Unions Win First Victory to Control Projects Funded by Water Bond

It was unlikely that a few isolated and marginalized critics would discourage California voters from approving a statewide ballot measure (Proposition 1) authorizing the state to borrow more than $7 billion for water projects. As Proposition 1 stated, “California has been experiencing more frequent and severe droughts and is currently enduring the worst drought in 200 years. These droughts are magnifying the shortcomings of our current water infrastructure.”

As a result, Proposition 1 passed on November 4, 2014 with 67.1% of the vote. Few people heard or heeded warnings from negative ninnies alleging that state agencies and local governments would surely squander the borrowed billions from Wall Street on special interest enrichment schemes.

Now the rains are coming to ease the crisis. Meanwhile, the Monterey County Board of Supervisors and Monterey County Water Resources Agency Board of Directors today (December 9, 2014) took the first legislative action to prove the negative ninnies were right.

MC-MCWRA PLA SlideAt the demand of California Assemblymember Luis Alejo, the Board of Supervisors voted 5-0 and the Water Board voted 6-1 to direct staff to negotiate a Project Labor Agreement with the Monterey/Santa Cruz Building and Construction Trades Council for the Interlake Tunnel Project. All construction companies will be required to sign this union agreement as a condition of working on the project.

This project is likely to be among the first – if not THE first – water project to obtain Proposition 1 water bond funding from the California Water Commission. At Monterey County Board of Supervisors meetings on October 14 and October 28, Assemblyman Alejo told the board that he had received a commitment from Governor Brown for $12-15 million for the project.

But Assemblyman Alejo also first suggested and then declared to the board that the money would only come if the county adopted a specific “design-build” procurement procedure authorized in Assembly Bill 155, introduced by Assemblyman Alejo and signed into law by Governor Brown. Assembly Bill 155 included a provision requiring the county to impose a Project Labor Agreement if it bid the Interlake Tunnel Project using the design-build procurement method.

Documents subsequently obtained from Monterey County through a public records request exposed how state and local construction union lobbyists inserted this Project Labor Agreement mandate into the bill with the enthusiastic participation of Assemblyman Alejo. Democrats (and one Republican) moved this bill through the state legislature, despite votes by the Monterey County Water Resources Agency Board of Directors and the Salinas River Basin Management Plan Committee to oppose Assembly Bill 155 because of the unwanted Project Labor Agreement mandate imposed by the legislature on their own project.

By the time the scheduled vote on the Project Labor Agreement appeared on the December 9, 2014 joint meeting of the Monterey County Board of Supervisors and Monterey County Water Resources Agency Board of Directors, the design-build procurement procedure had become a sideshow to the real issue: giving the unions a Project Labor Agreement. A staff presentation stated that a Project Labor Agreement would be imposed on the Interlake Tunnel Project no matter what kind of bid procurement system was used.

And no one wanted to let the public know why the unions were getting a monopoly on construction of a project expected to receive federal, state, and local funding courtesy of the taxpayers. The staff report and staff presentation for the item did not define or explain a Project Labor Agreement, nor did it indicate any reasons why a Project Labor Agreement was needed.

Monterey County Water Resources AgencyNo one on the Board of Supervisors or Water Board wanted to explain it either. Any ordinary residents watching the meeting and looking at the background documents would have been mystified. However, they would have recognized that Assemblyman Alejo and union lobbyists at the meeting were very intent on making sure that the boards made an unambiguous commitment to mandate a Project Labor Agreement.

Water Board member Mike Scattini, a representative appointed by the Grower-Shipper Association, was the one NO vote. The other eleven board members supported the deal or surrendered to the deal, for ideological reasons, political reasons, or pragmatic reasons.

California local governments are getting accustomed to the idea that the state will withhold funds for their projects and activities unless they acquiesce to the union political agenda. For example, charter cities throughout the state have been scrambling in the last few months to modify their municipal codes to express complete submission to state prevailing wage laws.

Water agencies will soon learn that money borrowed by the state via water bond sales comes to local governments with some costly and anti-competitive conditions imposed from the capitol. The Interlake Tunnel Project was estimated in June to cost $22 million; now it is estimated to cost $63 million – including $32.2 million just for the construction component. It’s unknown if the estimate includes cost increases anticipated from the reduced bid competition under a Project Labor Agreement.

Sources

How a Bill Becomes a Law in California: Assembly Bill 155 (2014) (with links to cited source documents)

Agenda and Reports for December 9, 2014 Special Joint Meeting of the Board of Supervisors, Board of Supervisors of the Water Resources Agency and the Water Resources Agency Board of Directors

Proposition 1 – Water Bond. Funding for Water Quality, Supply, Treatment, and Storage Projects

Election Results – Proposition 1


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

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