Greg Enholm's Statement on Project Labor Agreements

By Greg Enholm

Greg Enholm presented his position on Project Labor Agreements to the October 25, 2006 meeting of the Contra Costa Community College District Governing Board.

Greg Enholm, Candidate, Contra Costa Community College District Governing Board, Ward 3.

Good Evening.

I am Greg Enholm, a candidate for Contra Costa Community College District Governing Board, Ward 3. I have lived in Contra Costa County for 14 years. I hold a bachelor's degree in business and a master's degree in economics. I worked as a financial analyst for 20 years prior to taking early retirement to become a high school math teacher 8 years ago.

I am here this evening to comment on Item 32-C "Resolution to Negotiate a Project Labor Agreement (PLA)." I support passage of this resolution.

As a financial analyst, I understand risk. Project Labor Agreements, if properly negotiated, can both reduce risk for the College District and for the community as a whole. Risk is often misunderstood even though it is a relatively straightforward financial concept. Risk is having an outcome different that you expect. For instance, when most people buy a house, they pay more than the purchase price voluntarily in the form of homeowner's insurance. Why? Because they do not want the financial consequences if the house, for instance, is destroyed in a fire. Do people expect their homes to be burned in a fire? No but they understand the risk of such a fire and want to protect themselves from that outcome.

Now, what about the College District? What if in 2001, the College District could have purchase insurance to protect the District against a complete financial loss of their investment in the Regional Training Institute? In retrospect, how much should the Board have been willing to pay to have a full recovery of their RTI investment if the RTI failed, which it did (see Contra Costa Times editorial on reverse)? One hundred thousand dollars? Five hundred thousand dollars? Clearly, if that insurance had been available, purchasing it would have been a smart financial decision.

What makes a PLA attractive to the Board? Risk reduction. Eliminating outcomes you do not want to occur. I strongly urge the Board to look at PLAs as a way to avoid the kind of financial disaster which occurred with the RTI. You are entrusted by the public to spend the public's money wisely which, sadly, did not occur with RTI. Properly-negotiated PLAs will clearly reduce risk regarding the $286 million of publicly-approved bond funds to be spent on construction of District facilities.

I mentioned earlier that a properly-negotiated PLA will reduce risk for the community as well. Clearly, the community suffers losses just as individuals do when houses burn down or RTI-like investments become total losses. Small changes in decision-making such as fire codes or better financial forecasting could significantly reduce those losses. Wasting public funds on unnecessary construction delays is a risk for the community because unused work effort from any unnecessary delay is lost forever.

Also, I recommend that any PLA negotiated by the District require the use of local labor rather than encouraging hiring workers from distant areas or even from out of state. Local workers spend their money locally, often investing in homes, and founding or expanding local businesses. That activity is good for the community and for the tax base of the District.

For risk reduction, as well as other reasons, I urge the Board to approve the resolution to negotiate a Project Labor Agreement (PLA).

Thank you.