Should the City of San Diego have the power, in more situations than it does now, to require the construction companies it hires to have project labor agreements (PLAs)?
City of San DiegoMeasure D Ordinance - Majority Approval Required
City of San Diego
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Shall the San Diego Municipal Code be amended to provide that the City of San Diego may preserve its ability to receive State infrastructure funding by allowing the use of Project Labor Agreements on City Construction Projects; requiring provisions in the agreements to prohibit employment discrimination and ensure open competition; expanding public disclosure; tracking local hiring requirements; and establishing a Citizens' Oversight Board?
What is this proposal?
Pros & Cons — Unbiased explanation with arguments for and against
Information provided by Jeanne Weidner & Michelle Morgan, volunteers with the League of Women Voters of San Diego
The Question
The Situation
In 2012, San Diego voters passed Proposition A, which prohibited the city from requiring project labor agreements (PLAs) except when the city would lose state or federal funding by doing so.
By passing Prop. A at the time, voters generally agreed with the argument that PLAs dictate that governments follow costly, unnecessary union compensation practices and job rules, thus increasing the costs of construction. But new state laws (SB 922) may cut funding from cities with any law that prohibits, limits or constrains these agreements.
Proposition A can only be amended by a vote of the people of the City. As a charter city, San Diego’s 2012 PLA prohibition may expose the City to loss of State funds for construction projects, though to date there has been no such loss of State funds. The City has relied on the 2012 prohibition’s exception to continue pursuing State funding for projects, but it is unclear whether courts would rule that the City’s exception to the PLA prohibition is sufficient for continued State funding eligibility.
The Proposal
This ballot measure was brought before the Rules Committee by Councilmembers Raul Campillo and Stephen Whitburn. It removes the June 2012 Proposition A directive prohibiting the City from requiring use of PLAs except when needed as a contracting obligation or other condition of State or federal funding for City construction projects.
This current measure removes the 2012 PLA prohibition but does not mandate use of PLAs. The measure also allows the City Council to amend the Municipal Code language if state law changes in the future. Current law requires the City to post all City construction contracts valued at more than $25,000 on the City’s website. This measure would increase reporting requirements by requiring the City to post on its website all City construction contracts valued at more than $10,000 as well as demographic information for workers on a construction project that utilizes a PLA.
Fiscal effect
Office of Independent Budget Analyst Memo dated August 16, 2022:
Whether use of a PLA on a construction project would increase the overall cost of the project is debated. Some studies indicate PLAs increase project costs, while others conclude that PLAs do not increase, or may decrease, project costs. There is uncertainty regarding potential PLA impacts on overall project costs, the measure does not mandate PLA use, and the unknown magnitude and number of future projects using PLAs. The fiscal impact of potentially adopting PLAs on future projects cannot be reasonably projected.
Supporters say
- Helps protect San Diego from losing millions in state funding
- Requires public disclosure of city contracts, including tracking of local hiring so that local citizens can be prioritized before out-of-state workers
Supporters:
Mayor Todd Gloria
Jesse Connor, President, SD City Firefighters Association
Safeguard San Diego
Opponents say
- Discriminates against 80% of the local construction workforce, including underrepresented minority workers, by allowing backroom deals that benefit only 20% of the workforce
- Discriminates against local apprenticeship programs, such as those sponsored by the National Black Contractors Association, which would be shut out of working on city projects
Opponents:
Abdur-Rahim Hameed, President, National Black Contractors Association
Al Abdallah, Chief Operating Officer, Urban League San Diego County
Details — Official information
Summary
Prepared by the City Attorney and published on the City Clerk's website.
BALLOT TITLE
Amendments to San Diego Municipal Code sections 22.4401 through 22.4406 and 22.4408 related to the use of project labor agreements on City of San Diego construction projects.
BALLOT SUMMARY
In 2012, City of San Diego (City) voters passed Proposition A, the “Fair and Open Competition in Construction Ordinance,” which enacted Chapter 2, Article 2, Division 44 of the San Diego Municipal Code (Municipal Code). Proposition A prohibited the City from requiring a contractor to enter into a project labor agreement (PLA) as a condition of bidding, negotiating, or being awarded a City construction project, unless required by state or federal law as a contracting or procurement obligation, or as a condition for receiving state funding or financial assistance. A PLA is a prehire, collective bargaining, or similar type of project specific labor agreement between a contractor and a labor organization establishing terms and conditions of employment for a specific construction project or projects. Proposition A can only be amended by a vote of the people of the City.
State law prohibits a charter city, like the City, from receiving state funding or financial assistance for any construction project if the charter city adopted a law that prohibits or limits use of a PLA drafted to include provisions that prohibit discrimination; permit qualified contractors to bid and win contracts whether or not the contractor is party to a collective bargaining agreement; and require protocols concerning drug testing, guarantees against work stoppages and other disruptions, and dispute resolution by a neutral arbitrator.
This measure will amend the Municipal Code to allow the City to use PLAs for construction projects and makes the City eligible for state funding and financial assistance. The measure requires the City to post construction contracts valued at over $10,000 and demographic information for PLAs on its website, and establishes a citizens’ advisory board to review construction contracts. The measure also allows City Council to amend the Municipal Code language if state law changes in the future.
Background
Prepared by the City Attorney and published on the City Clerk's website.
The City Council directed the City Attorney to prepare a ballot title, summary, and impartial analysis of a measure that would amend San Diego Municipal Code sections 22.4401 through 22.4406 and 22.4408 to allow the use of project labor agreements on City of San Diego (City) construction projects, and voted to place the measure on the November 8, 2022, Municipal Special Election ballot. (See San Diego Resolution R-314249 (July 25, 2022).) The City Council also adopted San Diego Ordinance O-21510 (July 25, 2022), to submit the ballot measure to the voters on the November 8, 2022, Municipal Special Election ballot.
Impartial analysis / Proposal
Prepared by the City Attorney and published on the City Clerk's website.
CITY ATTORNEY’S IMPARTIAL ANALYSIS
This measure would amend the San Diego Municipal Code (Municipal Code) to allow the City of San Diego (City) to use project labor agreements (PLA) on construction projects. The Municipal Code defines a PLA as any prehire, collective bargaining, or similar type of project specific labor agreement entered into with one or more labor organizations, employees, or employee representatives that establishes terms and conditions of employment for a specific construction project or projects. This measure would affect City projects involving construction, rehabilitation, alteration, conversion, extension, maintenance, repair, replacement, or improvement of any City structures or land.
State law does not allow state funding or financial assistance for local construction projects in charter cities, like the City, if a local law prohibits that city from using or considering the use of a PLA. By repealing PLA restrictions which some have equated to a PLA ban, the City will be eligible for state funding for construction projects. Under state law, PLAs must include provisions that prohibit discrimination; permit qualified contractors to bid and be awarded contracts regardless of whether it is party to a collective bargaining agreement; address drug testing; guarantee against work stoppages, strikes, lockouts, and disruptions; and provide for dispute resolution by a neutral arbitrator. In 2012, City voters approved Proposition A, a citizens’ initiative titled “Prohibits the City from Requiring Project Labor Agreements on City Construction Projects.” Proposition A amended the Municipal Code to prohibit the City from requiring a PLA on City construction projects except when a PLA was required by state or federal law or as a condition of the City receiving state or federal funds. This measure would clarify any ambiguity, uncertainty, or potential conflict between the Municipal Code and California law by making clear that the City may use PLAs on City construction projects in accordance with California law, and that the City is eligible for state funding.
As adopted by Proposition A, the Municipal Code currently requires the City to post all City construction contracts valued at more than $25,000 on the City’s website. This measure would increase reporting requirements by requiring the City to post on its website all City construction contracts valued at more than $10,000 as well as demographic information for workers on a construction project that utilizes a PLA.
The measure also directs City Council to create a citizens’ advisory board to review construction projects for compliance with the Municipal Code amendments proposed by this measure.
The measure can only be repealed by a majority of City voters. The measure allows the City Council to amend the Municipal Code to comply with changes in the California Constitution or state law concerning use of PLAs. All other amendments must be approved by a majority of City voters.
This measure was proposed by members of the City Council, which voted to place it on the ballot. If approved, the Municipal Code amendments would take effect after the City Council certifies the results of the election in a resolution.
Financial effect
Prepared by the Independent Budget Analyst and published on the City Clerk's website.
FISCAL IMPACT STATEMENT FOR CITY MEASURE ON NOVEMBER 8, 2022 BALLOT
MEASURE D - CONTRACTING UPDATES. PROJECT LABOR AGREEMENTS FOR STATE FUNDING ELIGIBILITY
In addition to several other provisions, this ballot measure removes the June 2012 Proposition A directive prohibiting the City from requiring use of project labor agreements (PLAs) except when required as a contracting obligation or other condition of State or federal funding for City construction projects. This current measure removes the 2012 PLA prohibition but does not mandate use of PLAs.
Current State law prohibits a charter city from receiving State funding or financial assistance for any construction project if a charter provision, initiative, or ordinance limits that city’s ability to require or use a PLA that includes certain State-mandated provisions. As a charter city, San Diego’s 2012 PLA prohibition may expose the City to loss of State funds for construction projects, though to date there has been no such loss of State funds. The City has relied on the 2012 prohibition’s exception to continue pursuing State funding for projects, but it is unclear whether courts would rule that the City’s exception to the PLA prohibition is sufficient for continued State funding eligibility. Major State funding and loans awarded to the City for construction projects in fiscal years 2021 and 2022 were approximately $123.4 million and $697.0 million.
Uncertainty surrounding the 2012 Proposition A directive also raises the risk of litigation costs and related project delays. The only significant litigation to date was regarding certain labor requirements approved in 2018 for the City’s Pure Water Phase 1 project. This litigation was filed in 2019, and a preliminary injunction ruling found the City violated the intent of Proposition A. The litigation resulted in City payment of a $200,000 settlement and an estimated 4% project cost increase (based on historical trends) due to the 18-month delay.
Whether use of a PLA on a construction project would increase the overall cost of the project is debated. Some studies indicate PLAs increase project costs, while others conclude that PLAs do not increase, or may decrease, project costs. Certain common PLA requirements that may impact costs – such as payment of prevailing wages – are already required by the City regardless of whether a project has a PLA. Any PLA-related costs will depend on the magnitude and number of PLAs used for future City construction projects, which are currently unknown.
Given uncertainty regarding potential PLA impacts on overall project costs, the measure not mandating PLA use, and the unknown magnitude and number of future projects using PLAs, the fiscal impact of potentially adopting PLAs on future projects cannot be reasonably projected.
Lastly, software costs related to this measure’s requirement to post PLA project demographic data and hours worked are expected to be less than $100,000 annually. An undetermined cost for related collection efforts may also be incurred. There is also a requirement for a citizens’ oversight board, preliminarily estimated to cost $175,000 annually, depending on the duties of the Board as determined by the City Council.
Published Arguments — Arguments for and against
Arguments FOR
ARGUMENT IN FAVOR OF MEASURE D
Yes On D - Safeguard San Diego Infrastructure
Measure D delivers for San Diego by helping protect our state infrastructure funds, requiring public disclosure of city contracts, and creating good jobs for local workers struggling in today’s economy.
San Diegans are coming together behind Measure D: Taxpayer Watchdogs and Labor. Climate Advocates and NAACP leaders. Mayor Todd Gloria and San Diego Firefighters. Here’s why:
Measure D Helps Protect San Diego From Losing Millions In State Funding
Changes to California law threaten San Diego’s ability to keep receiving state funds to fix roads and improve safety – over $123.4 million/year according to the Independent Budget Analyst. Measure D aligns city contracting rules with state law so we don’t leave a single dollar on the table.
Measure D Demands Public Disclosure Of City Contracts
Measure D adds long overdue transparency and accountability safeguards. It requires public disclosure of who gets city contracts, citizen oversight to expose waste, and strict tracking of local hiring so we can prioritize local San Diegans before out-of-state workers for local jobs.
Measure D Cracks Down On Employment Discrimination In City Construction
By requiring tough anti-discrimination provisions and lifting an outdated ban on union protections, Measure D gives workers the fair shot and fair wages they deserve. And Measure D opens the door for more much-needed apprenticeship training opportunities for veterans, women, and youth.
Measure D Keeps San Diego Ready To Meet Climate Change’s Major Threats
San Diego depends on state funding – over $746 million so far – to prepare for worsening wildfires and expand our local water supply amid severe drought. Measure D helps protect this critical funding, protecting San Diego from climate change’s worst impacts.
“Vote YES on D!”
- Councilmember Stephen Whitburn, Sierra Club San Diego, San Diego Taxpayers Advocate Scott Barnett, Congressman Scott Peters, Senator Toni Atkins, and more at VoteYesOnD.com.
JESSE CONNER
President
San Diego City Firefighters Association
PAT ZAHAROPOULOS
President-CEO
SD Middle Class Taxpayers Association
RAUL CAMPILLO
San Diego City Councilmember
FRANK JORDAN
President Emeritus
California Conference of the NAACP
MAYOR TODD GLORIA
— Arguments are the opinions of their authors. Published on the City Clerk's website.
Arguments AGAINST
ARGUMENT AGAINST MEASURE D
In a time of high inflation, Measure D would increase costs to city residents, discriminate against local and minority craft workers, and send taxpayer dollars to Los Angeles contractors.
In 2012, City voters overwhelmingly approved a ballot measure to implement Fair and Open Competition for taxpayer-funded construction projects while protecting access to state infrastructure funds.
Ever since voters approved this ballot measure, the city has not lost out on any state funding and has saved taxpayer funds through the reduced cost of city projects.
Measure D would overturn this election outcome and jeopardize the amount of funding available for critical services such as public safety, infrastructure, and investments in clean water and energy.
Measure D would also restrict Fair and Open Competition by discriminating against 80% of the local construction workforce, including underrepresented minority workers, by allowing backroom deals that benefit only 20% of the workforce.
Measure D also discriminates against local apprenticeship programs, such as those sponsored by the National Black Contractors Association, which would be shut out of working on city projects.
Measure D hurts local hires and displaces thousands of craft workers who pay taxes and deserve the opportunity to build projects in our community.
Measure D undermines collective bargaining and goes around contracts that are already negotiated.
Measure D forces local construction workers to pay into pension funds without receiving the benefit.
Don’t be misled by the special interests promoting Measure D. The City’s Independent Budget Analyst confirmed in August that San Diego has lost no state funding due to the citizens support for Fair and Open Competition.
Vote NO on city insiders using your tax dollars to overturn a popular citizens’ initiative.
Vote NO on raising costs on taxpayers.
Vote NO on Discrimination.
Vote NO on D.
/s/
ABDUR-RAHIM HAMEED
President, National Black Contractors Association
CHRIS CATE
Councilmember, City of San Diego
AL ABDALLAH
Chief Operating Officer, Urban League of San Diego County
BISHOP WILLIAM BENSON
President, Pastors on Point San Diego
CHARLES DAVIS
Urban West Development
— Arguments are the opinions of their authors. Published on the City Clerk's website.
Read the proposed legislation
More information
News (5)
San Diego ballot measures continue to attract large amounts of campaign cash — October 30, 2022 San Diego Union-Tribune
Gov. Newsom endorses San Diego’s Measure D, which would lift city ban on project labor agreements — October 27, 2022 San Diego Union-Tribune
Explainer: Measure D — Project Labor Agreements — October 27, 2022 KPBS
Racial disparities are focus in San Diego Measure D battle over union-friendly construction pacts — October 13, 2022 San Diego Union-Tribune
In San Diego battle over ban on union-friendly pacts, both sides have $1M to spend on campaigns — October 5, 2022 San Diego Union-Tribune
Opinions & Analysis (2)
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Who supports or opposes this measure?
Yes on Measure D
Organizations (5)
No on Measure D
