Tag Archive for Stockton Record

Stockton’s Path to Bankruptcy and the Secretive $1 Million Neil Diamond Show

UPDATE: The notorious $1 million Neil Diamond show continues to haunt the City of Stockton, as shown in this April 8, 2013 Stockton Record article It Started in a Hush-Hush Meeting: Quiet Gathering Over Tax Leads to Public Snipefest:

Sgt. Kathryn Nance, president of the Stockton Police Officers’ Association…also fears pressure the tax may put on Stockton’s fragile general fund, impacting the city’s bankruptcy fight. On the flip side, a general tax could fall into unsafe hands a decade from now under the next generation of leaders, she said.

“We could be paying Neil Diamond to play again,” Nance said. “Who knows? We can’t have that.”

In a March 12, 2006 Los Angeles Times article “Barry, Going the Distance,” Barry Manilow described his career:

“I’m good, not great,” he said as the plane streaked toward the state line. “I know the difference. Sinatra is great. Judy [Garland] is great. Tony Bennett is great. I’m pretty good. But you can go far on pretty good if you work hard and pay attention.”

Manilow’s description of his own work (which does NOT include composing “I Write the Songs” – a member of the Beach Boys wrote it) could be applied to the songwriting of Neil Diamond. “Solitary Man” and “Girl, You’ll Be a Woman Soon” were good enough to be better cover songs for other performers. But by the time I was old enough to pay attention to popular music, schlock such as “America” and “Heartlight” played on my parents’ AM radios.

Stockton - nine exits on Highway 99 going south.

Stockton – nine exits on Highway 99 going south.

Nevertheless, Stockton city officials proudly announced on December 2, 2005 that Neil Diamond would be the featured performer when the city inaugurated its brand new arena on January 15, 2006.

Stockton had been planning its ballyhooed new arena for four years. (See a City of Stockton PowerPoint presentation based on a February 19, 2004 consultant’s report analyzing the proposal and financing of the arena – the report itself is not available on the city’s web site.) I’ve found reported costs of $60 million, $64 million, $65 million, and $68 million for this project.

Rumors still circulate in Stockton about the motivations for this selection. I was puzzled about it and a little embarrassed for Stockton, as I had not heard about Neil Diamond since UB40 remade his song “Red Red Wine” in 1988.

The selection of Neil Diamond in a city with a white non-Hispanic population of under 25% was also mystifying. Apparently other people besides me weren’t excited about paying a lot of money to hear a “song she brang to me” and other lyrics from Neil Diamond identified in Dave Barry’s Book of Bad Songs as some of the worst of all time. Comments from Stockton residents in the December 2, 2005 Stockton Record article announcing Neil Diamond’s visit hinted at the trouble to come: “she’s not a fan and most likely won’t go to the concert” and “It would be nice if they had something to appeal to all age groups.”

A December 20, 2005 Stockton Record article (Neil Diamond Fans Paying a Higher Price to See Him in Stockton) was another ominous warning that ticket sales that had started on December 17 might not be going well. Yet all official reports continued to proclaim an expected sell-out for the concert.

By the beginning of January 2006, it became clear to the public that something was going horribly wrong. A January 4, 2006 Stockton Record article Stockton Secretive Over Cost of Show revealed that the city did not intend to comply with the newspaper’s request under the authority of the California Public Records Act to obtain the contract cost for Neil Diamond’s appearance.

The Howard Jarvis Taxpayers Association was also on the city’s case about the concert. It was preparing to sue the City of Stockton because it was using city utility fees to fund the construction of the arena and an adjacent baseball park, in violation of Proposition 218. (The Howard Jarvis Taxpayers Association won the case [Howard Jarvis Taxpayers Association et al. v. City of Stockton], but the city’s bankruptcy in 2012 may prevent city taxpayers from getting back the inappropriately obtained $31.5 million.)

Stockton City Hall

Stockton City Hall

At its January 10, 2006 meeting, the city council – apparently in closed session – determined that the cost had to be provided to the public. And on January 11, the Stockton Record reported on the $1 Million Man: Stockton Taxpayers Pay Premium for Neil Diamond Concert. (I’ve been unable to obtain the actual contract, so it’s unclear how the city revealed the cost.)

All that the public heard at the January 10, 2006 Stockton City Council meeting was a comment from Vice Mayor Gary Giovanetti celebrating Stockton for now being able to attract performers such as Neil Diamond:

During that week, some tickets were discounted. Vice Mayor Giovanetti said after the concert that “he could imagine that some concertgoers who had paid the original price might be angry over the two-tiered ticket pricing.” Giovanetti’s support for the Neil Diamond concert rightfully became a major issue in his 2008 campaign for San Joaquin County Board of Supervisors, as shown by this union campaign mailer. He came in fourth out of five candidates.

Stockton Arena - Site of $1 Million Neil Diamond Concert in 2006

Stockton Arena – Site of $1 Million Neil Diamond Concert in 2006

The concert on January 15, 2006 went off without a hitch, except for the $396,000 estimated loss. See the Stockton Record article “It’s Show Time – Neil Diamond Breaks in the Stage at Stockton Arena.”

The January 18, 2006 Stockton Record article City Manager Fired reported the next step, an immediate termination of the city manager:

The City Council, in an unexpected closed meeting, voted 6-1 to oust the manager, finding his spending money without council approval and his contentious relationship with the media, among other things, were unbearable, Mayor Ed Chavez said. Vice Mayor Gary Giovanetti dissented…

Council members – a majority of whom supported the manager publicly until recently – routinely granted Lewis widespread discretion to spend money. But they distanced themselves from him after forcing him to disclose how much the city paid singer Neil Diamond to perform Stockton Arena’s first concert Sunday. City Hall, after initially pledging the show would make money, acknowledged late last week that the concert likely would cost taxpayers $396,650 and make nothing for the Stockton Parks and Recreation Foundation, the charity billed as the beneficiary of the event.

A common theme in this whole matter was a lack of openness and transparency from city council members and staff about decisions and costs. And the city remained consistent in this behavior in its subsequent management of the new arena.

From the beginning, the arena lost money for the City of Stockton. (You know that a publicly-owned entertainment facility is a money loser when the local newspaper has to obtain financial records through a request under the California Public Records Request.) The Stockton Record reported the losses in its February 16, 2007 article Stockton Arena Experiencing Growing Pains:

The arena lost $2.1 million in 2007, about $600,000 less than in 2006, according to documents provided by the city in response to a California Public Records Act request.

The loss was greater than the City Council once anticipated – even in its first year, the arena was expected to lose no more than about $1.7 million – but was less than the city resigned itself to lose after the facility posted a $2.7 million loss in 2006. The city had expected to lose $2.3 million last year.

Financial losses continued annually and reached a total of $7 million by the end of 2009, as reported in the February 16, 2010 Stockton Record article Still Seeing Red: Stockton Arena Posts $2 Million Loss for 2009. In January 2011, the City of Stockton paid $1.2 million to get out of its arena management contract and adopt a new contract. Losses continued and became one of many factors leading to the city’s bankruptcy.

Poster on vacant building in Downtown Stockton.

Poster on vacant building in Downtown Stockton.

Meanwhile, a lot of people were incredulous when Neil Diamond claimed in 2007 that his song “Sweet Caroline” was about Caroline Kennedy, who was four years old when the song was written. (In August 2012, “Sweet Caroline” was taken off Penn State’s song playlist at Beaver Stadium because of the lyric “touching me, touching you.”)

Note: you are welcome to take the photos in this article for personal or commercial use.

Lodi Energy Center Dedicated Today – Official Press Release Doesn’t Mention the Project Labor Agreement or California Unions for Reliable Energy (CURE)

UPDATE: Some good news for ratepayers: the reporter for the Stockton Record newspaper was willing to evaluate the Lodi Energy Center beyond the orchestrated perspective of the Northern California Power Agency and its public relations firm Ziegler Associates. Here’s an excerpt from Staying Power: State-of-the-Art Clean Energy Behemoth Dedicated in Lodi – Stockton Record – August 11, 2011:

The project was not without its controversies. Some questioned whether construction workers were hired locally as contract guidelines required. A labor group that represents nonunion construction companies also was outspoken in criticizing a project labor agreement the NCPA entered into with union affiliates, which included a $90,000 payment from the power agency to a union group fund.

[note: hyperlinks added by me]

Officials on Friday denied those assertions, saying the Lodi Energy Center employed 80 percent of its construction workers locally and hired soldiers who returned from war.

“These union agreements would cut bid competition, raise costs, and prevent ratepayers from getting the best quality construction at the best price,” said Kevin Dayton, a former representative of the NCPA foe, Associated Builders and Contractors.

Dayton and his colleagues made little to no impact on the construction of the project, however. And, those who were key figures in building the plant maintain that the NCPA and the state are better off for it.

Meanwhile, the Lodi News-Sentinel’s August 11, 2011 article Local Officials Dedicate Cutting-Edge Lodi Energy Center fulfilled expectations with an article that only had positive things to say about the power plant, complete with with a quotation from Bob Balgenorth, head of the State Building and Construction and Trades Council of California:

“When this plant got started, we were in the depths of the depression in the construction industry. We had people who had been out of work for two or three years. This put 300 people from this area to work. … People who were now able to pay their rent, make their house payment if they still had one, put food on the table and send their kids to school and provide clean, efficient energy for the state of California.”

— Robert Balgenorth, president of the State Building and Construction Trades Council of California

The article neglects to mention there was a government-mandated requirement for those 300 people: as stated in the Project Labor Agreement, “all Covered Work will be performed by workers who are union members,” “All employees performing Covered Work shall be or shall become and then remain members in good standing of the appropriate Union as a condition of employment,” and (to make sure it’s clear) “The Unions shall be the source of all craft employees for Covered Work for the Project.”

Nor does the article mention the $90,000 check that the Northern California Power Agency sent via Fed-Ex to Bob Balgenorth on August 17, 2010.

Today (August 10, 2012), the Northern California Power Agency (NCPA) issued its press release describing the dedication of the Lodi Energy Center. (See text below).

This 300 megawatt natural gas-fired power plant was built under a Project Labor Agreement demanded by California Unions for Reliable Energy (CURE), as I described in my August 9, 2012 web post “Excluded! I’m Not One of the 300 Guests Invited by the Northern California Power Agency to Attend the August 10, 2012 Dedication of the Lodi Energy Center Power Plant.”

The August 8, 2012 media advisory from the Northern California Power Agency had reported that one of the speakers at the dedication would be “Bob Balgenorth, State Building and Construction Trades Council of California.” But his remarks weren’t included in the August 10, 2012 press release describing the event itself.

Today’s press release refers to “hundreds of high-paying jobs for Central Valley workers,” which would have happened even if contractors were NOT required to sign a Project Labor Agreement with unions. In fact, one of the non-union industrial contractors planning to bid on it before the NCPA commissioners imposed a Project Labor Agreement on it was even based in Lodi.

The press release neglects to directly reference the Project Labor Agreement or the magnanimous cooperation of the State Building and Construction Trades Council of California.

Here are some examples of earlier power plant groundbreakings and dedications:

Sutter Power Plant Dedicated – August 17, 2001 – “SBCTC President Bob Balgenorth was one of the speakers at the dedication. He praised the union members who made this project possible, and also spoke of the improving relationship with Calpine for the construction of power plants in California. PLAs have been negotiated for six plants with Calpine to date, and talks are in process for other work.”

Groundbreaking & Signing Ceremony: Niland Gas Turbine Plant – April 20, 2007 – “As Chair of California Unions for Reliable Energy and President of the State Building and Construction Trades Council of California, I want to acknowledge my appreciation to the members of the management team and the Board of IID. During the negotiations on the Project Labor Agreement, the leadership of the Imperial Irrigation District demonstrated that they have a vision for the future of the Imperial Valley.”
Below is the text of the press release.

From: Energy Commission [mailto:listenergia@listserver.energy.ca.gov]

Sent: Friday, August 10, 2012 1:23 PM


Subject: LODI-LIST: State, Local Agencies Come Together to Dedicate State-of-the-Art Lodi Energy Center


For Immediate Release:

August 10, 2012



Friday, August 10: Carri Ziegler or Corinne Chee

916-502-1131 (c) | carri@zieglerassociates.net

916-341-0472 (o)

916-508-1611 (c) | corinne@zieglerassociates.net


After Friday, August 10: Jane Cirrincione

916-781-4203 | jane.cirrincione@ncpa.com


Media Contact for California Energy Commission:

Amy Morgan 916-654-4989


State, Local Agencies Come Together to Dedicate State-of-the-Art Lodi Energy Center Natural Gas-Fired Power Plant is the Cleanest of its Kind

(Lodi, Calif.) – State and local elected officials today joined with the Northern California Power Agency (NCPA) in celebrating the completion of the 300-megawatt Lodi Energy Center (LEC), the cleanest and most efficient combined-cycle natural gas-fueled power plant in the State of California, if not the nation.

As the owner and operator of the LEC, NCPA partnered with 13 public power utilities and other agencies to construct the $388 million project in Lodi during the past two years.  When it comes online next month, the facility will serve millions of Californians by providing electricity to several participating municipal utility communities, BART and the California Department of Water Resources. 

“LEC is the future of clean, reliable energy, not just for the individual communities and agencies represented here today, but for the entire state of California,” said NCPA General Manager James H. Pope during today’s dedication ceremony. “This facility will come online quickly, burn less fuel and produce fewer emissions.”

Nine of NCPA’s 16 members, along with four other public entities, are sharing in LEC’s investment and benefits. The City of Santa Clara’s Silicon Valley Power is a major participant in the LEC with a 25 percent share of the project. The San Francisco Bay Area Rapid Transit District (BART) will use its portion of LEC’s output to help power its transit system trains, Pope said. The Modesto Irrigation District and the municipal utilities serving Lodi, Gridley, Ukiah, Healdsburg, Biggs, Lompoc, and Azusa will receive LEC energy, along with the Plumas-Sierra Rural Electric Cooperative, and the Power and Water Resources Pooling Authority.

What makes the LEC unlike any natural gas-fueled generation facility in operation today is the “fast-start” turbine at the heart of the plant, Pope said. This state-of-the-art Flex-Plant 30 combined cycle technology, designed and built by Siemens, A.G., provides a number of economic and environmental advantages over traditional natural gas-fueled plants. 

Since most conventional plant emissions occur during start-up, the LEC’s ability to significantly reduce the amount of time needed, up to 50 percent less than other units, to bring the facility up to full generating capacity increases overall efficiency and dramatically reduces emissions, Pope said. Overall, greenhouse gas emissions are being cut by 30 percent, compared to traditional combined-cycle plants.

Another important advantage of the LEC’s cutting-edge technology is its ability to rapidly ramp production up and down to match market conditions. LEC participants will be able to quickly respond to changing consumer power demand, reducing overall costs to the consumer.

The operating flexibility of the new LEC also will facilitate greater use of renewable sources of electricity, such as wind and solar resources, which have been more difficult to integrate into California’s energy resources because of their weather-dependent nature. This flexibility will allow the LEC to serve as a reliable back-up when changing weather conditions reduce electrical output.

“This innovative fast-ramping, gas-fired plant was specifically designed by Siemens as a solution to balance fluctuations on diverse power grids managing both renewable and traditional energy sources,” said Mario Azar, President of Energy Solutions Americas for Siemens. “Its clean footprint and versatility makes it an ideal solution to the growing need for stable and environmentally friendly power sources in the U.S. and around the globe. We are proud to be introducing this groundbreaking technology in partnership with NCPA.”

“The Lodi Energy Center will provide grid reliability to the Central Valley, while integrating renewable resources,” said Energy Commission Chair Robert B. Weisenmiller. “This is the future for fast-start gas-fired combined cycle power plants in the country.”

Santa Clara City Councilman Pat Kolstad agreed. “California has set very ambitious carbon reduction and renewable energy goals,” said Kolstad, referring to the landmark 2006 climate change act, and 2011’s 33 percent renewable portfolio standard requirement. “Our participation in LEC will help ensure that my community will continue to lead the way toward a cleaner, greener energy future for California.”

Steve Berberich, president and chief executive officer of the California Independent System Operator, also praised the LEC for the contribution it will make toward maintaining grid reliability as intermittent energy resources continue to make up a larger percentage of the state’s energy portfolio.

“The Lodi Energy Center’s cutting edge technology will help strengthen electrical system reliability as variable renewable resources continue to be deployed,” Berberich said.

During the more than two years it was under construction, the LEC created hundreds of high-paying jobs for Central Valley workers. At its peak, more than 300 skilled laborers, tradesmen and managers worked full time at the LEC site, located just west of Interstate 5 in southwest Lodi.

At any time during construction, a minimum of 80 percent of LEC workers resided within 50 miles of the Lodi area, ensuring that the local area economy directly benefited from the project’s construction. The focus on local employment was a key part of the appeal of the LEC project, both for NCPA and for the City of Lodi.

“NCPA’s emphasis on hiring local workers to build the LEC has produced tremendous benefits for the Lodi-area economy, both in terms of creating a significant number of high-quality local jobs and providing a reliable and affordable source of electricity for the state,” said Assembly member Alyson Huber, whose district includes the Lodi area.

Beyond the creation of jobs and the multiplier effect those jobs have on the local economy, the LEC will continue to provide economic benefits to Lodi as well.

Since LEC will only use reclaimed water in its steam generating and power plant cooling systems, NCPA has partnered with Lodi to purchase wastewater from the White Slough Water Pollution Control Facility, turning a water disposal liability into a valuable local economic asset.  In addition, sales tax on the generating equipment and a multi-decade lease for city-owned land, on which LEC is sited, will generate substantial additional revenue for Lodi.

“The Lodi Energy Center is providing tremendous benefits that reach far beyond providing an affordable and reliable energy supply for the ratepayers of the City of Lodi,” said Lodi City Councilman and NCPA Commissioner Larry Hansen. “The positive impacts will continue to be felt for years throughout our community and the state.”

The ultimate beneficiaries of the LEC, noted Healdsburg Mayor and NCPA Commission Chairman Gary Plass, are the residents of the communities that will be served by the facility.

“It’s been very gratifying,” he said, “to be associated with a project that will directly benefit my community. For my community as well as others associated with LEC consumers, keeping electricity rates affordable for our residential and business customers, while at the same time maintaining our excellent record of environmental leadership, has always been our goal.”

Lodi Energy Center Project Participants

The City of Azusa, Bay Area Rapid Transit (BART), the City of Biggs, California Department of Water Resources (CDWR), the City of Gridley, the City of Healdsburg, the City of Lodi, the City of Lompoc, Modesto Irrigation District (MID), Plumas-Sierra Rural Electric Cooperative (PSREC), the Power and Water Resources Pooling Agency (PWRPA), Silicon Valley Power (The City of Santa Clara), and the City of Ukiah.

About Northern California Power Agency (NCPA) The Northern California Power Agency (NCPA) is a joint-action agency serving public power entities located throughout Northern and Central California, including municipal and cooperatively-owned utilities and special districts. NCPA has built, and currently owns and operates, a portfolio of electricity generation resources that is 95 percent carbon-emission free. Drawing upon NCPA’s diverse mix of resources, our members collectively serve 750,000 California electricity consumers with a 20 percent eligible renewable resource portfolio.


California’s Top Construction Union Boss Opens the Slush Fund Hydrant: $1.14 Million Full-Blast Against San Diego’s Proposition A Voter Initiative

Here’s yet another scoop from the Dayton Public Policy Institute about how unions are influencing the June 2012 elections in California: one supreme union official based in Sacramento has pumped $1.14 million into San Diego to defeat a city voter initiative called Proposition A. And some of the cash originally comes from utility ratepayers.

For readers unfamiliar with Proposition A, read immediately below. Those who know about Proposition A can proceed down to read about the union sources of $1.14 million for the No on A campaign.

Who Supports Proposition A in San Diego, and Why?

In 2011, San Diego voters signed petitions to qualify a Fair and Open Competition ordinance for consideration in the June 5, 2012 election. It was the first measure placed by voters on the city ballot since 1998. Now designated on the ballot as Proposition A, the Fair and Open Competition ordinance would prohibit the City of San Diego from requiring construction companies to sign a Project Labor Agreement (PLA) with unions as a condition of working on a taxpayer-funded project. It also contains language requiring the city to post certain contract information on-line.

The campaign to enact Proposition A is strongly supported by construction companies and construction trade associations. This is no surprise, since most construction companies work directly with their employees (either individually or collectively through a union) to determine the terms and conditions of work. They don’t want two-bit local politicians to negotiate separate 30-page to 60-page labor agreements with union officials (i.e. the politicians’ campaign contributors) and then impose those agreements on their businesses.

Many companies refuse to bid on work that includes a government-mandated Project Labor Agreement in the bid specifications. The resulting reduction in the number of bidders competing for contracts results in higher costs for taxpayers (as academic studies, basic economic theory, and common sense would predict).

See the YES on A campaign web site here and contributors to the YES on A campaign here.

Who Opposes Proposition A in San Diego, and Why?

The main opponents of Fair and Open Competition policies are obviously construction trade unions, which regard government-mandated Project Labor Agreements as an effective political tactic to cut bid competition and raise costs for their own benefit. With Project Labor Agreements, union organizers can completely avoid the unpleasant and time-consuming task of selling the benefits of unionization to skeptical workers. Instead, they simply ask their political allies in government to give them a union monopoly on construction!

Most construction unions in California belong under the umbrella of the State Building and Construction Trades Council of California, a union conglomerate based in Sacramento under the leadership of president Bob Balgenorth. If you look at the list of contributors to the No on A campaign (Taxpayers to Preserve Community Jobs, No on Measure A, sponsored by labor and management organizations), you’ll see the top two donors are Sacramento-based union-affiliated organizations under the direction of Bob Balgenorth. These two entities contributed $1.14 million to the No on A campaign, comprising 96% of all campaign receipts.

Let’s take a closer look at these two massive organizations funding the No on A campaign. One of them is a routine political action committee, but the other is a conspiracy theorist’s dream come true.

A Union Political Action Committee Gave One $45,000 Late Contribution, Comprising 3.8 Percent of the Contributions to the No on A Campaign

The Sacramento-based committee known as “Members’ Voice of the State Building Trades Council of California” made a late expenditure contribution of $45,000 to the No on A campaign on May 24. As you can see on the California Secretary of State’s web site, this committee collects money from various local construction unions and disburses the money to various campaigns for candidates and ballot measures. The Assistant Treasurer of the Members’ Voice of the State Building Trades Council of California is Bob Balgenorth.

A Mysterious Union Slush Fund, Authorized by an Obscure 1978 Federal Law to Encourage Better Relationships Between Unions and Manufacturers, Gave $1,095,000 to No on A – a Whopping 92% of All Receipts!

Something called the California Construction Industry Labor-Management Cooperative Trust contributed a total of $1,095,000 to the No on A campaign. This is an extraordinarily high amount for a political contribution from one entity, especially concerning a local ballot measure! The head of the California Construction Industry Labor-Management Cooperative Trust is Bob Balgenorth.

This is NOT a traditional Political Action Committee. It is 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. This is an ambiguous and forgotten law that’s ripe for abuse.

It’s Not Union Members that Give the Money to the California Construction Industry Labor-Management Cooperative Trust: It’s Utility Ratepayers and Contractors Working for Extorted Power Plant Owners

Since the 1990s, whenever an energy company or public utility submits an application to the California Energy Commission seeking approval of a new power plant, an organization called California Unions for Reliable Energy (CURE) often “intervenes” in the licensing process. Represented by a South San Francisco law firm called Adams Broadwell Joseph & Cardozo, CURE submits massive data requests and environmental objections to the California Energy Commission. The applicant by law is required to answer CURE’s submissions, at significant cost and delay. The chairman of California Unions for Reliable Energy (CURE) is Bob Balgenorth.

If the power plant owner agrees to sign a Project Labor Agreement and require its construction contractors to sign a Project Labor Agreement with the State Building and Construction Trades Council of California or its regional affiliates, CURE’s objections go away and the power plant can proceed unhindered through the licensing process. If the company or utility does not surrender to CURE’s demand, then CURE’s interference and lawsuits continue.

This racket – sometimes called “greenmail” because it’s the use of environmental laws to pressure developers to sign Project Labor Agreements – is well-known to the energy industry in California and has been extensively reported in the news media over the past dozen years. (For example, see Labor Coalition’s Tactics on Renewable Energy Projects Are Criticized – Los Angeles Times – February 5, 2011.)

For cases in which the power plant applicant succumbs to CURE’s harassment, the Project Labor Agreement that the power plant owner signs usually contains a provision requiring the owner or its contractors to make a lump-sum payment or series of payments to the California Construction Industry Labor-Management Cooperative Trust.

For example, the Project Labor Agreement signed by the Northern California Power Agency (a conglomerate of publicly-owned utilities) for the construction of the Lodi Energy Center required the agency to shell out $90,000 to the California Construction Industry Labor-Management Cooperative Trust. That amount was dutifully mailed to Bob Balgenorth on August 17, 2010. (For more on this payment, see High Energy: Lodi Center Designed to be a Powerhouse for Chunk of State – Stockton Record – October 4, 2011; also, the union rebuttal on the California Building Trades Council web site – ABC Falsehoods Refuted in Letter to Stockton Record – a denial that the California Construction Industry Labor-Management Cooperative Trust is used for political contributions.)

And the Project Labor Agreement signed by the Southern California Public Power Authority (another conglomerate of publicly-owned utilities) for the construction of the City of Anaheim’s Canyon Power Plant required the agency to shell out $65,000 to the California Construction Industry Labor-Management Cooperative Trust. See Section 13.1 of the Project Labor Agreement here.

The California Construction Industry Labor-Management Cooperative Trust reports these payments as “membership dues” to the Internal Revenue Service. Which brings up a question: are the local elected officials who serve as commissioners for the Northern California Power Agency and the Southern California Public Power Authority exercising their responsibilities as “members” to approve $1,095,000 in political contributions to the No on A campaign?

But Wait a Minute…Is It Legal to Have Utility Ratepayers Fund a Mysterious Union Trust Fund that Contributes to Political Campaigns, Such as No on A?

Well, in 2009 an internal committee of the Northern California Power Agency discussed whether or not a payment to the California Construction Industry Labor-Management Cooperative Trust was an illegal gift of public funds. (See here. Note the original amount to the California Construction Industry Labor-Management Cooperative Trust was supposed to be $150,000, but aggressive opposition to the Project Labor Agreement forced the unions to cut it down to $90,000 in order to win approval from the board of commissioners.)

To solve this uncertainty, in May 2011 State Senator Mark Leno (D-San Francisco) added a cryptic amendment at the request of union lobbyists and lawyers to the end of a large unrelated public utilities bill (Senate Bill 790) regarding “community choice aggregation.” It added Section 3260 to the Public Utilities Code: “Nothing in this division prohibits payments pursuant to an agreement authorized by the National Labor Relations Act (29 U.S.C. Sec. 151 et seq.), or payments permitted by the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Secs. 173, 175a, and 186). Nothing in this division restricts any use permitted by federal law of money paid pursuant to these acts.”

No one in the California State Legislature – apparently not even Senator Leno – initially knew what this strange new provision meant. In the end, a few legislators such as Assemblywoman Shannon Grove (R-Bakersfield) came to understand and reveal in floor debate that it authorized public utilities to pass on the costs of payments to labor-management cooperation committees to ratepayers. Governor Brown signed the bill into law with the language tacked on the end.

For more information, see the investigative report of the Coalition for Fair Employment in Construction at this September 23, 2011 post at www.TheTruthaboutPLAs.com: A Genuine California Union Conspiracy: Senate Bill 790 and the California Building Trades Council’s Ratepayer Funded Political Slush Fund

Confused about the Conspiracy? Here’s a Chart.

A public utility or private energy company applies to the California Energy Commission for approval to build a power plant.


California Unions for Reliable Energy (CURE) uses its “intervenor” status at the California Energy Commission to submit massive data requests and environmental complaints about the proposed power plant, as a result gumming up the licensing process and causing costly and lengthy delays for the applicant.


Applicant for prospective power plant surrenders and agrees to sign Project Labor Agreement with State Building and Construction Trades Council of California or its regional affiliates. CURE releases its grip of legal paperwork and the project moves forward unimpeded and acclaimed as environmentally sound.


The Project Labor Agreement contains a required payment or payments to the California Construction Industry Labor-Management Cooperative Trust. California Public Utilities Code Section 3260 – enacted by Senate Bill 790 in 2011 – allows public utilities to pass costs through to ratepayers.


California Construction Industry Labor-Management Cooperative Trust reports those payments to the IRS as “Membership Dues,” creating questions about the rights inherent for dues-paying members.


California Construction Industry Labor-Management Cooperative Trust makes contributions to political campaigns, such as $1,095,000 to fund 92% of the No on A campaign (Taxpayers to Preserve Community Jobs, No on Measure A, sponsored by labor and management organizations) in the City of San Diego in 2012.



If You Vote to Require Contractors to Sign a Project Labor Agreement, You Will Be Accountable to the People for That Vote

Here’s an independent expenditure mailer sent to voters by “Defending the Republic Political Action Committee (PAC)” criticizing the voting record of San Joaquin County Supervisor Leroy Ornellas. Ornellas is running in the Republican primary against Assemblyman Bill Berryhill for the 5th State Senate District. Notice the mailer indicates that Ornellas voted (on May 22, 2007) to require contractors to sign a Project Labor Agreement (PLA) as a condition of building the San Joaquin County New Administrative Building.

Mailer – Bill Berryhill against Leroy Ornellas 2012

As Supervisor, he was the pivotal vote for a $95 million tax-eating county construction project made more costly because it shut out local small businesses from competitive bidding. It was so bad that the Republican Party voted to condemn any GOP office holders who voted for similar sweetheart deals.

On May 22, 2007, the San Joaquin County Board of Supervisors voted 3-2 to approve a Project Labor Agreement as part of a resolution to award a design-build contract for building the new San Joaquin County Administration Building.  It was the first (and to this date, only) government-mandated PLA implemented in San Joaquin County. The PLA was slipped into the resolution quietly, without any public advance notice that an exclusive agreement with unions was in the works. Ornellas voted for it.

The county Project Labor Agreement subsequently received a lot of attention from the San Joaquin County business community and the news media. In response, the San Joaquin County Republican Central Committee passed a resolution and the San Joaquin County Republican Assembly passed a resolution in the summer of 2007 opposing the use of PLAs by local governments in San Joaquin County.

After some initial difficulty, the Golden Gate Chapter of Associated Builders and Contractors (ABC) and the Coalition for Fair Employment in Construction (CFEC) were able to regularly obtain bidder information for work on the county’s New Administrative Building. The union promise of local contractors on this project was a complete bust, as ABC and CFEC dutifully informed county residents through opinion pieces and letters to the editor published in the Stockton Record, Tracy Press, and Lathrop-Manteca Sun-Post newspapers every time a new round of bidding was completed.