Category Archives: Unions

Big government at work: Cost for Sea-Tac Airport project soars from $608 million to almost a BILLION

Can you imagine how many private contractors would go out of business if they couldn’t estimate construction costs properly and had overruns of over 50 percent on originally estimated costs? Course they have to make a profit – government bureaucrats don’t have to worry about details like that.

The Port of Seattle operates Sea-Tac International Airport. They are building a new International Arrivals Facility as the current one is 44 years old and needs updating. From the Port’s press release in August 2017:

“National and local leaders came to the Port of Seattle today to celebrate the official groundbreaking for a new International Arrivals Facility (IAF) at Seattle-Tacoma International Airport. The new facility will dramatically improve the experience for international travelers and better meet the region’s demand for business and tourism-related international service.

Scheduled to open in late 2019, the new 450,000-square-foot, multi-level facility will be built to the east of the current Concourse A.

The current 44-year-old facility no longer meets demand. Originally designed to serve just 1,200 passengers per hour, it now serves an average of over 2,000 passengers per hour during peak periods. The new IAF will increase passenger capacity to 2,600 passengers per hour, while improving the customer experience by nearly doubling the number of gates capable of serving international wide-body aircraft and more than doubling the Passport Check positions and kiosks.

The current budget for the IAF is $766 million. Funding for the project will come from a combination of airport generated revenues, passenger facility charges (PFCs) and revenue bonds. As with virtually all airport projects, no Port of Seattle levy taxes will be used to fund the project.”

The Port issued a press release on Sept. 11 indicating the new project cost and schedule:

“An independent review panel convened by the Port of Seattle Commission identified the scope and complexity of the program and the “supercharged” local construction market as the primary reasons for higher budget estimates for the new IAF at Sea-Tac.

The Executive Review Panel (ERP) provide their report to commissioners today, finding that the negotiated Guaranteed Maximum Price (GMP) of $773 million for construction and May 31, 2020, completed construction schedule are both “reasonable and achievable.” The IAF will open to passengers in August 2020, following extensive systems and user testing by the Port, airlines, and federal agencies.

The final cost to the Port, including $76 million in sales tax and additional Port costs, will be $968 million.

The Commission-directed review found the program’s final budget estimate of $773.9 million in construction elements and total program cost of $968.4 million is reasonable for the scope of the projects in this over-heated construction market. The panel also found the schedule to be achievable if the parties approach the work with a sense of urgency. The panel cited the following components for the cost increase and schedule changes: increased scope, tight construction market, complexity of program, and need for improved Port/Contractor relationship and clearer decision structures.”

The Seattle Times notes that the original budget for this project was $608 million. And now it’s at $968 million and scheduled to open eight months later.

One of the review panel members is quoted as saying, “There are reasons to have confidence and that these projections are good projections.”

The article also notes how the leadership of each side of the project have been changed to allow a “fresh start.”

I have confidence that the project costs will go even higher. That’s how big government works.

DCG

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SF Mayor commits $100 million to modular housing factory, predicts savings of $50,000 per unit

Mayor London Breed: Taking a $100 million risk with taxpayer dollars

Like many west coast, progressive run cities, San Francisco has a homeless crisis. The city has doubled the amount of taxpayer money they spend on the crisis and as of 2017 there were almost 7,500 homeless citizens.

The homeless are allowed to defecate and urinate on the streets and also use drugs. I’ve chronicled the many problems on the streets of San Francisco. See the following posts:

Yesterday Mayor London Breed announced that taxpayers will be committed to spending $100 million to attract a modular housing factory to build more affordable housing. See her press release here.

Excerpts from her press release:

  • Mayor London N. Breed today announced a commitment of $100 million in City taxpayer funding to purchase affordable housing made using modular construction built in San Francisco. The commitment represents the first production order for a new modular housing facility that will be built in the City in partnership with the San Francisco Building Trades.
  • The City selected the international design firm Nelson Worldwide to conduct a feasibility study for a new modular housing factory on Port-controlled industrial lands. Nelson Worldwide has already started conducting stakeholder meetings, data collection, and analysis necessary to support a future facility to determine capital investment requirements, operational and staffing goals, and supply and demand targets. The second phase of the feasibility study, expected to be completed by the end of year, will develop the business plan for the future factory.
  • “We are in a housing crisis and the reality is we need to produce affordable housing much quicker than we currently do, or we will continue to see displacement of our low and middle-income communities,” said Mayor Breed. “By building a modular housing factory in our own backyard, we can create housing faster and more cost-effectively, while also creating great union jobs in partnership with our labor leaders.”

Whenever government utters the words “cost-effective” and “union jobs” in the same sentence, I question what they have been smoking.

Anyhow, the good mayor left some details out of her press release that I came across in the SF Chronicle story. For example:

  • The city does not know at this time who will run the facility.
  • The mayor hopes the city’s promise to buy modular homes will entice an operator to open a facility.
  • The modular housing manufacturer won’t be providing any homes for YEARS.
  • The city is hoping that modular homes could bring down construction costs by 10 percent as technology improves.
  • Of the total cost for a modular home and land (up to $800,000), city taxpayers fund approximately $350,000 per unit after grants and other funding sources.
  • The mayor thinks the city can shave $50,000 off the cost of each unit.
  • The city is estimating that the $100 million will provide around 400 apartment units.

Read the SF Chronicle article here.

There’s quite a bit of “hopes,” “thinks,” and “estimates” in this taxpayer-funded project.

I think it’s cute that the mayor can make a prediction of cost savings per unit when the feasibility study isn’t even complete. Is she an expert in predicting future construction costs and real estate market values?

I understand a long-term solution is desirable yet question just how competently a progressive, government-run project can effectively solve any issue. One thing I know for sure, that union endorsement is going to pay off for the Teamsters.

DCG

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Oregon governor chooses demorat donor to manage PERS disaster, donor has no pension experience

Shenoy (l) being rewarded for donating to Gov. Brown (r)

The State or Oregon Public Employees Retirement System (PERS) is in a big financial hurt. In February 2017 it had $22 BILLION in unfunded liabilities, owing more money to former employees than they have in the bank.

In April this year, the New York Times did a story on Oregon’s PERS calling it a “severe, self-inflicted crisis.”

Read the whole New York Times story here as they describe how a former university president draws $76,111 per month, a former football coach draws more than $46,000 per month, and that more than 2,000 employees will soon draw a monthly pension in excess of $100,000 per month.

As a result of the financial crisis of PERS, many essential government services are “slashed.”

So who better to manage this whopping financial crisis? A former CFO and accountant who has a background in pension management information technology.

Last Thursday, the governor announced she chose Sadhana Shenoy to lead the PERS board as “she’s extremely bright” and has “great technical expertise.”

Shenoy will need to be confirmed by the state senate.

According to Oregon Live: “…Shenoy lacks any direct experience in pension management or administration. That’s experience that governor’s office originally said it was looking for in a new board chair, and background that could come in handy at a time when the administrative complexity and political profile of the system are rising.

Shenoy said, “I have the technical skills and background to lead a board oversee (sic) the management of PERS Funds with responsibility, acumen and foresight. These skills include a sound background in Finance, Accounting and Mathematics and working proficiency in modeling tools and techniques.

One interesting item that Oregon Live reports: “With Thomas’ resignation and Shenoy’s confirmation by the Senate, it (the PERS Board) would be made up entirely of Portland-area Democrats – one a union leader and two others, including Shenoy, who are donors to Brown’s campaign.”

The PERS Board is supposedly a “bipartisan” entity. Well, as much as it can be in progressive Oregon.

Read the whole Oregon Live story here.

While I understand that donors are typically rewarded with posts, is it too much to ask that taxpayer pension dollars be managed by people who have actual experience with pension management?

Most of the people commenting on the Oregon Live article are not pleased with the Governor’s choice. Elections have consequences.

DCG

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California bill would create health care price controls

government solve all problems
But, but…I thought Obamacare was suppose to reduce the cost of health care?
From Sacramento Bee: California’s government would set prices for hospital stays, doctor visits and other health care services under legislation introduced Monday, vastly remaking the industry in a bid to lower health care costs.
The proposal, which drew swift opposition from the health care industry, comes amid a fierce debate in California as activists on the left push aggressively for a system that would provide government-funded insurance for everyone in the state.
Across the country, rising health care costs have put the industry, lawmaker and employers and consumers at odds.
The proposal in California would affect private health plans, including those offered by employers and purchased by individuals. A nine-member commission appointed by the governor and legislative leaders would set prices for everything from a physical exam to an allergy test to heart bypass surgery. No other state has such a requirement.
“If we do not act now, I’m concerned that health care prices will become unsustainable,” Assemblyman Ash Kalra, a freshman Democrat from San Jose who wrote the legislation, said in a news conference in Sacramento.
The measure faces an uphill battle in the Legislature, where lawmakers are generally cautious about making drastic changes to the health care system and are already juggling a wide range of ambitious proposals.
The proposal is backed by influential unions including the Service Employees International Union, Unite Here and the Teamsters. The unions are frustrated that health care costs are gobbling an increasing share of employee compensation.
“Every dollar that we spend on rising health care prices is a dollar that comes out of a worker’s pocket,” said Sara Flocks, policy coordinator for the California Labor Federation, a union coalition. “This is something that is eating up our wages and it is increasing income inequality. This is a fundamental question of fairness.
Health care providers say price controls would encourage doctors to move out of state or retire, making it harder for people to see a physician when they’re sick, and force hospitals to lay off staff or, in some cases, close their doors.
The California Medical Association, which represents physicians, called the proposal “radical” and warned that it would reduce choices for consumers.
“No state in America has ever attempted such an unproven policy of inflexible, government-managed price caps across every health care service,” Dr. Theodore Mazer, the CMA president, said in a statement.
Under Kalra’s bill, prices would be tied to Medicare’s rate for a particular service or procedure, with that price as a floor. There would be a process for doctors or hospitals to argue that their unique circumstances warrant payments higher than the state’s standard rate.
Paying hospitals 125 percent of Medicare’s rate would cut $18 billion in revenue and force them to trim nurses and other support staff, said Dietmar Grellman, senior vice president of the California Hospital Association. Private insurers make up for the low payments from government-funded health care, which doesn’t cover the full cost of care, he said.
“That’s why their bill is such an empty promise,” Grellman said. “They take money out of the system with rate regulation, but then they don’t address the huge gaping hole that’s created by Medicare and Medicaid.”
In recent decades health care spending has risen faster than inflation and wages while employers and health plans have shifted more of the costs onto consumers through higher premiums, deductibles and copays. Americans spend more per capita on health care than other developed countries.
Meanwhile, a wave of consolidation by hospitals, physician groups and insurance companies has given industry players more power to demand higher rates.
DCG

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General Motors union workers to get $11k profit-sharing checks

maga-button
Add this company to the growing list of companies handing out “crumbs.”
From NBC Los Angeles: General Motors announced Tuesday it made $12.8 billion in pre-tax profits in 2017, and the company said union-represented workers will receive profit-sharing checks of $11,750.
The company reported a net loss of $3.9 billion, driven primarily by a $7.3 billion accounting charge related to the recent tax reform and $6.2 billion charge related to the sale of Europe’s Opel unit. But without the expense the company posted record per-share earnings.
About 50,000 GM factory workers will get $11,750 profit-sharing checks later this month. GM’s profit-sharing checks are higher than its Detroit-area rivals. Ford announced in January profit-sharing checks of $7,500 for an estimated 54,000 UAW-represented employees, and Fiat Chrysler said it would pay its UAW employees an average of $5,500, the Detroit Free Press reported. Fiat Chrysler also said it would give U.S. workers, aside from senior leadership, $2,000 bonuses, according to the Free Press.
Excluding one-time items, GM made $9.9 billion, or $6.62 per share, the highest since leaving bankruptcy in 2009. The earnings beat Wall Street estimates. Analysts polled by FactSet expected $6.33 per share. Full-year revenue was $145.6 billion, which also beat estimates.
“The actions we took to further strengthen our core business and advance our vision for personal mobility made 2017 a transformative year. We will continue executing our plan and reshaping our company to position it for long-term success,” GM CEO Mary Barra said in a news release.
GM says the change in the U.S. tax code forced it to write down accumulated losses that it uses to avoid corporate income taxes. The assets went from $33.6 billion to $24 billion. Since the rate fell from 35 percent to 21 percent, the losses are worth less.
DCG

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New Mexico could be first state to force students to apply for college

melissa harris perry
While I’m all for higher education, I believe it is 1) the job of the parents to decide this matter with their children and 2) dangerous to have the government tell you what your children must do. Stay out of our lives!
From NY Post: New Mexico’s high school juniors would have to apply to at least one college or commit to other post-high school plans as part of a proposed graduation requirement that would be the first statewide push of its kind in the US.
The proposal is scheduled for its first legislative hearing on Thursday. If it eventually becomes law, New Mexico would be the first state to require post-high school plans of students, said Jennifer Zinth, who is the director of high school and STEM research at the Education Commission of the States, a Denver-based group that tracks education policy.
The bill sponsored by Rep. Nate Gentry, a Republican, and Sen. Daniel Ivey-Soto, a Democrat, would make it mandatory for public school juniors to apply to at least one two- or four-year college. Exceptions would be made for students who can prove they have committed to military service, a vocational program, or work upon graduation in an apprenticeship or internship. Parents and school guidance counselors would have to approve of the students’ plans.
The measure was drafted with the aim of reversing declines in college enrollment across the state, which fell nearly 14 percent from 155,065 enrolled students in 2010 to 133,830 in 2016.
Ivey-Soto, an attorney and former educator, said it also could encourage prospective first-generation college students to seriously consider getting into a higher education institution. “There’s a reason we call graduation commencement because it’s the beginning of their future,” Ivey-Soto said. “Let’s take that seriously.”
The New Mexico bill is modeled after a similar requirement that Gentry said was put in place for high school students in San Marcos, Texas, more than a decade ago. And last year in Chicago, Mayor Rahm Emanuel made post-high school plans a graduation requirement — saying students had to either have plans to enter the military, take part in a “gap year” program, get a job offer or apprenticeship, or have an acceptance letter from a college.
The New Mexico proposal has received a mixed response from educators, with some questioning whether the bill that asks for no extra funding will further strain schools without enough counselors to give students the attention they need to develop post-graduation plans.
“We just need to make sure that the schools are funded well enough that there is a counselor or a person who can help each student,” said Betty Patterson, president of the National Education Association-New Mexico union representing more than 8,500 school employees.
The bill seeks to boost the state’s college enrollment rate in the hopes the state would have a better-educated workforce. That could attract more companies to New Mexico, where the unemployment rate is 6.5 percent, the second-highest in the US and more than two percentage points higher than the national rate.
While students would not be required to attend college, Gentry thinks requiring them to fill out applications will make them more likely to do so. Applying to the flagship University of New Mexico costs $25. Many of the state’s community colleges don’t charge application fees and applying online can take as little as 20 minutes.
At the Academy for Technology and the Classics charter school in Santa Fe, principal Susan Lumley said she was wary of the bill if it didn’t come with extensive support for helping students apply to college.
The school in Santa Fe graduated 43 students last year and all but one enrolled in college. The only one who did not enroll in college went to a vocational school for tattoo artists.
“You’ve got to provide the support to make that happen,” Lumley said. “First-generation kids, for a lot of them, the reason they don’t go to college is they have no idea how to even start that process.”
DCG

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NYC tax dollars at work: School bus driver fired after racking up 37 complaints

sumatie kalladeen bus driver facebook

Former bus driver Sumatie Kalladeen/Facebook photo


Via NY Post: City school-bus driver Sumatie Kalladeen’s scoldings terrified a little girl to the point where she was too afraid to ride the bus. The city Department of Education fired Kalladeen — but not before she racked up 37 complaints since 2001, seven of which were “substantiated,” records show.
She was suspended at least twice before, once after leaving 24 kids and teachers behind on a field trip, and once after she was arrested for assaulting her husband.
That a driver with so many offenses could remain behind the wheel for so long illustrates the city’s lax and ineffective disciplinary system for school-bus personnel, insiders charge.
The DOE’s Office of Pupil Transportation (OPT) has gone too easy on some bad bus drivers and attendants because it caters to the school-bus companies it contracts with to hire the workers, one OPT investigator alleged.
“They make sure the bus companies don’t lose too many drivers due to disciplinary decisions,” the investigator said.
The OPT worker said a seasoned supervisor who tried to get rid of lenient investigators was stopped by his boss. DOE contract officials even pressure investigators on behalf of the bus companies, he charged.
Making it worse, the number of bus investigators has dwindled from 12 to five since last summer, and each one struggles with more than 200 open cases at a time.
Kalladeen denied wrongdoing. “To my knowledge, no one was crying,” she said of the little girl.
In another disturbing case, attendant Patricia DiBenedetto was accused of throwing a boy off the bus before his regular stop — and later using a racial slur. “He’s a “troublemaking n—-r,” DiBenedetto told the kid’s mother when asked why her son was abandoned, records state.
The city Department of Education suspended DiBenedetto, but she kept her job.
DiBenedetto generated a dozen complaints for “obscene language.” Last May, she rang a school’s exit bell for 30 to 40 seconds — so long that administrators thought it was an emergency. The principal described DiBenedetto as “very aggressive and angry with the children.”
The Department of Education insisted all was done by the book. “All bus drivers involved in misconduct were appropriately disciplined,” a DOE rep said.
DCG

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California state payroll increased by $1 billion in 2017, twice as fast as previous year

Jerry Brown

California Gov. Jerry Brown is surrounded by unidentified SEIU workers after signing a bill creating the highest statewide minimum wage at $15 an hour by 2022 at the Ronald Reagan building in Los Angeles, Monday, April 4, 2016. (AP Photo/Damian Dovarganes)


No wonder the state wants half of the businesses’ tax-cut savings. Someone’s gotta fund the bureaucrats.
From Sacrament Bee: California’s state payroll – excluding its universities – grew by more than $1 billion last year, twice the rate of growth as the previous year, according to new figures from the State Controller’s Office.
The 6 percent growth rate was not unexpected. More than half of the state’s workforce voted on labor agreements early last year that included substantial pay raises. Money for the raises was included in the 2017-18 state budget.
The largest contract, for Service Employees Union Local 1000, included one-time bonuses of $2,500 for more than 95,000 state workers. That’s worth more than $235 million in total compensation for employees the union represents.
The California Department of Corrections and Rehabilitation saw payroll increase by $452 million, or 9 percent. The Department of Forestry and Fire Protection logged an $87 million, or 13 percent, increase in payroll as the state experienced a horrible wildfire season.
The Sacramento Bee’s state worker pay database has been updated with more than 250,000 civil service and California State University salaries for 2017. To search all state employee salaries, visit sacbee.com/statepay.
The number of state employees outside of universities earning more than $300,000 increased from 456 in 2016 to 709 in 2017, a rise of 56 percent. Those employees, however, still make up only a sliver of the state’s workforce.
Most of the highest-paid state workers outside of universities are doctors and dentists in the state prison system. The union for those doctors negotiated a pay hike of up to 24 percent over the next four years early last year. Prison health officials cited the difficulty of filling vacancies as a justification for the contract.
The highest-paid state worker outside of universities remains Ted Eliopoulos, chief investment officer of CalPERS. He earned about $867,000 last year, up from $768,000 in 2016.
CalPERS saw an 11.2 percent return on its investments in fiscal year 2017. That came as stock markets soared, with the S&P 500 increasing by 15.2 percent over the same period.
The state’s payroll fell during the recession a decade ago before stabilizing around 2012. It has risen since then.
Adjusted for inflation, California’s state payroll excluding universities was about 5 percent higher in 2017 than during 2008. The state’s population has grown about 9 percent over that period.
DCG

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Connecticut spiraling into financial despair

dannel malloy

Gov. Dannel Malloy (Demorat)


Odd how high taxes can lead to a financial crisis…
From Fox News: While Illinois Opens a New Window. Connecticut has been under the microscope for its $15 billion backlog of unpaid bills, multi-billion dollar pension crisis and paralyzing political polarization, it is not the only state facing pressure to pass a spending deal by June 30.
The nation’s wealthiest state, Connecticut, is also facing a series of challenges as it remains unable to strike a budget deal with the new fiscal year approaching on Saturday. It is likely the state will enter the new month without an approved two-year budget, but a so-called provisional “mini budget” is still on the table. This last-ditch option includes $300 million to balance out spending cuts the state would be prompted to make in order to keep up with the deepening deficit.
Revenue shortfalls in the state register around $450 million for the current fiscal year alone, while estimated deficit totals are projected to clock in near $5 billion for the 2018 and 2019 fiscal years combined, according to The Connecticut Business & Industry Association. Debt outstanding levels and unfunded pension liabilities relative to revenues are among the highest of any state in the country, Moody’s Investors Service said in May.
As previously reported by FOX Business, income-tax collections are projected to fall Opens a New Window. in fiscal year 2017 for the first time since the recession.
Connecticut’s financial despair comes despite the state government’s approval of one of its largest tax rate increases ever in 2015.
The three major rating firms have downgraded the state’s credit rating in response to the ongoing budget crisis. In its most recent downgrade, which landed Connecticut with the third-lowest rating out of every state behind only New Jersey and Illinois, Moody’s said “the downgrades reflect continuing erosion of Connecticut’s finances, evidenced by the pending elimination of its rainy day fund, growing budget gaps and rising debt levels.”
However, the situation could get worse still.
On Thursday, health insurance giant Aetna announced it would move its Hartford, Connecticut-based headquarters — after more than 150 years in the state — to New York City in late 2018. The company cited a lack of access to talent as one reason it was leaving its Connecticut base, and said Thursday its long-term commitment there will depend on the state’s “economic health.”
Earlier this year, General Electric (GE) announced a similar move, shipping its headquarters from Fairfield, Connecticut to Boston, Massachusetts.
DCG

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Seattle socialist council member Kshama Sawant wants to give city employees May Day off

sawant always screaming

Socialist Sawant…always screaming about something.


Of course, it’s a “right.”
Update: The day off was granted. From MyNorthwest.com:
Seattle Councilmember Kshama Sawant urged her peers to give city employees the option to take May Day off. They obliged Monday afternoon by unanimously voting to make it official.
From MyNorthwest.com: Seattle councilmember Kshama Sawant is urging her peers to give city employees the option to take May Day off.
On Monday afternoon, Sawant will introduce a resolution proclaiming that city workers have the “right to take the day off on May 1, 2017, without retaliation.” The resolution also asks that city departments inform non-emergency workers that they have the right to request the day off to attend the “celebrations.”
“I urge councilmembers to approve this May Day resolution, which explicitly recognizes the right of city workers to take the day off and provides protection to city workers who may otherwise worry about retaliation,” a statement from Sawant says. “May Day has historically been an important day of action for worker and immigrant rights. It’s especially significant this year, with immigrants, working people, labor unions, women, and the LGBTQ community under attack from Donald Trump. If Seattle is truly a Sanctuary City that supports immigrants and working people, then it should lead the way by enabling City employees to stand in solidarity with immigrants and all workers on May 1.
“Further, I call on everyone who opposes Trump’s bigoted, anti-worker agenda to participate in peaceful May Day activities, particularly the official May 1 Action Coalition march. Join our growing Resist Trump Coalition to actively organize and build the fightback against the billionaire class.”
Prior to a vote on the resolution, Sawant is calling for a rally at City Hall around 1:30 p.m. The resolution will be voted on during the 2 p.m. city council meeting.
Every year on May 1, a workers’ rights march is held in Seattle as part of International Workers’ Day. The march, attended by thousands, is typically peaceful. Other marches, unrelated to the workers’ march during the day, typically occur in the evening and into the night. Those have become known for antagonism, violence, and damage.
According to the Seattle Times, Sawant’s resolution notes that a state law gives public employees in Washington state the right to request two unpaid holidays per year for a reason of faith or conscience or an organized religious activity.
The law says an employee must be allowed to take off the days he or she wants unless the employee’s absence would impose an undue hardship on the employer, or the employee is necessary to maintain public safety.
DCG

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