SR-703-003 (19)
e .-
JCilYOf
Santa Moniea@
City Council Report
City Council Meeting: September 26, 2006
Agenda Item:-.38
To:
Mayor and City Council
From:
Candace Tysdal, Acting Chief Financial Officer
Subject:
Living Wage Report for Fiscal Year 2005/06
This report provides information to Council regarding the financial impact of the City's
Living Wage Ordinance ("Ordinance") and the financial impact of adjusting City
employee pay rates consistent with the Minimum Wage set by the Ordinance.
Executive Summary
The City Council adopted a Living Wage Ordinance in March 2005 and directed staff to
adjust City employee pay rates to the Minimum Wage set by the Ordinance. Total
identified cost associated with the adoption of the Ordinance for the fiscal year ended
June 30, 2006 (FY 05/06) is $583,320.
Discussion
The City of Santa Monica's Living Wage Ordinance, adopted in March 2005, affected all
contracts for services of $50,000 or more executed by the City in FY 2005/06. The
Ordinance established an initial Minimum Wage of $11.50 an hour for all employees
who work on service contracts for the City.
1
The City's cost of landscape maintenance, janitorial and bus-related services increased
by $254,043 or 19.9% in FY 2005/06 as a result of adoption of the Ordinance. The cost
of parking management and uniform services did not increase in FY 2005/06 as might
have been expected because employees of these contractors were exempted from the
provisions of the Ordinance by collective bargaining agreements.
To ensure compliance with the Ordinance, contractors sign a certification form
(Attachment) acknowledging both their compliance with the Ordinance and the City's
right to examine all books and records related to compliance. Salary rates for 369 City
employees were increased in FY 2005/06 ata cost of $329,277.
Staff will continue to monitor compliance and financial impact of the City's Living Wage
Ordinance. As resources permit, staff will audit compliance with the Ordinance by a
review of payroll records of contactors. To date, staff has received one report of non-
compliance, which was resolved expeditiously. The Minimum Wage, adjusted annually,
has increased from the initial $11.50 an hour rate to $12.10 an hour effective July 1,
2006, for all contracts for services of $52,600 or more.
2
Prepared by: Candace Tysdal, Acting Chief Financial Officer
Approved:
Forwarded to Council:
c
Candace Tysdal
Acting Chief Financi
ATTACHMENTS
Attachment 1 :
Living Wage Certification Form
3
A TT ACHMENT 1
e _
..~
CITY OF SANTA MONICA
Living Wage Certification for Providers of Services to the
City of Santa Monica
(Fiscal Year 06/07)
TO BE COMPLETED BY ALL CONTRACTORS PROVIDING SERVICES TO
THE CITY OF SANTA MONICA IN EXCESS OF $52,600 ]
The City of Santa Monica Municipal Code Chapter 4.65, Living Wage Ordinance (L WO)
establishes a Minimum Wage of $12.1 0 per hourI for certain employees of contractors providing
services to the City.
The L WO requires a contractor providing services to City of Santa Monica to pay at least the
Minimum Wage to any Employee working on that contract for work done on the contract if the
contract for services exceeds $52,600.1 The requirements of the L WO do not apply to
government agencies, City grantees and other non-profit corporations. An Employee is any
person who does not actually work as a manager, supervisor, or confidential employee, and who
is not required to possess an occupational license. Contractors with collective bargaining
agreements covering those employees assigned to contract are exempt from the wage
requirements of the Living Wage Ordinance only if the waiver is explicitly set forth in such
agreement in clear and unambiguous terms.
Please prepare the following certification if you are a contractor engaging in a contract for
services with the City of Santa Monica in excess of $52,600.1
Your signature on this certification grants the City permission to review any and all payroll
books and records to assure compliance with the L WO during the term of the contract.
Please direct any questions regarding applicability of the Ordinance to Candace Tysdal,
Financial Operations Manager, City of Santa Monica Finance Department, 1717 4th Street, Suite
250, Santa Monica, CA 90401 or e-mail candace.tysdal@smgov.net.
IF YOU ARE A CONTRACTOR PROVIDING SERVICES TO THE CITY UNDER A
CONTRACT EXCEEDING $52,6001, YOU ARE REQUIRED TO CERTIFY THAT ALL
EMPLOYEES WORKING ON THIS CONTRACT ARE PAID AT LEAST THE
MINIMUM WAGE. Please fill out the Certification that follows and return to Contract
Administration Office, 1717 4th Street, Suite 250, Santa Monica, CA 90401. If you are
exempt for a reason noted above, please note below why you are exempt and return the
Certification to the Contract Administration Office, 1717 4th Street, Suite 250, Santa
Monica, CA 90401.
I Adjusted annually each July 1 by an amount corresponding to the previous year's change (January to January) in
the Consumer Price Index for Urban Wage Earners and Clerical Workers 1967=100 for Los Angeles-Riverside-
Orange County, California
(Rev. 6/30/05)
TO BE COMPLETED BY ALL CONTRACTORS PROVIDING SERVICES TO THE
CITY OF SANTA MONICA IN EXCESS OF $52,600 I
(Fiscal Year 06/07)
Please read, complete, and sign the following:
THIS CONTRACT IS SUBJECT TO THE LIVING WAGE ORDINANCE. D
THIS CONTRACT IS NOT SUBJECT TO THE LIVING WAGE ORDINANCE. D
Contractor is exempt as a (please check one):
(a) _ Government agency
(b) _ City grantee
(c) _ Non-profit corporation
(d) _ Employees covered by a bona fide collective bargaining agreement where the
waiver is explicitly set forth in an agreement in clear and unambiguous terms
(Please provide copy of the collective bargaining agreement.)
The undersigned, on behalf of himself or herself individually and on behalf of his or her business
or organization, hereby certifies that he or she is fully aware of Santa Monica's Living Wage
Ordinance (L WO), and the applicability of the L WO, and the applicability of the subject
contract, as determined herein. The undersigned further agrees to be bound by all of the terms of
the L WO, as mandated in the Santa Monica Municipal Code, Chapter 4.65. If, at any time
during the term of the contract, the answers to the questions posed herein change so that
Contractor would be subject to the L WO, Contractor will promptly notify the Director of
Finance in writing. Contractor further understands and agrees that the failure to comply with the
L WO, this certification, or the terms of the Contract as it applies to the L WO, shall constitute a
default of the Contract, which shall be grounds for termination. City shall have the right to
examine all books and records of the contractor as they relate to compliance with the L WOo
Payroll records shall at a minimum include full name of each employee performing labor or
providing services under the contract, job classification and rate of pay.
These statements are made under penalty of perjury under the laws of the State of California.
Printed Name:
Title:
Signature:
Date:
Contractor:
Bid Number:
Number of Employees Applies to Living Wage:
Service Description:
1 Adjusted annually each July 1 by an amount corresponding to the previous year's change (January to January) in
the Consumer Price Index for Urban Wage Earners and Clerical Workers 1967=100 for Los Angeles-Riverside-
Orange County, California
(Certification Form Revised April 12, 2006)
Page 2