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

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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:



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.

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