Numerous local K-12 school districts and community college districts throughout California have entangled themselves in controversies over facilities construction funded by borrowed money obtained through bond sales. These controversies include the irresponsible sale of Capital Appreciation Bonds, inappropriate expenditures using bond proceeds, and questionable contracts for bond underwriting, construction program management, and project delivery. There has even been overt corruption.
An informed California taxpayer would probably conclude that stronger independent oversight is needed for bond finance and facilities construction at the state’s local educational districts. And, in fact, there is a structural check and balance now established in state law that can be assigned responsibility for greater oversight: the citizens’ bond oversight committees at school and college districts.
Construction Unions Resent Independent Oversight of Bond Measures
But the people of California should expect in 2016 to see their state government weaken – not strengthen – the powers of citizens’ bond oversight committees. These committees aren’t necessarily popular. Some district administrators and their lawyers and consultants apparently regard these committees as a meddling annoyance at best or an infuriating hinderance at worst. They certainly won’t object to weaker bond oversight committees.
But the sharpest distaste for citizens’ bond oversight committees comes from construction trade union officials. Oversight committees and their ability to independently evaluate policy proposals can sometimes undermine union efforts to implement policies such as Project Labor Agreements.
Independent citizens’ bond oversight committees have credibility with elected board members, the news media, and the public. They hold an official, formal role within a government to review policies and issue recommendations. They represent specific grassroots citizen constituencies in the community such as taxpayers, senior citizens, and parents. And they can generally review policies and make honest recommendations without worrying about political retaliation from special interests that provide campaign contributions, volunteers, and infrastructures.
Not surprisingly, citizens’ bond oversight committees usually don’t see an advantage in requiring construction contractors to sign a labor agreement with terms and conditions negotiated between union representatives and school district representatives. Why would a public agency want to impose a requirement in bid specifications that would obviously cut competition and raise costs of construction?
Bond Oversight Committees Were Meant to Protect the Interests of Taxpayers
In 2000, Governor Gray Davis and the Democrat-controlled California legislature enacted a state law mandating independent citizens’ bond oversight committees under certain conditions. This was part of a strategy to increase the passage rate for school and community college bond measures. Voters needed to be convinced that their interests as taxpayers would be protected even if the threshold for passage of school and college bond measures dropped from a two-thirds supermajority to a 55% supermajority.
The strategy worked. Voters approved a statewide ballot proposition reducing the threshold from two-thirds to 55%, and the passage rate for educational bond measures increased from 55% (from 1987 through 2000) to 82% (from 2001 through 2014). Educational districts were compelled to create and manage citizens’ bond oversight committees, although not always in compliance with state law.
The current purposes, functions, and organizational structure of these citizens’ bond oversight committees are outlined in California Education Code Section 15278-15282.
Citizens’ Bond Oversight Committees Object to Union Project Labor Agreements
There was no indication in 2000 that citizens’ bond oversight committees would object to government-imposed union monopolies for construction contracts. After all, the elected boards of only two local educational districts in California (the Los Angeles Unified School District and the West Contra Costa Unified School District) had considered Project Labor Agreement mandates at that time. The chaotic, raucous battles at California local governments over Project Labor Agreements had not yet become routine.
But as school and college bond measures became more frequent and much bigger in size after 2000, unions began aggressively lobbying school and college districts for Project Labor Agreements on facilities construction. Some citizens’ bond oversight committees were disturbed by this union pressure to change long-standing contracting policies (never mentioned during the bond measure campaigns) and decided they had a responsibility to make a recommendation on them. And the committees could cite state laws that gave them the authority to make such a recommendation:
1. California Education Code Section 15278 (b) states that “The citizens’ oversight committee shall actively review and report on the proper expenditure of taxpayers’ money for school construction.” Project Labor Agreements are never referenced in ballot language for bond measures (they are almost always implemented after voters approve the borrowing) and therefore it is debatable whether or not it is proper.
2. California Education Code Section 15278 (b)(5) says the citizens’ bond oversight committee has responsibility for “Reviewing efforts by the school district or community college district to maximize bond revenues by implementing cost-saving measures, including, but not limited to…” The reference to “but not limited too” was legislative intent for the Oversight Committee to have the authority to review matters such as unorthodox bidding requirements. Because unions (incredibly) claim PLAs are cost-saving measures, the bond oversight committees certainly have authority to review such proposals.
At the end of this article is a comprehensive list of actions taken by citizens’ bond oversight committees about Project Labor Agreements.
Unions May Try to Use the State Legislature to Neutralize Another Structural Check and Balance
What can unions do to suppress the independent activism of citizens’ bond oversight committees? Can the unions convince the legislature and Governor Brown to weaken citizens’ bond oversight committees, and can they do it without harming the ability of K-12 school and community college districts to win bond measures?
Opponents of Proposition 39 argued correctly in 2000 that the citizens’ bond oversight committee requirement used to promote Proposition 39 was based on a law passed by the legislature and would not be safely lodged in the California Constitution. That law could be repealed or amended by the legislature at any time.
That time is likely to be 2016.
The November 2016 ballot will include a $9 billion statewide bond measure. In addition, more than 150 school and college districts in California are expected to place a bond measure on the presidential primary and general election ballot. Unions want monopoly control of this work, and they don’t want to deal with continued flowering of local community resistance through bond oversight committees.
Since Governor Brown was elected in 2010, union lobbyists at the state capitol have diligently chipped away at structural checks and balances so they can realize the potential of a “one-party state” to achieve social change. For example, unions have been working for five years to neutralize powers granted to charter cities and other local governments under the California Constitution.
With the exception of political columnist Dan Walters, few political observers have highlighted this union-driven movement in California to centralize governance at the state capitol at the expense of local governments. In particular, construction union interests always seem able to preempt local control despite Governor Brown’s alleged support for the governance principle of “subsidiarity.”
Explaining the decision to strip power from citizens’ bond oversight committees will not be a challenge. Few Californians understand the cynicism and emptiness of policymaking at the California State Capitol. Unions will convince their legislative allies to justify weakened citizens’ bond oversight committees with arguments that they are broadening accountability and allowing educational districts to divert resources to the classroom.
And even if the citizens’ bond oversight committees are transformed into empty shells with no authority to review or make recommendations on anything of substance, voters are likely to continue approving 82% of bond measures (or perhaps 90% or higher in 2016 when Hillary Clinton is on the ballot). School and community college districts will continue to declare to voters in prominent ballot language that there will be independent citizens’ oversight of bond expenditures. Districts and their bond measure campaign consultants will assume – probably accurately – that 95% of voters won’t know the difference, and the other informed 5% had planned to vote against the bond measure anyway.
Watch for union-sponsored bills in 2016 that tackle their problem of independent citizens’ bond oversight committees.
History of Actions of Citizens’ Bond Oversight Committees on Project Labor Agreements
Although the Citizens Bond Oversight Committee at Los Angeles Unified School District – established locally through Proposition BB – was aware that the district and unions were negotiating a Project Labor Agreement in 1997-1999, the committee did not issue any statements or recommendations about it. This Project Labor Agreement preceded the passage of Proposition 39 in 2000.
From 2003 through 2006, five Citizens’ Bond Oversight Committees voted on recommendations concerning Project Labor Agreements:
1. San Jose Unified School District
On November 10, 2003, the Bond Oversight Committee for San Jose Unified School District voted 8-1 for the following motion: “At its meeting of November 10, the Measure F Oversight Committee was not convinced that adoption of a PLA would improve the efficiency of the expenditure of Measure F funds. The Oversight Committee therefore requests the Board of Education to refrain from adopting a PLA for Measure F.” The one vote against the resolution was an organizer for the local Carpenters union. In the end, the school board never voted on a negotiated Project Labor Agreement.
2. Fairfield-Suisun Unified School District
On February 24, 2004, the Bond Oversight Committee for Fairfield-Suisun Unified School District voted unanimously to recommend against approval of a PLA for future school construction. The school board subsequently voted 4-3 against negotiating a Project Labor Agreement.
3. Mt. Diablo Unified School District
On March 3, 2005, the Bond Oversight Committee for Mt. Diablo Unified School District voted 15-1 to recommend against approval of a PLA for future school construction. In the end, a Project Labor Agreement was imposed on some summer classroom renovation projects.
4. Sacramento City Unified School District
On August 3, 2005, members of the Bond Oversight Committee for Sacramento City Unified School District released a 15-page report backing their position that “since a problem does not seem to exist with regard to construction cost overruns, project delays or labor disputes within the district, and since clear and convincing evidence has not been submitted to substantiate the benefits of a Project Stabilization Agreement, the Citizens Bond Oversight Committee recommends that the Sacramento City Unified School District not enter into a Project Stabilization Agreement.” The school board subsequently voted 5-1 for a Project Labor Agreement.
5. Chabot-Las Positas Community College District
On July 25, 2006, the Bond Oversight Committee voted 4-2 to recommend to the board against using a PLA and to include this recommendation in the oversight committee’s annual report. District administrators and legal counsel argued that the oversight committee had no business making a recommendation. The college board voted 7-0 for a Project Labor Agreement.
By 2006, administrators and contract attorneys for school and college districts were obviously trying to suppress the desire of citizens’ bond oversight committees to review proposed Project Labor Agreements. A narrow legal interpretation about the role of bond oversight committees began circulating. This interpretation essentially confined the committees to a role of approving an annual report produced for the district showing that proceeds from bond sales were spent on construction and not on teacher and administrator salaries or general operating expenses.
From 2006 through 2015, numerous K-12 school and community college districts in California considered and approved Project Labor Agreements with unions. While some oversight committees received reports at their meetings from district staff about the proposed Project Labor Agreements, only four citizens bond oversight committees voted on a formal recommendation.
6. San Diego Unified School District
An editorial in the April 24, 2009 San Diego Union-Tribune reported on the district’s opposition to letting the bond oversight committee review Project Labor Agreements:
The policy was hastily adopted without any real scrutiny by district staffers. Voters were never told this costly requirement would be imposed before Proposition S was approved – or else they never would have approved it. But when members of the bond measure’s Independent Citizens Oversight Committee raised these and other issues, they were told to butt out. Mark Bresee, the school district’s general counsel, told committee members that their role as an “independent representative of all taxpayers” – Bresee’s term – didn’t mean they had a right to kibitz about the district’s possible adoption of a Project Labor Agreement…Thankfully, the bond oversight committee told Bresee and the school board majority to take a hike.
Then, as reported in the Voice of San Diego on May 26, 2009:
Staffers from San Diego Unified discouraged the bond oversight committee from weighing in on whether or not to adopt an agreement or how to do so, arguing that the research was so polarized and the question so political that there was no way to make a factual recommendation. The bond overseers disregarded their advice, then deadlocked on the issue of whether a contractor group should join the unions and the school district and the bargaining table.
That vote on May 21, 2009 was 4-4-1, and union officials had been prominent in contending that the oversight committee had no authority to discuss the issue. The board subsequently voted 3-2 for the Project Labor Agreement.
7. San Gabriel Unified School District
In 2010, the Bond Oversight Committee for recommended against a Project Labor Agreement. The board subsequently voted 3-2 for the Project Labor Agreement.
8. Oxnard Union High School District
On December 9, 2014, the district’s Citizens Bond Oversight Committee voted 4-1 to recommend that the board reject a Project Labor Agreement because of the likelihood of increased costs and other reasons. Nevertheless, the board voted 3-2 for a Project Labor Agreement.
9. San Bernardino Community College District
The bond oversight committee voted on December 12, 2014 to oppose the Project Labor Agreement, but the board voted 4-3 to approve it. Here is an excerpt from one of its reports:
More notable was the Board of Trustees passing a “Community Benefits Agreement” this December. This agreement is better known as a “Project Labor Agreement”, and these agreements give substantial advantages to union contractors vs. non-union contractors. The Bond Oversight Committee spent a significant amount of time and effort to determine if there was cost savings, as required under Section 5 of California Educational Code 15278. We gathered information from local businesses, trade groups, staff and other interested parties, and determined there was no clear cost savings, and a potentially significant (10-20%) cost increase with no benefit to the community. The committee made every attempt to communicate this decision to the Board, but we were not allowed to make our findings to the Board prior to the Board of Trustees voting to approve this agreement.
Despite consistent opposing arguments from student organizations and local stakeholders, as well as not taking the time to even hear the Citizens Bond Oversight Committee, regardless of our clear desire to present our well-researched findings and conclusion, the Community Benefits Agreement was approved. This rush to make a decision prior to hearing our report we find irresponsible, and we wish to make these actions known to the public.
Now, in 2015, citizens’ bond oversight committees in a high school district and a community college district in San Diego County want to hold meetings to discuss proposed proposed Project Labor Agreements and possibly make recommendations to the boards about the proposal. Union officials are unhappy about this. One request has been granted and one has been rejected.
10. Grossmont-Cuyamaca Community College District
At the Grossmont-Cuyamaca Community College District, the board voted 3-2 to delay a vote on negotiating a Project Labor Agreement in order to give the Bond Oversight Committee a chance to discuss the proposal and provide input to the board. That meeting is scheduled for November 12, 2015.
11. Sweetwater Union High School District
Despite repeated requests from representatives of its citizens’ bond oversight committee for a chance to make a recommendation, the board of the Sweetwater Union High School District shows no indication of letting that happen. As reported in the October 30, 2015 San Diego Union-Tribune, “Members of the Citizens’ Bond Oversight Committee criticized the board’s lack of transparency and called for a four-month moratorium to allow for study of the costs and benefits, to no avail.” The October 31, 2015 Chula Vista Star-News explained the view of one board member that the district has to pass the Project Labor Agreement in order for the bond oversight committee to know what’s in it:
Trustee Paula Hall brought the resolution to negotiate a project labor agreement forward. Hall said she has been having issues with her email so she didn’t get a chance to read the CBOC’s letter for a moratorium, but is aware of their concerns from them speaking out at previous board meetings. Hall said the board never sent the item to the CBOC because there is no information for them to look over as the board only passed a resolution. “There’s nothing to review,” she said. “There is no project labor agreement negotiated.”
It remains to be seen if the citizens’ bond oversight committee at Sweetwater Union High School District will ever get the chance to review a Project Labor Agreement and make a recommendation.
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.