Hospital, Trades Council debate wage issue

Carson City resident Cecil Hoffman and the Building Trades Council of Northern Nevada will oppose Carson-Tahoe Hospital in Carson City's First Judicial District Court in a wage dispute.

Because Carson City acted as an issuing agent for the $95 million in bonds to build the regional medical center, the Trades Council feels contractors and subcontractors participating in its construction should be required to pay workers state-determined prevailing wages.

Hospital attorney Mike Pavlakis said the bonds were issued as economic development bonds, but the city is constitutionally prohibited from paying them. Hospital revenues, an insurance policy, a letter of credit and a deed of trust on the hospital stand between Carson City and that liability.

In a 1993 opinion, Nevada Attorney General Frankie Sue Del Papa said prevailing-wage laws don't apply unless the public project is owned by the county or tax dollars are used.

The prevailing wage is based on surveys conducted by Nevada's Department of Labor. Contractors may be competitive but not necessarily in line with prevailing wages, Pavlakis said.

Trades Council attorney Mike Langton disagrees.

"We think the statute is clear. It doesn't address the issue of ownership," he said. "Whenever the city issues bonds of this nature, NRS 244A.763 kicks in and requires the payment of prevailing wages."

Del Papa's 1993 decision is argument, not law, Langton says.

The bottom line for the Trades Council is fair wages and a living wage for the 7,500 workers it represents, Langton said.

"The statute was enacted for a reason," he said. "During the Depression in the 1930s, contractors were bidding on jobs based on how little they could pay workers. We were getting poor quality work, and public funds were going into that construction."

"The prevailing-wage laws ensure the public gets its money's worth," he said. "Contractors know ahead of time that they have to bid and get the job based on their ability to manage, not on their ability to hire cheap labor.

"The philosophy also benefits the community," Langton said. "If workers don't get paid enough, they end up at hospitals as indigents, unable to pay for insurance."

No date has been set for the court hearing, but both sides would like to expedite the briefing and hearing schedule, Pavlakis said.

Carson-Tahoe Regional Medical Center is being constructed on the north end of Carson City just north of Eagle Valley Ranch Road.

The 337,000-square-foot replacement hospital is one of the largest construction projects to be built in the Carson/Douglas region. It should be completed in late 2005.