Tag Archive for International Brotherhood of Electrical Workers (IBEW) Union Local 340

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

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

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

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

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

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

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

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

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

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

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

Redding Needs a Charter to End Nonsense Definition of Private Hotel as a “Public Works” Project

UPDATE: My letter to the editor Kevin Dayton: Redding Needs a City Charter is in the February 4, 2013 Redding Record-Searchlight. Comments in response misrepresent “prevailing wage” as “living wage” just like at the Newport Beach City Council meeting on January 22, 2013. It’s possible that a political consultant has suggested using this strategy to take advantage of public ignorance about the calculation of “prevailing wages” and the resulting rates.

The City of Redding has been hit with a union-instigated obstacle to economic growth and job creation imposed by Senate Bill 975, enacted into law in 2001. This law (described below in greater detail) expanded the state’s definition of “public works” to include many private construction projects, thereby requiring companies working on these projects to pay state-mandated construction wage rates (so-called “prevailing wages”) instead of wages that reflect local market conditions.

On January 27, 2013, the California Department of Industrial Relations reversed an earlier decision from December 27, 2011 and determined that a proposed Sheraton hotel to be built in Redding by the Turtle Bay Exploration Park is a “public works” project after all.

Turtle Bay Exploration Center in Redding Loses to Unions

Turtle Bay Exploration Center in Redding Loses to Unions

This new decision was sought by three unions: the Plumbers & Pipefitters Union Local No. 228, the International Brotherhood of Electrical Workers (IBEW) Union Local No. 340, and the Sheet Metal Workers Union Local No. 162 (now absorbed into Sheet Metal Workers Union Local No. 104). As a result of a 22-page appeal of the original decision by the law firm of Adams Broadwell Joseph & Cardozo, the state has now decided that the privately-owned hotel would a public works project, equivalent to a courthouse, because the City of Redding waived rental payments on the land where the hotel will be built.

Now the proposed hotel project may be in jeopardy because the anticipated increased cost of construction may compromise the financial success of the hotel. A January 30, 2013 article in the Redding Record-Searchlight newspaper (Fate of Hotel at Turtle Bay in Limbo – Ruling: Park Must Pay Workers Prevailing Wage to build Sheraton Hotel) outlined the current status of the planned 130-room hotel:

…a park spokesman said he could not say when construction will start or whether the project is in jeopardy. Groundbreaking for the hotel had been scheduled this month.

“At this point we still hope to build the hotel, and operate a hotel there,” Turtle Bay’s Toby Osborn said Wednesday. “There is just a lot of uncertainty due to the ruling.”

…“Everybody woke up this morning and it was a different ballgame,” Osborn said. “Now we need to sit down and identify all the knowns and try to identify all the unknowns.”

But don’t worry, magnanimous union officials say they will help:

Andrew Meredith of the International Brotherhood of Electrical Workers Union Local 340 – one of the unions that appealed the ruling – said they were always confident the state would overturn its prevailing wage decision.

“That said, we are still committed to working with Turtle Bay to find a way to get this project off the ground,” Meredith said. “We know this is something that is important to the community.”

Turtle Bay met with the unions Wednesday to discuss how to move forward, including how the ruling will affect costs of building the hotel and restaurant.

What Is Senate Bill 975 and Why Is It an Obstacle to Private Construction Projects?

In 2001, Governor Gray Davis signed into law Senate Bill 975, a bill sponsored by the State Building and Construction Trades Council of California that expanded the definition of “public works” under California Labor Code Section 1720 to include many private projects. Existing law had defined “public works” as various types of construction “done under contract and paid for in whole or in part out of public funds.” Senate Bill 975 added a list of various kinds of non-monetary government assistance that qualified as public funds:

“paid for in whole or in part out of public funds” means the payment of money or the equivalent of money by a state or political subdivision directly to or on behalf of the public works contractor, subcontractor, or developer, performance of construction work by the state or political subdivision in execution of the project, transfer of an asset of value for less than fair market price; fees, costs, rents, insurance or bond premiums, loans, interest rates, or other obligations that would normally be required in the execution of the contract, which are paid, reduced, charged at less than fair market value, waived or forgiven; money to be repaid on a contingent basis; or credits applied against repayment obligations.

As business groups and Republican legislators predicted, the increased costs of construction labor resulting from prevailing wage requirements triggered by Senate Bill 975 scuttled numerous private commercial projects and private affordable housing projects, especially in the Central Valley, North State region (Redding and Chico), and other rural areas.

In these parts of the state, away from the coastal metropolitan cities, the disparity between state-mandated construction wage rates (so-called prevailing wages but actually based on union collective bargaining agreements) and actual median wages in the local market region is quite significant – as much as 30% or more, depending on the trade. See An Analysis of Market and Prevailing Wage Rates for the Construction Trades in California (2004) and The Effects of Prevailing Wage Requirements on the Cost of Low-Income Housing (2005).

Unions Derailed an Easy Local Solution to This Problem in 2011

Sundial Bridge in Redding, California

Sundial Bridge in Redding, California

There has been an ongoing grassroots effort in Redding to ask voters to enact a charter in order to circumvent costly and intrusive state meddling in local affairs. A charter would free the City of Redding from the mandates of the union-controlled California State Legislature, including state-mandated construction wage rates (so-called “prevailing wages”). See Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions?

In 2011, various local groups and individuals wanted voters to consider approving a robust charter, but union officials ultimately derailed the movement through a Charter City Exploratory Committee appointed by the city council.

The citizens of Redding need to enact a charter so their city has the same authority as the 121 California charter cities to establish its own prevailing wage policies. Why are the people of Redding acquiescing to the demands of unions and allowing the state legislature and a state agency to determine the fate of this hotel?

News Coverage of the Turtle Bay Hotel Prevailing Wage Saga:

Redding City Council Abandons Charter, Saves Prevailing Wage – State Building and Construction Trades Council web site – June 8, 2011

Cost of Turtle Bay Hotel Rests with Department of Industrial Relations; Prevailing Wage in Dispute – Redding Record-Searchlight – August 18, 2011

Turtle Bay Wins Ruling on Wages; Hotel Plan Not Subject to Prevailing Pay – Redding Record-Searchlight – December 28, 2011

Hotel construction cost estimates range from $13 million to $14.8 million. Total project costs are pegged at $21.2 million. Prevailing wage would have added roughly $1.25 million to that price tag, Osborn has said.

Hotel at Turtle Bay May Break Ground in JanuaryRedding Record-Searchlight – December 12, 2012

Unions Win Prevailing-Wage Case vs. Turtle BayRedding Record-Searchlight – January 29, 2013

Fate of Hotel at Turtle Bay in Limbo – Ruling: Park Must Pay Workers Prevailing Wage to build Sheraton Hotel – Redding Record-Searchlight – January 30, 2013

One More Costly Delay on Road to Turtle Bay Hotel – Redding Record-Searchlight (editorial) – January 30, 2013

Turtle Bay Nearing Compromise with Unions Over Hotel Construction – Redding Record-Searchlight – February 7, 2013

Finally, the Redding Employees Association of the Service Employees International Union (SEIU) is now suing the City of Redding for approving a contract with Vertex Business Solutions (Orcom Solutions), a provider of outsourced billing and customer care services to utilities, to take over billing and a call center from the city-owned Redding Electric Utility. It appears this contract would have been umambiguously legal if Redding operated as a charter city. See Union Sues Redding Over Outsourcing REU Call CenterRedding Record-Searchlight – January 18, 2013.

Construction Unions Demand Recount to Prevent Charter Supporter from Serving on Redding City Council

UPDATE: The recount determined that Gary Cadd won the Redding City Council seat by nine votes. Cadd’s original eleven-vote margin of victory (15,382-15,371) stands as the official record. The “Full Count for Redding 2012” organization spent $7,750 on the recount.

Construction trade unions of the Northeastern California Building and Construction Trades Council have filed paperwork with the Shasta County Clerk/Registrar of Voters office and established a Political Action Committee to prevent candidate Gary Cadd from being seated on the Redding City Council on December 4, 2012. Cadd defeated union-backed incumbent Dick Dickerson in the November 6, 2012 election by eleven votes: 15,382 to 15,371.

Although Redding voters would not know from local news media coverage why construction trade unions are spending $10,000 or more for a recount to try to overturn a city council election, this union challenge is related in part to an ongoing grassroots effort in Redding to ask voters to enact a charter. A charter would free the city from the costly mandates of the union-controlled California State Legislature, including state-mandated construction wage rates (so-called “prevailing wages”). See Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions?

In 2011, Cadd was part of a local group involved in promoting a charter, which union officials ultimately derailed through a Charter City Exploratory Committee appointed by the city council. Councilmember Dickerson had appointed a Carpenters Union representative to the committee. If Cadd is seated in place of Dickerson, there will be a 3-2 council majority in support of a meaningful charter to propose to city voters.

Union officials know they can’t allow this to happen. Considering that Democrats now have a veto-proof, unchecked two-thirds control of both houses of the legislature, the relatively conservative voters of Redding (a inland city of 90,000 near the Oregon border) will surely be eager to shake off the yoke of the Los Angeles union machine running the state capitol by the time they get the opportunity in the June 2014 election.

The union Political Action Committee funding the recount is called “Full Count for Redding 2012.” The chairman is Andrew Meredith with the International Brotherhood of Electrical Workers (IBEW) Local Union No. 340, and the treasurer is Bob Vanderpol with Operating Engineers Local Union No. 3, District 70. Meredith used to be a city council member in Galt and tried unsuccessfully in 2009 to pass a “local hire” ordinance there giving a competitive advantage to unionized construction companies. He resigned his office in 2010.

The recount will begin on Tuesday, November 27. The Cadd campaign is seeking contributions to pay the expenses of people overseeing the recount so that union lawyers are unable to manipulate it. If you’re interested in helping the Cadd campaign to ensure the recount is free of union mischief, please see the campaign web site: www.garycadd.com.

News Media Coverage

Redding Council Race Headed for a RecountRedding Record-Searchlight – November 21, 2012

Redding Trade Council Demands City Council Race Recount – KHTL – November 21, 2012

Group Files for Re-Count of Redding City Council Votes – KRCR – November 21, 2012

A Compilation of Construction Trade Union Project Labor Agreements for K-12 School and Community College Districts: Construction Manager-at-Risk, Lease-Leaseback, and Developer-Built Schools

The following set of Project Labor Agreements on California K-12 school district and community college district construction projects have unusual elements.

First, these Project Labor Agreements apply to public school and community college construction projects, but private parties negotiated them.

In the case of Hartnell Community College District, a construction manager-at-risk negotiated the Project Labor Agreement without authorization from the elected board of trustees. The board nullified the agreement after the company had applied the agreement to three small projects funded by Measure H.

In the case of Delano Union School District, the district arranged a lease-leaseback agreement with a private company, which proceeded to negotiate a Project Labor Agreement.

The remaining Project Labor Agreements were negotiated by private developers for school construction projects built privately by those developers. After the developers completed these projects, they transferred ownership to educational districts. Starting in the late 1990s, developers of proposed large residential housing projects in California began making agreements with K-12 school and community college districts to build their own schools and then transfer ownership to the districts. (See Builders Pick Up Tab for Schools – Los Angeles Times – July 7, 2002.)

Government agencies did NOT mandate that contractors sign these agreements, except in cases when a private Project Labor Agreement contained a successor clause that continued to apply the agreement to follow-up construction contracts, even after the ownership of the building transferred to the educational district.

In some cases, local governments provided some public funding for specific components of these developer-built projects. As a result, some taxpayer money was spent on contracts for which construction companies had to sign a Project Labor Agreement. For example, in 2002 the Roseville City School District made an agreement for Westpark Associates to fund five new schools in the West Roseville Specific Plan. Two have been completed: Junction Elementary School and Chilton Elementary School. Chilton Elementary School cost $50.6 million: the developer paid $33.7 million, the state provided $16.9 million, and the City of Roseville paid for construction of a gymnasium that the city uses for adult recreational activies outside of school hours.

Unlike government-mandated Project Labor Agreements, some of these private agreements only cover a few unions (typically, unions that engage in “greenmail” by submitting or threatening to submit legal objections under the California Environmental Quality Act – CEQA – concerning the proposed residential developments).

Project Labor Agreements negotiated by private developers are not a matter of public record, and the list below is surely not complete.

Monterey County – Construction Manager-at-Risk Project Labor Agreement

Hartnell Community College District Project Labor Agreement – Measure H – 2004 – Negotiated by DPR Construction and Employers’ Advocate – Nullified After Three Small Projects

Kern County – Lease-Leaseback Project Labor Agreement

Westside Educational Complex for Delano Union School District Project Labor Agreement 2011 between Grapevine Advisors LLC and the Kern, Inyo, Mono Building and Construction Trades Council 

Contra Costa County – Developer Project Labor Agreements Applying to Schools

San Ramon Valley Center Campus of Contra Costa Community College District Project Labor Agreement between Windemere-Brookfield-Centex and UA Plumbers and Steamfitters Union Local 159

Almond Grove Elementary School of Oakley Union Elementary School District Project Labor Agreement 2004 between Pulte Homes and UA Plumbers and Steamfitters Union Local 159, International Brotherhood of Electrical Workers Union Local 302, and Sheet Metal Workers Union Local 104

Seven Schools (Including Creekside Elementary School) of San Ramon Valley Unified School District Project Labor Agreement between Shapell Industries and Windemere and UA Plumbers and Steamfitters Union Local 159 and International Brotherhood of Electrical Workers Union Local 302*

Placer County  – Developer Project Labor Agreements Applying to Schools

Junction Elementary School, Barbara Chilton Middle School, and Three Other Schools of Roseville City School District 2005 between Westpark Associates and Signature Properties and UA Plumbers and Steamfitters Union Local 447, International Brotherhood of Electrical Workers Union Local 340, and Sheet Metal Workers Union Local 162

Ventura County – Developer Project Labor Agreements Applying to Schools

Rio Del Mar Elementary School, Rio Vista Middle School, and Another Elementary School of the Rio School District in the RiverPark Development 2004 between RiverPark Development, LLC and Shea Homes with the Ventura County Building and Construction Trades Council

Rio Del Mar Elementary School, Rio Vista Middle School, and Another Elementary School of the Rio School District in the RiverPark Development 2007 between RiverPark Development, LLC and Shea Homes with the Ventura County Building and Construction Trades Council – Amendment

* I do not have a copy of this Project Labor Agreement, but an Invitation to Bid notice (bid deadline March 11, 2008) from Roek Construction (based in Stockton) for the $22 million new Creekside Elementary School (in Shapell Industries’ Alamo Creek Development) for the San Ramon Unified School District states that “The owner does have project labor agreements from the plumbing and electrical trades on this project.” A contractor informed me via phone that Shapell Industries and Windemere were signatory to the Project Labor Agreement.