Tag Archive for Smart Cities Prevail

San Diego Political Celebrity Nathan Fletcher Now Supports Government-Mandated Construction Wage Rates

UPDATE – August 9, 2013: This morning Nathan Fletcher “chimed in” and spoke to Fox News 5 KSWB in San Diego about the Filner scandals. An excerpt from Fletcher May Run for Mayor if Filner Resigns:

Fletcher even told Fox5 that he’d consider throwing his hat in the ring if the mayor’s seat opens up.

“I’d have to consider it. I’ve been humbled by the number of folks that have reached out for the last few weeks and provided a lot of encouragement,” Fletcher said. “But as of right now, the office isn’t open. If it becomes open than that’s a decision that I’ll have to make.”

Until that happens, Fletcher can be found teaching at University of California, San Diego, working for Qualcomm and with his family.


Unexpectedly, former California State Assemblyman and once-and-future San Diego mayoral candidate Nathan Fletcher (R) (I) (D) declared his new position in support of state-mandated wage rates (“prevailing wages”) for contracts on public works construction projects. See the July 26, 2013 San Diego Daily Transcript commentary Prevailing Wage: Good for Local Economy, Local Workers.

He claims his position is a “no-brainer” that resulted from approaching the issue in a “thoughtful, open-minded way.” But why did he approach the issue in the first place? Mr. Fletcher has never before exhibited extraordinary interest or unusual expertise in arcane construction labor issues, including as a state legislator voting on such issues.

Tom Lemmon – the head of the San Diego County Building and Construction Trades Council – would have had credibility in submitting this professionally-written piece under his name. But few people would have read it. In contrast, Nathan Fletcher has a cult following in San Diego, apparently because many people can relate to his lack of principles – a condition that I warned Republicans to avoid in my www.FlashReport.org article Know Thyself, Republican: You Could Be the Next Nathan Fletcher.

Some people are suspicious of Fletcher’s authorship of his prevailing wage manifesto. On July 30, 2013, campaign consultant Duane Dichiara posted an article on San Diego Rostra – Notes on Fletcher’s Pro-Prevailing Wage Article – speculating that Fletcher didn’t write it because of the obvious rhetorical skill of the writer. Richard Rider of San Diego Tax Fighters then commented that “it’s TOO well written. I’d bet dollars to doughnuts that Nathan didn’t pen it. Doubtless it was written by labor union professionals (or their PR contractors), with Nathan dutifully signing it as the author.”

Regardless of who actually wrote it, representatives of www.SmartCitiesPrevail.org were quick to post comments in support of Mr. Fletcher and his position, and he received some impressive tweets of support.

I responded to Fletcher’s piece with a rebuttal published on July 29, 2013 entitled Did Nathan Fletcher Lose His Mind on Prevailing Wage? A representative of the union-oriented public policy organization Working Partnerships USA and a Colorado State University economics professor commented in response to defend their work as cited by Fletcher. I have commented in response to their comments. Meanwhile, Nathan Fletcher has not given the public any additional insight into his understanding or views on prevailing wage policies.

Newport Beach Is Latest California Charter City to Establish Its Own Prevailing Wage Policy: 7-0 Unanimous Vote for Fiscal Responsibility and Common Sense

On January 22, 2013, as shown in this meeting video, the Newport Beach City Council voted 7-0 to exercise its home-rule power as a charter city to establish its own policy concerning government-mandated construction wage rates (so-called “prevailing wages”). See the text of the resolution below.

RESOLUTION NO. 2013-6
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;

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;

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 (“City”) 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 or is otherwise funded from a source that requires prevailing wage; (2) the public work is a matter of statewide concern; or (3) the payment of prevailing wage is separately authorized by the City Council, because the project is of a complexity and nature that the public interest would be served by requiring prevailing wage.

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 22nd day of January, 2013.

The January 22, 2013 staff report to the Newport Beach City Council recommended the establishment of its own government-mandated construction wage rate policy:

…the City of Newport Beach, as a charter city, is not required to pay prevailing wage for locally funded public works projects. The City may adopt either an ordinance or a resolution to affirm its municipal autonomy and conserve valuable financial resources by exempting itself from the prevailing wage requirement for locally funded public works contracts. In the absence of an ordinance or resolution, the City may exempt itself from the payment of prevailing wage through the insertion of language into individual contracts (i.e., creation of an “actual conflict” through explicit contract terms). However, to ensure consistency staff recommends the adoption of the attached resolution. The attached resolution provides an exemption for public works projects, unless: (a) prevailing wage is compelled by the terms of a federal or state grant, or other funding source; (b) the public work is a matter of state-wide concern; or (c) the payment of prevailing wage is separately authorized by the City Council due to a project’s complexity or nature that the public interest would be served by requiring prevailing wage” to the third type of project for which the City might wish to pay prevailing wage.

Before the vote, the city attorney pointed out that the state’s definition of “public works” is ridiculously broad and recommended that the city council ensure flexibility and adopt a policy to “opt-in” to state-mandated construction wage rates. Councilman Michael Henn had the courage to state publicly that “prevailing wage” is a unique “anachronism of the construction industry” and noted that most business in America is done without government-mandated prevailing wage rates.

Study Session: Applicability of Prevailing Wage to City Projects

As a prelude to the agenda item, the Newport Beach City Council convened earlier in the day for what the city attorney described as a “fairly long study session” (Discussion Regarding the Applicability of Prevailing Wage to City Projects) to discuss exercising its right as a charter city to establish its own policy concerning government-mandated construction wage rates (so-called “prevailing wages”) on purely municipal construction projects.

Jim Adams of the Los Angeles/Orange County Building and Construction Trades Council [no web site] led off the public comment by showing a professionally-produced video called “Right the First Time” that promotes state prevailing wage laws through anecdotes and interviews with union-backed politicians. It neglects to mention the state’s absurd methods of calculating prevailing wage and defining public works. In addition, the video claims that prevailing wages are set by the free market, even though California Labor Code Section 1773 authorizes the state to set prevailing wage rates based on the applicable union collective bargaining agreements.

Other speakers represented union-affiliated groups such as Smart Cities Prevail and unionized construction trade organizations such as the Fire Sprinkler Advisory Board of Southern California, the Western Wall & Ceiling Contractors Association, the National Electrical Contractors Association (NECA) – Orange County Chapter, and the Western Steel Council. A few unionized contractors (locked into multi-year collective bargaining agreements) also spoke in defense of state-mandated construction wage rates.

Evening Meeting: Unanimous Approval of the Resolution

At the evening meeting, a collection of union representatives, unionized construction trade associations, and unionized contractors once again asked the city council to keep state-mandated construction wage rates. They again cited the usual union arguments about cheap, unskilled, out-of-town labor by uninsured and unlicensed contractors.

Notice how this letter from the National Electrical Contractors Association (NECA) says that quality construction requires “living wages and benefits,” as if the alternative to state-mandated construction wage rates is the California minimum wage of $8.00 per hour. Actually, state-mandated prevailing wages are typically four to six times higher than “living wage” rates set by local governments. For example, the “living wage” for the City of Irvine (in Orange County, near Newport Beach) is currently $13.13 per hour including benefits. The median wage (not including benefits) for an electrician in Orange County is $27.15, according to the California Economic Development Department. But the state-mandated total straight time “prevailing wage” for an inside wireman electrician in Newport Beach is $54.83 per hour.

Samantha Draper of Smart Cities Prevail (a union-affiliated labor-management cooperation committee) argued against the resolution, claiming the policy could result in economic “uncertainty and insecurity.” A representative of the unionized Fire Sprinkler Advisory Board of Southern California noted that prevailing wage contractors offer quality. Jim Adams of the Los Angeles/Orange County Building and Construction Trades Council encouraged the city council to continue requiring its contractors to abide by the state-mandated wage rates and warned of cheap labor from out of the area. A representative of the National Electrical Contractors Association (NECA) claimed that construction workers are “part-time workers” that work eight months a year and don’t get vacations or sick days. A union contractor said “we can afford it in Newport Beach” and noted many sections of the California Labor Code would be nullified. Also speaking against the policy was Jim Conway, a union-oriented consultant formerly involved with labor relations for the Sheet Metal & Air Conditioning Contractors National Association (SMACNA) in the San Francisco Bay Area.

News Coverage:

Newport Triggers Dock-Fee Increases, Cost-Saving Labor Contracts – Orange County Register – January 23, 2013

City Eschews Prevailing Wages: The City Council voted to exempt Newport Beach from a state requirement that compels cities to pay workers prevailing wages – Newport Beach/Corona Del Mar Patch – January 24, 2013.)

Council Closes Book on Dock Fee Increases (In other business…) – Newport Beach/Costa Mesa Daily Pilot – January 23, 2013

For More Information:

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

List of California’s 121 Charter Cities

California Supreme Court Affirms State Prevailing Wage Requirements Do Not Apply to Charter Cities – League of California Cities – July 2, 2012