Tag Archive for Voice of San Diego

California’s 2010 Law Changing the Crime Classification for Petty Marijuana Possession Reduced Workload for District Attorneys and Courts

Thanksgiving dinner at the Dayton household featured relatives and friends from San Francisco and Berkeley who are active in leftist causes and jubilant about the election results. Meanwhile, I was bemoaning the lack of present and future market demand in California for policy analysts and political consultants who advocate for minimalist government.

From their perspective, there was a solution: work with a campaign to convince a majority of California voters to legalize marijuana, as voters did in Colorado and Washington in the November 6 election.

Factions on both the Left and Right could agree that this step would give Californians more personal freedom from intrusive government and reduce the costs of law enforcement, courts, and prison, thus saving money for taxpayers and allowing the government to focus limited resources on more serious threats to an orderly, functioning society. The product could also be taxed as a source of revenue. In addition, such a campaign might introduce concepts of economic and personal freedom to California citizens who don’t often respond to the typical message and delivery from the Right. See the November 14, 2012 Cato Institute article A Time for Choosing: The GOP and the Marijuana Initiatives for this kind of thinking.

I was reminded of the Thanksgiving dinner advice when I saw tweets this morning from Scott Lewis, a reporter for the Voice of San Diego web news site. He wrote that the San Diego Association of Governments (SANDAG) reported 6,783 misdemeanor marijuana arrests in San Diego County in 2010, but only 703 in 2011. That’s a 90% drop in arrests. (The San Diego Union-Tribune has now reported this in the November 28, 2012 article Marijuana Arrests Plummet 90% Countywide.)

I immediately knew the reason for the drop, but people in San Diego replied with tweets asking if this was because of lack of enforcement, a drop in use, or the presence of medical marijuana dispensaries. All of these guesses were wrong but understandable, because Californians have dramatically inaccurate perceptions about the state’s marijuana laws.

As the reporter subsequently confirmed with another tweet, it’s because of an obscure change in state law in 2010, explained below. I tweeted a question on whether or not anyone had compiled the statewide statistics on misdemeanor marijuana arrests and/or estimated the savings for county district attorneys and the judicial branch. I’m looking forward to an answer.

Petty Marijuana Possession in California Ceased to Be a Felony in 1975, and It Ceased to Be a Misdemeanor in 2010

June 26, 2001 analysis of Senate Bill 791 for the Assembly Committee on Public Safety corrected a common misperception among Californians that hundreds of thousands of people are in prison because they were caught with a small amount of marijuana:

…possession of less than one ounce of marijuana was essentially decriminalized in 1975 with the passage of the Moscone Act. Up until that time, possession of any amount of marijuana was a felony, punishable by up to ten years in prison. In 1974, felony marijuana arrests peaked at nearly 100,000 (99,597), representing about one-fourth (24.75 percent) of the felony arrests in the state and over two-thirds (69.21 percent) of the state’s felony drug arrests.

Even though possession of one ounce (28.5 grams) or less of marijuana was no longer an offense for jail or prison (outside of some exceptions that continue today), the violation remained a misdemeanor to be addressed in trial courts. It was claimed that the misdemeanor classification was costly and absurd, because “there exists no disincentive for the accused to drain the resources of the state and the courts with a lengthy trial” that would simply result in a $100 fine if a judge or jury found the defendant to be guilty.

Few Californians know that in the waning days of his administration, Governor Arnold Schwarzenegger signed Senate Bill 1449, introduced by State Senator Mark Leno (D-San Francisco), which changed the classification of crime for possessing one ounce (28.5 grams) or less of marijuana from a criminal misdemeanor to a civil infraction that simply triggers a $100 fine. (To put this amount in perspective, California drivers are fined between $400 and $500 when photographed running a red light.)

At that time, California voters were about to decide on a statewide marijuana legalization ballot measure, Proposition 19, called the “Regulate, Control and Tax Cannabis Act of 2010.” Opponents of Proposition 19 thought Senate Bill 1449 could blunt voter support for Proposition 19. It did lose in the end, 53.5% to 46.5%.

Theories abound as to why a majority of voters rejected Proposition 19, with one being that some voters thought Senate Bill 1449 was acceptable but full-fledged legalization was too extreme. Another reasonable guess is that some voters agreed with the arguments of business groups and news organizations that Proposition 19 was poorly written and would undermine company drug policies, and it would even give people flexibility to drive under the influence of marijuana. (My former employer, Associated Builders and Contractors (ABC) of California, opposed Proposition 19 because it did not want construction workers on dangerous job sites to use Proposition 19 as a basis to evade company drug policies.)

Converting Petty Marijuana Possession from a Misdemeanor to an Infraction

Senate Bill 1449 was promoted as a way for the State of California to reduce the expenditures of the judicial branch by eliminating the involvement of trial courts in petty marijuana possession cases. The bill analysis for SB 1449 noted that “the number of misdemeanor marijuana possession arrests have surged in recent years, reaching 61,388 in 2008.”

According to an April 21, 2010 analysis of Senate Bill 1449 for the Senate Rules Committee and a June 22, 2010 analysis of Senate Bill 1449 for the Assembly Committee on Public Safety, supporters of the bill included the American Civil Liberties Union, the California Attorneys for Criminal Justice, the California District Attorneys Association, the National Organization for the Reform of Marijuana Laws – California, the District Attorney of San Diego, the Drug Policy Alliance, the Friends Committee on Legislation of California, and most significantly, the Judicial Council of California. Opponents listed in the April 21 analysis were the California Narcotics Officers Association, the California Peace Officers Association, and the California Police Chiefs Association. No opponents of SB 1449 were listed in the June 22 analysis.

A handful of Democrats voted against Senate Bill 1449. Two Republicans voted for it: Assemblyman Anthony Adams, who was not running again after supporting a budget deal in 2009 that raised taxes, and Assemblyman Chris Norby, a former Orange County supervisor whose voting record reflected a libertarian philosophy.

After being the lone champion in the state legislature of proposals unpopular with the Establishment – such as eliminating redevelopment agencies – Norby was defeated for re-election in November 2012 by a Democrat supported by every organization in Sacramento that feeds off the government. In Norby’s farewell statement issued today (November 28, 2012) and published on the OC Politics Blog as Verbatim: Chris Norby’s Goodbye, he wrote the following about his work on marijuana laws:

As for marijuana, I was happy to provide bipartisan support to legalize the growing of industrial hemp, and for more rational laws in dealing with its recreational use. The War on Drugs has become a war on people – especially poor people. It costs billions in incarceration and in broken lives of those whose only crime was ingesting a substance into their own bodies. Is this a criminal issue or health issue? Consensual, non-violent adult activity should not be subject to our costly criminal justice system or militarize our relations with other countries.

Republican leaders love to blast the over-intrusive “nanny state,” yet for cultural reasons most shy away from advocating common sense drug laws. Some have not shied away: influential columnists William F. Buckley and George Will, Reps. Ron Paul (R-Texas) and Dana Rohrabacher (R-Huntington Beach), Rep. and Sen.-elect Jeff Flake (R-Arizona), and former Secretary of State George Shultz. Where are the Democrats? The current presidential administration has raided more medical marijuana dispensaries than its Republican predecessor.

Another Republican who supported the change in petty marijuana possession from misdemeanor to infraction was former Santa Cruz State Senator Bruce McPherson, who introduced essentially the same bill as Senate Bill 791 in 2001. According to a June 26, 2001 analysis of Senate Bill 791 for the Assembly Committee on Public Safety, that bill was supported by the California Council of Police and Sheriffs, the Judicial Council of California, the Los Angeles District Attorney’s Office, and National Organization for the Reform of Marijuana Laws. Opponents listed in the analysis were the California Narcotics Officers’ Association, the California Peace Officers’ Association, and the California Police Chiefs’ Association – the same three groups that opposed SB 1449 nine years later.

Also opposing SB 791 was the “Committee on Moral Concerns,” a group active in the 1990s against medical marijuana but now appears to be defunct. This group argued that “It sends the message that marijuana use carries little or no legal risk and, therefore, is nearly acceptable. Strengthening the law, instead of weakening it, would save the lives of thousands.”

The bill passed the Senate 23-13 but was defeated in the Assembly 44-14. Only one Republican voted for it: Senator Tom McClintock, who now represents California’s 4th Congressional District.

Senator McPherson was subsequently appointed by Governor Schwarzenegger as California Secretary of State in 2005 after the Democrat incumbent resigned in disgrace. He lost to Democrat Debra Bowen when he ran for a full term in 2006. He quit the Republican Party in June 2012 when he was running for Santa Cruz County Board of Supervisors. It appears he barely won (with 50.33%) against a Democrat in the November 6, 2012 election.

Will the California Republican Party Ever Lean Toward Marijuana Legalization? If So, Would Californians Be More Willing to Give Republicans a Chance to Govern?

Of the four Republican legislators who voted to reduce the penalty for petty marijuana possession from a misdemeanor to an infraction, one was repudiated for supporting a tax increase, another was appointed to a statewide office, lost the election, and then quit the Republican Party to run for county supervisor, and a third was rejected by voters in favor of a Democrat. Not an impressive track record. Only Tom McClintock is still holding an office, but note McClintock was unsuccessful as a replacement candidate for Governor in the 2003 recall election.

And Governor Schwarzenegger – the Republican who signed the bill – certainly didn’t leave office popular with Republican Party leaders and activists, not to mention Californians at large. (Wait until the Global Warming Solutions Act of 2006 – Assembly Bill 32 – really begins kicking in!)

Among the groups taking a position on reducing the penalty for petty marijuana possession from a misdemeanor to an infraction, the district attorneys would seem to be the group most palatable to Republican voters. The district attorneys’ support for Senate Bill 1149 (2010) and Senate Bill 791 (2001) was based on pragmatic, fiscal concerns. Even then, few Republicans were in favor of the change. This is a case in which moral connotations and implications seem to have primacy over saving money for taxpayers.

Some people on both the Left and the Right feel that government should serve as an authoritative or guiding force for public morality. Others on both the Left and the Right fear government when it serves as an authoritative or guiding force for public morality. That debate will continue in the realms of intellectual ideas, such as constitutional law, philosophy, and theology.

Meanwhile, we can now measure the short-term fiscal impact of weaker drug laws on government expenditures and see how the government is redistributing limited resources to reduce violent crime and protect property. It looks like Senate Bill 1449 greatly reduced law enforcement and judicial activity for one kind of crime. The states of Colorado and Washington are now serving as pilot programs to see the effect of outright legalization. For California leaders who believe that minimalist government is the best approach, the next year will bring some interesting new insights.

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.

CEQA Greenmail Still Effective for Unions in San Diego: Just a Cost of Doing Business for Pragmatic Civic Leaders

The San Diego Daily Transcript business newspaper today (October 10, 2012) published an opinion piece from Eric Christen of the Coalition for Fair Employment in Construction entitled Unions Manipulate City Leaders with CEQA Threats.

In the commentary about union objections under the California Environmental Quality Act (CEQA) to the proposed expansion of the San Diego Convention Center, Christen contends that business, political, and community leaders in San Diego have essentially surrendered to the organizing agenda of union leaders. Unions and their lawyers have effectively exploited the California Environmental Quality Act (CEQA) to block proposed projects until the developer signs a Project Labor Agreement for construction and a neutrality agreement leading to a collective bargaining agreement for the permanent workforce. Eric writes the following:

In San Diego, the city’s civic leaders regard union CEQA abuse as a customary part of doing business. Instead of exposing it and shaming the perpetrators, they say nothing publicly and surrender to it privately. Then they pass the costs to the taxpayers and consumers.

Why aren’t San Diego business, community and political leaders — other than Councilman Carl DeMaio — holding these union officials accountable for their CEQA extortion on the proposed Convention Center expansion? Why aren’t they highlighting this incident as an outrageous example of CEQA abuse?

Apparently America’s Finest City is fine with this “cost of doing business in San Diego.” What an outrage.

I’m guessing that civic leaders and big developers closely observed how Nashville-based Gaylord Entertainment exposed and resisted the union environmental extortion in 2007 and 2008 against the proposed $1.2 billion Chula Vista Bayfront Hotel and Convention Center. The San Diego news media covered the story extensively, and ultimately it led to voters in the City of Chula Vista approving a ballot measure (Measure G) that prohibits the city from entering into contracts that require contractors to sign Project Labor Agreements.

Apparently, San Diego union leaders strategically determined that either Gaylord Entertainment would succumb to their demands to build and operate its facility exclusively with union workers, or Gaylord would never build it. After Gaylord Entertainment finally abandoned its plan to build the Chula Vista project and instead began construction of a facility in Mesa, Arizona, the Political Director/Organizer of the International Brotherhood of Electrical Workers Local Union No. 569 was proud, as she acknowledged to the now-defunct San Diego News Network in the July 6, 2009 profile Union Leader Badgley Shares Her Journey with IBEW 569:

Q: What accomplishment are you proud of?

A: Gaylord. We put a lot of resources into organizing the bay front in Chula Vista. It’s one of the last pieces of undeveloped land on the water, and we wanted something that was good for the environment and good for the workers. We worked with the environmental community, the trade show unions, the hotel and restaurant workers, and we tried to make sure that the project would be good for the environment and the workers. In some ways, I’ll take the blame. You have to respect the workers and the environment. We were asked, “Isn’t something better than nothing?” Our feeling is that if we build it right, we can build more.

(Nashville, Tenn.-based Gaylord Entertainment wanted to build a 1,500 room hotel and convention center on the Chula Vista bay front. In 2007, the company pulled out allegedly because it could not reach an agreement with labor unions. It then continued negotiating, and pulled out again a year later because it could not get financing.)

I believe we sent a strong message about the power and commitment of San Diego’s electrical workforce with the Gaylord campaign. We are committed to continue to make sure that whatever is built on the bayfront must create good, green, local careers.

Now we see San Diego developers and their community allies waving white flags, even as San Diego is close to having a free market-oriented mayor and a Republican city council majority, and even as voters in the County of San Diego and in the cities of San Diego, Chula Vista, Oceanside, and El Cajon have expressed their views on union monopolies by prohibiting government-mandated Project Labor Agreements through ballot measures.

For example, an article today in the October 10, 2012 San Diego Union-Tribune (Lane Field Hotels Approved by Port) reported that the Lane Field developers (Rob Lankford, architect John Portman & Associates and contractor Hensel Phelps) surrendered to union demands in order to get two proposed hotels approved and finally under construction:

Developers also avoided opposition from labor groups by agreeing to require union construction labor and welcome unionized workers at the finished hotels…But Trammer said underground parking could add nearly $18 million to the $115 million construction cost, roughly the same it will cost to use union labor.

So this is another Project Labor Agreement won by the San Diego County Building and Construction Trades Council (costing the developers an extra $18 million), and another neutrality agreement won by UNITE-HERE Local Union No. 30 to be imposed on a hotel operator who hasn’t even been identified yet. Again outraged by another surrender to extortion, Eric Christen posted a comment in response to the article:

Once again we see that threats of environmental lawsuits filed by labor unions would have been used had not the owner of this project not agreed to use union labor. And this is not laid out by the writer more explicitly why? This same writer just covered the Port Commission meeting two weeks ago where the unions dropped 150 pages of comments via their lawyers on the Convention Center Expansion yet these two striking similar projects but totally different union responses are not connected here.

This of course follows a decade of unions pulling this greenmail starting with Petco Park to this current project, and of course chasing Gaylord out of the state was their crowning achievement.

This extortion that unions use on projects that do not agree to use union labor is astounding. The silence form (sic) developers and the press on this is equally astounding.

As outlined in the www.PhonyUnionTreeHuggers.com article Lane Field in San Diego: UNITE-HERE Local 30 Doesn’t Like a Proposed Hotel, UNITE-HERE Local Union No. 30 had hired the law firm of Adams Broadwell Joseph & Cardozo to identify and submit substantial environmental objections to the project under CEQA.

And here is a THIRD example of union greenmail working its magic. A September 28, 2012 article in Voice of San Diego (U-T CEO Denies Threatening Port; New Email Emerges) revealed that developers who want to convert the Tenth Avenue Marine Terminal into a new sports/entertainment complex are seeking input and advice from Tom Lemmon, the head of the San Diego County Building and Construction Trades Council. The email was released by Lorena Gonzalez, the head of the San Diego and Imperial Counties Labor Council.

These three examples from just the last three weeks show that labor unions have been able to use CEQA to control anything having to do with downtown project development in the City of San Diego, particularly within the Port of San Diego‘s jurisdiction. Giving into union CEQA extortion is indeed a “cost of doing business” in San Diego (and throughout California).

Is this surprising, knowing the nature of humanity? After all, paying people off to avoid unwanted artificially-placed obstacles has probably been a standard way of doing business in most places in most times throughout human history. This country is not particularly clean: the United States is only ranked 24th in 2011 on the Transparency International annual Corruption Perceptions Index, with corruption defined as “the abuse of entrusted power for private gain.”

California’s urban local governments near the coast are generally fiscally irresponsible, mismanaged, unaccountable, and governed by pragmatists (at best) or compulsive criminals (at worst). These are ripe conditions for unions, corporate entities, and other self-interested organizations to infect and pervert government and commerce. The republican (lower case “r”) structure of checks and balances in American government works haphazardly in these cities; in particular, citizens fail to fulfill their necessary duty of educated and informed democratic participation in the process of choosing representatives and setting policies.

Nevertheless, Eric Christen is committed to fighting this urban corruption as reflected in union CEQA greenmail, according to an email he sent on October 10, 2012:

What is frustrating for myself as someone who deals with this locally and statewide every day is that I get what unions are doing and why they are doing it. What I do not get is how on earth they can keep getting away with doing it without being held accountable by an inquisitive press that asks simple questions after seeing the obvious staring them in the face.

I can fight unions and their shameless abuse of the California environmental law. I can continue to educate and inform the public about this and get them to ban PLAs when we put it on the ballot. I can continue to educate the media about this abuse. But what I cannot do is write the stories or pose the questions that help educate taxpayers, voters and citizens about exactly what is going on.

Sorry Eric, looks like few people want to join you in exposing this racket. You’re putting abstract principles ahead of tangible financial self-gain. That’s not a popular proposition.

But here is some consolation: this appeasement to union extortion recalls a well-known quotation attributed to Vladimir Lenin (but probably spurious): “the capitalists will sell us the rope from which we’ll hang them.”

Some of the capitalists to be hung will die rich. A few courageous ones to be hung will die right.

Michigan Reporter Joel Thurtell Provides Background on How Michigan Banned Capital Appreciation Bonds

UPDATE: Joel Thurtell has now posted (on his web site Joel on the Road) the “big graphic” – a table associated with his 1993 exposé of Michigan school districts selling Capital Appreciation Bonds (CABs). The table lists the Michigan school districts that sold Capital Appreciation Bonds, the amount of bonds sold, the amount of interest to be paid to investors, the length of time from sale to maturity, and the interest as a percentage of the principal (the amount borrowed).

To give readers an understandable comparison, the table also provides the numbers for a conventional mortgage at 7% for various time periods. (Try it at 4% today.)

These amounts and percentages are peanuts compared to what California K-12 and community college districts are selling as Capital Appreciation Bonds. Notice the highest percentages of interest to principal in Michigan school districts were 575% and 406%. In California, the Poway Unified School District’s 2011 bond sales were at 935%.

The next step in the process to ban California educational districts from selling Capital Appreciation Bonds is for someone to re-create this chart for California and circulate it widely.


Joel Thurtell (web site Joel on the Road) is the now-retired Detroit Free Press reporter whose intensively-researched 1993 articles about Michigan school districts borrowing money by selling Capital Appreciation Bonds were the catalyst for a 1994 Michigan ban on Capital Appreciation Bonds. Now he is working to make sure California citizens aren’t victimized by the same scam.

Through his blog, Joel Thurtell was the first reporter to publicly expose how California’s K-12 school districts and community college districts have been selling Capital Appreciation Bonds as a way to borrow money for school construction. His attention to this obscure but extremely costly and disingenuous method of borrowing money has been acknowledged by various news stories throughout California (Community College Districts’ Bonds Inflate Taxpayers’ Repayments– Sacramento Bee – August 22, 2012; High Cost of School Bond Shocks Poway – San Diego Union-Tribune – August 17, 2012; Kudos to Michigan Journalist on the Poway Bond Story– Voice of San Diego – August 8, 2012; Joel Thurtell Shames Poway, CA Financing– Daily Markets – August 10, 2012; School Bonds Could Trigger Fiscal Shock – Financial Times via CNBC – August 9, 2012)

The Voice of San Diego web newspaper finally managed to grab the attention of the state’s political leaders and news media with an article on August 8, 2012: Where Borrowing $105 Million Will Cost $1 Billion: Poway Schools – Voice of San Diego – August 6, 2012. I continue to believe that it was the Voice of San Diego’s simple pie chart of the Poway Unified School District’s bond repayments (designed by Keegan Kyle) that allowed this story to fly – give Mr. Kyle a Pulitzer.

I found out about Mr. Thurtell’s crusade to alert Californians to the Capital Appreciation Bond racket when his 1993 Detroit Free Press articles were referenced by Mt. Diablo Unified School District 2010 Measure C Citizens Bond Oversight Committee member Alicia Minyen at the California League of Bond Oversight Committees annual conference on May 9. I wrote about the presentation about Capital Appreciation Bonds at this conference in a couple of mid-May blog posts, which have received a consistent trickle of attention since then.

Now, with San Diego County Treasurer Dan McAllister promoting an outline of possible legislation to restrict the sale of Capital Appreciation Bonds in California, Joel Thurtell has posted Public Act 278, the 1994 law that banned Michigan school districts from selling Capital Appreciation Bonds. He indicates that the relevant sections are 380.1352a (Borrowing money and issuing bonds); 380.1351b (Appreciation or sale at discount); and 380.1352 (Borrowing or issuing bonds; contract for legal representation).

Joel Thurtell has also posted the text of most of his 1993 Detroit Free Press articles about Capital Appreciation Bond sales by Michigan school districts, although as of August 26, 2012 he was still preparing additional unpublished text from the first article, dated April 5, 1993, and related charts published in the newspaper.

This Michigan law banning the sale of Capital Appreciation Bonds was enacted shortly before major newspapers and most state legislative web sites began posting content electronically on the web. (For example, the Michigan and California legislative web sites post bills starting with the 1995 sessions.) Try to research any state or local public policy activity before 1995, and everything is a lot more difficult! Thank you to Joel Thurtell for taking the time to provide public access to how the people of Michigan handled the Capital Appreciation Bond sales in their school districts in the early 1990s.

San Diego County Treasurer Drafts Outline of Legislative Proposal to Restrict and Expose How California School Districts Sell Capital Appreciation Bonds

UPDATE:

Now posted on the County of San Diego Treasurer’s web site:

Information about San Diego County Treasurer Dan McAllister’s August 21, 2012 press conference and presentation materials about Capital Appreciation Bonds.

A YouTube video of San Diego County Treasurer Dan McAllister‘s August 21, 2012 press conference: SD County Treasurer Dan McAllister Calls for School Bond Reform

UPDATE 2: The San Diego Union-Tribune reports on Senator Mark Wyland‘s Senate Bill 1205, which was amended on March 28, 2012 to impose restrictions on the sale of Capital Appreciation Bonds by K-12 school and community college districts. Howard Jarvis Taxpayers Association official David Wolfe, who also serves on the Board of Directors of the California League of Bond Oversight Committees, is quoted in support of the bill. Senate Bill 1205 never had a hearing and never had a legislative analysis.

Lawmaker Sought to Stop Controversial Bond Financing – San Diego Union-Tribune – August 23, 2012


A little more than three months after the California League of Bond Oversight Committees (CalBOC) annual conference brought my attention to school districts and community college districts selling Capital Improvement Bonds (CABs) to borrow money for school construction, a prominent public official has proposed legislation to increase public awareness of the practice and rein it in.

Yesterday (August 21, 2012), San Diego County Treasurer Dan McAllister held a press conference to announce the outline of a legislative proposal to deal with Capital Appreciation Bonds. At the time of this writing, his office inexplicably does not have any information about the press conference or the proposal on its County of San Diego Treasurer web site, but the San Diego Union-Tribune posted his letter and proposal on its own web site. See them here:

Outline of the Proposed Capital Appreciation Bond Reform from the San Diego County Treasurer

Letter from the San Diego County Treasurer Explaining the Need for Capital Appreciation Bond Reform

As I wrote in my August 11, 2012 blog post (News Media Beginning to Pick Up on Story about California School Districts Selling Insidious “Capital Appreciation Bonds” – Dayton Public Policy Institute an Early Informant to California Taxpayers), the attraction of Capital Appreciation Bonds for California school districts and community college districts has been referenced in various specialty publications, including the CalBOC Newsletter, my own Dayton Public Policy Institute blog posts on Capital Appreciation Bonds, and originally in Joel Thurtell’s blog www.JoelontheRoad.com.

It was a set of articles earlier this month in the Voice of San Diego about the Poway Unified School District sale of Capital Appreciation Bonds that really brought the story to mainstream public attention. People get motivated when they are the direct victims! For proof that the school district borrowed $105,000,150 by selling Capital Appreciation Bonds and 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.

I hope the California Association of County Treasurers and Tax Collectors can align with the California League of Bond Oversight Committees (CalBOC) and various state and regional taxpayers organizations such as the Howard Jarvis Taxpayers Association to enact bipartisan legislation in 2012 to restrict or ban the sale of Capital Appreciation Bonds by school districts and community college districts. My statement about Capital Appreciation Bonds:

School board members don’t care how much these Capital Appreciation Bonds cost after 30 or 40 years. By the time property owners are assessed with the staggering tax burden, the elected board members will be out of office and probably dead. They won’t be accountable for the consequences, but they’ll still have their names on rusty plaques next to the front doors of deteriorating schools.

Latest News Media Coverage of CAB Reform

School Bond Reform Gaining Support – San Diego Union-Tribune – August 22, 2012

Tax Collector Blasts Poway Unified Bonds, Calls for Reform – North County Times – August 22, 2012

County Treasurer Calls for Widespread School Bonds Reform – Voice of San Diego – August 22, 2012

Poway Unified Residents Fume Over Expensive Bond: School District Officials Explain, Defend Decision Behind $1 Billion Debt – San Diego Union-Tribune – August 21, 2012

Poway Bond is a Billion-Dollar Box-Office Bomb – San Diego Union-Tribune (columnist Logan Jenkins) – August 21, 2012

County Treasurer Calls for Widespread School Bonds Reform – Voice of San Diego – August 21, 2012

A Creative Borrowing Boom: VOSD Radio – Voice of San Diego – August 20, 2012

Tonight: Big School Board Meeting in Poway – Voice of San Diego – August 20, 2012

High Cost of School Bond Shocks Poway Unified: Repayment Under Financing Plan Will Be 9 Times the Principal – San Diego Union-Tribune – August 17, 2012

‘Wow, If True Then That Is Financial Suicide’: Comments on School Bonds – Voice of San Diego – August 10, 2012

Find High-Interest School Bonds in Your District: A Five-Step Guide – Voice of San Diego – August 8, 2012

A Creative Borrowing Boom: Poway Not Alone in High-Interest Financing – Voice of San Diego – August 7, 2012

Where Borrowing $105 Million Will Cost $1 Billion: Poway Schools – Voice of San Diego – August 6, 2012

News Media Beginning to Pick Up on Story about California School Districts Selling Insidious “Capital Appreciation Bonds” – Dayton Public Policy Institute an Early Informant to California Taxpayers

Finally, the news media is discovering and reporting on how many California school districts are selling “Capital Appreciation Bonds” to investors, thus committing future generations of California property owners to staggering tax payments.

To summarize this obscure issue in two paragraphs, when California voters approve “bond measures” so that school districts or other government entities can borrow money for construction projects, voters are directing local governments to sell “General Obligation Bonds” to investors such as individuals, commercial banks, insurance companies, and money market funds. Investors make money through the interest paid by the municipal government during the time it borrows the money. “General Obligation Bonds” are backed by the “full faith and credit” of the government entities, meaning the investors are guaranteed to get the principal and interest on the investment.

Traditionally, school districts and other government entities have sold General Obligation Bonds that provide investors with a semi-annual interest payment throughout the term of the bond, with the principal returned to the investors when the bond matures. But a recent trend for California school districts is selling a different type of General Obligation Bond. These are called “Capital Appreciation Bonds” (CABs), also known as Zero-Coupon Bonds, in which interest is compounded over the life of the bond and then paid all at once with the principal to the investors when the bond matures. This means that the government entity can delay collecting property taxes and backload the tax burden to the later years of the term of the bond, which can be as long as 40 years. Compound interest (paying interest on the principal AND interest) can accumulate huge financial obligations over such a long time period.

A reporter for the Detroit Free Press newspaper named Joel Thurtell found this same racket going on at Michigan school districts in the early 1990s and wrote some comprehensive articles exposing it, starting with the April 5, 1993 story “Michigan Schools Load the Future With Debt.” His reporting was one of the catalysts leading to a provision in Michigan law prohibiting the sale of Capital Appreciation Bonds. It was added to a school finance bill on June 22, 1994 as an amendment offered by State Senator Joanne Emmons, and Governor John Engler subsequently signed the bill into law.

Now retired from the Detroit Free Press but continuing his journalism with a blog (Joel on the Road: Words Shot With a Loose Cannon), Mr. Thurtell discovered earlier this year that California school districts were now playing this game. The giveaway was an outrageous 2011 sale of Capital Appreciation Bonds by the Poway Unified School District (just north of San Diego) that allegedly will cost taxpayers a total of $981 million by 2051. That’s the price of borrowing $105 million in 2011!

As I say to Californians whenever I try to explain this:

School board members don’t care how much these Capital Appreciation Bonds cost after 30 or 40 years. By the time property owners are assessed with the staggering tax burden, the elected board members will be out of office and probably dead. They won’t be accountable for the consequences, but they’ll still have their names on rusty plaques next to the front doors of deteriorating schools.

I learned about Capital Appeciation Bonds at the California League of Bond Oversight Committees (CalBOC) annual conference on May 11, 2012. (I’m on the Board of Advisors for this group.) I was astonished at the lack of news coverage about this potentially disasterous practice for the state and posted an article about it that evening.

I was still thinking about the issue a few days later and wondering why so few Californians knew or cared. Looking through my notes from the conference, I saw that the feisty and determined Mt. Diablo Unified School District Measure C 2010 Citizens’ Bond Oversight Committee member Alicia Minyen (an unsung hero for fiscal responsibility in California) mentioned that a reporter in Michigan has exposed the racket there, which led to a state ban on school districts selling Capital Appreciation Bonds. Researching on the web, I identified the reporter and then found his blog. I discovered he had posted several articles in the previous two weeks on the threat of Capital Appreciation Bonds in California, starting on April 27, 2012:

Muni bomb ticks in California

Posted on April 27, 2012 by Joel

By Joel Thurtell I was sipping coffee and reflecting on the ignorance displayed for all the world to read in a New York Times article. It was January 9, 2009. The Times story claimed to offer “a rare glimpse into … Continue reading →

I posted a comment on his blog to let him know that a fiscally conservative policy consultant in California had noticed the issue and planned to spread the news. He then mentioned me in his blog:

See no evil: CABS and media

Posted on May 16, 2012 by Joel

By Joel Thurtell Thanks to Kevin Dayton of the Dayton Public Policy Institute for noticing my recent columns about the evils of Capital Appreciation Bonds. He covered the May 11, 2012 meeting of California’s League of Bond Oversight Committees annual … Continue reading →

Fast forward to August 2012, and people are giving as much attention to my May 2012 articles about Capital Appreciation Bonds (Please Read This, Even If You Think Municipal Bonds Are Really BORING: We’re Setting Up the Next Generation of Californians to Pay Staggering Property Taxes and Reporter Behind Michigan’s 1994 Prohibition of Capital Appreciation Bonds (CABs) Watches and Writes about the CAB Frenzy at California School Districts) as they are to my posted photo of the closest Chick-fil-A to San Francisco. The issue is now getting attention, perhaps in part because big urban school districts such as the Sacramento City Unified School District, the West Contra Costa Unified School District, and the San Diego Unified School District are asking voters on November 6, 2012 for approval to borrow hundreds of millions and even billions of dollars through bond sales to investors.

A big break for exposing the issue was a Voice of San Diego article on August 6, 2012:

Where Borrowing $105 Million Will Cost $1 Billion: Poway Schools

After putting together a bond that will cost taxpayers almost 10 times what they borrowed, the Poway Unified School District has become California’s poster child for a form of exotic financing.

I suspect that a key element in the successful spread of this article was the brightly-colored pie chart that put the astonishing news into graphic form for people to understand.

The Voice of San Diego then provided a nifty guide on August 8, 2012 to other school districts selling Capital Appreciation Bonds:

Find High-Interest School Bonds in Your District: A Five-Step Guide

Want to find out if your local school district has borrowed money using expensive capital appreciation bonds? Follow our guide.

Regrettably, as other news media outlets picked up on the story and circulated it nationwide, Mr. Thurtell and the Voice of San Diego received some attention for their dispute over proper attribution of sources and credit for the story. I’ll let them speak for themselves on their web sites, but I am pleased to see this issue brought to the attention of the public as more California local governments and the State of California itself careen toward bankruptcy. (For example, see The Right Way, the Wrong Way, and the Poway of School Bond Financingwww.CalWatchdog.com – August 9, 2012)

Something has to be done now to protect today’s California children from oppressive taxes in 20-40 years when they start families, buy a house or other residential property, and own small businesses with property. (I’m assuming there will still be private property in California in 2052 – am I being too optimistic?) I want to see someone in the California State Legislature introduce a bill banning the sale of Capital Appreciation Bonds and limiting all General Obligation Bonds to a maximum time period of 30 years. It can be modeled on the law in Michigan.

Will any California state legislator dare to challenge the many special interests that regard school bonds as “chasing after money…live for today and don’t worry ’bout tomorrow, hey, hey, hey” (Use the chorus of this song as the theme music for the effort.)

Also, I thank Joel Thurtell for mentioning my early attention to this story in his blog:

Credit

Posted on August 9, 2012 by Joel

By Joel Thurtell I appreciate the article by Andrew Donohue in the Voice of San Diego acknowledging my work in uncovering and reporting about the Capital Appreciation Bond scandal in California. Donohue responded to my complaint that reporter Will Carless of the … Continue reading →

I’m in Michigan. The first California reporter to write about California’s Cab scam was Kevin Dayton, on May 11 and May 14.

Comments Criticizing Draft Environmental Impact Report for San Diego Convention Center Expansion Phase III Include Analysis of Proposed Project Labor Agreement

A group called Alliance for a Cleaner Tomorrow (ACT) announced today (June 29, 2012) that it has “submitted 20 pages with 22 comments noting deficiencies in the Draft Environmental Impact Report for the proposed San Diego Convention Center Phase III Expansion and the proposed adjacent high-rise addition to the San Diego Hilton Bayfront Hotel.”

The California Energy Commission has approved the Alliance for a Cleaner Tomorrow as an intervenor in the licensing process for several large power plants. ACT has also submitted comments about the draft EIR for the Chula Vista Bayfront Master Plan and comments about the draft EIR for the Sutter Elk Grove Master Plan.

The latest submission from the Alliance for a Cleaner Tomorrow is to the Unified Port of San Diego, which is designated as the “lead agency” for this $520 million project. See a copy of ACT’s comments here. Below is a photo of the ACT submission at the Port of San Diego headquarters:

The comments submitted by Alliance for a Cleaner Tomorrow include a section about the proposed Project Labor Agreement for the San Diego Convention Center Expansion Phase III.

Rumors about a Project Labor Agreement for this project have circulated for a couple of years. See “It’s Out in the Open: Project Labor Agreement a Costly Possibility for San Diego Convention Center Expansion” – www.thetruthaboutPLAs.com – March 11, 2011; “Contractors Opposed to Union Labor Mandate on Convention Center Expansion” – San Diego Union-Tribune – February 22, 2011; A PLA for the Convention Center?San Diego Union-Tribune (editorial) – May 27, 2011; “Three Takeaways from the Convention Center Vote” – Voice of San Diego – May 7, 2012.

Here’s the section of the Alliance for a Cleaner Tomorrow comments that addresses the proposed Project Labor Agreement:

The Report Ignores the Environmental Impact of Commuting Vehicles of Out-of-Area Construction Workers, Especially Those Dispatched from Labor Union Hiring Halls with Large Geographical Jurisdictions

The news media has reported that the governing boards of one of the multiple public agencies entangled in the Project (the City of San Diego, the San Diego Unified Port District, or the San Diego Convention Center Corporation) may require the construction manager/construction-manager-at-risk/design-build contractor to require construction companies to sign a Project Labor Agreement with affiliates of the San Diego County Building and Construction Trades Council in order to work on the Project.

Under a Project Labor Agreement, all construction companies are required to obtain their workers from a worker dispatching program of applicable trade union hiring halls. (This is in contrast to the employment practices of non-union contractors, which use employment applications to develop a permanent in-house workforce.)

As a result, construction trade workers in unions with a large geographical jurisdiction that includes San Diego may travel hundreds of miles to work on the Project. This is confirmed in the opening brief submitted to the California Supreme Court by the State Building and Construction Trades Council of California in State Building and Construction Trades Council v. City of Vista. This brief acknowledges that “construction workers today routinely commute to projects outside the cities in which they happen to live” and “it is not uncommon for today’s construction workers to commute more than 100 miles to work at a job site.” This happens because construction trade unions have geographical jurisdictions that often encompass large regions and because they use a “traveler” classification so out-of-area union workers have access to jobs.

In addition, Project Labor Agreements cannot guarantee the employment of “local” residents on a Project – they can only set local hiring as a goal. And the definition of “local” can vary widely – in many cases, unions and union agreements consider “local” to be anyone dispatched from the union hiring hall that applies to the large geographic region that includes the project in question.

In order to account for the effects on greenhouse gas emissions of possible long-distance commuting of unionized construction workers from Los Angeles, Riverside, and San Bernardino to downtown San Diego, the Draft EIR needs to assess the geographical regions of each trade union with jurisdiction over elements of Project construction work and define the hiring and dispatching procedures of each of those unions.

Also, the Draft EIR needs to identify the likely non-union general contractors and subcontractors based in the San Diego region that have the capability to perform work on this Project and have plans to bid on the Project (if they are not required to sign a Project Labor Agreement), in order to determine the comparative effects on greenhouse gas emissions of the commuting vehicles of the employees of these local employees.

Finally, the Draft EIR needs to determine what percentage of construction trade workers in the San Diego region are union members. The Current Population Survey statistics on the California construction labor market (published by a joint collaboration of the U.S. Census Bureau and the U.S. Department of Labor’s Bureau of Labor Statistics) indicates that in California in 2011, 16.9% of construction workers were union members. (This figure includes the San Francisco Bay Area, which has a relatively high percentage of union workers.) Consider this statistic with observations from various construction trade associations in the region, and clearly non-union workers overwhelmingly dominate the San Diego construction labor market. Under a Project Labor Agreement, unions would need to obtain workers from outside of the San Diego region.

According to the announcement from the Alliance for a Cleaner Tomorrow, “This convention center expansion is rolling down the hill and picking up speed while the public is confused about what’s going on…The Draft Environmental Impact Report doesn’t make the situation any better for citizens of the City of San Diego…The Alliance for a Cleaner Tomorrow will ensure that the public is fully informed about the environmental implications of this convention center expansion.”

The announcement also notes that comments submitted by the Alliance for a Cleaner Tomorrow include the following criticisms:

  1. The report clumsily combines two projects into one, thus confusing the public.
  2. The report neglects to inform the public of how the many public and private entities involved with the projects are responsible for the environmental mitigation.
  3. The report justifies the projects to the public with propaganda and without any consideration of the legitimate arguments to not build the project (and thus spare the environment from new damage.)
  4. The report fails to address the public’s concern about blocked views from other properties – views that have a measurable market value.
  5. The report fails to address the public’s concern about litter thrown in the harbor.
  6. The report fails to inform the public of how a union-only Project Labor Agreement would encourage out-of-area workers to commute to the construction sites each day.
  7. The report neglects to inform the public about the details of 45,000 square feet of retail space planned for the project.

Public discussion about expanding the San Diego Convention Center began in 2008, and in January 2009, San Diego Mayor Jerry Sanders formed the Mayor’s Citizen Task Force on the San Diego Convention Center Project “to evaluate and recommend the necessary steps required to ensure San Diego’s ability to retain and enhance its current market position in the convention and meeting industry.” Considering the vested interests appointed to this Task Force, no one was surprised when the Task Force voted 15-1 to recommend expanding the convention center, with only Lani Lutar – head of the San Diego County Taxpayers Associationvoting NO because of uncertainty about the source of funding for the expansion. Of interest is that one of the Task Force members was Lorena Gonzalez, head of the San Diego and Imperial Counties Central Labor Council.

Articles: Traditional Newspapers

Convention Center EIR Cites Numerous Impacts – San Diego Union-Tribune – July 3, 2012

Port Preparing Final Convention Center Environmental Impact Report – San Diego Daily Transcript – July 3, 2012 (mentions the Alliance for a Cleaner Tomorrow submitted comments)

Concerns Expressed on Center Expansion: Report Brings Up Aesthetics, Noise, Air Quality, Traffic – San Diego Union-Tribune – July 6, 2012

Related Harassment from the San Diego-Imperial Counties Central Labor Council

Labor Says ‘Living Wage’ Threatened at Convention Center – San Diego Union-Tribune – July 5, 2012