HomeMy WebLinkAboutStaff Report 5.D 5/19/2014(i)
DATE: May 19, 2014
TO: Honorable Mayor and Members of the City Council
FROM: John C. Brown, City Manager
Agenda I-
SUBJECT: Resolution Establishing the Living Wage Rate for Fiscal Year 2014-2015
RECOMMENDATION
It is recommended the City Council adopt the Resolution Establishing the Living Wage Rate for
FY 2014/15 by increasing the Living Wage 2.6%.
The Living Wage Ordinance was approved and adopted effective December 20, 2006. The
Ordinance established an initial wage of $11.70 per hour with an employer contribution of at least
$1.50 per hour per employee toward medical benefits, and $13.20 per hour without contribution
toward benefits.
Petaluma Municipal Code Chapter 8.36 (the Living Wage Ordinance), at Section 836.060(D)
provides that the initial rate:
"...be increased annually on July 1, in accordance with any increase due to a cost of living
adjustment for City employees, equal to the average cost of living adjustment (excluding
equity pay increases) for all City non -safety, non -management employees as of the date of
the most recent adjustment of the pay of non -safety, non -management employees, but no
more than the most recent December to December Consumer Price Index for San
Francisco -Oakland -San Jose (CPI -U), published by the Bureau of Labor Statistics".
The Ordinance also provides that the City Council may review the impact of the cost of living
adjustment (COLA) on an annual basis to assess any potential adverse impact and may modify or
suspend adoption of a COLA otherwise allowed by this subsection. Pursuant to the Living Wage
Ordinance, any adjustment would be effective on July 1.
Last year, based on the December 2011 to December 2012 increase in the Consumer Price Index
for the San Francisco -Oakland -San Jose (CPI -U), the City Council adopted Resolution No. 2013-
050 N.C.S which increased the Living Wage rate by 2.2 percent effective July 1, 2013.
Agenda Review:
City Attorney Finance Director
City Man,
History of Living Wage Adjustments
LW Rate
With Medical
Contribution
Medical
Contribution
Rate
LW Rate
without
Medical
Contribution
Effective
% Increase
$11.70
$1.50
$11.20
12/20/2006
Established
$12.14
$1.50
$13.64
1/1/2008*
330%
$12.46
$1.50
$13.99
7/1/2010
2.60%
$12.65
$1.50
$14.20
7/1/2011
1.50%
$13.02
$1.50
$14.61
7/1/2012
2.90%
$13.31
$1.50
$14.93
7/1/2013
2.2%
$13.66
$1.50
$1532
7/1/2014
2.6%
* City used Oct to Oct 2007 to adjust CPI; Dec to Dec 2008 CPI was 0%
The December 2012 to December 2013 change in the CPI -U for the San Francisco -Oakland -San
.Tose area is a 2.6 percent increase. If COLA is aproved, the Living Wage will increase to $13.66
per hour with an employer contribution toward medical benefits and $15.32 per hour without that
contribution.
While the Ordinance provides that the Council may conduct an annual review of the Living Wage
to assess any potential adverse impact and may modify or suspend a COLA based on that review,
the Ordinance neither defines "adverse impact" nor dictates how a review must be conducted or
what factors should be taken into consideration. This provision was drafted to provide the Council
discretion to suspend COLA's for any reason the Council believes to be pertinent. In addition,
Section 836.050 (H), which governs waivers, indicates in part:
"The City Council may also waive the requirements of this chapter if a majority of its
members determines that an emergency exists which requires a waiver."
The Council has not relied upon, nor implemented this provision. Except for employees subject to
the Living Wage and the positions benchmarked to those positions, no new COLA adjustments
have been granted to any City employees since 2008. There is no provision for employee cost of
living adjustments in the budget or financial forecast.
Increasing the Living Wage by 2.6% this year would affect 15 employees in Living Wage
positions, and 27 employees in part time Recreation Services positions benclunarked to living
wage positions. Together, these positions represent a combined 2014/15 payroll of $401,161.
This would increase to $411,327 (an increase of $10,166) when the 2.6% COLA is applied.
FINANCIAL IMPACTS
Increasing the living wage by 2.6% will result in an estimated total increased cost to the City in
FY 2014-2015 of $10,166: $4,512 for Living Wage positions and $5,654 for benchmarked part-
time Recreation Services positions. The General Fund's share of this cost is $8,790.
ATTACHMENTS
1. Resolution— Setting the Living Wage for FY 2014-2015
RESOLUTION SETTING THE CITY OF PETALUMA LIVING WAGE RATE
AT $13.66 PER HOUR WITH AN EMPLOYER CONTRIBUTION
TOWARD MEDICAL BENEFITS AND $15.32 PER HOUR
WITHOUT AN EMPLOYER CONTRIBUTION TOWARD MEDICAL BENEFITS,
FOR THE 2014-2015 FISCAL YEAR
WHEREAS, the City Council of the City of Petaluma established a Living Wage
Required for Specified City -Funded Contracts and City Employees, by adopting Ordinance
No. 2256 N.C.S., effective December 20, 2006 ("the Living Wage Ordinance"); and,
WHEREAS, the Living Wage Ordinance is codified at Chapter 8.36 of the City of
Petaluma Municipal Code; and,
WHEREAS, Municipal Code Section 8.36.060.D, provides that the Living Wage
rate shall be increased annually on July 1, in accordance with any increase due to a cost of
living adjustment for non -safety, non -management City employees, but no more than the
most recent December to December Consumer Price Index for San Francisco -Oakland -San
Jose (CPI -U); and,
WHEREAS, Section 8.36.060.D further provides that the City Council may
review the impact of the cost of living adjustment ("COLA") on an annual basis to assess
any potential adverse impact and may modify or suspend adoption of a COLA otherwise
allowed by the subsection; and,
WHEREAS, the initial Living Wage rate in 2006 was $11.70 per hour with an
employer contribution of at least $1.50 per hour per employee toward medical benefits and
$13?0 per hour without said contribution; and,
WHEREAS, the current Living Wage pursuant to Chapter 836 is $1331 per hour
if a contribution of at least $1.50 per hour per employee is paid by the employer toward the
cost of medical benefits; and $14.93 per hour without said contribution toward medical
benefits; and,
4
WHEREAS, the December to December Consumer Price Index for San Francisco -
Oakland -San Jose (CPI -U) indicates an overall increase of 2.6% in Bay Area consumer
prices from December 2012 to December 2013.
NOW, THEREFORE, BE IT RESOLVED that pursuant to Petaluma Municipal
Code Section S.36.060.D, the City Council adopts a 2.6% COLA adjustment to the Living
Wage and effective July 1, 2014 the Living Wage is $13.66 per hour with an employer
contribution toward medical benefits of at least $1.50 per hour per employee, and $15.32
per hour without said contribution.