Commentary: Charter would risk state funding
The risk of losing state funding for Costa Mesa’s public works projects would be even greater if the proposed charter is approved in the November election.
On Aug. 27, San Diego Superior Court Judge Joel R. Wohlfeil issued a tentative ruling upholding Senate Bill 7, a law enacted in 2013 to encourage California’s charter cities to pay the prevailing wage on locally funded construction projects. The ruling might be appealed, but if so, Costa Mesa’s state funding could remain at risk for a long time.
Even charter city Newport Beach has recognized the risk to millions of dollars in state funding. The City Council voted Sept. 9 to avoid this and to pay the prevailing wage on city-funded public works projects. Final approval is expected Sept. 23.
To clarify, prevailing wage is not the same as union wage. According to the California Department of Industrial Relations, the prevailing wage rate is the basic hourly rate (union and non-union) paid on public works projects to a majority of workers engaged in a particular craft, within the locality and nearest labor market area.
The bipartisan California Senate Bill 7 provides incentives for charter cities to pay prevailing wage on city-funded public works projects starting in 2015. Under this law, a charter city gets state funding for public works projects if it pays prevailing wage on its projects. If the charter city doesn’t pay prevailing wage, they miss out on state funding.
Costa Mesa’s 2014 proposed city charter forbids paying prevailing wages on public works projects that are funded solely by city funds. A charter city would only be exempt from paying prevailing wage on public works projects that use only municipal funding, no state or federal funds. As mentioned in the March 13, 2014, Costa Mesa City Council Agenda Report, Costa Mesa has relatively few of these projects.
In addition to few projects, a prevailing wage exemption only applies to the labor portion of a project. This is usually about 10% to 30% of the total project cost. If prevailing wage is eliminated, as included in the charter proposal, some wages may be reduced, but not eliminated. Highly skilled workers will still get prevailing wage. As a result, the overall potential savings are relatively small. For the relatively small potential savings this provision might achieve, it puts the city at risk of losing a large amount of state funding.
Lastly, as a member of the Costa Mesa City Charter Committee, I know that charter city Carlsbad was surveyed to determine if it saved money from the prevailing-wage exemption.
They responded: “We have found savings to be hard to ascertain. Bid prices may be lower on the front end but there is some suspicion that the total project costs may impact initial savings (change orders, costly project delays, more labor by city employees, etc.)”
We should not risk state funding for the sake of some potential small savings.
I continue to oppose the proposed charter for many reasons, including its risky prevailing-wage provision.
Thirty-year Costa Mesa resident HAROLD WEITZBERG is a member of the Charter Committee and a former candidate for City Council.