Eye On Modesto

Thoughts and observations about Modesto and Stanislaus County

The Letter from Modesto Protesting SB-7 Inclusion of Maintenance In Prevailing Wage Programs

March 13,2013

English: Flag of Sacramento, California
The Honorable Darrell Steinberg
Senate President Pro Tem
State Capitol, Room 205
Sacramento, CA 95814

The Honorable Anthony Cannella
California State Senate
State Capitol, Room 3048
Sacramento, CA 95814

Re:   Opposition to SB 7 (Steinberg) Charter Cities: Unlawful Conditions on State Funding

Dear Senators Steinberg and Cannella,

The City of Modesto (Modesto) regrets to inform you of our opposition to SB 7 (Steinberg), which
would prohibit a charter city from receiving or using 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 state prevailing wage requirements on local construction projects funded by (nonstate)
city funds.

We are very concerned that as drafted, the legislation will jeopardize the City’s ability to contract out
basic maintenance services of its parks, municipal buildings and municipal facilities. These
contracts include a multi-year maintenance agreement with a local non-profit organization that
employs developmentally disabled workers.

Modesto, like many other cities, has been forced to utilize competitively bid contracts for
maintenance of a number of city owned facilities for fiscal survival. Modesto currently has at least
14 competitively bid contracts worth over $4.7 million annually for maintenance of city owned
facilities. These include but are not limited to contracts for maintenance of parks, janitorial services
and golf course operations. The requirement to pay prevailing wages on these contracts will impact
Modesto’s general fund and thus affect the level of service Modesto is able to provide to its citizens.
This new requirement will also impact a number of maintenance contracts in our utility funds,
increasing costs for our rate payers.

This measure violates the fundamental principle of local control and the constitutional limits of state
authority over charter cities, as recently held by the Court in the Vista decision.1 This measure
conflicts with Vista by attempting, via the Legislature, to leverage a different outcome than the
Court’s ruling by withholding vital state construction funds, derived from all of the state’s taxpayers,
from charter cities that fail to adopt prevailing wage requirements for projects built with local funds.
Such a condition is unlawful because the state is seeking to leverage outcomes it lacks the legal
authority to compel.

Modesto is a charter city that has opted to not impose state prevailing wage requirements under our
charter for projects that are considered to be strictly of municipal concern. Modesto does require
the payment of prevailing wages on all projects that are not considered to be a municipal concern in
strict accordance with the Department of Labor and Industrial Relations’ interpretation. Modesto
has grave concerns that this legislative tactic will be used in the future to erode other local flexibility
that is important to our community. Thus, we oppose this measure due to its undercutting of local
charter authority. The state should respect the Court decision in Vista and stay out of the matter.
This measure would establish a disturbing framework for future state micromanaging of charter city
laws and policies by the tactic of withholding state funds as political leverage to attempt to force
changes to city charters and ordinances.

At a minimum the proposed legislation should be amended to eliminate its application to
maintenance contracts. While Modesto believes this bill is inherently flawed from a legal
perspective, excluding maintenance contracts would at least help avoid forcing affected cities to
choose between closing parks and keeping police officers on the street.
For these reasons, the City of Modesto opposes this legislation.

cc: Senator Ted Lieu, Chair, Senate Committee on Labor and lndustrial Relations
(Attn. Alma Perez @ Fax No. (9161-327-5703)
Gareth Elliott, Legislative Affairs Secretary, Office of Governor Jerry Brown


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