Secret Deal Found and Exposed for Project Labor Agreement on City of Sacramento Memorial Auditorium
The Coalition for Fair Employment in Construction has obtained public records from the City of Sacramento proving there are secret deals involving construction trade unions, a union lawyer named Daniel Cardozo, the Sacramento City Manager’s office, and political consultant Rob Fong. These deals have already increased costs and delayed construction for the City of Sacramento Memorial Auditorium Renovation Project and will likely continue to increase costs. In fact, as one record states, "I don’t think we’ll be able to accommodate the Choral Society and Camellia Festival in Dec 2018 and Feb 2019."
At their May 22, 2018 meeting, the Sacramento City Council agenda approved new documents that relates to this: “Supplemental Agreement for a Guaranteed Maximum Price for the Memorial Auditorium Improvement Project.”
This was all done behind the scenes, with no public knowledge or deliberation.
In fact, one record we obtained indicates that parties involved insisted that "this agreement needs to be private and confidential.”
The deal would require construction companies to sign a union-only Project Labor Agreement with unions as a condition of working on the Auditorium project.
As shown at the website www.PhonyUnionTreeHuggers.com, the law firm of Adams Broadwell Joseph & Cardozo specializes in abusing the California Environmental Quality Act (CEQA) on behalf of unions. They object to environmental reviews and file lawsuits to stop projects until the public or private owner surrenders and agrees to sign a Project Labor Agreement. Then the environmental concerns are “mitigated” and the project moves forward.
These are the four unions involved in the pressure for a Project Labor Agreement on the City of Sacramento Memorial Auditorium Improvement Project:
- UA Plumbers and Pipefitters Union, Local 447
- International Brotherhood of Electrical Workers Union, Local 340
- Sheet Metal Workers Union, Local 104
- UA Road Sprinkler Fitter Union, Local 669
Timeline of Special Interest Back Room Deal
December 21, 2017
Dan Cordozo, an attorney for the law firm Adams Broadwell Joseph & Cardozo, emails this document to Project Manager Matt Wade of Kitchell CEM and consultant Rob Fong: “our proposed Community Workforce and Training Agreement for the Memorial Auditorium Renovation Project covering work within the jurisdiction of the plumbing, mechanical/sheet metal, electrical and sprinkler fitting trades.”
January 2, 2018
Consultant Rob Fong asks Mr. Wade via email when there will be a meeting to discuss the terms of the Project Labor Agreement.
January 3, 2018
Desmond Parrington, Senior Development Project Manager at the City of Sacramento, sends an email to Mr. Wade: “Attached is the new agreement Rob and Dan sent us. Our counsel is looking at it this week and hope to have our comments by the end of the week. As this will most likely be something we need to amendment our contract with the City, I would like to get the City comments as well. I know they don’t want the City involved, but think it’s a good idea to have you look at it since we’re contracted with the City. In addition, this agreement will most likely have some cost implications to the anticipated GMP amount and indirect costs.”
Mr. Parrington sends another email to Mr. Wade: “Have Rob or the Building Trades reached out to you about a meeting yet? Given that this is now a CWTA between Kitchell and the MEP Building Trades, Kitchell needs to take the lead on this. We understand your concerns about the new CWTA and you have our edits as well on the earlier version. (Other than limiting this to MEP and requiring union only subcontractors the prior CWTA and this one and the prior one are pretty similar). If you believe that this CWTA is going to increase costs or negatively impact the project from a cost or schedule standpoint then please recommend the necessary revisions to the Building Trades so that there is no cost impact. They promised everyone that there wouldn’t be cost or schedule impacts as a result of this CWTA so they need to live up to that. If you cannot achieve that please let us know ASAP.
January 10, 2018
Mr. Cardozo and union officials are sighted at city hall going into the mayor’s office. (We have not been able to get public records showing schedules of elected officials and city employees and their meetings with union representatives on the Project Labor Agreement.)
January 17, 2018
Mr. Cardozo emails Mr. Wade and Mr. Fong: “In order to narrow the issues for discussion at our meeting tomorrow and move closer to a final document, I have attached a response to the draft document you sent on January 10th. We accepted many of your proposed revisions and show our responses to other changes in redline. We are prepared to respond to the questions noted on your draft. Mr. Wade tells City of Sacramento staff “There are many important items we’re requiring that they have struck out.”
January 18, 2018
There appears to have been a meeting between Kitchell representatives and union representatives about what Mr. Wade describes as “preliminary comments and concerns that we feel necessary to address.”
Mr. Parrington emails Mr. Wage and others: “My understanding from Ryan is that if the CWTA is completed by the end of January then we are likely to have schedule issues with project. Unless you believe we have more time, I am going to send out a reminder to you and Rob Fong about this to make sure they understand the urgency of this.”
January 30, 2018
Mr. Wade emails Mr. Parrington: “Hi Desmond, Our attorney and us are finalizing comments and specific work exclusion items. The message below indicates the unions will not depart from the minimum 3 bids requirement. We need at least 4 bids to be somewhat competitive. Below is a graph of historical data Kitchell shares with our clients. The one below that is from another reputable cost estimating firm. We need some help with them agreeing to this in the best interest of the project budget and competitiveness.” He includes two charts showing reduced bid competition results in higher costs.
He writes to them in another email on the same day: “We’re currently going through all the master agreements received last week. There are a number of specific scope items that will need to be excluded based on the nature of this work, specified manufactures/installers, and our competitive work scoping strategy. The minimum 4 bid requirement will need to be accepted as we need to show City Council and City of Sacramento that we’re trying to be competitive. Below is another metric from a reputable cost estimating firm that indicates even high spreads from what Kitchell has seen historically of which I shared last week.”
Mr. Cardozo emails Mr. Wade and Mr. Fong: “We are still waiting for the description of any work you are proposing to exclude. I confirmed with my clients that they will not agree to depart from the longstanding three bid minimum provision that we sent to you. We are unaware of any other outstanding issues. We would like to wrap this up as soon as possible.” He also writes “One thing that would help us in sorting this out would be to review of your list of prequalified subcontractors in the MEPS trades. Please email the list to us and we will respond to your email below.
January 31, 2018
Mr. Wade emails Mr. Cardozo and Mr. Fong: I’ve also attached a current list of pre-qualified trade contractors per your request. The pre-qualification process will open up again due to the CWTA and will continue through the bidding phase, but they must be approved prior to the bid deadline.
Mr. Wade emails Mr. Parrington: “Please find the attached updated CWTA with our revisions from your latest version…This Unions will need to agree with most of our comments and revisions, otherwise we’ll lose competiveness (sic) as you all are aware.”
February 2, 2018
Mr. Cardozo emails Mr. Wade: While we accept a number of your changes, we cannot accept your wholesale exclusion of a substantial portion of the project work from the scope of the agreement. As we discussed, the agreement already contains an exclusion for specialized and technical work that the Unions do not traditionally and customarily perform, and we remain open to discussing work that may fall into that exception. However, we cannot agree to a blanket exclusion of work that is within the traditional and customary jurisdiction of the Unions and that is work performed by their signatory contractors.
Mr. Wade emails Mr. Parrington: “Looks like the Unions do not want to negotiate on the min 3 bidders to 4 bidders. Based on the exclusions that they are not accepting, we can package all the Theatrical scope with the electricians, but there may be a premium for that. The MEP demo work is very expensive by those Journeymen under those trades as opposed to a demolition contractor doing it with cost effective Laborer. Those are the bid items that we need to overcome.
Mr. Wade emails City of Sacramento staff: “Notice Desmond is out sick today. He mentioned a couple of days ago that the City was pushing the Mayor’s office and Council on the 4 bidder requirement versus the 3 that the Unions want. Has there been any further conversations about this?”
City of Sacramento Assistant City Manager emails Mr. Wade: I talked to Rob Fong on Wednesday and he knows it has to be settled today. I haven’t heard but hoped you had.”
Mr. Wade emails City of Sacramento staff: “They are still pushing for only 3 bidders as of today. 4 bidders is what we’re requiring them to provide. We can agree to the 3, but everyone needs to understand the potential risks and % differentials.”
City of Sacramento Assistant City Manager emails Mr. Wade: “City agrees, I will check with Rob.”
Mr. Cardozo emails Mr. Wade: “The difference in positions regarding the exclusions from Covered Work as reflected in the redlined documents does not seem minor. If you are indicating that Kitchell is willing to drop its proposed exclusions, then I agree we are getting close.” In another email he writes “Does this mean that you are accepting all of our revisions to your language in Section 3.2, except for 3.2(k)(iii)?”
February 5, 2018
Mr. Wade emails Mr. Parrington: “Attached is an updated staffing and resource plan for memorial illustrating the additional time and legal fee allowance to get through the CWTA negotiations and bidding. Updates are highlight (sic) in yellow. Please let me know if you have any questions. I’d like to get this approved prior to our February billing.”
A representative of another project management firm emails Mr. Wade: “Are you able to provide a narrative to the add request in order to assist Desmond in the review and approval of your additional fee? Understanding how the highlighted percentages break out in terms of scope of services (i.e. PLA negotiation, Sub-contractor requalification (sic), front end reviews) between the various resources would help expedite a review.”
February 6, 2018
Mr. Wade emails Mr. Parrington: “Please find the attached amendment request letter for the CWTA delays on Memorial. After further review, we have challenges with our approach in continuing the bid process even if the CWTA agreement is not negotiated and executed prior to bidding. The minimum 4 bidder and notification requirements in the agreement needs to be put in place prior to bidding to maximize are competiveness and hold the Unions accountable. Therefore, we’ll need this amendment request approved and the CWTA fully executed prior to Feb 15th. Kitchell’s final terms and comments regarding the CWTA are currently in the Unions court and still pending final resolution. I had a long conversation with Dan Cardozo yesterday afternoon answering addition questions about the scope of the project and the need to incorporate the CWTA in the bidding documents that would go to additional bidders, builder exchanges and in other advertisements. They continue to mention that this agreement needs to be private and confidential. We finished the call with him going back to the Unions for addition feedback and comments. As you can see with the updated preliminary schedule, most of the float we had built in the front-end has been consumed by the CWTA and finalizing the permitted bidding documents. As these two elements are not complete, we have concerns that the project may push beyond our July 1, 2019 contractual completion date of Phase 1. Other areas of concern includes the scope of work completed enough in Phase 1 for the 2019 Graduations and CMT Gala event. Not sure if those are booked or not. I don’t think we’ll be able to accommodate the Choral Society and Camellia Festival in Dec 2018 and Feb 2019. I’ll reach out to Dan and Rob again today and see where we’re at.”
February 7, 2018
Mr. Cardozo emails Mr. Wade: “In order to address concerns that you have raised, we have decided to return this to a standard public works PLA. Under the revised terms, you would be able to award the work to any bidder, union or non-union, that agrees to sign the PLA.”
February 8, 2018
Mr. Wade emails Mr. Cardozo, Mr. Fong, and others: “This doesn’t work for us, the City and Stakeholders involved. Non-union firms will not bid the project knowing they’ll need to sign the CWTA agreement and applicable Union Master Agreement. We’ve notified the City of your recent change and approach and awaiting their direction, as this continues to delay the bid period and overall project schedule, which is compromising the anticipated GMP amount that was budgeted in our contractual obligations. If we want to return to the standard, it would be to eliminate the CWTA altogether as originally planned for Memorial. I’ll follow up after I hear from our Client and the direction they would like us to take.”
Mr. Cardozo emails Mr. Wade (copied to Mr. Fong): I think you are misunderstanding the framework. Non-union firms do not have to sign the Union Master Agreement. They just have to sign the PLA. That is the fundamental structural change we are making in the PLA. We are changing it from a private project PLA to a standard public works PLA. All contractors would sign the PLA and work under the terms of the PLA and the applicable master agreement, but they would not have to become signatory to the master agreement. That is how all public works PLAs are structured. Non-union contractors bid and work under public works PLAs all the time. In many cases, the majority of the contractors on a public works PLA job are non-union. Your email demonstrates why this shift back to a public works PLA is legally required. We had understood that Kitchell and the Unions were to negotiate a private PLA entirely separate and independent of the City. Your email confirms that the City is directing this process, which effectively requires that any PLA meet the terms of Public Contract Code section 2500. We have prepared an agreement consistent with Section 2500.
Mr. Wade emails Mr. Parrington: “I don’t get it and conferring with our Attorney later today. Their new agreement calls out in multiple locations that that the Master Agreement needs to be followed and trust funds would need to be allocated by all. Again, Dan doesn’t understand that we’re trying to work with them, but have contractual obligations to the City. Therefore, we need direction on the path you want us to take. Frustrating that the Unions think this PLA is required and a must and now they taking out any accountability on their end.”
February 9, 2018
Mr. Wade emails Mr. Cardozo (copied to Mr. Fong): “Whether I’m misunderstanding the framework or not, based on the feedback I’ve received over the last 24 hrs from non-union firms that we had originally prequalified for this project before the CWTA was introduce to us, there’s not a non-union firm that will agree to sign the PLA and be forced to follow or sign the applicable Master Agreements. We won’t have any non-union firms bid this project. This also creates risks of Union firms not bidding if there is any potential for non-union firm to bid the project, which would really decrease the competition even worst (sic). Again, we need the minimum 4 bidder requirement or let this CWTA go on this small specialty project and focus on the appropriate CWTA for Community Center Theater and Convention Center.”
February 16, 2018
Mr. Parrington directs City of Sacramento staff via email: “Could you please process the following proposal as a supplemental to Kitchell’s original contract for pre-design services for Memorial Auditorium (Contract #2017-0677)?”
February 26, 2018
Coalition for Fair Employment in Construction submits public records request to City of Sacramento asking for documents related to the Project Labor Agreement.
March 8, 2018
City of Sacramento informs Coalition for Fair Employment in Construction it needs more time to fulfill the public records request.
March 21, 2018
City of Sacramento informs Coalition for Fair Employment in Construction it needs more time to fulfill the public records request.
May 10, 2018
City of Sacramento provides Coalition for Fair Employment in Construction with documents through February 26, after almost three months.
May 17, 2018
Coalition for Fair Employment in Construction emails two new public records requests to City of Sacramento:
All letters, memos, emails, texts, faxes, or other written or electronic documents - including emails on private email accounts used for public business - from or to the City of Sacramento mayor, city council, and/or city staff (especially the Office of the City Manager), and/or contractor Kitchell CEM, and/or consultant Rob Fong of RKF Consulting, and/or Daniel Cardozo of Adams Broadwell Joseph & Cardozo regarding the public records request #P008287-022618 submitted by Eric Christen on February 26, 2018. Specifically, we are seeking records that relate to the timing of the city's response to the request and indications of why a request submitted on February 26, 2018 could not be fulfilled until May 10, 2018. There are unsubstantiated reports that our request was delayed to allow negotiations on the COMMUNITY WORKFORCE AND TRAINING AGREEMENT FOR THE SACRAMENTO MEMORIAL AUDITORIUM RENOVATION PROJECT to continue without public interference and we want to obtain the records that confirm whether this is true or not true. Thank you for your help!
All correspondence, including emails and text messages, related to the project labor agreement/contract for Memorial Auditorium and the Powerhouse ScienceCenter and City of Sacramento Capital Improvement Projects, from February 25, 2018 to the present (May 17, 2018). I am requesting the same type of documents I requested on February 26, 2018 as Public Records Reference # P008287-022618, but because the city could not fulfill the request until May 10, 2018, there are another two and a half months of documents the public does not have, including documents that would allow the public to know what happened in the end with the COMMUNITY WORKFORCE AND TRAINING AGREEMENT FOR THE SACRAMENTO MEMORIAL AUDITORIUM RENOVATION PROJECT. In addition, the public did not know until receiving the documents on May 10, 2018 that a project labor agreement/community workforce agreement was being considered for all city Capital Improvement Projects. I appreciate the thoroughness and honesty of your response to my February 26, 2018 request, but now the public needs to know what has happened since then.
May 22, 2018
Sacramento City Council scheduled to consider agenda item entitled “Supplemental Agreement for a Guaranteed Maximum Price for the Memorial Auditorium Improvement Project.” It contains these provisions:
• Section 40 (“Priority Local Hire”) is amended to add the following language at the end of the section: “In the event that Contractor elects to negotiate in good faith and execute a Community Workforce and Training Agreement with mechanical, electrical, plumbing and sprinkler trades, should such unions be willing and able, Contractor shall not be required to demonstrate achievement of the 5% goal as set forth in this Section 40 above.”
• If Kitchell elects to enter into a Community Workforce and Training Agreement (CWTA) with any of the building trades, increased staff labor, subcontractor and consultant costs as well as schedule-related impacts due to disruption and resulting delays to the critical path schedule, caused by the execution of a CWTA are not included in the GMP. Kitchell may request additional compensation for such costs related to execution of the CWTA should Kitchell’s labor costs exceed the Staffing Rate Sheet - Job Total due to efforts needed to conform to the CWTA. Any labor, consultant, and delay costs incurred by Kitchell and its associated subcontractors caused by the CWTA shall be paid for from the City’s contingency and not from the Construction Contingency.