Governor Terry Branstad and Cedar Rapids officials have made no progress toward resolving a dispute that could derail $15 million in funding for the city’s Convention Complex project. Branstad administration officials continue to insist that Cedar Rapids set aside a project labor agreement signed in December, because it conflicts with Branstad’s Executive Order 69.
Follow me after the jump for recent news on this story, including comments this week from Iowa Attorney General Tom Miller.
This conflict arose in February, when the Iowa Finance Authority notified Cedar Rapids Mayor Ron Corbett that sticking with the project labor agreement for the Convention Complex would prompt the state to withhold $15 million in funding from the I-JOBS infrastructure bonding initiative. This month, Corbett tried to work out a compromise with Branstad’s office. One option would allocate the $15 million to cover convention project costs “not related to construction contracts tied to the project labor agreement.” The other idea was for Cedar Rapids to “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.” City officials could then use money allocated toward those projects to the Convention Complex. Corbett was not able to bring Branstad on board with either proposal, despite help from Republican State Representative Renee Schulte. (Schulte endorsed Branstad in the GOP gubernatorial primary and represents Iowa House district 37, covering part of Cedar Rapids.) Speaking to Rick Smith this week, Corbett indicated that forgoing the $15-million I-JOBS grant was not on the table.
Three Democratic state legislators, Representative Todd Taylor and Senators Rob Hogg and Bob Dvorsky, asked Attorney General Miller last month to give his opinion on the dispute. Miller wrote back to the lawmakers this week, saying that Cedar Rapids has “stronger legal arguments”:
Miller, though, said his comments stop short of a legal opinion because it is not appropriate for his office to issue opinions in a matter in which litigation is pending. […]
In his letter to Rep. Taylor, Miller notes that the Iowa Supreme Court has upheld project labor agreements that do not discriminate between union and non-union workers.
In addition, Miller notes that the Convention Complex project is receiving $35 million in federal help, adding that federal projects are subject to a presidential executive order that he says specifically authorizes the uses of project labor agreements.
“Courts expect government to live up to its contractual obligations,” Miller states. “The Governor should resolve the dispute with the City, or live up to the State’s grant agreement and allow the city to live up to the project labor agreement.”
It’s not clear what litigation is “pending” in this conflict. No entity has filed a lawsuit yet. Rick Smith reported on March 22,
The city’s project labor agreement is with the Cedar Rapids and Iowa City Building and Construction Trades Council, and Scott Smith, president of the group, on Tuesday stopped short of saying his organization would go to court to stop the governor from withholding state funds from the city’s Convention Complex because of the project labor agreement. […]
“No governor has the right to nullify existing agreements,” Smith said, adding that Attorney General Miller’s comments on Tuesday said as much. “Allowing a governor to throw out legally binding contracts would set a dangerous precedent for Iowans of all political persuasions.”
The city of Cedar Rapids could file suit if the state won’t release I-JOBS funds awarded last year. However, even if a court eventually orders the state to hand over the $15 million, litigation would delay a major part of the city’s downtown redevelopment plan. Corbett has more to lose than Branstad no matter how a court case plays out.
Branstad’s spokesman Tim Albrecht indicated yesterday that potential litigation won’t change the governor’s position: “The bottom line is, the attorney general has declined to issue any opinion on this matter […] The governor’s office remains committed to ensuring the enforcement of Executive Order 69 moving forward and is confident it will withstand any legal challenges.”
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UPDATE: Todd Dorman posted the full text of Miller’s letter to Democratic legislators here. Regarding Miller’s decision to “punt” rather than issue a formal opinion, Dorman writes,
I think what we have is a significant question of whether the governor’s order is consistent with his authority and can be enforced in this situation. That seems like a “dispute between two governmental entities” that Miller could help settle.
But that’s not going to happen. Branstad wouldn’t have listened to Miller, anyway, but a formal opinion would have given us another significant piece of the puzzle.