Tag Archive for City of Vista v. State Building Trades Council

Simple List of Official Documents Relevant to July 30 San Diego City Council Vote to Require State Prevailing Wage on City Contracts

Tomorrow afternoon (July 30, 2013), the San Diego City Council is scheduled to vote on a proposal from Mayor Bob Filner to abandon its own policy concerning government-mandated wage rates on city construction contracts and adopt union-backed state laws.

Here’s a collection of relevant documents.

Provided to the San Diego City Council from the Office of Mayor Bob Filner

May 8, 2013 memo from San Diego Mayor Bob Filner calling on the city council to impose state prevailing wage on city contracts

July 16, 2013 Report to the City Council from the Office of Mayor Bob Filner, coauthored by Jennifer Badgley, Office of the Mayor, Director of Special Projects and Labor Affairs, formerly Organizer/Political Director for International Brotherhood of Electrical Workers (IBEW) Local Union No. 569 in San Diego

July 22, 2013 request from San Diego Mayor Bob Filner to put the proposed prevailing wage ordinance on the city council meeting agenda for final approval

The ordinance proposed by Mayor Bob Filner imposing on the City of San Diego a requirement for contractors to pay state prevailing wage rates on city construction contracts

Provided by the City of San Diego Office of the Independent Budget Analyst

June 18, 2013 report from the Office of the City of San Diego Independent Budget Analyst “Review of Proposal to Require Compliance with the State’s Prevailing Wage Laws on all City Public Works Projects”

…the CIP Budget includes 190 construction contracts totaling $331 million anticipated to be awarded in FY 2014. About 21% or 16 of these contracts, totaling about $70 million, require payment of prevailing wages since they are funded with State or federal monies. If prevailing wages are required to be paid on the remaining $261 million construction contracts, a 5% or 10% increase would increase total costs by $13 million or $26 million respectively. Given tight financial constraints and competing budget priorities, this would likely reduce the number of capital projects that the city can implement.

July 26, 2013 report from the Office of the City of San Diego Independent Budget Analyst: “Key Issues Related to Requiring Payment of Prevailing Wages on all City Public Works Projects”

…our best judgment is that prevailing wages will increase total project costs for the City. The potential for increased total project costs is particularly important in light of the high priority the Council has assigned to addressing the City’s infrastructure challenges, including a backlog in deferred capital for buildings/facilities, streets, and storm drains currently estimated at $898 million.

Provided by the City Attorney for the City of San Diego

June 17, 2013 memo from City Attorney of San Diego noting that “The California Supreme Court also recently reaffirmed that charter cities like San Diego do not have to pay prevailing wages” and explaining various legal questions about Mayor Bob Filner’s proposed ordinance

Provided by Other Agencies of the City of San Diego

Chart #1 FY 2013 City of San Diego construction projects with and without state prevailing wage mandate

Chart #2 of recent City of San Diego construction projects with and without state prevailing wage mandate

June 20, 2013 Construction Industry Quarterly Meeting of City of San Diego Public Works Department where prevailing wage proposal was reportedly discussed. It included a presentation by Murtaza Baxamusa, City of San Diego, Office of the Mayor, Special Advisor for Public Policy, formerly with the San Diego County Building Trades Family Housing Corporation and the union-oriented Center on Policy Initiatives

Documents That Should Have Been Officially Provided to the San Diego City Council

Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions? – 92-page guidebook to status of prevailing wage policies in California’s 121 charter cities

State Building and Construction Trades Council of California, AFL-CIO v. City of Vista et al. – California Supreme Court decision of July 2, 2012 upholding constitutional right of charter cities to establish their own policies concerning government-mandated wage rates for municipal construction contracts

Union Operatives Infiltrate Office of San Diego Mayor Bob Filner to Push Costly and Burdensome Prevailing Wage Mandate for City Contracts

As of today, San Diego Mayor Bob Filner says he will remain in office despite women accusing him of sexual harassment. For the mayor, this is the most damaging of several recent scandals that include a mysterious trip to Paris, a generous complimentary refurbishing of the mayor’s office reception area, and alleged demands for payments in exchange for project approval.

While some of Mayor Filner’s staff have resigned in recent weeks, other people are coming into his administration to fill the power vacuum. And who better to become entrenched in this scandal-ridden administration than union officials?

Jennifer Badgley, Director of Special Projects and Labor Affairs

Apparently the mayor has brought on a former (or current) professional organizer and political director of San Diego’s International Brotherhood of Electrical Workers (IBEW) Local Union No. 569. Jennifer Badgley has recently become the “Director of Special Projects and Labor Affairs” for Mayor Filner, according to her Linked In profile.

Jennifer Badgley – San Diego Mayor’s Office and IBEW Local Union No. 569

According to a lobbying report filed by the IBEW Local 569, Badgley had lobbied Mayor Filner and staff on a few issues during the second quarter of 2013 (April 1 to June 30), including “good green local jobs and career pathways for local workers,” Community Choice Aggregation, and “responsible construction and development,” including on the San Diego Convention Center Expansion. She also “sat in with business” concerning a “potential San Diego energy project.”

She arrived just in time! A vote at the San Diego City Council is scheduled on July 30, 2013 to adopt a union-backed ordinance proposed by Mayor Filner to require construction companies with city contracts to pay wage rates (“prevailing wages”) set by the State of California. Since 1980, the City of San Diego has exercised its authority as a charter city to issue contracts for most purely municipal projects without state-mandated wage rates, as a result saving money for taxpayers. Filner’s proposal would submit the City of San Diego to state law regarding wage rates on public works projects.

Circumstances have now allowed the mayor’s Director of Special Projects and Labor Affairs to be the coauthor of a July 16, 2013 propaganda memo to the San Diego City Council arguing why city taxpayers should pay more for construction and why the city bureaucracy should be entangled in $250,000 worth of monitoring and enforcement of cumbersome unfunded state mandates per $100 million spent on construction. Some of the highlights of this memo:

  • It disparages the city’s Office of the Independent Budget Analyst, which issued a Review of Proposal to Require Compliance with the State’s Prevailing Wage Laws on All City Public Works Projects. The review estimated a cost increase of 5 to 10 percent on projects and noted “the likely trade off in the form of higher capital project costs and the resulting impact to infrastructure programs which are a high priority for the City.”
  • It claims that the state exempts volunteers from prevailing wage requirements, but doesn’t note that the exemption has an expiration date and that certain unions have objected to this exemption.
  • It cites and provides text of the 2010 Azusa Land Partners v. Department of Industrial Relations California appellate court decision that expanded prevailing wage to certain private housing developments, but it doesn’t mention the much more relevant 2012 California Supreme Court decision in State Building & Construction Trades Council of California v. City of Vista. Unions lost this case badly when the California Supreme Court upheld the right of charter cities to establish their own policies concerning government-mandated wage rates for purely municipal contracts.
  • It reports that “staff presented this proposal to construction industry stakeholders at their quarterly meeting on June 20, 2013,” apparently through a presentation by Murtaza Baxamusa, City of San Diego, Office of the Mayor, Special Advisor for Public Policy. (See more about Baxamusa below.) The association representatives at the meeting were reportedly delighted about the proposal; of course, the groups listed as attending the meeting represent and provide contract negotiation and administration services to companies that choose to be bound under the requirements of union collective bargaining agreements. They have a financial interest in government increasing project costs.

Such an rigid approach to public policy as reflected in Badgley’s memo is consistent with her history of advancing the union agenda. In the summer of 2009, at a time when 20% of IBEW Local 569 members were unemployed, Badgley expressed pride in what she identified as her greatest accomplishment: derailing the plan of Gaylord Entertainment to build a $1.2 billion hotel and convention center in Chula Vista because the company wouldn’t sign a Project Labor Agreement guaranteeing 100% of the construction trade work to unions. A July 6, 2009 profile on the now-defunct San Diego News Network web site reported her perspective as part of an interview to reveal her “journey” as she sought to “create broader social change.”

Badgley is or was married to Tefere Gebre, the executive director of the Orange County Labor Federation, AFL-CIO, who is expected to become the next Executive Vice President of the national AFL-CIO. In 2012 he proclaimed The Truth About the Right-Wing’s Latest Scheme to Punish Workers in Costa Mesa, and in 2009 he decried “The assault on Orange County by Colorado-based zealot Eric Christensen (sic) and Supervisor John Moorlach.” Gebre caused a stir in August 2007 when he sent Eric Christen of the Coalition for Fair Employment in Construction a bizarre email claiming that he saw Christen “on TV as a gay whitehouse corspondent.” (sic)

Murtaza Baxamusa, Special Advisor for Public Policy

Murtaza Baxamusa used to churn out policy reports for the union-backed Center on Policy Initiatives in San Diego. He was a founder of the phony Middle Class Taxpayers Association, which advocates for union-backed initiatives that increase costs to taxpayers. In 2011 he was hired as Director of Planning and Development for the San Diego County Building Trades Council Family Housing Corporation. The San Diego County Building Trades Family Housing Corporation contributed $85,000 to the November 2012 campaign to pass Proposition Z, a $2.8 billion bond measure with a Project Labor Agreement for the San Diego Unified School District. It’s unclear if Baxamusa is still employed at the union housing corporation.

Mayor Bob Filner’s Support for the Union Political Agenda

Bob Filner, the Mayor of the City of San Diego, has long supported the political agenda of construction trade unions. Eric Christen of the Coalition for Fair Employment in Construction wrote in an opinion piece in Voice of San Diego on July 20, 2007 that Filner had “an almost canine affection for doing the unions’ bidding.”

In 1999, then-Congressman Filner recognized Art Lujan of the San Diego-Imperial Counties Labor Council, AFL-CIO for his leadership in the San Diego labor movement. He noted that “Art successfully secured a Project Labor Agreement with the County Water Authority resulting in over $700 million in construction projects throughout the next eight years.” This was the first government-mandated Project Labor Agreement in San Diego County.

As a member of Congress in 2007, Filner blamed Chula Vista Mayor Cheryl Cox for the decision of Gaylord Entertainment to withdraw its proposal to build a $1.2 billion hotel and conference center on the Chula Vista Bayfront. Unions were threatening to block the project with environmental objections unless the company signed a Project Labor Agreement to build the project. Filner apparently felt that Cox should have pressured Gaylord to give the unions what they wanted.

A letter to the editor in the July 15, 2007 San Diego Union-Tribune explained Filner’s political attack:

So now the finger-pointing begins. And the show is being led by Rep. Bob Filner, who demonstrated political grandstanding at its finest by swooping in to defend the unions. How much has he been involved in this process before now? And without demonstrating any personal effort in advancing the project, how does he justify a self-appointed role as the arbiter of who did what wrong?

In 2010, Filner wrote a letter on Congressional stationery (in apparent violation of U.S. House of Representatives ethics rules) to the Chula Vista Chamber of Commerce telling them to oppose Proposition G. Prop G was a “fair and open competition” ballot measure to enact an ordinance prohibiting the City of Chula Vista from entering into contracts that required construction companies to sign a Project Labor Agreement as a condition of work. Filner claimed that it would be a “fool’s errand” to obtain federal funding for the City of Chula Vista if voters approved Proposition G. On June 6, 2010, 56% of Chula Vista voters supported Proposition G, and Filner subsequently played the fool and continued to send federal money there.

Of course Filner supported the Project Labor Agreement that the board of the San Diego Unified School District imposed on $4.9 billion in construction (not including state matching grants) approved by voters as Proposition S in 2008 and the subsequent Proposition Z in 2012. And citing arguments from the International Brotherhood of Electrical Workers (IBEW), he wrote letters to the U.S. Department of Energy in 2009 and 2010 opposing Sempra Energy’s construction of an electricity transmission line between Mexico and San Diego County.

And notably, he recognized Murtaza Baxamura in 2012 in the Congressional Record. Now Baxamura is on his staff, pushing for government-mandated construction wage rates.

Bakersfield Becomes Latest of California’s 121 Charter Cities to Free Itself from Government-Mandated Construction Wage Rates (So-Called “Prevailing Wage”)

As I anticipated in my July 2, 2012 article Prediction: An Explosion of California Cities Freeing Themselves from Costly State-Mandated Construction Wage Rate Laws, the past three months have seen a flood of California cities seeking voter approval for charters, as well as existing charter cities establishing their own policies concerning government-mandated construction wage rates (so-called “prevailing wages”) for purely municipal construction (or private projects that receive government assistance only from the city).

These recent www.CalWatchdogs.com articles summarize what’s happening in California: Push for Charter Cities Enrages Unions and Cities Vying for Local Control on November Ballot.

Through its July 2012 decision in State Building and Construction Trades Council of California, ALF-CIO v. City of Vista, the California Supreme Court affirmed the right of California’s 121 charter cities to set their own prevailing wage policies for municipal construction and thereby free themselves from the costly, complicated, and nonsensical way that the State of California calculates state-mandated construction wage rates and defines public works.

For comprehensive information, see the 92-page guidebook Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions?

Bakersfield is the latest charter city to establish its own policy concerning government-mandated construction wage rates. Hoping to sustain its economic boom and resist union-backed public policies dragging down economic growth and job creation in the state and other cities, the Bakersfield City Council voted 4-2 (with one city council member recusing himself) on October 17, 2012 to set its own policy. Here is the city’s agenda item description: Resolution exempting the City from prevailing wage requirements for locally funded public works contracts except where required by law.

Here’s a July 17, 2009 video report on KBAK Channel 29 (CBS) news featuring a comment from me about the need for the City of Bakersfield to free itself from state-mandated construction wage rates set based on collective bargaining agreements for urban areas: Prevailing Wage Wastes Tax Dollars in Bakersfield.

It was reported to me that unions brought busloads of people from Los Angeles to pack the council chamber, but the city council majority was not fooled and not intimidated. Here’s news coverage, with excerpts (bold highlights are mine):

Council Shakes Off Prevailing Wage Requirement – Bakersfield Californian – October 17, 2012

City staff also informally surveyed local contractors and were told that without the prevailing wage requirement, project costs could be cut by 3.5 percent to 30 percent

But just as many people spoke in favor of the resolution as against it, saying it would result in more efficient use of taxpayer money and wouldn’t lead to unfair construction wages or lower quality in projects.

“As a city council member, I have a fiduciary responsibility to taxpayers and the community to utilize funds with care and strive to provide the best value possible,” Weir said in an email earlier Wednesday. “With the approval of tonight’s resolution, we will be able to build better parks with more amenities, increase the amount of street repaving, and provide other benefits without additional cost to the taxpayers. To not pursue this opportunity would be a breach of my responsibility.”

Councilmembers added a late amendment to the resolution as a step to better protect against unqualified contractors bidding for city work. Before the resolution passed, projects valued at $1 million or more required that contractors be “pre-qualified” for their suitability to do the type of project at hand before being allowed to submit a bid. With the resolution, that threshold was lowered to $250,000.

Contractors, Unions Object to City Prevailing Wage Proposal – Bakersfield Californian –  October 16, 2012

City Manager Alan Tandy said savings for the city means more work can be done. Taking an example of 20 percent savings, he said, “If we save 20 percent on resurfacing a street, we can resurface 20 percent more streets. We have more that need resurfacing than we have money to resurface.”

Council Members Tackle High Speed Rail, Prevailing Wages in Heated Debate – KGET Channel 17 (NBC) news – October 18, 2012

Congratulations to the Bakersfield City Council. Under pressure and threats, they refused to payoff the unionsCalifornia Political News and Views – October 19, 2012

Will This Charter City Movement Lead to Genuine (or Any?) Prevailing Wage Reform?

Perhaps union officials in Bakersfield are realizing that “prevailing wage” as calculated under state law and “public works” as defined under state law are so outrageous that cities are intent on escaping them. Bakersfield’s own Assemblywoman Shannon Grove introduced two thoughtful and reasonable prevailing wage reform bills (Assembly Bill 987 and Assembly Bill 988) to make state-mandated government wage rates only apply to legitimate government projects and be more reflective of actual local market rates, but union lobbyists opposed these bills and Democrats defeated them in committee in January 2012.

In fact, as I reported in my April 20, 2012 article State-Mandated Construction Wage Rate Requirements Remain on California Projects Worth $1001 to $2000, union lobbyists and Legislative Democrats wouldn’t even support Assemblywoman Grove’s Assembly Bill 1958, which made two very modest changes to the state’s prevailing wage laws. That bill increased the project cost threshold for coverage from $1000 to $2000 to match the $2000 threshold set by the federal prevailing wage law called the Davis-Bacon Act. It also indexed the threshold to the same measure of inflation that the Democrats want to use for indexing the state minimum wage.

There WILL be a day when unions no longer control the California State Legislature and the Governor’s office. In the meantime, charter cities are exercising their own right to determine their economic destiny, and many of them don’t want to follow the direction of the State of California to inevitable bankruptcy.

Project Underway to Create a Cutting-Edge Model Charter for California Cities to Free Their Municipal Affairs from the State Legislature – YOU Can Help!

For more than a year, I’ve talked and written about developing a model charter that city councils and appointed charter commissions in California’s general law cities can use as a basis to develop their own proposed charters to bring before voters for consideration.

A model charter would also help city councils and appointed charter commissions in 121 California cities to amend and freshen their existing charters. (Note: voters in three more cities – Escondido, Costa Mesa, and Grover Beach – will consider enacting proposed charters in the November 6, 2012 election; there may be 124 charter cities in California at the end of 2012.)

Generally, the dozen cities that brought charters before their voters in the past six years obtained existing charters from other cities and tweaked them a little. City council members and staff have not started from scratch in developing their proposed charters, perhaps to avoid the political and legal risks of trying new concepts, and perhaps in part because developing a constitution from scratch is a time-consuming intellectual exercise better suited to James Madison or modern policy institutes.

Significant and recent developments in proposed city charters in California have been related to explicit provisions concerning the establishment of policies for government-mandated construction wage rates (so-called “prevailing wages”), prohibitions on requiring contractors to sign Project Labor Agreements with unions, and requirements for unions to get permission from city employees to deduct money from their paychecks to use for political purposes. In addition, some charters have contained provisions meant to prevent the kind of corruption among city council members and city staff that occurred in the City of Bell in the late 2000s.

As I wrote in the Auburn Journal newspaper on September 26, 2011, cities in California need to consider asking voters to enact a charter that would be “a searing and unprecedented manifesto in support of fair and open competition, free enterprise, economic growth and job creation.” A charter needs to give a city full control of its municipal affairs, so it can implement “lower taxes, reasonable regulation, fiscal responsibility, limited government, local control and more freedom from corrupt urban legislators.”

Defenders of the status quo prefer California’s advocates of economic and personal freedom to be apologetic, mealy-mouthed, submissive and ineffective. I noted that an ideal charter, with its “defiance of excessive state authority,” would enrage numerous special interest groups.

Of course, aggressive opposition from special interest groups indicates a proposed charter would be effective in expanding local control. Should city councils and city staff regard this opposition as an insurmountable obstacle to achieving meaningful home rule?

My thinking is that even a slightly effective proposed city charter will agitate the unions, the environmental extremists, and any other parties who use the California State Legislature as an agent to impose their utopian visions on communities where a majority of people just want to mind their own business. Opposition from powerful special interest groups will come if the proposed charter is 100% effective or 10% effective in changing things. So why not pursue a goal of claiming 100% of the potential for a city’s governing authority over municipal affairs?

I Need Your Help to Develop the Ultimate Model City Charter for California!

Almost everyone squatting in the state legislature for the duration of their term limit wants to leave a legacy of some sort of accomplishment; that is, something inserted in California law that they can proudly show their grandchildren and cite in speeches to inspire youths to pursue public service. Think about how the California State Legislature enacts a parade of inane laws every year that interferes with or intrudes in municipal affairs.

In Sacramento today, I spoke to a group of free market-oriented policy intellectuals based in California about my plan to collect ideas for provisions in a model charter. I expect to get some great recommendations from them concerning transportation, land use and zoning, air quality, etc. You can help too. Below are resources to help you develop ideas to send me for the model charter:

1. At the end of this post, I cite relevant language from the July 2012 California Supreme Court case State Building and Construction Trades Council of California, AFL-CIO v. City of Vista about the Constitutional right of charter cities to control their own municipal affairs. This citation also includes the four criteria under which an issue is a municipal affair versus an issue of statewide concern. Read the criteria and think about problems in your city that the city council can’t fix or evade under the status quo.

2. Here are links to a few of the city charters recently enacted by voters or to be considered by voters in the November 6, 2012 election. These are the current examples of charters now being circulated among California local officials:

City of Oceanside

City of Vista

City of Costa Mesa

City of Escondido

City of Grover Beach

3. Here is a link to my 94-page report (third edition) published by the California Construction Compliance Group about the status of policies concerning government-mandated construction wage rates (so-called “prevailing wages”) in California’s 121 charter cities. It’s the first and only comprehensive report ever written about this right of charter cities:

Are Charter Cities Taking Advantage of State-Mandated Construction Wage Rate (“Prevailing Wage”) Exemptions? – 3rd Edition – Summer 2012

4. The League of California Cities (which is NOT part of this project) has excellent information about charter cities and home rule: Resources on Charter Cities from the League of California Cities.

5. To send me your ideas for charter provisions, call me or go here on this web site and use the form to contact me in writing. Thank you for your ideas to advance economic and personal freedom!

California’s Home Rule Doctrine

(Excerpts from pages 6 and 7 of the City of Vista California Supreme Court Decision on charter cities and prevailing wages – citations removed and language simplified – see the decision itself for more technical guidance.)

Charter cities are specifically authorized by our state Constitution to govern themselves, free of state legislative intrusion, as to those matters deemed municipal affairs.

Article XI, section 5, subdivision (a) of the California Constitution provides: “It shall be competent in any city charter to provide that the city governed thereunder may make and enforce all ordinances and regulations in respect to municipal affairs, subject only to restrictions and limitations provided in their several charters and in respect to other matters they shall be subject to general laws. City charters adopted pursuant to this Constitution shall supersede any existing charter, and with respect to municipal affairs shall supersede all laws inconsistent therewith.”

The roots of this provision trace back more than 100 years. It was originally enacted upon the principle that the municipality itself knew better what it wanted and needed than the state at large, and to give that municipality the exclusive privilege and right to enact direct legislation which would carry out and satisfy its wants and needs. The provision represents an affirmative constitutional grant to charter cities of all powers appropriate for a municipality to possess and includes the important corollary that so far as municipal affairs are concerned, charter cities are supreme and beyond the reach of legislative enactment.

We set forth an analytical framework for resolving whether or not a matter falls within the home rule authority of charter cities.

  1. Does the city ordinance at issue regulate an activity that can be characterized as a municipal affair?
  2. Does the case present an actual conflict between local and state law?
  3. Does the state law address a matter of statewide concern?
  4. Is the law reasonably related to resolution of that concern and narrowly tailored to avoid unnecessary interference in local governance? If the subject of the state statute is one of statewide concern and that the statute is reasonably related to its resolution (and not unduly broad in its sweep), then the conflicting charter city measure ceases to be a municipal affair and the Legislature is not prohibited by Article XI, section 5(a), from addressing the statewide dimension by its own tailored enactments.”
Note: in the City of Vista case, the court ruled that “no statewide concern has been presented justifying the state’s regulation of the wages that charter cities require their contractors to pay to workers hired to construct locally funded public works. In light of our conclusion that there is no statewide concern here, we need not determine whether the state’s prevailing wage law is “reasonably related to . . . resolution” of that concern and is “narrowly tailored” to avoid unnecessary interference in local governance. The court didn’t need to consider #4 in the analytical framework listed above because the answer to #3 was NO.

City of Newport Beach Will Consider Establishing Its Own Policy Concerning Government-Mandated Construction Wage Rates for Municipal Projects

UPDATE: As stated in this staff memorandum about the proposed prevailing wage exemption for Newport Beach, “This item was originally scheduled for the September 11, 2012 City Council meeting. The City Council consented to staff’s request to continue this item to the September 25, 2012 meeting. Staff has not had sufficient time to fully review comments provided by stakeholders and is therefore requesting the item be continued to October 9, 2012.”

In other words, the Los Angeles-Orange County Building and Construction Trades Council has succeeded in slowing down this proposal for local cost-efficiency. I’m sure the unions want to delay it at least until after the voters of the neighboring city of Costa Mesa decide whether or not to enact their own charter allowing their city to establish its own policy concerning government-mandated construction wage rates. The charter is on the November 6, 2012 ballot in Costa Mesa as Measure V


Item #17 on the Newport Beach City Council’s September 11, 2012 meeting agenda:

PREVAILING WAGE EXEMPTION. [100-2012]  Adopt Resolution No. 2012-79, exempting locally funded public works projects from prevailing wage.

The staff report about the proposed Newport Beach prevailing wage exemption states that “The City of Newport Beach is a charter city and may adopt a resolution to assert its municipal autonomy and conserve valuable financial resources by exempting itself from the prevailing wage requirement for locally funded public works contracts.”

The Newport Beach/Costa Mesa Daily Pilot reported the following in its September 7, 2012 article Newport Council Poised to OK Law Affecting Public Works Projects:

The Newport Beach City Council on Tuesday is likely to pass an ordinance exempting public works projects from a prevailing-wage requirement.

The change would allow construction companies to bid on city jobs without paying their workers the state-regulated wage.

Newport Beach is following the lead of Vista, the San Diego County city that won a state Supreme Court ruling in July. Charter cities, the court ruled, can sign public works contracts without adhering to this particular state law.

Costa Mesa voters will decide in November whether the city should switch to a charter form of government, a change supported by City Council members who also want to save on public works contracts.

According to the September 11, 2012 Orange County Register article Newport Beach to Look at Lifting Union Wage Requirement, the city manager intended to fulfill a request of the Los Angeles-Orange County Building and Construction Trades Council and recommend to the city council that it delay the decision until the September 25, 2012 meeting. I expect union representatives and representatives of “Smart Cities Prevail!” will pack the Newport Beach City Council chamber tonight to defend inaccurate state prevailing wage calculations and absurdly broad state definitions of public works.

Here is the text of the proposed resolution exempting Newport Beach municipal projects from state-mandated construction wage rates:

RESOLUTION NO. 2012-?

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH EXEMPTING LOCALLY FUNDED PUBLIC WORKS PROJECTS FROM PREVAILING WAGE

WHEREAS, the California prevailing wage law requires contractors on public works projects to be paid the general prevailing rate of per diem wages for work of a similar character in the locality in which the work is performed; and

WHEREAS, under the California Constitution, Article XI, Section 5, the laws of charter cities supersede state law with respect to municipal affairs of the city; and

WHEREAS, the California Supreme Court has held that the wage levels of workers constructing locally funded public works are a municipal affair, and therefore a charter city’s prohibition on the payment of prevailing wage supersede state law; and

WHEREAS, the City of Newport Beach is incorporated as a charter city, and thus the City may exempt locally funded public works projects from prevailing wage to conserve the City’s limited resources.

NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows:

SECTION 1: The City of Newport Beach exempts locally funded public works projects from prevailing wage, unless: (1) prevailing wage is compelled by the terms of a federal or state grant; (2) the public work is a matter of state-wide concern; or (3) the payment of prevailing wage is separately authorized by the City Council.

SECTION 2: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this resolution.

ADOPTED this 11th day of September, 2012.

It’s “important for Costa Mesa residents to throw off the yoke of the Legislature and govern their own city affairs…” – from my commentary in the July 13 Daily Pilot Newspaper

“This was a solid victory for California citizens who believe that a city council might know more about local market conditions and the specific needs of a community than corrupt state legislators from Los Angeles and San Francisco. It was also a victory for California citizens who pay for local government services and want them provided efficiently and at a reasonable, competitive price.”

“It’s important for the unions and their sycophants in the Legislature to make sure Costa Mesa remains firmly under their thumb. It’s even more important for Costa Mesa residents to throw off the yoke of the Legislature and govern their own city affairs, by voting for their charter in November.”

Those are excerpts from my commentary in the July 13, 2012 Newport Beach/Costa Mesa Daily Pilot newspaper about the California Supreme Court decision in State Building and Construction Trades Council v. City of Vista on July 2, 2012. That ruling upheld the constitutional right of California’s 121 charter cities to establish their own policies concerning government-mandated construction wage rates on purely municipal projects. I anticipate Costa Mesa citizens will vote in November for their city to be among the next batch of cities to adopt “home rule” under a charter.

Read the full opinion piece from the Daily Pilot here: Commentary: Vista Ruling Benefits Local Governments, Residents

The Local Charter City Rebellion Against the Destructive California State Legislature Is Underway!

The Sacramento Bee published an editorial today (July 11, 2012) entitled “Will Cities Seize the Opportunity of Wage Ruling?” that urges charter cities to “seize the opportunity” and free themselves from costly state-mandated construction wage rates (also known as “prevailing wages”). It is the latest of numerous articles, editorials, blogs, and opinion pieces describing this court decision as a turning point for local governments seeking to provide adequate public services at a competitive and reasonable price. See my compilation of these articles here.

Regarding the July 2 California Supreme Court decision in State Building and Construction Trades Council v. City of Vista confirming the right of charter cities to establish their own policies concerning government-mandated construction wage rates, the Bee says the following:

…charter cities in California that use their own money to build new fire stations, libraries, sewer systems or other municipal facilities can ignore the state’s prevailing wage law.
The ruling is a blow to organized labor but a boon to taxpayers. If they have the political will to take advantage of it, struggling municipal governments can save a lot of money.

Do elected officials in charter cities have the political will to develop their own city prevailing wage policies, or even simply to exempt their purely municipal construction projects from state-mandated construction wage rates? They should proceed to do so, at least until the California State Legislature approves more reasonable definitions of public works through Assembly Bill 987 and approves more accurate methods of calculating prevailing wage through Assembly Bill 988? These two comprehensive, detailed, well-informed bills were introduced by Assemblywoman Shannon Grove (R-Bakersfield) but rejected in the Assembly Labor and Employment Committee on party-line votes (Democrats opposed, Republicans in support) on January 4, 2012. These bills need to be reconsidered!

Cities such as Costa Mesa and Escondido and Grover Beach [added August 19, 2012 – ed.] are definitely asking their citizens to approve robust, assertive charters. The cities of Temecula, Murrieta, Arroyo Grande, and Grover Beach are seriously considering asking their citizens to do the same. Several cities that already have charters are preparing to establish their own government-mandated construction wage policies.

Yes, unions will aggressively and viciously oppose any effort by the citizens of local governments to escape the oppressive mandates of the California State Legislature, long dominated by foolish union puppets from Los Angeles and San Francisco. Their opposition only confirms that city charters are a very powerful and meaningful way to assert local authority over local matters and provide public services at a better price for ordinary taxpayers.

Prediction: An Explosion of California Cities Freeing Themselves from Costly State-Mandated Construction Wage Rate Laws

California Supreme Court Issues Decision Upholding Local Control, Fiscal Responsibility, and Taxpayer Savings against Union Political Power

This morning, the California Supreme Court issued a decision in State Building and Construction Trades Council of California, AFL-CIO v. City of Vista that allows California’s charter cities to establish their own policies concerning government-mandated construction wage rates on taxpayer-funded public and private construction projects.

I predict that numerous charter cities in California will establish their own policies concerning government-mandated construction wage rates, and numerous cities that do not have charters will now seek voter approval for charters.

This is a badly-needed victory for supporters of local control, fiscal responsibility, and saving money for taxpayers. The timing could not be better. Finally, after five years with this case winding through the courts, fiscally responsible local governments have a clear and easy option to free themselves from a few of the intrusive union-backed laws of the California State Legislature.

How Does the State Determine Construction Wage Rates?

State-mandated construction wage rates often do not reflect the actual prevailing wage rates for a construction trade in a market region. This is one reason why many of California’s 121 charter cities (including the latest, El Cajon) establish their own policies concerning government-mandated wage rates for purely municipal construction projects.

Under the laws and regulations of the State of California, the state does NOT determine wage rates by surveying contractors or workers or by looking at statistics from the California Economic Development Department. Instead, state bureaucrats collect union collective bargaining agreements, parse through them to identify every required employer payment (even payments that are NOT employee compensation – called “Other”), and add up all the payments and declare the total as the “prevailing wage.” Some of these collective bargaining agreements cover half of California or all of California!

Sample Construction Wage Rates

The state sets the wage package for a bulldozer driver in Sacramento (Group 4, Area 1) at a straight time total rate of $62.00 per hour$37.15 + $24.12 in fringe benefits + $0.73 for “Other.”

The state sets the wage package for a basic carpenter in Sacramento (Area 3) at a straight time total rate of $56.60 per hour$31.62 + $22.69 in fringe benefits + $2.29 for “Other.”

The state sets the wage package for someone holding a stop/slow sign at a road site in Sacramento (Group 3, Area 2) at a straight time total rate of $42.93 per hour$25.89 + $16.91 in fringe benefits + $0.13 for “Other.”

Unions and Democrats in Legislature Have Blocked Attempts to Reform Prevailing Wage

Democrats and union lobbyists have blocked reasonable legislative efforts to reform how the State of California defines a “public works” project and how the State of California calculates its construction wage rates. In January, the Assembly Labor and Employment Committee voted down two comprehensive bills introduced by Assemblywoman Shannon Grove (Assembly Bill 987 and Assembly Bill 988) that would have made government-mandated wage rates more accurate and limited the definition of “public works” to actual government projects (ending prevailing wage mandates on private construction projects that get any sort of government assistance). The legislature even rejected a tiny bill (Assembly Bill 1958) to raise the project cost threshold for state-mandated government wage rates from $1000 to $2000 (to match the federal level) and index it to inflation!

I intend to aggressively encourage cities to take advantage of their local charter authority and free themselves from the costly burdens of the state legislature. I am also developing an aggressive model charter that gives cities authority to exempt themselves from numerous oppressive state laws.

California Supreme Court Ruling on Monday, July 2 at 10:00 a.m. – Right of California Charter Cities to Set Their Own Policies Concerning Government-Mandated Construction Wage Rates (Prevailing Wage)

The California Supreme Court will issue its ruling on Monday, July 2 at 10:00 a.m. in a five-year old case that is critical to issues of local government authority and the ability of construction unions to use the state government to set and mandate wage rates (“prevailing wages”) for construction workers on public works projects. The case is State Building and Construction Trades Council v. City of Vista.

If you want electronic notification from the California Supreme Court on Monday when it publishes the decision, go to this web site and fill out the form.

There are 121 charter cities in California, including the latest approved by voters on June 5 (City of El Cajon). Many of them set their own policies concerning government-mandated construction wage rates on municipal construction projects. (Most of those cities exempt their local projects from state-mandated construction wage rate laws.) See the only authoritive guide to the prevailing wage status of charter cities here:

http://abc-ccc.org/documents/CharterCityReportFINAL.pdf

(Note: the guide does not include El Cajon as the latest charter city, and Irvine repealed its exemption in April 2011 on a 3-2 vote of the city council.)

Want more information about this case and the practical implications of this case on California cities? My most recent articles on California’s state-mandated construction wage rate laws (prevailing wage laws) are found here:

Your Authoritative Background Guide to the Upcoming California Supreme Court Decision on Charter Cities and Prevailing Wage Laws (State Building and Construction Trades Council v. City of Vista)

Wildfires: Construction Unions Put Self-Interest above Public Interest in Court Case Against City of Vista’s Right as a Charter City to Set Its Own Prevailing Wage Policies

Escondido City Council Votes 4-1 to Approve Proposed Charter for Voters to Consider on November Ballot

Costa Mesa City Council Gets Email from the Center of the Great Quest to Free California’s Fiscally Responsible Local Governments from Centralized State Government Excesses and Mandates

Who Defeated the City of Auburn’s Proposed Charter, and How Was It Done? (Answer: Three Union Entities, by Spending $56.40 Per NO Vote)

Exclusive: Local Government Election Results in California Highly Relevant to Labor Issues

On June 5, 2012, Voters in City of Auburn Will Consider Proposed Charter with Local Control Over Government-Mandated Construction Wage Rates

Letter in San Diego Union-Tribune Reveals Insider Perspective on How Union Official Sabotaged City of Santee’s Local Charter Authority

Wildfires: Construction Unions Put Self-Interest above Public Interest in Court Case Against City of Vista’s Right as a Charter City to Set Its Own Prevailing Wage Policies

The California Supreme Court is about to issue a ruling in State Building and Construction Trades Council v. City of Vista, in which construction unions are suing the City of Vista to force it to comply with state laws that require contractors on public works projects to pay state-mandated wage rates (“prevailing wages”) to construction trade workers. (See my June 25 post about this case here.)

These laws are so important to unions that their attorney in this case told a state appeals court panel in San Diego County that it was more important to follow these laws than to build needed fire stations. Awkwardly for the lawyer, San Diego County had been the location of devastating fires one year earlier.

Many charter cities have traditionally asserted their right to exempt purely municipal construction from these costly state laws. They want to avoid state construction wage mandates because the state makes no effort to determine an accurate “prevailing wage.” Instead, the California Department of Industrial Relations calculates government-mandated wage rates by obtaining union collective bargaining agreements, adding up the employer payments in those agreements (including payments that are not employee compensation), and setting the total as the alleged “prevailing wage.”

After voters in the City of Vista approved a charter in June 2007, the Vista City Council used the authority of its charter to chose not to require its contractors to abide by state-mandated prevailing wage rates for construction contracts to build the city’s own fire stations. An umbrella group for construction unions, the State Building and Construction Trades Council of California, sued the City of Vista to force it to submit to state prevailing wage laws.

After losing in San Diego County Superior Court, the union organization appealed to a higher court. It was at this San Diego-based appeals court where judges considered the human implications of inflated state-mandated prevailing wages on Vista’s fire station construction.

Here is some of the remarkable dialogue between judges and the unions’ lawyer during the court hearing on November 14, 2008:

Judge (to the Union Lawyer): “How do you balance (your) argument against a municipality that might say ‘prevailing wages, that concept is going to, in effect, prevent us from building the fire station that we need?'”

Union Lawyer: “The same argument could be made about a lot of laws that cost money.  The way I balance it is to say that when the people as a whole deal through the legislature with a problem that does have real extra-municipal dimension, the interests of an individual locality have to yield.”

Another Judge (to the Union Lawyer): “The response that troubles me a little bit: ‘Well, if they can’t afford to build the fire station, and they have fire problems, that’s their tough luck,’ even though they’re using municipal funds. They’re not using state funds; the state isn’t granting its largess to solve the problem. So the charter makes no difference; the city simply is stuck.”

Union Lawyer: “When you say stuck, they have to follow the exact same rules that every other government entity follows in California to construct things…It’s true the city could say ‘we might be able to get lower bids on our project if we don’t include prevailing wage specifications, and we’d like to do that,’ but where the legislature has dealt with an issue that has extra-municipal concerns, the judgment of the entire legislature has to trump, because there are substantial externalities involved.”

Basically, the union lawsuit alleges that “extra-municipal concerns” and “substantial externalities” are more important than building fire stations, and therefore the City of Vista cannot relieve taxpayers from the unnecessary costs of state-mandated prevailing wage laws – even when public safety is at risk.

The appeals court also ruled against the unions, but the unions promptly appealed the case to the California Supreme Court, which is now about to issue a decision on whether or not the City of Vista can adopt its own prevailing wage policies as a fiscal strategy to build the fire stations it needs. Will union interests trump public safety?