A committee has been convened to study whether Arroyo Grande should try to become a charter city, a move that officials say could save money and give it more local control.
The idea, however, faces stiff opposition from local union members, who worry that one provision in many charters — the ability to forgo paying prevailing wage for certain public works jobs — will shortchange local workers, divert jobs to out-of-town companies and result in inferior projects.
The Arroyo Grande City Council first discussed the idea of becoming a charter city more than a year ago, but hasn’t yet asked voters to weigh in.
Instead, an 11-member committee has been appointed to develop recommendations on a proposed charter, and will advise whether the city should place a measure on the ballot.
Unlike general law cities, charter cities can establish their own policies regarding municipal affairs such as local elections, council member pay, certain land use and zoning decisions, and contract, purchasing and bidding procedures.
Charter cities are not bound by state prevailing-wage requirements, as long as projects are funded exclusively with local dollars.
The exemption was recently upheld by the California Supreme Court, which last summer ruled that charter cities don’t have to comply with a state law mandating payment of prevailing wages on municipal construction projects.
About 120 other cities in California, including San Luis Obispo, have become charter cities. But San Luis Obispo’s charter still requires the city to pay prevailing wage on all projects.
Grover Beach recently asked voters to approve a charter that included the prevailing wage exemption, but a measure on the November ballot failed by four votes. Grover Beach did include a provision to establish certain bid advantages for local companies.
Arroyo Grande City Manager Steve Adams estimated the prevailing wage exemption could save the city about $50,000 to $200,000 in the 2013-14 fiscal year, based on an estimate of potential savings on projects that could be funded with local money that year.
In a staff report written in April, he noted that “it is a generally accepted position among municipal agencies that costs increase anywhere from 5 percent to 30 percent” when prevailing wage is required.
The city could establish preferences to use local contractors and vendors, which Adams said is not allowed for general law cities.
Other benefits of becoming a charter city include allowing volunteer organizations to accept work by local contractors at a reduced cost on community projects on city property; using mail-in ballots for special elections, which would save money; and creating new opportunities for economic development incentives.
But several union officials dispute that cities save money by forgoing prevailing wage. Local money is not staying in the area if local workers are underpaid, or funds for a project are spent with an out-of-area company that can afford to underbid local contractors, according to two union representatives.
“In the eyes of a lot of cities or counties, they think it’s costing them more but they’re actually getting the highest-caliber workers,” said Don Savory, business manager for Ironworkers Local 155. He’s based in Fresno but represents 14 counties, including San Luis Obispo. “The job is done on time and safely. If you get rid of prevailing wages, you’re basically busting unions.”
Prevailing wage also keeps a level playing field, results in high-quality work and ensures that workers go through apprenticeship programs and receive benefits, said Steven Weiner, executive secretary-treasurer for the Tri Counties Building and Construction Trades Council, which represents 33 craft unions in Santa Barbara, San Luis Obispo and Ventura counties.
Meanwhile, the Arroyo Grande charter advisory committee will likely start meeting next month.
The committee consists of local residents and business leaders, including Bob Lund, Andrea Montes, Zachary Hall, John Keen, Duke Sterling, Randy Steiger, Judith Bean, Vard Ikeda, Trish Hardy, Kirk Scott and Tom Goss.