Anaheim Union High School District Board of Trustees Voted on July 13 for Discrimination and Waste

July 26, 2017

Below is the email sent on July 25, 2017 from the Coalition for Fair Employment in Construction to the Anaheim Union High School District elected board of trustees regarding their vote to require construction companies to sign a Project Labor Agreement with unions as a condition of winning a contract.

See the Project Labor Agreement here: Anaheim Union High School District Project Labor Agreement 2017

See the district staff report and board resolution for the Project Labor Agreement here: Anaheim Union High School District Project Labor Agreement - Agenda Item and Resolution - July 13, 2017

From: Eric Christen, Executive Director, Coalition for Fair Employment in Construction

Sent: Tuesday, July 25, 2017 6:05 PM

To: [Anaheim Union High School District Board of Trustees and Other Interested Parties]

Subject: July 13th you voted for discrimination and waste when you said yes to a union PLA

Trustees,

We tried to warn you last year what the results of agreeing to a union Project Labor Agreement (PLA) would be for the district (see email below). When I spoke to you in person I gave example after example of PLAs failing school districts north and south. Regardless a majority of the board voted on July 13^th to put the bigoted worldview of big labor special interests ahead of students and taxpayers when you approved your “negotiated” PLA. Of course nothing was negotiated as the PLA you voted to approve is the boiler plate PLA big labor pushes all over California.

Specifically these standard PLA provisions are all found in your PLA (see attached):

Section 3.5: A good faith effort will be made to hire local residents. A goal of 35% of workers will be local (10 mile radius). Notice there is no requirement but only “good faith effort”, something that could have been achieved without the following discriminatory aspects of a PLA that will in fact make it harder to find local workers. Notice also that there was no attempt made by the district to determine what your current local hire numbers are so as to determine if this is even an issue in the first place.
Section 3.7: Non-union firms are allowed to hire only FIVE of their current employees for an AUHSD job. FIVE. All other workers for a job must come from the union. It is remarkable to see how “exclusionary” and “progressive” are synonyms these days.
Section 3.10: All workers must pay union dues. Of course the PLA states that workers aren’t required to join a union but they do have to pay dues. This is what is known as a distinction without a difference. It’s the equivalent of saying that everyone in the South can vote but you just have to pay a poll tax and show you are literate. Again, congrats. You’re modern day Democrats who vote and think just like yesterday’s Southern Democrats.
Section 5.2: All benefits must be paid to the union. Again, this simply means that the non-union workers who do get employed under the PLA will have stolen from their paychecks approximately $20 per hour from their fringe benefit payments. Why? Because they won’t work long enough to vest in the union programs and therefore will never realize their hard earned wages. The question that is begged is why should they have to have the money taken in the first place? This is already a prevailing wage job and its money they already get. This is the most egregious part of the PLA and you actually agreed to it in your “negotiations.”
Section 13.2: Only union apprentices are allowed to work on Measure H work. There is nothing implicit about the discrimination in this provision. You just flat out tell the young men and women in state and federally approved non-union programs that they can vote for your bond and they can pay for your bond but they cannot work on your bond. This is what we refer to I suppose as “social justice.”

We will work tirelessly to inform your voters just what you approved on July 13^th so that when you are in need of a new bond, as you surely will be now that this one was just reduced 20% in value, they will know you aren’t capable of managing it properly and will vote accordingly.

Eric Christen

Executive Director

Coalition for Fair Employment in Construction

From: Eric Christen, Executive Director, Coalition for Fair Employment in Construction

Sent: Wednesday, October 12, 2016 9:00 AM

To: [Anaheim Union High School District Board of Trustees and Other Interested Parties]

Subject: Information Regarding Project Labor Agreements (PLAs)

Importance: High

AUHSD Board of Trustees,

First let me say thank you for adding us to the agenda as a presenter on the issue of PLAs. We look forward to seeing you Thursday to explain how PLAs would discriminate against workers and reduce the value of your bond significantly.

Below and attached is various material for the Board about Project Labor Agreements (PLAs). Please let me know if you have any questions.

Eric Christen

Executive Director

Coalition for Fair Employment in Construction

_______________________________________

Project Labor Agreements (PLAs) create barriers for local, minority and women-owned construction employers and their employees from participating in building their community because they contain provisions that do not allow for the full utilization of their own workforces.

Furthermore, studies show these types of agreements increase project costs – anywhere from 10-30% above prevailing wage because they restrict competition. Open competition is healthy and increases quality. It levels the playing field and local money is invested into the community.

And finally, PLAs exclude the men, women, and veterans who have chosen to enter into state approved, unilateral apprenticeship training programs in pursuit of a construction career from the opportunity to work and gain the invaluable on-the-job training experience that provides stability for them, their family and their community.

For these reasons, we strongly oppose Project Labor Agreements.

What is a Project Labor Agreement (PLA)?

An exclusionary labor agreement that discourages the vast majority of local contractors and small business owners from competing on and winning construction projects
Introduced as a tool to local school, city, county, state and federal officials by State and Local Building and Construction Trades Council Representatives

Almost Every Construction Trade Organization opposes PLAs

Opposed:

Air Conditioning and Trades Association
American Subcontractors Association
California Subcontractors Association
American Road Builders and Transportation Association
Asian American Contractors Association
Associated Builders and Contractors
Associated General Contractors
Black Contractors Association
Bay Area Black Contractors Association
Californians for the Advancement of Apprenticeship & Training
Golden State Builder's Exchanges
Independent Roofing Contractors of California
Independent Electrical Contractors Association
Kern Minority Contractors Association
National Association of Minority Contractors
National Association of Women in Construction
Painting Decorating Contractors Association
Plumbing and Heating Contractors of California
Western Electrical Contractors Association
Independent Electrical Contractors Association

In Favor:

Building Trades

Concerns for non-union workers

Union dues requirement for non-union workers on or after 8^th day (less money on pay-check)
Companies are forced to lay off productive non-union workers
Requires payment into union pension programs in which workers may never vest
Requires payment into union health & welfare program in addition to the mandated Affordable Care Act.
Non-union apprentices cannot learn their trade and work on these jobs in their own communities

Concerns for the Anaheim Union High School District

This issue was never discussed when your $244 million bond was being sold to voters.
PLAs are routinely used in bankrupt cities like Vallejo and fiscally mismanaged school districts like the West Contra Costa Unified School District and the Los Angeles Unified School District
Federal regulations prohibit the “local hire” requirements contained in PLAs. Section 200.319 “Competition” of the Electronic Code of Federal Regulations states “The non-Federal entity must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference.”
Negotiations can take up to two years adding delays and legal fee expenses up to $200,000.
It costs money to administer a PLA. The related professional services add to the expense.

Riverside Community College District: $1,800,000 before they abandoned their PLA
City of Pinole: $328,000 annually
San Diego City School District: $1 million annually

PLAs are exempt from DIR enforcement of prevailing wage requirements

As a result of SB 854, as of July 1, 2014, the DIR launched a new Public Works Contractor Registration Program. Contractors wishing to bid on public works will need to register online and submit a non-refundable $300 annual fee. The public works contractor registration fee pays for all DIR administration and enforcement of prevailing wage requirements.

o Exemptions: As of April 1, 2015, and even after January, 1, 2016, the following projects are exempt from the requirement to have contractors and subcontractors furnish certified payroll records (CPRs) to the Labor Commissioner: Projects covered by qualifying project labor agreements

Concerns for the taxpayers

Reduction of bidders and increased costs

$39M Pinole-Hercules Wastewater Treatment Plant Expansion

10 bidders pre-qualified for the Project
8 bidders present for mandatory job walk
2 bids received and opened on 12/10/15
Bids came in at 8% and 22% above engineer’s estimate of $39M
Increased Costs

$68M SMUD Corporate Headquarters Remodel bid with a PLA was rejected because it came in nearly $30M over the budget with just two bidders.
Alameda County Hall of Justice

project delayed and over budget
Local business participation under PLA. 60% goal, 2.58% achievement
$111,966,000 contract is now $122,384,711
Change in substantial completion date by 61 calendar days from 2/15/17 – 4/17/17

Cost of Golden 1 Center jumps by millions | The Sacramento Bee

What do studies say?

EBMUD conducted PLA survey of its union and non-union contractors

100% said PLAs increase costs
64% said PLAs were a disincentive to bid

Increased costs of 13-15% on California School Construction (July 2011 study released by the National University System Institute for Policy Research)

No studies exist that show PLAs save money

11 entities in California have banned the use of PLAs including the cities of Fresno, San Diego, Chula Vista, Oceanside and El Cajon (see attached)

City of Berkeley PLA One-Year Status Report

316 total workers employed on CWA-eligible projects
4 Berkeley residents
96 East Bay Green Corridor residents
35 Alameda County residents
Reports of concerns about a “displaced core workforce” from small contractors at pre-bid meetings to comply with local hire requirements
Increased engineer’s estimates in order to allow for the higher bid prices

Solutions

Continue bidding without PLA and keep FAIR and OPEN competition
ALL sides should be represented in any negotiations
Allow for ALL state approved apprentices to work on the project
Allow contractors to hire their entire CORE workforce
Allow contractors to pay health and pension benefits into their employees’ OWN plans to care for them and their families
Use an alternate bid approach
Rebid the project WITHOUT a PLA if there are three bidders or less on project
Set a HIGH Local Hire goal that benefits the workers in the community
Establish metrics for PROPER PLA compliance, accountability, and transparency

Americans overwhelmingly reject PLAs

In September 2009, nationally known pollster Frank Luntz surveyed Americans about taxpayer funded bidding procedures. 88.5% said they preferred a “fair, open, and competitive bidding process.” 12% felt that unions should have the exclusive right to the work.
In California multiple entities have banned PLAs-including Orange County-and every time the issue has been brought to the voters they have overwhelming rejected PLAs. (see attached)

Summary

Your proposed Project Labor Agreement (PLA) creates barriers for local, minority and women-owned construction employers and their employees from participating in building their community because they contain provisions that do not allow for the full utilization of their own workforces.

And finally, Project Labor Agreements exclude the men, women, and veterans who have chosen to enter into state approved, unilateral apprenticeship training programs in pursuit of a construction career from the opportunity to work and gain the invaluable on-the-job training experience that provides stability for them, their family and their community.

For these reasons we strongly oppose the proposed Project Labor Agreement for your school construction bond.

Additional PLA Educational Material for your review

In California, only 18.1% of the private construction workforce belongs to a union. State Building and Construction Trades Council representatives, AFL-CIO affiliates, introduce Project Labor Agreements as a tool to local school, city, county, state and federal officials to exclude non-union workers.

More information about PLAs can be found at www.thetruthaboutplas.com.

Link to recently produced video about Project Labor Agreements; Not What We Need, Not What We Deserve

Below are studies that show cost increases for public works projects on which contractors are required to sign Project Labor Agreements:

1. Here is the study released in mid-July 2011 from National University’s Institute for Policy Research (based in San Diego), with significant review from other economists: http://www.thecostofplas.com. This study concludes that costs are 13 to 15 percent higher when California school districts build a school under a Project Labor Agreement. In inflation-adjusted dollars, a Project Labor Agreement is associated with costs that are $28.90 to $32.49 per square foot higher. (In my opinion, this is the most comprehensive study ever conducted on the costs of Project Labor Agreements.) The study is also attached.

2. Two examples of projects in California bid without a Project Labor Agreement and then with a Project Labor Agreement. The Burckhalter Elementary School in Oakland Unified School District went from eight bidders to three bidders and the low bid increased 24 percent; the City of Pasadena’s Glendale Power Plant had a net loss of one bidder and the low bid increased more than 15 percent. The winning contractor declared that the higher bid was “100 percent due to the PLA.”

3. The Beacon Hill Institute at Suffolk University in Massachusetts has published studies comparing school construction costs in the Boston area, in Connecticut, and in New York State with and without PLAs. The studies conclude that Project Labor Agreements increased bid costs by 14 percent in the Boston area, by almost 18 percent in Connecticut, and by 20 percent in New York State.

Here is a link to the Boston study : www.beaconhill.org/BHIStudies/PLApolicystudy12903.pdf
Here is a link to the Connecticut study: http://www.beaconhill.org/BHIStudies/PLA2004/PLAinCT23Nov2004.pdf
Here is a link to the New York study: http://www.beaconhill.org/BHIStudies/PLA2006/NYPLAReport0605.pdf

4. A December 11, 2007 presentation by the California Department of Industrial Relations to the Director’s Advisory Committee on Public Works included results from a study by Leland Saylor Associates (a California construction cost analysis and management firm) indicating that 8+ bidders reduces cost 10-20%, 6-7 bidders reduces cost 0-10%, 4-5 bidders increases cost 0-10%, 2-3 bidders increases costs 10-25%, and one bidder increases costs 25-100%. This would seem to conform with classical economic theory (and common sense) that more competition results in lower costs. See attached DIR slides.

5. Government-Mandated Project Labor Agreements: The Public Record of Poor Performance (2014 Edition)

Summary of PLA Research (2014 Edition) The Impact of Government-Mandated Project Labor Agreements (PLAs): A Review of Key Reports and Studies (2014 Edition) (pdf) highlights excerpts from studies pertaining to common points of contention during PLA debates. A record of PLA construction projects experiencing an unfortunate pattern of cost overruns, reduced competition, delays in construction, construction defects, safety problems and diversity issues. It is a key resource to find failed government-mandated PLA projects in your community, illustrating why anti-competitive and costly government-mandated PLAs are nothing more than a bad solution in search of a problem.

6. Government Funded Study Finds PLAs Increase Costs and Offer Limited Value (June 2009)

A June 2009 study conducted by property and construction consulting firm Rider Levett Bucknall prepared for the U.S. Department of Veterans Affairs (VA) Office of Construction and Facilities Management found that PLAs would likely increase construction costs by as much as 9 percent on three of the five construction markets (Denver, New Orleans and Orlando) in which the VA is planning to build hospitals.

Project Labor Agreements – Impact Study for the Department of Veterans Affairs

7. Santa Cruz Metro Transit District Metrobase Project: 6 of 8 unresponsive bidders. Project bid September 12, 2012. Project not awarded until December 2012.

The project has nearly 1M in change orders (the project award was 13M)
In one of the narratives there is mention of contractor errors
There appears to be over $150,000 + in added architectural costs caused by delay in project completion
There is a spread sheet showing over $900,000 in added costs for delays
They needed to hire a new construction manager to oversee the errors and delays at a cost of 1.5M
The Owner's budget has increased by over 4M
Completion will be one year past contracted completion date (original was Dec, 2014, new is Fall of 2015)

8. Actual case studies in the Monterey County market demonstrate that a PLA will result in fewer local jobs not more. Without Project Labor Agreements, 56% of the money spent stays in the local economy. With PLAs, only 10% does.

9. Disastrous bid results under the Contra Costa Community College District PLA.

A. Contra Costa College New College Center

Bid results 10.2% over low engineer’s estimate of $45M
General Contractor from out of county
Only 2 subcontractors from Contra Costa County
1 out of state contractor

B. Los Medanos College Student Services Remodel

Bid results 9.8% over high engineer’s estimate of $15M
General Contractor from out of county
Only 2 subcontractors from Contra Costa County

10. $26M is the cost of PLAs at West Contra Costa USD to fund three updated construction bids for projects at Kennedy High, El Cerrito High and Coronado Elementary. This 37% increase over the $44.8 Million allocated by Measures J, D & E is the cost of government-mandated Project Labor Agreements (PLAs). WCCCUSD has had a PLA in place since 2000. Learn more. Also see attached CC Times Article: Pricey school construction spending at WCCUSD.

11. Oxnard Union High School District new Rancho Campana High School bid coming in 20% over estimates. The cost of the project had been estimated to be $49 million while the price tag now stands at $58 million. GC blames PLA. Latest projected cost is $78.2M.

12. South San Francisco school starts amid construction project

When school started the fifth grade classrooms had not been completed due to construction delays. The district says part of the construction delays at Buri Buri Elementary School was due to roofing materials that didn't arrive on time. In fact, this is not the only school in the district that's behind in construction.

The district has used up all the funds from the $162 million bond for school improvements and ran out. It moved $10 million from its general fund to complete projects because of increased costs.

South San Francisco Unified School District has been using Project Labor Agreements since 2011.

13. East Bay Municipal Utility District conducted a survey of its union and non-union contractors who bid district projects about Project Labor Agreements.

100% said PLAs increase costs
64% said PLAs were a disincentive to bid

14. Southwestern Community College National City Higher Education Center project failed to garner the required 3 bidders for the following trades and rebid them PLA-free:

· BP 01 – Surveying (Prof licensed surveyor)

· BP 02 – Final Clean (B or D-63)

· BP 03 – Earthwork & Site Demo (A or C12 & C21)

· BP 04 – TI Demo (C-21)

· BP 06 – Masonry (C-29)

· BP 10 – Misc Metals & Stairs (C-51)

· BP 11 – Non-Lab Casework (C-6)

· BP 14 – Sheet Metal (C-43)

· BP 18 – Flooring (C-15)

· BP 24 – Elevator (B or C-11)

· BP 25 – Fire Protection (C-16)