A proposal at the Tempe City Council to adopt an ordinance that would raise wage rates – and likely costs – for city construction contracts appears to have stalled after a similar measure adopted by the Phoenix City Council was reversed.
The proposed requirement sought by Tempe Councilman Randy Keating for “prevailing wages” would require the city to match standards determined by the U.S. Department of Labor based on typical payment for different worker groups in the region, such as landscapers, rather than by negotiating contracts directly with construction workers or contractors.
“We’re going to guarantee a certain level of wages on our city projects as long as they’re constructed in the city of Tempe and being funded by the city of Tempe taxpayers,” Keating said.
The proposal, however, has faced legal headwinds.
In a May 1 letter to city leaders on behalf of the Arizona Builders Alliance and the Associated Minority Contractors of Arizona, the Goldwater Institute warned that the ordinance would violate state law and create not only budgetary risks but also legal risks.
“If the City adopts this ordinance and regulates matters that are expressly preempted by state law, it will expose the City to a high risk of litigation, as well as costs and attorneys’ fees for parties who successfully challenge the unlawful ordinance,” said John Thorpe, staff attorney for the Goldwater Institute.
The letter also referenced an almost identical wage ordinance that the Phoenix City Council narrowly approved back in March before repealing it in April. That ordinance was supported by former Councilmembers Carlos Garcia (District 8) and Sal DiCiccio (District 6). DiCiccio broke with his conservative colleagues and sided with the more progressive members of the Council to deliver the decisive vote.
Phoenix Mayor Kate Gallego, however, had voted against the ordinance and described the city council’s decision to force a vote without review from their legal counsel or input from the affected industry stakeholders as “a terrible way to do public policy.”
The business community, including the Arizona Chamber of Commerce & Industry and other chambers of commerce, was aligned with Gallego against the ordinance.
The council reversed course after Councilmembers Garcia and DiCiccio had been replaced following the March election and after City Attorney Julie Kreigh announced that state Sen. Catherine Miranda, D-Phoenix, had filed a complaint against the ordinance with Attorney General Kris Mayes.
Despite the tumult in Phoenix, Tempe’s Keating still insists that the Phoenix ordinance represents a good model.
The Tempe Council was originally set to act on May 4, but tabled the matter. Keating said action was delayed “because there were some differences between the language that Phoenix had and the language that Tempe had, so we had to make sure we’re all on the same page moving forward.”
But a subsequent hearing on the proposal eyed for May 18 also won’t happen, raising speculation that Keating doesn’t have enough support for the measure to advance.
Courtney Coolidge, the vice president of government affairs at the Arizona Chamber, said the reversed Phoenix ordinance is a cautionary tale for Tempe.
“City governments relying on a federal bureaucracy to determine contract terms not only goes against state law, it also drives up costs for citizens,” Coolidge said. “Taxpayers shouldn’t have to foot the bill for meddling city governments. Hopefully, the recent experience of Phoenix will convince Tempe and other cities around the state not to pursue these prevailing wage proposals.”