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Home My WebLink AboutOrd 1276 - Prevailing Wage - PW Prjcts � ,��,�,°' y „-r`e ��.a.��i� !_�^�.'.•�pePFJ F�('@ i 3.. CITY OF PALM DESERT �� ;�, ,.;�,;�-�;;�;;.,:��;:��M.�_�.��,... � ,. �-:�.:r, �. - � CITY ATTORNEY Q`�`��'� ''� �'��_ � �� STAFF REPORT REQUEST: Introduce Ordinance No. i2�6_, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORN/A, AMENDING SECTION 3.30.020 OF THE PALM DESERT MUNICIPAL CODE TO REQUIRE COMPLIANCE WITH STATE PREVAILING WAGE REQUIREMENTS ON CITY PUBLIC WORKS PROJECTS SUBMITTED BY: David J. Erwin, City Attorney DATE: October 23, 2014 CONTENTS: Ordinance No. - 12�6 Recommendation Waive further reading and pass Ordinance No. �276 to second reading, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING SECTION 3.30.020 OF THE PALM DESERT MUNICIPAL CODE TO REQUIRE COMPLIANCE WITH STATE PREVA/L/NG WAGE REQUIREMENTS ON CITY PUBLIC WORKS PROJECTS. Fundinq Requirements: Not applicable. Executive Summary In response to the California Supreme Court's 2012 decision that affirmed charter cities are exempt from state prevailing wage law, the California Legislature adopted Senate Bill No. 7 ("SB 7"). SB 7 restricts state financial assistance to charter cities that exempt locally-funded construction projects from state prevailing wage requirements. Thus, pursuant to SB 7, the City stands to lose certain state funding unless it adopts an ordinance expressing its intent to require City contractors to comply with state prevailing wage law in accordance with SB 7. 72500.00874\9320516.1 Staff Report Ordinance No. 1276 - Prevailing Wage Requirements Page 2 of 2 Backqround In 1931, the California Legislature enacted the state's prevailing wage law. The 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. In 2012, the California Supreme Court upheld charter city authority to exempt locally-funded public works projects from prevailing wage. (State Bldg. & Const. Trades Council of Cal., AFL-CIO v. City of Vista (2012) 54 Cal.4th 547.) In response to the California Supreme Court's holding, the California Legislature passed SB 7. With the expressed intent to retain a "skilled construction workforce," SB 7 prohibits charter cities from receiving or using state funding for locally-funded construction projects if the charter city has a resolution or ordinance exempting projects from the state prevailing wage requirements. SB 7 additionally restricts state funding where a charter city has awarded, within the prior two years, a public works contract without requiring the contractor to comply with state prevailing wage law. As a result, to receive state funds for a public works contract, SB 7 requires charter cities to require its contractors to comply with state prevailing wage law on all charter city public works contracts, even those that are funded exclusively with charter city funds. Opposition to SB 7 was spearheaded by the League of California Cities. Many of California's 121 charter cities joined a legal action to challenge SB 7's application to charter cities. Recently, a trial court ruled against the charter cities' challenge to SB 7. The parties are now deciding whether to appeal the trial court's ruling. At this time, City staff believes that compliance with SB 7 is in the City's financial interests. At present, Section 3.30.020 of the Palm Desert Municipal Code would operate to exclude the City from receiving state funding or financial assistance for City- funded construction projects under SB 7. Thus, to continue to receive state funding, the City must amend Section 3.30.020 to require City contractors to comply with state prevailing wage law on City public works projects in accordance with SB 7. Nevertheless, if SB 7 is later found either invalid or inapplicable to charter cities by a court or is otherwise repealed, the City Council may amend Section 3.30.020 to its original form. Submitted By� ''' CITY COUNCIL��A T�ON " � APPROVED " DENiED Davi J. Erwin, City ttor ey RECEIVED OTHER \ Attachment (as oted) MEETING DATE - " AYF.S:�E;.,�''�'�r ^^� t�`'��t3��r°E'�GnnP�". NOES: ��j�e- — ABSENT: NOn� AI3STAIlV: �� V�RIFIED BY: �� Original on File with City lerk's Office 72500.00874\9320516.1 ORDINANCE NO. 1276 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING SECTION 3.30.020 OF THE PALM DESERT MUNICIPAL CODE TO REQUIRE COMPLIANCE WITH STATE PREVAILING WAGE REQUIREMENTS ON CITY PUBLIC WORKS PROJECTS 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 charter cities; and, WHEREAS, the California Supreme Court has held that the wage levels of workers constructing locally funded public works are a municipal affair; and, WHEREAS, the City of Palm Desert ("City") is incorporated as a charter city, and thus the City may exempt locally funded public works projects from state prevailing wage requirements to conserve the City's limited financial resources; and, WHEREAS, the California Legislature passed Senate Bill 7 requiring all California charter cities to adopt an ordinance or charter amendment mandating compliance with state prevailing wage law on all public works contracts in order to remain qualified for state funding on local public works projects; and WHEREAS, in accordance with Section 300 of the City Charter, the City Council has discretion to determine wages to be paid on City public works projects and may require that prevailing wages be paid by contractors employed thereon; and WHEREAS, the City Council finds that it is necessary to adopt an ordinance requiring contractor compliance with state prevailing wage law on all City public works projects in order to preserve the City's eligibility for state public works construction funding. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES ORDAIN AS FOLLOWS: SECTION 1. Amendment. Section 3.30.020 of the Palm Desert Municipal Code is hereby amended to read in full as follows: ORDINANCE NO. �276 "Section 3.30.020. Municipal Projects. A. Except on locally funded public works projects of twenty-five thousand dollars ($25,000) or less when the project is for construction work, or fifteen thousand dollars ($15,000) or less when the project is for alteration, demolition, repair or maintenance work, all contractors performing work on a City public works projects shall be subject to California prevailing wage law, codified at California Labor Code Section 1720 et seq., as it may be amended from time to time. B. The only limitation on the provisions of subsection A shall be in the event federal funding requirements supersede state prevailing wage laws." SECTION 2. The City Clerk shall certify to the adoption of this Ordinance and shall cause a copy of same to be published in the official newspaper of the City of Palm Desert within fifteen (15) days after its adoption. This Ordinance shall take effect on the later of the thirty-first (31 S') day after its adoption or January 1, 2015. PASSED, APPROVED AND ADOPTED this day of , 2014, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: VAN G. TANNER, MAYOR ATTEST: RACHELLE D. KLASSEN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA APPROVED AS TO FORM: ROBERT W. HARGREAVES, CITY ATTORNEY 72?QO OQR73\9297197 I 2