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More Taxpayer Money Spent Justifying Union Political Agenda in California

About 95% of the public policy studies and reports circulating among California state and local governments reject a free market approach to societal challenges. Instead, these studies and reports advocate more government spending, more government programs, and more government intrusion into commerce and personal behavior.

Obviously “Progressive” intellectual thought in California gets a disproportionate share of funding. Who funds the policy institutes churning out the vision that will likely define the future of the state?

You do. For many of these operations, government is a major source of funding.

Federal, state, regional, and local governments move money around with little accountability through grants and contracts. Some of it ends up going to Left-leaning policy institutes.

One notorious example of a government-funded policy institute is the union-oriented University of California Miguel Contreras Labor Program. After the California Labor Federation succeeded in establishing the program with a $6 million appropriation in the 2000-01 state budget, the annual budget always included a specific line-item amount for the program. The UC Labor Program received a total of $37.4 million in direct appropriations until Governor Schwarzenegger vetoed the $5.4 million assigned to it in the 2008-09 state budget. It continues to operate today with help from taxpayers.

Last week top administrators of the City of Los Angeles decided to contract with the University of California Institute for Labor and Employment (affiliated with the University of California Miguel Contreras Labor Program). For the second time in a year, the labor institute will analyze a proposal to increase the minimum wage in the City of Los Angeles. The public contract for the second analysis is reportedly worth $84,000.

A few Los Angeles City Councilmembers are objecting publicly to the contract because of the obvious bias of the labor institute. Chances of a negative report from this operation are zero, as shown from the first analysis.

Union leaders and lobbyists attained a major victory. They can use these minimum wage studies as a basis to promote minimum wage increases throughout Los Angeles County, the state of California, and in states and cities throughout the rest of the country. Best of all, they don’t have to pay for the studies.

Another example of taxpayer-funded Progressive policy analysis and promotion now getting attention is the Bay Area Regional Prosperity Plan – Economic Prosperity Strategy.

In 2011, the U.S. Department of Housing and Urban Development awarded a $4,991,336 grant to the Metropolitan Transportation Commission in the San Francisco Bay Area to develop and implement this plan. In collaboration with the Association of Bay Area Governments, some of this federal money was transferred to “Community-Based Organizations” that have close relationships with unions.

Now the plan has been developed through the involvement of union front groups such as Working Partnerships USA and the San Mateo County Union Community Alliance. “Community Outreach” to the nine Bay Area counties is underway. (See below for information about the five “launch meetings.”)

The plan designates $800,000 (including $760,000 in federal funds) specifically to the outreach program, which some might call “lobbying and public relations.” Already the Oakland City Council has scheduled an agenda item at its January 13 meeting to discuss the plan.

On January 15, union officials and community organizers will hold a “launch meeting” at the Redwood City Library about the Bay Area Regional Prosperity Plan’s Economic Prosperity Strategy. Attendees will get to hear a presentation about “Pursuing Project Labor Agreements and Community Benefits Ordinances.” (In other words, how to give unions a monopoly on public and private construction projects.) Project Labor Agreements are a specific recommendation in the plan and are referenced several times.

That particular workshop will not proceed without controversy and fierce resistance from the Merit Shop sector of the construction industry. But it’s unclear if and how corporations and business groups in the San Francisco Bay Area will respond to a well-funded coordinated campaign in nine counties to promote a wide variety of leftist policy objectives. Obvious business targets of the plan include residential and commercial developers, high-tech and biotech companies that contract out for services, and transportation related to the Port of Oakland.

Strangely, the Bay Area Council – “The Voice of Bay Area Business” – provided research support for the Bay Area Regional Prosperity Plan. There’s a famous but apparently apocryphal quotation attributed to Vladimir Lenin: “The capitalists will sell us the rope with which we will hang them.” In this case, the rope is being purchased with taxpayer money.


Here is the notice about the “launch meetings.”

EPS [Economic Policy Strategy] Launch Meetings

Dear Friends,

We are wishing you very happy holidays and best wishes for 2015. To kick off the year, the Economic Prosperity Strategy drafting team is hosting a series of launch events to build towards our Capstone Conference in April. The workshops are scheduled for January 13, 15, 23, 26 and February 2. Each workshop is in a different location and will focus on different themes in the EPS. We are inviting all stakeholders from all of the Regional Prosperity Plan working groups, all community members who participated in the initial EPS workshops and all local and regional policy makers who will have a role in implementing the strategy. Please share the invitation with your networks. Call or e-mail if you have any questions, 510-207-6346 orkss@well.com.

Best wishes,

Kirsten (The Rev. Kirsten Snow Spalding, San Mateo County Union Community Alliance)

Economic Prosperity Strategy Launch Meetings 2015

In October 2014, a team of partner organizations working for MTC and ABAG issued the “Economic Prosperity Strategy: Improving economic opportunity for the Bay Area’s low- and moderate-wage workers.” The report is available for download at http://planbayarea.org/pdf/EconomicProsperity_web_single.pdf. The report, part of the Bay Area’s Regional Prosperity Plan, was produced with input from hundreds of participants throughout the region, including representatives from economic development organizations, community members, non-profits, businesses, labor, local governments, workforce development partners and others.The thrust of the Economic Prosperity Strategy was that achieving improved economic opportunity for all requires working on three goals simultaneously:

GOAL A: Strengthen career pathways to middle wage jobs (that pay between about $18 and $30 per hour).

GOAL B: Grow the economy with a focus on middle-wage work.

GOAL C: Improve the quality of jobs for current and future lower-wage workers.

Now, it is time to dig into the findings, learn from pilot projects and talk about what it will take to implement the Bay Area’s vision of economic prosperity for everyone.In a series of five meetings around the Bay Area, we will focus on these three goals and invite all stakeholders to share in implementing this vision for the Bay Area. This is your chance to shape how we collectively move forward.

EPS Workshop #1: Expanding Economic Opportunity through Basic Skills and Entrepreneurship

Tuesday, January 13, 2015, 9:30-11:30 a.m. Monument Impact, (Formerly Michael Chavez Center & Monument Community Partnership), 2699 Monument Blvd, Ste G Concord, CA 94520

• Expanding job-focused basic skills training

• Improving career navigation systems and supporting pathways, at the k-12 level and beyond

• Focusing on business formation and expansion

Hear from pilot projects including: the Michael Chavez Center in Concord, the Multi-cultural Institute’s three County day laborer program, the Allies for Innovation basic skills collaborative in Santa Clara and San Mateo, a worker cooperative project in the East Bay and an entrepreneurship program in Sonoma.

EPS Workshop #2: Building Career Pathways in the Construction Sector

Thursday, January 15, 2015, 9:30-11:30 a.m.  Redwood City Library, 1044 Middlefield Road, Redwood City 94063

• Focus on the Construction Sector

• Establishing industry-driven, sector-based regional training partnerships.

• Pursuing Project Labor Agreements and Community Benefits Ordinances

Hear from the Construction Careers Initiative, an industry driven pre-apprenticeship program in Santa Clara and San Mateo Counties, from local developers and from Building and Construction Trades Councils about initiatives to improve construction sector wages and working conditions and create comprehensive packages of community benefits as new projects are planned and built.

EPS Workshop #3: The Invisible Workforce: Strategies to Lift Up the Low-Wage Contracted Service Sector

Friday, January 23, 2015, 10 a.m. -12 p.m., Pipe Trades Training Center, 780 Commercial Street, San Jose, CA 95112

• Upgrading conditions in lower-wage jobs

• Organizing and professionalizing industries

• Emerging approaches to improving working conditions in contracted service jobs

Hear about issues in several predominantly low-wage industries in the Bay Area, particularly contracted service industries which tend to grow in the “footprint” of driving industries and often remain below the radar. Discuss emerging approaches that address these issues, regional implications of these trends and how to build stronger coordination across cities and sectors that are dealing with the growth of low-wage contracted service work.

EPS Workshop #4:  Coordination between Economic and Workforce Development, Transportation and Housing Plans

Monday, January 26, 2015, 2-4 p.m. SPUR Urban Center, 654 Mission Street, San Francisco, CA 94105-4015

• A Vision for Economic Prosperity for Everyone

• Cross-Sector Collaborations

• Regional and Sub-regional policies

Hear from regional policy makers, local jurisdictional leaders, workforce and economic development agencies and the researchers and drafters of the economic prosperity strategy.

EPS Workshop #5: Planning for Manufacturing, Logistics and Industrial Job Growth

Monday, February 2, 2015, 2-4 p.m.  Metropolitan Transportation Commission, 101 Eighth Street, Oakland, California 94607

• Focus on the Logistics and Goods Movement Sectors

• Develop land use plans that support transit-oriented jobs, industrial uses and housing.

• Develop a regional strategy to preserve and invest in industrial land.

Hear from regional planners about planned investments in goods movement infrastructure, from local jurisdictions engaged in sub-regional strategies like the Port of Oakland and the Northern Waterfront Initiative and Design It, Build It, Ship It, an industry-led workforce and economic development collaborative.


Sources: UC Labor Program Studies of Minimum Wage for City of Los Angeles

Documents: Procure an Economic Analysis – Los Angeles City Council Economic Development Committee

Business Leaders Criticize City’s Choice to Study Minimum Wage Hike – Los Angeles Times – January 8, 2015

Minimum Wage Consultant Pick Draws ComplaintsLos Angeles Daily News – January 8, 2015

Two L.A. Councilmen Ask to Reconsider Team Set to Study Minimum WageLos Angeles Times – January 9, 2015

L.A. Needs a Fresh Analysis of the Effects of a Minimum-Wage HikeLos Angeles Times (editorial) – January 12, 2015

Sources: San Francisco Bay Area Regional Prosperity Plan – Economic Prosperity Strategy

San Francisco Bay Area Economic Prosperity Strategy

Oakland City Council Informational Report for January 13, 2015 Meeting – Bay Area Regional Prosperity Plan

San Francisco Bay Area Economic Prosperity Strategy Launch Meetings 2015

HUD FY2011 Sustainable Communities Grantees

San Francisco Bay Area Regional Prosperity Plan ABSTRACT


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 @DaytonPubPolicyThis article was originally published in www.FlashReport.org on January 12, 2015 as Taxpayers Fund Biased Policy Justifications for LA Minimum Wage and Bay Area Prosperity Plan.

California High-Speed Rail Business Plan Misrepresents Project Labor Agreement

Before submitting its business plan to the state legislature every two years, the California High-Speed Rail Authority is required to produce a draft and encourage public comments. Its new 2014 draft plan includes a deceptive paragraph touting the union Project Labor Agreement added to bid specifications without any public deliberation or vote. This deserves public comment.

Background on the Project Labor Agreement for California High-Speed Rail

At its December 6, 2012 meeting, the California High-Speed Rail Authority board voted for a fairly innocuous Community Benefits Policy that stated the Authority’s desire for “optimizing benefits to California communities, small businesses, and residents through participation of community-based small businesses and individuals in economically distressed areas in the construction of the system.” It was a scheme to provide legal backing for a union monopoly on construction of the California High-Speed Rail system, the most expensive construction project in human history.

In late December 2012, the California High-Speed Rail Authority staff added an addendum to the bid documents for the 29-mile initial construction segment of rail line between Madera and Fresno. Disguised under the name “Community Benefit Agreement,” the Project Labor Agreement mandated by the High-Speed Rail Authority is a traditional boilerplate agreement with the State Building and Construction Trades Council of California for construction companies and professional construction service companies.

For the agreements, see the December 26, 2012 Draft Project Labor Agreement as Addendum 8 and see the August 13, 2013 final executed version of the Project Labor Agreement for California High-Speed Rail.

To portray this union mandate as something that would help “disadvantaged” workers in California’s Central Valley to get jobs, the Project Labor Agreement included a section that set a goal for contractors to hire certain classifications of people (such as homeless, ex-offenders, etc.) from zip codes anywhere in the United States that would fall under a definition of “economically disadvantaged” or “extremely economically disadvantaged.”

Not surprisingly, the public responded with disbelief and derision to the California High-Speed Rail Authority’s absurd claim to be a solution to social problems by serving as an employment agency. For example, the March 4, 2013 Sacramento Bee article High-Speed Rail Project Targets ‘Disadvantaged’ Workers in the Central Valley reported the following:

In addition to veterans, former foster children and single parents, the classification includes high school dropouts, the homeless and people who have been convicted of a crime. “There’s another chapter in the high-speed fail saga, and I almost can’t do this one with a straight face,” Assemblyman Brian Jones, R-Santee, said in a recent installment of “Are You Kidding Me?” a video series in which Jones vents political frustrations. “What a social engineering disaster this is going to be, and add to California’s laughingstock reputation.”

The Sacramento Bee March 5, 2013 editorial Should Ex-Cons Get Dibs on Rail Project? was also skeptical:

People who are qualified, have been in prison and served their debt to society should not be denied a chance to work on high-speed rail or any other government project. But that they should be given preference above other equally qualified long-term unemployed is absurd…The real beneficiaries of the agreement are the state’s building trades unions. Embedded in the agreement are provisions that make it more likely that union workers will be employed on the project almost exclusively…

And that claim is true, of course. A line-by-line analysis of the so-called Community Benefit Agreement reveals its subtle, tricky language. Loopholes will allow unions to control the project workforce while avoiding the challenging task of overcoming the problems of individuals who have difficulty finding and holding decent jobs. For a comprehensive analysis of the Project Labor Agreement, see my January 11, 2013 blog post Analysis of the Phony Community Benefits and Other Provisions in the Union Project Labor Agreement for the First Segment of California’s High-Speed Rail.

What the Project Labor Agreement does achieve is a guarantee of construction trade union support for an extremely costly, unpopular, and troubled project. See my January 21, 2014 www.UnionWatch.org article Unions Virtually Alone in Love with California High-Speed Rail.

For a narrative on how the Project Labor Agreement was apparently planned and implemented behind the scenes, see my April 29, 2013 blog post Newly Obtained Documents Reveal Which Elected Official Was the Catalyst for the Project Labor Agreement on California High-Speed Rail: Fresno Mayor Ashley Swearengin.

What Does the Draft 2014 Business Plan Claim About the Project Labor Agreement?

Connecting California, the Draft 2014 Business Plan for the California High-Speed Rail Authority issued on February 7, 2014, states the following on page 23 about the Project Labor Agreement:

Additionally, the Authority Board of Directors has approved a Community Benefits Policy that will ensure that 30 percent of the hours will be performed by National Targeted Workers and that 10 percent of the hours will be performed by disadvantaged workers. According to the National Targeted Hiring Initiative, disadvantaged workers either live in an Economically Disadvantaged Area or face specific barriers to employment. The impact of the Authority’s policy will be most strongly felt in the Central Valley where the design-build contractors will be required to fulfill these requirements and where the majority of workers will qualify as disadvantaged workers. At the same time, the Fresno Regional Workforce Investment Board received a $1.5 million grant to train hundreds of people for jobs in constructing the project.

This paragraph is riddled with inaccuracies and distortions. If you choose as a resident taxpayer of California or the United States to comment on this paragraph, below is a list of some ideas worthy of your elaboration.

Problems with Draft Business Plan Description of the Community Benefits Policy

1. The vague and innocuous “Community Benefits Policy” adopted by the Board of Directors was in practice implemented through a Project Labor Agreement subsequently negotiated and executed between the State Building and Construction Trades Council of California and the California High-Speed Rail Authority. The Draft Business Plan distorts by not recognizing this.

2. The California High-Speed Rail Authority board has never commented on the Project Labor Agreement (aka “Community Benefit Agreement”), discussed it as a formal agenda item, or voted on it. In a January 16, 2013 email about the Project Labor Agreement to the former chairman of Fresno County Economic Opportunities Commission, the Small Business Advocate of the California High Speed Rail Authority stated that “The Community Benefits Agreement (CBA) is an internal administrative document that was not necessarily intended to be circulated for public comment.”

3. As the implementation document for the “Community Benefits Policy,” the Project Labor Agreement (aka “Community Benefit Agreement”) does not and cannot “ensure” that any percentage of hours will be performed by any specific type of worker. It sets goals and requires signatory parties to “exert their best efforts,” have “efforts made,” make their best effort,” “make every effort,” “recognize a desire,” “acknowledge” goals, and “exercise full support of this policy.” The Draft Business Plan distorts by not recognizing this.

4. As the implementation document for the “Community Benefits Policy,” the Project Labor Agreement (aka “Community Benefit Agreement”) does not and cannot “ensure” that Central Valley workers from “Economically Disadvantaged Areas” will perform any percentage of hours. Workers from any “Economically Disadvantaged Area” in the country are eligible to fulfill the goals. The Draft Business Plan distorts by not recognizing this.

5. As the implementation document for the “Community Benefits Policy,” the Project Labor Agreement (aka “Community Benefit Agreement”) does not and cannot “ensure” that truly “disadvantaged” workers will fulfill the goals. First, a specific zip code may include households in dire poverty but also include households that are well-off. In addition, the nine categories of “disadvantaged worker” include a category for a military veteran of any background or an entry-level apprentice, who may come from any background. The Draft Business Plan distorts by not recognizing this.

6. The Draft 2014 Business Plan states that “the majority of workers [from the Central Valley] will qualify as disadvantaged workers.” This is conjecture – no one has been hired yet for any trade work. In addition, there is no indication of how many workers will actually be long-term residents of the Central Valley, how residency will be determined, or how unions will dispatch workers through the “registration facilities and referral systems established or authorized by this Agreement and the signatory Unions” as indicated in the Project Labor Agreement (aka “Community Benefit Agreement”). The Draft Business Plan distorts by not recognizing this.

7. The Draft 2014 Business Plan does not mention key provisions of the Project Labor Agreement (aka “Community Benefit Agreement”) related to union hiring hall dispatching procedures and mandatory employer and employee payments to union trust funds:

  • Contractors must “recognize that the Unions shall be the primary source of all craft labor employed on the Construction Contract for the Project” (Section 7.1) through a system in which “one Core Worker shall be selected and one worker from the hiring hall of the affected trade or craft and this process shall repeat until such C/S/E’s requirements are met or until such C/S/E has hired five (5) such Core Workers for that craft., whichever occurs first. Thereafter, all additional employees in the affected trade or craft shall be hired exclusively from the applicable hiring hall list.” (Section 7.1.2)
  • Employees must “comply with the applicable Union’s security provisions for the period during which they are performing on-site Project work to the extent, as permitted by law, of rendering payment of the applicable monthly dues and any working dues” (Section 6.2)
  • “All employees covered by this Agreement (including foremen and general foremen if they are covered by the Schedule A Agreement) shall be classified and paid wages, benefits, and other compensation including but not limited to travel, subsistence, and shift premium pay, and contributions made on their behalf to multi-employer trust funds, all in accordance with the then current multi-employer Schedule A Agreement of the applicable Union.” (Section 8.1) 

8. Although the Fresno Regional Workforce Investment Board did receive a $1.5 million grant to train construction workers, the Draft Business Plan does not indicate that training is being done through construction trade unions with additional requirements related to union representation. It does not indicate how much grant money is being transferred to union-affiliated trust funds or how trainees will pay union dues and initiation fees.

9. There are reports that the Fresno Regional Workforce Investment Board web site was not functional for months because of an alleged “backlog of registrants.” How many people registered, what was the extent of complaints that led to the shutdown and continued during the shutdown, and has this program adequately served the public? The Draft Business Plan neglects this issue.

10. Has the Project Labor Agreement (aka “Community Benefit Agreement”) been approved by the Federal Railroad Administration, as required in Section 3 of Executive Order 13502? The Draft Business Plan neglects this issue.

How Do Californians and Americans Comment on This Matter?

To ensure that the public has an opportunity to respond, the Authority is providing five methods for submitting comments on this draft plan:

1. Online comment form through the Draft 2014 Business Plan website at http://www.hsr.ca.gov/About/Business_Plans/Draft_2014_Business_Plan.html

2. By email at 2014businessplancomments@hsr.ca.gov

3. By U.S. mail to the Authority:

California High-Speed Rail Authority
Attn: 2014 Business Plan
770 L Street, Suite 800
Sacramento, CA 95814

 
4. Voice mail comment at 916-384-9516.

5. Provide public comment at the Authority’s Board of Directors Meeting on February 11, March 11 and April 10.

The Draft 2014 Business Plan can be found online at http://www.hsr.ca.gov/About/Business_Plans/Draft_2014_Business_Plan.html

 


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.

 

 

 

How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 2

Part 1 of “How a Basketball Arena Would Expand the Unionized Workforce in Sacramento” described how unions obtained a monopoly on construction of the arena through a backroom deal for a Project Labor Agreement. Part 2 describes how unions are likely to win representation of the food and service workers at the new downtown Sacramento arena. Part 3 will outline how unions will likely target the ancillary development around the arena.


Will food and service employees at the new downtown Sacramento Entertainment and Sports Center have union representation? UNITE HERE claims to represent 25,000 concessions workers at 50 stadiums, serving over half of all major league sports teams, for employers such as Aramark, Levy, SMG, Centerplate and Ovations.

It is intent on making sure it does not lose the one major league professional sports team in Sacramento – the Kings of the National Basketball Association.

Surprisingly, the March 26, 2013 non-binding term sheet between the owners of the Sacramento Kings basketball team and the City of Sacramento does not specifically address the relationship between the Kings owners and the arena employees. It only states that the owners “may elect to hire a private management company experienced in the management of comparable facilities to manage the ESC, subject to the reasonable approval of the City.”

Unions are vigilant. The Sacramento Valley Union Labor Bulletin reported the following on May 21, 2013:

In a letter sent to Sacramento City Council members, staff and allies in March, the Sacramento Central Labor Council asked that specific language be incorporated into any pre-development agreement for a sports and entertainment complex in the city.

Provisions included that the development team members and operators provide guarantees that current employees at the Sleep Train Arena be retained at the new arena, that Labor peace guarantees be upheld for all hotel and food and beverage enterprises associated with new arena development with relevant unions in Sacramento County and that sustainable wages and health benefits for employees working at the arena facility and ancillary developments. Other provisions also were outlined.

What the Sacramento Central Labor Council wants is a “Community Benefit Agreement” with a service worker retention policy, similar to what’s in the Community Benefit Agreement covering the Anschutz Entertainment Group (AEG) L.A. Live Sports and Entertainment District Project in Los Angeles. (That development includes the Staples Center, home to two professional basketball teams and a professional hockey team.)

Former Kings owner Maloof Sports & Entertainment began using Levy Restaurants in 2010 to provide food and beverage service at what is now Sleep Train Arena, where the Kings currently play. Sacramento’s UNITE HERE Local Union No. 49 claims to represent 300 food-service workers at Sleep Train Arena.

This union is likely to use a few strategies to keep control of the workforce in the new downtown Kings arena. In fact, it is already implementing one of these strategies.

Holding Up the New Arena with Environmental Objections

On January 31, 2014, UNITE HERE Local 49 submitted a letter to the City of Sacramento with comments about the Draft Environmental Impact Report (DEIR) prepared in accordance with the California Environmental Quality Act (CEQA). After listing a variety of failings in the DEIR, the union letter asserted that “Due to the various inadequacies described herein, the DEIR is substantially inadequate in its overall consideration of the potential environmental impacts of the project, particularly with regards to the ancillary development around the ESC (hotel, residential, office, commercial).”

Also noted in the letter is the union’s concern about “the approximately 300 food-service workers at Sleep Train Arena who are most directly impacted by the project.” This of course is the real concern, and UNITE HERE will certainly be looking for a deal with the Kings ownership to make the environmental objections go away.

Incidentally, unions are involved in another fight over control of concessions for a sports complex in Sacramento. On February 28, 2014, the board of directors of the California Exposition and State Fair approved a proposal by Ovations for construction of a multi-use sports facility to host the Sacramento Republic Football Club Division III professional soccer team.

Union officials complained at the board meeting during public comment that Ovations had not yet reached an agreement for union representation of concessions workers at the facility.  To pressure Ovations, they could appeal the board’s approval of a “categorical exemption” for the project under the California Environmental Quality Act (CEQA), thus delaying the construction and ensuring the facility isn’t ready well into the team’s 2014 season.

State Legislation

Labor unions throughout California are constantly worried that entertainment and sports facility management will try to cut costs (or “boost profits”) by ending their obligations to collective bargaining agreements. One prominent example in California is Honda Arena in Anaheim, where the Ducks professional hockey team plays.

On June 27, 2013, Governor Jerry Brown signed into law Senate Bill 71, a budget trailer bill that included a special provision pushed by UNITE HERE and added at the last-minute without committee hearings:

Existing law, the Displaced Janitor Opportunity Act [of 2001], requires contractors and subcontractors, as defined, that are awarded contracts or subcontracts to provide janitorial or building maintenance services at a particular job site or sites, to retain, for a period of 60 days, certain employees who were employed at that site by the previous contractor or subcontractor. The act also requires that employees retained for that 60-day period be offered continued employment if their performance during that 60-day period is satisfactory. The act authorizes an employee who was not offered employment or who has been discharged in violation of these provisions by a successor contractor or successor subcontractor, or an agent of the employee, to bring an action against a successor contractor or successor subcontractor in any superior court of the state having jurisdiction over the successor contractor or successor subcontractor, as specified.

This bill would, until December 31, 2014, apply the provisions of the Displaced Janitor Opportunity Act to every contractor, as defined, that provides food and beverage services at a publicly owned entertainment venue, as defined.

This provision was carefully written to target one specific entertainment and sports facility: the Honda Arena, owned by the City of Anaheim.

Senate Bill 71 was signed three days before the in-house operator Anaheim Arena Management took over food and beverage service operations of the Honda Arena from a contractor, Aramark Sports and Entertainment.

With Democrats still hovering around a two-thirds super-majority in the California State Assembly and State Senate, this provision could be amended so that 2014 becomes 2015, thus entangling the new Kings arena in a policy originally targeted at the Honda Arena.

Litigation

Senate Bill 71 provided unions with a tool to retaliate against Anaheim Arena Management. On August 20, 2013, union workers filed a class action lawsuit in Orange County Superior Court against Anaheim Arena Management to get back-pay and interest. In addition, UNITE HERE Local 11 sued Anaheim Arena Management to get the former Aramark workers back in their old jobs.

Anaheim Arena Management was accused of only retaining 75 of the 568 food and beverage service workers previously employed by Aramark. A judge imposed a temporary restraining order, but ultimately Anaheim Arena Management prevailed in court against the union.

Pressure from the Sacramento City Council

Unions may have leverage through the provision of the non-binding term sheet stating that Kings ownership “may elect to hire a private management company experienced in the management of comparable facilities to manage the ESC, subject to the reasonable approval of the City.” Could “reasonable approval” require a commitment for unionized food and beverage service workers? If a Community Benefit Agreement is not in place and the Kings ownership decides to contract out its operations at the arena, the approval process at the Sacramento City Council could be a place for UNITE HERE to apply pressure. It appears this option would not be available to UNITE HERE if the Kings ownership decided to manage operations in-house, as was done at Honda Arena in 2013.

Sources

Proposed, Non-Binding Terms of a Potential Transaction for Entertainment and Sports Center in Downtown Sacramento

Arena Project Will Have Labor Jobs, Mayor Says – Sacramento Valley Union Labor Bulletin – May 21, 2013

UNITE  HERE Local 49 CEQA DEIR Comments on Kings Arena – January 31, 2014

Community Benefits Agreement for the Los Angeles Sports and Entertainment District Project

Senate Bill 71 (2013)

UNITE HERE litigation against Honda Center in-house operations management: Temporary Restraining Order and Class Action Complaint for Damages

 


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.

 

 

 

Unions Virtually Alone in Love with California High-Speed Rail

Even close observers of the California High-Speed Rail Authority have struggled to track developments for the state’s planned bullet train. The debacle began in November 2008, when 52.7% of California voters approved Proposition 1A and triggered serious planning for what could be the most expensive construction project in human history. With that kind of money at stake, unions were obviously inspired to be part of this boondoggle.

Kings County Says No to CaHSRThe California High-Speed Rail Authority has become justly notorious for backroom deals, secretive administrative actions, and lack of transparency. But most Californians are at least vaguely aware that the project has been mismanaged and misrepresented.

Proposition 1A – placed on the ballot by the California State Legislature – authorized the State of California to borrow $9.95 billion to begin design and construction of a $45 billion complete high-speed rail system linking San Francisco, Los Angeles, San Diego, and Sacramento. Including interest payments, the Proposition 1A commitment was estimated to be $19.4 billion to $23.2 billion for bonds to be paid back over 30 years. According to Proposition 1A, that money borrowed by the state was supposed to be supplemented with significant funding from the federal government, private investors, and municipal governments.

Proposition 1A also promised that the bullet train would be able to travel non-stop from San Francisco to Los Angeles in 2 hours, 40 minutes. Presumably many Californians who voted for it – including the 78.4% of San Francisco voters who approved it – imagined a fast train speeding between two world-class cities along the median of Interstate 5. They were wrong.

Here’s the current appalling status of California High-Speed Rail:

1. The California High-Speed Rail Authority has spent $587 million on consultants as of September 30, 2013. The California State Treasurer has sold at least $703 million worth of bonds (Buy America Bonds and perhaps others) for California High-Speed Rail as of May 13, 2013.

2. The estimated cost has been dramatically revised. Instead of being $45 billion for the entire system, it is now $68 billion just for the line between San Francisco and Los Angeles, and the high-speed rail will be “blended” with other commuter rail lines at the beginning and end of the route. One group has estimated that the entire system may exceed $200 billion if bond interest is included and the federal government does not provide additional grants.

3. The California State Treasurer cannot sell the Proposition 1A state bonds because a judge determined in November 2013 that the California High-Speed Rail Authority failed to comply with the law. While the California High-Speed Rail Authority has already obtained $2,942,000,000 from the federal government, possibly under false pretenses of a commitment to matching funds, the Republican majority in the U.S. House of Representatives is intent on stopping further grants until the Authority gets its act together. No private investors have emerged – corporations want to GET money from the Authority through contracts, not give it money to be squandered. Cities in the San Joaquin Valley where the line will be built first have no money to invest in it – Fresno is nearly bankrupt.

4. Governor Jerry Brown desperately included $250 million in his 2014-15 budget for California High-Speed Rail to be obtained from “Cap and Trade” allowances paid by emitters of greenhouse gases as part of the California Global Warming Solutions Act of 2006 (Assembly Bill 32 or AB 32). But the project is expected to increase greenhouse gas emissions during four years of initial construction. The Authority claims it will earn the Cap and Trade funds because offsets from its tree planting program (as well as other activities such as “cleaner school buses and water pumps in Central Valley communities”) will allow it to produce “zero net emissions.”

5. With the “blended” plan, there are serious challenges to achieving the 2 hour 40 minute travel time required in law. An analysis claiming that the time can be met includes the train going over the Tehachapi mountain range (north of Los Angeles) at 150+ miles per hour. There is idle talk about digging a long tunnel for the bullet train through the seismically-active San Gabriel Mountains from Palmdale to Los Angeles, but this is probably to lull citizens of Santa Clarita into believing the rail won’t go through their town.

6. To the surprise and confusion of hipster high-speed rail supporters in San Francisco and Los Angeles, this bullet train will be a local, with stops at least in Merced, Fresno, Hanford or Visalia, Bakersfield, and Palmdale. In June 2013, the Authority awarded a $970 million contract (with provisions for an additional $55 million) to Tutor Perini/Zachry/Parsons (a joint venture) to design and build the first 29-miles of the high-speed rail between Madera and Fresno by February 2018. People are supposed to be able to ride the high-speed rail between Merced and Palmdale by 2022.

7. The California High-Speed Rail Authority erred by awarding the first design-build contract for a 29-mile stretch that includes 25 miles in one segment assigned for environmental review (Merced to Fresno) and four miles in another segment assigned for a different environmental review (Fresno to Bakersfield). While it received full environmental clearance for the 25-mile stretch, it has not received clearance for the 4-mile stretch. In December 2013, the federal Surface Transportation Board rejected a secretive request from the Authority for an exemption to environmental review. If it can’t get the federal exemption, the Authority’s design-build contract is in jeopardy.

8. Owners of 370 parcels that the California High-Speed Rail Authority needs for the first 29-mile stretch are apparently resisting or holding out on selling their property. At last report in mid-December, the Authority had allegedly closed escrow on five parcels. The Authority has now received authorization from the California Public Works Board to possess two parcels through eminent domain.

Based on these eight points alone, who would still be eager to proceed with this project besides Governor Jerry Brown, the corporations seeking contracts, and a scattering of citizens committed to various leftist causes related to urban planning and environmentalism? Unions.

Union supporters at California High-Speed Rail Congressional field hearing in Madera on May 31, 2013.

Union supporters at California High-Speed Rail Congressional field hearing in Madera on May 31, 2013.

In a backroom deal, without any public deliberation or vote, the board of the California High-Speed Rail Authority negotiated and executed a Project Labor Agreement (called a “Community Benefit Agreement”) with the State Building and Construction Trades Council of California. This agreement gives unions a monopoly on construction trade work and certain construction-related professional services.

In a January 16, 2013 email about the Project Labor Agreement to the former chairman of Fresno County Economic Opportunities Commission, the Small Business Advocate of the California High Speed Rail Authority stated the following:

The Community Benefits Agreemeent (CBA) is an internal administrative document that was not necessarily intended to be circulated for public comment, however, that doesn’t mean you cannot provide me your input. The document was added to Construction Package #1 and Addendum 8 and I’ve attached it herein for your convenience. It includes regulatory compliance and is being reviewed by the Federal Rail (sic) Administration.

There is no evidence available to show that the Federal Railroad Administration approved the Project Labor Agreement, as required by law. But the final version of the agreement was signed in August 2013. No board member or administrator of the California High-Speed Rail Authority has commented in a public meeting about the agreement that will give unions control of most of the claimed 100,000 job-years of employment over a five-year period.

When State Senator Andy Vidak, with Congressman David Valadao, held a press conference critical of California High-Speed Rail on January 17, 2014 at the site of the eventually-to-be-demolished Fresno Rescue Mission, there were protesters: construction union leaders, lobbyists, public relations officials, and activists. The Fresno Bee reported this about the press conference:

In a news release prior to the announcement, Vidak indicated that his goal is to kill the bullet train. He tempered his in-person remarks, however, as he faced a crowd that included both high-speed rail critics from his home area in Kings County and a couple dozen representatives of labor unions who support the project…Rail supporters, some clad in hard hats and safety vests, booed Vidak as they wielded their own signs proclaiming high-speed rail as “good for the local economy, good for air quality and good for jobs.”

The Fresno Business Journal reported this about the press conference:

Dillon Savory, an advocate representing several local unions, commented after the event that high-speed rail would not only provide needed jobs, but it would help improve the Valley’s air, which has been heavily polluted this winter. Also, the cost of roadwork in the area is about double the cost of high-speed rail, making road construction less cost effective, Savory said. Savory criticized the anti-high-speed rail forced for trying to pit rail against water. He said the greater issue is putting people back to work with decent paying jobs. He said many union workers are only finding temporary work for about two weeks at a time. That is not putting food on the table, he said.

In 2013, Savory was the manager for the successful union-backed campaign to defeat a ballot measure (Measure G) supported by the Mayor of Fresno that would have allowed the city to outsource garbage collection. The political professionals are getting involved.

When the groundbreaking ceremony occurs for California High-Speed Rail, perhaps in an abandoned Madera County cornfield seized through eminent domain by the Authority, expect thousands of construction union workers to be bused in to block and neutralize any protesters. Governor Brown cannot suffer any more embarrassment over this boondoggle and debacle.

Bullet train path through Kings County farmland.

Bullet train path through Kings County farmland.

Sources

California Streets and Highway Code Section 2704.09 (implemented by California voters in November 2008 as Proposition 1A, as authorized by Assembly Bill 3034 (Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century)

Top-40 Donors to Campaign to Convince California Voters to Borrow $10 Billion to Start Building High-Speed Rail

Election Results by County: Proposition 1A (2008)

May 7, 2008 Senate Appropriations Committee legislative analysis for Assembly Bill 3034 (source of estimated costs of bonds, including interest payments)

American Recovery and Reinvestment Act of 2009 (ARRA) High Speed Rail Awards

July 2012 – California’s High-Speed Rail Realities: Briefly Assessing the Project’s Construction Cost, Debt Prospects, and Funding (“The Realistic – No Additional Federal Funding scenario results in a total debt burden of $203 billion between 201 3 and 2058.”)

February 11, 2013 California High-Speed Rail Authority memo “Phase 1 Blended Travel Time”

A Preliminary Timeline of Activity Concerning What Will Be $9.95 Billion Borrowed through Proposition 1A Bond Sales for California High-Speed Rail

June 2013 – Contribution of the High-Speed Rail Program to Reducing California’s Greenhouse Gas Emission Levels (includes “plans to plant thousands of new trees across the Central Valley” and “cleaner school buses and water pumps in Central Valley communities”)

November 15, 2013 – Project Update Report to the California State Legislature (source of report that $587 million was spent on consultants)

November 25, 2013 California High Speed Rail Authority Bond Validation Lawsuit Ruling

November 25, 2013 – Tos Fukuda Kings County v California High-Speed Rail Prop 1A Part 1 Ruling

November 25, 2013 Tos Fukuda Kings County v California High-Speed Rail Prop 1A Part 2 Ruling

California High-Speed Rail – Fresno to Bakersfield Surface Transportation Board Exemption Letters

Project Labor Agreement (Community Benefits Agreement) for California High-Speed Rail – Addendum 8 in Bid Specifications – December 26, 2012

Project Labor Agreement (Community Benefits Agreement) for California High-Speed Rail – Final – August 13, 2013

February 27, 2013 Fresno County Economic Opportunities Commission Chairman Wonders Why No Input Into California High-Speed Rail Authority Project Labor Agreement

Vidak Rails Against Bullet-Train Plan, Met by Bipartisan Crowd at Fresno EventFresno Bee – January 17, 2014

Vidak Calls for High-Speed Rail RevoteFresno Business Journal – January 17, 2014

California High-Speed Rail Scam

Past Articles in www.UnionWatch.org on Unions and California High-Speed Rail

Unions Creep Closer to Monopolizing California High-Speed Rail Construction – December 6, 2012

Watch Union Official’s Rude Antics at California High-Speed Rail Conference – January 15, 2013

Unions Await Fantastic Return on High-Speed Rail Political Investments – January 22, 2013

Exposing the Plot Behind Project Labor Agreement for California Bullet Train – April 30, 2013

Unions Defend California High-Speed Rail Project at Congressional Hearing – June 4, 2013

California Construction Unions Circumvent Public Scrutiny of Project Labor Agreements – September 17, 2013

 


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.

 

Watch Union Official’s Rude Antics at California High-Speed Rail Conference

On January 11, 2013, a video camera recorded a stunning public tirade by Fresno’s top construction union official at a conference about supposed local contracting opportunities for the first segment of California’s High Speed Rail. Below is video footage of the beginning of a panel discussion about Project Labor Agreements, and below that is the ignominious ending of the panel discussion a few minutes later.

The incident exposes the coercive power of special interest groups behind the California High-Speed Rail Authority’s quest to slice the first segments of this rail corridor through the San Joaquin Valley, located in the middle of the planned route between San Francisco and Los Angeles. It also compromises the California High-Speed Rail Authority’s relentless public relations program to portray the high-speed rail to coastal urbanites as a progressive, visionary plan to save the planet.

An effective public relations campaign depends on major news media focusing on idealistic concepts, rather than the coarse ground game related to which people from which places get the jobs to perform the actual construction. But while idealistic concepts for environmental sustainability are promoted by professional activists who work for non-profit environmental and public transit advocacy organizations, building the high-speed rail requires construction trade workers. This injects union officials from the San Joaquin Valley into the coalition to build the rail line. And one of those union officials tarnished the progressive image on January 11.

Background: Why Will Unions Get a Monopoly on Building California’s High-Speed Rail?

Construction trade unions have long planned to use the government as its agent to monopolize the building of high-speed rail, now estimated by the California High-Speed Rail Authority to cost $68.4 billion. It seemed probable (but not guaranteed) that union workers that specialize in heavy industrial infrastructure construction would end up building the rail line itself. However, the stations and other building infrastructure would be prime bidding targets for Northern California’s productive and efficient non-union contractors. And unions do not want another failure similar to their failed plot ten years earlier to win a Project Labor Agreement to build the new University of California campus in Merced.

That plan – backed by Governor Gray Davis – was undermined in 2001 and 2002 by San Joaquin Valley business, political, and community leaders, who worked with some aggressive construction business associations to expose and criticize the scheme. In the end, bidding was done under fair and open competition, and non-union contractors and their non-union employees were prominent in building the new campus.

This time, things are different. Unions provided campaign support to pass Proposition 1A (the “Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century”) in November 2008. The head of the State Building and Construction Trades Council of California was appointed to the High-Speed Rail Authority Board of Directors, along with an official for the Operating Engineers Local Union No. 3, which represents operators of cranes, excavators, and other construction equipment.

So it shouldn’t be a surprise that Section 7.11.3 of the Request for Proposal for Design-Build Services for the first segment of the California High-Speed Rail project states that “Proposers are advised that, subject to FRA [Federal Railroad Administration] approval, the Authority intends to develop a Community Benefits Agreement consistent with the Community Benefits Policy adopted by the CHSRA [California High-Speed Rail Authority] Board at its December 6, 2012 meeting with which the Contractor will be required to comply.” (Note: “Community Benefits Agreement” is a euphemism for “Project Labor Agreement” meant to give the public a nice warm feeling about a union sweetheart deal.)

And Section 10.1 of the Request for Proposal states that  “The Authority [that is, the California High-Speed Rail Authority CEO Jeff Morales] will not make a recommendation for award of the Contract [to the California High-Speed Rail Authority Board of Directors] unless the successful selected Proposer has submitted the following: Escrowed Proposal Documents and corrected any deficiencies identified by the examination of the EPDs, and A letter of assent executed by the Proposer agreeing to be bound by the Community Benefits Agreement.” This indicates a government-mandated Project Labor Agreement.

California High Speed Rail Project Labor Agreement Mandate - Section 10.1

California High Speed Rail Project Labor Agreement Mandate – Section 10.1

In addition, the California High-Speed Rail Authority arranged the bidding process on the first segment of the High-Speed Rail (from Madera through Fresno) so that the five prequalified design-build construction consortiums are obligated to sign a Project Labor Agreement with the State Building and Construction Trades Council of California in order to be competitive. This subtlety is possible because the High-Speed Rail Authority is authorized to select the winning bidder using a somewhat subjective scoring system based on “best value” procurement criteria.

On December 6, 2012, the California High-Speed Rail Authority voted for a policy resolution that established generalized “community benefits” that contractors would have to demonstrate as a result of building the high-speed rail through the Central Valley. Not surprisingly, these same benefits are cited in the union Project Labor Agreement that is now included as a “Community Benefits Agreement” in Addendum 8 of the bid documents for the first segment of the high-speed rail. In order to maximize the score for community benefits, the contractor simply agrees to the Project Labor Agreement, and then everyone will feel good that ‘Needy’ Workers Will Get Jobs on High-Speed Rail.

For technical details about the provisions of this Project Labor Agreement, see my comprehensive, 4000-word Analysis of the Phony Community Benefits and Other Provisions in the Union Project Labor Agreement for the First Segment of California’s High-Speed Rail.

Unexpectedly Defiant Resistance to the Project Labor Agreement Provokes Union Anger

A panel discussion about the draft Project Labor Agreement for the construction of the first segment of the California High-Speed Rail was scheduled for 1:30 p.m. on Friday, January 11, 2012 during the 6th Annual San Joaquin Valley Region Public Contracting / Central Valley High Speed Rail Conference / Expo (Jobs & Contracts) at the Downtown Fresno Radisson Hotel & Convention Center. The panel moderator was Kathleen Ellis Faulkner, a Bakersfield attorney.

Three invited panelists showed up: John Hutson, Secretary-Treasurer of the Fresno, Madera, Kings and Tulare Counties Building and Construction Trades Council (this organization lacks a web site), Eric Christen of the Coalition for Fair Employment in Construction (a Project Labor Agreement opponent), and Nicole Goehring of the Northern California Chapter of Associated Builders and Contractors (another Project Labor Agreement opponent). As you hear in Video #1, organizers of the panel discussion had asked other union officials to participate (some apparently chose instead to sit in the audience).

As shown in Video #1, Hutson was flummoxed to find out he would be defending the unions’ Project Labor Agreement instead of explaining to the construction companies of the Central Valley how they would soon enjoy the benefits of unionization under the Project Labor Agreement if they hoped to work on the High-Speed Rail. He expresses his astonishment that “some little kid” was handing out information from Associated Builders and Contractors about Project Labor Agreements. He then proceeds to tell a colorful story from “when he was a small boy” about farm life.

None of this has anything to do with the terms and conditions of Project Labor Agreements in bid specifications for construction contracts, and Video #2 shows what happened when an effort was made by the moderator to get the panel discussion on track.

Hutson complains that Eric Christen is “edging it on” and “smiling it up.” (Did he mean “egging it on?”) He then says to Christen, in defiance of social norms of respect for other people as promoted by the White House and the U.S. Department of Labor, “I think I recognize you from before your sex change operation.”

The moderator tries to take the microphone away and restore order, but Hutson resists: “get your hands off.” Then he walks away from the table, only to return to spit out some profanity (specific words heard by witnesses but not quite audible on Video #2). He then storms out of the room (and the hotel) with his fellow union officials, leaving the contractors sitting in the room stunned at the personal attacks and derogatory statements launched during the five-minute panel discussion.

A press release jointly issued on January 11, 2013 by the Coalition for Fair Employment in Construction and Associated Builders and Contractors quoted a Fresno-based construction company owner who attended the panel discussion:

I took time away from my workday to be here to discuss this important issue on behalf of my employees that prefer to work in a merit shop environment. The antics displayed today represent the reason why I left the Union many years ago. The taxpayers and voters of California should be deeply concerned about the union favoritism displayed in this agreement.

In November 2008, 52.7% of California voters supported Proposition 1A, called the “Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century.” How many of them assumed that the 21st Century would involve these kinds of union antics?

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.