San Diego and Sacramento Asking Voters to Approve Over $3.0 Billion in Construction Bonds with Union Mandated Labor Agreements

Two California urban school districts notorious for requiring their construction contractors to sign Project Labor Agreements (PLAs) with construction trade unions will be asking voters to approve huge bond measures in the November 6, 2012 election.

Voters have overwhelmingly approved two large bond measures during the past 15 years for both the San Diego Unified School District and the Sacramento City Unified School District, but Project Labor Agreements were not an issue in those four campaigns.

The current elected board members of these two school districts apparently figure that cutting bid competition by giving unions control of construction work will not deter the November electorate in their cities from approving a third bond measure.

Whether or not voters make these school districts accountable for their construction contracting policies on behalf of construction trade unions will largely depend on the response of business and taxpayers groups to the proposed bond measures. There are few precedents in California for organized, well-funded campaign opposition to bond measures at school districts. On the other hand, opponents of Project Labor Agreements have 15 years of political experience aggressively fighting union-backed contracting policies at California local governments, particularly in San Diego and Sacramento.

San Diego Unified School District Wants Taxpayers to Pay for Bond Measure Worth $2.8 Billion (before Interest is Considered)

At its July 24, 2012 meeting, the Board of Education of the San Diego Unified School District approved a resolution to place a $2.8 billion bond measure on the November 6, 2012 ballot. This plot to get more taxpayer funding for construction has been in the works since the board’s November 1, 2011 meeting, at which the board directed staff to study the feasibility of a new capital facilities bond measure. The board received the results of the feasibility study on February 14, 2012, and of course the bond measure was highly feasible.

This is the third time in 15 years that the San Diego Unified School District has asked voters to approve billion-dollar bond measures. On November 3, 1998, 78% of voters approved the $1.51 billion Proposition MM, under which construction was awarded under fair and open bid competition, despite union lobbying for the school district to mandate that construction contractors sign a Project Labor Agreement.

Not knowing at the time that construction unions would be given control of the work, 69% of voters approved the $2.1 billion Proposition S on November 4, 2008. A Project Labor Agreement was sprung by the school board in January 2009 after union special interests won a seat in the same election and attained 3-2 majority control. The final version of the Project Labor Agreement was approved in July 2009 on a 3-2 vote, and the two board members who voted against it are no longer on the board.

In contrast to 2008, San Diego voters in the November 2012 election will be fully aware that the school board has given unions control of most of the work funded by the proposed $2.8 billion bond measure. To lock in the Project Labor Agreement for additional work funded by future bond measures, the school board voted 5-0 at the July 24, 2012 meeting for a resolution that expands the scope of the Project Labor Agreement for all projects that exceed $1 million and are paid for in whole or in part with future local bond funds.

Usually school boards are coy about their plans to mandate a Project Labor Agreement until after voters approve a bond measure. In this case, voters will be considering the wisdom of government-mandated Project Labor Agreements as well as the wisdom of taxing the citizens and businesses of San Diego an additional $2.8 billion (plus billions more in interest) for school construction.

Sacramento City Unified School District Wants Taxpayers to Pay for Bond Measure Worth $346 Million (before Interest is Considered)

On July 19, the Board of Trustees of the Sacramento City Unified School District approved a resolution to place a $346 million bond measure on the November 6, 2012 ballot. This plot to get more taxpayer funding for construction has been in the works since the board’s January 19, 2012 meeting, at which the board authorized the development of a Sustainable Facilities Master Plan. A feasibility study for this bond measure, including polling of voters, is ongoing, but you can bet that the bond measure will be found to be highly feasible.

This is the third time in 15 years that the Sacramento City Unified School District has asked voters to approve multi-million-dollar bond measures. On October 19, 1999, 79% voters approved the $195 million Measure E in a special election. On November 5, 2002, 67% of voters approved the $225 million Measure I.

The board of the Sacramento City Unified School District voted 5-1 on September 1, 2005 to require all contractors to sign a Project Labor Agreement with construction unions in order to work on projects worth $1 million or more funded by the remaining $170 million authorized by Measure E (1999) and Measure I (2002). On September 4, 2009, the board voted 5-0 to extend the district’s Project Labor Agreement on all Sacramento City Unified School District projects worth $1 million or more for another four years. International Brotherhood of Electrical Workers (IBEW) Local No. 340 union official and board member Patrick Kennedy did not vote, in order to avoid a conflict-of-interest. See the amended and extended Project Labor Agreement here.

The school board for the Sacramento City Unified School District has considered Project Labor Agreements three times since 2000. The change in voting patterns symbolizes the change in the political climate of California over the past 15 years.

• 2000 Board voted 4-3 to reject a PLA.
• 2005 Board voted 5-1 to approve a PLA. (Actual vote count was 5-2.)
• 2009 Board voted 5-0 to renew a PLA. (Actual vote count was 7-0.)

First Study on Project Labor Agreements in California Shows Cost Increase on School Construction

In July 2011, the Associated Builders and Contractors – California Cooperation Committee (ABC-CCC) announced the release of a study done by the National University System Institute for Policy Research in San Diego showing that California school construction project costs under Project Labor Agreements are 13-15 percent higher than costs under fair and open bid competition. The study is at www.thecostofPLAs.com.

The policy institute held a press conference on July 22, 2011 about the study, and a mailer about the study was sent to all public works and facility officials at California local governments. Union officials and a professor at a labor institute at Michigan State University promptly attacked the study, but undermined themselves by claiming the study omitted the consideration of variables that the study actually and clearly considered. This comprehensive study took 2½ years to complete and is probably the best Project Labor Agreement study ever produced in terms of sample size and validity of the results.

The author of the National University study spoke at a monthly meeting of the Contra Costa Taxpayers Association on May 18, 2012 and was greeted by a “friend,” courtesy of the Contra Costa County Building and Construction Trades Council.

It’s not a surprise to see union officials so intent on attacking the detractors of Project Labor Agreements, considering their significant loss of market share over the past 30 years and the difficult economic circumstances in the California construction industry. They need work without the disadvantage of competition, and the school boards of the San Diego Unified School District and the Sacramento City Unified School District are willing to give it to them through Project Labor Agreements. It remains to be seen if taxpayers are willing to be part of it.

Kevin Dayton is the President and 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.