High court rules hospital not required to pay prevailing wage

The Nevada Supreme Court ruled Thursday that Carson Tahoe Regional Medical Center wasn't required to pay prevailing wage rates to construction workers who built the new regional medical center, saving the hospital $2 million in construction costs.

Six members of the court voted to overturn a ruling by Carson District Judge Mike Griffin which said they were required to pay those higher wages because the new facility was financed with $95 million in economic development bonds authorized by Carson City Supervisors.

The petition was filed by the Building and Construction Trades Council of Northern Nevada and the Southwest Regional Council of Carpenters, Carpenters Local 971. Griffin granted them declaratory relief.

But the high court ruled that nothing in statute requires all projects financed by city revenue bonds be required to pay prevailing wages, only those projects in contracts "to which a public body of this state is a party." Public body, they wrote, means a political subdivision sponsoring or financing a public work.

"In this case, no public body is a party to the construction contract," the opinion states. "Instead, C-TH is a private nonprofit corporation that entered into a construction contract with a general contractor to build a hospital on privately owned land."

That was the argument presented by the hospital.

"Our position was always that Carson Tahoe Regional Medical Center was not a public project, therefore we did not fall under the NRS statutes covering prevailing wages - the Supreme Court agreed," said Kevin Stansbury, vice president of operations for Carson Tahoe Regional Healthcare. "We are pleased with their decision. We'd like to commend our legal team for representing us so soundly. We felt very strongly about the prevailing wage issue. It's rewarding to be supported by the court."

The opinion states that the hospital project is not a public work and that no public money was used to finance the project.

The opinion was signed by Chief Justice Bob Rose and justices Ron Parraguirre, Mark Gibbons and Jim Hardesty. Two more members of the court agreed with that analysis. But justices Michael Douglas and Nancy Becker wrote separately to say they believe the plain language of the statute doesn't follow stated legislative intent in this case.

Lawmakers, they wrote, clearly intended economic development revenue bonds to promote public safety, industry and employment.

"The omission by the Legislature as to requiring the prevailing wage hopefully was an oversight but due to that oversight, this legislation failed to promote employment."

They expressed the hope the next Legislature will fix the problem to make it clear prevailing wages should be paid on such projects.

The seventh member of the court, Justice Bill Maupin, said he would affirm Griffin's order because the prevailing wage law was intended to apply to any contract for new construction financed through the economic development revenue bond law and Carson-Tahoe Hospital fits that definition.

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