The San Diego region’s drinking water wholesaler recently passed a rule guaranteeing most of its infrastructure projects are built under union-friendly labor deals, as long as a majority of the board agrees.
That seems likely since a majority of the San Diego County Water Authority’s board voted in favor of the change at its January meeting. That also means almost every waterworks contract the Water Authority touches will undergo negotiations with labor unions, which some contractors and board members fear will add time and costs even as water rates continue to skyrocket.
Since 2005, the San Diego County Water Authority operated under rules that said the board had to vote on whether to enter into a project labor agreement for any project worth $100 million or more. These agreements, known as PLAs, generally mean labor unions guarantee that a project will have workers – and they won’t go on strike – but in exchange, all workers must pass through union halls with potential added fees and benefits.
But at its Jan. 27 meeting, a majority of the Water Authority’s governing board OK’d lowering that threshold to any project over $1 million. For an agency that builds and maintains extensive and expensive regional water systems, dams and reservoirs, that means almost all of the projects the Water Authority undertakes would be subject to considering a PLA.
The Water Authority has a lot of big contracts coming up, including a $1.5 billion hydroelectricity project at San Vicente Reservoir and, potentially, a $5 billion parallel pipeline to the Colorado River to cut San Diego’s dependence on Los Angeles for its main source of drinking water.
Dozens of workers and representatives from local unions voiced their support for the move during the January meeting, while organizations representing non-unionized workers denounced it.
PLAs “allow public agencies to enable local hiring and help manage complex construction projects efficiently,” said Carol Kim, business manager of the San Diego Building Trades Council. “They ensure that workers are trained, skilled and qualified and can set goals for hiring local workers.”
Eddie Sprecco, CEO of San Diego’s chapter of the Associated General Contractors, which also represents non-union labor, argued PLAs mean a smaller number of contractors would be eligible to bid on these projects at a higher cost to the taxpayer.
“The last thing I would recommend is a wall-to-wall PLA on your projects because it raises prices 20 percent and shuts out a lot of your local contractors and workers,” Sprecco said.
Nick Serrano, a city of San Diego rep on the Water Authority board and Mayor Todd Gloria’s deputy chief of staff, led the charge in favor of PLAs as a spokesman for a separate subcommittee the Water Authority created in 2021 to study whether to create such a rule.
Serrano pointed to other agencies in San Diego adopting similar requirements like the San Diego Association of Governments which voted in July of 2021 to negotiate with labor unions on a multi-billion dollar transit and freeway system overhaul, according to the Union-Tribune. He said this kind of PLA requirement is “necessary to ensure the agency has the ability to continue competing for and securing state and federal funding for water projects,” later pointing to recent moves by President Joe Biden who recently signed an executive order requiring PLAs on certain federal projects over $35 million, according to reporting by FOX Business.
The California legislature has sought in recent years to require cities to adopt PLAs as a condition for receiving state funds, including a 2019 bill championed by Gloria when he was in the assembly, requiring PLAs on state-funded construction related to one of the city’s largest and most significant water projects known as Pure Water.
“It’s in the best interest of our ratepayers to put our best foot forward and … be proactive in having a policy like this on our books, ready to go, so we can remain competitive for these dollars,” Serrano said at the meeting.
A contingent of the Water Authority board, generally representing more rural and conservative-leaning cities like Carlsbad, Helix, Poway and Ramona, voted against the rule change.
Matt Hall, the Republican mayor of Carlsbad and board director, called for more study over what it will cost the Water Authority in time and staff to negotiate project labor agreements.
“In fairness to all concerned, most importantly the ratepayer after we spent a year talking about rates, what the impacts of some of this may be,” Hall said.
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