Charles BISHOP, individually and as Business Representative and Member of Local Union No. 322, International Brotherhood of Electrical Workers, Plaintiff and Appellant, v. CITY OF SAN JOSE, a municipal corporation, et al., Defendants and Respondents.
Plaintiff, Charles Bishop, appeals from an adverse judgment in an action seeking an injunction, declaratory relief and damages against the City of San Jose and its officers (hereafter City). Plaintiff, as a resident and taxpayer of the City, as the business agent of Local No. 322 of the International Brotherhood of Electrical Workers (hereafter Union), and as the assignee of certain Union members employed by the City, filed this action alleging that from 1958 to 1966, the City had failed to pay its electricians the prevailing rate of per diem wages for their craft, pursuant to the prevailing wage law (Lab.Code, § 1770 et seq.) and had failed to seek competitive bids for a number of improvement and construction projects, pursuant to the applicable City Charter provisions.
On appeal, plaintiff contends that: 1) the trial court erred in concluding that wages paid to City electricians were a ‘municipal affair’ governed exclusively by the City Charter, rather than the state prevailing wage law (Lab.Code, § 1771 et seq.); 2) the findings are incomplete and inconsistent; and 3) the City violated the competitive bidding requirements of its Charters and should have been enjoined from future violations, and required to pay damages to the aggrieved Union members.
The record reveals the following facts: The City is a freeholders' Charter City organized under the Constitution and laws of this state. From May 3, 1965, the City operated under its 1915 Charter, as amended, hereafter the 1915 Charter; since 1965, the City has operated under the 1965 Charter, as amended, hereafter referred to as the 1965 Charter. Both Charters contain ‘home rule’ provisions and provisions requiring that all public public buildings and works costing more than a specified amount shall be put out for contract and let to the lowest responsible bidder.1 ,2 Neither Charter contained any provisions relating to prevailing wages as the City periodically passes prevailing wage ordinances.
The City employs 17 electricians (one foreman, 12 journeymen and 4 apprentices) who work under the City electrician and are responsible for the additions, modification, maintenance and repair of all City electrical facilities, buildings and equipment, including street lights, traffic signals, fire alarm boxes and systems, etc. In 1965 and 1966, 25 percent of the City electricians were working on new construction; in 1963, however, 41 percent had been so employed. Until 1958, the City electricians were paid the equivalent of a Union scale.3 Since that time, however, they have been on a different basis, namely, monthly salaries. These monthly salaries are set by a comparison with the hourly rates for electricians provided in collective bargaining agreements and in relation to monthly salaries for other City Civil Service' employees. Therefore, the wages paid to the City electricians after 1958 were not set directly in relation to the Union scale for electricians. Between 1958 and 1966, the City also adopted prevailing wage ordinances applicable to electricians employed on public works that were done under contract. The base salary paid by the City to its electricians was about $4.80 an hour. This hourly rate was below the $5.23–$5.85 established by the Union's collective bargaining agreements for electricians employed by private contractors, including those awarded City contracts.
The City electricians are permanent Civil Service employees with a guaranteed annual wage and receive, in addition, the basic hourly wage, and a number of fringe benefits, such as a retirement benefit provided by the City of 9.813 percent of the basic hourly rate; health insurance at about 1 percent a month; sick leave that can be cumulated up to 1,500 hours and received as an additional retirement benefit; 10–11 holidays a year, vacation, military and funeral leave, death benefits and special holidays, such as Good Friday.
Under collective bargaining agreements, electricians receive $5.23–$5.85 per hour. In 1964, this included a 4 percent hourly vacation differential, and a 10 cent an hour health and welfare benefit, both of which are deducted and put in a trust account for the employee. After 1964, the hourly Union scale included a 4 percent deduction for holidays, an 8 percent vacation deduction, a 15 cent an hour health and welfare deduction, and a 1 percent pension benefit. Special holidays, like Good Friday, were also customarily holidays in the construction industry.
Because of the varying fringe benefits, no precise comparison could be made.4 In addition, the study prepared by the City Finance Director to compare the monthly compensation of City electricians and those employed in private industry, consisted of a comparison of the highest scale that a journeyman electrician could obtain from the City with the minimum scale that an electrician could obtain in private industry. In the opinion of the City Budget Officer, the impact of applying the prevailing hourly Union scale to the City electricians would result in the necessary increase of other City craft employees and result in a 9 cent increase in the City property tax.
The complaint in the instant case focused on the following 4 kinds of work done by the City electricians between 1958 and 1966, in violation of the prevailing wage law and applicable Charter provisions: 1) the fire alarm system; 2) the overhead traffic signals; 3) the IBM project; and 4) certain miscellaneous electrical work at the municipal airport, in Kelley Park, and inside the City Hall. A more detailed description of each item is required for an understanding of the questions presented.
THE FIRE ALARM SYSTEM
In 1958, after the City moved to its new Civic Center, a new communications center was built. The old communications center, containing all of the electrical equipment relating to the old fire alarm system was destroyed. The City electricians installed the new fire alarm systems in the new communications building. This involved removing old alarm circuits and extending new ones to all of the existing fire houses. From 2 to 6 City electricians worked on the fire alarm systems at various times from 1958 to 1963. One electrician spent 95 percent of his time for 1 1/2 to 2 years working on the fire alarm system. The total cost of the fire alarm installations and extensions was $55,000, paid by the City from capital funds. Thus, the cost of the fire alarm project far exceeded the $1,000 limitation of the 1915 Charter.
The uncontroverted evidence indicated that although the materials for the fire alarm installation were purchased by bid, all work relating thereto was done by the City electricians. This was in accordance with a long standing custom of the City to do all fire alarm system work with its own employees and not put it out to bid. For as long as anyone could remember, all fire alarm installation systems had always been done by City employees and no attempts were made to keep records as to whether the $1,000 limitation of the applicable Charter had been exceeded. There was some evidence that other cities also treated their fire alarm systems in this manner.
THE OVERHEAD TRAFFIC SIGNALS
Between 1958 and 1966, the City electricians installed a large number of overhead traffic signals at various City intersections as required by the rapid growth of the City during this period. The maintenance of the City's 237 traffic signals is regularly assigned to 4 of the City's 17 permanent electricians, and paid for from the state gas tax funds. These gas tax funds are the chief source of funds for maintenance of the City streets and 40 percent thereof is used for new construction. Some of the intersections involved state highways. State highways, or portions thereof, within the City limits are maintained by the City pursuant to agreements with the state. All of the traffic signals installed by the City electricians were temporary and so classified as they were installed at intersections that are subsequently expected to have street widening or other improvement work. A temporary signal usually remained in place for an average of 3.7 years. Of the 32 temporary signals installed by the City electricians between 1958 and 1964, 6 exceeded the then applicable Charter limit of $1,000. After the adoption of the 1965 Charter, the installation of temporary traffic signals was contracted out. Between 1958 and 1966, the City contracted out the installation of 101 traffic signals at a cost of $1,378,000.
THE IBM PROJECT
In June of 1964, the City entered into an agreement with the IBM Company for a joint project at 33 City intersections to establish whether it was economically and functionally feasible to control the flow of traffic with a digital computer. This experimental project, which began in June of 1964 and ended in November 1965, involved delicate coordination between the local ‘controllers' (used at each intersection to establish the relief of cycle length at the intersection and offsets between intersections) and detectors located in the street that reacted as each automobile went over them. The concept of having a digital computer take over the control of traffic was unique in the United States. There were many problems with the detectors as the original ones provided did not function properly and had to be replaced. In addition, because of the uniqueness and newness of the project, a number of contractors were reluctant to bid. As the project was unique, it attracted a great deal of national and international interest.
Three new electricians were hired by the City before the project was started and others used as needed. The uncontroverted evidence indicates that the labor costs on the project were far in excess of the then applicable $2,500 labor cost limitation of the 1965 Charter. The City's operating engineer at the time realized that the labor costs of the City electrical crews working on the IBM project would exceed $2,500. One City electrician (Mr. Smith) spent at least half of his time during 1964 on the IBM project and at least 4 months of 1965; another, Mr. Hall, worked about 3 months installing the detector cabinets. Much of the work done by City electricians on the IBM project consisted of experiments with different types of installations to help the City determine how to prepare the specifications for the portions of the project that were subsequently put out to bid.
The City's expenditures for its portion of the IBM project exceeded $300,000, all paid out of the 1961 Improvement Bond Fund. Of this total, $83,831.12 was contracted out.
THE MISCELLANEOUS PROJECTS
The City electricians also installed new lights in some hangars and underground taxi-way lights at the municipal airport; revised some equipment at ‘Happy Hollow,’ the children's fairyland of Kelley Park; and the necessary rewiring, etc. after certain moveable walls were relocated on the third floor of the City Hall. The labor cost of the airport and Kelley Park items could not be ascertained. The City electricians worked for 681 hours on the rewiring in the City Hall, at a total labor cost of $3,228.
After the filing of this complaint, the City changed a number of its procedures, including the establishment of the position of the operating engineer charged with determining whether or not jobs were within the Charter bid limitations. In addition a continuing check is kept on all work orders. The City also uses a 20 percent tolerance to make certain that work orders are within the $2,500 labor cost limit of the 1965 Charter.
The trial court made the following findings: all of the City electricians who have assigned their claim to plaintiff were year-round, full-time, regularly salaried Civil Service employees of the City, paid monthly salaries for their respective job classifications in accordance with the City's salary ordinances; and in addition, were paid overtime and received other benefits as set forth below;5 that with respect to the salaries and other benefits provided for its employees, the City at all times acted in the good faith belief that the prevailing wage provisions of Labor Code, section 1771 et seq. did not apply.
The contemporaneous long standing and consistent administrative construction of the 1915 Charter was that neither the fire alarm system nor the traffic signal system came under that section and that in calculating the cost for the purposes of the section, the cost of the materials already purchased pursuant to sections 58a and 59 of the 1915 Charter was to be excluded. This administrative construction was reasonable, held conscientiously in good faith, and the work done on the fire alarm and traffic signal systems was done pursuant thereto in good faith, and did not in any way violate section 89.
The period from 1958 to 1966 was a period of extraordinary and explosive growth in the City. During this period of time, the City awarded construction contracts totaling more than $67,750,000 for capital improvement work of all kinds, including City streets, bridges, sewers, drains, sewage treatment plant, parks, playgrounds, library, water lines, street lights, traffic signals, fire alarms, airport expansion and community buildings. The electrical work done by the City's own employees in the 4 areas here complained of amounted to less than 1/4 of 1 percent of the amount of construction work done by contract. In addition to the construction contracts awarded by the City, over $70,000,000 of street improvement work, including sewers, drains and street lights, were installed in the City by subdividers and developers and dedicated to the City. At the time of trial, the work load of the City's own electricians was about 84 percent maintenance and only 16 percent construction.
While operating under the 1915 Charter, the City did not use its own employees to do any work at the airport, in the City Hall, or any streets where the cost of the job, including the cost of labor and materials, exceeded $1,000, except for 3 small jobs on the City's traffic signal system and some of the work on the fire alarm system. With respect to these 2 items, the City was acting in good faith and in the conscientious belief that the work done did not come under section 89; that such work did not come under section 89 and, in any event, was de minimis.
The work done by the City's own employees on the IBM project was experimental in nature and, therefore, no bidding specifications could be devised therefor nor would any useful purpose have been accomplished by so doing. The prevailing wage provisions of Labor Code, section 1771 et seq. do not apply to the setting of salaries for the City's own employees. Even if they did, the monthly salaries regularly paid to the City's own employees, together with the fringe benefits in the form of paid holiday vacations and sick and disability leave, health insurance and retirement, were at least equivalent to the prevailing rate of per diem wages, including overtime, paid to electricians who are not City employees, for work exclusive of maintenance work. The City did not by any of the work done with its employees or in any other way violate either the 1915 Charter or the 1965 Charter. Since its effective date, the City has faithfully complied with the requirements of section 1217 of the 1965 Charter, and has instituted and is following workable and effective procedures to guard against any violation of the requirements of that section and the City intends in good faith to continue its compliance with the requirements of section 1217 of the 1965 Charter.
If the prevailing wage provisions of Labor Code, section 1771 et seq. were applied to set the salaries of the year-round, full-time, regularly salaried Civil Service electricians, it would result in a substantial increase in the City's salary costs and tax rates, resulting in a 9 cent increase in the property tax rate.
The trial court then concluded that: 1) the prevailing wage provisions of section 1771 et seq. of the Labor Code could not constitutionally be applied to set the salaries of year-round, full-time, regularly salaried Civil Service electricians employed by the City, as it would be contrary to sections 6, 8, 8 1/2 and 13 of article XI of the state Constitution; 2) the work of constructing and maintaining the City's streets, including lights, sewers and drains, its traffic signals, fire alarm system, parks and playgrounds, its municipal airport and its municipal buildings was purely a ‘municipal affair’ and not a matter of statewide concern; the expenditure of the City's own moneys for the work done, including the payment of salaries to the City's employees, was a purely municipal affair and not a matter of statewide concern; 3) the City's fire alarm system and traffic signal system were not public works within the meaning of the 1915 Charter; that the work on the fire alarm and traffic signal systems did not come under the section; that the work done on the IBM project was exempted from the competitive bidding provisions of both Charters, as it was of an experimental and research nature and, therefore, specifications and plans would be impossible and the bidding procedure and requirement would serve no useful purpose; 4) the City did not, by having any of the work done with its own employees, or in any other way, violate section 89 of the 1915 Charter or section 1217 of the 1965 Charter; that the cost of materials already purchased by the City under sections 58a and 59 of the 1915 Charter must be excluded when calculating costs for the purpose of the competitive bidding provision of the 1915 Charter, which applies only to new construction and not to maintenance; 5) the work related to the moveable walls in the City Hall and making the wiring changes required thereby is exempt from the bidding requirement of the 1965 Charter and need not be followed where the work is done by the City's own employees; 6) the determination of what is a public works project within the meaning of section 1217 of the 1965 Charter is essentially a matter of legislative and administrative concern; that the administrative determination of what constitutes a single public works project will be given great weight but must be reasonable and that in making this determination, the City may take into consideration not only engineering principles but also financial budgetary matters and the exigencies of work priority and work load. Accordingly, the trial court concluded that plaintiff, his assignors, the Union and its members, had not suffered any loss or injury or damage by reason of any act or omission of the City and were, therefore, not entitled to any damages or an injunction. The court entered its judgment in favor of the City, and this appeal ensued.
I. THE PREVAILING WAGE LAW
Plaintiff first contends that the trial court erred in concluding that the prevailing wage law could not be constitutionally applied to the electricians directly employed by the City. The trial court's conclusion was predicated upon the dual propositions that the California Constitution gives Charter cities exclusive plenary power with respect to all municipal affairs, including matters of public employment,6 and that the City has exercised those powers in a manner consistent with the Charter provisions.
There is no question but that the City's actions with respect to the payment of its electricians here are inconsistent with the provisions of Labor Code, section 1770 et seq. and that one or the other must give way. The basic question is whether or not the matters embraced by the code sections are, when applied to the City, exclusively municipal affairs. If they are, the prevailing wage law does not apply. On the other hand, the clear language of the constitutional provisions relied on by the City herein, deny to the state Legislature the right to interfere with a chartered city only with respect to matters that are exclusively municipal affairs (Professional Fire Fighters, Inc. v. City of Los Angeles, 60 Cal.2d 276, 290–291, 32 Cal.Rptr. 830, 384 P.2d 158).
Chartered cities have full power to regulate municipal affairs. The 1914 amendment to the state Constitution removed the necessity for the enumeration of powers in a city charter. The purpose of this amendment was to free cities that availed themselves of home rule of the control of general laws in the area of municipal affairs and to give them complete control over such matters, whether or not their charter expressly enumerated a power over the municipal affair in question (Bellus v. City of Eureka, 69 A.C. 353, 363–364, 71 Cal.Rptr. 135, 444 P.2d 711). Neither the 1915 nor the 1965 Charter contained any provisions pertaining to prevailing wages. The City customarily adopted periodic prevailing wage ordinances.
The City here relies on a series of authorities holding that public employment in a chartered city is basically a municipal affair. However, none of these cases hold that all matters connected with public employment in a charter city are exclusively municipal affairs in which the state has no concern. Each deals with a specific phase of city employment and each holds that the phase there under consideration is a municipal affair.
For example, City of Pasadena v. Charleville, 215 Cal. 384, 10 P.2d 745, and Adams v. Wolff, 84 Cal.App.2d 435, 190 P.2d 665, held that the hiring and paying of municipal employees is generally a municipal affair. Neither denies the proposition that there may be particular phases of public employment that are of state concern. Significantly, City of Pasadena v. Charleville, supra, held that the Public Works Alien Employment Act of 1931 (now Lab.Code, § 1850) prevailed over local ordinances in regard to the construction of city-owned works.
Thus, there are instances where the relationship between a city and its employees are deemed to be of statewide concern, and where general laws prevail over local acts of a chartered city, even though they deal with matters that, generally speaking, may be defined as strictly municipal affairs. Thus, it has been held that chartered cities are subject to the Workmen's Compensation Act (Healy v. Industrial Acc. Com., 41 Cal.2d 118, 258 P.2d 1), as well as certain portions of the Military and Veterans Code, despite contrary provisions in the City's Civil Service regulations (Cunningham v. Hart, 80 Cal.App.2d 902). Professional Fire Fighters, Inc. v. City of Los Angeles, supra, held that since labor relations are a matter of statewide concern, the sections of the Labor and Government Codes pertaining to employee organizations for law enforcement officers and firemen applied to charter cities. In Fort v. Civil Service Commission, 61 Cal.2d 331, 38 Cal.Rptr. 625, 392 P.2d 385, and Kinnear v. City etc. of San Francisco, 61 Cal.2d 341, 38 Cal.Rptr. 631, 392 P.2d 391, it was assumed, without discussion, that Government Code, sections 3201–3205, which regulate political activities of local public employees, were applicable to chartered cities and counties. Also in point are cases holding that many other kinds of local charter provisions must give way to the general laws enacted on the same subject (for example, Eastlick v. City of Los Angeles, 29 Cal.2d 661, 177 P.2d 558, 170 A.L.R. 225; City of Pasadena v. Chamberlain, 204 Cal. 653, 269 P. 630; Nicholl v. Koster, 157 Cal. 416, 108 P. 302; City of Sacramento v. Industrial Acc. Com., 74 Cal.App. 386, 240 P. 792; Tolman v. Underhill, 39 Cal.2d 708, 249 P.2d 280).
Because the sections of article XI fail to define municipal affairs, it becomes necessary for the courts to decide, under the facts of each case, whether the subject matter under discussion is of municipal or statewide concern. This question must be considered in the light of the legislative purpose in each individual instance (Professional Fire Fighters, Inc. v. City of Los Angeles, supra). Thus, here, we must determine whether the Legislature was attempting to deal with the compensation to be paid to certain public employees on a statewide basis and whether the particular aspect of labor relations covered by the prevailing wage law is of the same statewide concern, for example, as collective bargaining organizations for public employees and workmen's compensation. The question is one of first impression.
We conclude that the very language of sections 1771, 1772 and 1773, when read together with the other pertinent provisions of Part 7 of the Labor Code, clearly indicates a legislative purpose to apply the minimum wage to certain public employees on a statewide basis (including municipal employees). We also consider the matter of a prevailing minimum wage rate within the same general category of statewide concerns as workmen's compensation and the right of public employees to organize.
The Labor Code provisions here in issue (like those in the Professional Fire Fighters case, supra) are all found in Division 2, Part 7 of the Labor Code, which is entitled ‘Public Works and Public Agencies.’ The very first section of Chapter 1, entitled ‘Public Works' defines the term as follows: ‘As used in this chapter ‘public works' means: (a) Construction, alteration, demolition or repair work done under contract and paid for in whole or in part out of public funds, except work done directly by any public utility company pursuant to order of the Public Utilities Commission or other public authority.
‘(b) Work done for irrigation, utility, reclamation and improvement districts, and other districts of this type. ‘Public work’ shall not include the operation of the irrigation or drainage system of any irrigation or reclamation district, except as used in Sections 1850 to 1854 of this code relating to employment of aliens, and Section 1778 relating to retaining wages.
‘(c) Street, sewer or other improvement work done under the direction and supervision or by the authority of any officer or public body of the State, or of any political subdivision or district thereof, whether such political subdivision or district operates under a freeholder's charter or not.’ (Italics added.)
Significantly, subdivision (a) refers to ‘work done under contract,’ while subdivision (c) refers to ‘work done under the direction and supervision or by the authority of any * * * political subdivision’ etc. and clearly indicates that it applies to cities operating under a freeholder's charter.
Labor Code, section 1771 provides: ‘Not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed, and not less than the general prevailing rate of per diem wages for holiday and overtime work fixed as provided in this chapter, shall be paid to all workmen employed on public works exclusive of maintenance work.’ (Italics added.) Thus, the language of section 1771 is not limited to workmen employed on public works by contract, but ‘all workmen employed on public works exclusive of maintenance.’ Any doubts about the broad scope of section 1771 are resolved by the language of section 1772, which appears to be designed to carefully include workmen employed under contract, as it provides: ‘Workmen employed by contractors or subcontractors in the execution of any contract for public work are deemed to be employed upon public work.’
We recognize the existence of some authorities in other jurisdictions that, for the purpose of applying a prevailing wage statute, distinguish between workmen employed by contract and those not employed by contract but directly by a public entity.7 However, the language of the sections discussed above, as well as section 1773, indicates that our prevailing wage statutes were more broadly designed than those of other jurisdictions.
For example, section 1773 provides (so far as pertinent): ‘The body awarding any contract for public work, or otherwise undertaking any public work, shall ascertain the general prevailing rate of per diem wages in the locality in which the public work is to be performed for each craft, classification or type of workman needed to execute the contract, and shall specify in the call for bids for the contract, and in the contract itself, what the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in the locality is for each craft, classification or type of workman needed to execute the contract’ (italics added).
We also note that recently, our Supreme Court in Kugler v. Yocum, 69 A.C. 379, 386, 71 Cal.Rptr. 687, 445 P.2d 303, pointed out, at footnote 4,8 that while section 1773 of the Labor Code has never been directly attacked, it has been implicitly sustained (Franklin v. City of Riverside, 58 Cal.2d 114, 23 Cal.Rptr. 401, 373 P.2d 465).
As this court (Division One) recently said in Redwood City v. Moore, 231 Cal.App.2d 563, at 580 and 581, 42 Cal.Rptr. 72, at 84: ‘* * * the constitutional concept of municipal affairs is not a static quantity, but changes with the changing conditions upon which it is to operate. Whether such a change has taken place can, of course, be determined by the courts, under the facts of each case, and in making that determination the courts will look to the legislative purpose in each individual instance. (Professional Fire Fighters, Inc. v. City of Los Angeles, supra, 60 Cal.2d p. 294, 32 Cal.Rptr. 830, 384 P.2d 158.) In Professional Fire Fighters, it was clearly held that the Legislature can enact a statute making a municipal affair subject to general law on the basis of statewide concern. It was there held that, because labor rela tions are of statewide concern, the Legislature could by statute, authorize fire fighters to organize and join labor organizations, and that such statutes were applicable to a city whose charter provisions, ordinances and regulations, inconsistent with such statute, must give way. The plain holding of Professional Fire Fighters is that the Legislature [under the proper circumstances] does have the power to change a municipal affair into a matter of statewide concern, and thus impinge upon local control, where it is the legislative purpose to deal with the particular subject matter under discussion on a statewide basis. (See Helmer v. Superior Court, 48 Cal.App. 140, 141, et seq., 191 P. 1001; Key System Transit Co. v. City of Oakland, 124 Cal.App. 733, 741, 13 P.2d 979; People v. Western Air Lines, Inc., 42 Cal.2d 621, 635, 268 P.2d 723.)’ (Italics added.)
Therefore, we cannot agree with the City that Pasadena v. Charleville, supra, is controlling in the instant case. The improvement there contemplated (a galvanized wire fence around a city-owned water reservoir) was clearly at that time a municipal affair and a far cry from the improvements here undertaken. Furthermore, in that case and at that time, the court fell into the error of looking at the issues solely from the standpoint of the particular physical result to be achieved rather than any statewide objective the Legislature may have entertained.
Our Legislature, in enacting the prevailing wage law, undoubtedly had under consideration the general public policy of a minimum wage for all mechanical and manual labor employed by the state or its political subdivisions, and not the particular kind of work to be done, or the physical result to be achieved thereby.
We are, therefore, of the opinion that the principle of the prevailing wage law (like that underlying the statutes relating to the organization and political rights of public employees) is obviously one of general and statewide concern, and not merely a municipal affair. Thus, we hold that the prevailing wage provisions of the Labor Code apply to all workmen employed on all kinds of public works (except as otherwise provided in section 1720) regardless of whether employed by contract, subcontract or, as here, directly by a charter city (cf. State v. Jaastad (1934), 43 Ariz. 458, 32 P.2d 799). We point out, however, that the electrical work done at the municipal airport, Kelley Park and the City Hall falls within the ‘maintenance’ exception of Labor Code, section 1771.
As our above conclusion compels a reversal of the judgment, we will deal only briefly with the other contentions on appeal.
We note that the trial court's findings on the one hand that the City electricians were, in fact, receiving salaries equivalent to the general prevailing rate of per diem wages, and on the other hand, that if prevailing wage statutes were applied the City's salary costs and tax rate would increase, are inconsistent.
As section 1773.1 has broadened the definition of wages under the prevailing wage law to include all financial benefits of employment,9 great care should be taken to properly impute the dollar value of the fringe benefits in determining the amount of damages due. However, section 1773.1 would include only those fringe benefits that have a readily computable dollar value. Retirement or extra paid holidays are good examples. Benefits such as comparative permanency of employment and year-round employment, although they have value, should not be included because of their intangible character. As the value of sick leave is too varied for easy calculation and contingent on both continued employment and illness, it should not be deducted (cf. Adams v. City & County of San Francisco, 94 Cal.App.2d 586, 596, 211 P.2d 368, 212 P.2d 272). However, it may be that the value of the City's 1,500 hour sick leave cumulation and conversion into an extra retirement benefit can be calculated, and its consideration may be proper. Any computable financial benefits enjoyed by City electricians and not enjoyed under the prevailing wage should be considered.10
II. THE CHARTER PROVISIONS
We turn next to the portion of the judgment pertaining to the absence of any violations of the competitive bidding requirements of the 1915 and 1965 Charters. As indicated above, under the 1915 Charter, the $1,000 limitation applied to the total cost of a ‘public work’ while under the 1965 Charter, the $2,500 limitation excluded the cost of materials, and included a detailed definition of the term. In view of the uncontroverted evidence indicating that the City (in accordance with long standing, but completely erroneous, administrative construction and practice), had always considered fire alarm systems and traffic signals as not subject to the bidding requirements of the Charter, and had clearly violated the Charter provision as to the fire alarm system and 6 of the 32 temporary traffic signals (25 percent) installed, we think there were clear violations of the 1915 Charter. As these matters, however, are resolved by the subsequent practices and detailed provisions of the 1965 Charter, no further comment is necessary.
The IBM project presents a far more difficult problem. As noted above, while the City's total expenditures on the IBM project were in excess of $300,000, only about $83,000 was let out by contract. Some of the work on the project was done under the 1915 Charter and some under the 1965 Charter. In any event, the uncontroverted evidence indicated that the labor costs on the IBM project far exceeded the applicable Charter limitations, and that a number of City officials were aware of this fact. The City, however, relies on subdivision (h) of section 1217 of the 1965 Charter, which specifically provides that the competitive bidding requirements do not apply to ‘situations where solicitation of bids would for any reason be an idle act,’ and also cites some authorities so holding, such as Los Angeles Dredging Co. v. City of Long Beach, 210 Cal. 348, 291 P. 839, 71 A.L.R. 161; Hodgeman v. City of San Diego, 53 Cal.App.2d 610, 128 P.2d 412; and Hiller v. City of Los Angeles, 197 Cal.App.2d 685, 694, 17 Cal.Rptr. 579. In the Long Beach case, the issue was 2 additional oral dredging contracts made on behalf of the City by its manager. The court discussed and applied the two well recognized exceptions to the rule that contracts made contrary to competitive bidding are void. The exceptions may be invoked where competitive bids would be undesirable, impractical or impossible, and in emergencies. In the San Diego case, the appellate court affirmed the sustaining of a demurrer where the trial court found that the nature of the parking meters in question was such that it was impossible to draw specifications or permit any competitive bidding. The recent Los Angeles case involved a lease between the City and a nonprofit corporation that would study, construct and operate a zoo, to be paid with $6,000,000 raised by a recreation and park bond issue. The court, after pointing out that parks were a municipal affair, held at page 694, 17 Cal.Rptr. 579, that the lease for the zoo fell within the impractical and impossible to solicit competitive bids exception and cited the Long Beach case.
The question presented in the instant case is whether the City's IBM project likewise fell within the same exception to the competitive bidding requirements of the 1915 and 1965 Charters. Plaintiff, citing cases such as Pac. Tel. & Tel. Co. v. City & County of S. F., 51 Cal.2d 766, 366 P.2d 514, and Southern California Roads Co. v. McGuire, 2 Cal.2d 115, argues that since the regulation of traffic on city streets is a matter of statewide concern and the IBM project attracted national and international attention, the exception should not apply. Admittedly, less than one-third of the total cost of the project was put out to bid, and City officials were well aware of the fact that the cost far exceeded the limitations in both Charters for noncontractual jobs. We agree that all Charter violations by municipal officers should be condemned (Flora Crane Service, Inc. v. Ross, 61 Cal.2d 199, 206, 37 Cal.Rptr. 425, 390 P.2d 193), but the uncontroverted evidence here indicated that the IBM project attracted national and international attention because of its uniqueness and totally experimental nature, and that contractors were reluctant to bid because of the newness and unknown aspect of the project. Furthermore, much of the work done by the City electricians was of a preliminary and experimental nature required before specifications could be drawn for the portions of the project put out to bid.
As stated in Los Angeles Dredging Co. v. City of Long Beach, supra, at page 354, 291 P. at page 842, quoting from a New York case: “Competitive offers or bids have no other object but to insure economy and exclude favoritism and corruption in the furnishing of labor, services, property and materials for the uses of the city. This was the purpose and the only purpose of the framers of the statutes, and when they have this effect given to them, nothing further is needed. They are not to have such a construction as to defeat this purpose, to impede the usual and regular progress of the public business, or to deprive the inhabitants, even temporarily, of those things necessary and indispensable to their subsistence, their health, or the security and protection of their persons or property.”
Clearly, in these days of urban crisis, cities should be encouraged to seek and apply new solutions to basic urban problems such as traffic congestion. This consideration must be balanced against the evil to be prevented by the competitive bidding provisions. We think that in the instant case, the City should be commended for undertaking the IBM project which apparently was successful.11 We hold, therefore, that the trial court properly concluded that the IBM project, because of its experimental and unique nature, fell within the exception to the competitive bidding requirements of the Charters.
Finally, we turn briefly to the trial court's gratuitous and advisory findings concerning the breaking up of single projects into multiple ones. Such procedures have been expressly disapproved by the Legislature. Government Code, section 37902.1 provides: ‘It shall be unlawful to split or separate into smaller work orders or projects any public work project for the purpose of evading the provisions of this article requiring public work to be done by contract after competitive bidding. Every person who willfully violates this provision of this section is guilty of a misdemeanor.’
The judgment is reversed with directions to the trial court to enter judgment in accordance with the views expressed herein. In light of the corrective procedures recently adopted by the City, it is for the trial court to determine whether injunctive relief is now required.
1. 1915 Charter, section 89: ‘All public buildings and works, when the expenditure therefor shall exceed one thousand dollars ($1000.00), shall be done by contract and shall be let to the lowest responsible bidder, after advertising for five consecutive days in a daily newspaper of general circulation published in the city, for sealed proposals for the work contemplated.’
2. 1965 Charter, section 1217: ‘Except as hereinafter otherwise provided, each purchase of supplies and materials the expenditure for which exceeds One Thousand Dollars ($1,000), each purchase of equipment the expenditure for which exceeds Two Thousand Dollars ($2,000) and each specific ‘public works project,’ hereinafter defined, the expenditure for which (excluding the cost of any materials which the City may have already lawfully acquired therefor) exceeds the amount which a general law City of the State of California may legally expend for a public project (as defined by State law) without a contract let to a lowest responsible bidder after notice, shall be contracted for and let to the lowest responsible bidder after notice; provided, however, that in no event shall the above apply to any specific ‘public works project’ the expenditure for which (excluding the cost of any materials which the City may have already lawfully acquired therefor) does not exceed Two Thousand Five Hundred Dollars ($2,500).‘* * *‘For purposes of this Section, ‘public works project’ shall be deemed to mean and is hereby defined as a project for the construction, erection, improvement or demolition of any public building, street, bridge, drain, ditch, canal, dam, tunnel, sewer, water system, fire alarm system, electrical traffic control system, street lighting system, parking lot, park or playground; provided and excepting that ‘public works project’ shall not be deemed to mean or include the maintenance of any of said things, or any repairs incidental to such maintenance * * * Also, the provisions of this Section shall not apply to any of the following: * * * (b) the purchase of any supplies, materials or equipment which can be obtained from only one vendor or manufacturer; * * * (f) work involving highly technical or professional skill where the peculiar technical or professional skill or ability of the person selected to do such work is an important factor in his selection; (g) expenditures deemed by the Council to be of urgent necessity for the preservation of life, health or property, provided the same are authorized by resolution of the Council adopted by the affirmative vote of at least five (5) members of the Council and containing a declaration of the facts constituting the urgency; and (h) situations where solicitation of bids would for any reason be an idle act.'
3. In fact, they received the Union rate less 12 percent to make up for certain benefits provided by the City and not provided by the Union scale.
4. Both groups received overtime at time and a half and had Social Security deducted. Thus, these factors could be disregarded in making a comparison.
5. Pay for 11 paid holidays per year, vacation leave (10 working days per year for employees with less than 5 years' service, 15 working days per year for employees with more than 5 years' and less than 20 years' service, and 20 working days per year for employees with more than 20 years' service), as well as sick and disability leave; monthly contributions from the City to a retirement fund for each employee, and payment of the monthly premium for health insurance.
6. The Constitutional provisions are sections 6, 8, 8 1/2 and 13 of article XI of the state Constitution. These sections provide respectively that: chartered cities are empowered to make and enforce all laws and regulations in respect to municipal affairs, subject only to the limitations contained in their own charter; when such a charter is adopted and approved by the Legislature it supersedes all general law inconsistent therewith; the various boards and commissions created by such charter or ordinances adopted pursuant to the power granted shall be autonomous and free from interference by the state Legislature; the state Legislature may not delegate to any special commission the power to control municipal affairs. The issue here raised must not be confused with the principle of state preemption of the field although the two doctrines overlap. State preemption becomes a determining factor only when a political subdivision attempts to legislate under its admitted police power (art. XI, § 11) on a subject that the state also has legislated upon. The question then arises as to whether the subject matter of the legislation has not been preempted by the state. However, the preemption doctrine is not applicable to a situation like the one here presented where the claim is that the state Legislature is prohibited by the home rule provisions of the other sections of article XI from enacting legislation that will affect a chartered city.
7. City of Monmouth v. Lorenz (1963) 30 Ill.2d 60, 195 N.E.2d 661, held unconstitutional an amendment to the prevailing wage law which attempted to include employees of public bodies engaged in public construction. The court reaffirmed its position in Bradley v. Casey (1953) 415 Ill. 576, 114 N.E.2d 681 that the prevailing wage law applied only to persons employed under ‘contracts for public works.’ See other cases collected in 18 A.L.R.3d 944.
8. The case is not otherwise helpful as the only constitutional question raised was that of the improper delegation of legislative power. The court held that Metropolitan Water Dist. etc. v. Whitsett, 215 Cal. 400, 10 P.2d 751 (decided contemporaneously with Charleville) disposed of the question—negatively.
9. ‘Per diem wages shall be deemed to include employer payments for health and welfare, pension, vacation and similar purposes, when the term ‘per diem wages' is used in this chapter or in any other statute applicable to public works.’
10. We are greatly indebted to the excellent analysis and discussion of this matter in 35 Ops.Cal.Atty.Gen. 1.
11. The record indicates that at the conclusion thereof, the City decided to purchase a digital computer to regulate traffic.
TAYLOR, Associate Justice.
SHOEMAKER, P.J., and AGEE, J., concur. Hearing granted; DRAPER and MOLINARI, JJ., sitting pro tempore in place of TOBRINER and SULLIVAN, JJ.