Did you know that in a little less than four months, San Diego could lose out on hundreds of millions of dollars in state funding for construction projects? Or that our city might no longer be eligible to receive low-interest loans for sewer and water projects?

fix san diego opinionThis probably comes as a shock, since no one seems very interested in talking about it. But the future of our cityscape is at stake. These factors could make it much more expensive to build in San Diego.

To understand how we got here, we need to go back a few years.

On Oct. 2, 2011, Gov. Jerry Brown signed SB 922, which prohibits using state funds for local construction projects where local agencies no longer allow the use of project labor agreements. These are pre-hire collective bargaining agreements with labor organizations that set the terms of employment for specific construction projects.

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The legislation takes effect in January.

The day after Brown signed that bill, supporters of banning labor agreements for city projects appeared at the San Diego City Council meeting. They had gathered enough signatures to place the labor agreement ban on the ballot, so the Council had two choices: Adopt the measure outright, or place it on the ballot. Council members voted to place it on the June 2012 ballot, designated as Prop A.

On April 26, 2012, Brown signed SB 829, which prohibits state funding or financial assistance to support any construction projects awarded by a city “if a charter provision, initiative or ordinance of a charter city prohibits, limits or constrains in any way the governing board’s authority or discretion to adopt, require, or utilize a project labor agreement.” That legislation also takes effect in January.

By potentially banning project labor agreements, we were setting ourselves up to lose out on tons of state funding. Leading up to the June 2012 election, Prop. A opponents warned of the significant financial risks to the public if the measure passed.

“If Prop. A passes, San Diego would no longer be eligible to receive state grants for local construction projects,” State Controller John Chiang warned in May of that year.

The city also sounded an alarm of sorts in its 2012 bond offering documents: “If approved, Proposition A could cause the city to lose state funding for city construction projects.”

Even global ratings agency Fitch Ratings weighed in, calling Prop. A a “potential area of general fund exposure” and noted that its passage “could place downward pressure on the city’s bond ratings.”

Prop. A supporters argued that there was nothing to worry about and dismissed the discussion of financial risks as a “scare tactic.” They said Senate bills 922 and 829 were “legally suspect” and that “Proposition A was written to protect the city’s access to state construction funds.”

In June 2012, voters approved Prop. A and it became law. There hasn’t been much talk about what that means for the city since then. But a court ruling this past August might change that — it seems to confirm that SB 922 and SB 829 are “constitutionally permissible,” and that the state can place conditions on the receipt of state discretionary funds, meaning it can withhold funding to cities and counties that ban project labor agreements.

We have a few options, such as holding a special election to undo Prop. A, pushing for state legislation, initiating litigation or trying to somehow convince the state or the courts that San Diego’s Prop. A didn’t really ban project labor agreements.

The first option — putting the matter back on the ballot – may be the simplest solution. A special election would cost money, but nowhere near as much as the city could lose in state funding and loans for construction projects.

The second option — seeking state legislation — is possible, but it seems unlikely that state legislators would overturn their own laws given the court’s ruling that upheld the constitutionality of the legislation. Initiating litigation is also on the table, but that would take time and the outcome likely would be the same.

The last option of trying to convince the state or the courts that San Diego’s Prop. A actually allows project labor agreements might be worth a shot, however long.

Whatever we do, it needs to happen soon and in full view of the public.

Donna Frye is a former San Diego city councilwoman. Frye’s commentary has been edited for style and clarity. See anything in there we should fact check? Tell us what to check out here.

    This article relates to: Fix San Diego, Infrastructure, News, Opinion, State Government

    Written by Catherine Green

    Catherine Green is deputy editor at Voice of San Diego. She handles daily operations while helping to plan new long-term projects. You can contact her directly at catherine.green@voiceofsandiego.org or 619.550.5668. Follow her on Twitter: @c_s_green.

    Joe Jones
    Joe Jones subscriber

    The operative word in Comrade Frye's laughable opinion piece is "could." Other key words are "might" and "potentially." As point of fact, there is not a single example example of Prop A costing taxpayers a nickel, not a single construction project even mentioned.

    Mr. Roboto
    Mr. Roboto subscriber

    For those who read this article and think they might agree with Ms. Frye: (for context here, please keep in mind PLAs are usually only used on massive construction projects. A 20 story residential project downtown is not a likely candidate for one. Think stadiums and similar size undertakings.)

    1. PLAs are an economic tool used by labor to block non Union shops from construction projects. The PLA does not outright block non-Union contractors from bidding on work, but it sets up a system where they are pilfered by the union shops. As part of their employees pay, Non-Union shops have to pay into a benefit pool that goes to the local union. However, the employee will not receive those benefits unless he or the company he works for joins the union. Essentially holding the non Union workers pay benefits hostage for a ransom that can only be paid with membership.

    2. Labor likes to claim PLA's increase the use of local labor. What they don't tell you is that to achieve that claim, any Union contractors from out of town have their paychecks addresses to the local union halls so they look like they are local.

    3. Most importantly! Prop A did not ban PLA's in San Diego. In fact Ms. Frye's statements in this article should be fact checked since they are outright false. Prop A merely prevents the City from requiring a PLA. But wait there is more! Prop A does not apply to projects where the state or federal government requires a PLA as a contracting obligation or as a condition of the receipt of state or federal funds. Effectively nullifying the entire point of Ms. Frye's op-ed.

    4. Just because the State is complicit in these practices and is attempting to strong arm San Diego in to backing out of a good decision, that does not mean that we should. San Diego should not cave in to what is essentially legalized government racketeering.

    Mandy Barre
    Mandy Barre subscriber

    My- the anti-union sentiment is awful here. I don't see this as any problem whatsoever. Just do all contracts with PLAs and that will be that. No need to spend anymore time or money or negativity on this. Fair wages help everyone by putting more money back into the consumer driven market.

    Joe Jones
    Joe Jones subscriber

    @Mandy Barre I'm sure you'll be shocked to hear this, but there is zero consensus on what comprises a "fair" wage. As a taxpayer, I'm going to guess that competition in the marketplace might define "fair" a little differently than a union would.

    Mark Giffin
    Mark Giffin subscribermember

    Toni Atkins voted for SB 922 and SB 829.

    Her actions show just whom she supports and whom she thinks should be punished for not kowtowing to the union alter.

    Voters keep electing her and should not be surprised by lack of representation of the voters wishes concerning prop "A"

    Chris Wood
    Chris Wood subscriber

    “…On Oct. 2, 2011, Gov. Jerry Brown signed SB 922, which prohibits using state funds for local construction projects where local agencies no longer allow the use of project labor agreements….”

    Since San Diegans support Proposition A it is one more reason not to vote for Mr. Brown in the next election.

    R_Markuson subscriber

    Ms Frye. Please don't blame the supporters of Fair and Open Competition or the voters of San Diego for the loss of "hundreds of millions of dollars in state funding for construction projects." The blame rests squarely on the State Building and Construction Trades Council who rammed the bills you mentioned through the legislature and the San Diego legislators who willingly sacrificed San Diego on the alter of obedience to big union bosses, namely: Atkins, Block, Kehoe, Hueso, and Vargas. And don't forget the role of Senator, now Chevron lobbyist Michael Rubio. They are to blame, along with Senator Steinberg and the other supporters of these unconstitutional bills for the fix San Diego is in!

    Bob Hudson
    Bob Hudson subscriber


    Amen - and while we are at it, does the fiancially-mismanaged State of California actually have money to give to cities for construction projects or is this just a hypothetical case?