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?