Who Defeated the City of Auburn’s Proposed Charter, and How Was It Done? (Answer: Three Union Entities, by Spending $56.40 Per NO Vote)

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Tonight I spoke during public comment at the Auburn City Council meeting to encourage the five city council members after last week’s defeat of Measure A, a proposed charter for the City of Auburn. I’m sure it was frustrating for them to see 65% of city voters reject an ordinary, reasonable proposal to shift government authority from the state to the local level.

Measure A lost on a vote of 1409 to 748 in the June 5, 2012 election.

As I mentioned in an earlier post, construction unions derailed the proposed charter for the City of Auburn using the same methodology used to defeat the proposed charter for the City of Rancho Palos Verdes in an election on March 8, 2011. In both cases, professional, experienced, and well-funded regional union political operations overwhelmed a local grassroots movement. (In Rancho Palos Verdes, 69% of voters rejected the charter after the unions flooded the city’s voters with deceptive mailers.)

The campaign in support of Measure A scraped together $8,671.00, mostly in small contributions from Auburn residents and local businesses. They spent $2,200 on advertising in the Auburn Journal newspaper and printed some flyers and campaign signs. Nothing unusual for a local campaign in a city with a total population of 13,300.

Meanwhile, as seen in this campaign finance report and this campaign finance report, three union entities contributed a total of $75,000 (plus $4,463.83 in non-monetary contributions) to the campaign opposing Measure A, as a result spending $56.40 per NO vote to defeat the proposed charter. The ratio of union spending (in opposition to Measure A) to local spending (in support of Measure A) was 9 to 1.

The steamrolling was so bad in Auburn that the union opponents of the proposed charter spent more than twice as much on legal/accounting services ($17,618.20 billed by Olson, Hagel & Fishburn LLP) than the local Measure A supporters raised for their entire campaign ($8,671.00).

There were only three donations to the campaign against Measure A, which would have enacted a charter that included provisions allowing the city to establish its own government-mandated construction wage rates (“prevailing wages”) for municipal construction and permanently exempt the city from potential state requirements that volunteer labor be paid at state-mandated wage rates.

Here is an analysis of the three contributions to ”Preserve Auburn, No on Measure A, sponsored by California Alliance for Jobs” campaign:

1. $25,000 from the International Union of Operating Engineers Local No. 3, which represents union workers who operate equipment such as excavators and cranes in Northern California.

This contribution appears to come from the union’s general fund. (It is classified in the campaign finance report as “Other” and not as a political committee.) According to its Form LM-2 for 2011 filed with the U.S. Department of Labor’s Office of Labor Management Standards, the multi-state Operating Engineers Local No. 3 had total receipts in 2011 of $41,851,469. It spent $630,837 on political activities and lobbying. This union spent more than twice as much in 2011 at Give Something Back Office Supplies ($62,285) than it did against Measure A in 2012.

So what is the typical state-mandated wage rate for an operating engineer in Auburn? The state sets the wage package for a bulldozer driver in the City of Auburn (Group 4, Area 1) at a straight time total rate of $62.00 per hour$37.15 + $24.12 in fringe benefits + $0.73 for “Other.”

2. $25,000 from the Northern California Carpenters Regional Council Issues Political Action Committee (PAC). (The Carpenters also reported $4,463.83 in web site development expenditures against Measure A.)

According to its latest Form 460 filed with the California Secretary of State, this PAC started the year with $223,739.45 and collected another $72,340.12 in 2012, up to May 19. It had money to burn for a campaign in Auburn.

So what is the typical state-mandated wage rate for a carpenter in Auburn? The state sets the wage package for a basic carpenter in the City of Auburn (Area 3) at a straight time total rate of $56.60 per hour$31.62 + $22.69 in fringe benefits + $2.29 for “Other.”

3. $25,000 from the California Alliance for Jobs, an example of an arcane type of union trust authorized by the obscure Labor-Management Cooperation Act of 1978, a law signed by President Jimmy Carter and implemented by the Federal Mediation and Conciliation Service.

Inspired by the decline of unionized manufacturing in the Northeast, this federal law was meant to help industrial management and union officials build better personal relationships and cooperate against the threat of outside competition. There are no federal or state regulations specifically addressed toward these trusts, and these trusts do not have any reporting requirements to the U.S. Department of Labor’s Office of Labor-Management Standards. (Another example of this kind of trust is the California Construction Industry Labor-Management Cooperative Trust, explained in my past blog posts here and here.)

Collective bargaining agreements for the Laborers and the Operating Engineers in Northern California include mandatory employer payments to the California Alliance for Jobs trust based on hours worked by trade workers represented by those unions. Those payments are incorporated into the state’s construction wage rates (“prevailing wages”) in the Other component established in 2003 through Senate Bill 868 (signed into law in 2003 by soon-to-be-recalled Governor Gray Davis) as California Labor Code Section 1773.1(a)(7-9).

The latest available IRS Form 990 for the California Alliance for Jobs (for 2010) indicates expenses of $2,391,938, including $685,000 in lobbying and political expenditures. So $25,000 sent to a campaign in the City of Auburn is peanuts to this group.

As a major participant in the California Alliance for Jobs, the Northern California District Council of Laborers must be included as the third construction trade union that opposed Measure A.

So what is the typical state-mandated wage rate for a laborer in Auburn? The state sets the wage package for someone holding a stop/slow sign at a road site in the City of Auburn (Group 3, Area 2) at a straight time total rate of $42.93 per hour$25.89 + $16.91 in fringe benefits + $0.13 for “Other.”

Perhaps these wage rates accurately reflect the true prevailing wage rates in Auburn, and Auburn taxpayers are getting their money’s worth when they pay for purely municipal construction performed under these rates. Perhaps it is reasonable to require businesses to make their contractors pay these rates on private construction projects that receive any sort of city financial assistance.

But shouldn’t that be a decision for the Auburn City Council, rather than the California State Legislature and the Division of Labor Statistics and Research (DLSR) in San Francisco?

Tonight I urged the Auburn City Council to prepare another proposed charter, and this time don’t make it typical, ordinary, and reasonable. Develop a manifesto of local control against the power of the state government and the special interests that control it. Offend every group in Sacramento. And then bring it before the voters of Auburn.

I don’t think the people of Auburn will be fooled again, especially if the supporters of the charter abandon the low-key grassroots operation and fight fire with fire in Round Two.

8 comments

  1. Chux Rabin says:

    You forgot the people of Auburn. They voted against the measure and you’re calling them stupid for doing so.
    We avoided a power grab by a scandalous city council and their unknown backers. The charter was written poorly and went against all advice by organizations like the California League of Cities. Even the Tea Party advocates (they are pushing this charter drive in all cities) joined with the California Alliance for Jobs and rejected a more detailed plan because…get this It didn’t contain enough provisions to protect the citizenry from the abuses by city hall.

  2. Chux Rabin says:

    …should have added Redding as the city that had their charter rejected by the Tea Party in conjunction with California Alliance for jobs.

  3. Kevin Dayton says:

    Chux Rabin:

    Thank you for your comments. What would you put in a charter?

    If I had drafted the charter, I would have added provisions to provide extra guarantees that the antics in the City of Bell would not happen in Auburn. I would have added a lot of other provisions, too. But I wasn’t one of the “unknown backers.” Whoever those backers were, they certainly didn’t want to spend money on promoting it.

    The enactment of the charter in Bell was a complete scam from the beginning, and Auburn is a very different community, so I’m not sure the fear was warranted. But you say there is scandal in the city, so maybe you’re right.

    As far as the California Alliance for Jobs, I don’t object to some of their agenda, but their insistence that every government entity must conform to state-mandated construction wage rates is based on their own self-interest than any sort of acknowledgement of local market conditions.

    I’m thinking of drafting a new proposed charter and sending it to the city council to consider. I won’t be an “unknown backer” either – I have no qualms about being a very public intellectual backer of a charter. It would be much more detailed about the various options available for prevailing wage policies, too. We’ll see if anyone is interested.

  4. Frederic Bastiat says:

    Go for it, Kevin…draft your own charter (I could have sworn that you drafted the first one…oh well) and send it to the citizens of Auburn for a vote…spend lots of your money…hell, spend all of it.

    Good luck.

    If you believe that the citizens of Auburn are stupid enough to enact a charter just so they can poke a sharp stick in the eye of the unions (and save NO money doing so) you are engaging in magical thinking of the highest order.

    • Kevin Dayton says:

      M. Bastiat: you’re still alive? Have you changed your thinking since writing The Law, which warned against turning law into an instrument of plunder? Do you still believe these statements from The Law: that legal plunder can be committed in an infinite number of ways; that these ways include tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, et cetera; and these ways – with their common aim of legal plunder – constitute socialism?

      Don’t be too worried that I’ll be writing a model charter from scratch anytime soon, as it would have to be a labour of love – like this blog. I can’t imagine the established pro-government special interest groups and crony capitalists wanting to pay me for it, and the middle class taxpayers in California who would benefit most from it have no money.

      Regarding authorship of the Auburn charter, I’m aware of the accusations that I wrote it on behalf of my former employer, Associated Builders and Contractors (ABC) of California, and I’m honored if the true authors were inspired by my ideas. But notice ABC was not involved in the campaign to support the Auburn charter. And as I wrote in my letter published in the Auburn Journal on September 26, 2011, in contrast to the ordinary and innocuous charter developed by local Auburn leaders, a proposed charter under my development would have been a searing and unprecedented manifesto in support of fair and open competition, free enterprise, economic growth and job creation. Its defiance of excessive state authority would have enraged numerous special interest groups.

      http://auburnjournal.com/detail/188633.html

      • Frederic Bastiat says:

        “The worst thing that can happen to a good cause is, not to be skillfully attacked, but to be ineptly defended.”

        I am a ardent supporter of free markets. But we don’t have free markets in the US. We have never had free markets in the US. The idea of free markets are an intellectual construction for use by economists and scholars…in the real world of governance and polticial economy they are as real as unicorns…they simply cannot exist where man has created rules for society.

        When most conservatives speak of “free markets” what they are really talking about is eliminating market externalities that benefit the working man.

        For some reason, most conservatives NEVER discuss eliminating the market externalities that benefit the affluent and the powerful.

  5. [...] aggressive opponents of proposed charters are unions, particularly construction trade unions. (See Who Defeated the City of Auburn’s Proposed Charter, and How Was It Done? Answer: Three Union Entit….) As confirmed by a California Supreme Court decision in July 2012 (State Building and [...]

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