Are California cities getting the most out their ability, under the California Constitution, to exercise “home rule”? According to a comprehensive report released today by the Associated Builders and Contractors, California Cooperation Committee (ABC-CCC), the vast majority of California cities are not using important tools at their disposal that could dramatically help control spending and protect taxpayer funds. The report released today is an important blueprint for cities looking to exercise greater autonomy over their municipal affairs.
The ABC-CCC report entitled "Are Charter Cities Taking Advantage of Prevailing Wage Exemptions?" examines the prevailing wage policies of the 114 California charter cities to determine how many of them choose to exempt themselves from onerous state wage regulations when constructing municipally-funded public works projects. Surprisingly, it found that 58 percent of those cities continue to follow state mandates regarding prevailing wage despite the fact they have granted themselves the ability to take greater control over municipal affairs. By clinging to the state’s prescribed wage demands, municipalities are often paying a premium of anywhere from 6 to over 15 percent on municipally-funded public works projects. By cutting the cord from Sacramento, these cities could realize millions in savings and ensure that more local companies have the opportunity to bid on important jobs.
For those unfamiliar with what a charter city is, it is a city that has chosen to operate under a constitutionally-protected city charter where provisions of the charter pertaining purely to municipal affairs trumps state law. The ability of charter cities to exempt themselves from state law on prevailing wage for locally-funded projects was affirmed in April by the California’s 4th District Court of Appeal but 67 of the 114 charter cities in California continue to ignore this cost-saving opportunity, including some of California’s largest cities like Los Angeles, San Francisco, San Jose, Oakland and Riverside. Recently, the city of Palo Alto reaffirmed its commitment to taxpayers by continuing to exercise its exemption from prevailing wage law after a staff report indicated that following the requirement would hike the cost of public works projects by 10 percent.
Unfortunately, not enough cities are taking advantage of this opportunity. Currently, only 34 of California’s 480 cities fully exempt themselves while a handful of others partially exempt themselves from the state’s prevailing wage law. If only half of California’s cities took this important step, the savings could be astronomical. Modesto City Councilmember Janice Keating said her city alone has saved $1.2 million over the last five years by utilizing their charter-granted autonomy. That is more money for police, firefighters and other important local services.
I urge every local elected official and every policy maker to read this report and learn how they, too, can make “home rule” work for them and their constituents.