AGC Monday Morning Quarterback

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The Associated General Contractors of America, San Diego Chapter, Inc.

December 12, 2011

In This Issue A Financial Disaster at SDUSD SDUSD PSA "Paycheck Protection" Repeal 3% Withholding Law Partnership with Enterprise Fleet Management AGC National Safety Award Program Annual Meeting AGC Winter Conference Calendar of Classes Calendar of Committee Mtgs.

Building Your Quality of Life

A Financial Disaster at San Diego Unified School District....The Trustees Have Wasted $16,000,000 in Two Years!!!
By Jim Ryan, Executive Vice President On Thursday of last week, AGC was provided information by sources inside the San Diego Unified School District (SDUSD) that proves the union-only Project Stabilization Agreement (PSA) for construction projects financed by the Proposition S bond issue has been a financial disaster!!! Taxpayers from throughout the District should revolt and demand that the Trustees stop this incredible waste of taxes. The result is that students are going to be taught in schools that will not receive the critical repairs that their schools so desperately need. The 2 documents that were given to AGC are entitled......

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"San Diego Unified School District-Proposition S Construction Contracts Bidding Review." CLICK HERE More about AGC San Diego Construction Data CLICK HERE The documents show that San Diego contractors are not bidding the union-only PSA projects, and as a result of fewer bids, the District is paying millions of dollars over and above what they should be paying for their union-only Proposition S construction projects. Here are the key statistics contained in the documents. Remember....these statistics came from the District... 1. There have been 35 construction projects bid since 2009 and funded by the Proposition S Bond issue which was approved by voters in November 2008. The first projects funded by this bond issue were bid in 2009. 2. 16 of the projects bid since 2009 were not included in the union-only PSA. The 16 projects ranged in size from just under $1 million to about $10 million. Some were bid in 2009 before the union-only PSA took effect, but were funded by the Prop S bond issue. Some were under the threshold amount in the PSA, and were bid in 2010 and 2011.

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3. 19 of the projects were bid under the union-only PSA. They were bid in 2010 and 2011. The projects ranged from just over $1 million to about $10 million. 4. All 35 projects were very similar in scope and range of size. 5. The 16 projects that were not subject to the union-only PSA averaged 10 responsive general contractor bidders.
________________________ AGC Annual Meeting Hilton Torrey Pines December 15, 2011

6. The 19 projects that were subject to the union-only PSA averaged only 5 responsive general contractor bidders. In addition, the GC's tell us that the subcontractor bids that they received were at least 50% below the number of bids they would normally receive for projects of this nature. The District's own study confirms this (see next article). 7. The 16 projects that were not subject to the union-only PSA averaged 31.6% below the budget set by the District for the projects. 8. The 19 projects that were subject to the union-only PSA averaged 9.7% below the District's budget for the projects. 9. Thus, it is logical to conclude that the District is spending 21.9% more than it should when it subjects projects to the union-only PSA. 10. In addition, the architects and consultants also provide an estimate of the project cost after design is complete. The 19 projects that were subject to the union-only PSA were 20% higher than the estimates for the 16 projects that were not subject to the union-only PSA. The conclusion to be drawn from all of this is simple......all 35 projects were basically the same type project; they were all bid in the same 2-3 year time frame in which construction costs have been low and flat; and they were all bid for the same owner and staff. The budget estimate to actual bid price should have been nearly identical between the two groups of projects. They were not!!! In addition, it is logical to assume that the actual cost to the District of implementing the union only PSA on their projects involves roughly a 21.9% premium. For the projects that were bid under the union only PSA the premium that the District paid was about $16 million....and if this pattern continues to the conclusion of the bond issue the total dollars wasted will be in the $200 million or more range. The reason for all of the cost difference.... is exactly what we have been telling the District since they came up with this union-only PSA....there is a lack of competition....and less competition means higher prices...it is that simple. We would like to thank SDUSD for providing this comparison. It certainly ranks as one of the strongest "apples to apples" comparisons anywhere in the United States that details the cost increase that come with these union-only agreements. It proves that when an agency restricts the bidding to a segment of the market, there is a cost...and in this case, it is a very high cost that will end up hurting the students in the San Diego Unified School District!!!!

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Jackson Hole, Wyoming

San Diego Unified Project Stabilization Agreement: A Review of Construction Contractor and Labor Considerations
By Jim Ryan, Executive Vice President You may have noticed this weekend that the San Diego Unified School District held a closed press conference on Friday and released the results of a study that the Trustees commissioned several months ago concerning the effectiveness of the union-only PSA on proposition S construction projects. It is our understanding that the AGC/ABC/Coalition for Fair Employment press release which detailed cost problems featured in the previous article caused a few problem questions for the Trustees during this closed press conference. Sorry about that! Anyway....it has always been our impression that this report was a vehicle to provide cover for Trustees Richard Barrera and John Evans if they had any opponents when they ran for the School Board again in 2012. President Barrera's new trustee "wingman," Scott Barnett, has a history with the consultants that were hired. We are confident that the "scope" was very clearly defined for the consultants, Rea and Parker Research. We were also confused as to why the Trustees would hire the consultants when the District has an oversight committee. The oversight committee is tasked with making sure the Proposition S funds are being spent properly by the Trustees. For instance, I am the Chair of the Transnet Oversight Committee, and our task is to make sure SANDAG is properly using the cent sales tax that is for transportation in our county. Our oversight committee commissions a program audit every few years, but the auditors report directly to the oversight committee. Hmmmm..... makes you wonder doesn't it!!! After reviewing this report, which cost about $400 per page for a total of $80,000, it was obvious that some of the facts did not match the conclusion.... which was basically that the union-only PSA was a brilliant move by the Trustees...(who of course paid for the study!!) Since our readership is made up primarily of individuals that are in the construction industry, I thought you would be interested in the following..... They agreed that there was a mysterious drop in the number of bidders on union only PSA projects. They even found that on the Prop S projects that were not subject to the union only PSA, there were 80.7 plan holders vs 35.4 for the union-only Prop S projects. In addition, the required site walks for each project only attracted 24.4 participants for the union-only Prop S projects vs 40 for the Prop S projects that were not covered by the union- only PSA. This adds to the contention that there are fewer bidders at all levels on the union-only PSA projects. But somehow the consultants did a bit of what has been called "confusing" statistical analysis of certain non-randomly selected projects that showed that all of this made no difference...the costs were somehow the same...despite the facts detailed in the previous article. We have seen emails that seem to challenge the statistical analysis methods used by Rea and Parker Consulting. Maybe Rea and Parker subcontracted this

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part of the study to Laurel and Hardy Consulting!! Well anyway.....I am sure the study fulfills its intent. Richard and John can now refer to it if anyone challenges them over the cost of the PSA!!!

"Paycheck Protection" Qualifies for November 2012 Ballot - Campaign Finance Reform Measure Designed to Limit Political Influence
By Brad Barnum, Vice President Government Relations An initiative designed to level the playing field as far as state and local political contributions is concerned has qualified for the November 2012 ballot. If passed by a majority of California voters, the Stop Special Interest Money Now Act, will: Ban both corporate and labor union contributions to candidates Prohibit government contractors from contributing money to government officials who award them contracts Prohibit corporations and labor unions from using payroll deductions to collect political funds from employees and union members Make all employee political contributions by any other means strictly voluntary A grassroots coalition of taxpayers, good government advocates, and business leaders submitted more than 900,000 signatures to county registrars across the state in support of the initiative, well over the 505,000 needed to qualify. "Californians are sick and tired of the dysfunction caused by the outsized influence special interests maintain over politicians in our state," said former U.S. Secretary of State, and longtime California resident George Shultz. "In recent years, California voters have started to take back their government by passing redistricting and other fundamental political reforms. This measure is the next step in the process. It minimizes the influence of the well funded few and empowers the nearly-silenced many." According to the nonpartisan Fair Political Practices Commission, the top 15 special interest groups have spent more than $1 billion on influencing the political process in the past ten years while the state's fiscal and economic climate has reached historic lows. At the same time, more than 40% of the legislation introduced in Sacramento is written by special interest lobbyists, and these bills are much more likely to become law. Other "Paycheck Protection" measures have been on the ballot in 2005 and 1998, both losing by a margin of 6%. However, the efforts by labor to defeat them were brutal, and that can be expected again this time (public employee unions' political contributions are derived through deductions from employee paychecks as part of their union dues). An early "tell" was the law passed by the Democrat-controlled Legislature and signed by Governor Brown that forced all state ballot measures to the November 2012 ballot, which basically ensures a better turn-out by Democratic voters. The initiative actually qualified for the June 2012 Primary, where

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Have You Moved Lately?

Please notify us if your company has a change of address, phone/fax, or change of contact person, so we can update our records. Email Marcy Knopman of any necessary changes.

more Republican voters are expected to turn out because of the contested Republican Presidential race. Potential Impacts: Since this measure will ban corporate and union contributions directly to candidates, it would likely shift campaign expenditures into massive independent expenditure committees. AGC's PAC may have some contribution limitations as well, if the contributions come from corporations. Expect a lot of fireworks as the campaign heats up the next 10+ months. AGC's Government Relations will review the initiative early next year, and will make a recommendation to the Board of Directors

About Monday Morning Quaterback

AGC San Diego Chapter's Monday Morning Quarterback is a "hot off the press" and to the point Monday morning briefing on the important issues facing San Diego's construction industry. It is prepared by AGC Executive Vice President, Jim Ryan, and Vice President Government Relations, Brad Barnum. Please contact Jim Ryan or Brad Barnum with your comments, or with information that should be conveyed to the industry through this service. Well over 2,000 individuals employed by AGC member firms are part of this system. Archives

AGC Powers Construction Industry Efforts to Repeal 3% Withholding Law

By now, you know that the President signed 3% Withholding Repeal legislation. But do your members know that AGC led the construction industry in the fight to repeal this onerous legislation? The "Building the Successful Case for Repeal of 3% Withholding" document (click here) details all the efforts by AGC of America, AGC Chapters, and AGC members in this successful legislative advocacy endeavor. The overwhelming votes in the House and Senate for repeal of 3% withholding was the culmination of over five years of work by AGC, AGC Chapters, AGC members and our coalition partners. This document discusses the activities undertaken and measures some of the success along the way. It is important to note that this concerted effort produced a significant bipartisan victory in an era when bipartisanship seldom happens. AGC members made a concerted effort after this year's AGC convention to get cosponsors, and educate industry partners, such as public officials, subcontractors, and suppliers in our push to get 3% repealed in 2011. AGC members from all regions of the country, all types of construction, and all types of occupations within construction firms sent emails, made phone calls, and made visits urging members of Congress to cosponsor the 3% repeal bills and vote for repeal. We estimate that at least 80% of the House cosponsors and 90% of the Senate Cosponsors of the 3% repeal bills personally met with AGC members or AGC staff. In addition, to face-to-face meetings, and more than 18,000 letters urging repeal were delivered to members of the House and Senate using the AGC Legislative Action Center. It was the focus of members, Chapters and the national staff applying constant pressure over the last 5 years that lead to the final, overwhelming votes for repeal.

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Partnership with Enterprise Fleet Management

Greg Murphy and Michele Luker from Enterprise Fleet Managment presented a revenue sharing check to AGC for member participation in the AGC Partnership Program. Enterprise Fleet Management is one of the many participants in AGC's Discounted Partnership Program. Click Here for other AGC San Diego Membership Discounts with selected partners. Click Here for AGC of America Membership Discounts

AGC National Safety Awards (NASA) Program - This is a consecutive THREE year program, DON'T MISS OUT.
The Associated General Contractors of America is announcing its 2011 NASA program. CLICK HERE for the National AGC Safety Awards program details and application (last page). The National AGC Safety Awards (NASA) program has been an ongoing effort since 1991 to offer AGC members an opportunity to evaluate their safety record. NASA compares an AGC member's safety record with other AGC members according to the member size and construction type. Additionally, NASA provides a great opportunity for contractor members who have excellent safety records to compete for nationally recognized awards.

The deadline for chapter submission of entries to the AGC San Diego is January 31, 2012. Let's best our chapter record of 2011 (47). We are looking for 60 entries and up. Are you up to the challenge?

REMINDER...this Thursday, Dec. 15th AGC Annual Meeting at the Hilton La Jolla Torrey Pines
The Annual Meeting is an opportunity to receive a complete update on the activities and finances of the AGC. Most General

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Contracting firms are represented at this meeting. While Specialty and Affiliate members will not be able to vote, the Board is convinced that sharing the valuable information about the association with the entire membership is important. We encourage all AGC firms to take a couple of hours out of your schedule on December 15th to attend. It is an opportunity for each member to learn more about the AGC. The event will begin at 11:30 a.m. at the Hilton La Jolla Torrey Pines, located at 10950 North Torrey Pines Road, La Jolla, CA 92037, and will conclude around 1:30 PM. Please complete the linked form and fax to 858-558-8444. You can also contact Rae Krushensky with any questions. The deadline to register is Wednesday, Dec. 14th by 8:00 a.m.

AGC Winter Conference - February 2-5, 2012 Room Block is Full!

For those that have delayed in registering for the AGC Winter Conference to Jackson Hole, Wyoming, we can increase the room block, but we need to know by Dec. 30th. Flight schedules are also limited, so members need to act now! Complete the registration form by Clicking Here and fax to Rae at (858) 558-8444. You can also contact Rae with any questions at [email protected] Remember....A bad day skiing is 10x better than a good day at work!!!

Calendar of AGC Safety & Education Classes

DECEMBER CLASSES Dec. 13 Dec. 13, 14, 15 Dec. 13-14 Dec. 16 Dec. 19 Dec. 20 Dec. 21 Dec. 22-23

EM385-1-1 Military Safety Requirement QSD Training QSP Training Storm Water Sampling Training Safety Rigging & Signal Person Conned Space HazWoper OSHA 10-hour

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To register for classes, click on Education Training or Safety Training HOT OFF THE PRESS 2012 AGC Education/Safety Training Catalog
Jan- June 2012 FLIP THROUGH THE PAGES

Up Coming AGC Committee / Council Meetings DECEMBER MEETINGS

Date Dec. 7 Dec. 13 Dec. 14 Time 7:00 A.M. 12:00 PM. 11:30 A.M. Commiee Meeng Safety Commiee Environmental Stewardship Commiee HR Commiee Commiee

To volunteer to serve on a committee, click here Get involved! "The more you put into the AGC, the more you'll get out! "

The Associated General Contractors, San Diego Chapter, Inc. 6212 Ferris Square, San Diego, CA 92121 | Phone (858) 558-7444 | Fax (858) 558-8444 www.agcsd.org

Building Your Quality of Life

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