HomeMy WebLinkAboutStaff Report 3.E 07/01/2019��ALUAgendaI
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DATE: July 1, 2019
TO: Honorable Mayor and Members of the City Council through the City Manager
FROM: Cynthia Kasten, Interim Human Resources Director
SUBJECT: Resolution Setting the City of Petaluma Living Wage Rate at $16.17 Per Hour
With an Employer Contribution Toward Medical Benefits and $18.12 Per Hour
Without an Employer Contribution Toward Medical Benefits for Fiscal Year 2019-
2020
RECOMMENDATION
It is recommended the City Council adopt the Resolution Setting the City of Petaluma Living
Wage Rate at $16.17 Per Hour With an Employer Contribution Toward Medical Benefits and
$18.12 Per Hour Without an Employer Contribution Toward Medical Benefits for Fiscal Year
2019-2020.
BACKGROUND
The Living Wage Ordinance was approved and adopted effective December 20, 2006. The Living
Wage Ordinance set minimum wages for the City and for covered entities contracting with the
City. 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 8.36.060(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 increase in the Consumer Price Index for the San Francisco -Oakland -San
Jose (CPI -U), the City Council adopted Resolution No. 2018-099 N.C.S which increased the
Living Wage rate by 3.2 percent effective July 1, 2018.
History of Living Wage Adjustments
Living Wage with Medical
Contribution
Living Wage Medical
Rate Contribution Rate
$11.70
$11.70
$12.14
$12.14
$12.46
$12.65
$13.02
$13.31
$13.66
$14.03
$14.48
$14.99
$15.47
*$16.17
*Proposed
DISCUSSION
$1.50
$1.50
$1.50
$1.50
$1.50
$1.50
$1.50
$1.50
$1.50
$1.50
$1.50
$1.50
$1.50
$1.50
Living Wage Rate
without Medical
Contribution
$13.20
$13.20
$13.64
$13.64
$13.99
$14.20
$14.61
$14.93
$15.32
$15.73
$16.23
$16.80
$17.34
*$18.12
Effective
12/20/2006
2007
1/1/2008
2009
7/1/2010
7/1/2011
7/1/2012
7/1/2013
7/1/2014
7/1/2015
7/1/2016
7/1/2017
7/1/2018
7/1/2019
% Increase
Established
None
3.30%
None
2.60%
1.50%
2.90%
2.20%
2.60%
2.70%
3.20%
3.50%
3.20%
4.50%
The December 2017 to December 2018 change in the CPI -U for the San Francisco -Oakland -San
Jose area is a 4.5 percent increase: If a COLA is approved, the Living Wage will increase to
$16.17 per hour with an employer contribution toward medical benefits and $18.12 per hour
without that contribution.
Increasing the Living Wage by 4.5% this year would affect 19 employees in Living Wage
positions, and approximately 23 employees in part time Recreation Services positions
benchmarked to living wage positions. Together, these positions represent a combined 2018/19
payroll of approximately $487,359. This would increase by $21,931. to $509,291, when the 4.5%
COLA is applied. In addition to impacts related to City staff, increases to the living wage will
have implications on employers subject to the Living Wage Ordinance.
2
PUBLIC OUTREACH
There was no specific outreach performed in relation to this item aside from the normal public
meeting agenda process.
FINANCIAL IMPACTS
Increasing the Living Wage by 4.5% will result in an estimated total increased cost to the City in
FY 2019-2020 of $21,931: $10,364 for Living Wage positions and $11,567 for part-time
Recreation Services positions benchmarked to the Living Wage. The General Fund's share of this
cost is $20,041.
ATTACHMENTS
1. Resolution — Setting the Living Wage for FY 2019-2020
ATTACHMENT 1
RESOLUTION SETTING THE CITY OF PETALUMA LIVING WAGE RATE
AT $16.17 PER HOUR WITH AN EMPLOYER CONTRIBUTION
TOWARD MEDICAL BENEFITS AND $18.12 PER HOUR
WITHOUT AN EMPLOYER CONTRIBUTION TOWARD MEDICAL BENEFITS
FOR FISCAL YEAR 2019-2020
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 as 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
$13.20 per hour without said contribution; and,
WHEREAS, the current Living Wage pursuant to Chapter 8.36 is $15.47 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 $17.34 per hour without said contribution toward medical
benefits; and,
M
WHEREAS, the December to December Consumer Price Index for San Francisco -
Oakland -San Jose (CPI -U) indicates an overall increase of 4.5% in Bay Area consumer
prices from December 2017 to December 2018,
NOW, THEREFORE, BE IT RESOLVED that pursuant to Petaluma Municipal
Code Section 8.36.060.1), the City Council adopts a 4.5% COLA adjustment to the Living
Wage and effective July 1, 2019 the Living Wage is $16.17 per hour with an employer
contribution toward medical benefits of at least $1.50 per hour per employee, and $18.12
per hour without said contribution.