Proposed City-Wide Project Labor Agreement Mandate: Look Before You Leap

Dear Mayor Steinberg and Councilmembers,

We write to urge you to postpone consideration of the proposal to mandate that all city projects of $1 million or more include a project labor agreement, which appears on your agenda for tomorrow evening.

The consideration of such a measure with zero public awareness and no opportunity of the public to adequately express their views would be an affront to any concept of open, transparent government or inclusive public engagement. Slamming this proposal through the city council without adequate time and opportunity for real public input would further undermine the public’s already attenuated trust in city government and city leaders.

This is not the way a participatory, inclusive democracy behaves. This is the way slick politicians who want to sneak things past the public behave. We trust that you wish to count yourselves among the former and not the latter.

The proposed mandate would have a huge and as yet unknown impact on the city’s budget and on the burdens of city taxpayers. We all know that project labor agreements serve to effectively restrict city contracts to union-only contractors, thereby reducing the number of eligible bidders on city contracts, thereby needlessly driving up city and taxpayer costs by 10% to 20%, according to the studies of independent analysts.

Such cost spikes will likely drive up taxpayers costs by tens of millions of dollars each year in Sacramento, depending on the volume and magnitude of city capital improvement projects each year. Over a 10-year span, such a mandate could drive up costs by as much as $200,000,000, all for the sake of benefiting a narrow special interest, the construction trades unions, while unfairly cheating the 90% of skilled trades workers who are not union members out of the opportunity to earn a living.

It would also especially harm minority and women-owned businesses, the great majority of whom are non-union businesses.

We also note that Sacramento residents will vote this fall on your proposal to double and make permanent the temporary Measure U one-half percent sales tax hike that expires in March.

As chair of the campaign to defeat the double-the-tax Measure U, it would behoove me to remain silent and even encourage you to approve such a budget-busting PLA mandate on city projects as it would hand our No on Measure U campaign a vivid example of how our city government is shoveling millions of dollars out to back door of City Hall into the pockets of politically connected special interests at the expense of average Sacramentans.

But I also happen to be a citizen who deeply cares about the long-term fiscal health of our city. I cannot stand idly by while the proponents of this deeply flawed proposal drive the city’s financial future into a ditch.

We urge you to do the right thing and direct staff to do a comprehensive, independent fiscal analysis of the long-term impacts of the proposed PLA mandate on future city budgets, non-union workers and minority and women-owned Sacramento businesses. If you are serious about restoring trust in city government, you must provide the public a reasonable opportunity to learn about this proposal, study it and then communicate with their representatives their views on it.

If you wish to discuss this matter, please do not hesitate to contact me.

Sincerely,

Craig Powell, President
Eye on Sacramento
Phone: (916) 718-3030

cc: Media Distribution List

Eye on Sacramento’s Position on Mayor’s Effort to Double Measure U Sales Tax Hike

MEDIA RELEASE

For Immediate Release

Date/Time: July 31, 2018, 6:00 a.m.
Contact: Craig Powell, President,
Eye on Sacramento
Phone: (916) 718-3030
E-mail: craig@eyeonsacramento.org
Website: www.eyeonsacramento.org

 

Eye on Sacramento’s Position on Mayor’s Effort to Double Measure U Sales Tax Hike

 

Below is a link to a letter that was sent today by Eye on Sacramento President Craig Powell to Sacramento Mayor Darrell Steinberg regarding EOS’s position on the Mayor’s effort to double the Measure U one-half percent “temporary” sales tax hike in the City of Sacramento.

Measure U will be on the agenda of two Sacramento council meetings today, July 31st, one at 2:00 p.m. and a second meeting at 5:00 p.m. Mr. Powell will be available for interviews both before and after the 2:00 p.m. council meeting.

Letter to Mayor Darrell Steinberg

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Is Steinberg Being Reckless? … Mayor wants to double a ‘temporary’ sales-tax hike

By Craig Powell

If all you knew about the performance of Mayor Darrell Steinberg in office was what you read in the pages of The Sacramento Bee, two things would be apparent. First, you’d think Steinberg was that rarest of creatures: a politician incapable of making a misstep or a bad policy choice. Second, you’d be woefully ill-informed about the potential downside consequences of his policies—and some of the cynical political calculations behind them.

Since the June primary, the mayor has been a man on fire. His first salvo was to publicly press the City Council and city voters to support his campaign to double the “temporary” one-half-percent sales-tax hike known as Measure U, which was approved by voters six years ago as an emergency response to city service cuts in the Great Recession. He seems not to care that Measure U was sold to voters as a temporary tax designed to fill the coffers of a recession-battered city.

Neither the mayor nor The Bee bothers to point out that city revenues have fully recovered from the recession. City revenues have risen 16 percent over the past two years and were up 6 percent last year. The mayor and The Bee have also failed to mention that the city’s labor costs soared 8.5 percent last year on the heels of pricey new city union contracts and soaring pension costs. How pricey? Under the new police contract, officers with more than four years on the job were given 17 percent pay raises (not counting the impact such raises have on city pension costs), while average annual increases in the CPI were less than 1.3 percent over the past four years.

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Budget Checkup … City Hits List of 20 Most Financially Distressed U.S. Cities

By Craig Powell

After devoting my last two columns to Sacramento’s homeless crisis, I figure we’re due for a review of the city’s financial situation since Darrell Steinberg became mayor.

Among the more than 3,300 issue files that Eye on Sacramento (the civic watchdog group that I head) maintains on municipal issues is one that is often whimsical: our city rankings file. We track every time a study or publication ranks Sacramento against other cities on everything from its appeal to millennials to the quality of our coffeehouses. (There’s considerable crossover there.) But the latest ranking, published by JPMorgan Chase, is anything but whimsical. It’s disturbing.

Since JPMorgan Chase manages about $90 billion in municipal bonds, it’s pretty concerned about whether cities will be able to pay back their bond debt. So it created what one financial analyst calls a comprehensive guide of “which municipalities haven’t the slightest hope of surviving their multi-decade debt binge and lavish public pension awards”—i.e., Chicago, Pittsburgh, Atlanta, Cleveland.

view/download … Budget Checkup … City Hits List of 20 Most Financially Distressed U.S. Cities

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RT’s $10 Million Streetcar Design Contract

MEDIA RELEASE

Date/Time: April 25, 2016, 4:00 a.m.
Contacts: Erik J. Smitt, Policy Director,
Eye on Sacramento
Phone: (916) 215-2275
E-mail: erik@eyeonsacramento.org

REGIONAL TRANSIT’s $10.2 MILLION CONTRACT

DOWNTOWN RIVERFRONT STREETCAR DESIGN SERVICES

Tonight, Sacramento Regional Transit District’s Board of Directors will consider approving a $10.2 million contract with HDR, Inc. for design services of the Downtown Riverfront Streetcar Project. These design services will cover complete track-routing and all other facets of the proposed 4.2 mile system. The $10.2 million will come from federal Congestion Management Air Quality funds.
But there is more to the story.

The community does not want this useless streetcar. Last June, city of Sacramento registered voters in a proposed assessment district voted a resounding “NO!” to a $38 million bond measure to fund the city’s share of the $195 million streetcar project. This “NO!” vote created a significant hole in the streetcar construction funding. As yet, after ten months, the city has not found a funding source for their commitment to the project. Also, the State of California has not firmly guaranteed their $10 million share of construction.

Now, with significant funding still in limbo, the RT Board is asked to roll-the-dice on this $10.2 million financial commitment, which could be used on more important projects.

Another consideration: As pointed out in our recent report, “EOS’s Recommendations on RT’s Fiscal Crisis,” Appendix 1 (www.eyeonsacramento.org), based upon research by transit authority Dr. Gregory Thompson, annual operational expenses will likely range from $6.3 to $8.8 million. The streetcar project’s operational cost projections are woefully below this range, adding another significant project risk.

We want and need smart, long-range decisions for transit problems. Not needed are decisions, such as the one before the RT Board tonight, that may not only cause chronic operational red ink, but also become a waste of taxpayer funds if anticipated local monies fail to materialize.

Unless construction funding by all governmental agencies committed to this project are firmly identified, Eye on Sacramento urges a “No” vote on this Downtown Riverfront Streetcar design services contract.

(The design contract is #13 on RT’s Agenda. The board meeting begins at 6:00 pm and the meeting chambers are located at RT’s headquarters, 1400 29th St.)

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RT on the Rocks … Fight over fare hikes splits transit board

By Craig Powell

 

To get a sense of how broke Regional Transit is, consider this analogy. Let’s say you’re part of a Sacramento family. You have a fairly well-off, middle-class lifestyle, but in the last couple of years you’ve really splurged, buying yourself a big, new Mercedes and a big, pricey cabin up at Lake Tahoe, all financed to the hilt. Meanwhile, the small business you run, RT Clothing, has never regained the boatload of customers you lost when you decided to jack up your prices by 20 percent in the middle of the last recession (oops), leaving you with a flat income for years. Fortunately, your wife, a retiree who collects both a military pension from the federal government and a healthy state government pension, has been collecting cost-of-living increases for years. She brings home close to 80 percent of the family income these days, bless her. Together, you have a family income of close to $150,000 per year.

The charming new home you bought 30 years ago in Light Rail Estates is showing serious signs of age and, let’s be honest, neglect. Your roof is shot, the paint’s badly peeling, you may need a new furnace and your backyard pool has algae stains and a rather unpleasant odor. Lately, some of the sketchier kids in your neighborhood have been jumping over the fence when you’re not home, swimming in your pool, hanging around for hours on end and leaving their trash everywhere. It’s gotten so bad that many of your longtime friends no longer accept invitations to your summer pool parties. You’ve spotted some of them going into Bob and Nancy Uber’s backyard down the street. The Ubers put in a nice, new pool last year and they let their friends drop in to swim whenever they want.

Things are going so-so until one day you decide to open up your bank and credit card statements for the first time in six months. You’re stunned (stunned!) to see all of the savings you thought you were socking away each month have somehow evaporated. Not only that, you owe a whopping $18,000 on your Visa bill. (How did that happen?) In a panic, you check the balance in your checking account and your heart sinks further. You have just $3,000 in cash and, at the rate your family burns money, it will be long gone in three months’ time.

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The Pot Tax … Helping kids at the expense of the general fund

By Craig Powell

Jay Schenirer means well, he really does. But programs launched with the best of intentions are no guarantee of sound policy or effectiveness, as Schenirer’s recent proposal confirms.

His basic idea is to dramatically increase city funding of programs for children and young adults by getting voters in June to approve a “new” 5 percent tax on marijuana cultivation, with the proceeds directed exclusively to youth services, bypassing the city’s general fund. Schenirer and his hardworking staff have spent the past year compiling research studies that show the benefits such programs can have on outcomes for kids.

Schenirer is certainly not new to youth issues: He’s spent most of his adult life working on them—in state service, on the city school board, as an education consultant and as the founder of youth-focused nonprofits since his 2010 election to the city council. (He’s raised more private funds for these nonprofits from corporations and foundations than any other councilmember with the exception of our city’s star private fundraiser, Mayor Kevin Johnson.) Schenirer is almost certainly the council’s foremost authority on youth issues, with Rick Jennings—the long-term CEO of the Center for Fathers and Families who served on the city school board alongside Schenirer—a close second.

Schenirer and his staff have prepared a thoughtful 22-page blueprint for how to create a new city department of youth services, an idea that city manager John Shirey threw cold water on by calling it a wasteful increase in city overhead. Shirey prefers to have the parks department, which administers the city’s current youth services programs, handle any expansion of such programs.

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Expansive Plans … The mayor’s budget message proposes wide-ranging ideas

Published on Wednesday, 01 April 2015

Expansive Plans

The mayor’s budget message proposes wide-ranging ideas

By Craig Powell

As I wrote last month, the mayor and city council have taken aggressive steps in the past few months to assert much greater front-end control over both the city budget and the city manager (hiring an independent budget analyst, forming a new council budget committee, public outreach on budget matters). But the process changes were just the beginning. On March 10, the mayor took the unprecedented step of releasing a “Mayor’s Message on Budget Priorities” that lays out what is likely the most expansive plan ever proposed for the role of city government in Sacramento. It proposes a cautious approach to city spending and debt management in the near future while proposing more than a dozen new and unprecedented programs and initiatives.

Notably, the mayor’s plan was not the product of deliberation and consensus by the council’s new budget and audit committee. Instead, it is the mayor’s own vision and was slated for initial council review late last month. If it ends up being approved by the council, it will represent marching orders to city manager John Shirey on how to draw up the city budget for the next fiscal year that begins July 1.

The central premise of Johnson’s plan is that the city must exercise spending caution in the short term as the city nears a fiscal cliff in 2019 (due to escalating pension contributions and expiration of the Measure U half-percent sales tax hike), but that the city must ultimately fix its fiscal problems by taking aggressive steps to grow the local economy, resulting in higher city tax revenues. His ideas for growing the local economic pie are bold: He proposes a slew of new investments, plans and programs that, if approved, would inject the city more assertively into local economic development than ever before.

view/download … Expansive Plans The mayor’s budget message proposes wide-ranging ideas

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Katy Grimes Piece on Measure L, Sac County GOP and our EOS Report

Here’s a revealing article by Katy Grimes on Measure L and the coopting of the Sac county GOP.

Local ‘Thought Leaders’ Bamboozle Sac GOP on Measure L

Op/Ed in Today’s Bee – EOS Report on Measure L

Sacramento city charter should not be overhauled without good cause | The Sacramento Bee