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HomeMy WebLinkAboutReview of Ordinance No. 1554, Quality Jobs and Living Wage.pdf1 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Patricia Berg, Human Resources Director Chris A. Kukulski, City Manager SUBJECT: Review of Ordinance 1554 - Quality Jobs and Living Wage MEETING DATE: March 1, 2010 AGENDA ITEM TYPE: Consent RECOMMENDATION: Review as per Ordinance; BACKGROUND: The Living Wage Ordinance (Attachment A) was adopted on December 19, 2001, with the following stated purpose: “to prescribe a living wage for City employees and to prescribe that certain businesses receiving financial assistance from the City pay employees a minimum level of compensation”. The Ordinance requires the Commission to review the Ordinance biannually “to determine whether any modifications to this chapter are necessary or whether the chapter should be repealed.” Applicability: The following were subject to the provisions of the Living Wage Ordinance on December 19, 2001: 1. City of Bozeman employees, except those under a collective bargaining agreement and those employees who are regularly scheduled to work less than 20 hours per week; 2. Recipients of financial assistance under the Community Development Block Grant (CDBG) revolving loan program with more than 15 employees (except employees who are also owners under a Chapter S or C corporation); 3. Recipients of financial assistance under the Tax Abatement Program, except employees who are also owners under a Chapter S or C corporation; 55 2 In addition any Recipients who, on or after 7/1/02, receive or received financial assistance under the CDBG revolving loan fund, and who had fewer than 15 employees, were required to pay their employees a living wage within three (3) years of receiving this financial assistance. The exception of “owners under a Chapter S or C corporation” would also apply to this category. In the case of items 2 and 3 above, “Financial Assistance” is defined as “financial support from the City of Bozeman for the following City programs”: 1. CDBG Economic Development Revolving Loan fund; and 2. Tax Incentive Program for New Industry or Expanding Industry under MCA §15-24-1401, et. seq. Adjustments to figures established under the 2002 Living Wage Ordinance: 1. Wages: The Ordinance provided for the Living Wage to be adjusted on an annual basis, by an amount equal to the most recent CPI, Class B and C for the Western Region. The first adjustment occurred January 4, 2004 for the twelve month period ending the previous November. The annual adjustment for the twelve month period ending in November, 2009 is 1.4%. 2. Benefits: A “per hour medical rate” of $1.00 per hour was established under this Ordinance. The Ordinance requires annual adjustments, based on the Consumer Price Index for the Western Region for the “Medical Care” expenditure category, for the twelve month period ending the previous November. The annual adjustment for the twelve month period ending in November, 2009 is 4.4%. The first 2 columns of Table 1 show the per-hour pay and medical rates established under this Ordinance in 2002. The third and fourth columns show the 2009 rates resulting from the required annual adjustments. The last 2 columns show the actual rates paid by the City of Bozeman for each classification. TABLE 1: Living Wage Ordinance Adjustments Original Ordinance/ July 2002 Hourly Rates 2009 Adjusted Hourly Rates City of Bozeman Actual Current Rates Employee Category: With Health Benefits: Without Health Benefits With Health Benefits Without Health Benefits With Health Benefits Without Health Benefits Regular, Non union and > 20 hours per week $8.50 $9.50 $9.9254 $11.0931 $13.2933 N/A Probationary $8.07 $8.07 $9.4233 $9.4233 $9.88 N/A Seasonal $8.0618 $8.0618 N/A $9.4233 N/A $9.2816 Temporary & short term $7.4933 $7.4933 N/A $8.7498 N/A $9.2816 Per Hour Medical Rate $1.00 $1.40 $4.21 56 3 Compliance with Living Wage Ordinance Requirements: A. Hourly Pay rates: 1. City of Bozeman Compliance – As noted above, the last two columns of Table 1 show the current rates paid to or on behalf of City of Bozeman employees covered by this Ordinance. Where more than 1 employee is included in a particular classification, the lowest pay rate of that classification is shown. With the exception of seasonal employees the City currently pays more than the pay rate required under the living wage ordinance. The City’s current pay scale for seasonal, temporary and short term employees is included as Attachment B. For the past several years, the City has made Living Wage and cost of living adjustments for short term, seasonal and temporary employees in April, after the demand for seasonal employees has been identified, and after we know which of the current seasonal employees will return for the next season. 2. CDBG Recipients - Prospera Business Network administers these programs and has certified that recipients of these funds are complying with this Ordinance as required. Prospera’s Guidelines directly incorporate the City’s Living Wage Ordinance (Attachment C, page 2.) 3. Tax Abatement Program Recipients - Since the enactment of this Ordinance, one organization has been a recipient under the Tax Abatement program. This recipient also received CDBG funds and, as a result, has been certified by Prospera to have met the requirements. (In cases where these Recipients do not also receive CDBG funds, the City will be responsible to insure compliance with the Ordinance.) B. Health Benefits: 1. City of Bozeman Compliance - As the last row of Table 1 demonstrates, the adjusted cost per hour of health benefits under this Ordinance is $1.17 per hour. The City of Bozeman currently contributes $4.21 per hour for eligible employee health care. Therefore, the City of Bozeman complies with the minimum health benefit payment required under the Ordinance. 2. CDBG and Tax Abatement Recipients Compliance - Please refer to Hourly Pay Rates, paragraphs 2 and 3, above. 57 4 FISCAL EFFECTS: Assuming the City hires 20 new seasonal employees, for an average of 3.5 months per at 173.33 hours per month, the increased salary and benefits cost would be approximately $1,750.00. ALTERNATIVES: As suggested by the City Commission. Report compiled on February 24, 2010 Attachments: Attachment A: Ordinance 1554 Attachment B: Pay Scale for Non-Represented Part-Time and Seasonal Employees Effective 4/24/09 Attachment C: Prospera Business Network/Revolving Loan Fund Policies and Procedures dated September 28, 2007 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74