Monterey County Water Officials Abandon Bill After Unions Reshape It

Any California local government seeking help from the state should know that union lobbyists won’t let the legislature pass anything unless unions have their own interests satisfied in the process. The Monterey County Water Resources Agency learned this lesson the hard way: it has now withdrawn support for its own bill after the State Building and Construction Trades Council of California added its unwanted and unannounced “ornamentation.”

A water drop or a teardrop?

This water district wants to build a pipeline between two reservoirs to increase water storage. It needs a special provision in state law to authorize its use of a specific version of “design-build” contracting. Instead of using the traditional design-bid-build contracting process, the agency wants to combine design and construction into one contract and award the contract based on somewhat subjective bidding criteria.

Assemblyman Luis Alejo (D-Watsonville) agreed to gut and amend one of his existing bills (Assembly Bill 155) and create a new bill authorizing the agency to use design-build project delivery for the pipeline. But the authorization comes with a catch: a provision added to the bill requires the design-build entity to sign a Project Labor Agreement with construction unions as a condition of working on the pipeline.

There was never any public deliberation or a vote on this union mandate. And it’s unclear how many people on the elected Monterey County Board of Supervisors, the appointed Monterey County Water Resources Agency board of directors, and the appointed Salinas River Basin Management Planning Committee knew about it. The Northern California Chapter of Associated Builders and Contractors (a construction trade association) requested relevant documents on June 26 under the authority of the California Public Records Act, but the county has delayed providing any records that would reveal details of the backroom deal.

At the state level, Assembly Bill 155 is significant for taxpayers and local governments. It contains the first explicit state mandate for a Project Labor Agreement on a California local government project. Assembly Bill 155 would create a precedent to impose a requirement that all construction companies on local design-build projects sign a Project Labor Agreement with unions.

To subvert the state legislature and bring the fight to the local level, opponents of Project Labor Agreements brought the issue to the attention of the Salinas River Basin Management Planning Committee at its June 18 meeting, during which some limited information was revealed about how this backroom deal was developed. (See excerpt from minutes, below.) At its July 9 meeting, the committee voted 4-1 to recommend to the Monterey County Water Resources Agency board of directors that it withdraw its support for Assembly Bill 155.

On July 28, after a staff presentation and extensive discussion, the Monterey County Water Resources Agency board of directors voted 5-3 to direct agency staff to send a letter to the Monterey County Board of Supervisors asking them to withdraw support for the bill. One board member who voted against the resolution advocated openly for Project Labor Agreements. Speaking in opposition to the withdrawal of support for Assembly Bill 155, an official with the Monterey/Santa Cruz Building and Construction Trades Council claimed that a non-union contractor on a recent agency project submitted excessive change orders.

What was once an optimistic, ambitious opportunity to increase water storage during a severe drought has become a dispute over who gets control of construction work. Unions want a monopoly on this pipeline project, and they have an angle to get it. But local water officials are defying how business is done at the state capitol and making things uncomfortable for the unions and their political allies.

Will unions retaliate against this presumptuous challenge to their political power? Maybe. Three threats are in circulation:

1. The head of the Monterey/Santa Cruz Building and Construction Trades Council has repeatedly threatened in public comment to sue the Monterey County Water Resources Agency for alleged illegal contracting practices. These threats surfaced after community leaders began questioning the sneaky Project Labor Agreement mandate. The Monterey County counsel’s office doesn’t see any validity to the union claims, but lawsuits are a frequent weapon of unions, which presumably can obtain the money to pay lawyers for aggressive, expensive, time-consuming litigation against a financially-struggling local agency.
2. Water officials sympathetic to Project Labor Agreements have hinted that Assemblyman Alejo could block future state funding to the agency in his district. This might seem self-destructive, but there is a precedent in California. Democrat state legislators representing the City of San Diego have no qualms about cutting off construction funding to the city after its voters approved an ordinance in June 2011 prohibiting Project Labor Agreements. These legislators voted for Senate Bill 922 and Senate Bill 829, which cut off state funding as a retaliatory measure. Ultimately, these union-backed state legislators want to pressure their San Diego constituents to surrender and vote for another ballot measure that repeals their city’s “Fair and Open Competition” ordinance.
3. At the July 29 meeting of the Monterey County Board of Supervisors, Supervisor Fernando Armento declared that a Project Labor Agreement mandate on county projects was inevitable, sooner or later. It would not be surprising to see a vote for a Project Labor Agreement policy scheduled for an upcoming board meeting to punish brazen advocates of fair and open competition and fiscal responsibility.

Meanwhile, Assemblyman Alejo told staff of the Monterey County Water Resources Agency in a meeting on July 7 that he will continue to advance Assembly Bill 155 even if the agency stops supporting it. (Certainly the unions still like it.) With its special “urgency” status, Assembly Bill 155 needs two-thirds approval in the Assembly and in the Senate.

In the Assembly, the Democrat supermajority can pass the bill without any Republican votes. In the Senate, Republican Anthony Cannella – a strong supporter of the construction union agenda who represents the Salinas Valley – is a sponsor of Assembly Bill 155. Another Republican – Steve Knight – voted for the bill in committee, perhaps to seek favor from unions in a general election against Republican Tony Strickland for an open Congressional seat. This bill is on its way to become law.

Minutes of the June 18, 2014 meeting of the Salinas River Basin Management Planning Committee reveal how and why the Project Labor Agreement mandate was added to Assembly Bill 155.

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.