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To understand the endless debate over project labor agreements, come with us to the Jefferson Elementary School playground.
There, an engineer estimated that expanding the playground would cost $3.1 million. San Diego Unified told construction companies bidding on it that it would cost somewhere between $1 million to $5 million. Ultimately, the lowest — and winning — bid came in at $2.7 million.
The school district cheers because the bid was 11 percent under the original estimate of $3.1 million. But opponents of the labor pacts jeer, saying that the playground cost 170 percent more. How? They used the lowest end of the bidders’ price range, $1 million, as its baseline.
Those opponents, led by the Coalition for Fair Employment in Construction, used the numbers this week to point out that school construction projects like that playground have been more expensive and gotten fewer bidders since the district signed a labor pact on its $2.1 billion construction initiative.
But the school district uses different numbers to judge how it’s doing. And while San Diego Unified agrees that costs have gone up, it disagrees with the coalition on whether the labor pact is to blame.
Under project labor agreements, employers must provide healthcare largely through union plans and use union hiring halls to find most of their workers. In exchange, unions promise not to strike or stall work. The school board signed a project labor agreement last year for most work on the construction bond.
The Coalition for Fair Employment in Construction did its own analysis and concluded that 13 projects done under the labor agreement cost 32 percent more than the low end of the price range given to bidders, while 15 projects done before the agreement came in 20 percent below it.
The group argued yesterday that its figures show financial mismanagement at San Diego Unified and are a good reason to oppose Proposition J, a parcel tax being pushed to lessen program cuts.
San Diego Unified officials and labor leaders say it is impossible to say whether the project labor agreement is to blame for the increased costs, since the cost of construction materials and labor has also gone up in urban areas nationwide during that time.
Even with the cost increases, most projects done under the labor pact have stayed both under the engineer estimate and under budget, which is pegged above the engineer estimate. School district officials complain that by comparing costs to the wrong benchmark, the group is inflating the numbers.
The coalition got its numbers by comparing the winning bids for school construction projects to the low end of the project price range that San Diego Unified gives to companies when it invites them to bid. The range can be wide, spanning from $5 million to $10 million.
But Lou Smith, who oversaw the last school construction bond, said that comparing costs to the low end of the bidding range is not an accurate way to judge costs. Stu Markey, who handles the current bond in San Diego Unified, said the number is just used to tell companies roughly the size of the job.
Instead, the school district and other public agencies usually look at how much an engineer estimated the project would cost. Using that number gives a very different picture, as you can see by looking at the Jefferson playground. Members of the school bond oversight committee said it was the best method.
So we studied the same projects as the coalition and compared them to the engineer estimate instead.
We found that projects done without the labor pact came in 14 percent under the engineer estimate, while projects under it came in 7 percent under estimate. (While doing our analysis, we had to exclude one project outside the labor agreement, which did not have an engineer estimate because it was a different kind of contract.)
That still means costs have gone up since the labor agreement was struck, but it is a smaller increase than the numbers that the coalition touted in its report.