State prosecutes UCLA in wage suit

By Alisa Ulferts
Daily Bruin Senior Staff

UCLA is fighting in court a ruling by the state that claims the
university owes its construction workers a higher wage for working
on publicly funded projects.

The problem is that no one can agree on whether the construction
is publicly funded.

According to the California Code of Regulations, a "prevailing
wage" must be paid for projects financed in whole or part with
public funds. A prevailing wage is an average of the going regional
wage — generally close to the higher union wage scale.

The state board of labor has determined that the ongoing $50
million UCLA Mar Vista family student housing project is publicly
funded. As a result, the school must pay project workers the higher
wage.

UCLA administrators have a different view.

"We disagree with the conclusion of the director (of Industrial
Relations)," said Sam Morabito, assistant vice chancellor for
Business Enterprises. "There are no public funds being used."

At issue is whether the monies collected in the form of rent are
considered public funds and are thus subject to the state labor
law, said Richard Slawson, a building trades counselor for the Los
Angeles County Building and Construction Trades Council.

"(UCLA) has refused to acknowledge that the prevailing wage rule
applies (to the Mar Vista project)," Slawson said. "This is not the
first time the university has taken this position."

Union groups accuse UCLA of seeking out private lenders in an
attempt to circumvent public funding, and thus the prevailing wage
rule.

That is not the case, according to Morabito.

Morabito said the university decided several years ago to
replace rather than refurbish the student family complex, and that
funds for the project were acquired through a private loan with
First Interstate Bank. Wayne Kennedy, senior vice president of
business and finance for the University of California, then issued
an exemption to the prevailing wage requirements, citing UCLA’s
exceptional need for housing that could not be met if prevailing
wages were paid.

"We had to consider what graduate student families could
afford," Morabito said, adding that paying the higher wage would
have increased the construction project’s budget and forced the
university to raise the rent to a level above what student families
could afford. The university plans to repay the loan using rent
from future tenants.

Lloyd Aubry, director of industrial relations, refused to
confirm whether the rent was the public money in question, but did
clarify what constituted a public work. "The source of the funds is
not the only criteria used (for determining public funds). If money
passes through the hands of state agencies it becomes state money
and is subject to prevailing wage rule."

Union groups and labor activists also accused UCLA of using the
appeals process to avoid paying the higher prevailing wage.

"UCLA is trying to use the appeals process, hoping the project
will end before the process is over," said Michael McGrorty, a
compliance officer for Southern California IBEW-NECA
Labor-Management Cooperation Committee. "UCLA has been informed (of
the requirements) and has refused to act. It’s one state agency
telling another state agency to go to hell."

Morabito denied that UCLA was using the appeals process to avoid
paying the higher wage. "Our option is to appeal and adjudicate a
solution in court."