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

December 12, 2011 Building Your Quality of Life

In This Issue A Financial Disaster at SDUSD

SDUSD PSA"Paycheck Protection"

Repeal 3% Withholding Law

Partnership with Enterprise FleetManagement

AGC National Safety AwardProgram

Annual Meeting AGC Winter Conference

Calendar of ClassesCalendar of Committee Mtgs.

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byDec. 15th

A Financial Disaster at San Diego Unified SchoolDistrict....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 sourcesinside the San Diego Unified School District (SDUSD) that proves theunion-only Project Stabilization Agreement (PSA) for construction projectsfinanced by the Proposition S bond issue has been a financial disaster!!!Taxpayers from throughout the District should revolt and demand that theTrustees stop this incredible waste of taxes. The result is that studentsare going to be taught in schools that will not receive the critical repairsthat their schools so desperately need. The 2 documents that were given to AGC are entitled...... "San Diego Unified School District-Proposition S Construction ContractsBidding Review." CLICK HERE

Construction Data CLICK HERE The documents show that San Diego contractors are not bidding theunion-only PSA projects, and as a result of fewer bids, the District ispaying millions of dollars over and above what they should be paying for their union-only Proposition S construction projects. Here are the keystatistics contained in the documents. Remember....these statistics camefrom 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 inNovember 2008. The first projects funded by this bond issue were bid in2009. 2. 16 of the projects bid since 2009 were not included in the union-onlyPSA. 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 tookeffect, but were funded by the Prop S bond issue. Some were under thethreshold amount in the PSA, and were bid in 2010 and 2011.

Monday Morning Quarterback http://campaign.r20.constantcontact.com/render?llr=law4x9fab&v=001F...

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AGC Annual MeetingHilton Torrey PinesDecember 15, 2011

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2012 Winter ConferenceFeb 2-5

3. 19 of the projects were bid under the union-only PSA. They were bid in2010 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 averaged10 responsive general contractor bidders. 6. The 19 projects that were subject to the union-only PSA averaged only5 responsive general contractor bidders. In addition, the GC's tell us thatthe subcontractor bids that they received were at least 50% below thenumber 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 averaged31.6% below the budget set by the District for the projects. 8. The 19 projects that were subject to the union-only PSA averaged9.7% below the District's budget for the projects.

9. Thus, it is logical to conclude that the District is spending 21.9% morethan 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 weresubject to the union-only PSA were 20% higher than the estimates for the16 projects that were not subject to the union-only PSA. The conclusion to be drawn from all of this is simple......all 35 projectswere basically the same type project; they were all bid in the same 2-3year time frame in which construction costs have been low and flat; andthey were all bid for the same owner and staff. The budget estimate toactual bid price should have been nearly identical between the two groupsof 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 a21.9% premium. For the projects that were bid under the union only PSAthe premium that the District paid was about $16 million....and if thispattern continues to the conclusion of the bond issue the total dollarswasted will be in the $200 million or more range. The reason for all of the cost difference.... is exactly what we have beentelling the District since they came up with this union-only PSA.... there is

a lack of competition....and less competition means higher prices...itis that simple. We would like to thank SDUSD for providing this comparison. It certainlyranks as one of the strongest "apples to apples" comparisons anywherein the United States that details the cost increase that come with theseunion-only agreements. It proves that when an agency restricts thebidding to a segment of the market, there is a cost...and in this case, it isa very high cost that will end up hurting the students in the San DiegoUnified School District!!!!


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San Diego Unified Project Stabilization Agreement: AReview of Construction Contractor and Labor ConsiderationsBy Jim Ryan, Executive Vice President You may have noticed this weekend that the San Diego Unified SchoolDistrict held a closed press conference on Friday and released the resultsof a study that the Trustees commissioned several months agoconcerning the effectiveness of the union-only PSA on proposition Sconstruction projects. It is our understanding that the AGC/ABC/Coalitionfor Fair Employment press release which detailed cost problems featuredin the previous article caused a few problem questions for the Trusteesduring this closed press conference. Sorry about that!

Anyway....it has always been our impression that this report was avehicle to provide cover for Trustees Richard Barrera and John Evans if they had any opponents when they ran for the School Board again in2012. President Barrera's new trustee "wingman," Scott Barnett, has ahistory 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 consultantswhen the District has an oversight committee. The oversight committee istasked with making sure the Proposition S funds are being spent properlyby the Trustees. For instance, I am the Chair of the Transnet OversightCommittee, and our task is to make sure SANDAG is properly using the cent sales tax that is for transportation in our county. Our oversightcommittee commissions a program audit every few years, but theauditors report directly to the oversight committee. Hmmmm..... makesyou 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 theconclusion.... which was basically that the union-only PSA was a brilliantmove by the Trustees...(who of course paid for the study!!) Since our readership is made up primarily of individuals that are in theconstruction industry, I thought you would be interested in the following..... They agreed that there was a mysterious drop in the number of bidderson union only PSA projects. They even found that on the Prop S projectsthat were not subject to the union only PSA, there were 80.7 plan holdersvs 35.4 for the union-only Prop S projects. In addition, the required sitewalks 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 bythe 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 projectsthat showed that all of this made no difference...the costs were somehowthe same...despite the facts detailed in the previous article. We haveseen emails that seem to challenge the statistical analysis methods usedby 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 cannow refer to it if anyone challenges them over the cost of the PSA!!!

"Paycheck Protection" Qualifies for November 2012Ballot - Campaign Finance Reform Measure Designed toLimit Political InfluenceBy Brad Barnum, Vice President Government Relations

An initiative designed to level the playing field as far as state and localpolitical contributions is concerned has qualified for the November 2012ballot. If passed by a majority of California voters, the Stop SpecialInterest Money Now Act, will:

Ban both corporate and labor union contributions to candidates

Prohibit government contractors from contributing money togovernment officials who award them contractsProhibit corporations and labor unions from using payrolldeductions to collect political funds from employees and unionmembersMake all employee political contributions by any other meansstrictly voluntary

A grassroots coalition of taxpayers, good government advocates, andbusiness leaders submitted more than 900,000 signatures to countyregistrars across the state in support of the initiative, well over the505,000 needed to qualify. "Californians are sick and tired of thedysfunction caused by the outsized influence special interests maintain

over politicians in our state," said former U.S. Secretary of State, andlongtime California resident George Shultz. "In recent years, Californiavoters have started to take back their government by passing redistrictingand other fundamental political reforms. This measure is the next step inthe process. It minimizes the influence of the well funded few andempowers the nearly-silenced many."

According to the nonpartisan Fair Political Practices Commission, the top15 special interest groups have spent more than $1 billion on influencingthe political process in the past ten years while the state's fiscal andeconomic climate has reached historic lows. At the same time, more than40% of the legislation introduced in Sacramento is written by specialinterest lobbyists, and these bills are much more likely to become law. Other "Paycheck Protection" measures have been on the ballot in 2005and 1998, both losing by a margin of 6%. However, the efforts by labor todefeat them were brutal, and that can be expected again this time (publicemployee unions' political contributions are derived through deductionsfrom employee paychecks as part of their union dues). An early "tell" wasthe law passed by the Democrat-controlled Legislature and signed byGovernor Brown that forced all state ballot measures to the November 2012 ballot, which basically ensures a better turn-out by Democraticvoters. The initiative actually qualified for the June 2012 Primary, where


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Have You MovedLately?

Please notify us if your company has a change of address, phone/fax, or changeof contact person, so we canupdate our records. EmailMarcy Knopman of anynecessary changes.

About Monday MorningQuaterback

AGC San Diego Chapter'sMonday Morning Quarterbackis a "hot off the press" and tothe point Monday morningbriefing on the important issuesfacing San Diego'sconstruction industry. It isprepared by AGC ExecutiveVice President, Jim Ryan, andVice President GovernmentRelations, Brad Barnum. Please contact Jim Ryan or Brad Barnum with your comments, or with informationthat should be conveyed to theindustry through this service.Well over 2,000 individualsemployed by AGC member firms are part of this system.

Archives

more Republican voters are expected to turn out because of thecontested Republican Presidential race. Potential Impacts: Since this measure will ban corporate and unioncontributions directly to candidates, it would likely shift campaignexpenditures into massive independent expenditure committees. AGC'sPAC may have some contribution limitations as well, if the contributionscome 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, andwill make a recommendation to the Board of Directors

AGC Powers Construction Industry Efforts to Repeal 3%Withholding Law

By now, you know that the President signed 3% Withholding Repeallegislation. But do your members know that AGC led the constructionindustry 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, AGCChapters, and AGC members in this successful legislative advocacyendeavor. The overwhelming votes in the House and Senate for repeal of 3%withholding was the culmination of over five years of work by AGC, AGCChapters, AGC members and our coalition partners. This documentdiscusses the activities undertaken and measures some of the success

along the way. It is important to note that this concerted effort produced asignificant bipartisan victory in an era when bipartisanship seldomhappens.

AGC members made a concerted effort after this year's AGC conventionto 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, madephone 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 theSenate Cosponsors of the 3% repeal bills personally met with AGCmembers or AGC staff. In addition, to face-to-face meetings, and morethan 18,000 letters urging repeal were delivered to members of theHouse and Senate using the AGC Legislative Action Center. It was thefocus of members, Chapters and the national staff applying constantpressure over the last 5 years that lead to the final, overwhelming votesfor repeal.


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Partnership with Enterprise Fleet Management

Greg Murphy andMichele Luker fromEnterprise Fleet Managment presenteda revenue sharing

check to AGC for member participationin the AGC PartnershipProgram. EnterpriseFleet Management isone of the manyparticipants in

AGC's DiscountedPartnership Program.

Click Here for other AGC San Diego Membership Discounts with selectedpartners. Click Here for AGC of America Membership Discounts

AGC National Safety Awards (NASA) Program - This is aconsecutive THREE year program, DON'T MISS OUT. The Associated General Contractors of America is announcing its 2011NASA program. CLICK HERE for the National AGC Safety Awardsprogram 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. NASAcompares an AGC member's safety record with other AGC membersaccording to the member size and construction type.

Additionally, NASA provides a great opportunity for contractor memberswho have excellent safety records to compete for nationally recognizedawards.

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

REMINDER...this Thursday, Dec. 15th AGC AnnualMeeting at the Hilton La Jolla Torrey Pines

The Annual Meeting is an opportunity to receivea complete update on the activities andfinances of the AGC. Most General


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Contracting firms are represented at thismeeting. While Specialty and Affiliate members will not

be able to vote, the Board is convinced that sharing the valuableinformation 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 eachmember 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 willconclude around 1:30 PM. Please complete the linked form and fax to 858-558-8444. You can alsocontact Rae Krushensky with any questions. The deadline to register isWednesday, Dec. 14th by 8:00 a.m.

AGC Winter Conference - February 2-5, 2012Room 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, butwe need to know by Dec. 30th. Flight schedulesare also limited, so members need to act now! Complete the registration form by ClickingHere and fax to Rae at (858) 558-8444. You canalso 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 EM385-1-1 Military Safety RequirementDec. 13, 14, 15 QSD Training

Dec. 13-14 QSP Training

Dec. 16 Storm Water Sampling Training

Dec. 19 Safety Rigging & Signal Person

Dec. 20 Conned Space

Dec. 21 HazWoper

Dec. 22-23 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 CatalogJan- June 2012

FLIP THROUGH THE PAGES

Up Coming AGC Committee / Council Meetings

DECEMBER MEETINGSDate Time Commiee Meeng

Dec. 7 7:00 A.M. Safety CommieeDec. 13 12:00 PM. Environmental Stewardship Commiee

Dec. 14 11:30 A.M. 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

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