Skip to comments.Los Angeles Signs Labor Deal Covering $1.5B in Port Projects
Posted on 07/06/2011 6:53:38 PM PDT by Eva
Los Angeles Mayor Antonio Villaraigosa signed a five-year labor agreement on Tuesday that will cover more than $1.5 billion in planned Port of Los Angeles construction projects.
Approved by the port governing board in March and the City Council in May, the agreement sets guidelines on the types of workers that must be hired by contractors for all capital projects at the port. The terms cover about 95 percent of the port's projected capital projects outlays for the next five years.
"This project labor agreement gives thousands of our local workers in some of the most economically disadvantaged communities the jobs and job training opportunities they need to get back on their feet," Villaraigosa said.
The projected port projects are expected to require a total of more than 6,000 workers through 2016. Under the terms of the agreement struck with the trades council: 30 percent of the jobs must go to local port-area residents; 10 percent must go to "at-risk" workers, such as unemployed or workers with criminal records; and, at least 20 percent must go toward union apprentices.
The rest of the available positions will go to union workers.
Supporters have argued that such labor agreements assure union workers for projects while reducing work stoppages and strikes during construction.
Opponents of similar labor agreements have said they drive up costs and shut out small contractors who cannot afford to provide labor from outside their own firms.
As I suspected this $1.5 billion is stimulus money that was withheld to influence the election.
Stimulus Bill Provisions for Ports
President Obama has signed the American Recovery and Reinvestment Act of 2009 (ARRA) that provides significant new funding for transportation infrastructure.
AAPA is focused on working with agencies for quick distribution of the funds. AAPA will continue to provide updates on the process and are working to have speakers to discuss this program at this Spring Conference. Below is a chart that highlights the final stimulus funding levels.
PROGRAM FINAL AGREEMENT
State Highway Program - DOT $27.5 billion
Discretionary Transportation Grants - DOT $1.5 billion
This might be a clue.
TxDot got close to 2.5 billion of that. Port of Houston got 99 million and Port of Galveston got 25 million.
I assume "skilled" is not among the job requirements?
Union and non-union guys working side-by-side? Really? With equal wages? Or a 2:1 differential? Doesn’t sound like a recipe for success to me.
But did they spend it? These are all projects that are still in the planning stages, just in time for the election.
It’s all stimulus money from 2009.
At risk and APPRENTICES! That means high school drop outs and former gang bangers, who will make the best of working on the docks.
Should I also state the obvious?
That the requirements do not include U.S. citizenship or legal residency?
And folks wonder why we’re losing the port business to Mexico.
Is it any wonder that the Democrats are now pushing for legalization of drugs and government regulation? They are doing everything possible to facilitate the illegal drug trade, first with their gun running program in AZ and now by putting the illegals and gang bangers right on the docks in LA, where they can oversee and facilitate the importation of their most important products, drugs.
I was doing a little more research on the funding of the Los Angeles port project and found out that in addition to the 2009 stimulus money, Goldman Sachs and De La Rosa and Company handled the sale of bonds?
I wonder how that sale turned out, how many bonds were actually sold.
>>... Goldman Sachs and De La Rosa and Company handled the sale of bonds?
That goes back to Arnie’s big-bang-bonds. In total, it was a $107 billion dollar plan, heralded by his leftist Agenda21 Commissar, Sunne Wright McPeak. It started with voters (foolishly) passing Proposition 1B in 2006, $20 Billion in Transportation Bonds. I haven’t followed the status of bond issuance since then.
CA: Official backs billions in state bonds (Essential for economy - “must spend $107 billion”)
Proposition 1B - Transportation Bond Program
Talk about a slippery slope. Talk about "moral hazard."
There’s a lot about this project that I don’t understand, bonds are part of that.
I am also wondering about how much of this money is stimulus money because there are already restrictions on that money and the jobs created by it, that hey pay prevailing wages to union members only.
So, are they going to unionize all the illegals in San Pedro and surrounding area?
>>It would be fiduciary irresponsibility to fail to take the government’s bribe
LOL. Good point. I do not question that the bonds were sold (or are being sold). I just haven’t followed the details to be able to speak to the status off the top of my head. The State Treasurer issues a report every year called the “Debt Affordability Report.” It usually wraps up the status of all things bondage. I haven’t read it in a couple of years, though. So many things to research, so little time...
I don’t know that you can get an easy breakdown of the funding. I know I created a spread sheet back in 2007 showing source of funds and posted it - but I can’t find it now. While that was pre-stimulus, it did include funds that were to be provided by “federal” sources (as well as public-private partnerships - the Buffet equation). I was able to locate this (summary) explanation of the $107 billion in Transportation funds that I mentioned above (which was also part of a larger $222 Billion “infrastructure” plan):
“Investments for the Future
The SGP [Strategic Growth Plan] calls for investing $107 billion in transportation infrastructure during the next decade. Funding includes $47 billion in existing transportation funding sources such as the gas tax, sales tax on gasoline, and federal funds. A total of $40.1 billion in new funding is proposed from other fund sources and leveraging existing funds to attract increased federal, private, and local funding. The remaining $19.9 billion of need will come from General Obligation (GO) bonds.”
A much more detailed version can be found here:
There is also a bunch of stuff posted here on FR. Some keywords to get you there:
Do you have any information about what the projects are? What they are going to build?
I’m heading out. I’ll try to take some time and look tomorrow. I might have some old word and excel files with that info. It was info buried in a series of bills that passed in 2007 or 2008. I painstakingly worked through all the numbers to try to figure out who was screwing who, LOL.
I’ll ping you if I find anything and post accordingly.
That is a mouthful.
Eva sorry for the delayed response. I got busy this weekend and didn't have any time to look in detail. I found a bunch of things but not sure what kind of thing you want. If you can explain (in general) your interest, maybe I can sift out the good stuff. It might also be easier to email you the info (a spreadsheet or two or three). Let me know.
Here is one breakdown of the $40 billion worth of bonds that went on the ballot. Each of these tie to different legislative bill that have the details of the projects. I do have a spreadsheet with some of the detail but requires explanation. Anyway, freepmail me and I'll follow up with more
Bondsall November 2006 ballot (54 votes)
SB 1266 / SB 86Transportation $19.9725 billion
SB 1689 / SB 364Housing 2.850 billion
AB 140 / SB 87Flood protection 4.090 billion
AB 127 / SB 79--Education Bond 10.416 billion
Total $37.3285 billion
Appropriation bill (54 votes)
AB 142 / SB 524$500 million (General Fund) for pay-as-you-go levee repair
Policy bills (41 votes)
AB 143 / SB 59Design-build
AB 1039 / SB 677Environmental streamlining
AB 1467 / SB 797Public-private partnerships
AB 127 / SB 79
Education bond: $10.416 billion
K-12 facilities: $7.329 billion
o $1.9 billion for new construction
o $3.3 billion for rehabilitation and modernization
o ($200 million for small high schoolsincluded in new construction and modernization above)
o $1 billion for hyper-dense overcrowded schools
o $500 million for career technical education facilities
o $500 million for charter schools
o $100 million for green schools
o $29 million for joint use facilities
Higher education: $3.087 billion
o $1.580 billion for UC and CSU
o $1.5 billion for community colleges
SB 1266 / SB 86
Transportation & air quality bond: $19.925 billion
Mobility, transit, congestion relief: $17.250 billion
o $4.5 for high priority corridor improvements
o $1 billion for State Highway 99 Enhancement Plan
o $2 billion for trade infrastructure
o $2 billion STIP augmentation
o $4 billion for rail, bus, transit improvements
o $750 million for SHOPP and ITS
o $1 billion for State-Local Partnership Program
o $2 billion for local streets and roads
Safety, security, disaster preparedness: $1.525 billion
o $1 billion for transit safety and disaster response (new program)
o $100 million for Port Security Program
o $125 million for local bridge seismic retrofit
o $250 million for grade separations.
Air quality: $1.2 billion
o $1 billion for port air quality
o $200 million for school bus retrofit and replacement
SB 1689 / SB 364
Housing and land use bond: $2.85 billion
Affordable housing: $1.50 billion
o $345 million for multifamily housing
o $300 million for Cal Home homeownership program
o $200 million for CHADAP downpayment assistance program
o $195 million for supportive housing
o $135 million for farm worker housing
o $125 million for the Building Equity and Growth in Neighborhoods (BEGIN) Program
o $100 million for affordable housing innovation
o $50 million for homeless youth housing
o $50 million for domestic violence shelters
Infill incentives: $850 million (up to $200 million available for urban parks)
Housing-related parks in urban, suburban, and rural areas: $200 million
Transit oriented development: $300 million
AB 140 / SB 87
Flood protection bond: $4.090 billion
$3 billion for levee inspection, repair, flood control improvements, and delta levee protection
$500 million for flood control subventions
$290 million for flood corridors, bypasses, and flood plain mapping
$300 million for storm flood management
That is a mouthful.
The phrase did not originate from me with respect to California debt, but it seemed to fit and stuck (a few years back).
Hence the FR keyword "calbondage." LOL.
Thanks for your hard work. I guess the problem is that I just don’t understand bonds and how they work.
How could they pass bonds without specifics about how the money would be spent, all laid out ahead of time? Do people just invest without any details of what they are investing in?
Hey - no problem. It wasn’t that much work. I just couldn’t remember where I might have filed that stuff on my computer. It’s been a few years. Anyway, I’ll try to answer some of your questions.
From the State/voter perspective, here is a good primer on bonds.
It was prepared by the State Legislative Analyst’s Office and sent out with the voter pamphlet when the infrastructure bonds went on the ballot. It outlines some of the various methods for financing infrastructure (e.g. revenue bonds, general obligation bonds) and discusses how the bonds get paid off. In the case of revenue bonds, voter approval is not required. They will be paid by revenue dedicated for that purpose (e.g. gas taxes for highways, water fees for a treatment plant, etc). The bonds that Schwarzenegger pushed on the ballot were general obligation bonds, meaning that they would be paid out of the general fund. Interest on those bonds is now a HUGE portion of the state’s annual expenditures, contributing to the deficit.
That primer was a good start in educating the populace. Unfortunately, I doubt very many people read it. There is no “truth in advertising” when it comes to politics and lots of voters are lazy and/or stupid. When politicians sell their bond proposals, they characterize bond money as basically free. “We can accomplish all of this without raising taxes” Schwarzenegger repeated over and over. Voters bought that line and passed the infrastructure bonds.
Now, from an investor’s standpoint, here is a good overview on bonds:
Basically, when the state issues bonds it is just issuing a big giant IOU. The state wants cash and investors have it. If you invest in these state issued bonds, you (the lender) are in essence loaning money to the state (borrower) and in return you get interest on your money. The state will use those funds for some purpose (e.g. to build a dam). The bond buyer/lender (you) have no ownership rights to that dam. So, investors don’t much care about the details of what infrastructure was to be built. They care only about how they will be repaid, if there is a risk of default, what the interest rate is, etc.
So, the people who invested in the bonds weren’t interested in detailed building plans. But voters were interested. The promotion of these bonds had a little bit for everybody and promised to fix all ills (slightly exaggerated, but you get the idea.) If campaigning in L.A., say that you will reduce congestion on the busiest freeway in the area. If in Sacramento, mention the Sacramento freeway. The law itself specified a list of *possible* infrastructure plans but did not guarantee they would be built. Voters are such suckers. (You had to dig real deep into the fine print, and programs cited only by reference to some other law, to see the massive amount of dollars going to hiking trails, bike paths, homeless shelters and a long list of things that wouldn’t qualify as “infrastructure” in any normal world).
But the state bonds discussed above were just one (very large) source of funding for Arnie’s $222 billion plan. It assumed use of existing gas tax revenue, sales tax revenue, local government funding (county/city tax revenue or bond issues), federal funding, and “private sources”. Those private sources involved “public private partnerships” (PPP) and required a separate law be passed to authorize it. It is included in my long list, above (toward the top). This would include things like toll roads where a private interest offers upfront cash in exchange for the right to build/operate/maintain/administer the road for a period of time. Those rights would also include the authority to establish tolls and charge users whatever they see fit. While toll roads are not new, this PPP arrangement for roads is a relatively new phenomena.
If you have specific questions from those links, or what I wrote above, or you have some burning questions about something I didn’t address, ask away. It may take a day or two or three to respond - but I will get to it.
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