More Union Deals in Monterey County's Quest for Water Project Funding

More than a year of waiting has proven fruitless for Monterey County. It’s now February 2016 and the State of California still hasn’t provided any funding to the Monterey County Water Resources Agency for a tunnel expected to significantly increase its capability for water storage.

California State Assemblymember Luis Alejo, who represents the region, could not obtain the $12-15 million in state money he repeatedly promised for the Interlake Tunnel Project. Alejo was confident that his Assembly Bill 155, signed by Governor Brown in 2014, would satisfy union lobbyists at the state capitol and establish ideal conditions for the county to obtain funding from the state.

The bill included a mandate for the county to require contractors on the project to sign a Project Labor Agreement with construction trade unions. For background, see these UnionWatch.org articles:

• Monterey County Water Officials Abandon Bill After Unions Reshape It – July 19, 2014
• Documents Expose Union Lobbying Scheme to Control Water Project Construction – September 16, 2014
• Unions Win First Victory to Control Projects Funded by Water Bond – December 9, 2014

Meanwhile, the water project has expanded in scope. Estimated costs have risen from $23 million to $68 million. The project now even includes a $5 million contraption to protect the white bass.

Where will the money come from for this ambitious water project? The Monterey County Board of Supervisors knows what to do. They must turn again to the union lobbyists at the state capitol, this time with a bit more attention to giving the State Building and Construction Trades Council of California what it wants, promptly.

If the county finishes negotiations and finalizes a Project Labor Agreement with state union officials, perhaps the California state legislature will pass Assembly Bill 1585, a new bill introduced in January 2016 by Assemblyman Alejo that sends $25 million in state funds (from a currently unidentified source) directly to Monterey County for its water project.

This bill is an “urgency” bill, requiring two-thirds supermajority approval in the Assembly and Senate. If every Democrat voted for AB 1585, Assemblyman Alejo would still need three Republicans in the Assembly and one Republican in the Senate to vote for it.

This isn’t as impossible as it seems. After all, Assemblyman Alejo has extra motivation to get the legislature to pass the bill and the governor to sign it.

A former city councilmember from Watsonville (in Santa Cruz County), Luis Alejo is termed out of his Assembly seat and now running for a Salinas-based seat on the Monterey County Board of Supervisors against the incumbent supervisor and an incumbent Salinas City Councilmember. He is under pressure to deliver the funding and prove to the powerful local agricultural industry and the people of Salinas that he can best serve their interests. To complicate matters, Alejo’s wife – now on the Watsonville City Council – is running for his open Assembly seat against a former mayor of Salinas.

How does all of this translate into policy? On February 9, the Monterey County Board of Supervisors will consider the following actions regarding the Interlake Tunnel and Spillway Modification Projects:

• Support a Project Labor Agreement (PLA) related to AB 1585 in a process open to interested parties, and emphasizing timeliness and accountability.
• Direct staff to begin negotiations with labor immediately on points not requiring design process information; and to provide the Board of Supervisors with bi-weekly progress reports.
• Provide that implementation of a PLA is contingent upon adequate funding being made timely available through enactment of, and budget appropriation for, AB 1585.

The staff report for the Project Labor Agreement agenda item explains what needs to be done:

If adopted and signed in its current form, AB 1585 would require no less than $25M to be allocated, upon appropriation of the legislature, to construct (revision) both the tunnel and spillway modification components of the project, using a Project-Labor Agreement (PLA). Since AB 1585 is an urgency bill, it requires a 2/3 vote, and if passed becomes effective immediately. The first hearing of AB 1585 will be sometime between February 8 and the beginning of March at a Policy Hearing.

The goal is to get AB 1585 to the Governor around the time he signs the state budget with the necessary funding so provisions of the bill go into effect as the monies are made available – which could be July 2016. Meeting the July 2016 goal is dependent on diligent movement through and consideration by the State Legislature without substantial amendments, approval by the Governor, and timely adoption of the State Budget.

Assembly Member Alejo has made it clear that the Agency/County needs to follow the process set forth in AB 155 related to the PLA to access funding related to AB 1585. In other words, the Assembly Member wants the PLA negotiated as soon as possible, and before AB 1585 is enacted. To that end, counsel has reached out to Building Trades representatives.

This is complicated wheeling and dealing. And negotiating and implementing the Project Labor Agreement mandate won’t be any easier, according to the staff report:

It is important to understand how the PLA negotiation process affects or is affected by using the AB 155 design-build or the Infrastructure Financing design-build-finance methods of awarding the construction projects. To assist in the decision-making process and facilitate the Board’s action to keep the Projects moving forward, three informational attachments are included with this report. They are: 1) a Project Labor Agreement Overview Briefing; 2) a PLA Checklist; and 3) the DRAFT Decision Matrix discussed at the December 15, 2015 meeting. Attorney Joan Cox, the Agency’s contract counsel, will present the PLA overview. Ron Drake, the Agency’s consulting Project Manager, will be available to review the Draft Decision Matrix.

See all of the documents referenced above at this link: Interlake Tunnel Project Update – Project Labor Agreement

The vote occurs on the afternoon of February 9. Opposed to the Project Labor Agreement are the Salinas Valley Chamber of Commerce, the Salinas Taxpayers Association, and several business associations representing non-union construction companies. It’s unclear what the unions will support and what they will reject in the current proposal. The agricultural industry wants the project but fears the increased costs to water users from a Project Labor Agreement. Strategic local politics may add some drama to the meeting.

And it may be all for nothing if the legislature and the governor don’t want to create a precedent by giving $25 million in state funds to one local government for one project.

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.