Local News

Wednesday, Oct 17 2012 11:02 PM

Council shakes off prevailing wage requirement

BY ANTONIE BOESSENKOOL Californian staff writer aboessenkool@bakersfield.com

Tradesmen, many of them wearing construction vests or orange T-shirts, packed the city council chambers Wednesday night, with an overflow crowd spilling out into the lobby and to the steps outside. But their presence didn't prevent the council from passing a resolution that does away with the prevailing wage requirement for public works projects paid for solely with city dollars.

Prevailing wages are based on the pay and benefits paid to a majority of workers in an area for public works projects. The California Supreme Court ruled last summer that charter cities, like Bakersfield, could be exempt from having to pay prevailing wages on public works projects that are city-funded. Wages for city-funded projects, they ruled, are a "municipal affair." Charter cities' laws supercede state laws for municipal business.

Under the city's resolution there are some exceptions, such as if a city has to pay prevailing wages under the terms of a federal or state grant. Council members also may decide to pay the prevailing wage for a specific project. Projects paid for with state and federal money, such as the Thomas Roads Improvement Program road construction, wouldn't qualify.

City Hall staff got 69 phone calls leading up to the meeting from people opposing the resolution, City Clerk Roberta Gafford said. More than a dozen spoke against the resolution, and more than a dozen spoke in favor of it.

City Manager Alan Tandy said the vast majority of the capital improvement projects Bakersfield will undertake in the next five to seven years are funded with federal or state money and wouldn't be affected by the resolution, and will still be paid at prevailing wages. As a comparison based on the last few years, the city spends about $3.6 million a year on projects that would be eligible under the new resolution, he said. But TRIP projects, which wouldn't qualify, will constitute $556 million in contracts over the next 21/2 years. City staff also informally surveyed local contractors and were told that without the prevailing wage requirement, project costs could be cut by 3.5 percent to 30 percent, Tandy said.

But construction workers and union representatives said the policy would lead to a lower standard of living for workers and their families, effectively lower wages to $8 an hour, sap sales tax revenues from the local economy and lead to shoddy workmanship on public works projects.

"(There is) a huge cost in terms of impact to the community," said David Kersh of the Carpenters/Contractors Cooperation Committee. Kersh said doing away with the prevailing wage requirement would lead to lower-quality work on city projects and drive skilled workers away from the city. Workers would have less income to spend in the city, he said, echoing statements by several other speakers.

"It's a race to the bottom," he said. "It's an attack on the middle class."

But just as many people spoke in favor of the resolution as against it, saying it would result in more efficient use of taxpayer money and wouldn't lead to unfair construction wages or lower quality in projects.

The policy will allow the city to save money and not be overruled by state government, said Tami Chapman of Johasse Rebar, a local contractor.

"The state is requiring taxpayers in Bakersfield to overpay for local construction projects" by requiring contractors to pay wages at the same level here as in cities like San Francisco, with a higher cost of living. To stay in business and attract skilled workers, businesses will still have to pay competitive wages, she said.

Councilmembers Sue Benham and Rudy Salas were in the minority, voting against the resolution. Councilman Russell Johnson abstained from the vote, citing a potential conflict of interest.

"This proposal is suggesting a solution to a problem that doesn't really exist," Benham said before the vote, saying that Bakersfield's fiscally conservative governance means the city isn't facing the same constraints as other cities. "The savings would be much less than what we would lose in terms of the vitality of our local economy," she added. Those still standing in the lobby outside council chambers cheered.

Councilman Ken Weir had asked that the prevailing wage issue be taken up by the council.

"As a city council member, I have a fiduciary responsibility to taxpayers and the community to utilize funds with care and strive to provide the best value possible," Weir said in an email earlier Wednesday. "With the approval of tonight's resolution, we will be able to build better parks with more amenities, increase the amount of street repaving, and provide other benefits without additional cost to the taxpayers. To not pursue this opportunity would be a breach of my responsibility."

Councilmembers added a late amendment to the resolution as a step to better protect against unqualified contractors bidding for city work. Before the resolution passed, projects valued at $1 million or more required that contractors be "pre-qualified" for their suitability to do the type of project at hand before being allowed to submit a bid. With the resolution, that threshold was lowered to $250,000.

Outside, Ed Padilla of the Laborers International Union of North America -- Local 220 said he was disappointed by the council's decision.

"We think a lot of the information that (City Manager) Alan Tandy provided (city councilmembers) wasn't very accurate at all. ... It doesn't give us a chance to explain why we think different." Padilla said without the prevailing wage requirement, there is a risk that workers could be cheated out of being paid all the hours they work because there won't be as much monitoring of payrolls.

The council was more in agreement on a second hot-buton issue before them Wednesday night: whether to authorize the city attorney to file a lawsuit against the California High-Speed Rail Authority, should that step become necessary in the future. The council voted unanimously to allow that action.

Tandy said that the recently installed CEO of the state body, Jeff Morales, contacted him and pledged a renewed effort in working with the city on its concerns about how the project would impact city property, transportation projects, homes and businesses.

The step would allow the city attorney's office sue the authority claiming that the draft environmental impact report the authority issued in July for the project doesn't comply with the California Environmental Quality Act (CEQA) because it doesn't adequately address how impacts to city projects and properties would be mitigated.

The aim would be to force the authority to at least address those concerns.

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