Peter Tateishi, CEO of Associated General Contractors of California is urging state politicians to vote no on a senate bill with language that would require the University of California to place all construction funds into an escrow-like account with the state controller until the system and an unnamed "third party" can certify that approved union members are being hired for all service work, such as landscaping, custodial and food service, at all UC facilities.

“If adopted, such a proposal would undoubtedly impede the UC's ability to finance and deliver critical capital projects such as medical/hospital facilities, student housing and seismic renovation projects,” wrote Tateishi in a June 24 letter to California Senators Nancy Skinner and John Laird, as well as to Assembly members Phil Ting and Kevin McCarty. 

At issue is Section 67 of SB 132, a higher education bill that is part of the Budget Act of 2021. The bill, including Section 67, is currently making its way through the California Senate and was taken up at a July 7 meeting of the State Assembly Budget Committee. 

UC’s capital financial plan for construction projects runs from 2020-26 and represents $56 billion of capital need spread across its various campuses, health centers and other units over the next five fiscal years. Section 67 of SB 132 would impact the entire $56 billion in projects under the plan, says Ryan King, spokesperson for UC's office of the president. 

In addition to AGC of California, the California State Building & Construction Trades Council and San Francisco Building Trades Council oppose Section 67. 

“Section 67 would seriously harm the UC's ability to finance much-needed construction projects, such as life-safety improvements, medical/hospital facility upgrades, and student housing,” wrote the San Francisco council in a recent news bulletin. “It would put more construction workers out of work at a time when we most need the job site opportunities provided by the UC at its many campuses, medical centers and national research labs.”

In support of Section 67 is the American Federation of State, County and Municipal Employees (AFSCME) Local 3299, the University of California’s largest employee union, representing more than 27,000 service workers. According to the budget committee website, the union says the proposed language in Section 67 “comes after six years of University of California efforts to continue outsourcing service jobs despite prior legislative actions” and despite previous agreements, the “university has nonetheless continued to outsource thousands of custodial, food service, grounds keeping, sterile processing, medical assistant and other jobs.”

King says deep concerns remain within the UC system rover the proposed language. 

“If enacted, this language in section 67 of SB 132 would put on hold current construction projects at our locations, putting nearly $7.8 billion in crucial economic activity on hold as the state continues to recover from the COVID-induced recession,” he says.

UC already certifies that it is not hiring outside contractors for service work (pursuant to SB 820, a bill passed in September 2020) in compliance with the law and remains committed to insource contracted work. 

“As currently drafted, Section 67 would undercut UC’s ability to secure reputable contractors, increase our costs to borrow and hamstring California’s recovering economy by delaying $7.8 billion in construction projects underway,” says King. 

SB 132 and Section 67 are unlikely to be taken up again until August, after the month-long summer break

AFSCME Local 3299 could not be reached for this story.