MOORLACH UPDATE — PUBLICCEO.com — February 22, 2010

I was asked last week to write a 600-word column in opposition to the government use of project labor agreements for today’s issue of PUBLICCEO.com. 

Since we just had the pleasure of approving an ordinance eliminating their requirement, what came to mind for my 600 words was the experience of it all.

When something is really good, then it would have community-wide support.  But, PLAs don’t have community wide support.  Consequently, here are my thoughts and the counterpoint by Bob Balgenorth representing the union perspective.

PUBLICCEO.com

Point-Counterpoint: The Argument Against Project Labor Agreements


Written by John M.W. Moorlach

It would be easy to make arguments for a competitive and level playing field when discussing PLAs.

For me the topic flows in a number of images.

The first is one of shock when the Board of Supervisors approved the requirement for PLAs on county related projects.  Why would a board comprised of five Republicans vote to approve this?

Well, the answer is that only a three-member voting-block approved this counter-intuitive initiative.  And they did it for a simple, but inexcusable, reason.  At the time the PLA was approved, Orange County was in the middle of a major land battle over the issue of converting the closing El Toro Marine Base into an international airport.

The voters had seen two countywide ballot measures in support of the conversion.  Soon the voters were going to weigh in on a third ballot measure.  This time the anti-airport constituency was mobilized, funded and emotional.  The three-member voting-block needed help. 

The public unions traded putting their shoulders toward the effort for the PLA.  For them it was a win-win.  If they succeeded in defeating the anti-airport measure, they would have participated in building the new airport.  If they lost, they still had the PLA in place.  It was a clever way for the camel to get its nose under the tent in a politically conservative county.

The anti-airport movement prevailed.  Their ballot measure passed.  An airport at El Toro was lost, but the PLA was still in place.

I can still remember being in a room ten years ago with non-union shop representatives debating the feasibility of gathering signatures for an anti-PLA ballot measure to undo the embarrassing damage.  They decided the cost was too high and the battle too formidable.

Some five years later, the county let the PLA requirement lapse and the new Board of Supervisors communicated that such a decision would not occur again under their watch.

End of discussion?  No.  Approving an ordinance that would prohibit the requirement for a PLA, unless mandated by state or Federal law, had to be done in order to make it difficult for future boards to make the “El Toro” faux pas.

This action incited the ire of the union community and their methods of persuasion were anachronistic.  The “old-school” methods of protesting outside the Board’s office were utilized on two occasions.  Both protests included two large inflatable rats.  That was not very persuasive.

Testimony at our Board meetings included false claims and threats.  “We tried to schedule meetings with each of the Supervisors.”  I never received a call.  “If you vote for this ordinance, we’ll go after you in your next election!”  That’s persuasive.

The most interesting argument was “if you’re already opposed to doing a PLA, then why institutionalize it in an ordinance?”  It made one wonder, if it really doesn’t change anything, then why are you here with inflatable rats, false claims and threats?

We’re talking about competitiveness, not coercion.  Having a level playing field is the best approach for the taxpayers.  If you need an edge to win, then you’re probably not running your business properly.  And forcing your competitors to pay more or to claim that they are abusing their employees is not a logical argument when governments are retaining the lowest and most responsible bidders.

The images of the absurdity of mandating a PLA destroys the credibility of the good arguments that may be there to consider one.  If your best argument is to force it on us, then you’ve failed in the debate before you’ve started.

John M.W. Moorlach, C.P.A.
Orange County Supervisor, Second District

Point-Counterpoint: The Case For Project Labor Agreements


Written by Bob Balgenorth   

What makes a community?  Families, friends, neighborhoods, good jobs with decent pay and benefits–all these things are essential to a strong, healthy, happy community.

These are also the goals and benefits of project labor agreements, which smart local leaders are able to customize to bring about precisely that result, a stronger and better community.

A project labor agreement is a pre-hire contract between labor and management that governs pay rates, benefits, work rules, and dispute resolution, and guarantees that workers will perform most efficiently during the project. PLAs are widely used in the public and private sectors for construction of everything from schools to courthouses to reservoirs to sports stadiums.

PLAs uplift communities and people, because they ensure that workers are highly skilled, have steady jobs, with family-supporting incomes, and the peace of mind that comes from knowing that families have good health care. Without those guarantees that PLAs bring, communities are left to bear the costs of caring for people without means, and everyone pays the price.

PLAs also bring the pride of high-quality workmanship to community projects, and prevent the shoddy workmanship that occurs when workers are inadequately trained, that inevitably leads to higher long-term maintenance and repair costs.

This is why communities greatly benefit from PLAs. They bring stability, reliability, quality, and long-term value, and can be customized to create a better social climate.  In Los Angeles, for example, city officials tailored their redevelopment agency’s PLA to provide good construction career and apprenticeship  opportunities to people in their most depressed areas, at once providing a better life and hope for a better future where these things were needed most.

Local government leaders who have used PLAs know about these benefits from firsthand experience. But recent academic studies have also reached the same conclusion: the benefits promised by PLAs are real, and the complaints used against them are unfounded and false.

A Cornell University study from 2009 found: “PLAs are a valuable construction management tool for project planning and labor cost reduction,” and further, “There is no evidence to support claims that project labor agreements either limit the pool of bidders or drive up actual construction costs.”

In fact, not only did non-union contractors bid on the Metropolitan Water District’s  $2 billion eastside reservoir project, over 70 of them actually worked on that project.

Another 2009 study from Michigan State University, that researched PLA use dating back to the massive public works projects of the 1930s, found that the record clearly shows that PLAs “improve construction projects and provide benefits to owners, contractors, construction labor, communities, and the public.” 

These studies prove that the repeated misrepresentations about PLAs—that they increase costs and exclude non-union bidders—simply hold no water, because the underlying assumption, that providing decent wages and conditions for workers necessarily increases the overall cost, is flatly false.

When the long-term increases in maintenance and repair costs resulting from poorer workmanship, and the costs of stoppages and delays of non-PLA projects are considered, PLAs look like a bargain. When the invigoration of the local economy, and local tax base, from decent wages and local hiring  (a UCLA study shows PLAs result in 30% more local hiring) are factored in, it becomes a no-brainer. PLAs are a home run for local communities and their governments.

Further, PLAs in no way restrict bidding or opportunities for non-union contractors and workers. They simply hold union and non-union bidders alike to the same negotiated and agreed-upon wages, benefits, quality standards and local hiring provisions.

And they work. Local officials who’ve used them know PLAs work, and that their communities, businesses and workers are all better off because of them.

Bob Balgenorth
President of the State Building and Construction Trades Council

FIVE-YEAR LOOK BACKS

1995

February 21

Daily Pilot Editor Bill Lobdell allowed me to resume my monthly “Conservative Politics” column with this submission, titled “Costa Mesa’s long overdue for term limits.”  My “Second Time a Charm?” column of September 27, 1993, predicted every winner in the local November elections, but one.  Here are some snippets.

                Incumbents win more than 90% of the time.  However, in Costa Mesa, if the incumbent is being challenged by a candidate for a second consecutive time, the challenger has a high probability of winning.

                So there is a formula for unseating an incumbent or winning an open seat.  Newport Beach has formalized one:  term limits.

                Is it time for Costa Mesa to adopt a similar approach?  From my perspective, as it relates to how our council dealt with its investment in the Orange County Investment Pool, I believe we’re long overdue for term limits.

                If there is a major disappointing occurrence that I’ve observed from this experience, then it has to be that most of the critically incorrect decisions were made by elected officials that have been in office for more than eight years.

                We have two choices.  We either need to hire more competent staff or we need to elect fresh, reliable individuals to represent us.  That’s why I’m a stronger proponent of encouraging individuals to challenge incumbents and that we should encourage term limits.

February 22

Well, the word “anoint” surfaced again.  This time from the county’s newly appointed CEO.  Under the heading of “Orange County In Bankruptcy – Bond Ticker,” Los Angeles Times reporters Shelby Grad, Matt Lait and Eric Bailey put together this interesting short article, titled “Popejoy Won’t Anoint Moorlach.”  I don’t know what motivated the article or the activity, but you can bet your sweet bippy that I gave Mr. Popejoy a telephone call that morning requesting an explanation.

County Chief Executive Officer William J. Popejoy has asked the Board of Supervisors to form a screening committee of finance professionals who would select the most qualified person to become the county’s next treasurer.

Popejoy’s recommendation, detailed in a memo to the supervisors last week, comes despite support from a majority of supervisors to give the job to John M. W. Moorlach, the certified public accountant who ran unsuccessfully against then-Treasurer-Tax Collector Robert L. Citron in June. During the campaign, Moorlach was the first to publicly express concerns about Citron’s risky investments, which led to the collapse of the county investment pool.

"I respectfully submit that it would be highly irresponsible to select an individual without the qualifications and abilities required for the task at hand and as a result compound and continue the problems of the office," Popejoy stated in his Feb. 17 memo.

"We must take advantage of this opportunity to get the best talent available and set the tone for future treasurer’s office operations," he added.

Thomas E. Daxon is the county’s acting treasurer, appointed by the Board of Supervisors after Citron’s resignation Dec. 4. His assignment has always been temporary and he is expected to leave the post and become Oklahoma’s finance director at the end of March, county officials said.

A majority of supervisors came out in favor of appointing Moorlach to the job following Citron’s resignation. Although the job is an elected position, the board has the authority to appoint someone to fill the remainder of Citron’s term, which expires in 1998.

Moorlach said Tuesday that he is still interested in the job.

"I’m a man who stood up to the plate and called it extremely accurately and am still willing to serve my community," he said. "I’m happy to serve. But if they don’t want me to, that’s fine."

2005

February 19

Five years ago interest rates were low and the county decided to refund (refinance) its bankruptcy related debts.  Norberto Santana, Jr. of the OC Register covered the topic in “O.C. looks at chance to pay bankruptcy debt early—Refinancing deal could cut county’s payments by a decade.”

                Refinancing appears promising, said Treasurer-Tax Collector John Moorlach, whose warnings about Citron’s risky strategy went mostly unheeded.

                “Municipal debt has a chance to be refunded once, so when it comes around you really want to take a hard look at it,” he said.

February 21

Martin Wisckol’s weekly “The Buzz” column in the OC Register came with the title “Candidates gear up to fill 2006 election war chests.”  Out of a long list, here was the race nearest and dearest to me.  I had to first close my Treasurer-Tax Collector account before I could open my Supervisor account, thanks to the arcane election rules in Tin Cup.

The race to replace Supervisor Jim Silva, who’s also termed out next year, is less impressive financially.  Treasurer-Tax Collector John Moorlach opened an account just last month and so raised no money last year.  Assemblyman Tom Harman has one with a mere $1,100 in it – but look for him to transfer $100,000 he has in his Assembly account.

Frank Mickadeit’s regular column featured an interesting snippet on CalSTRS.  The closing quote is a stunner.

                One of my favorite prognosticators floated county Supervisor Tom Wilson’s name as an O.C. favorite to replace Miguel Pulido on the State Teachers Retirement System board.

Wilson told me he called Pulido last week to let him know he might pursue it but hasn’t decided if he’s going to call the governor’s office.  Why is a seat on this obscure board so important even though it pays just $200 a month for two days’ work?  Because it controls $126 billion in public school teachers’ pension assets and is targeted by Arnold Schwarzenegger in his plan to further privatize many, many gov’mit functions.

The move would make sense for Wilson because it gets him in with the Sacramento power base, and he’ll be looking for a full-time job when he leaves office at the end of next year.  But would it make sense for Schwarzenegger – who fired Pulido for refusing to go along with his plans to reduce public pension costs?  Wilson, remember, was one of the three supervisors who voted for the sizable increase in county pension benefits last year.

I ran that by county Treasurer John Moorlach, a critic of those benefits, who said, “I would think Arnold might have trouble with that” and that Wilson might have some ‘splainin to do.  Wilson, however, told me the two were completely separate issues and that he “can certainly back the governor and his approach” to privatization of pensions.  “What I did for the county was something we needed to do . . . It was situational with regard to the county.”

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