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Kevin Dayton

Will a Few Republican State Legislators Open Floodgates for Costly Union Control of California Water Projects?

Union lobbyists try to be discreet when they influence the California State Legislature to gain advantages in public contracting. That secrecy is now crumbling in the case of a new “urgency” bill that authorizes a Monterey County water agency to use an alternative bidding procedure to build a pipeline project.

Can unions whip this bill through the legislature before new revelations about backroom deals undermine local support for it? It depends on how many Republicans in the Assembly and Senate see construction union support as useful to their political futures.

A Mundane Objective: Awarding a Contract for a Water Storage Project

The Monterey County Water Resources Agency proposes a $25 million pipeline to improve water storage by transferring water between two reservoirs. It wants to use a construction procurement procedure called “design-build.” Instead of awarding separate design and construction contracts to the lowest responsible bidders, the agency would award one combined contract for the project based on subjective scoring criteria.

Since the early 1990s, the California legislature has passed numerous bills authorizing local governments to use design-build procurement. Continuing this pattern, Assemblyman Luis Alejo (D-Watsonville) gutted and amended his Assembly Bill 155 in early June to create an “urgency” measure authorizing the Monterey County Water Resources Agency to bid the pipeline project using design-build procurement.

A Scheme to Have the State Impose a Union Monopoly on a Local Project

Assembly Bill 155 (AB 155) contains a new, unprecedented twist: it is the first California bill to require a design-build contractor to enter into a “Project Labor Agreement” with construction trade unions that would “bind all of the contractors performing work on the project.” In fact, it is the first California bill that mandates a Project Labor Agreement on ANY project, state or local.

Staff for the Monterey County Water Resources Agency describe this mandate as an “ornament on a Christmas tree.” It must be hung on the bill to get it passed by the legislature and signed by the governor.

Union leaders might describe it as the star at the top of the Christmas tree. A Project Labor Agreement requires a construction company to pay employee fringe benefits into union-affiliated trust funds. It also requires a construction company to obtain most or all journeymen and apprentice workers through the applicable union hiring hall dispatching system. And it requires workers to pay union dues and initiation fees.

Government-mandated Project Labor Agreements institute favoritism for unions and unionized contractors. They are an unnecessary bid specification that discourages bid competition and increases costs of public works construction for taxpayers.

Where Did That Come From?

The public never had a chance to review and comment on AB 155 as it was developed and introduced. The Monterey County Board of Supervisors Legislative Committee never discussed or voted on AB 155, as the county’s administrative procedure seems to require. Meeting agendas of the appointed Monterey County Water Resources Agency Board of Directors and the agency’s appointed Salinas River Basin Management Planning Committee did not include any specific discussion of AB 155.

In fact, many relevant Monterey County elected and appointed officials knew little about AB 155 and didn’t know about the Project Labor Agreement requirement. But as local officials found out about the bill and began to question the origin and motivations for a state-mandated Project Labor Agreement, the California legislature quickly moved toward imposing it. On June 25, the California State Senate Governance and Finance Committee voted 6-1 to send the bill to the full Senate.

Republicans Are Essential for the Union Victory

Union lobbyists at the state Capitol seem confident of enough Republican support to win the two-thirds Senate approval necessary to pass AB 155 as a special “urgency” bill. Republican State Senator Anthony Cannella represents the Salinas Valley and typically votes to support the agenda of construction trade unions. He joined Assemblyman Alejo as a cosponsor.

In addition, Republican State Senator Steve Knight – facing off in a competitive general election against Republican Tony Strickland for a Congressional seat – voted for AB 155 in the Governance and Finance Committee. (The other committee Republican – Mimi Walters – was the NO vote.) This allowed Assemblyman Alejo to declare in a press release that AB 155 “passed out of the Senate Local Government and Finance Committee with bipartisan support.” It’s rumored that a few other Republican state senators regard a vote for AB 155 as an easy way to satisfy unions.

Union lobbyists will also get the two-thirds vote needed to pass it in the Assembly if all but two Democrats vote for it, or if they can lock down the votes of a few Republicans. No Democrat with future political ambitions will dare to vote NO or be absent.

A Quest for Transparency and Accountability

There is organized resistance to the plot. Construction trade associations are trying to unravel and expose the secret dealings for the Project Labor Agreement. In addition, key local agricultural organizations such as the Monterey County Farm Bureau and the Salinas Valley Water Coalition have spoken out against the lack of government openness and transparency in the development of AB 155. These groups also resent the state legislature’s intent to dictate local policy decisions.

Public testimony and committee discussion at the June 18 and July 9 meetings of the Salinas River Basin Management Planning Committee revealed that union officials at the state and local levels conspired to threaten to block AB 155 unless unions obtained a monopoly on the pipeline construction. In fact, the head of the Monterey/Santa Cruz Building and Construction Trades Council confirmed at the July 9 meeting that these statements in the June 18 committee meeting minutes were correct:

  • “The language regarding the labor agreement was added in the process. The Building Trades Council added this to garner their support for the bill.”
  • “Our elected officials would not carry the bill without this being added.”

With this documentary evidence, opponents of the Project Labor Agreement mandate are threatening to ask the Monterey County Grand Jury to investigate secret dealings leading to the inclusion of the mandate in AB 155. Such an investigation would potentially reveal the entire unsavory political plot as it developed in Monterey County and at the state Capitol, as well as reveal other conduct that taxpayers and ratepayers probably would not appreciate.

Union Officials Stand Firm and Introduce an Old Standby: The Lawsuit Threat

At the July 9 meeting, staff for the Monterey County Water Resources Agency reported that Assemblyman Alejo had agreed to delete the Project Labor Agreement mandate in AB 155 only if the Monterey County Board of Supervisors voted to impose its own local government mandate for a Project Labor Agreement. Adding to the pressure, the head of the Monterey/Santa Cruz Building and Construction Trades Council alleged during public comment that the Monterey County Water Resources Agency violated state procurement laws for professional services (specifically, the “Brooks Act”) during its early stages of planning for the pipeline project. Some observers at the meeting recognized this as a union threat to file or fund a lawsuit against the Agency if contractors are not required to sign a Project Labor Agreement with unions.

Finally “fed up with this mess,” the Salinas River Basin Management Planning Committee ended its July 9 meeting by voting 4-1 to recommend to the Monterey County Water Resources Agency Board of Directors that it pull its support for Assembly Bill 155. That board meets on July 28, and then the elected Monterey County Board of Supervisors has a joint meeting with the agency board on July 29.

This Bill About a Monterey County Water Project Has Costly Statewide Implications

Before these meetings occur, unions are expected to push AB 155 through the legislative process as quickly as possible before any other Monterey County elected or appointed government body gets “fed up with this mess.” Erosion of local support for AB 155 could derail an important opportunity for construction unions to expand their control of public works construction.

Union lobbyists know that AB 155 will create a precedent for the California State Legislature to mandate a Project Labor Agreement on all future projects authorized for design-build procurement. It will also create a precedent for the California State Legislature to mandate a Project Labor Agreement on all future water projects, perhaps even on all projects funded by money that California voters may authorize the state to borrow through a proposed water bond measure.

Assembly Bill 155 is not really about a water agency in Monterey County. It’s about who controls future high-profile public works construction in California and how much it will cost taxpayers and water customers.


Assembly Bill 155

June 18, 2014 Minutes of Salinas Valley Basin Management Planning Committee

Monterey County Water Resources Agency

Press Release: Senate Committee Approves Streamlining Monterey County Interlake Tunnel Project

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 Follow him on Twitter at @DaytonPubPolicy.



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