It seems state funding for local water projects will keep flowing.

The City Council, city attorney, state representatives and the mayor’s office figured out a way to end a conflict between state and local law Monday that threatened to close the tap to hundreds of millions of dollars in state money for local construction projects.

One project made vulnerable by the standoff was a plan to build a recycled water system.

The conflict involved two conflicting pieces of legislation, one approved by San Diego voters, and one written by state lawmakers: The 2012 voter-approved Proposition A — which restricted the city’s ability to negotiate wages and working conditions on a construction project before hiring workers — and SB 829, a state law written specifically to withhold state funds from cities that passed laws like Prop. A.

In recent letters to the city, state agencies said it considered San Diego ineligible for various pots of money unless it could explain why it wasn’t in violation of state law.

The city’s vote Monday was an attempt to explain just that. But the vote really just keeps the money coming until the courts determine the constitutionality of SB 829, which was written to keep money from any city with a restriction on project labor agreements, or PLAs.

The Council’s action confirmed that “as a condition for the receipt of state funding and financial assistance the city maintains its discretion to adopt, require or utilize (PLAs).”

The resolution mirrored a response City Attorney Jan Goldsmith wrote to state officials last week, in which he said there was no conflict between the two measures because of a clause in Prop. A that said the law didn’t apply if it meant the loss of state or federal funds.

But the resolution was crafted based on input from Goldsmith, Council President Todd Gloria’s office, Mayor Kevin Faulconer, and, crucially, Assembly Speaker Toni Atkins.

Since it was the state that said the city couldn’t get funds until it undid the conflict, it’s really the state’s opinion that matters. And Atkins’ involvement — and her celebratory announcement after the Council resolution passed — is a good indication the state is satisfied.

The city’s solution won’t bring much gratification to either extreme on the issue though. Prop. A supporters want to kill PLAs, and this doesn’t do that. And those who supported SB 829 did so to put pressure on cities not to restrict PLAs in any way. This doesn’t resolve the question of whether that’s allowed.

For everyone involved, it’s a punt until the case wends its way through the legal system.

Essentially, Prop. A is sidelined so long as the state laws remain in effect. If they get struck down, Prop. A is back.

A statement from one of Prop. A’s biggest backers indicates that side is content to wait it out.

“We are confident the courts will ultimately decide to protect Prop. A and stop the state’s power grab,” said Scott Crosby, president of the Associated Builders and Contractors of San Diego.

Andrew Keatts

I'm Andrew Keatts, a managing editor for projects and investigations at Voice of San Diego. Please contact me if you'd like at andrew.keatts@voiceofsandiego.org...

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