SR-05-13-2014-7BCity Council Meeting: May 13, 2014
Agenda Item: :::�
To: Mayor and City Council
From: Gigi Decavalles- Hughes, Director of Finance
Subject: Introduction and First Reading of an Ordinance Amending Santa Monica
Municipal Code Chapter 4.65, Living Wage
Recommended Action
This report recommends that the City Council introduce for first reading an ordinance
amending Santa Monica Municipal Code Chapter 4.65 to increase the City's Living
Wage to $15.37 per hour effective July 1, 2014.
Executive Summary
The increase to the living wage recommended from $14.08 to $15.37 per hour in this
report would affect the contracts for services that the City currently has and any new
ones that will be awarded for the next fiscal year. The increase would also affect certain
City employees as it would establish the rate as the new minimum wage.
Background
The living wage ordinance was adopted on March 08, 2005. The ordinance, which
became effective on July 1, 2005, established a wage requirement of $11.50 per hour
for contracts in excess of $50,000; established exemptions for government agencies,
City grantees and other nonprofits; and included annual escalator clauses for both the
wage level and the contract threshold. On April 08, 2008, Council approved a revision
of the ordinance removing the provision requiring an annual adjustment of the contract
threshold amount to avoid confusing contractors and providing an exemption for
banking services. The ordinance was last revised on April 12, 2011 to require that
contractors provide the same benefits to same sex spouses and domestic partners as
are provided to other employees' spouses. At this time, the living wage rate is $14.08
per hour.
Discussion
Pursuant to Council direction at its January 28 2014 and February 11, 2014 meetings,
staff is preparing to implement a new living wage rate of $15.37 per hour for City
employees and for employees performing work under contract for services in an amount
of $54,200 or more, to become effective July 1, 2014. The new living wage rate would
be equivalent to that which the Council has approved in a number of recent
development agreements. The living wage rate would continue to adjust annually by
the consumer price index. It is anticipated that 315 City employees, most of them
temporary employees, and 220 City contracts would be impacted by the increased rate.
Public Outreach
Staff would send letters to all existing contractors who currently are required to pay the
living wage notifying them of the change in the wage rate. The letter would also be sent
to all contractors who would reach the threshold of $54,200 next fiscal year due to the
increase. All competitive bid documents would have the new rate listed so that any
contractors submitting a bid would include the new rate in their price.
Financial Impacts & Budget Actions
The total cost to increase staff salaries and contractual work to reflect the new living
wage rate is approximately $700,000. Staff will incorporate these costs in the Proposed
FY 2014 -15 exception -based budget that will be presented to Council on May 27, 2014.
Prepared by: Araceli Esparza, Purchasing Services Manager
Approved:
Forwarded to Council:
Attachments:
A. Ordinance
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City Council Meeting: 5 -13 -14
Santa Monica, California
ORDINANCE NUMBER (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA AMENDING SANTA MONICA MUNICIPAL CODE SECTION 4.65.010
TO INCREASE THE LIVING WAGE
WHEREAS, in May of 2005, the City Council of the City of Santa Monica (the
"City Council ") adopted Ordinance No. 2152 to require that persons working on City
contracts receive a living wage (the "Living Wage Ordinance "); and
WHEREAS, the findings approved as part of the Living Wage Ordinance
establish that its purposes include ensuring that those workers have sufficient income to
pay the high costs of living in the City, region and State to cover costs of health care,
and to have the leisure to participate in civic life; and
WHEREAS, the Living Wage Ordinance set an initial Minimum Wage of eleven
dollars and fifty cents per hour, effective July 1, 2005, to be adjusted annually, each July
1, by an amount equal to the consumer price index ( "CPI ") for the previous year; and
WHEREAS, commencing July 1, 2006, the Minimum Wage has increased
pursuant to the requirements of the Living Wage Ordinance to an amount equal to
fourteen dollars and eight cents ($14.08) effective through June 30, 2014; and
WHEREAS, the City Council recently approved several development agreements
requiring a wage of fifteen dollars and thirty -seven cents ($15.37) an hour for workers
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associated with those projects; and
WHEREAS, in the interest of consistency, fairness and equal treatment for
workers with City contracts and City employees, the City Council now desires to
increase the Minimum Wage under the Living Wage Ordinance to an equivalent
amount; and
WHEREAS, the City wishes to amend Santa Monica Municipal Code Section
4.65.010 to increase the Minimum Wage to an amount equal to fifteen dollars and thirty-
seven cents ($15.37), to be effective July 1, 2014.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Section 4.65.010 of the Santa Monica Municipal Code is hereby
amended to read as follows:
4.65.010 Definitions.
As used in this chapter:
"Employee" means any person who does not actually work as a manager,
supervisor, or confidential employee, and who is not required to possess an
occupational license.
"Minimum Wage" means a wage payment set under this Chapter. at aAs of July
1 2005 Minimum Wage means a wage payment at an initial hourly rate of eleven
dollars and fifty cents per hour. As of July 1 2014 Minimum Wage means a wage
Payment at an initial hourly rate of fifteen dollars and thirty -seven cents. Thise rate
Minimum Wage shall be adjusted annually each July 1st, beginning 2006, by an amount
corresponding to the previous year's change (January to January) in the Consumer
PJ
Price Index for Urban Wage Earners and Clerical Workers 1967 =100 for Los Angeles-
Riverside - Orange County, California.
SECTION 2. Any provision of the Santa Monica Municipal Code or appendices
thereto inconsistent with the provisions of this Ordinance, to the extent of such
inconsistencies and no further, is hereby repealed or modified to that extent necessary
to effect the provisions of this Ordinance.
SECTION 3. If any section, subsection, sentence, clause, or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any
court of competent jurisdiction, such decision shall not affect the validity of the
remaining portions of this Ordinance. The City Council hereby declares that it would
have passed this Ordinance and each and every section, subsection, sentence, clause,
or phrase not declared invalid or unconstitutional without regard to whether any portion
of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 4. The Mayor shall sign and the City Clerk shall attest to the
passage of this Ordinance. The City Clerk shall cause the same to be published once
in the official newspaper within 15 days after its adoption. This Ordinance shall become
effective 30 days from its adoption.
APPROVED AS TO FORM:
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