Tag Archive for International Union of Operating Engineers Local No. 3

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

Who’s Paying to Convince Sacramento Voters to Take On $414 Million of Additional Debt – Plus Interest – with Measures Q and R?

Measures Q and R on the November 6, 2012 ballot ask Sacramento voters to let the Sacramento City Unified School District Board of Trustees borrow a total of $414 million for construction by selling bonds to institutional investors. Sacramento taxpayers must pay this money back to the investors – with interest! It will cost at least $734 million – perhaps more if the district is lured into selling Capital Appreciation Bonds.

The opposition web site to Measures Q and R: www.fairandopencompetitionsacramento.com

Here are a couple of my observations about contributions to the campaign, based on the Sacramento City Unified School District – Yes on Q and R Campaign Form 460 – through September 30 2012 and the Sacramento City Unified School District – Yes on Q and R Campaign Form 460 – through October 20 2012.

1. This Campaign Is a Sitting Duck for Accusations of “Pay-to-Play”

Here’s a list of all of the campaign contributors through October 20, 2012, with links to the company web sites, the amounts contributed, and the business interest of the contributor.

DONOR INTEREST AMOUNT
Plumbers and Pipefitters Local Union No. 447 Construction trade union $25,000
Lozano Smith Law firm for school districts $10,000
Cumming Construction management $5,000
California Association of Realtors Selling houses and protecting interests at the state capitol $5,000
Landmark Construction Construction company – built past SCUSD schools without and then with a Project Labor Agreement $5,000
Lionakis Architect $5,000
Orrick, Herrington & Sutcliffe Bond counsel $5,000
Sacramento-Sierra’s Building and Construction Trades Council Construction trade unions $2,500
[Central Valley Sheet Metal Industry] Labor Management Cooperation Trust Union-affiliated labor-management cooperation committee $2,500
DLR Group Architect $1,500
Northern California Carpenters Regional Council Construction trade union $1,000
Operating Engineers Local Union No. 3 District 80 Construction trade union $1,000
Kronick, Moskovitz, Tiedemann & Girard Law firm for school districts $500
Loan from Patrick Kennedy for SCUSD Board of Education School board member’s political campaign fund $528
Williams + Paddon Architects + Planners Architect $500
Bricklayers and Allied Craftsworkers Local Union No. 3 Construction trade union $250
Other $25
TOTAL $70,303.00

2. Another Labor-Management Cooperation Committee Contributes to a Campaign

How many people in Sacramento know about the Central Valley Sheet Metal Industry Labor Management Cooperation Trust? There’s only one place on the web where you’ll read about labor-management cooperative trusts, and you’re reading it now. These trusts are arcane entities 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. 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.

Barreling Down the Tracks: Project Labor Agreement for California’s High-Speed Rail – the Biggest, Costliest Union Construction Monopoly in History

Background on Contracts for Construction of the First Section of the California High-Speed Rail, as Based on the Bill Approved by the State Senate Today (July 6, 2012)

This afternoon (July 6, 2012), the California State Senate barely passed a budget trailer bill (Senate Bill 1029) that authorizes $5.85 billion (actually, $5,849,752,000.00) to acquire land and build the “initial operating segment” of the California High-Speed Rail. According to the bill, the project will be reviewed and overseen by the (obscure) State Public Works Board.

In December 2012, the California High-Speed Rail Authority will award several contracts for this first segment through an alternative bidding procedure called design-build. Five entities that are conglomerates of major engineering and heavy construction infrastructure corporations have qualified to bid under this procedure. (This is the Big Time, although there is supposed to be a goal to have 30 percent of the work go to small businesses.)

Instead of awarding contracts to design the project and then awarding contracts to the lowest responsible bidder to build it, the California High-Speed Rail Authority is authorized to award contracts to qualified corporate entities that combine project design AND construction work. The California High-Speed Rail Authority will select the design-build entities using a somewhat subjective list of “best value criteria” that could result in design-build entities winning contracts without being the lowest price. The State Public Works Board and the California Department of Finance will approve the criteria to aware the design-build contract.

As directed by Assembly Bill 1029, the California High-Speed Rail Authority is now required to issue some reports related to construction:

1. By October 1, 2012, prior to awarding a contract to start construction of the first segment of the California High-Speed Rail, and prior to advertising additional contracts to be awarded in September 2013 and October 2013, the California High-Speed Rail Authority will provide a comprehensive staff management report that includes a list of “proposed steps and procedures that will be employed to ensure adequate oversight and management of contractors involved in the construction contracts funded in this act.” That same report will list “procedures to detect and prevent contract splitting.” The California High-Speed Rail Authority will also need to submit a report with the same content requirements before additional contracts are awarded in March 2017.

3. On or before March 1 and November 15 of each year, the California High-Speed Rail Authority will provide a Project Update Report approved by the Secretary of Business, Transportation and Housing to the budget committees and the appropriate policy committees of the Assembly and Senate on the development and implementation of the California High-Speed Rail.

4. On or before June 30, 2013, the California High-Speed Rail Authority will prepare and submit a report approved by the Secretary of Business, Transportation and Housing that provides an analysis of the net impact of the California High-Speed Rail program on the state’s greenhouse gas emissions. The report shall be submitted to the Assembly and Senate budget committees and transportation committees.

My observations about these provisions in Senate Bill 1029:

1. While it’s unclear how it will be implemented, it’s quite likely there will be a requirement for the design-build entities and their subcontractors to sign a Project Labor Agreement with unions for some or all of the construction work. I provided extensive background information about this Project Labor Agreement threat in my highly-read January 12, 2012 article in www.TheTruthaboutPLAs.com entitled California’s Top Construction Union Officials Love the State’s $100 Billion High-Speed Rail Project.

The eight-member Board of Directors of the California High-Speed Rail Authority includes Bob Balgenorth, head of the State Building and Construction Trades Council of California, and Russ Burns, head of the International Union of Operating Engineers Local No. 3. The Senate Rules Committee appointed Balgenorth, and former Assembly Speaker Karen Bass appointed Burns.

Balgenorth has spoken repeatedly and publicly in support of the California High-Speed Rail even as just about everyone with common sense has mocked the costly, beleaguered project. Surely someone will reward Balgenorth and Burns for their efforts with a requirement for contractors to sign a Project Labor Agreement with unions to work on construction of the California High-Speed Rail. Of particular benefit to the unions, a Project Labor Agreement will kill off what would have been fierce competition from non-union contractors to perform electrical work and build the stations.

2. According to its web site, the State Public Works Board (SPWB) “was created by the Legislature to oversee the fiscal matters associated with construction of projects for state agencies, and to select and acquire real property for state facilities and programs. The SPWB is also the issuer of lease-revenue bonds, which is a form of long term financing that is used to pay for capital projects.” Its five members are officials from the Department of Finance, the Department of General Services, the Department of Transportation, the State Treasurer’s Office, and the State Controller’s Office. Amazingly, there isn’t a representative of organized labor sitting in on this board.

3. According to the May 12, 2012 minutes of the State Public Works Board, the High Speed Rail Authority “anticipates acquiring 1,100 properties from Madera County to Bakersfield County over the next two years as part of the high speed train system.” Perhaps this explains why the California Construction Industry Labor-Management Cooperative Trust and its precedessor (the State Building and Construction Trades Council of California Labor-Management Cooperation Trust) made two huge campaign contributions ($1,000,000 and $250,000) to committees opposing statewide ballot measures to restrict government power to acquire property through eminent domain. (I’ll write more about this issue in a later post – it deserves its own analysis.)

4. It would seem that the report requirement in Senate Bill 1029 to explain oversight and management of the contractors on the California High-Speed Rail project would be fulfilled with implementation of the labor compliance requirements now outlined in California Labor Code Section 1771. This is language enacted in 2011 through union-backed Assembly Bill 436, a bill that also repealed language of California Labor Code 1771.9, which was enacted in 2003 by union-backed Assembly Bill 1506. That original language applied specifically to contractor labor law compliance for the California High-Speed Rail project. Note that the new 2011 law (Assembly Bill 436) allows a government entity to exempt itself from labor compliance requirements if “the awarding body has entered into a collective bargaining agreement that binds all of the contractors performing work on the project and that includes a mechanism for resolving disputes about the payment of wages.” (This is the definition of a Project Labor Agreement.)

5. What is “contract splitting,” and why does Senate Bill 1029 require the California High-Speed Rail Authority to report on its efforts to prevent it? These are interesting questions. Obviously someone somewhere is worried about something!

California Public Contract Code Section 20915 states that “It shall be unlawful to employ any means to evade the provisions of this article requiring contracts to be awarded after advertising and competitive bidding, including the splitting of projects into smaller work orders, the amendment of existing contracts, or the approval of a subcontract or subcontracts let under existing contracts. Every person who willfully violates this section shall be guilty of a misdemeanor.”

6. Senate Bill 1029 requires the California High-Speed Rail Authority to provide “an analysis of the net impact of the high-speed rail program on the state’s greenhouse gas emissions.” Realize that the construction of the California High-Speed Rail will result in significant greenhouse gas emissions from the diesel equipment used to build it. The Teamsters union was so “concerned” about greenhouse gas emissions in the Central Valley area where the first segment will be built that it filed a lawsuit in 2011 challenging the construction of a distribution facility in Visalia (where truck drivers would not necessarily be unionized).

In addition, the draft Environmental Impact Report for this project indicates that the California High-Speed Rail program may use diesel-powered switch locomotives associated with maintenance-of-way activities. See California High-Speed Train Project EIR/EIS – Fresno to Bakersfield Section – 3.3 Air Quality and Global Climate Change. (How could this be? I thought this High-Speed Rail was going to save the planet!)

The home page for California High-Speed Rail declares that “California Is Thinking Big Again.” I’ve only scratched the surface of a few of many issues involving this project, and I’m thinking California Is in Big Trouble if this project continues.

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)

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.