Labor unions, historically a powerful interest group at Sacramento City Hall, are suddenly at a crossroads.

Labor's steadiest ally on the City Council, Councilwoman Sandy Sheedy, said Monday she is stepping down. Harry Rotz, the most influential leader in local labor – and perhaps city politics – just retired.

Finally, a June ballot measure seeks to bar the city from entering into agreements ensuring union labor will be used on publicly funded construction projects.

All of this is happening as city officials demand employees contribute more toward their pensions, a common theme playing out in cash-strapped locales across the state and country.

"Labor has been under attack for the last several years," said Sacramento public relations consultant Doug Elmets. "They're never to be underestimated, but given the current economic environment, both locally and nationally, they're being forced to come up with a new paradigm to succeed."

At City Hall, labor lost a key friend Monday when three-term Councilwoman Sheedy announced she would not seek re-election in June. Sheedy, 68, said she was stepping down to spend more time with her family. She was facing a campaign against four challengers.

Bill Camp, the head of the Sacramento Central Labor Council, called Sheedy's departure "a huge loss for the city of Sacramento."

Also stepping down from the council this year is Rob Fong, who generally has been supported by unions during his time at City Hall. The departure of Fong and Sheedy could leave as few as two council members on the dais – Kevin McCarty and Bonnie Pannell – who are seen by the city's non-public safety unions as staunch allies.

In contrast, the city's police and fire unions count other supporters on the council, including Mayor Kevin Johnson.

Still, Sheedy said she wasn't concerned about the future of labor at City Hall.

"They're big boys; they're going to figure it out," she said. "They have a celebrated and honorable cause."

Sheedy's announcement follows the retirement of Rotz earlier this month as the business manager of Plumbers and Pipefitters Local 447, the most politically active union at City Hall. While it's unclear whether Rotz will step away completely from the union's political activities, his retirement raises questions about whether the plumbers will remain a force.

Under Rotz's watch, the plumbers union has donated more than $800,000 to local campaigns in the past four years, records show. According to Sheedy, "Harry and his family have always been among the most influential people" at City Hall.

Rotz, who never speaks with the media and declined a request to comment for this article, regularly made his presence known during City Hall campaigns with independent expenditure mailings supporting pro-labor candidates and causes.

This spring, labor will be under pressure to fight back against a measure that likely will be on the June ballot. That measure, sponsored by a group called Fair and Open Competition Sacramento, seeks to outlaw project labor agreements, making it easier for nonunion firms to win contracts on taxpayer-funded projects, such as the planned Kings arena downtown.

Eric Christen, an anti-union activist leading the campaign, said his group filed nearly 50,000 signatures from city voters supporting the measure with the City Clerk's office last month. That is well above the required 32,000 signatures needed to place the proposal on the ballot.

County elections officials are validating the signatures, and a decision on the measure's future is expected this week.

"With the economy the way it is, (taxpayer-funded projects) should be available to all workers," Christen said.

Phil Giarrizzo, a Sacramento political consultant and former union leader, said such measures are "unnecessary political fights." He said business interests should concentrate more on investing in development projects. When it comes to the arena, "they're throwing a hand grenade by launching this kind of assault."

"People are trying to take advantage of the economic climate to kick labor unions," said Giarrizzo, who is running the City Council campaign of developer Allen Warren, one of the candidates seeking to replace Sheedy.

With the deadline for candidates to enter local campaigns just six weeks away, labor groups will now refocus on Sheedy's race. In addition to Warren, other candidates seeking to represent the North Sacramento district include Sondra Betancourt, president of the Ben Ali Community Association; former Councilman Rob Kerth; and Kim Mack, who ran President Barack Obama's local campaign in 2008.

Camp said his organization will re-examine the candidate pool now that Sheedy has exited the race. Sheedy said she has urged labor groups to seek prospects from the Latino community, describing the other candidates as "very weak."

Camp said the pressure being applied to the local labor movement isn't surprising.

"I think people still see the labor movement as a valuable voice," he said. "We're speaking up for the middle-class families of our region and as a result, some people don't like it when we speak up."

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