishness That Won’t Be Stopped: California’s K-12 School Districts Use Borrowed Money from Bond Sales to Buy iPads and Other Technological Gadgets

The web site www.EdSource.org (“Engaging Californians on Key Education Challenges”) has an article today (December 18, 2012) entitled Districts Face Questions in Spending Long-Term Bonds for Short-Lived Technology. It’s a good summary of how some K-12 school districts in California are using language in Proposition 39 to justify spending borrowed money from bond sales to “equip” schools with computers and other technological products.

Money borrowed through bond sales is typically paid back with interest over a long period of time – much longer than the useful life of computers. Aren’t you glad you didn’t take out a 30-year bank loan to pay for your Radio Shack TRS-80?

Chris Reed had a short piece posted in the December 9, 2012 www.CalWatchdog.com entitled Will School Finance Scams Be Addressed? One of Two at Best. He predicts the California state legislature will restrict the ability of educational districts to sell Capital Appreciation Bonds (CABs), but will not prevent educational districts from using bond proceeds to buy technological products.

Proposition Z was and still is the Zombie Tax.

Proposition Z was and still is the Zombie Tax.

The most prominent recent controversy about California school districts using borrowed money from bond sales to buy technology occurred during the fall 2012 campaign to pass the $2.4 billion Proposition Z bond measure for the San Diego Unified School District. The San Diego County Taxpayers Association led the charge in pointing out how the school district was spending bond proceeds on iPads. In the October 9, 2012 article Is School Bond Money Going to iPads Over Repairs? Fact Check, Voice of San Diego reported the following:

As of mid-September, the district says it had spent more than $379 million of its Prop. S funds. About 11 percent of that has been used to buy iPads, computers and other technologies, according to figures released by school officials.

While the article never actually stated the amount, 11 percent of $379 million is $42 million.

In a subsequent October 25, 2012 article $2,500 iPads? Fact Check, Voice of San Diego reported these findings:

A display case at San Diego Unified School District administrative headquarters highlighting the Proposition S bond measure. The school board has not yet directed district personnel to enhance the display with the original signed Project Labor Agreement negotiated with union officials.

A display case at San Diego Unified School District administrative headquarters highlights the Proposition S bond measure.

The school district used some money collected under Proposition S, the bond approved in 2008, to invest in classroom technology upgrades, including more than 21,500 iPads and nearly 77,800 laptops. More purchases are planned next year…

The iPad purchases came in two phases. First, the district used a series of highly controversial 40-year bonds to buy 10,729 iPads. The district says each iPad cost $420 plus another $116.50 for three-year warranties and accessories. After reviewing bond documents, we calculated that the district will pay an average of about 7.6 times that amount once the final bill comes due. That means a single iPad will cost $4,077.

The district’s second purchase of nearly 10,800 iPads will be less burdensome. The next set of bonds came with a bill that’s an average of about 5.1 times the original cost. Our math shows the district can expect to pay about $2,731 per device for iPads purchased in the second wave.

San Diego voters didn’t care: 61.80% of them voted for Proposition Z on November 6, 2012 and guaranteed that the San Diego Unified School District will have the authority from the 2008 Proposition S and the 2012 Proposition Z to borrow millions of dollars more to spend on iPads.

Besides the bond investors, the people making money on this activity are investors in Apple, Inc. I tweeted the following about the www.EdSource.org article:

California school districts using borrowed $ from construction bond sales to buy computers. (What’s Apple’s position?)

Finally, Jack Weir, a member of the Pleasant Hill City Council and an activist in several community and taxpayer groups in Contra Costa County, emailed a provocative response to the leadership of the Contra Costa Taxpayers Association in response to the www.EdSource.org article:

From:Jack Weir
Sent:Tuesday, December 18, 2012 9:26 AM
To: xxxx
Subject: Re: Should schools be using bond money for technology which is so short lived?

As Alicia Minyen, Anton Jungherr and other CalBOC board members have amply demonstrated, school bond programs are largely out of control – literally.  Mt. Diablo and West County districts have abused Prop 39 on a major scale, although there are far more egregious examples elsewhere in the state.  The new Mt. Diablo board is committed to address their Measure C issues, but will have little corrective latitude.  Dismantling the massive damned solar canopy won’t unring the bell.

There is a whole industry of bond counsels and consultants that work this field, operating in tandem with teachers unions and Democrat politicians that advocate milking the school construction programs to wring additional operational (compensation) funding from local property-owning taxpayers.

After ten years of wrestling with the problem of bringing public (government) education into the 21st century, it is clear to me that nothing short of a whole new paradigm is needed.  And, to get there, we should be asking broad future-focused questions, such as:

> Do we really need brick and mortar facilities dedicated exclusively to classroom teaching?  (Ditto brick and mortar “libraries.”)
> Does it make sense to continue to load ten year-olds with 50 back-breaking pounds of paper books*, when most have (or should have) access to digital devices and the internet?  Within five years, every bit of data and information needed for a good education will be available on the “cloud,” accessible only via digital devices.  Other countries (and states) will leap-frog traditional educational models and kick our economic asses.  Take a look at what India did to bring education into its remote rural villages 25 years ago, and now their kids are coming here to work on H-1B programs.
> Who should pay for K-12 education?  “Free” education ain’t; certainly not to taxpayers, who currently gain a pathetic return on their “investment.”
> What’s the right role for taxpayer advocates in the political forum going forward?

It’s time to start over.
Jack

Based on the results of the November 6, 2012 elections, Californians don’t want to start over. They like the current paradigm, in which the kids get to use “free” iPads.


* Note from Kevin Dayton: regarding the weight of paper textbooks, Assembly Bill 2532, signed into law by Governor Gray Davis in 2002, required the California Board of Education, on or before July 1, 2004, to adopt maximum weight standards for elementary and secondary school textbooks. The California Board of Education subsequently adopted regulations concerning textbook weight standards.

Voters Approve Selling Bonds to Borrow Huge Amounts of Money for Construction in Four Educational Districts that Use Project Labor Agreements

All four of these school districts require contractors to sign Project Labor Agreements, and the San Diego Unified School District has already approved a resolution requiring contractors to sign a Project Labor Agreement for certain future construction funded by Proposition Z.

  • At the Sacramento City Unified School District, 69% of voters approved Measure Q and 67% of voters approved Measure R. These authorize the school board to borrow $414 million through bond sales for construction.
  • At the Solano Community College District, 62% of voters approved Measure Q. This authorizes the governing board to borrow $348 million through bond sales for construction.
  • At the West Contra Costa Unified School District, 63% of voters approved Measure E. This authorizes the school board to borrow $360 million through bond sales for construction.
  • At the San Diego Unified School District, 60% of voters approved Proposition Z.  This authorizes the school board to borrow $2.8 billion through bond sales for construction.

My Report on www.UnionWatch.org: Tracking California’s November 2012 Elections Related to Labor Issues

See my article posted this morning (November 5, 2012) on www.UnionWatch.org called Tracking California’s November 2012 Elections Related to Labor Issues.

If you are a regular reader of the Dayton Public Policy Institute blog (a project of Labor Issues Solutions, LLC), you know a lot about the following races in California:

  • Proposition 32 – Stop Special Interests state ballot measure (includes “paycheck protection”)
  • Measure V – proposed charter in Costa Mesa
  • Proposition P – proposed charter in Escondido
  • Measure I-12 – proposed charter in Grover Beach
  • Measures Q and R – authorization to borrow $414 million through bond sales for construction at Sacramento City Unified School District (which imposes Project Labor Agreements)
  • Measure Q – authorization to borrow $348 million through bond sales for construction at Solano Community College District  (which imposes Project Labor Agreements)
  • Measure E – authorization to borrow $360 million through bond sales for construction at West Contra Costa Unified School District (which imposes Project Labor Agreements)
  • Proposition Z – authorization to borrow $2.8 billion through bond sales for construction at San Diego Unified School District (which imposes Project Labor Agreements)

There are also some elections for local government offices in California that have significance for people interested in labor policy issues.

City of San Diego

If Republican Ray Ellis defeats Democrat Councilwoman Sherri Lightner for the one undecided city council race (in La Jolla), Republicans will have a 5-4 majority on the city council. What a change from ten years ago, when Republicans almost disappeared from a city council they had long controlled. (I credit the Republican Party of San Diego County for this transformation: see my www.FlashReport.org article The Untold Story: Years of Challenging, Unglamorous Work Led to Big Republican Election Night in San Diego on June 5.

Republican Councilman Carl DeMaio stands a good chance of defeating Democrat Congressman Bob Filner and getting elected as Mayor of San Diego. A few weeks ago I wrote an article comparing DeMaio’s campaign to the 2010 campaign of Rob Ford, a libertarian-oriented city council member who unexpectedly won election as Mayor of Toronto, Ontario, Canada. (See Carl DeMaio’s Campaign for Mayor of San Diego Echoes Rob Ford’s Successful Campaign for Mayor of Toronto.) Chris Reed wrote the following in a November 1, 2012 article for The American Spectator (Anger Mismanagement on the Ballot; linked at www.CalWatchdog.com as Will San Diego Elect a Gay Libertarian or a Snarling Misanthrope as Mayor?):

All this is remarkably good news for DeMaio and for libertarians who have long wondered what a government run by a Reason-blessed true believer would be like…If Filner has this [negative] effect on enough people, in five weeks time, America’s eighth-largest city will inaugurate as mayor a brash reformer bent on transforming the government status quo. Thanks to a June initiative primarily authored by DeMaio, San Diego is by far the largest U.S. city to have ended costly defined-benefit pensions for nearly all its new hires. As mayor, DeMaio would ramp up San Diego’s already-aggressive attempts to bid out a wide array of government services. He also wants to end automatic “step” pay increases given to public employees just for years on the job and to finally bring to government the productivity revolution that has fueled U.S. private-sector growth for two decades. The goal, DeMaio told me in April, is to set up a national model for downsized, efficient government. If elected, DeMaio appears likely to have a GOP majority on the City Council. If these more conventional Republicans back him up, San Diego could become Ground Zero for government experimentation – of a sort that many will call radical but that libertarians will call long-overdue.

City of Costa Mesa (Orange County)

In the City of Costa Mesa, three of the four city councilmembers (the 3Ms, Gary Monahan, Steve Mensinger, and Colin McCarthy) who voted in 2011 with Councilman Jim Righeimer to “outsource” government services and put the Measure V charter on the ballot in 2012 are running as a slate. They are challenged by a slate of three candidates associated with a group called Costa Mesans for Responsible Government who oppose outsourcing and the charter. Obviously this a battle based largely on labor issues.

City of Brentwood (San Francisco Bay Area, in Contra Costa County)

In the City of Brentwood, unions are trying to keep Mayor Bob Taylor in office. Taylor voted in 2009 and 2010 to require contractors to sign a Project Labor Agreement to build the city’s civic center and associated parking garage. I wrote about this race in Electrical Workers Union Tries to Salvage Political Career of City of Brentwood Mayor Robert Taylor (Bob Taylor) and Contra Costa Times Recognizes Fiscally Responsible Candidates for Brentwood City Council: Endorsements EXCLUDE Project Labor Agreement Supporters.

Opponents of Project Labor Agreement for San Diego Unified School District Smack $2.8 Billion Proposition Z with 50,000 Mailers

The Coalition for Fair Employment in Construction continues its “School Bond Accountability Project” by sending out a mailer to 50,000 San Diego households reminding them that the Board of Education of the San Diego Unified School District requires construction contractors to sign a Project Labor Agreement with unions in order to work on certain projects funded by school district bond sales.

Coalition for Fair Employment in Construction No on Prop Z San Diego Unified School District Mailer - Front

Coalition for Fair Employment in Construction No on Prop Z San Diego Unified School District Mailer – Front

Coalition for Fair Employment in Construction No on Prop Z San Diego Unified School District Mailer - Back

Coalition for Fair Employment in Construction No on Prop Z San Diego Unified School District Mailer – Back

In November 2008, voters approved Proposition S, authorizing the Board of Education of the San Diego Unified School District to borrow $2.1 billion for construction (and apparently, iPads) by selling bonds to investors. Voters had no indication that the Board of Education would promptly make a deal with construction unions to give them a monopoly on construction with a Project Labor Agreement. (See San Diego Unified School District Proposition S Project Labor Agreement 2009.)

Project Labor Agreement Policies for San Diego Unified School District

1999 Union officials unsuccessfully lobby the school board and district officials to require contractors to sign a Project Labor Agreement for construction funded by Proposition MM.
May 26, 2009 Board votes 3-2 to approve a Project Labor Agreement for construction funded by Proposition S.
July 24, 2009 Board again votes 3-2 to approve a Project Labor Agreement for construction funded by Proposition S, replacing the first, defective agreement with a new agreement containing terms and conditions acceptable to the Carpenters Union.
July 24, 2012 July 24, 2012 – Board votes 5-0 for a resolution expanding the scope of the Project Labor Agreement to projects funded by future bond measures, thus imposing the Project Labor Agreement on projects funded by the proposed $2.8 billion bond measure on the November 6, 2012 ballot.

Administrative offices of the San Diego Unified School District.

Now the Board of Education wants to borrow another $2.8 billion! It wants voters to approve Proposition Z, authorizing more bond sales for construction. The Board of Education of the San Diego Unified School District also passed a resolution on a 5-0 vote committing to require contractors to sign a Project Labor Agreement with unions in order to work on projects funded by Proposition Z.

Read this list of contributors to the campaign to convince voters to let the San Diego Unified School District sink under another $2.8 billion (plus interest) in debt with Prop Z. It includes ONE San Francisco investment banker who has essentially funded 20% of the campaign.

The Coalition for Fair Employment in Construction sent this press release out today (November 1, 2012):

CFEC Mails 50,000 Taxpayers in San Diego Reminding Them How San Diego Unified Spends Bond Money Wastefully

San Diego, CA – 50,000 households within the San Diego Unified School District (SDUSD) will be receiving this mailer over the next couple of days reminding them how the San Diego Unified School District spends bond money.

Proposition S, a $2.1 billion school construction bond passed by voters in 2008, was placed under a union-crafted Project Labor Agreement (PLA) in early 2009. This payoff to the union bosses who financed school board members’ political campaigns has resulted in the district having 50% fewer bidders on projects while the costs of those projects are 20% higher than non-PLA projects.

SDUSD is paying $1 million annually just to oversee the PLA.

“SDUSD homeowners are currently on the hook for  $4.7 BILLION in debt for all previous bonds.  What they receive for that debt, however, is further reduced in value due to the PLA.” said CFEC’s Eric Christen.

What are homeowners getting for all of this wealth they are giving up?

iPads that cost you and me $500 but SDUSD pays $4,000 to be paid back over 40 years. This means current SDUSD students’ GRANDCHILDREN will still be paying off iPads that were thrown away 30 years before they were even born.

The facts regarding the failures of how Prop S money is spent certainly did not come from the District which has admitted that the records it keeps on how Prop S funds were spent are “incomplete” and essentially misleading.

“Voters need to know the fiscally reckless manner in which this District is spending billions in taxpayers dollars” added Christen. “This mailer will help accomplish this goal.”

To date approximately 20% of the money authorized to be spent under Prop S has in fact been spent.

ONE San Francisco Investment Banker Is Funding About 20% of the Yes on Proposition Z Campaign for San Diego Unified School District to Borrow $2.8 Billion Through Bond Sales

Ordinary taxpayers of San Diego! The so-called “One Percent” really, really wants you to take on $2.8 billion more in debt (plus interest) and pay it back with new taxes.

This debt is in addition to the $4.7 billion debt you already owe (see page 17 of this official statement) as a result of past bond sales by the Board of Education of the San Diego Unified School District. Remember when you approved the school board to borrow $1.51 billion through Proposition MM in 1999 and borrow $2.1 billion through Proposition S in 2008? See below.

Bond Measures for San Diego Unified School District

Authorized Bond Amount. Does Not Include Interest and Fees

Date of Election

Ballot Designation

Outcome

$1.51 billion November 3, 1998 Proposition MM Approved by 78% of voters.
$2.1 billion November 4, 2008 Proposition S Approved by 69% of voters.
$3.61 billion Total from two bond measures from 1998 to the present.
$2.8 billion November 6, 2012 Approved for consideration by district voters through a resolution of the school board on July 24, 2012

Below, I’ve listed every contributor to the Yes on Proposition Z campaign through October 24, 2012 in order from biggest to smallest, including the latest reported “late contributions.” The total collected is $519,697.96, not including a $15,000 loan from Gafcon, which is also a $15,000 contributor and has a relationship with a $10,000 contributor, Sharepoint 360. I also do not include in-kind (non-monetary contributions) such as $4,626.91 from “A Better San Diego Issues Committee, A Sponsored Committee of The San Diego and Imperial Counties Labor Council, AFL-CIO” and $19,050 from “Communications and Its Subsidiaries,” whatever that is!

You’ll see on the list how construction trade unions (and their affiliated labor-management cooperation committees) are eager to monopolize that $2.8 billion in future construction with their guaranteed Project Labor Agreement: they’ve contributed a total of $191,612.96.

Project Labor Agreement Policies for San Diego Unified School District

1999 Union officials unsuccessfully lobby the school board and district officials to require contractors to sign a Project Labor Agreement for construction funded by Proposition MM.
May 26, 2009 Board votes 3-2 to approve a Project Labor Agreement for construction funded by Proposition S.
July 24, 2009 Board again votes 3-2 to approve a Project Labor Agreement for construction funded by Proposition S, replacing the first, defective agreement with a new agreement containing terms and conditions acceptable to the Carpenters Union.
July 24, 2012 July 24, 2012 – Board votes 5-0 for a resolution expanding the scope of the Project Labor Agreement to projects funded by future bond measures, thus imposing the Project Labor Agreement on projects funded by the proposed $2.8 billion bond measure on the November 6, 2012 ballot.

Architects and engineers have also generously contributed to the campaign, along with a few construction contractors. A few San Diego philanthropists and civic leaders have contributed, as well as one parent.

But note that the Yes on Prop Z committee reports $100,000 from the California Charter Schools Association Advocates Issues Committee (FPPC #1343062). This matches the $100,000 total contributed as indicated in the California Secretary of State records for the California Charter Schools Association Advocates Issues Committee. In addition, the California Charter Schools Association (not its Political Action Committee) contributed $7,500 to the committee on March 9, 2012. So the total from this group is actually $107,500, and that’s how I list it below.

In 2011 and 2012, the only monetary contributions received by the California Charter Schools Association Advocates Issues Committee are four payments totaling $500,000 from John H. Scully and his wife Regina Scully. See the California Secretary of State’s record for contributions received in 2011-2012 by the California Charter Schools Association Advocates Issues Committee.

In other words, about 20% of the $500,000+ campaign to convince San Diego voters to vote for Proposition Z and allow the San Diego Unified School District board of education to borrow another $2.8 billion for construction through bond sales is coming from ONE San Francisco investment banker.

Here is the complete list of contributions to Yes on Proposition Z, authorizing the board of education of the San Diego Unified School District to borrow $2.8 billion for construction by selling bonds to investors. (That money must be paid back, with interest, by taxpayers.)

DONOR INTEREST AMOUNT
California Charter Schools Association Charter schools/John Scully, investment banker $107,500
Irwin & Joan Jacobs Philanthropists $80,000
San Diego County Building and Construction Trades Council Family Housing Corporation No. 1 Construction trade union – property owner $42,500
San Diego County Building and Construction Trades Council Family Housing Corporation No. 2 Construction trade union – property owner $42,500
San Diego County Building and Construction Trades Council Construction trade union $25,000
International Brotherhood of Electrical Workers (IBEW) Local Union No. 569 Construction trade union $20,012.96
Gafcon Construction management $15,000
California Teachers Association Teachers’ union $14,000
Sharepoint 360 Information technology for construction (closely associated with Gafcon – see above) $10,000
Sheet Metal Workers International Association Local Union No. 206 Construction trade union $10,000
Southern California Pipe Trades Council #16 Construction trade union $10,000
Laborers Local Union No. 89 Construction trade union $10,000
Plumbers Local Union No. 230 Construction trade union $10,000
Southwest Regional Council of Carpenters Construction trade union $10,000
San Diego Electrical Industry Labor Management Cooperation Committee Union-affiliated labor-management cooperation committee $10,000
PJHM Architects Architect – clients include K-12 school districts $10,000
Mike Kooyman – Executive with PCM3 Construction management $10,000
John R. (Jack) McGrory San Diego civic leader, real estate investor, former City Manager of San Diego $9,000
Barney & Barney Insurance and employee benefits $7,500
CPM Ltd. (dba Manpower of San Diego) Temporary employment $5,000
Orrick Herrington & Sutcliffe Bond counsel $5,000
KPI Architects Architect $5,000
CSDA Architects Architect $5,000
Harris & Associates Construction management/engineers $5,000
Mel Katz Manpower/Philanthropist $5,000
LPA, Inc. Architect $5,000
GKK Works Architect – clients include K-12 school districts $3,500
NTD Architecture Architect – clients include K-12 school districts $3,000
Borrego Solar Systems Construction contractor $3,000
Carl Schneider – Executive with SchneiderCM Construction management $2,500
Fieldman, Rolapp & Associates Bond broker $2,500
Fulbright & Jaworski Law firm; clients include local governments $2,500
Vanir Construction Management Construction management $2,000
BSE Engineering Engineering $1,250
IBI Group Architect/engineering $1,250
Operating Engineers Local Union No. 12 Construction trade union $1,000
Andy Berg –National Electrcal Contractors Association San Diego Chapter Unionized construction trade association $1,000
HMT Electric Construction contractor $1,000
Peter Spencer, executive with Audio Associates of San Diego Design and installation of audio/video systems $1,000
Frisco White, with Westberg + White Architect $1,000
Amy Redding Philanthropist/school volunteer/parent of SDUSD student $1,000
Burkett & Wong Engineers Engineering $1,000
Blue Coast Consulting Inspectors – clients include K-12 school districts $500
Vickie Fortie, executive with Turpin & Rattan Engineering Engineering $500
Tom Gaeto, executive with Construction Testing & Engineering Engineering $500
Heat & Frost Insulators & Allied Workers Local Union No. 5 Construction trade union $500
Sylvia Avendano – executive with Owen Group Engineering $250
Johnson Consulting Engineers Engineering $250
Debra Preece – executive with Vector Resources Information technology – clients include K-12 school districts $250
Alison Whitelaw – executive with Platt/Whitelaw Architects Architect $250
Arthur Cantu, head of International Brotherhood of Teamsters Union Local No. 36 Construction trade union $100
Not itemized $85
TOTAL $519,697.96

Sources: Campaign Finance Report through June 30, 2012; Campaign Finance Report through September 30, 2012; Campaign Finance Report through October 20, 2012; Late Contribution Reports: 10/22 #1, 10/22 #2, 10-24-1, 10/26, 10/29.

Finally, take a look at the list above and notice the incongruity with the claim of John Lee Evans, a school board member for the San Diego Unified School District, who was secure enough in his position before he voted for the Project Labor Agreement on May 26, 2009 to inform the business establishment in San Diego that their traditional role as responsible community leaders was coming to an end:

“I think the bigger picture that people are realizing – and this is what scares some people – is that San Diego is changing, the United States is changing…this is a different city…we are looking at a different community.”

Not really. The same crowd is still putting a little money into the democratic system in order to make a lot more money off of that same system, with ordinary citizens paying for it through taxes.

Who’s Paying to Convince San Diego Voters to Take On $2.8 Billion of Additional Debt – Plus Interest – with Proposition Z?

As of this writing, the link for the October 20, 2012 Proposition Z campaign finance report is not working as provided by the County of San Diego Registrar of Voters Campaign Finance Disclosure Public Site. However, the June 30, 2012 Proposition Z campaign finance report, the September 30 Proposition Z campaign finance report, and three post-October 20, 2012 Proposition Z campaign finance reports are on the site. So here is a partial record of contributions to the campaign for Proposition Z, allowing the San Diego Unified School District Board of Education to borrow $2.8 billion by selling bonds to investors.

DONOR INTEREST AMOUNT
Irwin & Joan Jacobs Philanthropists $80,000
California Charter Schools Association Charter schools $32,500
San Diego County Building and Construction Trades Council Family Housing Corporation No. 1 Construction trade union – property owner $30,000
San Diego County Building and Construction Trades Council Family Housing Corporation No. 2 Construction trade union – property owner $30,000
Southern California Pipe Trades Council #16 Construction trade union $10,000
Laborers Local Union No. 89 Construction trade union $10,000
Plumbers Local Union No. 230 Construction trade union $10,000
Southwest Regional Council of Carpenters Construction trade union $10,000
San Diego Electrical Industry Labor Management Cooperation Committee Union-affiliated labor-management cooperation committee $10,000
PJHM Architects Architect – clients include K-12 school districts $10,000
Barney & Barney Insurance and employee benefits $7,500
CPM Ltd. (dba Manpower of San Diego) Temporary employment $5,000
CSDA Architects Architect $5,000
Gafcon Construction management $5,000
Harris & Associates Construction management/engineers $5,000
Mel Katz Manpower/Philanthropist $5,000
LPA, Inc. Architect $5,000
Mike Kooyman – Executive with PCM3 Construction management firm $5,000
Carl Schneider – Executive with SchneiderCM Construction management firm $2,500
BSE Engineering Engineering $1,250
IBI Group Architect/engineering $1,250
Operating Engineers Local Union No. 12 Construction trade union $1,000
Andy Berg –National Electrcal Contractors Association San Diego Chapter Unionized construction trade association $1,000
Amy Redding Philanthropist/school volunteer/parent of SDUSD student $1,000
Burkett & Wong Engineers Engineering $1,000
Blue Coast Consulting Inspectors – clients include K-12 school districts $500
Sylvia Avendano – executive with Owen Group Engineering $250
Johnson Consulting Engineers Engineering $250
Debra Preece – executive with Vector Resources Information technology – clients include K-12 school districts $250
Alison Whitelaw – executive with Platt/Whitelaw Architects Architect $250
TOTAL $285,500.00

California Local Election Report: Construction Bond Measures for School Districts and Community College Districts – Four That Obviously Deserve a NO Vote

California’s elected school boards and community college boards have put 106 measures on local ballots for the November 6, 2012 election asking voters to authorize borrowing money for construction through bond sales. At least four of these proposed bond measures are so stunningly misguided that citizens in these districts should take democratic action, defy the well-funded Establishment, and reject the debt with a NO vote.

Below, I list and explain the four districts where voters should Close the Spigot of taxpayer money to the elected boards. First, some general background about educational facility bond measures on the November 6, 2012 ballot:

CALIFORNIA – 106 Bond Measures for Construction at Educational Districts

A web site – www.californiacityfinance.com – lists 106 school construction bond measures on the November 2012 ballot in California. An article from School Services of California and reprinted on September 26, 2012 by the Coalition for Adequate School Housing (CASH) confirms there are 106 proposed bond measures. That article also notes that 106 is the highest number of California school bond measures ever considered in an election. It also claims that voters authorize the sale of bonds in California school districts about 70% of the time.

The number of bond measures presented to voters throughout California has trended relentlessly upwards since November 2000, when 53.4% of California voters narrowly approved Proposition 39, which dropped the voter threshold for approval of educational construction bond measures from 66.67% to 55%. This was the start of California’s massive accumulation of debt for educational construction at the state and local levels of government.

A few professional political consulting firms (such as Tramutola Advisors, based in Oakland, and TBWB Strategies, based in San Francisco) specialize in the business of convincing voters to vote Yes for school bond measures. They are adept at emotive messaging (“it’s all about the kids”) and at exploiting technical loopholes to leverage public funds as much as legally possible to develop and promote the bond measures.

Funding for the campaigns to pass the bond measures is collected from banks, bond brokers (underwriters), and other financial service corporations that make money from bond transactions. This has generated some criticism; see Vote No on Sacramento’s Measures Q and R web site for a compilation of 2012 news articles about bond underwriters and campaign contributions.

Bond measures also generate business for the construction industry. A perusal of contributors to bond measures usually reveals architects, engineers, contractors and construction trade associations, and construction trade unions.

Have YOU checked the list of contributors to campaigns to pass bond measures in your K-12 school and community college district?

Rarely does significant opposition develop against proposed bond measures, as shown by how often official voter information guides outright lack an opposition statement to a proposed bond measure. When there is organized opposition, it usually centers around a regional taxpayers association, with help from the local Libertarian Party or Tea Party organizations. Generally, opposition campaigns are passionate, but amateurish. They usually don’t have any money to spend on getting their message out to voters.

PROFESSIONALIZING OPPOSITION WITH CALIFORNIA’S “OPERATION CLOSE THE SPIGOT” 

Earlier this year, I circulated a proposal for “Operation Close the Spigot,” a program to have a well-funded, coordinated opposition campaign statewide against the most egregious bond measures proposed for California K-12 school districts and community college districts. While a formal organization has not yet emerged to close the spigot of taxpayer funding, my agitation on this issue – like my agitation for charter cities – has inspired some promising grassroots movement for local individuals and organizations to gather together and make a more serious effort to inform voters about the huge debt burden accumulating on Californians as a result of the parade of bond measures.

As the November 6, 2012 election approaches, here are the most promising developments for organized opposition against four foolish proposed educational construction bond measures in California.

1. SACRAMENTO CITY UNIFIED SCHOOL DISTRICT – $414 Million Measures Q and R

The “Fair and Open Competition – Sacramento” committee that had organized in 2011 to enact Fair and Open Competition ordinances in the City of Sacramento and the County of Sacramento reorganized its leadership and membership and decided to expose the foolhardiness of the Sacramento City Unified School District’s proposal to borrow another $414 million by selling bonds. (District taxpayers currently owe $522 million from the last two bond measures.) This group was inspired to oppose Measures Q and R on the November 2012 ballot because the school board requires its construction contractors to sign a Project Labor Agreement with unions to work on Sacramento City Unified School District contracts. In fact, the leading spokesperson to pass Measures Q and R is school board member Patrick Kennedy, who has been and may still be employed by Sacramento construction trade unions or affiliated entities.

The Sacramento City Unified School District sold notorious Capital Appreciation Bonds to bury future generations in debt. These are bond issues for which investors collect a huge amount of compound interest when the bonds mature, rather than getting interest payments at regular intervals and then getting the principal back when the bonds mature.

Fair and Open Competition – Sacramento submitted excellent arguments against Measure Q and against Measure R for the official voter information guide. They tried to discourage Sacramento area business groups from knee-jerk “it’s for the kids” endorsements of Measures Q and R. Finally, they established a web site to make a logical, fact-based case against borrowing more money through bond sales to investors. As I declared in a Tweet yesterday, “Never before has a campaign web site so thoroughly analyzed and hammered a California school construction bond measure: http://fairandopencompetitionsacramento.com.”

The Sacramento Bee’s editorial board has not taken a position yet on Measures Q and R. On October 14, 2012, the Sacramento Bee endorsed Measures Q and R (Sacramento City Unified School Bonds Are a Smart Investment for Students), with the Project Labor Agreement policy as the only negative reference:

Opponents object to the district’s use of project labor agreements for large projects – as has this editorial board. But the district points out that only 14 of 74 projects since 2005 have had project labor agreements. Union and nonunion shops get a chance to bid on the vast majority of projects under $1 million.

2. WEST CONTRA COSTA UNIFIED SCHOOL DISTRICT – $360 Million Measure E

The Official Statement for the West Contra Costa Unified School District’s latest bond sale contains some harsh facts about this fiscally irresponsible, mismanaged school district in an economically struggling area. Residents and businesses in this school district have taken on a staggering amount of debt through construction – $1.77 billion to date by borrowing money from five bond measures since 1998. (A sixth attempt failed in 2003.) Five is not enough, so now there is the $360 million Measure E.

Chevron owns 13.1% of the assessed property value of this district, and what will happen when Chevron finally decides to shut down its Richmond refining facility? (I’ve been predicting for 14 years it will become a distribution center for fuels refined in Mexico.) And Chevron is not the only problem with the school board’s rosy expectations for future tax collection. In 2009-10, total property value tax assessment in the district dropped 12.3%, and it dropped another 7.7% in 2010-11. (It was up 1.1% in 2011-12, but that’s not a good rationale to take on more debt.)

Bond Measures for West Contra Costa Unified School District

Authorized Bond Amount. Does Not Include Interest and Fees. Does Not Include State Matching Grants.

Date of Election

Ballot Designation

Outcome

$40 million June 2, 1998 Measure E Approved by 76.0% of voters
$150 million November 7, 2000 Measure M Approved by 77.5% of voters
$300 million March 5, 2002 Measure D Approved by 71.6% of voters
$450 Million September 16, 2003 Measure C Rejected in a special election because only 59.1% of voters approved the bond measure, which needed two-thirds voter approval
$400 million November 8, 2005 Measure J Approved by 56.9% of voters
$380 million June 8, 2010 Measure D Approved by 62.6% of voters
$1.27 billion Total from five bond measures from 1998 to the present.
$360 million November 6, 2012 Approved for consideration by district voters through a resolution of the school board on August 1, 2012

No surprise, the school board requires its construction contractors to sign a Project Labor Agreement with unions to work on West Contra Costa Unified School District projects. It was the first school district in Northern California to adopt a Project Labor Agreement, leading the way for followers such as the Vallejo City Unified School District, the East Side Union High School District (in San Jose), and the Oakland Unified School District. (By the way, Oakland USD and East Side Union HSD also have big bond measures on the November 2012 ballot.)

Of course, the West Contra Costa Unified School District sold Capital Appreciation Bonds to bury future generations in debt. One school board member – Charles Ramsey – even recognized the risk, but voted for the West Contra Costa Unified School District to sell Capital Appreciation Bonds anyway.

The Contra Costa Taxpayers Association is leading the opposition to Measure E and submitted excellent arguments against West Contra Costa Unified School District’s Measure E for the official voter information guide. Opposition also includes a small group of local activists who understand the debt implications of this latest bond measure. Unfortunately, the web presence of opposition arguments to Measure E is sparse. A local political and community activist, Charley Cowens, writes a blog called Mystery Education Theater 3000 about this district, which his kids went through, and there is also a blog called West Contra Costa Unified School District Quality Improvement Project. This is a tough place to advocate for fiscal responsibility.

Today (October 13, 2012), the Contra Costa Times newspaper endorsed four bond measures in San Francisco’s East Bay (Four School Bond Measures that We Believe Should Pass), but held off on discussing West Contra Costa Unified School District: “Five East Bay school districts seek voter approval Nov. 6 for bond measures to fund school construction. We recommend passage of four. We will consider the fifth, West Contra Costa’s Measure E, on Monday.” It looks like this district’s proposed bond measure will get a special editorial from the Contra Costa Times on Monday, October 15, 2012.

UPDATE: The Contra Costa Times slammed the proposed bond sales through Measure E at the West Contra Costa Unified School District: see Yes on Measure G, No on Measure E in West County – Contra Costa Times – October 15, 2012. The editorial points out that the official ballot information for Measure E neglects essential information for voters to consider (business as usual), including the huge outstanding debt obligations from five previous bond measures, the projected tax burden in a few years of $290 per $100,000 of property value, and the projection for repayment in 40 years at disproportionately high interest rates. The editorial concludes with this blunt statement:

District leaders say they need the additional bond money to complete their school construction program. That’s what they said 2½ years ago for the last bond measure. They claimed then that they needed more because rising construction costs had eroded their purchasing power. In today’s economy, that excuse won’t work. We endorsed the successful 2010 measure. But we warned that would be the last time. We meant it. As far as we are concerned, this train has run out of track. Vote no on Measure E.

3. SAN DIEGO UNIFIED SCHOOL DISTRICT – $2.8 Billion Proposition Z

No, that $2.8 billion jaw-dropping figure is not a typographical error. It represents the unapologetic arrogance of a union-controlled school board that is spending itself close to bankruptcy; in the meantime, let the good times roll!

In November 2008, voters in the San Diego Unified School District approved a ballot measure (Proposition S) authorizing the school board to borrow a whopping $2.1 billion for construction by selling bonds to investors. With a new pro-union majority also elected to the school board, the board (on a 3-2 vote) subsequently required construction companies to sign a Project Labor Agreement to work on San Diego Unified School District construction projects of more than $1 million funded by Proposition S. Unions now have total control of the San Diego school board, which has already voted 5-0 for a union Project Labor Agreement on construction funded by the proposed Proposition Z.

Of course, the San Diego Unified School District sold Capital Appreciation Bonds to bury future generations in debt. The board passed a resolution claiming they wouldn’t sell any more Capital Appreciation Bonds. (See my article Board of San Diego Unified School District Senses Voters May Reject $2.8 Billion Bond Measure (Proposition Z) Because of Board’s Past Use of Capital Appreciation Bonds.) Now the Voice of San Diego reports (on October 12, 2012 in School Officials Pitch Prop. Z As The Only Alternative to Exotic Loans) that school district officials are claiming the San Diego Unified School District will have to sell MORE Capital Appreciation Bonds if voters reject Proposition Z. Unbelievable!

The San Diego County Taxpayers Association jumped on Proposition Z right away as unworthy of voter support. This particular taxpayers’ organization in San Diego extensively researches ballot measures and is very cautious about taking opposition positions.

The San Diego Union-Tribune editorial board has urged voters to reject Proposition Z: Vote No on San Diego School Bond: It Props Up a Broken Status QuoSan Diego Union-Tribune – September 22, 2012.

4. SOLANO COMMUNITY COLLEGE DISTRICT – $348 Million Measure Q

The $124.5 million Measure G bond approved by Solano County voters in 2002 was not enough for the businesses and individuals who feed off money borrowed through bond sales. Especially interested in this new proposed $348 million bond measure are construction unions who obtained monopoly control of Measure G work with a Project Labor Agreement on Solano Community College District projects.

Stunningly, one of the board members – Catherine Ritch (representing Fairfield) – voted NO on putting the bond measure on the November ballot. Ritch was appointed to the Solano Community College District Governing Board in March 2012. She is not running in 2012 for a full term, so she could actually vote based on what is right for the people rather than for what is politically expedient. She also has a professional background as a legislative and administrative government analyst, so she was evidently too informed to be hoodwinked by this scheme.

The Fairfield Daily Republic newspaper was not impressed with the 6-1 vote to ask voters to borrow $348 million by selling bonds. In an August 5, 2012 editorial entitled “Board Appears Set for Local Tax Measures,” the Daily Republic said the following:

Solano Community College jumped on the tax bandwagon this week when trustees voted 6-1 to place a $348 million property tax measure on the November ballot. Trustee Catherine Ritch voted no, and for good reason. She said the finer points of the proposal had not been laid out completely for the board to consider, and called for the board to take “a deep breath” before approving the staff recommendation.

The Central Solano Citizen/Taxpayer Group is opposing Measure Q, as reported in Opponents Mobilize Against Local Tax MeasuresFairfield Daily Republic – October 4, 2012.

In an October 13, 2012 opinion piece in the Vallejo Times-Herald (We Deserve the Entire Story on Measure Q), Eric Christen of the Coalition for Fair Employment in Construction considered the cost increases caused by the Project Labor Agreement on construction funded by Measure G:

…now this same college [Solano Community College District], which still has governing it three of the board members who voted for the PLA [Project Labor Agreement], wants almost $350 million for another bond measure. The reason? Measure G wasn’t large enough to cover the college’s needs. Do you think they could have used that extra $24 million they wasted under a PLA?

The SCCD Governing Board should be honest about whether or not a PLA will be used on this bond should it pass. Voters should have all the information possible before voting to put themselves another $350 million in debt, especially if what they get for that debt is reduced in value in order to placate union special interests. Every candidate running for the board should also be asked whether they would vote to have a PLA placed on Measure Q.

Board members and candidates won’t answer that question. Although the answer is YES to a Project Labor Agreement, Solano County voters won’t support Measure Q if they learn that unions will get a costly government-mandated monopoly on the work.

Solano Community College District sold $1,584,811.70 in Capital Appreciation Bonds in 2005 as part of a large package of refunding bonds. Will the college board do it again on a much larger scale when they have authority from voters to sell $348 million instead of $124.5 million in bonds?

A FINAL QUESTION: Why Should You Care?

As a beleaguered Californian bombarded by bad economic and political news every day, you may now be cynically asking, “Why should I care?” You might have these thoughts:

  • If you live in or pay property taxes to one of these four educational districts, you have probably assumed that any local community opposition to the bond measure will be weak, ineffective, and easily crushed by the bank-and-union funded campaign machine that supports it.
  • If you don’t live in nor own property in one of these four educational districts, you may conclude that citizens who choose to live there accept or are resigned to seeing their school districts waste taxpayers’ money. It’s not your problem – you live elsewhere.
  • And if you live in California but don’t own any property, you may assume that these ballot measures don’t apply to you, because you don’t pay the property taxes for the principal and interest that goes to bond investors, nor the fees to financial service companies for issuing the bonds. You think you have no financial interest in the matter.

Well, you SHOULD care, for four reasons:

  1. Imagine the power of the message voters would send to the state’s political leadership if they rejected huge bond measures to pay for construction in these districts. By using their democratic power and defeating these bond measures, California citizens would nudge their elected officials toward more accountability to the taxpayers instead of the financial industry and union lobbyists.
  2. Voter rejection of bond measures in these four districts would repudiate thoughtless borrowing, taxing, and spending, including the sale of Capital Appreciation Bonds and the adoption of public policies such as Project Labor Agreements that impose costly union monopolies on taxpayer-funded construction.
  3. Voters might encourage some relatively thoughtful school board members in these four districts and other school districts to stand up to the most absurd demands from union lobbyists for more money and more laws. (Surely there are elected board members in school districts who honestly want to focus on student academic performance and aren’t warped by selfish ambitions for higher office.)
  4. Finally, voters would send a message to every California school board member that “it’s for the children” is no longer a sufficient message in itself to collect more taxes for the purpose of repaying money borrowed with interest and fees from investment banks and insurance companies.

Californians need to realize that EVERYONE in the state pays for construction in these three large school districts. The obscure State Allocation Board regularly provides matching grants for construction projects at school districts with proceeds from bond sales authorized by three past statewide propositions totaling $35.8 billion:

Even renters and consumers pay for bond measures. Property owners consider property taxes as a cost of doing business. The tax burden “trickles down” to all Californians.

In addition, Californians need to start thinking about how some of the largest beneficiaries of these bond measures are investment banks, brokerage firms, and other corporate providers of financial services. The so-called “One Percent” makes good money off of Californians’ emotional desire to “help the children.” School districts borrow money now and arrange for property owners to pay it back, along with significant interest payments and financial transaction fees.

Future generations of Californians are going to be crushed under the burdens of debt repayments for the school construction programs of today. For example, the debt of the San Diego Unified School District for school construction bonds was listed in May 2012 at $4.7 billion. It’s time to Close the Spigot and protect those future generations.

Signing the Union Project Labor Agreement to Work at the San Diego Unified School District Is a Perilous Exercise

UPDATE, September 7, 2012: I found a letter embedded in one of the grievance files that actually belongs to another grievance not provided to me by the SDUSD (I’ve added it to the list below), and I’ve learned about another grievance not provided to me by the SDUSD. I will be asking the school district to do a second check of their files, so my compilation of grievances is complete.


In the past 18 months, a few small construction companies have contacted me after unions tangled them up in costly and confusing contractual issues related to working under the Project Labor Agreement imposed by the board of education of the San Diego Unified School District. Contractors must sign this Project Labor Agreement with the San Diego Unified School District and unions in the San Diego County Building and Construction Trades Council to work on construction projects of $1 million or more funded by bonds sold under the authority of Proposition S, approved by voters in November 2008.

The school board approved this union agreement in 2009 on a 3-2 vote, to the great jubilation of union officials. As a result of a subsequent 5-0 vote of a new school board in July 2012, the union agreement will also apply to construction funded by bonds sold under the authority of Proposition Z, if voters approve that $2.8 billion bond measure on the November 6, 2012 ballot. (The San Diego County Taxpayers Association is opposed to Proposition Z.)

To ascertain the extent of the difficulties that small contractors can experience when signing this Project Labor Agreement, I requested the following records from the San Diego Unified School District:

All records generated by the SDUSD or provided to the SDUSD since July 28, 2009 concerning disputes and grievances between and/or among contractors and unions and the district that have been addressed under Article VI of the Project Stabilization Agreement (Work Stoppages and Lockouts), Article VIII of the Project Stabilization Agreement (Work Assignments and Jurisdictional Disputes), Article IX of the Project Stabilization Agreement (Management Rights), and Article X of the Project Stabilization Agreement (Settlements of Grievances and Disputes). For example, please provide all records, including grievances, concerning disputes between the Operating Engineers union and the Laborers union over trade jurisdiction.

I obtained the records in person at the school district headquarters last week. (The main receptionist and the staff at Legal Services were quite helpful, even though I arrived at 4:55 p.m.)

Unions have filed TEN at least ELEVEN grievances under the Project Labor Agreement as of the end of July 2012. Nine At least ten were against construction companies, and one was against the school district.

The San Diego Unified School District has compiled a log listing the grievances filed by unions under the Project Labor Agreement. This log does not completely match up with the actual documents. The list and summary below is based on the actual documents provided by the school district about the grievances:

Operating Engineers Union Local No. 12 went after Crown Fence Company for having a worker on the job site who was not referred from the union hiring hall. The union demanded $64.54 per hour worked by the employee to be paid into a union trust fund. See SDUSD PLA Grievance Crown Fence Company.

Ironworkers Union Local No. 229 went after Triton Structural Concrete claiming that the company improperly assigned bleacher construction to trades other than the Ironworkers. In the end, the union decided to “respectfully withdraw the grievance” so the bleachers could be finished on schedule for mid-September 2011. It appears that Worldbridge Technologies may have also been involved in this dispute. See SDUSD PLA Grievance Triton Structural Concrete.

Operating Engineers Union Local No. 12 went after FenceCorp., Inc.  for having a worker on the job site who was not referred from the union hiring hall. The union demanded $64.54 per hour worked by the employee to be paid into a union trust fund. See SDUSD PLA Grievance FenceCorp, Inc.

Plumbers and Pipefitters Union Local No. 230 went after Rand Engineering claiming that the company improperly assigned “installation of piping for potable water, sewer, and storm drain” as work under the Laborers jurisdiction rather than the Plumbers and Pipefitters jurisdiction. It appears that Quality Plumbing may have also been involved in this dispute. See SDUSD PLA Grievance Rand Engineering.

Plumbers and Pipefitters Union Local No. 230 went after Bert W. Salas, Inc. claiming that the company improperly assigned “installation of piping for potable water, sewer, and storm drain” as work under the Laborers jurisdiction rather than the Plumbers and Pipefitters jurisdiction. The two unions fought over the assignment, the Project Labor Agreement administrator Parsons Construction, Inc. became involved, and there was an arbitration hearing. See SDUSD PLA Grievance Bert W. Salas, Inc.

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.

International Brotherhood of Electrical Workers (IBEW) Union Local No. 569 went after Logical Choice Technologies claiming that certain work performed by the company’s employees was covered under the scope of the Project Labor Agreement. The contractor contended that the work was excluded under Section 2.3 of the union agreement. The dispute went to arbitration and lawyers became involved. See SDUSD PLA Grievance Logical Choice Technologies.

The United Union of Roofers, Waterproofers and Allied Workers Local Union No. 45 went after Mark Beamish Waterproofing claiming that the company improperly assigned “installation of Polyguard below-grade waterproofing” as work under the Painters union jurisdiction rather than the Waterproofers union jurisdiction. The two unions fought over the assignment, the Project Labor Agreement administrator Parsons Construction, Inc. became involved, and lawyers were called in. See SDUSD PLA Grievance Mark Beamish Waterproofing.

The United Union of Roofers, Waterproofers and Allied Workers Local Union No. 45 went after Roger H. Proulx claiming that the company improperly assigned waterproofing work to the Laborers union. The company changed the classification of the work. See SDUSD PLA Grievance Roger H. Proulx.

NEW ADDITION: The Laborers International Union of North America (LIUNA) Local No. 89 went after Mission Valley Landscape claiming that the company improperly assigned work to the Landscaping and Irrigation (Plumbers) Union Local No. 345. See SDUSD PLA Grievance Mission Valley Landscape.

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.

This is more evidence for non-union contractors (especially subcontractors in certain trades) that signing a Project Labor Agreement as a condition of winning a job can be a perilous exercise. It can result in significant financial losses or even going out of business if the public entity withholds payments to your company as the grievance is adjudicated.

For taxpayers, why do you vote for school board members who focus on requiring contractors to sign Project Labor Agreements with unions? What do the grievance procedures of Project Labor Agreements have to do with educating students?

Keep in mind that the board of education of the San Diego Unified School District was authorized by voters in 2008 to borrow money for school construction by selling $2.1 billion in bonds to investors, who will make money on the interest. The school district has sold Capital Appreciation Bonds, which accrue a huge amount of compounded interest to be paid back as taxes by future generations of district residents. It now wants approval from voters in November 2012 to borrow another $2.8 billion from investors by selling bonds, to be paid back later with interest. Overhanging it all is the school board’s mandate that construction companies sign an agreement with unions as a condition of work.

Board of San Diego Unified School District Senses Voters May Reject $2.8 Billion Bond Measure (Proposition Z) Because of Board’s Past Use of Capital Appreciation Bonds

“Board of Education” is displayed on the outside of the board’s meeting room at San Diego Unified School District headquarters. Oversized portraits of board members have not been hung – yet.

The board of education of the San Diego Unified School District wants permission from voters on November 6, 2012 to borrow more money for school construction by selling another $2.8 billion worth of bonds to investors. (The $2.8 billion amount does not include interest payments and transaction fees.) The ballot measure is designated as Proposition Z.

In November 2008, 68.71% of voters in the school district approved the $2.1 billion Proposition S. This bond measure remains controversial because the newly elected pro-union majority subsequently voted 3-2 to require construction contractors to sign a Project Labor Agreement (PLA) with unions for projects of $1 million or more funded wholly or in part by Proposition S.

The current school board – now made up of five pro-union board members – recognized that the proposed Proposition Z bond measure would inevitably draw opposition because of the Project Labor Agreement on projects funded by Proposition S. They made a political calculation and voted on July 24, 2012 to apply the Project Labor Agreement to Proposition Z as well as Proposition S. This locked in the campaign support of the San Diego County Building and Construction Trades Council for a tough campaign. (Proposition Z is already opposed by the San Diego County Taxpayers Association.)

But now a new and unexpected campaign vulnerability looms for the San Diego Unified School District’s proposed $2.8 billion Proposition Z: the sale of Capital Appreciation Bonds.

One of the school districts bordering the San Diego Unified School District – the Poway Unified School District – is now getting national news attention because its board decided in 2011 to borrow $105,000,150 by selling Capital Appreciation Bonds. Taxpayers will need to pay investors $981,562,329 by 2052. See page 12 of the Poway Unified School District’s Proposition C Bond Building Fund Annual Audit Report, January 31, 2012.

The San Diego Unified School District was also in on the Capital Appreciation Bond racket, big-time.

For example, the San Diego Unified School District board of education voted on March 24, 2009 to authorize what became a sale of $131,157,580.95 in Capital Appreciation Bonds for Proposition S. To complicate matters, $73,168,837.40 of those bonds (but not the other $57,988,743.55) would convert to the more traditional current interest bonds in 2019. The interest on borrowing that $131 million would total $273,994,919.05 by 2033, with the interest backloaded to the end of the maturity period, of course. Based on this 2011 San Diego Unified School District annual audit report, it would be accurate to say that taxpayers are paying $405 million through 2033 to borrow $131 million in 2009 through the “2008 Series A” bond sales.

Perhaps the school board let this happen because it was preoccupied with negotiating the Project Labor Agreement to fulfill the demands of construction union lobbyists. Either that, or it just didn’t care about how the specifics of its bond sales would affect future taxpayers.

Even worse is the $163,869,784 that the San Diego Unified School District borrowed from investors through the “2008 Series C” bond sales. Interest on that $164 million will total $740,360,216 by the time the bonds mature in 2050. It would be accurate to say that taxpayers are paying $904 million through 2050 to borrow $164 million in 2010 through the “2008 Series C” bond sales.

That’s $1.3 billion to borrow $295 million. Not as bad as the Poway Unified School District, but it’s unlikely many voters in the district would have voted for Proposition S if they understood what it would truly cost taxpayers to borrow money for school construction.

And you can’t blame the voters. The people who approved Proposition S in November 2008 didn’t know that the district would sell Capital Appreciation Bonds, rather than the traditional “current interest bonds” for which interest is paid out twice a year to investors. (Actually, I’ll make a guess that most people who voted for Proposition S couldn’t explain a bond if they were asked – they just wanted to help the kids.)

Now the board of education for the San Diego Unified School District needs to neutralize the Capital Appreciation Bond issue before it sinks the proposed Proposition Z. The board president John Lee Evans has declared that the board will consider a resolution stating it will not sell any more Capital Appreciation Bonds.

SD Unified to Consider Bond Restrictions – San Diego Union-Tribune – August 23, 2012

City Schools Prez Pledges No Exotic Financing on New Bond – Voice of San Diego – August 23, 2012