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HomeMy WebLinkAboutAgenda Statement 1986/05/20 Item 8 COUNCIL AGENDA STATEMENT Item 8 Meeting Date 5/20/86 ,/ 3 ITEM TITLE: Resolution la ' Establishing the minimum wage as the prevailing wage scale for construction and maintenance projects involving City funds SUBMITTED BY: Director of Public Works/City Engineer f/ REVIEWED BY: City Manager (4/5ths Vote: Yes No X ) Per Resolution 7532 adopted November 26, 1974, the City Council established as the prevailing wage rates those listed in the booklet entitled, "Equipment Rental Rates and General Prevailing Wage Rates," published by the State of California be used for all public works construction contracts let by the City of Chula Vista. RECOMMENDATION: That the Council rescind the use of the booklet entitled, "Equipment Rates and General Prevailing Wage Rates" as the basis of pay for projects not involving the use of Federal or State monies. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: Recently, it has come to our attention that the City could save a substantial amount of money if it were able to pay less than the prevailing wage rates on certain public works projects. For example, the City recently received bids for the construction of the Library water feature. The bid received for this project was considerably higher than the engineer' s estimate. Upon conversations with the low bidder, it was apparent that the wages required to be paid utilizing the prevailing wage scales listed in the booklet entitled, "Equipment Rental Rates and General Prevailing Wage Rates," were much greater than what he paid his employees for doing similar type work. This resulted in a bid price considerably greater than what was expected. In addition, the requirement of paying prevailing wage scale probably discourages many smaller firms from bidding City projects because the wages they pay their employees are considerably less than those listed in the said booklet. A second project for the installation of sewer laterals in the Country Club area is now out to bid. These plans were prepared by Fuller Plumbing under City contract. As part of his contract, Mr. Fuller provided the City with guaranteed prices for which he would construct the individual house laterals to the various homes. Mr. Fuller, who is now reviewing the plans and specifications for the project, now indicates that his bidding of the project utilizing the prevailing wage scale, he would not be able to match the prices he has guaranteed to us as part of his consultant contract. The reasons for this is strictly the prevailing wages required to be paid to perform the work. Page 2, Item 8 Meeting Date 5/20/86 Recently, Gene Grady, Director of Building and Housing, requested from Charles Gill , Assistant City Attorney, an opinion concerning prevailing wages. Attached is a memo to Gene Grady concerning this matter. It is apparent that the recent court case in the City of San Diego has clearly established that charter cities are not required to pay prevailing wages as outlined in the Labor Code, Section 1770, et seq. , as long as the projects in question are within the realm of municipal affairs. Since the City of Chula Vista is a charter city and it is in the best interest of the City and its citizens to extend the purchasing power of its CIP dollars, it is appropriate for the City to not pay prevailing wage scale for projects funded with other than State of Fid ral monies. For projects not funded with State of Federal funds and are within the realm of municipal affairs, wage scale would not be less than minimum wage. FISCAL IMPACT: Unknown, but it is expected that the City could save several thousand dollars a year. WPC 2072E by tic ity Council of Chula Vista, California Dated April 9, 1985 TO: Gene Grady, Director of Building and Housing FROM: Charles Gill, Assistant City Attorney Cam` SUBJECT: Prevailing Wages You have requested that this office provide its advice relating to the state requirements for the payment of "prevailing wages" on public works projects . Your request for our advice indicated that the City could save a substantial amount of money if it were able to pay less than prevailing wages on certain public works projects . You specifically referenced a recent City of San Diego opinion relating to this subject which concluded that the City of San Diego need not pay prevailing wages. Labor Code §1770, et seq. requires any public entity to pay prevailing wages on Public Works projects. However, in the case of Vial v. City of San Diego (1981 ) 121 C.A.3d 346, 175 Cal .Rptr. 647 , the Court of Appeals held that the prevailing wage requirements of the Labor Code do not pertain to public works of a chartered city, when the city is contracting for projects which are limited in scope to "municipal affairs" . In Vial , the City of San Diego adopted a resolution rescinding the wage schedule and declaring payment of prevailing wages to be appropriate "only when required by federal or state grants and on other jobs considered to be of state concern. . . . " (Vial, at page 347) . Section 5 of Article 11 of the California Constitution provides a definition for municipal affairs . A chartered city' s ordinances which deal with purely municipal affairs are valid even if they conflict with general laws . The prevailing wage law, a general law, does not apply to the public works projects of a chartered city; as long as the projects in question are within the realm of municipal affairs. (City of Pasadena v. Charleville [1932] 215 C. 384, 10 P.2d 745 ) . Accordingly, the City of Chula Vista should adopt a resolution which substantially comports with the terms of the resolution adopted by the City Council of the City of San Diego rescinding the prevailing wage schedule and declaring that prevailing wages will only be paid when the job is of a statewide concern or involves federal or state monies . Should you have any further questions relating to this matter, please do not hesitate to call. cRG: clb RECEIVED 0298a ?'NZ tI 9 1985 By BUILDING INSPECTION DIVISION CHULA VISTA, CALIFORNIA