PLA – Project Labor Agreement

Many years ago, when my predecessors were trying to convert the El Toro Marine Base into an international airport, the Board made a counter-intuitive move to assist their cause.

In a move to curry favor and support from the union community, as this would be a major public works project, the majority of the Board quickly voted in a multi-year “Project Labor Agreement (PLA).”

That move hurt non-union shops in the County and it failed in assisting the then-Board majority in their base conversion attempts.

My office put a new ordinance on Tuesday’s Board agenda that prohibits the Board from approving a PLA, unless mandated by Federal or State law.

This will prevent a future Board from putting such an idea on the agenda on a late Friday afternoon, to be voted on the following Tuesday, thus giving little time for opposition to respond.

This agenda item did not receive printed newspaper coverage, although the LA Times did have an electronic article on the vote, see http://www.latimes.com/news/local/la-me-oc-labor28-2009oct28,0,6153443.story.

Today, the OC Register has a supportive editorial and today’s PublicCEO.com coincidentally addresses the topic (which will provide you with the reasons why our ordinance was critical to pursue).

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Unions’ public-works loss is taxpayers’ gain

An Orange County Register Editorial

Score one for taxpayers, at least for the moment.

On Tuesday, the Orange County Board of Supervisors dealt a blow to backroom union deals that squelch competition and raise costs for government public works projects.

At its regularly scheduled meeting the board unanimously voted in favor of a ordinance that will prohibit so-called project labor agreements for public projects in Orange County, much to the chagrin of union bosses, many of whom were at the meeting.

Supervisor John Moorlach introduced the ordinance, which, if it wins final approval at next week’s board meeting, will put into law what already had been the philosophy of the board: opposition to project labor agreements. Supervisor Chris Norby suggested that the ordinance was just a reaffirmation of a current policy. The controversial first reading of the ordinance brought out droves of union bosses, community organizers and activists on both sides of the issue. More than two dozen people commented, and the heated discussion lasted well over an hour.

Of course, the union bosses and workers in attendance wanted the supervisors to leave PLAs alone because by allowing PLAs unions are delivered a de facto monopoly on government projects because the agreements require that private firms bidding on public projects use union labor.

There is a lot of bad blood and history surrounding PLAs in the county. In 2000, in exchange for granting a multiyear project labor agreement, labor unions agreed to push for the El Toro Airport project (a priority for the board majority at the time). The political deal was revoked in 2004, but it didn’t completely correct the damage that had already been done – reduced competition and hikes in the cost of contracting projects that had been completed under the PLA. Final approval of the ordinance will help protect the county in the future.

Unfortunately, the ordinance will not be retroactive, meaning existing PLAs in the county will not be overturned (which would be illegal under current state law). Mario Mainero, a senior policy adviser to Supervisor Moorlach, told us that several subcontracts in the county might currently include PLAs; this ordinance will not correct those but will protect Orange County residents in the future by making the prohibition of PLAs a law, rather than an understanding among board members.

The unions will come out in force at next Tuesday’s meeting because they have a lot to lose. But we still expect the ordinance to pass unanimously. If passed, the new law would go into effect 30 days later.

PUBLICCEO.com

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Unions Blackmail Agency Over Project Labor Agreements

Written by  James Spencer   

 

Facing the pressure of blackmail, a California Agency is seeking to railroad through a suspicious Project Labor Agreement that will waste dollars and embarrass a number of local government agencies.

The vote is set to take place next week over a Project Labor Agreement for a power plant project in Lodi.

The Northern California Power Agency (NCPA) seeks to adopt an agreement that would bar fair and open competition for labor bids on the project, based on the threats of labor unions.

It appears a vote will be pushed through in favor of the agreement, with a number of bizarre twists along the way.

The decision on whether or not to adopt the agreement was already voted on last week, resulting in a 3-3 tie with five abstentions and nine absences. Following the meeting, it was announced that there was no quorum, and the issue will be  voted on again on Nov. 2.

The NCPA is jockeying for a change of voting based upon politicking those who weren’t there that it believes would vote in favor of the special interest agreement.

NCPA staff even e-mailed its voting members a list of “Not for Distribution Talking Points” with a blatant pro-labor agreement stance in preparation for the vote.  There was no attempt to offer arguments for and against the policy, just rhetorical arguments advocating for a policy that wastes public money.

A Commissioner’s Take

Doug Crane, who is in his fifth year as the City of Ukiah’s NCPA Commissioner, voted against the agreement last week but expects the NCPA will get the outcome it’s seeking.

So why would any organization choose to shorten its list of potential bidders when the goal should be to find the highest quality of work at the lowest bid?

Well, it’s more about what the unions want.

“Its not about what’s right or what’s fair,” Crane said. “It’s about who has the most power and who can extort the most. It’s a simple shakedown in my opinion.”

Shakedown is certainly one way of putting it.

Unions have essentially blackmailed the NCPA with threats of delaying the project by blocking the California Energy Commission’s permit for power plant construction if a Labor Agreement was not adopted.  It is a practice commonly referred to as “Greenmail.”

The unions use the California Environmental Quality Act (CEQA) and seek to delay the project on environmental grounds.  Once the target agency agrees to the Project Labor Agreement, the environmental objections are withdrawn, thus the term “Greenmail.”

In addition to the barring of qualified bidders, this Project Labor Agreement includes a $150,000 payment to the union’s slush fund.

Sound fishy yet?

“They’d rather pay extortion than stand up and do the right thing,” Crane said. “The right thing is to say, ‘Are we going to get blackmailed or are we going to stand up?’”

While unions try to allege otherwise, this isn’t a union vs. non-union issue. If union labor can put together a better project at a lower bid, it will win the project. It should be that simple.

Prohibiting Project Labor Agreements

In a phone conversation with NCPA Assistant General Manager Jane Cirrincione, she told PublicCEO that the two significant benefits of the Project Labor Agreement were 1) a no-strike clause and 2) that labor jobs would be awarded to those workers in a 50-mile radius.

What remains unclear, however, is why those couldn’t be included in any standard Request For Proposal?

It’s absolutely possible.

So possible, in fact, that the Orange County Board of Supervisors voted unanimously on Tuesday to approve a resolution that will prohibit the requirement of labor agreements on county projects.  Fresno also prohibits them.

Author of the O.C. ordinance, Professor of Law Mario Mainero, is the senior policy adviser for County Supervisor John Moorlach. He said the major point of not allowing Project Labor Agreements was simple: to level the playing field.

“I think that’s just better policy,” Mainero said in a phone interview. “Just like everyone else in the market, be competitive and come up with the best price and you’re going to get the job.”

If Orange County and Fresno can build multi-million dollar projects without a need for Project Labor Agreements, why can’t the NCPA?

The truth is that it can.

And given the fact that local governments throughout California are laying off employees, including those who are members of NCPA, it’s unconscionable to think that any overspending is an appropriate way to spend taxpayer money.

And the issue isn’t even about wages.  The State Prevailing Wage must be paid on this project, with or without a Project Labor Agreement, according to NCPA’s “Talking Points.”

Still A Chance To Say No

Instead, decision-makers at the NCPA are knuckling to pressure that in any other context would be considered extortion.

“Looking at it from the standpoint of small community, I’m not thrilled,” Crane said, “We get saddled with additional costs based upon this essentially legalized racketeering.”

With a total project price tag of $432 million, and an estimated $60 million dedicated to labor, it would seem there might be a closer eye on spending ratepayer money most efficiently.  The increased costs of this project due to the Project Labor Agreement will result in higher than necessary utility rates for customers.  So as taxpayers, they’re being forced to pay more to fund the project and their rates will be higher as well. 

It’s this lack of public accountability that has given government a black eye. And with local agencies already mired in red ink, how can an organization explain not opening up the bidding process to potential lower bids? 

The fact is that all the alleged benefits within the Project Labor Agreement can be accomplished through a fair and open process that results in a binding contract.  Businesses, union and non-union, do it everyday.

But that doesn’t appear to matter to the staff at the NCPA.  Maybe it’s because they’re not accountable to voters and they’ve worked hard to keep this out of the public eye.

It will be offensive to hard-working taxpayers and an embarrassment to commissioners if this second chance vote is in favor of this agreement.

James Spencer can be e-mailed at jspencer@publicceo.com

INVITATION

OCTOBER 29 — TODAY

Join us for a tour of the Tustin Blimp Hangars.  OC Parks and the U.S. Navy will be escorting us for a tour at 1:30 p.m.  We have a good sized group that is attending, so arriving a few minutes early may be a good idea.

We will meet at Gate 14, which is at the end of Armstrong Avenue, next to the Sheriff’s Academy Training Center.  Be prepared to drive on a gravel road.

We have been requested to encourage everyone to enter at the same time because the gates will be closed once we enter, so it might be difficult for latecomers to enter the hangar.  We are working on a solution for those that cannot arrive at or before 1:30 p.m.

To whet your appetite, please go to the City of Tustin’s website at http://www.tustinca.org/ and click on “The Tustin Hangars:  Titans of History.”  This documentary, written and directed by Costa Mesa’s Peter Buffa, is an outstanding program on local history.  It premiered on September 21st, so it is hot off the press.

Please RSVP by responding to this e-mail or with Margaret Chang at Margaret.Chang@ocgov.com.

FIVE-YEAR LOOK BACKS

October 30

2004

The OC Register did a “Proposition Watch” series, which included “Prop. 71 allows bond sale for stem-cell research.”

Who’s against it:  State Sen. Tom McClintock, R-Thousand Oaks, and Orange County Treasurer John Moorlach signed ballot arguments opposing, saying Prop. 71 needlessly subsidizes California’s biotech industry and establishes a giant new bureaucracy with little public oversight of spending.

 

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