Wednesday, May 6, 2009 | Billboards and protests are roaring back and forth on a controversial project labor agreement for building and renovating San Diego Unified schools. But while unions and the school district hash out the plan behind closed doors, millions of dollars of work is already up for grabs on the $2.1 billion facilities bond, minus any restrictions from a labor agreement.
School district officials and board members say that the projects, which include artificial fields and new classrooms, were too important to wait on the labor pact. Some have already been awarded to the lowest bidder; others are slated to get the green light from the school board later this month.
And in an interesting twist of timing, the unfettered projects are being snapped up by non-unionized companies, many of which are uneasy about the planned labor agreement. One builder even said she will forgo future work if the agreement goes forward. Her Bonita-based company was the lowest bidder to revamp a San Diego High school building with a new student television station.
“I’ll be going someplace else,” said Christina Gomez Holben, president of St. Thomas Enterprises, Inc. and a board member for the local chapter of the Associated General Contractors. “I would not work under a PLA.”
Opponents of the labor agreements contend that other builders and renovators that are not unionized will avoid bidding on the work as well, pushing costs upward as bids dwindle. Supporters tout benefits such as being able to hire local workers and insist on healthcare. They challenge the claim that companies will really eschew millions of dollars in construction work in a grim market.
But when it comes to how PLAs affect the bottom line, both sides can muster stacks of studies. It is tricky to suss out whether the agreements cost or save money because there are no laboratories to compare what the exact same project at the exact same time would cost with or without an agreement.
The window of time before San Diego Unified and the unions sign a deal could be the next best thing: a way to compare costs before and after a project labor agreement is put into place in the school district.
And whether that comparison is deemed fair or unfair, it could prove critical for fans and foes of the labor deal alike in a campaign that has spiraled beyond the bond, targeting the school board members who voted for the plan. It will test whether the dire claims of opponents are borne out — or fall flat.
“It gives us an opportunity to have a real test case,” said John Stump, an attorney and member of the oversight committee. “Now they’ve got one set of prices without a PLA — and now they can bid them out with a PLA.”
The debate over the deal began in January when a new school board majority, elected with labor backing, voted to start bargaining with unions over a project labor agreement. Exactly what that means is still unclear. Such agreements typically involve a trade off in which unions agree not to strike in exchange for guarantees on health benefits and hiring that unions savor.
Companies that are not unionized can bid on work in a project labor agreement, as has occurred in other school districts and cities that adopted them, but must follow rules that can include hiring a certain percentage of their workers from unions or paying into a union benefits plan. Whether they balk at those rules and go elsewhere — and whether that will impact costs — is the million dollar question.
Unions say the answer is no. “You would expect the same people bidding on it whether there is an agreement or not,” said Tom Lemmon, a coalition of unions that is negotiating the agreement with the school district. Such agreements can also include an “escape clause” that exempts a project from the labor pact if too few bidders throw their hats into the ring.
Contractors say the answer is yes. “San Diego is a huge town and there’s a lot of other stuff out there. Why bother?” said Jim Ryan, executive vice president of the local chapter of the Associated General Contractors.
Citizens charged with overseeing the bond work are weighing the different arguments. Against the advice of San Diego Unified staffers, who told the oversight committee that opining on the labor agreement could politicize the group and fell outside its purview, members recently opted to study the issue and give their opinion to the school board.
It is an especially touchy question because several members of the committee are aligned with the groups on either side of the debate. One is a staffer with the Associated General Contractors, one is a business manager for a construction union, and three others work with builders or construction management groups.
The school board has already signed off on more than $3 million in bond work, including more than $2.7 million to replace synthetic fields and tracks at two high schools and $260,000 to remodel a student cafe at Mission Bay High. Both of the winning bidders are non-unionized, although they sometimes hire unionized subcontractors, and both are wary of the push for a project labor agreement.
“I don’t particularly like them,” said Steve Davey, one of the owners of Byrom-Davey Inc., which is installing synthetic turf fields and two tracks. “I think it’s a waste of taxpayers’ money.” But he added, “I’ll still bid it.”
Three winning bids will go before the school board for approval this month: Gomez Holben bid $1.55 million to remodel the San Diego High building. Erickson-Hall Construction, a non-unionized contractor that was awarded more money under the previous San Diego Unified bond than all but one other company, is slated to receive $5.4 million to erect a new building meant to ease overcrowding at Hoover High School. Its chief operating officer, Michael Hall, said that Erickson-Hall “doubts seriously” that it would bid for work under a project labor agreement but is still weighing the issue.
And a Northern California company with a San Diego office, Bay Air Systems, is poised to install air conditioning at E.B. Scripps Elementary to the tune of $1.78 million, according to a bidding list provided by the local chapter of the Associated General Contractors.
“If the rumors are true that they’re trying to get only union labor, obviously we’d have an issue with that,” said Jeff Greco, project manager and estimator for Bay Air Systems, a non-union company that hires both unionized and non-unionized subcontractors.
But he said that other projects that required his company to hire only a fraction of their workers from unions, including work at Cuyamaca College, had posed no problems. “If it were something along those lines, it’s not something to lose any sleep over,” Greco said.
Stuart Markey, who is overseeing the bond, said that the bids have been coming in 25 to 35 percent below what was originally estimated. Markey told members of the bond oversight committee that costs were so low that he wanted to accelerate building to take advantage of the prices. The Hoover High project that was bid for $5.4 million, for example, was originally estimated to cost more than $10 million.
Even when the labor agreement is signed, there may still be projects that fall outside of its rules if there are too few bidders. Some agencies have also limited their labor rules to more expensive projects, leaving the less costly projects free from other restrictions. But proponents are eager to see the agreement put into place so that as many future projects as possible will fall under its rules.
“It really should be signed as soon as possible,” said Corinne Wilson, research and policy analyst for the Center on Policy Initiatives, a think tank that favors PLAs. “It really does have community benefits through local hiring.”