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Peralta Community College District Trustees gave the unanimous go-ahead Tuesday to the construction of the Laney College New Art Building by a San Joaquin County modular building firm. Meanwhile, with consideration of the long-delayed proposed contract to developer Alan Dones for a Laney-Peralta development plan failing to make the trustee’s agenda, opponents came out to oppose the proposal anyway. 

Trustee ratification of Chancellor Elihu Harris’ $8.1 million Laney New Art Building no-bid contract with Lodi-based Meehleis Modular Builders had originally been on the Peralta board’s agenda two weeks ago, but was put off after concerns were raised by the Alameda County Building Trades Council over union-pay issues. 

The chancellor’s office returned with approvals of the contract from Alameda County Building Trades Council Secretary-Treasurer Bill Luboviski, Peralta Chief Financial Officer Tom Smith, Peralta General Counsel Thuy Thi Nguyen, and the college district’s bond attorneys. Trustee Cy Gulassa said that he had been prepared to vote against the contract when it was on the agenda two weeks ago, but was now satisfied. 

Concerns over the Meehleis contract had risen because the building’s modular parts will be constructed at the company’s Lodi plant and then assembled on-site at Laney, leaving local union leaders worried that the building would be constructed at below-union wage rates. But under questioning from Trustee Gulassa at Tuesday’s meeting, Meehleis Project Manager Mike Sinclair said that the company “will be paying local prevailing wages” at the Laney site, where two-thirds of the work will be done. The prevailing wage in the Bay Area is union scale. Sinclair said that the fabrication work in Lodi is not covered by prevailing wage. 

Chancellor Harris said that while the trades council “still has general concerns about the modular industry in California and its effect on union wages,” he reported that Luboviski “has signed off on this project.” 

General Counsel Nguyen also said she was satisfied of the legality of what appeared to be a contradiction in the classification of the construction materials. 

The Meehleis contract was signed by Harris using the so-called “piggyback” clause of the State Public Contract Code, which allows one education district to ride—without a new bid—on an old properly-bidded contract already signed by another school district. Because the “piggyback” clause is restricted to the purchase of moveable property (called “personal property” in the law), districts have been classifying modular buildings as moveable “personal” property at the time they are purchased at the construction factories in order to qualify them under this clause. 

However, $1 million of the Laney New Art Building is being paid for with Measure E bond money, which is restricted to real (rather than “personal”) property. (The remaining $7 million is scheduled to be paid by CalTrans, which had forced the construction of the New Art Building because it needed the land currently being occupied by Laney’s present Art Annex.) In order to qualify for both “piggyback” contract money and Measure E money, Peralta was classifying the modular building in two seemingly legally-opposed ways. 

Peralta General Counsel Nguyen released a letter to trustees from Peralta bond counsel Charles F. Adams of Jones Hall attorneys, stating that “bond proceeds may be spent to acquire and install modular school facilities due to the fact that once these facilities are bolted to permanent foundations and are connected to utilities, they become ‘fixtures’ under California law, and, as such, may be treated as real property. We have always recognized that at the moment in time when modular school facilities are purchased, however, they have not yet been affixed to real property and therefore constitute personal property until they are affixed. … we believe it is entirely consistent—and certainly not inconsistent—for the District to treat the modular school facilities as personal property at the point in time when they are purchased, but for us to regard them as real property for the purposes of the constitutional restriction on spending Bond proceeds.” 

Adams said in his letter that the prefabricated parts of modular buildings should be treated no differently from any other type of building materials, including lumber and nails. Following the meeting, General Counsel Nguyen said she had reached the same conclusion prior to submitting her query to the bond counsels. 

Chief Financial Officer Smith said the Meehleis contract was “in the best financial interest of the district,” and called Ikharo’s use of the “piggyback” clause “a pretty neat trick.” 

Earlier on Tuesday, Laney College held a kick-off celebration for the Art Annex Construction, which is being built on land formerly occupied by the college’s tennis courts, and which will border the channel running between Lake Merritt and the estuary. 

Representatives of the District Academic Senate and the Laney College Faculty Senate spoke to trustees on the subject. Karolyn Van Putten, the Laney College representative on the District Academic Senate, said “we knew the contract was not on the agenda, but we felt so strongly about this that we wanted to attend anyway.” 

Outgoing Peralta trustees authorized Chancellor Harris last November to enter into a one-year contract with Dones and his Oakland based Strategic Urban Development Alliance to come up with a development plan for the Peralta Administration Building and certain Laney College properties. Harris indicated to district leaders that he was going to put the item on Tuesday’s agenda. 

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