Brown recently asked the California Supreme Court for an expedited review – and reversal – of two lower court rulings that have halted the state’s high-speed rail system. Just three days prior to that request, Brown’s campaign accepted $27,200, the maximum campaign contribution allowed by law, from Tutor Perini, which has more than a $1 billion in outstanding contracts with the California High-Speed Rail Authority.

Tutor Perini did not respond to an email request for comment about the campaign contribution. A spokesman for the governor’s office denies that the campaign contribution was connected to the lawsuit.

“Contributions have no bearing whatsoever on the state’s legal filings,” said Evan Westrup, Brown’s spokesman.

Sen. Andy Vidak: Case of “You scratch my back, I’ll scratch yours”

The timing of the campaign contribution doesn’t sit well with the state Legislature’s leading critic of the $68 billion high-speed rail project.

“Let’s connect the dots,” said Senator Andy Vidak, R-Hanford, who has introduced a package of legislation “aimed at driving a stake through the heart” of the state’s bullet train. “The HSR Authority’s apparent bid-rigging lands this company a $1 billion contract, then this company gives Brown a max campaign contribution, and then Brown sues to bail the company out?”

“In farm country, this is called ‘you scratch my back, I’ll scratch yours,'” Vidak said.

A controversial choice for the state’s high-speed rail project, Tutor Perini “had the lowest technical and safety rating of all the bidding companies, and the Authority board changed the rules to give Tutor the winning bid,” according to the Hanford Sentinel.

Last year, the California High-Speed Rail Authority awarded a billion dollar design-build contract to a joint venture headed by Tutor Perini Corporation. The contract is valued at approximately $985 million, plus an additional $53 million in provisional sums. Tutor Perini’s portion of the contract value is approximately $500 million, according to the company’s website.

Rail Critic: “Unbelievably Brazen”

Kevin Dayton, a Roseville-based policy consultant and a leading critic of the project, expressed disbelief with the timing of the campaign contribution.

“It’s unbelievably brazen,” said Dayton, who has frequently criticized the high-speed rail project. “The prime contractor for California High-Speed Rail maxes out to Brown’s re-election campaign, and later in the week Brown asks the state Supreme Court for extraordinary intervention to keep the project going even though it doesn’t comply with state law.”

He added, “This is a consequence of one-party rule: clearly Brown doesn’t think Republicans are capable of making him accountable for anything he does.”

Judge Puts High-Speed Rail Project on Hold

In November, a Sacramento Superior Court judge delivered “a major legal blow to the California bullet train” that effectively halted California’s plans to connect San Francisco and Los Angeles. In two separate but related rulings, Superior Court Judge Michael Kenny found that the project violated voter-approved requirements on the construction process, and therefore, the California High-Speed Rail Authority could not legally tap $9 billion in bonds. Construction cost estimates for the project have more than doubled since voters approved the project in 2008.

Before bond monies can be used for construction, Proposition 1A requires the state to detail how the project will be financed, a requirement that hasn’t been met, according to the superior court judge.

In a lengthy 49-page petition, state officials are asking the high court to review and reverse those two Sacramento County Superior Court rulings.

“If left to stand, these lower court rulings would not only prevent the state from proceeding quickly to build high-speed rail as the Legislature and voters intended,” said H.D. Palmer, a spokesman for the California Department of Finance, which is a plaintiff in the case. “They could also inject unwarranted uncertainty into the state’s ability to sell voter-approved bonds in a timely manner to finance public works projects.”

The state planned to build the first 130-mile segment with $3.24 billion in federal funds and $2.61 billion in Prop. 1A bond money, according to the San Francisco Chronicle. Brown has also proposed using $250 million in new greenhouse gas fees — also known as cap-and-trade fees — to fund the project.

Read the Brown administration’s petition to the California Supreme Court.

The bill was a classic special interest sponsored bill, sponsored by the State Building and Construction Trades Council, AFL-CIO.

What does SB 7 do?

SB 7 compels charter cities to require prevailing wages on local projects they construct with local funds by withholding all state contracting funds from non-compliant cities. The result could mean that local governments simply forgo important infrastructure projects because they cannot afford to fund them.

SB 7, however, is arguably unconstitutional. In 2012, the California Supreme court confirmed, in State Building and Construction Trades Council of California AFL-CIO vs. City of Vista, that California charter cities would be able to maintain the autonomy to decide whether to pay prevailing wages for local construction projects. It was a step in the direction of the free market for local governments.

What is going on in California if the Legislature and governor ignore the constitution?

According to Russell Johnson, Associated Building and Contractors, Inc., the California Supreme Court decision meant that charter cities can operate as they see fit. “The Court said, 'Autonomy with regard to the expenditure of public funds lies at the heart of what it means to be an independent governmental entity.’ We can think of nothing that is of greater municipal concern than how a city’s tax dollars will be spent; nor anything which could be of less interest to taxpayers of other jurisdictions,” Johnson told me in June.

“Whether a charter city pays prevailing wage with local funds is up to each city and not the Legislature,”  Johnson said.

Charter Cities

Of the 482 cities in California, 121 are charter cities; the rest are “general law cities” over which the Legislature exercises more control. But not all charter cities avail themselves of the prevailing wage exemption. There are 70 cities with no exemption, 10 cities with a partial exemption, and 41 charter cities with full exemption, according to the California Construction Compliance Group.

“In recent years, city councils have proposed charters and voters have approved charters in order to circumvent costly and unnecessary state mandates imposed by the California State Legislature on local governments,” Kevin Dayton wrote yesterday in the Flash Report. “Many of these mandates are pushed into state law by union lobbyists.”

“To stifle this little local rebellion, State Senate President pro Tem Darrell Steinberg and Republican Senator Anthony Cannella introduced a bill in 2013 sponsored by the State Building and Construction Trades Council of California,” Dayton said. “Senate Bill 7 cuts off state construction funding for charter cities that set contracting policies that deviate from state-mandated prevailing wage laws.”

“Supporters of Senate Bill 7 say it 'encourages' charter cities to abide by state prevailing wage law” Dayton said. “Others suggest that the term 'encourages' is somewhat Orwellian, as the term 'punishes' would be more accurate.”

By Katy Grimes

While reports of an improving California economy abound, many in the state aren’t buying it — particularly given how many anti-business bills are working through the Legislature.

Of particular interest is Senate Bill 7, by Senate President pro Tem Darrell Steinberg, D-Sacramento, and Sen. Anthony Cannella, R-Ceres. SB 7 would deprive charter cities of state funding and financial assistance for projects simply because some city charters do not require paying the prevailing wage.

The bill is sponsored by the State Building and Construction Trades Council, AFL-CIO.

“Continuing California’s economic growth depends on creating more middle class jobs, especially in the construction industry that was hit so hard during the Great Recession,” said Steinberg on his website. “Low wage contractors cut costs by cutting corners, but the data shows that they’re not saving public money. We can’t afford to shortchange workers and taxpayers by ignoring the economic net benefit of California’s prevailing wage law.”

What does SB 7 do?

SB 7 seeks to compel charter cities to require prevailing wages on local projects they construct with local funds by withholding all state contracting funds from non-compliant cities. The result could mean that local governments simply forgo important infrastructure projects because they cannot afford to fund them.

SB 7, however, is arguably unconstitutional. In 2012, the California Supreme court confirmed, in State Building and Construction Trades Council of California, AFL-CIO vs. City of Vista, that California charter cities would be able to maintain the autonomy to decide whether to pay prevailing wages for local construction projects. It was a step in the direction of the free market for local governments, as I wrote last September in “Push for charter cities enrages unions.”

“Whether a charter city pays prevailing wage with local funds is up to each city and not the Legislature,” said Russell Johnson, Associated Building and Contractors, Inc., California Government Affairs Director. “In this decision the court said, ‘Autonomy with regard to the expenditure of public funds lies at the heart of what it means to be an independent governmental entity.’ We can think of nothing that is of greater municipal concern than how a city’s tax dollars will be spent; nor anything which could be of less interest to taxpayers of other jurisdictions.”

According to Johnson, the ruling means charter cities now have a clear path to continue to operate as they see fit.

What is a California charter city?

In California, charter cities are under a unique protection in the State Constitution, and are allowed autonomy from the state when it comes to “municipal affairs.” This means when local dollars are used, charter cities get to make local decisions.

“In the Vista case, the California Supreme Court unambiguously upheld the right of charter cities to establish their own contracting policies for public works projects paid for with local funds,” Russell explained. “Local projects built with local funds are not subject to prevailing wage.”

The bill

Passage of SB 7 would establish a disturbing road map for future state intrusion on charter city laws and policies by withholding state funds as leverage to attempt to force changes to voter-approved city charters and ordinances.

“Cities recognize that exercising the power of a charter can free their municipal affairs from the grip of the state legislature and the special interest groups entrenched at the capitol,” Kevin Dayton, CEO of Dayton Public Policy Institute, said in a recent op ed on UnionWatch.org.

Dayton wrote:

“A staff report about city charters to the Murrieta City Council for its October 2, 2012 meeting was blunt about the need for cities to enact charters:

“‘…a knowledgeable, involved electorate should both propel and constrain the direction of its own city. Local control has always been a paramount matter of residents, businesses and the Murrieta City Council. Yet state legislators and previous gubernatorial administrations continue to impose far greater mandates, while at the same time hindering the ability of local governments to operate successfully. With little ability to protest, local governments have watched as the state government continues to balance its budget deficits on the backs of fiscally responsible local jurisdictions…The voice of cities in Sacramento has become mute due to a combination of special interest groups, influential political campaign contributions and tone-deaf lawmakers passing unfunded mandates. This process has left cities with little ability to petition the state government…’”

Of the 482 cities in California, 121 are charter cities; the rest are “general law cities” over which the Legislature exercises more control. But not all charter cities avail themselves of the prevailing wage exemption. There are currently 70 cities with no exemption, 10 cities with a partial exemption, and 41 charter cities with full exemption, according to the California Construction Compliance Group.

“But there are aggressive opponents who regard cities’ exercise of their charter authority to be an attack on their hegemony,” Dayton said. “In 2011 and 2012, unions spent jaw-dropping amounts per voter on campaigns to convince voters to reject reasonable proposed charters.”

Charter cities and Project Labor Agreements

This isn’t the first time unions have been at the dance to crush charter city authority. The unions backed SB 922 in 2011 and SB 829 in 2012, both by former state Sen. Michael Rubio. These two laws cut off state money to charter cities that adopt policies prohibiting those cities from requiring construction contractors to sign a Project Labor Agreement with unions as a condition of work. Both bills were signed into law by Gov. Jerry Brown.

“SB 7 just adopts the same concept of overpowering charter city authority,” Dayton said.

Dayton anticipates the Democratic legislative supermajority and Brown, also a Democrat, will advance even more union-backed efforts to chip away at Article XI, Section 3 of the California Constitution, which allows cities to govern their own municipal affairs under a charter.

Dayton said, “It would be an effective way to eliminate another one of the diminishing number of checks and balances that interfere with utopian schemes planned under the benevolent and enlightened one-party state.”

By Katy Grimes

In addition to a government reform ballot initiative attempting to stop unions from using employee dues for political purposes, three cities have initiatives on the November ballot asking voters to allow a constitutional change to become charter cities.

Proposition 32, the ballot initiative which would ban automatic payroll deductions by corporations and unions of employees’ wages to be used for politics, is a big deal and would give back the individual voice in politics.

Equally full of impact, Escondido, Costa Mesa, and Grover Beach, currently general law cities under the California Constitution, are also asking voters to allow the cities the chance to regain local control.

The change from a general law city to a charter city is technical, but very powerful and important. Charter cities have significantly more autonomy and flexibility than general law cities to protect taxpayer funds through more careful spending, and exemptions from state-mandated prevailing wage agreements and Project Labor Agreements.

Charter changes

The charter provides a city with the ability to control its own business on a local level. Local elections, decisions about city salaries, zoning and land use issues, and financing, are all issues that newly formed charter cities would have control over.

In providing local control, voters would have more input into how a city is run, and how projects are managed, and manage these projects at reasonable, competitive prices.

The charter city initiatives include important provisions to allow cities to decide whether or not to pay union wages on public works projects, an issue hotly contested by the state’s construction labor unions. Provisions also require voter approval to increase city workers’ retirement benefits.

Proponents of the charter city initiatives say that a charter will bring about tremendous cost savings by allowing cities to pay non-union wages and contract out for many projects.

Charter cities would be allowed to use local businesses. They could once again have volunteers work on projects, and accept donations for these projects.

Currently, if there is union labor involved in a local public works project, no one is allowed to volunteer or make a private donation to the project, lest it displace a union worker.

But the biggest benefit, according to Kevin Dayton, CEO of Dayton Public Policy Institute, an employment and labor specialist and charter city expert, would be not having to pay prevailing wages on local public works projects. In a recent interview, Dayton said that labor union prevailing wage rates do not accurately reflect the actual industry rates, nor do they accurately reflect the construction industry in all areas within the state.

Costa Mesa

“The fire-fighting model has to change, ” Costa Mesa City Councilman Jim Righeimer said in an interview. Righeimer, who introduced Measure V, the city charter change to Costa Mesa, explained that Costa Mesa gets 9,000 9-1-1 calls each year, but more than 6,000 of the calls are for medical services. “A couple thousand calls are duds,” Righeimer said, “but only 224 of the calls are actual calls about fire. Mostly barbeque fires, garage fires or kitchen fires. Costa Mesa doesn’t have many fires.”

Righeimer said what then happens after the 9-1-1 call is that fire engines arrive at the caller’s residence, along with ambulance services on medical calls, and merely follow the ambulance to the hospital where the fire fighters stand around until everyone is cleared to go. It works this way because the fire fighters’ union negotiated for two paramedics on each fire truck in addition to the fire fighters, requiring them to go to the hospital with the ambulance.

As a city council member, Righeimer wants the flexibility and control to be able to decide if this is cost-effective policy for Costa Mesa, and to establish its own government-mandated construction wage rate policy for municipal projects.

But the rational discussion about cost effectiveness has turned into an all-out assault. According to Dayton, unions have steamrolled right over smaller cities’ efforts to adopt charters. “Union leaders get very testy when someone points out that a charter city can establish its own policies concerning government-mandated construction wage rates,” Dayton said.

Opposition to charter cities

Showing how much is at stake in this fight, Righeimer said that the Orange County Employees’ Association, the State Building and Construction and trades Council, and other labor unions, all opponents to the Costa Mesa charter city initiative, have just made a $160,000 media purchase  in Costa Mesa to fight the charter attempt.

“As more and more California cities head down a path toward becoming ‘charter cities,’ more and more officials reveal their true intention: to avoid paying the prevailing wage,” one opposition blogger wrote.

“The charter city movement in Costa Mesa, as most other places where this battle is being fought, is a thinly veiled anti-union attack akin to Michigan’s ‘Emergency Financial Manager’ law. It aims to put legislation into place that undermines the bargaining power of labor organizations under the auspices of fiscal responsibility. It’s playbook Right Wing stuff….”

However, a recent California Supreme Court decision upheld the right of California’s 121 charter cities to establish their own policies about government-mandated prevailing wages in municipal construction projects.

Righeimer said that Costa Mesa residents should not have to spend 20 percent more for public works projects, and will save money should the city adopt a charter. “We love our police and fire,” Righeimer said. “It’s just not sustainable at this level.”

Sept. 30, 2012

By Katy Grimes

SACRAMENTO — The November election is shaping up to be a biggie, and probably even a game changer. In addition to California’s tax increase ballot initiatives and the paycheck protection measure, voters in three California cities will decide whether to approve the proposed city charters.

Escondido, Costa Mesa, and Grover Beach, currently general law cities under the California Constitution, are asking voters to allow the change to charter cities.

The change from a general law city to a charter city is technical, even obscure, but very powerful. Charter cities have significantly more autonomy and flexibility than general law cities to protect taxpayer funds through more careful spending, and exemptions from state-mandated prevailing wage agreements and Project Labor Agreements.

Many Californians believe that the only for cities way to wrestle control away from powerful public employees unions is to file municipal bankruptcy. But Charter Cities are a much better way to accomplish this.

Charter Cities

“A charter needs to give a city full control of its municipal affairs, so it can implement lower taxes, reasonable regulation, fiscal responsibility, limited government, local control and more freedom from corrupt urban legislators,” according to Kevin Dayton, CEO of Dayton Public Policy Institute, an employment and labor specialist, and charter city expert.

There are 121 charter cities in California out of 482 cities. But not all charter cities avail themselves of the prevailing wage exemption. There are currently 70 cities with no exemption, 10 cities with a partial exemption and 41 charter cities with full exemption, according to the California Construction Compliance Group.

The 70 cities with no prevailing wage exemption even include many of the state’s more politically liberal cities: Alameda, Berkeley, Los Angeles, Oakland, Sacramento, Santa Barbara, Santa Cruz and Santa Monica. Included in the list are Stockton, San Bernardino and Vallejo — three of California’s cities to file for bankruptcy.

“Defenders of the status quo prefer California’s advocates of economic and personal freedom to be apologetic, mealy-mouthed, submissive and ineffective. I noted that an ideal charter, with its ‘defiance of excessive state authority,’ would enrage numerous special interest groups,” Dayton said.

That is exactly what has happened.

Dayton said that unions have steamrolled right over smaller cities’ efforts to adopt a charter. “Union leaders get very testy when someone points out that a charter city can establish its own policies concerning government-mandated construction wage rates,” Dayton said.

“Did you know that, under certain home rule provisions in California’s state constitution, voters can exercise a greater degree of local control than that provided by the California Legislature?” the League of California Cities explained. “Becoming a charter city allows voters to determine how their city government is organized and, with respect to municipal affairs, enact legislation different than that adopted by the state.”

Labor Smackdown

A recent California Supreme Court decision will actually help taxpayers bring some balance to the extreme positions coming out of state government.

The Supreme Court upheld the right of California’s 121 charter cities to establish their own policies about government-mandated prevailing wages in municipal construction projects.

This is big, and it is a smack down to California’s arrogant labor unions.

Charter cities

California’s 121 charter cities maintain a governing system defined by the city’s own charter document rather than by the state.

The Supreme Court ruling is significant because it upheld that the state’s charter cities are not required to pay prevailing wages under state law for local public works projects that are funded by local taxpayer funds.

In State Building and Construction Trades Council of California, AFL-CIO vs. City of Vista, the court confirmed that California charter cities maintain the autonomy to be able to decide whether to pay prevailing wages for local construction projects. It’s a step in the direction of the free market.

While some of the recent California cities to file for bankruptcy, including Stockton and San Bernardino, are charter cities, being a charter city does not lead to insolvency as many in the media would have Californians believe.

Los Angeles and San Francisco are also charter cities. Plenty of California’s cities, other than charter cities, are facing financial meltdown. However, being a charter city allows flexibility.

California’s charter cities first were established in the 1870s during difficult economic times, and in response to the state meddling in city affairs. A constitutional revision granting municipalities the charter option was approved and cities revised their own charters.

The beauty of charter cities is that, when used properly, the charter allows them more flexibility to cut costs and use revenues wisely, unlike most state mandates, which always favor certain special interests. This gives a city more control in making decisions more in line with local issues and needs.

But not everyone agrees.

“With a majority of the state’s largest cities chartered and thus suffering from unchecked wages, workers are being hurt statewide,” a story in the Daily Kos reported. “The high court of California had the opportunity to right this wrong but instead sided with the cities and bucked the Building Trades Council which represents 131 local unions in California.”

To understand this thinking, it is important to read further. “Prevailing wage laws are meant to protect wages across the industry, not just for union workers or workers in a given region,” the Daily Kos writer reported. “Republicans argue that such laws are outdated, but it is difficult to argue that preventing unscrupulous contractors from underbidding on contracts only to make up the difference on the backs of workers is a concept with an expiration date.”

What is difficult is to argue that supply and demand don’t matter, or that different regions and locals don’t have differing pay scales and needs.

However, Stockton and San Bernardino were not availing themselves of the ability to not pay higher prevailing wages, whereas most charter cities seek to pay wages more in line with the local economy.

“Significant and recent developments in proposed city charters in California have been related to explicit provisions concerning the establishment of policies for government-mandated prevailing wages, prohibitions on requiring contractors to sign Project Labor Agreements with unions, and requirements for unions to get permission from city employees to deduct money from their paychecks to use for political purposes,” Dayton explained. “In addition, some charters have contained provisions meant to prevent the kind of corruption among city council members and city staff that occurred in the City of Bell in the late 2000s.”

Dayton said that voters need to seriously consider approving the charter city proposals. “If you support lower taxes, reasonable regulation, fiscal responsibility, limited government, local control and more freedom from corrupt urban legislators, vote yes on the charters. If you believe citizens are not yet giving enough of their money to the government, vote no on the charter.”

Look for Part 2 of this Charter Cities series soon.