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Home My WebLink About50A - ORD - PREVAILING WAGESREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: DECEMBER 16, 2014 CLERK OF COUNCIL USE ONLY: TITLE: APPROVED EMERGENCY ORDINANCE AMENDING SAMC ❑ As Recommended SEC 33 -202 AND ADDING 33 -206 RELATING TO El E] As Amended Ordinance Reading PAYMENT OF PREVAILING WAGES [I on Ordinance on 2 2n nd Reading (STRATEGIC PLAN NO. 1, 3; 7,4) ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER CITY MANAGER RECOMMENDED ACTION Adopt an emergency ordinance amending Santa Ana Municipal Code Section 33 -202 and adding 33- 206 to the Santa Ana Municipal Code relating to payment of prevailing wages. The California legislature passed Senate Bill (SB) 7 which requires cities to have a prevailing wage ordinance in place by January 1, 2015 to continue to receive state funding. DISCUSSION 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. Under the guise of advancing 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. As a result, to receive State funds for a public works contract, SB 7 requires charter cities to comply with prevailing wage law on all of its public works contracts, even those that are funded exclusively with charter city funds. The City believes that compliance with SB 7 is in the best interest of our community, supports the City's strategic plan goals, and will allow the city to continue to receive State funding by amending SAMC Sec. 33 -202 and adding Sec. 33 -206. 50A -1 Adoption of Ordinance Amending SAMC Sec 33 -202 And Adding Sec 33 -206 Relating to Prevailing Wages December 16, 2014 Page 2 STRATEGIC PLAN Approval of this item supports the City's efforts to meet Goal # 1 Community Safety, Objective # 3 (promote fiscal accountability to ensure financial responsibility at all levels of the organization) and Goal # 7 Team Santa Ana, Objective # 4 (establish employee compensation that attracts and retains a highly qualified workforce). ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT Prevailing wages will be required for all contracts executed after January, 1, 2015 that exceed twenty -five thousand dollars ($25,000) when the project is for construction work, or fifteen thousand dollars ($15,000) when the project is for alteration, demolition, repair or maintenance work. Exhibit 1: Ordinance 50A -2 (jxs 12/02/14) ORDINANCE NO. NS -XXX AN EMERGENCY ORDINANCE OF THE CITY OF SANTA ANA AMENDING SANTA ANA MUNICIPAL CODE SECTION 33 -202 AND ADDING 33 -206 TO THE SANTA ANA MUNICIPAL CODE RELATING TO PAYMENT OF PREVAILING WAGES 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 Santa Ana ( "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, which enacted California Labor Code 1782, 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, Section 1782 prohibits a charter city from receiving or using state funding or financial assistance for a public works project unless the charter city requires contractors to comply with California's state prevailing wage law on those projects; WHEREAS, Section 1782 further provides that a charter city is eligible to receive state funding or financial assistance if the city has a local prevailing wage ordinance for all its public works contracts that includes requirements that are equal to, or greater than, the state's prevailing wage requirements; WHEREAS, in accordance with Section 200 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 Ordinance No. NS -XXX Page 1 of 5 y III J projects in order to preserve the City's eligibility for state public works construction funding. THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES ORDAIN AS FOLLOWS: SECTION 1. Section 33 -202 of the Santa Ana Municipal Code is hereby amended such that it reads as follows [New language is underlined]: Sec. 33 -202. - Definitions. For purposes of this article, the following definitions shall apply: Construction manager shall mean an agent of the city who provides the city with professional services in the fields of technology, scheduling, ability to construct, and /or management of the fiscal aspects of a public works project. A construction manager shall be responsible for some or all of the following: (1) Overseeing a public works project through completion of construction; (2) Assumption of financial responsibility; (3) Hiring of an architect/designer, if necessary, through a qualification process consistent with procedures established pursuant to section 2 -803; and /or (4) Contracting for actual construction work by award of a contract to the lowest and best bidder in conformance with section 421 of the city's charter. Design- build -bid shall mean a procurement process in which both the design and construction manager professional services for a public works project are procured from a single entity, while the actual construction work is awarded by the entity to the lowest and best bidder in conformance with section 421 of the city's charter. Professional services shall have the same meaning as in section 2 -802 of this code. Public works shall have the same meaning as in California Labor Code sections 1720, 1720.2 1720.3, and 1771 and as may be amended from time to time. Public works construction shall have the same meaning as in section 421 of the city's charter. Public works project shall mean the totality of a project, including both professional services and public works construction, which ultimately results in the erection or improvement of public buildings, streets, drains, sewers, parks or playgrounds. Purchasing manager shall have the same meaning as in section 2 -802 of this code. Ordinance No. NS -XXX Page 2 of 4 y ll 1 I SECTION 2. Section 33 -206 of the Santa Ana Municipal Code is hereby added such that it reads as follows: Sec. 33.206. - Prevailing wages required. 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 project shall be subject to California prevailing wage law, codified at California Labor Code Section 1782, at sec, as it may be amended from time to time. The only limitation on this requirement shall be in the event federal funding requirements supersede state prevailing wage laws. SECTION 3. The adoption of this ordinance is exempt from CEQA and a Notice of Exemption will be filed if this ordinance is adopted. SECTION 4. California Government Code Section 36937 authorizes the City Council to adopt an urgency ordinance, by a four -fifths vote, without following the procedures otherwise required for the adoption of an ordinance, in order to protect the public peace, health or safety. This ordinance shall be immediately effective pursuant to Section 415 of the City Charter. SECTION 5. The City Council finds, determines and declares that the current and immediate threat to the public health, safety and welfare of the city and its citizens necessitates the immediate enactment of the ordinance. The facts constituting such urgency are set forth as follows: 1) The California State Legislature enacted SB7 which mandates that Charter Cities that do not have prevailing wage ordinances in place by that January 1, 2015 will not be able to receive State funding or other financial assistance. 2) SB7, codified in California Labor Code Section 1782, effective January 1, 2015, requires that Charter Cities must have a local prevailing wage ordinance in order to be eligible to receive to State funding or other financial assistance for construction projects. 3) Santa Ana is a Charter City which currently does not a have a prevailing wage ordinance. 4) This ordinance will immediately provide for payment of prevailing wages as required by State Law. 5) Failure to adopt an urgency ordinance will result in the City being unable to obtain State Funding for future construction projects which likely will exceed millions of dollars. 6) Such loss of funding will require diversion of other funds away from other critical programs, included but not limited to, police, fire and parks. Ordinance No. NS -XXX Page 3 of 5 y ll SECTION 6. The Clerk of the Council shall certify to the adoption of this ordinance and cause the same to be published in the manner prescribed by law. SECTION 7. This ordinance is introduced, passed and adopted at one and the same meeting and is thereafter immediately effective. The City Council finds that this ordinance is necessary to protect the public safety, health and welfare. The reasons for the emergency are set forth in Section 5 of this ordinance. ADOPTED this day of AYES: NOES: ABSTAIN: NOT PRESENT: Ordinance No. NS -XXX Page 4 of 4 Councilmembers Councilmembers Councilmembers Councilmembers 2014. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney y 1 M of Assistant City Attorney CERTIFICATE OF ATTESTATION AND ORIGINALITY I, Maria D. Huizar, Clerk of the Council, do hereby attest to and certify that the attached Ordinance No. NS -XXX to be the original ordinance adopted by the City Council of the City of Santa Ana on , and that said ordinance was published in accordance with the Charter of the City of Santa Ana. Date; Clerk of the Counc City of Santa Ana 50A -7 Ordinance No. NS -XXX Page 5 of 5 y 1 � • STATE OF CALIFORNIA EDMUND G. BROWN JR., Governor DEPARTMENT OF INDUSTRIAL RELATIONS �. Office of the Director -Legal Unit 160 Promenade Circle, Suite 330; Sacramento, CA 95834 .F '_ Tel: (916) 928 -3184 Fax: (916) 928-3196 February 28, 2014 Marcia Huizar Clerk of the Council 20 Civic Center Plaza, M -30 Santa Ana, CA 92869 Subject: State Funding Restriction for Charter Cities Dear Ms. Huizar, On October 13, 2013, Governor Brown signed Senate Bill 7 into law. Senate Bill 7 facilitated the addition of Section 1782 to the California Labor Code. The new law restricts state funding or financial assistance to cities that are not in compliance with California's prevailing wage laws. It also requires the Director of Industrial Relations to maintain a list of charter cities that may receive state funding or financial assistance for their construction projects. A copy of the law is enclosed for your convenience. Section 1782 of the Labor Code prohibits charter cities from receiving or using state funding or financial assistance for a construction project unless the city requires contractors on its public works to comply with California's prevailing wage requirements. Specifically, charter cities may receive state funding or financial assistance if the city has a local prevailing wage ordinance, applicable to all of its public works contracts, that includes requirements that are equal to or greater than the state's prevailing wage requirements. Section 1782 excludes contracts for projects of $25,000 or less for construction work, or projects of $15,000 or less for alteration, demolition, repair, or maintenance work. The law does not apply to funding that was awarded or bids advertised or awarded prior to January 1, 2015. In order to add your city to the list of charter cities that are in compliance with the law and are therefore eligible to receive state funding or financial assistance for construction projects, please confirm that your city has or intends to pass an ordinance that will facilitate compliance with Labor Code section 1782,.Please advise if your city intends to comply in another manner and believes it is or will be eligible for state funding. This information can be e- mailed to aber ingdir.ca.gov or faxed to (916) 928 -3196. If e -mail or fax is unavailable, the information can be mailed to: Department of Industrial Relations, Office of the Director -Legal Unit, Attn: Special Investigator Arnie E. Bergin, 160 Promenade Circle, Suite 330, Sacramento, CA 95834. If you have any questions, feel free to contact me at (916) 928 -3186. Sincerely, Arnie E. Bergin Special Investigator Enclosure ' • y Labor Code Section 1782 1782. (a) A charter city shall not receive or use state funding or financial assistance for a construction project if the city has a charter provision or ordinance that authorizes a contractor to not comply with the provisions of this article on any public works contract. (b) A charter city shall not receive or use state funding or financial assistance for a construction project if the city has awarded, within the prior two years, a public works contract without requiring the contractor to comply with all of the provisions of this article. This subdivision shall not apply if the charter city's failure to include the prevailing wage or apprenticeship requirement in a particular contract was inadvertent and contrary to a city charter provision or ordinance that otherwise requires compliance with this article. (c) A charter city is not disqualified by subdivision (a) from receiving or using state funding or financial assistance for its construction projects if the charter city has a local prevailing wage ordinance for all its public works contracts that includes requirements that in all respects are equal to or greater than the requirements imposed by the provisions of this article and that do not authorize a contractor to not comply with this article. (d) For purposes of this section, the following shall apply: (1) A public works contract does not include contracts for projects of twenty -five thousand dollars ($25,000) or less when the project is for construction work, or projects of fifteen thousand dollars ($15,000) or less when the project is for alteration, demolition, repair, or maintenance work. (2) A charter city includes any agency of a charter city and any entity controlled by a charter city whose contracts would be subject to this article. (3) A "construction project" means a project that involves the award of a public works contract. (4) State funding or financial assistance includes direct state funding, state loans and loan guarantees, state tax credits, and any other type of state financial support for a construction project. State funding or financial assistance does not include revenues that charter cities are entitled to receive without conditions under the California Constitution. (e) The Director of Industrial Relations shall maintain a list of charter cities that may receive and use state funding or financial assistance for their construction projects. (f) (1) This section does not restrict a charter city from receiving or using state funding or financial assistance that was awarded to the city prior to January 1, 2015, or from receiving or using state funding or financial assistance to complete a contract that was awarded prior to January 1, 2015. (2) A charter city is not disqualified by subdivision (b) from receiving or using state funding or financial assistance for its construction projects based on the city's failure to require a contractor to comply with this article in performing a contract the city advertised for bid or awarded prior to January 1, 2015. 50A -10 DECLARATION OF PUBLICATION STATE OF CALIFORNIA, ). ) ss. County of Orange ) I am a citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years and not a party to or interested in the above entitled matter. I am the principal clerk of The Notice, a newspaper of general circulation, published in the city of Santa Ana, County of Orange, and which newspaper has been adjudged to be a newspaper of general circulation by the Superior Court of the County of Orange, State of California, under the date of December 27, 2013, Case No. 30-2013 - 00684532-PR-OP-CJC, that the notice, of which the annexed is a true printed copy, has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to wit: September 25. 2015 "I certify (or declare) under the penalty of perjury under the laws of the State of California that the foregoing is true and correct ": Executed at Santa Ana, Orange County, California on September 25. 2015 Signatlre V The Notice Legal Aid Society of Orange County 2101 N. Tustin Ave. Santa Ana, CA 92705 714 -571 -5242 PROOF OF PUBLICATION ORDINANCE PUBLICATION The Santa Ana City Council adopted the following emergency ordinance by a 6 -0 vote (Tinajero absent) at the regularly scheduled meeting held December 16, 2014, 22 Civic Center Plaza, Santa Ana. ORDINANCE NO. NS- 2$75- AN EMERGENCY ORDINANCE OF THE CITY OF SANTAANAAMENDI NG SANTAANA MUNICIPAL CODE SECTION 33 -202 AND ADDING 33 -206 TO THE SANTAANA MUNICIPAL CODE RELATING TO PAYMENT OF PREVAILING WAGES The ordinance is on file in the Clerk of the Council Office, Santa Ana City Hall, 20 Civic Center Plaza, telephone (714) 647 -6520_ Maria Huizar. Clerk of the Council Publish: The Notice (LASOC) Date: September 25, 2015 (LN 738)