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.)

By Katy Grimes

SACRAMENTO — At Assembly Transportation Committee hearings in the Capitol on Monday, Assemblywoman Bonnie Lowenthal, D-Long Beach, cut the microphone of two speakers during the three minutes left for public comment at the end.

The two members of the public raised some real concerns about discriminatory language contained within the hiring agreements of the California High Speed Rail Authority Project Labor Agreements.  But Lowenthal, the committee chair, wouldn’t hear it, nor would she allow anyone else to hear it.

By the end of the hearing, when Lowenthal wrapped up legislators’ questions, it was 2:27 p.m. and time for public comment. Lowenthal announced that they had the committee room until 2:30. She told those wishing to make public comment to make it quick.

Eric Christen, a representative for fair employment in construction, said there was discriminatory language in the construction Project Labor Agreement the CHSRA is responsible for.  Christen said the PLA was a “give-away to the unions.”

Christen explained the CHSRA required in recent bid specifications that the winning design-build entity and its subcontractors sign a Project Labor Agreement with unions in the State Building and Construction Trades Council of California.

Lowenthal cut off Christen’s microphone.

A draft Project Labor Agreement for the first segment of the California High-Speed Rail was included as Addendum 8 in the Request for Proposal to the five pre-qualified design-build consortiums for the initial construction segment from Madera through Fresno, according to Christen. It contains the standard boilerplate language used in most Project Labor Agreements that contractors must sign with unions to work on government projects in California. Christen provides the information at California High-Speed Rail Scam.

Open competition

Nicole Goehring, with Associated Builder and Contractors, said they had been advocating for a fair and open competition policy all along, but Lowenthal cut her off as well.

Goehring later told me that, without critical changes, the discriminatory language will remain in the PLAs and prevent qualified California workers from competing for work on the project. Goehring said the PLA not only shuts out Merit Shop Contractors, but seriously limits California workers, including the nearly 1,800 students that are currently enrolled in ABC’s craft and apprenticeship programs, from working on this project.

Goehring said the PLA was created to benefit only the construction unions and not the 83 percent of California workers who choose not to be in a union. She said, “This section puts the unions in control of all craft labor for the project despite the fact that they represent only 17 percent of California’s construction workforce.”

That was just at the tail end of the hearing. The first 57 minutes displayed the Legislature’s continued refusal to grill CHSRA executives about what’s really going on.

Rail Authority CEO

“Early on, the High-Speed Rail Authority stumbled in its projections, its estimates and its outreach, and the Legislature responded with countless hearings, inquiries, and reporting requirements,” Lowenthal said during her opening statement.

Lowenthal said the purpose of Monday’s hearing was to “move forward,” leaving past worries and concerns behind.

But she did not say it was only when the CHSRA lied about ridership projections and job creation, and got caught, that the full Legislature was forced to respond. Up to that point, legitimate concerns over the high-speed rail debacle came primarily from the Republican minority.

High Speed Rail Authority CEO Jeff Morales proved once again that he can kill time during the mandatory hearings, and barely say anything of substance. At Monday’s hearing, Morales was allowed by Lowenthal to drone on, while most of the committee members tossed him softball questions. I have attended nearly every committee hearing on High-Speed Rail, whose officials rarely are asked to answer anything in detail.

Who is Jeff Morales?

Morales came to the CHSRA from California’s largest agency, Caltrans, where he worked for 3-1/2 years under Gov. Gray Davis. Morales resigned when Davis was voted out of office in the historic 2003 recall election. Many question the conflict of interest in Morales’s role as CEO at the rail authority. Morales is a former senior vice president at Parsons Brinckerhoff, an international transportation consulting firm, and also the primary contractor on the rail project.

The choice of Morales reinforced “a long tradition of inside dealing within the authority,” California Rail Foundation president Richard Tolmach said at the time. “An outside observer could be excused for thinking the CEO’s job is to grease payments for Parsons Brinckerhoff.”

Morales is supposed to receive a $25,000 bonus on top of his $365,000 salary if he meets a few goals: establishing a management plan to oversee CHSRA contractors; filling the vacant positions among the senior staff; appointing a risk-management officer; successfully awarding contracts for the first construction projects at or below engineering cost estimates; meeting goals for including small businesses and businesses owned by minorities, women and disabled veterans in construction contracts; and making major improvements to the agency’s outreach to the public, communities, property owners and other stakeholders along the route.

And Morales discussed the outreach the rail authority has done with land owners in the Central Valley.

Legislators’ questions

Assemblyman Jim Patterson, R-Fresno, asked Morales to explain the CHSRA calculation used to claim 20,000 jobs will be created by high-speed rail. “In the business plan, it appears there is a multiplier used; one job equals one year,” Patterson said. “This inflates the number. How many real long term jobs are there?” Patterson asked.

Morales said, “20,000 are job years. It’s an industry standard used.”

“Without the multiplier, how many jobs will there be?” Patterson asked again.

“The multiplier is used over many years, created by the level of investment,” Morales said, dodging the answer.

According to the Assembly Republican Caucus, “HSRA uses a highly misleading methodology to inflate job estimates. Estimates of jobs created are represented in ‘job-years.’ One year of full employment equals a job-year. One person employed for 20 years equals 20 ‘jobs’ under this system.”

After Patterson asked another question about the lack of private investment involved, Lowenthal interrupted him to take questions from other committee members.

Fortunately, Vice Chairman Eric Linder, R-Corona, was next. “Who will be responsible for inspecting the building?” Linder asked.

“Many layers of state employees,” answered Morales. “It’s consistent with how design-build work is done around the state. State people need to make state decisions, and public people need to make public decision. They need to be accountable.”

Morales said the rail authority is “holding meetings on-the-record” to involve private sector people and companies. And they are holding “informal discussions with investors to help shape the best path forward.”

By Katy Grimes

In what strange world do janitors get paid $45 per hour? In California, the land of the prevailing wage.

The dirty secret is that janitors often are not really getting paid $45 per hour, but the taxpayers are being charged this amount on public works projects.

Designed to help the worker, the prevailing wage was created to set a minimum hourly rate paid on all public works projects, primarily for construction workers. But the classification has been expanded and greatly abused.

One contractor’s saga

I recently met with a Southern California contractor who has owned a final construction cleanup business for more than 25 years. Final cleanup on government construction projects is always the last task in the project, and usually takes place within days of the occupants moving in, depending on the size and scope of the cleanup. The contractor said that the work he and his crews do includes cleaning the construction dust off of walls, washing and polishing floors, cleaning windows and mirrors, power-washing all surfaces, wiping down fixtures and hosing down the roof and parking lots.

He is hired as a subcontractor by large general contractors on all kinds of public works construction projects: school construction sites, police department construction, state, city and county office buildings and the like.

However, this contractor is in a pickle. There is no Department of Industrial Relations prevailing wage classification for this specific type of janitorial work. He said the going rate in the private sector for a basic janitorial job is between $10 and $15 per hour. But the Department of Industrial Relations states that the prevailing wage rate is $45 per hour for construction-project janitors.

Kevin Dayton, an expert on Project Labor Agreements and prevailing wage issues, told me that because vacuuming up the sawdust at a construction site is considered part of a construction trade, the DIR considers such work within the work assignments listed in the applicable collective bargaining agreements of the union, the Southern California District Council of Laborers.

Although there are slight differences between prevailing wage laws in Northern and Southern California, they generally are the same. Dayton explained, “For Northern California, the state-mandated total straight time hourly ‘prevailing wage’ rate for a journeyman in the Laborers Group 4 trade classification applies to the following: ‘Final cleanup on building construction projects prior to occupancy only. Cleaning and washing windows (new construction only), service landscape laborers (such as gardening, horticulture, mowing, trimming, replanting, watering during plant establishment period) on new construction.’

“Under Section 1773 of the California Labor Code and Title 8, Subchapter 3 of the California Code of Regulations, the State of California determines ‘prevailing wage’ rates in most cases by obtaining the union collective bargaining agreements for each trade in each geographical region of the state, adding up all of the payments indicated in these agreements, and declaring the total to be the ‘prevailing wage.’”

He added, “In negotiating their collective bargaining agreements, construction trade unions actually enjoy a kind of quasi-regulatory authority, because their final agreements are the basis for the state-mandated construction wage rates. They are loath to compromise this power.”

The contractor I met with said he’s in trouble because the general contractors which hire him calculate the prevailing wage rate of $45 per hour in their bids to the government, but refuse to pay him that rate. He said the general contractors have been charging the state, and ultimately the taxpayers, $45 per hour for janitors on public works projects, but only pay their subcontractors $10 to $15 per hour for their final clean up janitors.

The contractor told me the labor compliance program of the DIR is cracking down on him for not paying the prevailing wage of $45 to his employees. Then he is punished and forced to abandon final cleanup jobs, and charged back the cost of the replacement final cleanup crew, at prevailing wage rates. He said that he is not only out of a job, but he then has to pay the additional cost of the final cleanup to the general contractor.

This contractor said he follows the letter of the law in running his business, and makes sure all of his employees are paid properly and legally through his payroll service. But when a general contractor refuses to pay him the legal prevailing wage rate for his crew, he cannot pay his employees the prevailing wage rate either.

Legislation to fix this mess

Assemblyman Curt Hagman, R-Chino Hills, announced last week he has introduced legislation to address this problem, but only after trying to work directly with the Department of Industrial Relations himself to no avail. He said that the DIR will not discuss the prevailing wage classification problem, and continually referred him to the DIR website.

Hagman told me that if the prevailing wage actually worked in California, employees would be getting paid the prevailing wage. “But the system is broken and is being abused,” Hagman said. He said that the $45 per hour prevailing wage for janitorial cleanup is just one example of why public construction projects in California cost so much.

Hagman said some contractors pay the janitorial employees between $10 and $15 per hour to perform the final cleanup, then pocket the difference. “On the books it looks as if everyone is making a ton of money, but the worker is not getting the pay or benefits they are legally entitled to,” he said.

Hagman’s bill would require the Department of Industrial Relations to establish a new specific group classification for final cleanup laborers, and set appropriate prevailing wages.

Prevailing wage limits competition

A 2010 Cato Institute study concluded the purpose of prevailing wage laws was to limit competition, as well as provide significant benefits to labor unions. These policies come at the expense of taxpayers, who are forced to pay far more for projects that require prevailing wage mandates.

“Those laws mandate that on government construction projects, the labor component will not be subject to competitive bidding; rather, the wages paid to the various classes of construction labor are set by government officials at rates determined to prevail in the job site’s locality—typically, prevailing union wages,” wrote Cato author George Leef. “Labor wages and benefits are thus removed from competition by operation of law.”

Déjà vu all over again

Almost one year ago exactly, in the first committee hearing of the New Year, the Assembly Labor and Employment Committee killed two prevailing wage reform bills by Assemblywoman Shannon Grove, R-Bakersfield. AB 987 and 988 would have reformed and updated state prevailing wage laws by changing the calculations for prevailing wages, and would have allowed local governments to determine their own prevailing wage policies.

“The reforms in these bills are bold and significant steps to reviving our dire economy and putting Californians back to work,” Grove said at the hearing on the bills.  “Forcing citizens to pay amounts for projects beyond what the local free market would otherwise dictate is a misuse of taxpayer dollars.  Unfortunately, the powerful union interests benefit at this taxpayer expense.”

At wit’s end

The contractor I met with is at his wit’s end, and rapidly losing business because he can no longer play the prevailing wage game. He took matters into his own hands, and together with two other subcontractors met with several general contractors’ project managers, recording the meetings. In a video I saw posted on YouTube, the project manager admitted that, as the general contractor, he cheats on the prevailing wages for public works projects.

One of the project managers said that it doesn’t matter what the rate per hour is as long as the subcontractors provide invoices that match. “I can give you a contract, and you will have to price everything out, or you give it to me right now on a Purchase Order. You are set up as my water guy,” the general contractor told the final cleanup subcontractors.

When asked what the prevailing wage for the final cleanup workers was, the project manager just shrugged, and never answered. This happened several times with different project managers during the videos.

In another segment of the video, the general contractor’s project manager explained that the subcontractor can change his invoices as long as the general contractor is able to claim that “the bulk of the work falls into the other category.”

Changed invoices

The final clean up contractor I met with said that, for many years, he has been told to change his invoices to take out the work detail, and just include one total price.

But he said that not only is the re-invoicing illegal because it ignores the prevailing wage rate, his crews are often scheduled to work on weekends when overtime is supposed to be paid. Overtime for a final cleanup worker makes the $45 per hour rate go to $63 per hour for time-and-one-half, and $78 per hour on a Sunday.

“We are often told to come in after hours and on weekends,” he told me. “I don’t want to be followed around by the unions; I just want the industry to be cleaned up. The prevailing wage is messing up the industry.”

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.”

By KATY GRIMES

It’s like a runaway train pushing a side a cow on the tracks. Controversy over the $98.5 billion-dollar-and-growing price tag? Move aside! The California High-Speed Rail Authority held a seemingly “regular” monthly meeting in Los Angeles on Thursday. But the real story was a brewing controversy about an obscure, costly proposal for the high-profile project, which could add to the already skyrocketing costs to build a High-Speed Rail system in the state.

AB 1254, authored by Assemblyman Mike Davis, D-Los Angeles, would require that a minimum of 25 percent of the workforce used at each worksite be from the local workforce. And it would require that a minimum of 25 percent of the aggregate dollar amount of contracts awarded be subject to project labor agreements.

Forget the free market and competitive bidding. High-Speed Rail could be constructed using more expensive, “platinum” union contractors, if AB 1254 is passed. Prevailing wages and union labor contracts could become the roadblock to non-union private sector contractors working on high-speed rail construction.

Status of High-Speed Rail Today

The recently passed SB 52, known as “The Jobs and Economic Improvement Through Environmental Leadership Act of 2011,” establishes California Environmental Quality Act permit streamlining. But it does so only for projects costing $100 million or more. And it requires high wages — specifically, prevailing wages as determined by the state of California. Prevailing wages are paid at union-wage scales instead of current market-based wages determined by what the market will bear.

“What may have once seemed a worthy project has been exposed as a high-speed marketing charade to the sophisticated voters of California,” Assemblywoman Diane Harkey, R-Dana Point, said at a press conference this week. At the conference, she introduced legislation to halt state debt funding of the High-Speed Rail project. “The Legislature would be wise to do their job and stop the financial and real property carnage.”

As reasons enough to pull the plug on the project, Harkey cited a lack of future federal funding and a lack of oversight, accountability and inconsistency in route and planning. “Our governor is asking for long-term increases, while recommending cuts to education and public safety. This one project has the potential to double our state’s debt and become a huge future drain on our state’s budget,” Harkey added. “California does not need a shiny new heavily subsidized toy with no confirmed ridership.”

In fact, California’s existing rail and roadway infrastructure is in need of attention and funding. But that’s not part of the high-speed spending plan.

Many rail followers anticipated that the board members of the California High-Speed Rail Authority were planning on discussing and supporting Assembly Bill 1254, the new bill that requires the California High-Speed Rail Authority to perform at least 25 percent of its contracts under a Project Labor Agreement. But that issue was pulled from the agenda the evening before the Thursday meeting.

How Did PLAs Become Part of the Deal?

“The State Building Trades made a strategic blunder in exposing their intent to force construction contractors to sign a PLA by having this bill introduced,” said Kevin Dayton, government affairs director for the Association of Builders and Contractors, a non-union contractors’ association. “It provides specific, explicit documentation proving the PLA plot, when HSR board member Balgenorth could have imposed the PLA in a sneaky, underhanded way through manipulating the design-build contractor for the first phase.”

Dayton explained that Balgenorth wrote an opinion piece in the November 27, 2011 Bakersfield Californian newspaper promoting construction of the state’s proposed $98.5 billion High-Speed Rail as a better alternative to the construction and modernization of freeways and airports. Balgenorth wrote, “High-speed rail is the only viable means of making sure our transportation infrastructure can meet our growing demand. Continuing to build more and more freeways and airports would be more expensive, more environmentally damaging, and less efficient for moving millions more Californians up and down our state.”

Dayton asked recently in a story for The Truth About PLAs, “What would lead Balgenorth to make such a bold public assertion? Is it possible he has greater wisdom and foresight than the average Californian about getting a speedier ride from Madera to Corcoran after 2017?”

Balgenorth, head of the California State Building and Construction Trades Council, AFL-CIO, is also on the High-Speed Rail Board of Directors — quite a coup, according to Dayton.

In March 2011, the Democrat-controlled State Senate Rules Committee appointed Balgenorth to a vacant seat on the California High-Speed Rail Authority Board of Directors. Dayton said that Russ Burns, the business manager for Operating Engineers Local No. 3, also serves on the nine-member board.

Dayton said that likely construction contract scenarios include the California High-Speed Rail Authority’s Board of Directors’ approval of a resolution requiring its contractors to sign a Project Labor Agreement. Or political pressure could be exerted behind the scenes to convince the prime contractor to negotiate and sign a PLA, without any explicit direction from the High-Speed Rail Authority. Either scenario will cost taxpayers significantly more than competitive bids would cost.

Californians Would Reject Rail Bond

In 2008, voters narrowly approved Proposition 1A, the “Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century.” It green-lighted the issuance of $9.95 billion in general obligation bonds for the project. A recent Field Poll found that, by a nearly two-to-one margin, Californians would reject the $9.95 billion bond if again presented with the choice at the ballot box.

The fiscal estimate provided by the California Legislative Analyst’s Office said, “State costs of about $19.4 billion, assuming 30 years to pay off both principal ($9.95 billion) and interest ($9.5 billion) costs of the bonds. Payments of about $647 million per year.

“When constructed, additional unknown costs, probably in excess of $1 billion a year, to operate and maintain a high-speed train system. The costs would be at least partially, and potentially fully, offset by passenger fare revenues, depending on ridership.”

In a 2011 report on the High-Speed Rail plans, the California Legislative Analyst’s Office recommended that, because of numerous problems, the first segment of the train should be built somewhere other than Bakersfield to Fresno. It added that, “based on our analysis, other segments could provide greater benefit to the state’s overall transportation system even if the rest of the high-speed rail system were not completed.”

The LAO report also said that the project has “governance problems” and that control of the project should be transferred from California’s High-Speed Rail Authority to the California Department of Transportation.

But none of the dire warnings has put an halt to the rail project.  Instead, it appears that many in the state Legislature, as well as Gov. Jerry Brown, are insisting that High-Speed Rail receive full taxpayer funding and support.

At a time when California is nearly bankrupt and facing crushing deficits for generations to come, Harkey said that funding such a large “non-priority project” would likely divert funds from local transportation, and starve other necessary state programs.

But critics insist that the High-Speed Rail “boondoggle” has become a full-blown train wreck, as California faces an actual cash deficit of $21 billion, amounting to nearly one-quarter of the total $88.5 billion state budget. And those numbers come from the State Controller.