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State to Reconsider Labor Deal

Politics: Business leaders cry foul over Davis administration contract that restricts the use of outside firms.


SACRAMENTO — Two years after voters decided to speed up transportation projects through more public-private partnerships, the Davis administration has agreed to a labor contract that restricts the use of outside firms and thus, critics say, undermines the initiative.

An outcry from the state's business community has prompted the administration to reconsider the labor deal with state engineers and architects.

The dispute over the contract is the latest in a two-decade battle between public and private employees for the design and engineering work on billions of dollars worth of state transportation projects.

Voters handed the private firms a key victory in 2000 by approving Proposition 35, which was supposed to make it easier for state and local agencies to contract with private firms to accelerate construction projects ranging from schools to highways.

But the labor agreement with Professional Engineers in California Government, the union that represents 11,000 engineers, architects and land surveyors employed by state agencies, renews the skirmish.

The agreement includes a provision that essentially requires the state to use government employees rather than private firms in years when workloads do not increase.

An exception would be made if the state wanted to contract with private firms to perform specialized services.

If the California Department of Transportation's workload were to increase, the state could contract out up to half of the growth.

Critics of the deal, which include the California Chamber of Commerce and the private firms behind Proposition 35, fear that the new restrictions would slow the delivery of transportation projects.

"There's no question Californians want transportation projects accelerated as rapidly as possible," said Bill Hauck, president of the California Business Roundtable.

"It appears to me that this could and probably would have the effect of going in the opposite direction.... I can't imagine that the governor would be supportive of this."

Assembly Republican Leader Dave Cox of Fair Oaks has asked legislative lawyers to determine whether the labor agreement, contained in SB 1213 by state Sen. Dede Alpert (D-Coronado), is legal.

Cox said the lawyers advised his office earlier this month that the agreement's restrictions on outside contracts represent an unconstitutional violation of Proposition 35.

"Our folks will not vote for it, because it undermines Proposition 35," Cox said. "We need to uphold the will of the people."

Caltrans is taking another look at the deal as a result of the questions, said Marty Morgenstern, director of the state Department of Personnel Administration.

"The language on the contracting out is something that Caltrans worked on rather than us," Morgenstern said. "They felt this change in the law met our needs and was appropriate and allowed the department flexibility on a permanent basis."

Caltrans spokesman Dennis Trujillo said that work on $7 billion worth of transportation contracts is underway and that 20% of the activity is being contracted out.

"This [labor agreement] will allow us to contract out at the same level," he said.

Bruce Blanning of Professional Engineers in California Government emphasized that the agreement also allows the state to contract out additional work if, despite hiring efforts, Caltrans is unable to deliver transportation projects on schedule.

Blanning said the deal strikes a balance between Californians' desire to have public and private employees working on highway projects. He also said Proposition 35 does not require the state to contract out.

Union members, he added, are in the process of ratifying the agreement.

"We proposed and ultimately agreed with the governor on a flexible formula for the Legislature and the governor to allocate jobs for staffing and contracting," Blanning said.

"Contracting out," he added, "is for peaks, not for regular work."

The union's campaign contributions records show that it gave Gov. Gray Davis more than $130,000 from 1999 through 2001.

The private firms behind Proposition 35 say the measure gave the state the right to contract out in any year to move projects along--not only when Caltrans' workload is on the rise.

If the restrictions became law, they contend, they could prevent future governors from contracting with outside firms as they saw fit.

"We can't always be the last one hired and first one fired," said Gene Erbin, a lobbyist representing the private firms. "We need a dependable, reliable and predictable relationship with Caltrans."

Richard Markuson of the Consulting Engineers and Land Surveyors of California, a group representing about 17,000 private engineers and land surveyors, predicted that within three years Caltrans would have no authority to contract out for anything other than specialized services, which include underwater work performed on bridges.

Markuson based his conclusion on Caltrans' future workload and an anticipated reduction in federal transportation funding.

The labor contract bill is awaiting a hearing in the Assembly Committee on Public Employees, Retirement and Social Security. No date has been set.

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