Bond betrayal: Did college district dupe OC Tax on PLA?

UnionsLastHopeMarch 29, 2013

By John Hrabe

When Orange County voters approved $698 million in new borrowing for the Coast Community College District last fall, they received reassurances from the county’s preeminent taxpayer organization that the measure took a responsible approach to long-term indebtedness. That helped the district garner 57 percent of the vote on Measure M on Nov. 6, just above the 55 percent threshold for passing such bonds. The bond money will be repaid with tax increases on property owners.

OC Tax doesn’t endorse or oppose school bond measures, but it does offer an exhaustive 13-point list of criteria for the public to judge bond measures. The last item of OC Tax’s list is: disclosure of whether the agency intends to use any project labor agreements during construction. A PLA is defined as, “when the government awards contracts for public construction projects exclusively to unionized firms.”

Back in September, when the district was desperately seeking OCTax’s coveted seal of approval, Reed Royalty, then-president of the organization, directly asked the district to address the PLA issue.

“One problem: your last item says ‘The ballot language contains no reference to a PLA.’ I can’t tell whether that statement precludes, includes, or simply ignores the possibility of having the work done under a PLA,” Royalty wrote on September 19 to district spokeswoman Martha Parham, according to copies of the emails exclusively obtained by CalWatchdog.com. “OCTax doesn’t like PLAs, but we don’t insist that you refuse to hire a contractor that operates under one.”

“We simply want voters to know in advance whether or not you will do so. We want voters to know what they’ll be paying for,” he added. “OCTax will not state that Measure M meets our 13 criteria unless/until you disclose your intent.”

Two and a half hours later, the district replied with an emphatic no.

“We do NOT have PLAs in place nor do we intend to enter into a PLA,” Parham wrote. “I hope that clarifies things, please let me know if you have further questions. — Martha.”

The emails are reproduced at the end of this article.

But now, as the district begins to draft construction contracts, it appears to have changed its mind. The Daily Pilot’s Jeremiah Dobruck wrote that, at a recent board meeting, “a board member floated a broad labor agreement,” which contained support for a PLA “on how to spend $698 million in bond money.”

Transparency

OC Tax’s new president, Carolyn Cavecche, says the issue is less about PLAs and more about transparency.

“We simply want transparency for the taxpayers while they determine how they will vote,” Cavecche told CalWatchdog.com. “We were given written assurances by the district that the Measure was silent on the issue because PLA’s would not be a part of Measure M.”

Cavecche pointed out that Measure M could have met OCTax’s bond criteria even if it had included a PLA. She believes that the district staff were among those caught off guard by the sample agreement.

“I get the impression that district staff was taken off guard by the board’s request to consider a Project Labor Agreement,” she said.

Local contractors, including the Associated Builders and Contractors and the Coalition for Fair Employment in Construction, are less forgiving and see the district’s move as a deliberate trick.

“How can the CCCD Trustees even consider a PLA after they told the OC Taxpayers Association in writing that there would not be a PLA on the bond?” asked Dave Everett, the government affairs director for the Associated Builders and Contractors, Southern California Chapter.  “Not only would this waste over $100 million of students’ education dollars, but it would discriminate against eight out of 10 construction workers.”

Hoodwinked

One anti-union activist believes the election outcome would have been different if the taxpayer group hadn’t been “hoodwinked by the college district” into providing its seal of approval.  

“The Orange County Taxpayers Association must feel a little sheepish, getting hoodwinked by the college district into endorsing Measure M even though they specifically won’t endorse bond measures for which a Project Labor Agreement is planned,” argued Kevin Dayton, the president and CEO of Labor Issues Solutions, LLC, who was the first blogger to report on the Coast Community College District’s potential use of a PLA. “I bet Measure M would have failed without their endorsement — Measure M only passed with 57 percent of the vote.”

Cavecche said the organization will be reconsidering its bond measure policies.

“Needless to say, OCTax will be re-evaluating how we review future school bond measures,” she said.

A spokeswoman for the district was unavailable to comment for the story. However, a district spokeswoman told the Daily Pilot that no PLA was being drafted or negotiated.

This isn’t the first controversy involving Measure M. Orange County Register Watchdog Ronald Campbell reported last November that the Coast Community College Foundation may have violated federal tax rules with a $200,000 contribution to the Yes on Measure M campaign.

“The foundation, a tax-exempt nonprofit, is legally barred from spending a ‘substantial’ share of its money on lobbying,” Campbell wrote. “The gift to Measure M on the Nov. 6 ballot was equivalent to 59 percent of the foundation’s total expenditures last year and 51 percent of its average annual expenditures over the past five years.”

Measure M increased taxes about $215 a year for a home with the area’s median price of $500,000.

(The following emails, between Reed Royalty and Martha Parham, have had the email addresses removed.)

Hrabe Measure M emails



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