Carson-Tahoe Hospital, unions argue wage laws before state high court

Carson-Tahoe Hospital on Tuesday asked the Nevada Supreme Court to reverse a decision it says could add "several million dollars" to the cost of its new hospital.

But lawyers for the building trades unions argued the hospital was trying to get the tax and interest benefits of public bonding without passing any of them on to the workers building the new facility.

The unions sued Carson-Tahoe, saying Nevada law requires they be paid the prevailing wage as determined by the state's Labor Commission as a condition of enjoying the benefits of government-endorsed economic development bonds. Those bonds not only get the hospital a lower interest rate than they could in the private sector, but make the bonds tax exempt.

Carson District Judge Mike Griffin ruled in favor of the unions. Hospital Director Ed Epperson said if that ruling stands, the price of the $132 million hospital will increase "in the realm of several million dollars."

Hospital lawyer Mike Pavlakis said prevailing wage isn't required because the money building the hospital is all private.

"The bond law does not require payment of prevailing wages in this case because there is no public money involved in this project," he told the court.

Justice Ron Parraguirre asked whether the hospital was agreeing to pay prevailing wages to workers in return for getting those tax and interest benefits.

Justice Michael Douglas also asked that question at one point in the hearing: "The hospital receives the benefits. Why should they not pay prevailing wage?"

Chief Justice Nancy Becker summed up the issue before the court: "Did the Legislature say that, in return for that benefit, do you agree to pay prevailing wages, or do we only want prevailing wages on projects for which the public is financially responsible?"

Pavlakis repeated his interpretation of the law: Prevailing wage is required only on projects financed with public dollars. He said more evidence of the separation is evident in that Carson City has no liability to repay the bonds if the hospital can't. He said the city's only function is to issue the bonds.

Mike Langton of the Building Trades Council said he believes lawmakers clearly intended language in the economic development bonds law to require recipients pay the prevailing wage. He said the 1991 law was aimed at Southern Nevada urban redevelopment projects, designed to require they pay workers prevailing wages in order to get the tax and interest benefits of those bonds.

"The Legislature wanted workers to get the prevailing wage," he said.

Langton said a private company can make whatever deal it wants to if it gets its own financing.

"They chose to involve the government through economic development revenue bonds," he said of the hospital.

That, he said, means it accepted the requirement it pay prevailing wages, as lawmakers intended.

The high court took the case under submission.

n Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.