Cities lose ‘prevailing wage’ case

An attempt by several cities to overturn a state law that forces them to choose between paying generally higher or “prevailing” wages on most public works projects or lose state construction dollars has been turned aside in a tentative court ruling.

San Diego County Superior Court Judge Joel Wohlfeil rejected arguments from the cities of Oceanside, Vista, Carlsbad and El Cajon that the requirement violates the state constitution. The municipalities argued that local tax proceeds used on public construction projects in their jurisdictions aren’t subject to state restriction.

Wohlfeil issued his tentative decision on Wednesday and heard more argument Thursday but did not declare his decision final.

At question is a state law that requires charter cities to pay prevailing wage on all public works projects regardless of the source of funding beginning Jan. 1 of next year. Refusing to do would mean most but not all state construction dollars for local projects would be forfeited.

The cities also contended that provision may force them to reduce public services in order to paying higher wages or require taxpayers to shell out more.

Wohlfeil wasn’t swayed in his tentative decision, ruling the law “appears to legitimately influence local governance by attaching conditions on the receipt of discretionary state funding.” He also said pursuing state policy objectives through financial incentives is generally constitutional.

Prevailing wage generally reflects the most common pay in a region. Because public works contracts usually involve unions, the amount tends to be closer to higher union-scale wages. Backers argue that helps workers earn a livable wage, guarantees the best professionals are on the job and helps provide apprenticeship training.

Escondido attorney James P. Lough represented the cities and said he is recommending they appeal if the judge sticks with his initial decision.

Dale Howard, spokesman for union-backed group called Smart Cities Prevail, hailed the preliminary decision.

“With this ruling, it appears that this law … is on its way to being affirmed by the courts,” he said.

San Diego, Chula Vista, San Marcos and Santee are the other local charter cities. In 2012, the San Diego City Council voted to pay prevailing wages for all public works jobs. Statewide there are about 120 other charter cities. Two — El Centro and Fresno — are part of the litigation.

General law cities, where voters have chosen not to pass special charters that provide more independence, already must comply with the prevailing wage laws for all public works projects.

The state law and challenge to it stem from high-profile contest over prevailing wage out of Vista. In 2012, the state Supreme Court upheld the city policy of not requiring prevailing wage when using local dollars. To comply with that ruling, but also push prevailing wage practices, Democratic legislators wrote the bill that required all charter cities pay prevailing wage on public projects or lose state funding.

In challenging that law, the cities also argued that it could force them to have to seek two-thirds voter approval for increases in special assessments or taxes, reduce maintenance services or divert funds used for public safety.

The law waives the prevailing wage mandate for projects of $25,000 or less for construction, and projects of $15,000 or less for alteration, demolition, repair, or maintenance.