Council Meeting:
February 22, 2005
TO: Mayor and City Council
FROM: City Staff
SUBJECT: An Ordinance for First Reading Requiring
that Certain Contractors Providing Services to the City of
Introduction
This report presents an ordinance
for first reading requiring that effective July 1, 2005, certain contractors
providing services to the City of
Background
Pursuant to City Council direction, staff is preparing to implement a living minimum wage of $11.50/hour for City employees and for employees performing work under contracts for service to the City in an amount of $50,000 or more. An initial step was taken with adoption of a salary resolution governing City as-needed job classifications at the City Council meeting of February 8, 2005. Institution of the living wage for City employees covered by collective bargaining agreements will be a subject of negotiations over the next year. While the salaries of City employees are set by resolution, an ordinance is required to implement the living wage for City contractors.
Other local governments in the
region, including the City of
Discussion
In addition to establishing a wage requirement of $11.50 per hour the attached proposed ordinance:
Commentary on the impact of establishing a living wage for government contractors suggests that prospective application of the wage as contracts are competitively bid will serve to control the incremental contract cost increases to the City. Additionally, applying the requirements only to new contracts as they are bid will avoid legal disputes with existing contractors, promote fairness and avoid significant administrative difficulties. As directed by Council, that is the way in which the proposed ordinance will be implemented. Both the amount of the wage ($11.50) and the threshold contract amount for applicability ($50,000) will increase annually on July 1, based on the January to January Consumer Price Index for Urban Wage Earners and Clerical Workers 1967=100 for Los Angeles-Riverside-Orange County, CA published by the U.S. Department of Labor, Bureau of Labor Statistics. Findings to support the institution of a living wage are made in the ordinance.
Budget/Financial Impact
It is not possible to predict with any certainty the financial impact on contract costs stemming from the requirement that contractors pay a higher wage. To inform prior Council deliberations estimates of from $500,000 to several million dollars were provided. As planning for the FY 2005/06 budget goes forward, provision will be made to include a prudent amount, based on contracts anticipated to be bid during the fiscal year.
Recommendation
It is recommended that the City Council hold first reading of the attached ordinance establishing a minimum living wage of $11.50/hour for employees performing work under contracts for services to the City of $50,000 or more, to be effective July 1, 2005.
Prepared by: Susan E. McCarthy, City Manager
Marsha Jones Moutrie, City Attorney
Attachments: A) Ordinance
B) Current Living Wage Amounts in the Region
Attachment B
Current Living Wage Required of
Contractors
by Other Public Agencies in the Region*
|
|
$10.28 |
|
|
|
|
City of |
$10.03 |
|
|
|
|
|
$9.46 |
* Listed wages include health benefit amount
** West Hollywood follows the City of