The San Diego City Council on Monday unanimously approved a measure that should allow the city to continue to get state funds for construction projects, which have been under threat of voter-approved restrictions against requiring "project labor agreements" for construction contracts.
“A financial crisis was averted today," said City Council President Todd Gloria, adding that if the city hadn't reaffirmed a loophole in the restrictions, it could have lost hundreds of millions of dollars in infrastructure aid. He said that last year alone, the city could have lost $383 million because of the dispute.
The crisis revolved around Proposition A, a measure that voters passed in 2012 — with heavy backing from the San Diego Regional Chamber of Commerce and local builders and developers — to block the city from requiring developers to enter collective bargaining agreements with labor unions, setting the wages and benefits of all employees on a particular project.
Gloria said Proposition A was a "gratuitous measure" that addressed a problem that did not exist: "The city of San Diego has never required a project labor agreement for a construction project," he said.
But the state government recently informed City Hall that Proposition A conflicted with so many state laws that the city would no longer qualify for funds or financial assistance on its projects.
Because Proposition A was approved by voters, the City Council had no power to rescind or amend it. But the proposition did include an "exception clause," saying it did not apply “where required by state or federal law as a contracting or procurement obligation, or as a condition of the receipt of state or federal funds.”
It took the combined work of Gov. Jerry Brown's office, State Assembly Speaker Toni Atkins, Mayor Kevin Faulconer and City Attorney Jan Goldsmith to convince the state government that the clause was enough to allow for the funding to continue — and even then the state asked for a vote from the City Council to affirm its support for the clause.
Faulconer said Monday that the city will operate under the exception clause until the state Supreme Court decides the matter, which has affected several other cities. Meanwhile, he said, the city would continue to seek fair and open competition in all its contracts.