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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.

 

 

 

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.

 

Exposing the Plot Behind Project Labor Agreement for California Bullet Train

Documents obtained on April 29, 2013 through a request under the authority of the California Public Records Act reveal behind-the-scenes maneuvering for a government mandate that construction companies sign a Project Labor Agreement with the State Building and Construction Trades Council of California as a condition of building California’s High-Speed Rail.

Getting these records was not a simple task. The appointed board of directors of the California High-Speed Rail Authority never discussed or voted on this union monopoly. The Project Labor Agreement materialized out of nowhere in late December 2012 as Addendum 8 in the bid specifications for the first construction segment from Madera to Fresno.

For reasons still to be publicly revealed, obscure Fresno-based appointed boards and quasi-public groups interacted with federal and state officials to develop the Project Labor Agreement for what will be the most expensive public works project in human history. It was the Fresno Regional Workforce Investment Board that possessed many of the key documents. So far only one elected official has been identified as a direct player in the scheme: Fresno Mayor Ashley Swearengin.

Here’s what is available and known to the public as of April 30, 2013.

In November 2009, the California High-Speed Rail Authority requested “expressions of interest” from local governments for a $40 million heavy maintenance facility somewhere from Merced to Bakersfield that would employ up to 1500 workers during peak shifts. The County of Fresno, the City of Fresno, the Economic Development Corporation in Fresno County, and the Fresno Regional Workforce Investment Board organized a consortium called “Fresno Works” to compete for the facility against cities such as Merced, Chowchilla, and Bakersfield.

At some point this Fresno Works consortium appeared to expand its interests to include getting a requirement for high-speed rail contractors to hire people from areas of the Central Valley where unemployment is high. In September 2011, the Fresno Regional Workforce Investment Board recommended to the Fresno Works consortium that the California High Speed Rail Authority (CHSRA) implement a “Targeted Unemployed Worker” Program and “First Source” transparency requirement for contractors working on the California High-Speed Rail project.

The board of the California High-Speed Rail Authority discussed the proposal at its January 12, 2012 meeting. (Board member Tom Richards was also serving as chairman of the Fresno Regional Workforce Investment Board and removed himself from the board discussion.) It was already moot because a letter dated January 6, 2012 from the U.S. Department of Labor’s Federal Railroad Administration to the California High Speed Rail Authority indicated that the proposed workforce requirements violated rules concerning the use of federal grants for construction projects.

Nothing was mentioned about labor unions or Project Labor Agreements in this proposal. California High-Speed Rail Authority board member Bob Balgenorth, who was also head of the State Building and Construction Trades Council of California, inquired during discussion on whether or not construction trade union officials had been consulted and noted that the proposal did not seem to recognize that union hiring halls typically dispatch workers directly to the job site and not to an employer’s office.

Work apparently resumed in Fresno to develop a targeted hiring program that would meet federal contracting standards. In a memorandum to the California High Speed Rail Authority dated March 21, 2012,  the co-chairman of the Education Committee of the Fresno Works Consortium (who was also the executive director of the Fresno Regional Workforce Investment Board) proposed a set of revised “Targeted Unemployed Worker” Hire Criteria and “First Source” Transparency Requirements.

Here for the first time were references to unions. It stated that hiring criteria “be reflective of union apprenticeship requirements” and that “if a project labor agreement is negotiated to cover this project, such an agreement shall include a provision requiring the parties to adhere to this Targeted Unemployed Worker Program.” Obviously, someone had proposed (or demanded) a union Project Labor Agreement.

An opportunity soon came to propose combining a targeted hiring policy (albeit without local hiring requirements) with a union Project Labor Agreement. Sometime during the following three months, word reached Fresno that the U.S. Department of Labor’s Federal Transit Administration had given approval in February 2012 to the Los Angeles County Metropolitan Transportation Authority to require contractors to sign the new Project Labor Agreement for its massive construction program. Using this approval as the basis for her argument, Fresno Mayor Ashley Swearengin sent a letter dated June 19, 2012 to Ray LaHood, Secretary of the U.S. Department of Transportation, seeking approval for a revised hiring program for the California High-Speed Rail Authority:

…it has come to my attention that Mr. Dorvel R. Carter, Chief Counsel of the Federal Transit Administration, approved language put forward by the Los Angeles County Metropolitan Transit Administration (sic) (LACMTA) and the Los Angeles/Orange Counties Building and Construction Trades Council which is very similar to the Fresno Works targeted hiring program. This language focuses on establishing targeted hiring criteria in project labor agreements…we have modified our initial proposal to more closely comport with the LACMTA language that has been approved by USDOT-FTA and respectfully request that USDOT work with us to institute this revised proposed, the “National Targeted Hiring Program,” for the Initial Construction Section of the California High Speed Rail program…I look forward to discussing it with you and your team at your earliest convenience.

While mentioning some conditions and caveats, a letter from the head of the Federal Railroad Administration at “Secretary LaHood’s request” dated June 29, 2012 assured Mayor Swearengin that “we would respect the choices of CHSRA in adopting a variation of a targeted hiring program so long as the program is consistent with the California state procurement policies and procedures that CHSRA uses in the expenditure of its non-Federal funds.”

The general counsel for the Fresno Regional Workforce Investment Board then produced a legal analysis of a revised Fresno Works consortium proposal for a ”National Targeted Hiring Program” that would win federal approval. He noted that a similar hiring program was approved by the Federal Transit Administration as included in a Project Labor Agreement that contractors must sign to work on projects of the Los Angeles County Metropolitan Transportation Authority.

Representatives of the Fresno Works consortium and the Fresno Regional Workforce Investment Board – including Chuck Riojas, the head of the International Brotherhood of Electrical Workers (IBEW) Local No. 100 in Fresno – then made a presentation about the new proposal at the November 14 board meeting of the California High Speed Rail Authority. No references were made to a Project Labor Agreement, and Mr. Riojas of the IBEW official even asserted that “This isn’t I’d like to stress a union or non-union document” and that apprentices from non-union programs could get on-the-job training opportunities under the proposal. (These claims turned out to be false when the final version of the proposal was adopted in the context of a Project Labor Agreement.)

At their following meeting on December 8, the California High Speed Rail Authority board approved a “Community Benefits Policy” meant to adopt guidelines for a targeted hiring program. Again, there were no references in the policy to unions or a Project Labor Agreement.

Then, in late December, the California High Speed Rail Authority issued Addendum 8 for the bid specifications for the first construction segment from Madera to Fresno. Contractors would now be required to sign a “Community Benefits Agreement.” The so-called Community Benefits Agreement turned out to be a typical Project Labor Agreement negotiated with the State Building and Construction Trades Council of California, with the goals of the targeted hiring program inserted in it.

Unless you were part of the inner circle working behind-the-scenes on this scheme, you would have no way of knowing that union officials were using a benevolent-sounding, locally-motivated targeted hiring program as their vehicle to gain monopoly control of construction for California High Speed Rail. References to a Project Labor Agreement only appeared in passing in internal letters and documents for obscure local appointed boards and quasi-public organizations in Fresno. The board of the California High Speed Rail Authority never discussed a Project Labor Agreement or voted on it. The public was kept uninformed, for obvious reasons.

So far the only elected official implicated in the scheme is Fresno Mayor Ashley Swearengin, who was prodded by someone to send the pivotal letter to a top Obama Administration official asking for federal approval to require contractors to sign a Project Labor Agreement for California High Speed Rail. That’s where the plot can be exposed in greater detail. Here are questions for Mayor Swearengin that need to come from Fresno citizens and all parties interested in California High Speed Rail:

1. How did you find out about the Project Labor Agreement with the Los Angeles/Orange Counties Building and Construction Trades Council that the Los Angeles County Metropolitan Transportation Authority requires contractors to sign as a condition of work?

2. Who asked you to send the letter to U.S. Transportation Secretary Ray LaHood asking for approval for the California High-Speed Rail Authority to use a targeted hiring program in the context of a Project Labor Agreement? Who wrote the letter?

3. Which union officials contacted your office related to the targeted hiring program and the Project Labor Agreement?

4. Why did you send the letter from your office instead of more appropriately referring the subject to the California High-Speed Rail Authority?

5. Was your letter part of some sort of deal related to union lobbying for selecting Fresno as the location for the California High-Speed Rail Heavy Maintenance Facility?

6. The City of Fresno municipal code prohibits the city from requiring contractors to sign a Project Labor Agreement with unions as a condition of work. Did you keep this letter from exposure to the public because you knew it asked for something contrary to the principles established in your city’s own laws?

The California High-Speed Rail Authority and its appointed board members have earned a reputation for a lack of transparency and accountability, and as long as it gets taxpayer money, it can continue this practice with impunity. But with relentless public pressure on elected officials who are supposed to be accountable to the people, the complete story of the Project Labor Agreement on the California High-Speed Rail will eventually come out, to the shame and detriment of everyone involved in the sneaky scheme.

Background and Sources:

Project Labor Agreement for California High-Speed Rail

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 -www.LaborIssuesSolutions.com – January 11, 2013

Community Benefits Policy for California High-Speed Rail

Project Labor Agreement for Los Angeles County Metropolitan Transportation Authority

Construction Careers Policy for Los Angeles County Metropolitan Transportation Authority

Fresno Regional Workforce Investment Board (FRWIB) Board of Directors

Fresno Works Consortium

Fresno Mayor Ashley Swearengin

Origin of Fresno Works Consortium, established to win selection of Fresno to be site of California High-Speed Rail Heavy Maintenance Facility

California High-Speed Rail Authority January 12, 2012 Board Meeting Agenda Item #3 – Presentation of Fresno Regional Workforce Investment Board

Transcript of January 12, 2012 Board Meeting for California High-Speed Rail Authority

January 6, 2012 Federal Railroad Administration Letter – California High-Speed Rail – Targeted Hiring

March 21, 2012 Fresno Works Consortium Revised Targeted Hiring Program for California High-Speed Rail

June 19, 2012 Letter from Fresno Mayor Ashley Swearengin to Federal Railroad Administration – Inquiry on Applying Project Labor Agreement to California High-Speed Rail

June 29, 2012 Letter from Federal Railroad Administration to Fresno Mayor Ashley Swearengin on Targeted Hiring Program for California High-Speed Rail

August 8, 2012 Legal Analysis for Fresno Regional Workforce Investment Board of California High-Speed Rail Targeted Hiring Program

Transcript of November 14, 2012 Board Meeting for California High-Speed Rail Authority – Hints of Project Labor Agreement

January 17, 2013 Letter from Associated Builders and Contractors (ABC) National Office to Federal Railroad Administration on California High-Speed Rail Project Labor Agreement

March 26, 2012 Letter from Federal Railroad Administration to Associated Builders and Contractors on California High-Speed Rail Project Labor Agreement

April 11, 2013 Letter from Fresno Regional Workforce Investment Board – Public Documents – Process Leading to Project Labor Agreement on California High-Speed Rail

California High-Speed Rail Authority Keeps Union Deal Out of Public Forums – my article in www.FlashReport.org – February 10, 2013

www.CaliforniaHighSpeedRailScam.com – your centralized source for key information about the debacle that is the California High-Speed Passenger Train for the 21st Century.


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.