NEW BUSINESS  11.

COMMITTEE MEMORANDUM

HISTORY:

Every year, during budget discussions for the subsequent fiscal year, the City Commission considers whether or not to change the living wage rates that certain City contractors are required to pay their employees. On October 18, 2017, the City Commission approved increases to the living wage rates for fiscal years 2018, 2019 and 2020 in the following phased-in approach:

1. Effective January 1, 2018, covered employees must be paid a living wage rate of no less than $11.62 per hour with health care benefits of at least $2.26 per hour, or a living wage rate of no less than $13.88 per hour without health care benefits; and
2. Effective January 1, 2019, covered employees must be paid a living wage rate of no less than $11.70 per hour with health care benefits of at least $2.74 per hour, or a living wage rate of no less than $14.44 per hour without health care benefits; and
3. Effective January 1, 2020, covered employees must be paid a living wage rate of no less than $11.78 per hour with health care benefits of at least $3.22 per hour, or a living wage rate of no less than $15.00 per hour without health care benefits.

ANALYSIS:

In keeping with past practice, this item is presented to the Finance and City-Wide Projects Committee (the "Committee") for its recommendation to continue with the phased-in increase approved for fiscal year 2019, or recommend some other option for the rate that becomes effective January 1, 2019.

Again, the Ordinance, as approved, will require contractors to pay employees a living wage rate of no less than $11.70 per hour with health care benefits of at least $2.74 per hour, or a living wage rate of no less than $14.44 per hour without health care benefits, beginning on January 1, 2019. The approved rate will have a potential budgetary impact of approximately $596,690.98 due to increase labor costs in City contracts.

As a point of information, staff has met with representatives from Service Employees International Union (SEIU) to discuss the approved living wage rates for fiscal year 2019. SEIU has informed staff that it will not be seeking changes to the approved rates.

In the event that the Committee wishes to consider options other than those previously approved, the Living Wage Ordinance allows for a rate adjustment based on the increase in the Consumers Price Index (CPI) for the local area, not to exceed 3% or the Cost of Living Adjustment (COLA) approved for unclassified employees, whichever is lower.

CONCLUSION:

The Administration is seeking a recommendation from the Committee to continue with the approved increase for fiscal year 2019, or a recommendation for an option provided for in the Ordinance.