On Jan. 1, a law takes effect that could deny San Diego tens of millions of dollars annually in state loans and grants. That law, SB 829, says that any city that bans Project Labor Agreements—pre-hire work agreements for large-scale projects—will no longer be eligible for state construction grants and loans. Signed by Gov. Jerry Brown in April, SB 829 was aimed at San Diego in hopes of stopping Prop. A, a measure on the June ballot that sought to ban the City Council from voting to require a PLA. Even though the city's never considered requiring one, the measure's backers, which included mayoral candidate Carl DeMaio, argued it was a pre-emptive move.
Prop. A passed and in early November, a supervisor with the Clean Water State Revolving Fund program told me that after Jan. 1, his department will no longer be able to execute loan agreements with the city. To put that into perspective, in October alone the city put in for $31 million in CWSRF low-interest loans. In 2011, the city relied on $158 million in state loans and grants to fund infrastructure projects.
There's a loophole in Prop. A that says the law would be moot if state or federal funding hinged on allowing the consideration of a PLA. Even though City Attorney Jan Goldsmith's impartial analysis of the measure said that the exception clause would likely face a court challenge, on Nov. 30 Goldsmith issued a legal memo saying he thought the city had a strong case against SB 829 because of the exception clause. But no lawsuit's been filed and the City Council's done meeting for the year.
At a press conference this week, Mayor Bob Filner acknowledged Prop. A was a bit of a boondoggle, but he was "in discussions with Sacramento." Asked to elaborate, Filner said he's "trying to get them to implement [SB 829] in a way where a Democratic governor and a Democratic legislature will help out a Democratic mayor."
But, he also said that the law "probably will… effect our ability to do sewer and water projects, but we’re unclear on the impact of that."
Filner said that though Goldsmith wanted to file a lawsuit, he urged the City Attorney to wait until after the first of the year.
"I want to see if we can more pragmatically work it out," Filner said. "The council and the [City] Attorney have given me time to try to do that."
I put in a call to the Governor's office and will update this post when I hear back.
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