Tag Archive for Vallejo Times-Herald

California Public Agencies Revert to Closed Session When Construction Unions Have a Spat Over Who Gets Taxpayers’ Money

UPDATE (November 13, 2013): At its November 12, 2013 meeting, the board of trustees for Rancho Santiago Community College District voted unanimously to continue a practice adopted in August 2013 not to discuss its Measure Q Project Labor Agreement negotiations in closed session until the college chancellor gets legal clarification from California Attorney General Kamala Harris. An opinion from the Attorney General is not likely to be produced for several months.

Speaking in support of having the discussions in open session was Dave Everett, Government Affairs Director for the Southern California Chapter of Associated Builders and Contractors, and Craig Alexander of the Pacific Justice Institute. On behalf of trustee Phil Yarbrough, Alexander wrote a November 5, 2013 memo to the board explaining why discussing Project Labor Agreement negotiations in closed session was not legal.

The head of the Los Angeles/Orange County Building and Construction Trades Council was at the meeting but didn’t speak. Also silent was board member José Solorio, who is running for California State Senate in 2014 and appears to be the impetus for the Project Labor Agreement.

During his public comments, Dave Everett asked the college to identify its source for the list of local governments that have discussed Project Labor Agreements in closed session. The chancellor responded that staff obtained the list, but Mr. Everett then asked if those governments had indicated their closed session discussions on public meeting agendas. The chancellor did not know. Mr. Everett then expressed concern that the list was provided by a union lawyer based on personal experience and knowledge – not a reliable source of information for making decisions concerning a $198 million bond measure.

In addition, when the board president asked Mr. Everett if he assumed the construction plan would not move forward while the college and unions were negotiating a Project Labor Agreement, Mr. Everett responded by asking “Are they planning the projects with or without a PLA?” The board president replied “I’m not going to tell you that”  and then the Chancellor declared the exchange to be out of order.

Thank you to elected trustee Phil Yarbrough for being a champion of the people on this issue.


There are always a few “people on the fringe” who stubbornly fight for what is right after most people choose to acquiesce to the prevailing culture for their own good and the alleged “common good.” I’m told that a few aggressive opponents of the construction union political agenda are spoiling negotiations for “peace in our time” and making California’s political, corporate, and union leaders very angry.

Construction trade union lobbyists and lawyers are continuing to advance legislative strategies that will neutralize these people, described as “radicals” by one union official. These union strategies eliminate or circumvent structural checks and balances that advocates of fair and open competition use to expose and derail Project Labor Agreements and other union initiatives.

In my September 17, 2013 article in www.UnionWatch.org (California Construction Unions Circumvent Public Scrutiny of Project Labor Agreements), I reported on “the end of public deliberation and votes for Project Labor Agreements in the legislative branch of state and local governments. Instead, backroom deals are made in the executive branch to give unions control of the work.”

Now, in my November 9, 2013 article in www.FlashReport.org entitled Smoothing Over Project Labor Agreement Disputes in Closed Session: The Latest Union Scheme for “Progress” in California, I report that “In order to evade public scrutiny of government-mandated Project Labor Agreements (PLAs) for construction contracts, union officials are implementing a strategy to redirect certain discussions of this controversial issue into ‘closed session’ at board meetings of government agencies.” The board of trustees for the Rancho Santiago Community College District will discuss the legality of the practice at its November 12, 2013 meeting.

The public learned about this abuse of “closed session” through my July 23, 2013 article in www.LaborIssuesSolutions.com entitled Project Labor Agreement Negotiations Fail, Government Transparency Is Restored, Ferry Agency Resumes Fair and Open Bid Competition, followed by a July 27, 2013 article in the Vallejo Times-HeraldVallejo Ferry Hub Accord in Jeopardy.

It’s not hard to figure out what’s happening. Ultimately, the negotiation and execution of Project Labor Agreements for government projects will always occur administratively through backroom deals, without unpleasant and embarrassing public discussions and votes. The perspectives of the Coalition for Fair Employment in Construction, Associated Builders and Contractors, certain districts and chapters of Associated General Contractors, the Western Electrical Contractors Association, and local business and taxpayer groups will be moot.

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

Solano County’s Measure Q Looks Vulnerable to Defeat: Will Voters Refuse to Authorize Solano County Community College to Borrow $348 Million Through Bond Sales?

What happens when you live in an elite socio-intellectual enclave where everyone agrees with your worldview? You’re shocked when you discover ordinary people who disagree with your plan to take and use their money. I suspect that’s the reason why Measure Q in Solano County (in the San Francisco Bay Area, stretching toward Sacramento) is now vulnerable to defeat.

Measure Q authorizes the Solano County Community College District to borrow $348 million for construction by selling bonds to wealthy individuals and institutional investors. Solano County taxpayers will need to pay this $348 million back, plus interest payments. (It’s not free money.)

In November 2002, 55.6% voters in Solano County barely approved Measure G, which authorized the Solano Community College District to borrow $124.5 million for construction by selling bonds. (The threshold for approval was 55%.) The governing board then voted 6-1 in April 2004 to force contractors to sign a Project Labor Agreement with the Napa-Solano Building and Construction Trades Council to work on Solano County Community College District projects funded by proceeds from bond sales authorized by Measure G. This union deal received ample news media attention and public criticism.

Despite these warning signs, the people now pushing Measure Q obviously were unprepared for aggressive opposition. The Yes on Q campaign is apparently relying on rudimentary campaign web sites (www.solanocollegeyesonq.com and www.facebook.com/YesOnQSolanoCollege) and endorsements from local politicians to win over Solano County voters. The Vacaville Reporter criticized the backers of Measure Q in an October 13 editorial:

Where in the world is the campaign for Solano Community College’s Measure Q? And what does it say that the college faculty this week sponsored a voter registration drive and campus forum on statewide ballot measures but not, according to its press release, on the local bond?

Perhaps this lack of action from unions explains why Measure Q supporters are pressuring chambers of commerce in cities such as Vallejo to support this tax increase. (See Chamber Seeks to Avoid Controversy on Measure Q – Vallejo Times-Herald – October 14, 2012).

The identities of the big backers of Measure Q are no surprise: it’s the Napa and Solano Counties Central Labor Council, with the Napa-Solano Building and Construction Trades Council and its various construction trade unions.

I think Solano County’s top union officials will need to call some bond brokers and other financial services firms in New York City and get some more money for mailers and KUIC radio commercials, quick! In the meantime, here’s what’s happening in the campaign against the $348 million (plus interest) Measure Q:

According to an October 11 article in the Vacaville Reporter (Solano County Taxpayers Association Issues Their Proposition Recommendations), the Solano County Taxpayers Association opposes Measure Q because it is “a 40-year dream for the college that includes buildings that were listed on the previous bond that is still unpaid.”

The Central Solano Citizen/Taxpayer Group is opposing Measure Q, as reported in Opponents Mobilize Against Local Tax Measures – Fairfield Daily Republic – October 4, 2012. As reported in an October 20, 2012 article in the Fairfield Daily Republic (Aging, Limited Facilities at Heart of Solano College Bond Effort), “opponents and Trustee Catherine Ritch have questioned the timing of the bond, saying there are still aspects of the planning that need to be done. A formal opposition was recently formed to Measure Q by the Central Solano Citizen/Taxpayer Group, which said the bond isn’t specific enough and some of the projects won’t directly benefit students.”

Here’s what the Central Solano Citizen/Taxpayer Group posted on its web site about Measure Q:

Make no mistake: This is a huge tax! For what purpose? We start by asking, What did the district do with the $125 million bond measure passed 10 years ago? Why weren’t “earthquake/fire safety code” issues taken care of then? Next, Why are computers and office equipment in the bond? Such things will be obsolete and discarded in a few years; but we’ll be paying for them for decades. Now look at the objectives listed. Notice how vague they are. No specific projects. No timetable. Measure Q is a blank check for almost anything the board wants to do. Finally, we’re still paying for the last bond, and will be for another 20 years. Measure Q will double or triple what you’re paying now, and for 40 years. Everyone will pay: individuals, businesses, even renters when the landlord adds the tax – yes, it’s a tax – into your rent. Remember, Solano Community College was on probation for administrative issues – like accounting for funds – and is still on the “warning” list. Don’t you have doubts about handing over so much money? Don’t you think we’re taxed more than enough already? Vote NO on Measure Q.

On October 17, the 6-1 tax-and-spend majority on the Governing Board of the Solano Community College District was stunned when someone actually showed up in their lair in Vallejo to speak out against their agenda. Here is a report from Eric Christen of the Coalition for Fair Employment in Construction:

The meeting began at 6:30 p.m., and other than the Trustees, the room contained only a few staff and a reporter for the college newspaper. This is how entities like this prefer it: no public oversight and never having to answer to the public for their actions or lack thereof. They just want your tax dollars with zero accountability. Government defined.

Last night, however, these Trustees were held accountable to the public at least for 3 minutes while I explained in great detail why it is they did not deserve to be given any more tax dollars in the form of construction bond money.

I reminded them that in 2004 the Solano Community College Governing Board placed a union-crafted Project Labor Agreement (PLA) on Measure G bond work. The $124.5 million Measure G had been passed by voters in 2002 with no hint that a controversial PLA would be used. The PLA vote occurred despite vigorous opposition from local contractors and contractor associations such as ours.

For the new Trustees who weren’t on the board at that time, I explained how PLAs force workers to pay union dues, pay into union pension plans, be hired through a union hiring hall, and explicitly forbid non-union apprentices from working at all. I did thank them in that because of their actions, and others, PLAs had become so controversial that they have been banned in 11 entities in California including the City of San Diego, where in June citizens voted 58%-42% to forbid them.

I also reminded then that at the time of their vote in 2003 the College’s own construction manager told the board a PLA would add 5-15% to the cost of any project. Last summer, I further explained, the most comprehensive study on Project Labor Agreements ever conducted was released by the National University System Institute for Policy Research and found PLAs add 13-15% to the cost of a project. What that means for SCCD was their $124.5 million bond was reduced by up to $24 million in value.

Finally I stated that SCCD now wants another bond, this time for $348 million. The reason? Measure G wasn’t large enough to cover their needs. I asked them if they thought they could have used that extra $24 million they wasted under a PLA.

I left them with the promise that my editorial that ran in the county’s newspapers (We Deserve the Entire Story on Measure QVallejo Times-Herald – October 13, 2012 and PLAs a Waste of MoneyVacaville Reporter – October 14, 2012) was just the opening salvo in what would be an escalating campaign to educate voters about why they need to think twice before giving any more money to this college. Two of the three board members who were on the board in 2003 and who voted for the PLA (Honeychurch and McCaffery) and who are still on the board were less than thrilled to have me there calling them out.

The Coalition for Fair Employment in Construction issued a press release on October 17 in conjunction with this public comment: Solano Community College District Trustees Being Called Out Tonight About Their Plans to Place New $350 Million Construction Bond Under a Union-Friendly Project Labor Agreement.

Finally, a professor in the Solano Community College engineering and physics department is perplexed by the college board’s logic in trying to borrow another $348 million for construction: Concerns About Measure QVacaville Reporter – October 14, 2012 and Measure Q IssuesVallejo Times-Herald – October 10, 2012. Give her a Profile in Courage award.

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.