San Diego Narrowly Averts Financial Crisis: Clarifies PLAs Are Not Banned

January 15, 2015 - Reacting directly to legislation sponsored by the State Building and Construction Trades Council of California, the San Diego City Council has narrowly averted a financial crisis by clarifying its position that Project Labor Agreements are not banned in the city. The U-T San Diego newspaper reported that as a result, the city may therefore continue to receive state funding for its construction projects.

The news story reported that the state confirmed San Diego’s eligibility for the funds in response to the city council’s action last fall declaring that PLAs were permitted, reversing the position of a 2012 city ballot measure to prohibit PLAs.

This information may prove beneficial to local Building Trades councils who have cities that have yet to repeal PLA bans or that decline to pay prevailing wage. The text of the story follows, along with a link to it at the newspaper’s website.

State clears SD on labor rules

Conflict over union wages could have cost city many millions

By David Garrick

DOWNTOWN SAN DIEGO — State officials confirmed Thursday that San Diego averted a potential financial crisis last fall by declaring that the city can make special wage agreements with labor groups on certain construction projects.

City officials expressed confidence in October that the declaration, approved unanimously by the City Council, would preserve their eligibility for millions in state funding.

But that wasn’t certain until San Diego was included Thursday on an eligibility list released by the state’s Department of Industrial Relations.

“Our legal analysis on this was creative and a bit novel,” City Attorney Jan Goldsmith said. “But, we were correct and convinced the state’s lawyers.”

The possibility that the city couldn’t enter into special wage pacts with unions, which are called “project labor agreements,” was jeopardizing its eligibility for many millions in state funding.

It would also have threatened the city’s chances for funding from a $7.5 billion bond for water projects approved by state voters in November, Goldsmith said.

The controversy stemmed from Proposition A, a measure city voters approved in 2012 to prohibit project labor agreements, which have been criticized for increasing the labor costs of public projects in other cities.

State officials told the city earlier in 2014 that Proposition A conflicts with multiple state laws, making the city no longer eligible to receive state funding or financial assistance on any construction projects.

San Diego’s Building and Construction Trades Council, a labor union, praised the city’s move in October.

Goldsmith credited Assembly Speaker Toni Atkins, D-San Diego, with helping craft the compromise resolution.

To be eligible for state funding, San Diego also must comply with the state’s prevailing wage laws and apprenticeship requirements on all public works projects.

Print this Page