Commentary: Court decision illustrates charter dangers

On Monday, the California Supreme Court ruled in a split decision that Vista’s charter permitted the city to pay nonprevailing wages to build two fire stations (“Ruling: Charter can set wages,” July 3).

The court’s decision illustrates three of the dangers of Costa Mesa’s proposed charter: delay, litigation expense and compromised public safety.

The court found that the design and construction of a fire station, exclusively paid for with municipal funds, was a “municipal affair.”

Because Vista is a charter city, the court held that Vista does not have to pay prevailing wages to the workers on the project. The prevailing-wage rate is not the highest wage paid; it is the basic hourly rate paid on public works projects to a majority of workers engaged in a particular craft, classification or type of work within the locality and in the nearest labor market area.

If state or federal funds would have been used to build the fire stations, then Vista would have had to pay prevailing wages.

It took five years for the Vista case to wind through the court system. The resolutions approving Vista’s fire station design and construction contracts were passed in October 2007. During the next five years, Vista paid for a trial, an intermediate appeal and a trip to the California Supreme Court.

Such legal machinations cost a fortune. Costa Mesa can expect the same cost and delay if the proposed charter becomes law. Of course, any hoped-for savings on “prevailing wage” are likely to be offset by increased legal expenses.

Costa Mesa’s City Council should have learned the lesson of how hasty decisions can lead to delay and outrageous legal expense. In the 2012 fiscal year alone, Costa Mesa has spent or incurred more than $2 million on legal expenses, more than $900,000 of which stems from the council majority’s decision to send out more than 200 termination notices in March 2011 against the city attorney’s advice.

There is a long way to go on Costa Mesa’s lawsuit during which the objective of the layoff notices — outsourcing of certain city employee functions — has been blocked by court order.

The ruling in the Vista case does not eliminate litigation risk for Costa Mesa; indeed, the Vista case illustrates the risk. The Vista court applied a four-factor test to determine whether the state laws or Vista’s charter was the controlling law regarding prevailing wages. The parties vigorously argued each factor during the five-year litigation.

For instance, the majority ruled that the contracts to construct fire stations were “municipal affairs” because they “are facilities operated by the city for the benefit of the city’s inhabitants, and they are financed from the city’s own funds.”

But the majority emphasized that the “concept of municipal affairs is not a fixed or static quantity ... [but one that] changes with the changing conditions upon which it is to operate.”

Such murky, shifting legal standards keep lawyers in business. If Costa Mesa’s proposed charter passes, then Costa Mesa will pay for numerous lawyers to argue over what is, and what is not, a “municipal affair.” The Vista case proves the point.

Finally, the Vista case illustrates the risk to public safety. On construction contracts “you get what you pay for.” Quality risk, in Vista’s case, can compromise public safety because the contract is for the design and construction of two fire stations. Our current City Council has stated that it intends to use prevailing-wage workers on construction projects with high safety risk. But they cannot speak for future councils.

Public safety is always the paramount concern — above the risk of delay and litigation expense. Costa Mesa’s proposed charter creates a risk to public safety, particularly after the Vista case. That is a risk we cannot take.

Business attorney JOHN STEPHENS is candidate for Costa Mesa City Council.