The City of Gilroy could lose millions in state funding for public works projects if California Senate Bill No. 7 – authored by Senate President Pro Tem Darrell Steinberg (D- Sacramento) and Senator Anthony Cannella (R-Ceres) – eventually becomes law, confirmed Mayor Don Gage.
The bill – which cleared another legislative hurdle last Wednesday – demands that everyone involved in public works construction projects from the bidders to the sub-contractors be unionized. To supporters, SB-7 guarantees higher productivity and faster completion times; to opponents, SB-7 is an egregious example of the state meddling in local affairs.
If SB-7 is passed and Gilroy continues to not pay prevailing wage, then all state funding for public works projects would be withdrawn. For the Garlic Capital, “we could lose millions of dollars,” Gage said. “We have lots of projects in progress.”
Transportation projects, such as repairing local streets using revenue from the state “gas tax” would be particularly badly hit.
“The list goes on and on,” Gage added.
Tellingly, SB-7 is seen by many observers as a direct punitive response from construction unions to last year’s California State Supreme Court ruling that upheld the right of charter cities to decide who and how much they paid for public works projects. Mayor Don Gage calls the bill “a direct assault on the Supreme Court’s decision.”
Assemblyman Luis Alejo (D-Salinas) is on the Assembly Local Government Committee that voted on the bill Wednesday in Sacramento. Alejo’s vote helped SB-7 to pass 5-3 along party lines. The bill now moves on to the Assembly Labor and Employment Committee.
“I see that prevailing wage could be a good thing,” he said. “I have the obligation to foster public policy that promotes jobs in our communities and strengthens our local economies.”
That logic was met with derision from Gage.
“Who does he think he’s representing up there?” the mayor asked.
A charter city since the 1960s, Gilroy has the choice to not pay prevailing wage, or union rates, for public works projects and retains the flexibility to accept the lowest sensible bid it receives.
The League of California Cities – an association comprised of California city officials – describes a charter city as a “city that allows voters to determine how their city government is organized and, with respect to municipal affairs, enact legislation different than that adopted by the state.”
City Administrator Tom Haglund traveled to Sacramento for the vote – along with other administrators and officials from the League of California Cities – to enlighten the committee of the real issue at hand: what Haglund calls “naked aggression against charter cities.”
He is particularly incensed by the message the bill sends to the residents of Gilroy and other charter cities from the lawmakers “far removed in Sacramento.”
“Each and every voter in charter cities is simply being told, ‘you’re not smart enough to manage your own affairs,’” Haglund asserted.
There are a total of 121 charter cities in California.
Dan Carrigg, legislative director with the League of California Cities, echoed Haglund’s concerns.
“The heart of this whole issue is ‘how much control should the state have?’” Carrigg reasoned.
Legislative precedence has already been established on that very question. The California State Supreme Court upheld the rights of cities such as Gilroy and King City – both in Alejo’s 30th District in the State Assembly – in 2012 when it decided 5-2 in favor of charter cities being able to opt out of paying prevailing wage in “State Building and Construction Trades Council of California AFL-CIO vs. City of Vista.”
That decision lead to SB-7 being sponsored once again by AFL-CIO, explained Carrigg, as a way to “punish” cities after AFL-CIO was unable to get the State Supreme Court to see things the way the unions wanted.
More worrying for Gage is the fact Alejo voted yes on the bill, pushing for millions in state funding to be taken away from cities in his own district.
“It ends up saving taxpayers dollars with quality construction,” was Alejo’s take on one of the benefits of prevailing wage.
“Public funds should be used on projects that provide a fair pay, stimulate the local economy, provide a competitive field and use a skilled labor force,” he added.
In fact, Gilroy’s new municipal library was built using prevailing wage and the library’s success story of timeliness and cost effectiveness is now being used against Gilroy by politicians pushing for SB-7 to become law.
Haglund calls this reasoning “spurious.”
“We used our charter authority to decide whether or not to pay prevailing wage,” Haglund said. “Why do we need a law?”
Carrigg is unsurprised by Alejo’s stance on the bill.
“Most people think that representatives are looking out for them,” Carrigg stated. “I don’t think they expect them to vote to take all of their money away.”
“Welcome to Sacramento politics,” he added.
-Yes: Alejo (D-Salinas), Levine (D-San Rafael), Gordon (D-Menlo Park), Mullin (D-South San Francisco), Rendon (D-Lakewood)
-No: Achadjian (R-San Luis Obispo), Melendez (R-Lake Elsinore), Waldron (R-Escondido)
-Absent: Bradford (D-Gardena)
