Branstad spurns compromise with Cedar Rapids officials on labor agreements

Cedar Rapids officials and Terry Branstad’s administration are still at odds over labor policy, and the dispute could cost Iowa’s second-largest city a $15 million state I-JOBS grant for work on its Convention Complex flood recovery project. Mayor Ron Corbett, a former Republican speaker of the Iowa House during the 1990s, has suggested compromises to accommodate Branstad’s opposition to project labor agreements, but  the governor has so far dismissed those ideas.

Follow me after the jump for background and recent news on the most significant clash between the new Branstad administration and a local government.  

As Bleeding Heartland discussed here, the conflict centers on a project labor agreement the Cedar Rapids City Council approved in December for building a $76.5-million Convention Complex downtown. The following month, a few hours after his inauguration, Branstad signed an executive order banning project labor agreements not only on state-funded projects, but on virtually any project receiving any form of public funding in Iowa. In February, the Iowa Finance Authority informed Corbett that the state may pull the $15 million I-JOBS grant awarded for the Convention Complex project. Corbett had promised to honor the executive order for future projects but took the position that the city was bound by the PLA approved in December. Branstad administration officials didn’t see it that way:

However, in his letter to Corbett, [Iowa Finance Authority general counsel Mark] Thompson states that Executive Order 69 is in full effect on projects “for which a construction contract had not been entered into” before Jan. 14. Thompson adds that the governor’s office has informed the authority that Executive Order 69 should apply to the Cedar Rapids Convention Complex project.

In late February, the Cedar Rapids City Council approved the first Convention Complex contract on a divided vote. Cedar Rapids Gazette columnist Todd Dorman noted that the work went to a local non-union contractor, but that fact didn’t appease Branstad.

Mayor Ron Corbett has been “trying to resolve the issue, keep the governor happy and use local labor,” he told the Gazette last week. He has proposed two ways forward:

In the first, Corbett proposes that the city use the state’s $15 million in I-JOBS funds for parts of the Convention Complex project not related to construction contracts tied to the project labor agreement. The state funds, for instance, could cover the purchase of land, furniture and professional services, he has proposed.

In a second proposal, Corbett has suggested that the city return the $15 million I-JOBS grant to the state with the understanding that the state I-JOBS Board then would direct the funds to other city building projects, which have I-JOBS grants themselves, funding gaps and no project labor agreements. In turn, the city will use city funds it intends to spend on the other projects – the new Central Fire Station and library and the renovations of the Veterans Memorial Building, the former federal courthouse, the Public Works Facility and the Paramount Theatre – for the Convention Complex project.

State Representative Renee Schulte, a Republican who represents part of Cedar Rapids in House district 37, is also working with the governor’s office to resolve the conflict without the city losing money.

Branstad rejected any suggestion of compromise during a visit to the Cedar Rapids area on March 9:

The governor was well aware that Corbett and a majority on the City Council have focused on the fact that they approved the project labor agreement on Dec. 14, 2010, a month before Branstad took office.

Branstad, though, dismissed such a timeline, noting that he emphasized at a gubernatorial debate at Coe College on Oct. 7 that he opposed then-Gov. Chet Culver’s support for project labor agreements and, further, if elected, that he would put a stop to using state funds on public projects with such agreements in place.

“They knew after my election (in November), they knew it was coming because right in the debate in Cedar Rapids – and everybody who was there knows how emphatically I stated it – that I think project labor agreements are wrong and that I intended to reverse that,” the governor said. “They were on notice of that.”

Branstad said he vetoed so-called “prevailing-wage” legislation way back in the 1980s as governor, and he said project labor agreements similarly do nothing but drive up the cost of public projects and benefit out-of-state contractors and unions at the expense of Iowa businesses and Iowa taxpayers.

Dorman asked Branstad about the compromises and discussed the governor’s approach in his March 10 column:

“Absolutely not,” Branstad told me Wednesday in an interview hours before his planned stop in Hiawatha. “I did what I thought was absolutely right and certainly have the support of the contractors of the state of Iowa and the taxpayers of the state of Iowa. I just think it needs to be abided by.”

I give him points for backbone. But his vision is fuzzy.

Branstad isn’t trying to see this through the eyes of local officials who forged a PLA with local trades, in hopes of making sure that local workers built the complex. To the governor, this is a statewide battle, a big picture painted in broad political and budgetary brush strokes. He didn’t sweat the little details, even as he signed an order covering every big and little burg in Iowa.

He said he didn’t consider Cedar Rapids’ local circumstances when he signed the order. His objective was to reverse a politically motivated order by his predecessor, Chet Culver, encouraging state agencies to use PLAs. Branstad believes strongly that PLAs drive up the cost of projects and are unfair to non-union contractors. And if making that larger point causes problems for Cedar Rapids, so be it.

The fact that the first contract put up for bid under the Cedar Rapids PLA came in under budget and went to a non-union contractor also doesn’t figure in to the big picture. “I took the action that I did based on the best information I had available. I don’t know all the circumstances with all the communities in Iowa,” Branstad said.

And to me, that’s the problem. Branstad should have considered local circumstances before issuing a sweeping order that changed them so dramatically. Wielding such broad authority within hours of taking office seems to be more about making a political point than making good policy.

It doesn’t sound as if Schulte’s intervention has helped move Branstad toward Corbett’s proposals:

Tim Albrecht, the governor’s spokesman, said Tuesday [March 8] that the governor takes “a serious look” at each of the proposals coming to him from the mayor. He takes flood recovery in Cedar Rapids “very seriously” as well, Albrecht added.

“(But) at the end of the day, Gov. Branstad expects the PLA executive order he signed to be enforced,” he said.

Branstad takes flood recovery in Cedar Rapids so “seriously” that he is willing to cripple a centerpiece downtown project to prove a point. The Cedar Rapids approach to the Convention Complex clearly hasn’t benefited out-of-state contractors or labor unions. Corbett has searched for creative ways to accommodate the governor’s concerns. Yet Branstad simply won’t let local officials determine the appropriate way to rebuild their own city. Sounds like “big government” to me.

In related news, Corbett is asking state legislators to approve a sales tax diversion for Cedar Rapids to help pay for extensive flood mitigation work. Later this week the mayor will present his proposal to a bipartisan legislative panel.

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