Branstad to Corbett: Letter warns of I-JOBS grant loss

Gov. Terry Branstad and Mayor Ron Corbett were still disagreeing Tuesday over the project labor agreement that the Cedar Rapids City Council has put in place for its $76.5-million Convention Complex project.

Only now, Branstad has put his administration's position in the form of a written threat.

In a letter to Mayor Corbett, the Iowa Finance Authority's general counsel Mark Thompson states that the city of Cedar Rapids is in jeopardy of losing its $15 million in state I-JOBS funds for the Convention Complex project if the city persists with its project labor agreement as the city prepares to seek bids on construction contracts for which the labor agreement applies.

In response, Corbett argued again Tuesday that the city's labor agreement went into effect on Dec. 14, a month before Branstad issued Executive Order 69, which prohibits the use of state funds on public works projects using project labor agreements.

However, in his letter to Corbett, Thompson states that Executive Order 69 is in full effect on projects “for which a construction contract had not been entered into” before Jan. 14. Thompson adds that the governor's office has informed the authority that Executive Order 69 should apply to the Cedar Rapids Convention Complex project.

Thompson then quotes the I-JOBS agreement with the city, which states that the city agrees to comply with all laws, “rules, ordinances, regulations and orders when performing within the scope of this agreement.”

He continues, saying that the authority may declare the city to be in default of its agreement if the city uses a project labor agreement on the Convention Complex. The authority, he says, can terminate the grant agreement and order the return of any disbursed funds plus interest.

To date, the city has received $750,000 of its $15-million I-JOBS grant, though Mayor Corbett noted on Tuesday that the city already has filed disbursement requests for more than half of the money.

Last night, the mayor reported that he stopped in the governor's office on Tuesday after speaking to Iowa lawmakers about the city's proposal to use some state sales tax money to help build a $375-million flood protection system for the city. The mayor said he visited with the governor's chief of staff, Jeff Boeyink, but only heard in person what the letter to him earlier had said about project labor agreements.

Corbett said again that he's willing to honor the governor's order for city building projects like the new library and new central fire station that are not as far along as the Convention Complex project. But he said he doesn't want to go back on the labor agreement that the council already has put in place on the Convention Complex.

For now, the mayor said he will wait and see what the Iowa Attorney General's Office might say about the dispute.

At the request of the Cedar Rapids/Iowa City Building & Construction Trades Council, state Sen. Rob Hogg, D-Cedar Rapids, has asked for a legal opinion from the Iowa Attorney General's Office on the dispute between the governor and the mayor on the Convention Complex project.

Geoff Greenwood, spokesman for Attorney General Tom Miller, said on Tuesday that the office is reviewing Hogg's request.

Corbett, as part of a Cedar Rapids City Council majority, put the project labor agreement in place in hopes of guaranteeing that local workers do much of the work on the Convention Complex project. Opponents of such agreements - Branstad's predecessor, Gov. Chet Culver, encouraged them - say they drive project costs up and keep some contractors from bidding on projects.