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El Cajon places Charter question on June ballot

Wednesday, February 29, 2012
posted by Bill Wells

Last night the El Cajon City Council voted to place a Charter City proposal on the June 5, 2012, ballot. Becoming a Charter City will allow El Cajon to establish greater autonomy from Sacramento and save millions of dollars in building costs. As a Charter City, El Cajon will be able to exempt itself, in certain situations, from paying prevailing wage. It also allows for the use of design build contracts. The vote was a unanimous 5-0 decision.

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19 Responses to “El Cajon places Charter question on June ballot”

  1. Alger says:

    Will El Cajon save as much in building costs as the City of Vista did?

  2. Thor's Assistant Thor's Assistant says:

    Alger, the intent of the question may be lost on some, including Mr. Wells. It could be he can actually articulate the savings the city hopes to achieve with an upcoming project, whether or not that is a different scenario than the Vista claims. Councilman Wells?

  3. Thor's Assistant Thor's Assistant says:

    Mr. Schmidt, thanks, we also just tweeted your story. You did indeed have coverage of this last night.

  4. Alger says:

    T.A.,

    My point was that Vista passed their Charter at least in part on the promise of saving money on the construction of their new Civic Center when in fact that project, despite a downturn in the general cost of construction, ended up costing more than $10 million more than was originally forecast.

  5. Jim Sills says:

    To paraphrase Bill Shakespeare, “The Fault is not in our Charters, but in Ourselves.” The responsibility for out-of-control spending in Vista rests with the City Council majority there.

    It sounds like Bill Wells, on the other hand, has the willpower to make good use of the options a Home-Rule city charter offers.

  6. Bill Wells Bill Wells says:

    Friends,

    We did a lot of research on the issue of prevailing wages, and though there are a multitude of opinions and ways to spin the issue, most unbiased research suggests a 15%-20% cost savings when prevailing wages are exempted. For example the California Institute for County Government has published an exhaustive review. Here is a web site you can go to for a short description of this organization: http://www.csac.counties.org/default_print.asp?id=234

  7. Alger says:

    Bill,

    Much like the issue of PLA’s, the problem with prevailing wage studies is that almost all, if not all, of them are biased to one side or the other. That being said, consider this:

    The labor component of a vertical building project is generally around 30% of the entire project cost. That means to achieve a project savings of the 15-20% you quote, you would have to cut the labor costs in half and you would also have to assume that you could get the same quality and the same production perhour from people who were willing to work for half their normal wages.

    I know the reasonable people of Vista expected huge savings but they didn’t materialize. I know that you are a reasonable man too, but do you really think you will achieve those savings?

  8. Spin Zone says:

    So, based on Alger’s numbers, let’s say the savings can only be achieved on the labor component. Let’s even call it only a 15 percent savings. The thirty percent labor piece on a $25 million project is $7.5 million. A 15 percent savings on that would be $1.125 million. Pennies, obviously, that we should deny in savings to the good people of El Cajon.

  9. Alger says:

    Spin Zone,

    The point is that the discussion should be based on real numbers not gross exaggerations. I would accept that, assuming you could get the same quality of worker to work for 15% less, you could save 4-5% on the total cost of the project.

    In the case of Vista, a certain lobbyist for a certain non-union contractors’ association wrote an op-ed claiming that the elimination of prevailing wage would allow the city to “build two city halls for the price of one.” in fact, the result was a project that came in more than 25% over budget.

  10. Bill Wells Bill Wells says:

    It is a shame that political spin makes good ideas hard to recognize, but we all can agree that saving the tax payer’s dollars is a vital part of any City Council Member’s job. Besides, the idea of fair and open competition appeals to my nature. In any event, I see no harm in letting the voters decide.

  11. Alger says:

    Bill,

    I have no problem with “letting the voters decide.” I only ask that the voters be given honest information with which they can use to decide. In the case of Vista, the voters were clearly not given this courtesy.

  12. I suspect that the ultimate savings (whatever the percentage) will result not only from the WAGE and fringe differential, but the absence of anti-productivity labor union rules — and work stoppages.

    Another MAJOR factor that will help with project savings is the increased number of firms that will bid on an open project as opposed to a PLA project. A larger number of bidders sharpens the pencils, and naturally should result in a lower bid.

    A big factor in the total cost of a project is whether the land is already OWNED by government, or has to be purchased as part of the project. UPGRADING or replacing an existing structure will thus make labor costs a bigger percentage of the project than starting from scratch with a property purchase.

  13. Alger says:

    Richard,

    And yet Vista’s new Civic Center was 25% over budget despite the elimination of the prevailing wage requirement and during the biggest downturn in construction prices since before Vista was even a city. I guess the promise of “two City Halls for the price of one” was slightly overstated, wouldn’t you agree?.

  14. Jim Sills says:

    Sorry, Alger, that Vista dog won’t Hunt. The problem there was a Council majority too busy raising pensions for City employees, and not paying attention to the Public’s business. When a Vista city councilman ran against Bill Horn for Supervisor in 2010 (remember?) North County voters said, “Forget about it.”

    El Cajon is another story. The Council out there appears to mean Business.

  15. Alger says:

    Jim,

    My only point was these charters are being sold to the public as a way to save EXTRAORDINARY amounts of money on construction projects, predominantly from the elimination of the requirement to pay prevailing wages. Unfortunately this just won’t happen and it is dishonest to make it the focal point of the campaign. The vast majority of the cost of these projects come from the cost of materials, permitting, overhead and profit, none of which are affected by prevailing wage.

    It might surprise you, but I do believe that often a city is well-served by having its own charter and that there is a potential for SOME construction cost savings, predominantly from the ability to use alternative project delivery methods. I would just like to see more honest debates; in my opinion at least, political honesty is beneficial to the public.

    Finally, as good a Council Member as Bill Wells is and as good as his colleagues are, they are not going to supervise the day-to-day operation of a construction project. They have neither the time not the expertise.

  16. Alger, the Vista problem was in large part related to the passage of the city’s sales tax increase. All fiscal prudence went out the window with that windfall. With this increased (and never-dropping — oops!) revenue source, the city geniuses opted for the gold-plated Cadillac city hall plan — “city pride” and all that.

    Moreover, I don’t think the project was 25% “over budget.” It was over the low-ball false ESTIMATE the city used to con the voters into approving the sales tax increase. That ain’t a budget. It was fraud — SOP in CA (think of the Sprinter, or CA HSR).

    It’s a perfect example of why we should oppose such “needed” tax increases. The best way to waste money and block fiscal reform is to give the rascals more loot to spend.

    As P.J. O’Rourke so famously observed, “Giving more money to politicians is like giving whiskey and car keys to teenage boys.”

    To read more about the foolish Vista city hall project, go to:
    http://www.utsandiego.com/news/2012/feb/21/tp-vista-city-hall-financing-falling-short-of-the/?page=2#article and
    http://www.nctimes.com/news/local/vista/article_34ee38cd-314e-5f52-ae27-0b34371dd63f.html

  17. Alger says:

    Richard,

    Let’s stick to the question of whether becoming a charter city is going to save the taxpayers oodles of money on construction projects.

    The problem with Vista’s final bill being above estimates was not the fault of fancy fixtures although that certainly made the cost higher than it needed to be. The engineer’s estimate on the project was actually based on the “gold-plated Cadillac city hall plan” and it still ended up costing 25% more than that.

    One other point: You seem to have gotten your talking points for PLA’s and prevailing wage confused. Charter cities are trying to eliminate prevailing wage. No city in San Diego has ever mandated a PLA on any municipal project. Please go back to your friends at the ABC and AGC and ask them to explain the difference to you.

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