Title
Staff Report for an Ordinance Amending San Leandro Municipal Code Section 1-5-400 to Eliminate Provisions Exempting Certain Public Works Contracts from Payment of Prevailing Wages and to Add a Provision Requiring Compliance with California Labor Code Section 1782
Staffreport
RECOMMENDATIONS
Staff recommends that the City Council adopt the attached Ordinance amending San Leandro Municipal Code Section 1-5-400 to eliminate provisions of the municipal code that exempt certain public works contracts from paying prevailing wage and to add a provision requiring compliance with California Labor Code Section 1782.
BACKGROUND AND SUMMARY
The City's existing municipal code generally requires payment of prevailing wages for City contracts for the performance of public works in excess of five thousand dollars ($5,000) and for certain contracts between private persons for the performance of construction work. However, the municipal code currently exempts the prevailing wage requirement from contracts on: public works performed by City employees; on maintenance contracts; on private contracts for construction work on property owned by the City and subject to a ground lease in effect prior to the effective date of the prevailing wage provision of the municipal code; for any public work performed following the declaration of an emergency.
In 2013, Governor Brown signed Senate Bill 7 into law which added Section 1782 to the California Labor Code. California Labor Code Section 1782 restricts state funding or financial assistance to cities that are not in compliance with California's prevailing wage laws. Specifically, California Labor Code Section 1782 prohibits charter cities from receiving or using state funding or financial assistance for a construction project unless contractors are required to comply with state law prevailing wage requirements on all City public works contracts.
Charter cities are not prohibited from receiving state funding or financial assistance where the local prevailing wage ordinance includes requirements that are equal to or greater than state prevailing wage requirements. Additionally, California Labor Code Section 1782 excludes contracts for projects that are twenty five thousand dollars ($25,000) or less for construction work or projects that are fifteen thousand dollars ($15,000) or less for alteration, demolition, repair or maintenance work.
The California Department of Industrial Relations is required to maintain a list of charter cities that comply with California Labor Code Section 1782 and are eligible to use state funding or financial assistance for construction projects. Upon adoption of this Ordinance, staff will forward the revised municipal code section to the California Department of Industrial Relations.
Staff has indicated that it currently complies with California state law prevailing wage requirements despite the provisions in the municipal code. Thus, staff does not anticipate that the elimination of the exemptions under the existing municipal code and the explicit requirement that the City comply with California Labor Code Section 1782 will have a significant impact.
This Ordinance eliminates the provisions of the municipal code that exempt public works projects which are: performed by City employees; for maintenance contracts; for private contracts for construction work on property owned by the City and subject to a ground lease in effect prior to the effective date of the prevailing wage provision of the municipal code; for public works performed following the declaration of an emergency. This Ordinance also amends the municipal code to explicitly require the City to comply with California Labor Code Section 1782 when awarding public works contracts.
PREPARED BY: Richard D. Pio Roda, City Attorney, City Attorney's Office
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