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City’s living wage ordinance remains

Eight years ago, Sonoma joined Sebastopol and Petaluma in enacting the “living wage ordinance,” which created new regulations for those receiving city money. The ordinance, reviewed at the Sept. 5 City Council meeting at the request of Mayor Joanne Sanders, sets a higher minimum wage requirement for those receiving money from the city. The current standard is $15.15 an hour, with some credit given to employers who offer health benefits.

At the time of its enactment, the ruling was considered controversial and drew opposition from the Sonoma Valley Chamber of Commerce and Sanders, herself, who said its passage inspired her to run for a council seat. But the review, which resulted in no action, brought few people to speak – and those who did praised it.

Marty Bennett, co-chair of the Living Wage Coalition, told the council that 150 cities, counties, universities, and public agencies have such ordinances. “Since 1998, a total of 25 cities and counties in California have passed living wage laws,” said Bennett. He added that costs have been less than one-tenth of 1 percent of their budgets. He also said there have been no adverse impacts on those communities.

Sanders disagreed. “I appreciate the desire for a wage people can live on, but my concern is for unintended consequences,” she said. She used the Sonoma Creamery building on the corner of First Street East and East Spain Street as an example. She said the building remains empty after nearly seven years because the living wage ordinance does not fit “the restaurant model.” Restaurants generally pay a set wage, which may be lower than other businesses, because employee wages are supplemented by tips. Sanders pointed out that unemployment has doubled and the amount required of employers is significant. “We should be going the other way,” she said.

The old creamery building received money from the now-defunct redevelopment agency for seismic and accessibility improvements within the last five years. While redevelopment agencies are gone, several bills in the legislature may bring them back in a new form. If loans to businesses resume, further living wage impacts could occur.

The ordinance, enacted at $13.20 an hour in 2004, rises with city union employees wage adjustments. Now at $15.15, it has remained at that level since 2010. Those who are affected by the ordinance include: the city; for-profit service contractors who receive $10,000 or more from city contracts in a 12-month period; nonprofit service contractors who receive $75,000 or more in a 12-month period; recipients of city leases, concessions, or franchises that employ 25 or more employees and have $350,000 in gross receipts; city financial aid recipients that receive more than $100,000 in loans or other cash/ or non-cash assistance in any 12 month period, plus five years thereafter; subcontractors or subtenants of the persons described above; public agencies who receive $10,000 or more from the city in a 12-month period.

City Manager Linda Kelly said the following are currently bound by the ordinance: Sonoma Valley Visitors Bureau, Sonoma Community Center, Scandia Landscaping and UBS Janitorial. She said city construction projects are subject to living wage laws, but they are also required to pay prevailing wages that are much higher.

“Waivers are allowed, but to date no waivers have been requested,” said Kelly.

There are also exemptions for those in temporary job training programs, or city employees who are on probationary assignment; those under 21 years of age who are hired by nonprofits for after-school or summer employment; part-time firefighters with EMT certification and part-time paramedics; on-call employees; those in disabled employment programs, and those subject to a collective bargaining agreement where waivers are set forth.

Kelly said enforcement is on a complaint basis, and no complaints have been filed. She said hourly rates are verified with the nonprofits. No audits are performed. “Contractors get the ordinance as part of their bid package,” said Kelly, who added that temp agencies are included.

Sanders said she was concerned about impacts on a nonprofit like the one raising funds for a community pool. “If we were to provide funding for the pool, it could trigger the living wage criteria.” Kelly said it would depend on the arrangements in place at the time.

Bennett presented the council with several studies that were done when the living wage ordinance was first enacted in the city. In one undated study, the following information was provided: living wage laws have small to moderate effects on municipal budgets; the laws benefit working families; the laws have raised productivity and decreased turnover among all affected firms studied.

Councilmember Laurie Gallian said the ordinance has benefitted the city. “The amount of negative impact is negligible. My only recommendation is to strengthen and continue it.”