May 1 9 1Qqa

CRIMINAL BRANCH (213) 485-5452

CIVIL BRANCH (213) 485-6370 of tke Tag cAttermg ffire WRITER'S DIRECT DIAL (213)485-5403 7El:1e cAngrle, alifurttia NUMBER JAMES K. HAHN CITY ATTORNEY

09 0 7 5 REPORT NO. MAY 1 9 1QQA

REPORT RE

POSSIBLE REVISIONS TO THE CITY'S LIVING WAGE ORDINANCE CONCERNING THE COVERAGE OF CITY TENANTS

The Honorable City Council City of Los Angeles Room 607, City Hall 200 N. Main Street Los Angeles, CA 90012

[Council File 96-1111-S1 not transmitted but referred to]

Honorable Members:

THE COVERAGE OF CITY TENANTS UNDER THE LIVING WAGE ORDINANCE.

The City's Living Wage Ordinance ("LWO"), Los Angeles Administrative Code §§ 10.37 et seq:, has beep)op,erative since May 5, 1997. While a number of questions have arisen about the interpretation or application of this legislation in the past year, perhaps of greatest interest recently have been questions raised concerning the extent to which activities of City tenants have been and should be covered.

In § 10.37.1(h) the LWO defines "service contract" so as to cover those leases and licenses issued by City departments under which "services are rendered for the City" where it has been determined that "but for" such lease or license the "services to be rendered probably would otherwise be rendered by City employees." The meaning of this ordinance

AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER

EIGHTEENTH FLOOR, CITY HALL EAST • 200 N. MAIN STREET • LOS ANGELES CA 90012-4131 Recyclable and made from recycled waste TeK:9 The City Council City of Los Angeles Page 2

language has been center stage most prominently in connection with disputes over whether the LWO should apply to certain airline leases let by the Department of Airports.' The purpose of this report is to offer the Mayor and City Council an opportunity to clarify and possibly modify the LWO in regard to City tenants.

BACKGROUND.

One of the subjects discussed when the LWO was in development was consideration of which City tenants would be covered and which would not. Those tenants to be covered were those rendering services for the City where it could be said that but for their role in providing those services, the services would probably be provided by City employees. Determination of who would be covered by the LWO and who would not ("who's in, who's out) constituted an important, if brief, part of the deliberations on the LWO. This Office took a preliminary stab at making the distinction by circulating a document at that time showing examples of which tenants might be "in" and which might be "out."

The coverage of tenants represented an extension of one of the two main branches of the LWO. Under one such branch, coverage is effected over those expending City financial assistance for economic development or job growth. Under the other branch, the LWO covers those rendering services to the City -- the typical service contractor. Yet, it was recognized in the LWO that some tenants provide services for the City. As stated in the LWO's preamble:

Among those so rendering services for the City are some of the tenants and concessionaires operating at City facilities.

LWO § 10.37, ¶ 2(emphasis added). So the LWO's service contractor branch was extended to cover such tenants. As with service contractors, in determining which tenants should be "in" and which should be "out" of LWO coverage, attention was to be directed to the

1 The LWO expressly applies to all City departments, including "independent" departments such as the Department of Airports. See § 10.37.1(b). This Office refused to approve the LWO as to form and legality because of our opinion that such coverage cannot be squared with the independent authority conferred on those departments by the City Charter. The commissions heading those departments, however, retain the authority to adopt separate, lawful policies or to adopt by reference the LWO. In the case of the Department of Airports, the Airports Commission has not adopted the LWO for contracts on a blanket basis. It has chosen, instead, to apply the LWO on a case-by-case basis. The City Council City of Los Angeles Page 3

touchstone of LWO coverage -- the identification of which tenant employees could rightly be regarded as substitutes for City employees. As also stated in the preamble:

The service contracts, as well as the tenants and concessionaires, that are subject to this article are those that through their employees render services that otherwise probably would be performed by City employees. Even though these contractor employees are to work under the direction and control of the contractor, they may nonetheless be seen as substitutes for City employees.

Id. This approach was taken for tenants as varied as food concessions at City airports to golf and tennis pros at City recreation facilities to the Ports of Call Village at the Port of Los Angeles to the tenants at El Pueblo de Los Angeles (Olvera Street) to duty free shops and buses at City airports. These, then, were the fundamental principles underlying LWO coverage at the time of the ordinance's birth.

It can be seen and might be recalled that the analytical framework erected at that time regarded tenants as either wholly in or wholly out of LWO coverage. It is in retrospect that we can plainly see that a "who's in, who's out" approach necessarily implies a "primary activity" standard (or something like it), where the primary activity of the tenant determines whether "but for" its performance by the tenant through its employees, the primary activity would be performed directly by the City using City employees. The absence of such a standard necessarily would imply that every tenant is at least potentially covered, with coverage perhaps depending on the particular services being rendered. This result, however, was clearly not intended by the LWO.

Application of these principles to City tenancies soon revealed uncertainties about the scope of coverage and questions by some about the fairness of the "wholly in, wholly out" concept. It was seen that the activities tenants might perform could be several and varied, but the determination on coverage was being predicated exclusively upon the tenant's "primary activity." With this "primary activity" alone determining coverage, ancillary or "secondary" activities were being deliberately ignored for this purpose. Thus, as an example, coverage of a food concessionaire depended on evaluation of the "primary" activity ofthe concessionaire -- the selling offood to the public. Depending on the situation, such concessionaire may or may not have been covered by the LWO. All the while, however, it was understood that such concessionaires would be engaged in activities that supported the "primary" one -- such as maintenance and security. These "secondary" activities played no role in determining LWO coverage. The City Council City of Los Angeles Page 4

What this meant in practical application was that ifthe "primary activity" ofthe tenant passed muster under the LWO,then all the employees, save for those excluded by the definition of employee in § 10.37.1(e), would be covered. Conversely, if the "primary activity" did not pass muster, then no employee would be covered. Seemingly anomalous results followed:

Not all City food concessions, for instance, need be covered -- for a number offactors go into the determination of coverage, including whether the services are seen as "essential to the City operation, the "views" ofthe responsible City department, and the "history of the operation." See Regulation No. 1.2 So, conceivably some City food concessions might be covered and others not. As an example, the restaurants at Olvera Street are regarded as "out," while the food concessions at LAX are seen as "in." Whenever this occurs, employees performing similar work may find themselves at different compensation levels.

.4 The deliberate inattention to "secondary activities" leads to coverage of some such employees and non-coverage of others. A tenant's employees may perform a variety of tasks. Thus, continuing with the food concessionaire as an example, in addition to personnel required to prepare and serve food to the public, maintenance workers might be on the payroll as might security personnel. A City contract with a vendor to perform such maintenance or security services likely would otherwise be covered by the LWO. But where a tenancy is deemed to be "out," none of the employees will be covered.

—I Workers located in close proximity to each other performing essentially the same duties may be working at different compensation levels. Consider custodial workers at an airline terminal. Some may be employed by the Department of Airports, others by service contractors of the Department, still others directly by tenant airlines, and yet others by contractors of the airlines. A very real possibility exists under these conditions that the compensation levels for workers working virtually side-by-side performing essentially the same duties can vary widely.

These seeming anomalies can only be explained in terms ofthe ostensible goal ofthe LWO -- to identify those employees of service contractors and tenants who can be regarded as serving in the stead of City employees. Since in the absence of such contractors and tenants the City

2 Rules and Regulations for Implementation of Article 10, Chapter 1, Division 10 and Article 11, Chapter 1, Division 10 of the Los Angeles Administrative Code (September 24, 1997). The City Council City of Los Angeles Page 5

would perform some activities and not others, the variability in coverage only makes sense from this standpoint.

The question of coverage has been framed most prominently lately in regard to airline leases for the movement of passengers and cargo. Since such leases contemplate not only the movement of passengers and/or cargo on the leased premises, but typically involve as well collateral, supportive activities to such movement (e.g., maintenance and security), the issue is a logical one. On November 21, 1997 the "wholly in, wholly out" approach based on the tenant's "primary activity" was applied by the Bureau of Contract Administration, the agency charged with administration ofthe LWO,to a lease agreement by the Department of Airports with DynAir for a mail service operation. The lease was determined not to be covered. Lately under consideration by the Bureau are several proposed operating permits and lease agreements for terminal and cargo space at LAX and Ontario Airports submitted by the Department of Airports for living wage review on March 3, 1998. Determinations have yet to be issued by the Bureau on such permits and leases.

A number of criticisms have been advanced by critics ofthe "primary activity" - "wholly in, wholly out" interpretation ofthe LWO. The Living Wage Coalition regards this interpretation as an "extremely blunt reading" ofthe definition of"service contract." Letter to the undersigned of September 22, 1997 from Madeline Janis Aparicio, Nari Rhee, and Erika Zucker at 1. They contend that determinations should "account for the entire scope of activities that occur under a contract, lease, or license." For airline leases, for example, they argue that the determination should "distinguish between services that are essential to the operation of airport facilities and those activities that are airline-specific." Id. at 2(emphasis deleted) They assert that a "consistent reading of the LWO mandates coverage of those agreements under which a significant share of workers provide services in the former category." Id.(emphasis deleted). Another approach advanced is to reconfigure the LWO's coverage test so as to ask not whether the activity is one that would be conducted by City employees but for the letting of the lease or license to the tenant; but rather, whether City employees would do the work but for it being performed by the tenant. Still another approach proposes a focus upon public perception, such that at a minimum coverage ought to extend to those tenant employees who interface with the public. Thus, for example, airline employees who assist the traveling public with their luggage or who move some passengers in wheel chairs should be covered under this view, since it is claimed that the Department of Airports has a proprietary interest in how the traveling public perceives the quality ofthose services. Margo A. Feinberg, an attorney working with the Coalition, suggests covering leased facilities frequented by large numbers of the public. It is in such places, she argues, that the proprietary interest of the City in the public's perception of the quality of service becomes most prominent. The City Council City of Los Angeles Page 6

To this we should add that we are advised that the Bureau appears to be moving away from the "primary activity" - "wholly in, wholly out" determinant oftenancy coverage, although it has yet so to rule formally in any determination.

ALTERNATIVE REVISIONS OF THE LWO TO CLARIFY AND POSSIBLY CHANGE THE COVERAGE OF TENANTS.

The LWO should be clarified to resolve questions such as those posed above, and to this end this Office presents for consideration several possible amendments. Doubtless others will present themselves during Council deliberations on this matter. In these proposed alternatives we shall focus on the obvious starting point -- the current definition of"service contract" in § 10.37.1(h). We should bear in mind, however, that depending on what modifications are made to the definition, other provisions (notably the preamble in § 10.37) will require corresponding modification. Whether coverage of the LWO should remain as it is or be modified is a policy question on which this Office expresses no opinion.

The definition of"service contract" in § 10.37(h) now reads:

Alternative No. 1: Codifying the Status Quo: Coverage Dependent Upon Whether the "Primary Activity" Passes the "But For" Test.

To codify the current interpretation under which coverage depends on whether the "primary activity" is one that would be performed by City employees but for the lease or license agreement, the text of § 10.37.1(h) could be revised so as to read:

or(2) a lease or license under which services are rendered to or for the City by the lessee or licensee where by regulation authorized under section 10.37.6 the lease or license has been determined to be one in which, but for such lease or license, the primary activity thereunder probably would otherwise be performed by City employees. Coverage ofthe primary activity shall require coverage ofall employees within the meaning ofsubsection (e) performing work under the lease or license.

Alternative No. 2: Covering Individual Activities and Changing the "But For" Test to Assume the Existence of the Lease or License.

A means by which coverage could be expanded is to allow for consideration of particular activities performed by the tenant (as opposed to only the "primary" one) and to change the nature of the "but for" test. Under the current approach to the LWO the "but for" test has asked whether the services to be performed by the lessee or licensee probably would be performed by City employees in the absence ofthe lease or license. One suggested change to this test involves assumption of the existence ofthe lease or license and a revision of the "but for" test to ask whether the particular activity in question probably would be performed by City employees in the absence of its performance by the tenant. A revision along this line could read:

"Service contract" means (1) a contract let to a contractor by the City primarily for the furnishing ofservices to or for the City(as opposed to the purchase of goods or other property or the leasing of property) and that involves an expenditure in excess oftwenty-five thousand dollars($25,000), a contract term of at least three months, and where by regulation authorized under section 10.37.6 the contract has been determined to be one in which, but for such contract,the services to be rendered probably would otherwise be rendered by City employees or (2) a lease or license under which services are rendered for the City by the lessee or licensee, but only to the extent that an activity performed thereunder has by regulation authorized under section 10.37.6 been determined to be one which, but for its performance by the lessee or licensee, probably would otherwise be performed by City employees.

Alternative No. 3: Covering Individual Activities, Changing the "But For" Test to Assume the Existence of the Lease or License, and Covering Tenant Employees Who Deal Directly with the Public.

Another means by which coverage could be expanded is to modify the alternative just mentioned to ensure coverage oftenant employees who deal directly with the public. The rationale for this approach presumes that the quality of experience enjoyed by the public bears upon the success or failure ofthe lessor City department's operations. Thus, The City Council City of Los Angeles Page 8

the department could be viewed as having a proprietary interest in how the public perceives those who attend to them, whoever might be their employer. Such a revision could read:

"Service contract" means (1) a contract let to a contractor by the City primarily for the furnishing ofservices to or for the City(as opposed to the purchase ofgoods or other property or the leasing of property)and that involves an expenditure in excess oftwenty-five thousand dollars($25,000), a contract term of at least three months,and where by regulation authorized under section 10.37.6 the contract has been determined to be one in which, but for such contract,the services to be rendered probably would otherwise be rendered by City employees or (2) a lease or license under which services are rendered for the City by the lessee or licensee, but only to the extent that an activity performed thereunder has by regulation authorized under section 10.37.6 been determined to be one which, but for its performance by the lessee or licensee, probably would otherwise be performed by City employees or where the employee deals directly with the public.

Alternative No. 4: Covering Individual Activities, Changing the "But For" Test to Assume the Existence of the Lease or License, and Covering Tenant Employees Who Work in City Facilities Frequented by the Public in Substantial Numbers.

Another means by which coverage could be expanded is vary the last alternative so as ensure coverage of tenant employees who work in City facilities frequented by the public in substantial numbers rather than those who interface with the public. This approach posits the proprietary interest that the City has in how the public perceives the quality of operations in those facilities visited frequently as contrasted with other facilities, even many open to the public, where because of relatively infrequent visitation the proprietary interest is less pronounced. Such a revision could read:

"Service contract" means (1) a contract let to a contractor by the City primarily for the furnishing ofservices to or for the City(as opposed to the purchase ofgoods or other property or the leasing of property)and that involves an expenditure in excess oftwenty-five thousand dollars($25,000), a contract term ofat least three months,and where by regulation authorized under section 10.37.6 the contract has been determined to be one in which, but for such contract,the services to be rendered probably would otherwise be rendered by City employees or (2) a lease or license under which services are rendered for the City by the lessee or licensee, but only to the extent that an activity performed thereunder has by regulation authorized under section 10.37.6 been determined to be one which, but for its performance by the lessee or licensee, probably would otherwise be performed by City employees or where the premises are visited by large numbers of the public on a frequent basis. The City Council City of Los Angeles Page 9

Alternative No. 5: Covering Individual Activities and Tenant Employees Whose Services are Deemed Essential to Department Operations (i.e., are not Tenant-Specific).

Another approach to coverage asks whether the employee's services are deemed essential to the department's operations, as opposed to being tenant-specific. Such a revision could read:

"Service contract" means (1) a contract let to a contractor by the City primarily for the furnishing ofservices to or for the City(as opposed to the purchase ofgoods or other property or the leasing of property)and that involves an expenditure in excess oftwenty-five thousand dollars($25,000), a contract term ofat least three months,and where by regulation authorized under section 10.37.6 the contract has been determined to be one in which, but for such contract,the services to be rendered probably would otherwise be rendered by City employees or (2) a lease or license under which services are rendered for the City by the lessee or licensee, but only to the extent that an activity performed thereunder has by regulation authorized under section 10.37.6 been determined to be one which is deemed to be essential to the department's operations.

Alternative No. 6: Covering Individual Activities and Tenant Employees Whose Services are Deemed Essential to Department Operations (i.e., are not Tenant-Specific) and Where their Numbers are Significant.

To the previous variation we can add the requirement that the number of employees performing such essential services be significant. Such a revision could read:

authorized under section 10.37.6 been determined to be one which is deemed to be essential to the department's operations and where it is performed by a significant number of employees.

Very truly yours,

JAMES K. HAI1N, City Attorney

FREDERICK N. MERKIN Managing Assistant Employee Relations and Police-Fire Services Divisions

cc: The Honorable Richard J. Riordan Mayor

Keith Comrie City Administrative Officer

Ronald F. Deaton Chief Legislative Analyst

Ellen Stein President, Board of Public Works

C. Bernard Gilpin Director, Bureau of Contract Administration

William Fujioka General Manager, Personnel Department

Professor Richard Sander UCLA School of Law

Assistant Professor E. Douglass Williams Carleton College, Economics Department

31634 fY OF J. MICHAEL CAREY LOS ANGELES Office of City Clerk CALIFORNIA CITY CLERK Council and Public Services Room 395, City Hall When making inquiries Los Angeles, CA 90012 relative to this matter Council File Information - (213) 485-5703 refer to File No. General Information - (213)485-5705

Pat Healy Chief Legislative Assistant RICHARD J. RIORDAN 96-1111-S1 MAYOR

May 22, 1998

PERSONNEL COMMITTEE

In accordance with Council Rules, communication from the City

Attorney relative to possible revisions to the City's Living Wage

ordinance concerning the coverage of City tenants, was referred on

May 22, 1998, to the PERSONNEL COMMITTEE.

City Clerk amm

Oa AN EQUAL EMPLOYMENT OPPORTUNITY — AFFIRMATIVE ACTION EMPLOYER Recyclable and made from recycled waste. 7;K:9 ,ITY OF LOS ANGELE-- J. MICHAEL CAREY Office of City Clerk CALIFORNIA CITY CLERK Council and Public Services Room 395, City Hall When making inquiries Los Angeles, CA 90012 relative to this matter Council File Information - (213)485-5703 refer to File No. General Information - (213) 485-5705

Pat Healy Chief Legislative Assistant RICHARD J. RIORDAN 96-1111-Si MAYOR

PLACE IN FILES JULY97 July 17, 1997 DEPUTY

Bureau of Contract Administration City Administrative Officer Chief Legislative Analyst

RE: RECEIVE AND FILE CITY ADMINISTRATIVE OFFICER REPORT RELATIVE TO ADDING THREE POSITIONS TO THE 1997-98 BUDGET FOR THE DEPARTMENT OF PUBLIC WORKS, BUREAU OF CONTRACT ADMINISTRATION, FOR FULL IMPLEMENTATION OF THE LIVING WAGE ORDINANCE

At the meeting of the Council held July 15, 1997, the following action was taken:

Attached report adopted X Attached motion ( ) adopted Attached resolution adopted Ordinance adopted Motion adopted to approve attached report Motion adopted to approve attached communication To the Mayor for concurrence To the Mayor FORTHWITH Mayor concurred Appointment confirmed Findings adopted Negative Declaration adopted Categorically exempt Generally exempt EIR certified Tract map approved for filing with the County Recorder Parcel map approved for filing with the County Recorder

6.116

City Clerk bs

steno\961111.1

QD AN EQUAL EMPLOYMENT OPPORTUNITY — AFFIRMATIVE ACTION EMPLOYER Recyclable and made from recycled waste. 7E:1(9 File No. 96-1111-S1 TO THE COUNCIL OF THE CITY OF LOS ANGELES

Your PERSONNEL and BUDGET AND FINANCE COMMITTEES

report as follows:

Yes No Public Comments XX

PERSONNEL and BUDGET AND FINANCE COMMITTEES REPORT relative to adding three positions to the 1997-98 Budget for the Department of Public Works, Bureau of Contract Administration, for full implementation of the Living Wage Ordinance.

Recommendation for Council action:

RECEIVE and FILE City Administrative Officer (CAO) report dated May 6, 1997 (attached to Council File 96-1111-S1) relative to adding the following positions to the Department of Public Works, Bureau of Contract Administration for full implementation of the Living Wage Ordinance, inasmuch as these positions have already been included in the Bureau's 1997-93 Budget:

No. Code Title 1 9184-1 Management Analyst I 2 9184-2 Management Analyst II

Fiscal Impact Statement: Not applicable.

Summary:

In the aforementioned report, the CAO recommended that the Council add the three positions listed above to the Bureau of Contract Administration for full implementation of the Living Wage Ordinance adopted March 18, 1997. At their meeting held May 28, 1997, the Personnel Committee recommended that the Council receive and file the CAO's report inasmuch as these positions have been included in the Bureau's 1997-98 Budget. At their meeting held June 10, 1997, the Budget and Finance Committee concurred with the Personnel Committee's recommendation.

Respectfully submitted,

PERSONNEL BUDGET AND FINANCE ITTE COMMITTEE

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Council File No.

Council Member(s)

Interested Department \O-)vve , F,C Ccr,„1. „42k.

Mayor (with/without file)

Board of Civil Service Commissioners

Personnel Department

City Administrative Officer

City Attorney

Chief Legislative Analyst

Controller

Treasurer

Information Services Department

Appropriate Pension System

Appropriate Bargaining Unit PERSONNEL COMMITTEE

WEDNESDAY - JUNE 25, 1997

2:00 P.M. - ROOM 340 - CITY HALL 200 N. SPRING ST., LOS ANGELES, CA 90012

MEMBERS: COUNCIL MEMBER JACKIE GOLDBERG, CHAIR cetvrTI, mEmBEIR-NnTY-4THOMAS NC CHICK

(John A. White - Legislative Assistant - 213-485-5775)

FILE NO. SUBJECT

(1) Continued f m meeting held June 11, 1997 96-0851 Consideratio of ordinance amending Memorandum of Understanding (MOU) Ordinance Nos. 169900, 170101, and 170864 (1992- 7 Management Employees) to amend various ordinances set ing the salaries for Chief Port Pilot I and II. (Purs ant to Council May 7, 1997 referral.)

Fiscal Impact S tement submitted: No

DISPOSITION

(2) Continued from meet i ng held May 28, 1997 97-0771-S1 City Administrative Officer (CAO) report relative to special salary adju•tment recommendations for non- represented employees Commission Executive Assistant I and II positions at the Fire, Personnel, and Police Departments.

Fiscal Impact Statement ubmitted: Yes, by the CAO

DISPOSITION

(3) 95-2425 City Attorney Ordinance a CAO report relative to salary increase recommendati s for certain Department of Water and Power non-repre nted employees.

Fiscal Impact Statement Submit ed: Yes, by the CAO

DISPOSITION

PERSONNEL COMMITTEE Wednesday - June 25, 1997 4) Personnel Department Equal Employment Opportunities Section to report relat e to the Office of Discrimina- tion Investigation - Sta• s Report.

Fiscal Impact Statement Submitted: No

DISPOSITION

(5) Continued from meeting held June 11, 1997 96-1111-Si Bureau of Contract Administration to report relative to the status and enforcement of the Living Wage Ordinance regulations.

Fiscal Impact Statement Submitted: No

DISPOSITION (CVONd Y- -.)-- VJI2J2kS Loh" Ace 40 6,-5, s (6) 96-1977 Continued from meeting held June 11. 1997. Fire Department a • Board of Fire Commissioners reports relative to the u e of Community Service Workers from the Los Angeles Co nty Work Release Program.

Fiscal Impact State ent Submitted: No

DISPOSITION

(7) Continued from meeting eld May 28. 1997 97-0892 Fire Department to resort relative to the federal firefighters who have bee displaced as a result of the closure of the Long Beac Naval Shipyard, pursuant to Motion (Goldberg-Chick).

Fiscal Impact Statement Su.mitted: No

DISPOSITION

(8) Continued from meeting held Ju e 11. 1997 95-0837-S1 Police and Personnel Department- to report relative to the establishment of a panel of experts to review the psychological screening process.

Fiscal Impact Statement submitted:

DISPOSITION

PERSONNEL COMMITTEE Wednesday - June 25, 1997 (9) Continued from mee ing held June 11. 1997 97-0684 CAO report relativz to a Police Department request to exempt from the hiring freeze two Management Analyst I positions and one nagement Aide position for the Department's Employe- Opportunity and Development Division Special Proje is Section. (Also referred to the Budget and Finance ommittee.)

Fiscal Impact Statement .ubmitted: Yes, by the CAO

DISPOSITION

(10) 97-0777 CAO report relative to a h ring freeze exemption for various positions in the olice Department's Motor Transport Division. (Also eferred to the Budget and Finance Committee.)

Fiscal Impact Statement Submi ted: Yes, by the CAO

DISPOSITION

(11) 97-1002 CAO report relative to a blanket hiring freeze exemption for Department of Buildin and Safety for two Deputy Superintendent of Building positions, and one Deputy Superintendent of Building I position, pursuant to Motion (Chick-Alatorre). (Al referred to the Budget and Finance Committee.)

Fiscal Impact Statement Submitted: es, by the CAO

DISPOSITION

(12) 97-1003 CAO report relative to a blanket exe ption from the 1997-98 hiring freeze for various positions in the Bureau of Contract Administration. (A1 =o referred to the Budget and Finance Committee.)

Fiscal Impact Statement Submitted: Yes, • the CAO

DISPOSITION

COMMENTS FROM PUBLIC ON ITEMS OF PUBLIC INTEREST WITHIN COMMITTEE'S SUBJECT MATTER JURISDICTION pr0625.agd

PERSONNEL COMMITTEE Wednesday - June 25, 1997 of property) and that involves an expenditure in excess of twenty- five thousand dollars ($25,000) and a contract term of at least three months or (2) a lease or license under which services are rendered for the City by the lessee or licensee; but only where by regulation authorized under section 10.37.6 the contract, lease, or license, as referenced in (1) and (2) above, has been determined to be one in which, but for such agreement, the services to be rendered probably would otherwise be rendered by City employees. Sec. 10.37.1(h).

Under the first part of the definition of Service Contracts, the contract must be primarily for the furnishing of services to the City. As discussed above, the subject terminal and cargo leases clearly do not fall within this prong of the definition. The leases are not contracts whose primary purpose is to furnish services to or for the City. The analysis is similar with respect to the second part of the service contract definition. An airline does not lease space in order to provide services to the City, nor are there any services rendered for the City, as required by the definition. All services and work performed under the lease are connected to, and for the purpose of, the airlines' business of providing air transportation services to their customers. Airline employees, or the employees of vendors and subcontractors to the airlines, are simply not acting as substitutes for City employees.

While we do not believe an employee-by-employee analysis is proper (or feasible) under the LWO, such an analysis also requires the conclusion that the LWO is not applicable to the subject leases. As noted above, the Bureau's regulations require the Bureau to consider several factors: whether the services are essential to the City operation, the views of the responsible City department, the history of the operation, and other relevant factors. The responsible City department -- Los Angeles World Airports -- has stated that the services provided under the subject leases would not otherwise be provided by City employees. Application of the other factors listed in the regulations to the custodial, maintenance and security services provided pursuant to the leases leads to the conclusion that the LWO should not apply.

a. Passenger security screening

One "security" service provided in the terminal is the pre-boarding screening of passengers and visitors for weapons or other designated dangerous materials. Federal law and regulations make passenger screening the exclusive responsibility of the airlines. 49 U.S.C. §44901 provides as follows:

6 The Administrator of the Federal Aviation Administration shall prescribe regulations requiring screening of all passengers and property that will be carried in a cabin of an aircraft in air transportation or intrastate air transportation. The screening must take place before boarding and be carried out by a weapon-detecting facility or procedure used or operated by an employee or agent of an air carrier. intrastate air carrier. or foreign air carrier. (Emphasis added).

FAA regulations require the airlines to adopt and carry out security programs which will provide for the safety of persons and property traveling in air transportation against acts of criminal violence and air piracy. 14 CFR Part 108. The regulations call for airlines to conduct security screening to inspect all persons passing through preboarding screening checkpoints (14 CFR Part 108.9).

The federal regulations covering passenger security screening also set forth detailed requirements for the qualifications of employees performing these functions. 14 CFR Part 108.31. This is a further indication that local regulation of these employees is preempted by federal law. See Huntleigh Corp. v. Louisiana State Board of Private Security Examiners, 906 F.Supp. 357(M.D. La 1995).

Passenger security screening has never been performed by City employees, and no City employees are currently performing this function at LAX or Ontario. Because this is not a service which would otherwise be provided by the City, these employees are not covered by the LWO. The same is true with respect to the employees providing baggage security services.

b. Janitorial services

Certain employees provide janitorial services in the exclusive and joint-use spaces at the terminals. The City, as a commercial landlord, has no legal obligation to supply janitorial services to airline-leased premises. Historically, the Airlines have provided their own janitorial services for their terminal space and these services are not essential to the operation of the City. Thus, these employees should not be not covered by the LWO.

In sum, these workers are not performing services for the City, and are not substitutes for City employees. Their presence is entirely at the discretion of the Airlines (except where required by federal law); the services they provide are voluntarily provided by the airlines to their passengers.

7 4. Proposed Amendments to the LWO.

In his report dated May 19, 1998, the City Attorney identified six possible alternative amendments to the LWO. These amendments would either clarify or expand the scope of the LWO. The Airlines offer the following comments with respect to each alternative, with the caveat that any attempt to regulate or affect the services provided by employees in the air transportation business would be subject to federal preemption as discussed above.

Alternative No. 1: Codifying the Status Quo: Coverage Dependent Upon Whether the "Primary Activity" Passes the "But For" Test.

As stated by the City Attorney, this amendment would codify the current interpretation of the LWO under which coverage depends on whether the "primary activity" is one that would be performed by City employees but for the lease or license agreement. If the primary activity to be performed under the lease would otherwise be performed by City employees, then all employees performing work under the lease would be covered by the LWO.

For the reasons stated earlier, this amendment is the most workable, and the most consistent with the wording and intent of the LWO.

Alternative No. 2: Covering Individual Activities and Changing the "But For" Test to Assume the Existence of the Lease or License.

This amendment would introduce into the LWO the unworkable and burdensome requirement of looking at the activities performed by each individual employee working on the leased premises. As noted earlier, such an approach would raise many difficulties. The activities of every employee would have to be examined. Some employees perform multiple activities. How would the LWO apply to them? What happens when new activities are added after a lease is approved without the LWO being applied?

Alternative No. 3: Covering Individual Activities, Changing the "But For" Test to Assume the Existence of the Lease or License, and Covering Tenant Employees Who Deal Directly With the Public.

This amendment would expand the scope of the LWO to cover not just those services which would otherwise be performed by City employees but also any services performed "where the employee deals directly with the public." The amendment goes

8 far beyond the intent of the LWO, and would result in difficult questions of interpretation and application. Like Alternative No. 2, it would require the City to examine the activities of every employee working on the leased premises and make an individual determination as to their level of contact with the public.

This amendment is a variation on the last alternative, and would apply the LWO to tenant employees who work in City facilities which "are visited by large numbers of the public on a frequent basis," rather than only to those employees who interface directly with the public.

This amendment is very vague and would almost certainly result in inconsistent application. What constitutes "large numbers" or "on a frequent basis"? Additionally, it appears to be aimed specifically at the Airport, and thus is discriminatory under federal aviation statutes and regulations.

Alternative No. 5: Covering Individual Activities and Tenant Employees Whose Services are Deemed Essential to Department Operations (i.e., are not Tenant-Specific),

This alternative asks whether the employee's services are deemed essential to the department's operations. This is one of the factors already considered under the Bureau's regulations in determining whether the primary purpose of the lease is the provision of services to the City. Isolating this factor as a test for individual employees, however, creates the same burdens and uncertainties as discussed above concerning alternative No. 2.

This alternative is essentially the same as the previous one, with the additional requirement that the number of employees performing such services be significant. This additional language does not solve the problems associated with the prior

9 alternative, and introduces further ambiguity by not defining the phrase "significant number."

10 CITY '" - .0S ANGELES SPEAKER

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Please see reverse of card for important information and submit this entire card to the presiding officer or chairperson. LOS ANGELES LIVING WAGE COALITION 634 South Spring Street Suite 1016 Los Angeles, CA 90014 (213) 486-9880 Fax (213) 486-9886 INTERNET:[email protected] The L.A. Living Wage Coalition includes: Labor: Los Angeles County Federation of June 25 1997 Labor, AFL-CIO Union Privilege, AFSCME Council District 36,Building Trades of L.A. & Orange Counties, California Immigrant Workers Association Honorable Members of the Personnel Committee (CIWA), Carpenters L.A. City Council District Council-Local 409, Engineers & City Hall Architects Assoc, Hotel Employees & Restaurant Los Angeles, CA 90012 Employees, Locals 11 & 814, International Brotherhood of Electrical Re: Handling costs associated with contracts bid before the LWO Workers Locals 11 & 18, LA MAP, LA Professional Manager's Assoc., Operating Engineers Dear Councilmembers: Local 501, Painters District Council Local 36, Service Employees Intl The Living Wage Coalition would like to address the issue of contracts currently Union, Locals 347 & 399, UCLA Ctr for Labor up for approval that were bid or otherwise let before the passage of the Living Research & Education, Union of Needle Wage Ordinance. Some departments seem to be developing the practice of trades/IndustrialfTextile absorbing the whole cost--or at least the lion's hare--of the wage increases. We Employees-Western States, Union Heritage, see this as an unncessarily expensive way to deal with the issue, and recommend United Food & Commercial Workers- rebidding contracts as a way to hold down costs associated with the LWO. Locals 324, 770, & 1442, Utility Workers Union- Local 132. The handling ofthe DWI'cooperative security contracts and the recent Community: AGENDA, CARECEN, CHIRLA, discussions about the General Services Department janitorial contracts during CNNE, Coalition to End Homelessness, Coalition the past few weeks have involved asking contractors how much more it would LA, Communities for a Better Environment cost to comply with the LWO,and assume that the Depainnent must absorb the (CBE), Democratic additional wage costs. This sets a bad precedent for other departments that Socialists of America, Esperanza Community might confront this dilemma, and sets up a high benchmark for future bids. In Housing Corp, KIWA, Mothers of East LA-Santa addition, a contractor has no incentive to economize if the department is Isabel, National Lawyers apparently willing to cough up the increase that he Guild (LA Chap), Soledad or she specifies. Enrichment Action, Tourism Industry Development Council Furthermore, we believe that this practice contradicts the consensus reached (TIDC), Vermont-Slauson Economic Development during the legislative process that contractors and the city would share the Corp., Youth burden of the increased costs, and that the higher wage floor in Empowerment Project. combination Interfaith: All Saints with competitive pressures would encourage bidders to economize on non-labor Episcopal Church, Beth Shir Shalom Temple, factors such as high profit margins or otherwise improve their efficiency. Centenary United Methodist Church, Holman United Methodist There is a better way of dealing with this dilemma, one already practiced by the Church, Immanuel Episcopal Church, Department of Airports: when the Board of Airport Commissioners adopted the Presbyterian Church USA-Synod of So. Cal & LWO on June 3, they rejected all previous bids on service contracts covered by Hawaii, Rabbi Leonard the LWO and issued new RFPs with living wage Beerman, St. Marks requirements attached. They Lutheran Church, Second also decided not to exercise remaining options on existing janitorial contracts, Baptist Church of Los Angeles, United but instead extended them on a month to month basis (with additional funding Methodist Church Urban Strategy. to cover living wage compliance) and issued new RFPs for those contracts. Drawing upon Baltimore's experience, we believe that this method ofdealing with existing low bids will yield cost savings in the long run. The Preamble Center's study on the Baltimore Living Wage law identified the competitive pressures ofthe bidding process as a key reason why the city's contract costs did not increase. The L.A. wage increase is greater than the one implemented in Baltimore, but we believe that the beneficial principles of competitive bidding will still hold: it will yield lower contract costs over the short and long run than will contracts in which the city simply makes up the difference on existing bids.

In conclusion, we urge the City Council to ensure that city depai tments exercise the option to rebid on contracts that were let before the passage ofthe Living Wage Ordinance. This will help minimize the Ordinance's fiscal costs and spread the burden more evenly between the city and its contractors.

Sincerely,

Nari Rhee Research Analyst CRIMINAL BRANCH (213) 485-5452

CIVIL BRANCH (213) 485-6370 ffirr of tile Tag cAttornrg WRITERS DIRECT DIAL

X053 /144-tvies, Tatifornia (21 -i) JAMES K. HAHN NUMBER 4RS-5403 CITY ATTORNEY

R97-00/4 REPORT NO. MAR 1 8 1997

REPORT RE

TRANSMITTAL OF FINAL "LIVING WAGE" ORDINANCE

The Los Angeles City Council Room 395, City Hall Los Angeles, CA 90012

(Council File 96-1111-Si not transmitted but referred to)

Honorable Members:

On March 18, 1997 the City Council adopted on first reading (12-0) the proposed Living Wage Ordinance, which adds Art. 11 to Ch. 1 of Div. 10 of the Los Angeles Administrative Code, beginning with § 10.37. Before the Council at that time was a draft bearing such date, the text of which the Council adopted through its action. Transmitted herewith is the ordinance in final form.

The final ordinance contains a formal change from the draft before the Council. We have abandoned in the final ordinance the acronym CFAR (City financial assistance recipient) that had been used in the draft in § 10.37.1(e). Since the draft failed to define the acronym and used it nowhere else, to avoid confusion we have inserted in its place the full expression: "City financial assistance recipient."

AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER (2D EIGHTEENTH FLOOR, CITY HALL EAST • 200 N. MAIN STREET • LOS ANGELES CA 90012-4131 Recyclable and made from recycle° wasle 7:16) The City Council, City of Los Angeles Page 2

It will be noted that the ordinance is not approved by this Office as to form and legality. For reasons we have expressed both orally and in writing, there is one provision in the LWO that compels this Office to withhold its approval. The provision in question is contained in § 10.37.1(b), the definition of "City." The definition attempts to include within the LWO's coverage "those City departments which exercise independent control over their expenditure of funds." These are the independent departments, which by Charter have control over their funds, which funds by Charter have designated purposes. To view the LWO as a mandate, as opposed to a recommendation, to such departments would encroach upon their fiscal and managerial authority under the Charter. It may be recalled that the Service Contractor Worker Retention Ordinance, Los Angeles Administrative Code §§ 10.36 et seq., contained the same language in § 10.36.1(b), and we refused to approve it for the very same reason.

Very truly yours,

JAMES K. HAHN, City Attorney

'<7

FREDERICK N. MERKIN Managing Assistant Employee Relations and Police-Fire Services Divisions

cc: The Honorable Richard J. Riordan Mayor

Keith Comrie City Administrative Officer

Ronald F. Deaton Chief Legislative Analyst

contremp.083 1 7 1 5 /I ORDINANCE NO.

An ordinance adding Article 11 to Chapter 1 of Division 10 of the Los Angeles Administrative Code to require that nothing less than a prescribed minimum level of compensation (a "living wage") be paid to employees of service contractors of the City and its fmancial assistance recipients and to employees of such recipients.

THE PEOPLE OF THE CITY OF LOS ANGELES

DO ORDAIN AS FOLLOWS:

Section 1. The Los Angeles Administrative Code is hereby amended by adding Article 11 to Chapter 1 of Division 10 to read as follows:

ARTICLE 11 LIVING WAGE

Sec. 10.37 Legislative Findings

The City awards many contracts to private firms to provide services to the public and to City government. The City also provides financial assistance and funding to others for the purpose of economic development or job growth. The City expends grant funds under programs created by the federal and state governments. Such expenditures serve to promote the goals established for those programs by such governments and similar goals of the City. The City intends that the policies underlying this article serve to guide the expenditure of such funds to the extent allowed by the laws under which such grant programs are established.

Experience indicates that procurement by contract ofservices has all too often resulted in the payment by service contractors to their employees of wages at or slightly above the minimum required by federal and state minimum wage laws. Such minimal compensation tends to inhibit the quantity and quality of services rendered by such employees, to the City and to the public. Underpaying employees in this way fosters high turnover, absenteeism, and lackluster performance. Conversely, adequate compensation promotes amelioration of these undesirable conditions.

1 Through this article the City intends to require service contractors to provide a minimum level of compensation that will improve the level of services rendered to and for the City. Among those so rendering services for the City are some of the tenants and concessionaires operating at City facilities. The service contractors, as well as the tenants and concessionaires, that are to be subject to this article are those that through their employees render services that otherwise probably would be performed by City employees. Even though these contractor employees are to work under the direction and control of the contractor, they may nonetheless be seen as substitutes for City employees.

The inadequate compensation typically paid today also fails to provide service employees with resources sufficient to afford life in Los Angeles. It is unacceptable that contracting decisions involving the expenditure of City funds should foster conditions placing a burden on limited social services. The City, as a principal provider of social support services, has an interest in promoting an employment environment that protects such limited resources. In requiring the payment of a higher minimum level of compensation, this article benefits that interest.

Nothing less than the living wage should be paid by the recipients of City financial assistance themselves. Whether they be engaged in manufacturing or some other line of business, the City does not wish to foster an economic climate where a lesser wage is all that is offered to the working poor. The same adverse social consequences from such inadequate compensation emanate just as readily from manufacturing, for example, as service industries. This article is meant to protect these employees as well.

Sec. 10.37.1 Definitions.

The following definitions shall apply throughout this article:

(a) "Awarding authority" means that subordinate or component entity or person of the City (such as a department) or of the financial assistance recipient that awards or is otherwise responsible for the administration of a service contract or, if none, then the City or the City financial assistance recipient.

(b) "City" means the City of Los Angeles and all awarding authorities thereof, including those City departments which exercise independent control over their expenditure offunds, but excludes the Community Redevelopment Agency of the City of Los Angeles ("CRA"). The CRA is urged, however, to adopt a policy

2 similar to that set forth in this article.

(c) "City financial assistance recipient" means any person who receives from the City discrete financial assistance for economic development or job growth expressly articulated and identified by the City, as contrasted with generalized financial assistance such as through tax legislation, in accordance with the following monetary limitations. Assistance given in the amount of one million dollars ($1,000,000) or more in any twelve-month period shall require compliance with this article for five years from the date such assistance reaches the one million dollar ($1,000,000) threshold. For assistance in any twelve-month period totaling less than one million dollars ($1,000,000) but at least one hundred thousand dollars ($100,000), there shall be compliance for one year if at least one hundred thousand dollars($100,000) of such assistance is given in what is reasonably contemplated at the time to be on a continuing basis, with the period of compliance beginning when the accrual during such twelve-month period of such continuing assistance reaches the one-hundred thousand dollar ($100,000) threshold.

Categories of such assistance include, but are not limited to, bond financing, planning assistance, tax increment financing exclusively by the City, and tax credits, and shall not include assistance provided by the Community Development Bank. City staff assistance shall not be regarded as financial assistance for purposes of this article. A loan shall not be regarded as financial assistance. The forgiveness of a loan shall be regarded as financial assistance. A loan shall be regarded as financial assistance to the extent of any differential between the amount of the loan and the present value of the payments thereunder, discounted over the life of the loan by the applicable federal rate as used in 26 U.S.C. §§ 1274(d), 7872(f). A recipient shall not be deemed to include lessees and sublessees.

A recipient shall be exempted from application of this article if(a) it is in its first year of existence, in which case the exemption shall last for one year,(b) it employs fewer than five employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year, or (c) it obtains a waiver as provided herein. A recipient -- who employs the long-term unemployed or provides trainee positions intended to prepare employees for permanent positions, and who claims that compliance with this article would cause an economic hardship -- may apply in writing to the City department or office administering such assistance, which department or office which shall forward such application and its recommended action on it to the City Council. Waivers shall be effected by Council resolution.

3 (d) "Contractor" means any person that enters into a service contract with the City.

(e) "Employee" means any person -- who is not a managerial, supervisory, or confidential employee and who is not required to possess an occupational license -- who is employed (1)as a service employee of a contractor or subcontractor on or under the authority of one or more service contracts and who expends any of his or her time thereon, including but not limited to: hotel employees, restaurant, food service or banquet employees; janitorial employees; security guards; parking attendants; nonprofessional health care employees; gardeners; waste management employees; and clerical employees; or (2) by a City financial assistance recipient who expends at least half of his or her time on the funded project, or(3) by a service contractor of a City financial assistance recipient and who expends at least half of his or her time on the premises of the City financial assistance recipient directly involved with the activities funded by the City.

(f) "Employer" means any person who is a City financial assistance recipient, contractor, or subcontractor and who is required to have a business tax registration certificate by Los Angeles Municipal Code §§ 21.00 -21.198 or successor ordinance or, if expressly exempted by the Code from such tax, would otherwise be subject to the tax but for such exemption; provided, however, that corporations organized under § 501(c)(3) of the United States Internal Revenue Code of 1954, 26 U.S.C. § 501(c)(3), whose chief executive officer earns a salary which when calculated on an hourly basis is less than eight times the lowest wage paid by the corporation, shall be exempted as to all employees other than child care workers.

(g) "Person" means any individual, proprietorship, partnership, joint venture, corporation, limited liability company, trust, association, or other entity that may employ individuals or enter into contracts.

(h) "Service contract" means(1) a contract let to a contractor by the City primarily for the furnishing of services to or for the City (as opposed to the purchase of goods or other property or the leasing of property) and that involves an expenditure in excess of twenty-five thousand dollars ($25,000) and a contract term of at least three months or(2) a lease or license under which services are rendered for the City by the lessee or licensee; but only where by regulation authorized under section 10.37.6 the contract, lease, or license, as referenced in (1) and (2) above, has been determined to be one in which, but for such agreement, the services to be rendered probably would otherwise be rendered by City employees.

4 (i) "Subcontractor" means any person not an employee that enters into a contract (and that employs employees for such purpose) with (a) a contractor to assist the contractor in performing a service contract or (b) a City financial assistance recipient to assist the recipient in performing the work for which the assistance is being given. Vendors, such as service contractors, of City financial assistance recipients shall not be regarded as subcontractors except to the extent provided in subsection (e).

Sec. 10.37.2 Payment of Minimum Compensation to Employees

(a) Wages

Employers shall pay employees a wage of no less than the hourly rates set under the authority of this article. The initial rates shall be seven dollars and twenty- five cents ($7.25) per hour with health benefits, as described in this article, or otherwise eight dollars and fifty cents ($8.50) per hour. Such rates shall be adjusted annually to correspond with adjustments, if any, to retirement benefits paid to members of the City Employees Retirement System ("CERS"), made by the CERS Board of Administration under § 4.1040. The City Administrative Office shall so advise the Bureau of Contract Administration of the Department of Public Works of any such change by June 1 of each year and of the required new hourly rates, if any. On the basis of such report the Bureau shall publish a bulletin announcing the adjusted rates, which shall take effect upon such publication.

(b) Compensated days off

Employers shall provide at least twelve compensated days off per year for sick leave, vacation, or personal necessity at the employee's request. Employers shall also permit employees to take at least an additional ten days a year of uncompensated time to be used for sick leave for the illness of the employee or a member of his or her immediate family where the employee has exhausted his or her compensated days off for that year.

Sec. 10.37.3 Health Benefits

Health benefits required by this article shall consist of the payment of at least one dollar and twenty-five cents($1.25) per hour towards the provision of health care benefits for employees and their dependents. Proof of the provision of such benefits must be submitted to the awarding authority to qualify for the wage rate in section

5 10.27.2(a) for employees with health benefits.

Sec. 10.37.4 Notifying Employees of their Potential Right to the federal Earned Income Credit

Employers shall inform employees making less than twelve dollars($12) per hour of their possible right to the federal Earned Income Credit("EIC") under § 32 of the Internal Revenue Code of 1954, 26 U.S.C. § 32, and shall make available to employees forms informing them about the EIC and forms required to secure advance EIC payments from the employer.

Sec. 10.37.5 Enforcement

(a) An employee claiming violation of this article may bring an action in the Municipal Court or Superior Court of the State of California, as appropriate, against an employer and may be awarded:

(1)For failure to pay minimum wages, back pay for each day during which the violation continued.

(2) For failure to pay medical benefits, the difference during the involved period between the minimum wage required herein without benefits and such minimum wage with benefits.

(b) The court shall award reasonable attorney's fees and costs to an employee who prevails in any such enforcement action.

(c) Compliance with this article shall be required in all City contracts to which it applies, and such contracts shall provide that violation of this article shall entitle the City to terminate the contract and otherwise pursue legal remedies that may be available.

(d) An employee claiming retaliation for alleging non-compliance with this article may report such claimed retaliation to the Bureau of Contract Administration, which shall investigate such claim and report the results to the awarding authority. Service contracts shall expressly prohibit such retaliation and shall also include a pledge that there shall be compliance with federal law proscribing retaliation for union organizing.

6 (e) Notwithstanding any provision of this Code or any other ordinance to the contrary, no criminal penalties shall attach for any violation of this article.

Sec. 10.37.6 Administration

The Bureau of Contract Administration in the Department of Public Works shall monitor compliance, including the investigation of claimed violations, and shall promulgate implementing regulations consistent with this article. Such regulations shall include, but not be limited to, determinations that particular contracts, leases, or licenses shall be regarded as "service contracts" for purposes of section 10.37.1(h), the establishment of employer reporting requirements on employee compensation and on notification about and usage of the federal Earned Income Credit referred to in § 10.37.4. The Bureau shall report on compliance to the City Council no less frequently than annually.

During the first, third, and seventh years of this article's operation, and every third year thereafter, the Chief Administrative Officer and the Chief Legislative Analyst shall conduct or commission an evaluation of this article's operation and effects. The evaluation shall specifically address at least the following matters:(a) how extensively affected employers are complying with the article; (b) how the article is affecting the workforce composition of affected employers; (c) how the article is affecting productivity and service quality of affected employers;(d) how the additional costs of the article have been distributed among workers, their employers, and the City. Within ninety days of the adoption of this article, these offices shall develop detailed plans for evaluation, including a determination of what current and future data will be needed for effective evaluation.

Sec. 10.37.7 Exclusion of Service Contracts from Competitive Bidding Requirement

Service contracts otherwise subject to competitive bid shall be let by competitive bid if they involve the expenditure of at least two million dollars ($2,000,000). Charter § 387 shall not be applicable to service contracts.

Sec. 10.37.8 Coexistence with Other Available Relief for Specific Deprivations of Protected Rights

This article shall not be construed to limit an employee's right to bring legal action for violation of other minimum compensation laws.

7 Sec. 10.37.9 Expenditures Covered by this Article

This article shall apply to the expenditure -- whether through aid to City financial assistance recipients, service contracts let by the City, or service contracts let by its financial assistance recipients -- of funds entirely within the City's control and to other funds, such as federal or state grant funds, where the application of this article is consonant with the laws authorizing the City to expend such other funds. As to any grant or similar program, this article shall become applicable to the funds authorized by such program if and only if the City Attorney's Office has obtained from the funding government either an opinion or other determination indicating such consonance or a judgment of compliance from a court of law or other tribunal, which procurement has been reported in writing by such Office to the City Council by a letter to the City Clerk.

Sec. 10.37.10 Article Applicable to New Contracts and City Financial Assistance

The provisions of this article shall apply to (a) a contract consummated and financial assistance provided after the effective date of this ordinance,(b) a contract amendment consummated after the effective date of this ordinance which itself meets the requirements of section 10.37.1(h) or which extends the duration of the contract, and (c) supplemental financial assistance provided after the effective date of this ordinance which itself meets the requirements of section 10.37.1(c).

Sec. 10.37.11 Supersession by Collective Bargaining Agreement

Parties subject to this article may by collective bargaining agreement provide that such agreement shall supersede the requirements of this article.

Sec. 10.37.12 Severability

If any provision of this article is declared legally invalid by any court of competent jurisdiction, the remaining provisions shall remain in full force and effect.

8 Sec. 2. The City Clerk shall certify to the passage of this ordinance and cause the same to be published in some daily newspaper printed and published in the City of Los Angeles.

I hereby certify that the foregoing ordinance was passed by the Council of the City of Los Angeles, at its meeting of HAR 1 S 1997

J. MICHAEL CAREY, City Clerk Approved as to Form and Legality

By JAMES K. HAHN, City Attorney Deputy Presented to me for my consideration on March 19, 1997, and returned to the By City Clerk on March 27, 1997 with my FREDERICK N. MERKIN di ..z.roval letter d March 26, 1997. Senior Assistant City Attorney

Mayor

I hereby certify that the foregoing ordinance was again introduced at the meeting of the Council of the City of Los Angeles AR C 1 199/ and was passed at its meeting of eR 0 1 by a two-thirds vote, notwithstanding the objections of the 1557 Mayor, pursuant to Charter Section 29.

Approved J. MICHAEL CAREY, City Clerk

By Deputy

/7-t 1 File No. L ( REPORT FROM

CITY ADMINISTRATIVE OFFICER

TO DATE CAO FILE No. The Personnel Committee 05/06/97 0150-03535-0020 REFERENCE COUNCIL FILE No.

Personnel and Budget and Finance committees Joint Report Adopted by the 96-1111,S1 Council on April 7, 1997

SUBJECT COUNCIL DISTRICT Analysis of Staffing Requirements for the Bureau of Contract Administration, Office of Contract Compliance, for Full Implementation of the Living Wage Ordinance

SUMMARY

Your Committee directed this Office to prepare a report analyzing the staffing and funding needs in the Bureau of Contract Administration, Office of Contract Compliance (OCC), for full implementation of the Living Wage Ordinance (LWO). The LWO, adopted by the City Council on March 18, 1997, requires the Bureau of Contract Administration to implement, monitor compliance, and investigate claimed violations of the LWO and to report on compliance to the City Council no less than annually. The LWO operation would involve concentrated monitoring of approximately 240 of 600 total concession and service contracts as recommended by the Council commissioned Sander-Williams study.

The Bureau of Contract Administration plans to combine LWO compliance activities with the Service Contract Worker Retention Ordinance (SCWRO) activities under the direction of a Senior Management Analyst. The addition of three staff level positions to the three existing positions would result in a total staff of six positions for both the LWO and the SCWRO. Direct salary and expense costs would total $122,200 for fiscal year 1997-98.

The addendum to this report provides additional details regarding the proposed work program and the required resources. (Recommendations attached) ,o ° MAY 08 AV ojvui-•t f-oala° `‘'

'OM/AA CITY ADMINISTRATIVE OFFICER

CAO 649 CITY v. LOS ANGELES SPEAKER t.,,ARD

Date Council File No., Agenda Item, or Case No. (a fit (RI-

!Amish to speak before the maf yo/if Name of City Agency, Department, Committee or Council

Do you wish to provide general public comment, or to speak for or against a proposal on the agenda? ( ) For proposal ( ) Against proposal Name: (1_,).--General comments

Business or Organization Affiliation: lAkAis/) C m9vutitt. Address: OM (AiITS tvo-e- GniA q004-9 Street oat-44City State Zip Business phone: (0.55—,4--06 Representing:

CHECK HERE IF YOU ARE A PAID SPEAKER AND PROVIDE CLIENT INFORMATION BELOW:

Client Name: Phone #:

Client Address: Street City State Zip

Please see reverse of card for important information and submit this entire card to the presiding officer or chairperson. CITY kor LOS ANGELES SPEAKER CARD

Date Council File No., Agenda Item, or Case No.

I wish to speak before the 6-x a.. t( Name of City Agency, Department, Committee or Council

Do you wish to provide general public comment, or to speak for or against a proposal on the agenda? ( ) For proposal ( ) Against proposal Name: Or a Micq e 00 if_ ,--i`c,4•0 ( L4--6eneral comments Business or Organization Affiliation: I-- IV 1 VI 6L-gx- 66 cLJ, X. e)—Y— Z--A— Address: tp 3 treet 5. 5c ri'5 City State Zip Business phone: Representing:

CHECK HERE IF YOU ARE A PAID SPEAKER AND PROVIDE CLIENT INFORMATION BELOW:

Client Name: Phone #:

Client Address: Street City State Zip

Please see reverse of card for important information and submit this entire card to the presiding officer or chairperson. CAO FILE No. PAGE

)150-03535-0021) 2

RECOMMENDATIONS

That the Council, subject to the approval of the Mayor:

1. Add three positions to the 1997-98 Budget for the Department of Public Works, Bureau of Contract Administration, as follows:

No. Code Title

1 9184-1 Management Analyst I 2 9184-2 Management Analyst II

2. Increase the 1997-98 Budget for the Bureau of Contract Administration, Department 76, Fund 100 by $122,200 as follows:

Account No. Name Amount

1010 Salaries General $105,000 3310 Transportation Expense 300 6010 Office and Administrative Expense 3,400 7300 Equipment 13.500 Total $122,200

FISCAL IMPACT STATEMENT

The direct costs of $122,200 and employee benefits costs of $26,000 will reduce the Reserve Fund for 1997-98 by a total of $148,200. The Bureau of Contract Administration will continue to review the potential for reimbursement of a portion of these costs from the proprietary departments.

LMJ:jl

30452b48

CAO 649A Recyclable and made from recycled waste 7=i6)1 ADDENDUM

Living Wage Ordinance

The Living Wage Ordinance(LWO) amends Article 11, Chapter 1 of Division 10 of the Los Angeles Administrative Code to require that nothing less than a prescribed minimum level of compensation (a living wage) be paid to employees of service contractors of the City, and its financial assistance recipients, and to employees of such recipients. The Ordinance states that procurement by contract of services has all too often resulted in the payment by service contractors to their employees of wages at or slightly above the minimum required by federal and State minimum wage laws, which adversely affects the level of services rendered to or on behalf of the City. Moreover, the minimum wage, particularly without health benefits, is seen as inadequate compensation to live in Los Angeles today, and as an additional burden upon limited social services resources. The City, as a principal provider of social support services, has an interest in promoting an employment environment that protects such limited resources. The payment of a higher minimum level of compensation benefits that interest. The contracts covered by the LWO include service contracts in excess of $25,000 with a duration of at least three months, and recipients of financial assistance from the City in excess of $100,000 with compliance for at least twelve months and in excess of $1,000,000 with compliance for at least five years.

Workload Analysis

The Sander-Williams study, which was commissioned by the City Council to evaluate the LWO, identified a minimum number of 600 contracts (250 concession contracts and 350 service contracts), as well as an undetermined number of financial assistance recipients, that could potentially be covered by the LWO. The Bureau, based on past experience and the Sander-Williams study, expects that most of the low-end wage employees would be concentrated in 40 percent of these contracts. The narrower focus allows the Bureau to estimate the number of annual contracts reviewed, monitored and investigated for violations and potential violations to be 240, or approximately 40%, of the 600 contracts. Additionally, the Bureau expects to do random contract monitoring and enforcement activities for the remaining 60 percent, or 360 contracts.

The OCC utilizes a benchmark, which is based on their previous workload reviews of Labor Compliance activities, of a maximum of 80 contracts per analyst. The LWO workload is expected to be labor intensive and require considerable staff time. The duties would include reviewing contracts, monitoring payroll and contractor operations, reviewing and auditing source documents, interviewing employees, and investigating violations and potential violations. Additional work would be required if an aggrieved worker decides to litigate.

Dr. Richard H. Sander, as part of the Sander-Williams study and under contract with the City, completed "An Empirical Analysis of the Proposed Los Angeles Living Wage Ordinance" report dated January 17, 1997. Dr. Sander has been retained under contract to assist the Bureau of Contract Administration in the implementation process of the LWO, and to conduct and report back to the Council in one year an evaluation of the impact of the LWO on the County of Los Angeles. Funding for the contract extension would be provided for in the Chief Legislative Analyst's budget. 2

Staffing and Funding Needs

Based on the estimated number of 240 contracts divided by a maximum annual caseload of 80 contracts per analyst, a requirement of three staff positions, one Management Analyst I position and two Management Analyst II positions, is needed for the 1997-98 fiscal year. The Management Analysts would be required to work independently, interact with various contractors, the City Attorney, and City departments, and deal with all aspects of the operation. Final determination of the appropriate staffing classifications would be made by Personnel Department and any pay grade determinations by the City Administrative Officer.

One position of Management Analyst II is recommended for 12 months and two positions, one Management Analyst II and one Management Analyst I, for nine months during the fiscal year 1997- 98. The first full year salary costs for the three positions would be $105,000. Expense costs would be $3,700 and equipment costs, consisting of three personal computers, would be $13,500, for a total cost of $122,200. An appropriation of $122,200 is recommended for the 1997-98 direct costs of the additional positions. Related costs of $26,000 would be required as well for employee benefits. The Bureau of Contract Administration will continue to review the possibility of receiving partial reimbursement from the proprietary departments for these costs.

The Contract Worker Section was recently established in the Office of Contract Compliance (OCC) to implement the Service Contract Worker Retention Ordinance (SCWRO) that was approved by Mayor and Council action in September 1996 (C.F. 95-0654,S1). The OCC has 47 total positions, of which three positions are currently assigned to the new Section (see the attached organization chart). The three LWO positions would be assigned to the new Section. It is anticipated that some SCWRO compliance activities would overlap with the LWO compliance activities. The existing staff cannot effectively absorb the LWO workload. Therefore, a combined staff of six analysts is recommended for economy and efficiency of the SCWRO and the LWO compliance efforts.

30452b48 PAGE NO. 2 BUREAU OF CONTRACT ADMINISTRATION FISCAL YEAR 1996-97

CONTRACT COMPLIANCE DIVISION

CONTRACT COMPLIANCE PROGRAM MANAGER II CODE 9165-2 DAVE PETERSON TOTAL - 47

CONTRACT COMPLIANCE PROGRAM MANAGER PROGRAM I CODE 9165-1 (TO BE REALLOCATED FROM SR. MGMT. ANALYST I TOTAL - 29

CLERICAL SUPPORT MBEMBE CERTIFICATION AFFIRMATIVE ACTION LABOR COMPLIANCE MBE/WEE BID REVIEW & CONTRACT WORKER SECTION 11 - TOTAL 12 - TOTAL - TOTAL 9 - TOTAL ACCEPTANCE REPORTS 3 - TOTAL 5 - TOTAL 1 PRINCIPAL CLERK 1 SR MGMT ANALYST I 1 MANAGEMENT ANALYST II 1 MANAGEMENT ANALYST II 1 SR MGMT ANALYST I CODE 1201 CODE 9171-1 CODE 9169-2 CODE 9169-2 1 MANAGMENT ANALYST II CODE 9171-1 FRANCES TAYLOR HELMUT PEINOL KEN MAYA MANAUEL PEREZ CODE 9169-2 JALAL SUDAN HANNA CHOI LABOR COMPLIANCE 3 MANAGEMENT ANALYST II CONSTRUCTION SECTION 5 MANAGEMENT ANALYST I 2 MANAGEMENT ANALYST I 1 SR CLERK TYPIST CODE 9169-2 1 MANAGEMENT ANALYST I CODE 9169-1 3 MANAGEMENT ANALYST I CODE 9169-1 CODE 1368 LINDA MIMS CODE 9169-1 ALEM KAHSAY CODE 9169-1 TITUS WONG (FILLED IN-LIEU) SUSAN PETERS (FILLED IN-LIEU) BELKIS DEL VALLE (FILLED IN-LIEU) SHERY WILLIAMS (3 FILLED IN-LIEU) VICKI ESTELLE 2 CLERK TYPIST 2 MANAGMENT ASSISTANT LYNDA MCGLINCHEY CODE 1358 6 MANAGEMENT ANALYST I CODE 1539 2 MANAGMENT ASSISTANT ROBERT ROSS CATHY TAYLOR CODE 9169-1 LAURA BLOOMFIELD CODE 1539 EDELIZA TUMBUCON MARTHA ARCHILA (FILLED IN-LIEU) ED GONZALEZ NANCY BOWER MARIELLA FREIRE ROBIN RAY STANLEY DESIR 1 MANAGMENT AIDE 2 MANAGEMENT ASSISTANT CHRIS JENSON CODE 1508 AFFIRMATIVE ACTION CODE 1539 NON-CONSTR. SECTION STEPHANIE JOHNIGAN (FILLED IN LIEU) 1 SR CLERK TYPIST BILL CORDERO 1 MANAGEMENT ANALYST I JOYCE TAYLOR CODE 1368 ROTUNDRA GREENE CODE 6169-1 ANN AVERY LA TRICIA JONES RICHARD HAMMER 1 MANAGEMENT AIDE GLEN MORIHOTO CODE 1508 1 CLERK TYPIST MARY ORCUTT (FILLED IN-LIEU) CODE 1358 BERYL TAYLOR SYLVIA SY HOSIE THOMAS

HBE/WBE BID REVIEW 1 CLERK TYPIST CODE 1358 VAN TRAN

CERTIFICATION 1 SR CLERK TYPIST CODE 1368 SANDY JERNAGIN

2 CLERK TYPIST CODE 1358 ED GROVER APRIL HEZQUITA

RECEPTION 1 CODE 1141 KIMBERLY MITCHELL

ORG PLUS:COMP96-7.DWG(REV.5/1/97) PERSONNEL COMMITTEE Report/Ceffirrttrri-ca-t-turr-for Signature

Council File Number 2'((2 --( k" S/

Committee Meeting Date 5- 2-t-9-1

Council Date

COMMITTEE MEMBER YES NO ABSENT

COUNCILMEMBER GOLDBERG, Chair ../

CO•,- ': - II OMAS

COUNCILMEMBER CHICK i...

FeC o-,6, (e_, Remarks CA6 v-.✓e irAJ. -\t-f ,-- fv-kiti...,.e,t, 05 I - 5& cos,•rtL--3 1-6z-de -e-c,1-1 I v.c 1,,0 ('-, 9-) bb L0512,), John A. White, Legislative Assistant ...... Telephone 485-5775 BUDGET AND FINANCE COMMITTEE ReportILCiefiwaaswoi.ea#44a44 for Signature Council File Number 96- //// -51 Committee Meeting Date 4-/o - /I Council Date 1 (L5 \ c'l/

COMMITTEE MEMBER YES NO ABSENT

COUNCILMEMBER ALATORRE, Chair V'

COUNCILMEMtreft IFTVER 11.

COUNCILMEMBER WALTERS A\n-) too.'

Remarks loyiega km, IWS Xed„ yle /2417

Konrad Carter, Legislative Assistant 4.*••• Telephone 485-4467 OF LOS ANGELES OFFICE OF THE J MICHAEL. CAREY CITY CITY CLERK CALIFORNIA CITY CLERK ROOM 395 CITY HALL LCS ANGELES. CA 90012 21 31 485-5708 FAX { 21 31 237-0636

RICHARD J RIORDAN Indicate if info 96-1111-Si, S2 and S3 MAYOR should be f ed & add WA't

April 7, 1997

711LE: Y N___ All City Departments WA# Board of Civil Service Commisgloners Personnel Department City Administrative Officer City Attorney Chief Legislative Analyst Controller: Room 220 Accounting Division, F&A Disbursement Division

RE: ORDINANCE AGAIN ADOPTED BY COUNCIL ON APRIL 1, 1997 AND MAYOR'S VETO OVERRIDDEN IN APPROVING THE "LIVING WAGE" ORDINANCE

At the meeting of the Council held March 18. 1997 , the following action was taken:

Attached joint report of Personnel and Budget and Finance Committees adopted X Ordinance transmitted to the Mayor FORTHWITH X Mayor Message dated March 26, 1997 and Vetoed Ordinance returned to City Clerk's Office 3-27-97 Verbal Motion (Goldberg - Alarcon) adopted that notwithstanding objections of Mayor, that said Ordinance be again adopted by Council - Mayor's Veto Overridden, pursuant to Charter Section 29 4-1-97 "Living Wage" Ordinance Number 171547 Publication date 4-4-97 Effective date 5-5-97

6— UclY 16 City Clerk et steno\9

ACTION remace arc Tace trc. 'eFf0°A 11415e AN EQUAL EMPLOYMENT OPPORTUNITY —.AFFIRMATIVE EMPLOYER , File No. 96-1111-81 96-1111-82 96-1111-83 TO THE COUNCIL OF THE CITY OF LOS ANGELES

Your PERSONNEL and BUDGET AND FINANCE COMMITTEES

report as follows:

Yes No Public Comments XX

PERSONNEL and BUDGET AND FINANCE COMMITTEES JOINT REPORT relative to the proposed Living Wage ordinance. ivs Recommendations for Council action:

1. REQUEST the City Attorney to finalize the language in the January 21, 1997 version of'the proposed Living Wage ordinance and present that final ordinance to the City Council for approval.

2. INSTRUCT the Director of the Bureau of Contract Administra- tion, Department of Public Works and the City Administrative Officer (CAO) to report to a 'oint meetin• of the Budget &- ignance and Personnel Committees within 30 days wi a recommends ions on a e un•in• an• s a ing a at would be necesswry-to-- .• II mister and enforce this or•inance.

3. INSTRUCT the Director of the Bureau of Contract Administration in the Department of Public Works to promulgate and present to Council foi6r consideration within 60 days proposed rules and regulations to implement the proposed Living Wage Ordinance, including development of a reporting and evaluation mechanism to closely monitor the cost implications of this ordinance, any job-loss in the affected industries, the effect on the number and type of bidders for service contracts, and any other information that Bureau believes will be helpful in measuring the actual effect of the ordinance on City services.

4. INSTRUCT the General Manager of the Community Development Department to prepare and present a report to the Personnel and Budget & Finance Committees within 60 days outlining a program, including funding and staffing requirements, that would encourage increased use of the federal Earned Income Tax Credit by all employers and low-wage workers in the City of Los Angeles.

Fiscal Impact Statement: The City Administrative Officer (CAO) and the Chief Legislative AnalYiI- (CLA) report that 68% ($14.7 million) of the $21.6 million projected costs of the proposed Living Wage Ordinance (LWO) would involve contracts and concessions

1 of 4 in the proprietary departments, especially at the Department of Airports. Those costs would not affect the City's general fund. With regard to the $6.9 million in anticipated cost to Council-controlled departments, about $3.3 million of the $6.9 million projected general fund impact may be paid from non-general fund sources, leaving an anticipated general fund impact of $3.6 million.

SUMMARY

On February 18, 1997, the members present at a joint meeting of the Budget & Finance and Personnel Committees unanimously approved the joint Chief Legislative Analyst (CLA) and City Administrative Officer (CAO) report as submitted, which summarized the latest version of the proposed Living Wage ordinance (LWO) and analyzed the UCLA study of this proposal that was commissioned by the City. This action marked the/'3sculmination of ten Personnel Committee meetings and three joint meetings of the Personnel and Budget and Finance Committees on the Living Wage issue, all of which were open to public comment.

Public testimony brought the issue to the Personnel Committee's attention at its June 26, 1996 meeting, which clearly detailed that full-time employees of certain City contractors were not receiving wages that were even comparable to the federal poverty level. Subsequently, a Motion (Goldberg - Hernandez) was introduced on July 3, 1996, to review the wages, salaries, and benefits paid by City contractors and subcontractors to low-end employees and to develop a Living Wage policy for employees of contractors and subcontractors who contract with the City of Los Angeles.

Inasmuch as the City policy has always been to provide its employees with fair and reasonable wages and benefits for the services that they provide to the residents of Los Angeles, and since employees of independent contractors are essentially acting on behalf of City employees by providing City services that could otherwise be provided using City personnel, the Personnel Committee proceeded in the development of a Living Wage Ordinance.

The proposed Living Wage Ordinance, as agreed to by the Joint Committee on February 18, 1997, is a "compromise" version, dated January 21, 1997 that included many of the recommendations from the UCLA study, including the Earned Income Tax Credit (EITC), and affects only those employers who have contracts with or receive substantial financial assistance from the City of Los Angeles. The CAO and CLA reported that the affected group comprises less than h of 1% of the City's total labor force. That compromise ordinance is projected by the UCLA study to cost an estimated $21.6 million in 2006 (first year of full phase-in), provide 3,800 persons (3,100 Full-time Employees(FTE'S)) with wage increases and improve the benefits of over 4,800 individuals (3,800 FTE's). Year 2006 is when the Department of Airports concession contracts will be up for renewal. The UCLA study determined that approximately 250 of the

2 of 4 1,000 City concessionaires would be covered by the proposed ordinance.

The CAO and CLA reported that the proposed ordinance would mandate a minimum salary of $7.25/hour (with benefits) or $8.50/hour (without benefits) for employees of City service contractors and concessionaires and employees of businesses that receive substantial financial assistance from the City.

The CAO and CLA further found that 68% ($14.7 million) of the $21.6 million projected costs of the proposed LWO would involve contracts and concessions in the proprietary departments. Those costs would not affect the City's general fund. Some of the $6.9 million in anticipated cost of this proposed LWO on Council-controlled departments may be passed on to non-general fund sources. Similarly with regard to the costs of the measure on concessions in Council- controlled departments, most, if not all, of the $3.2 million increased cost of couRsil-controlled concessions would also be passed onto the concessionaires and/or their consumers. As a result, about $3.3 million of the $6.9 million projected general fund impact may be paid from non-general fund sources, leaving an anticipated general fund impact of $3.6 million.

The proposed LWO allows the Council to review on a case-by-case basis the situation of any company that would be receiving substantial City financial assistance at a level that would qualify that company under this ordinance. The proposed ordinance gives the Council the authority to exempt a financial-assistance recipient from this LWO, if the company employs trainees or long-term unemployed individuals and claims that the LWO would cause economic hardship.

The CLA and CAO recommended that the responsibility for administering and enforcing this program be assigned to the Office of Contract Compliance in the Bureau of Contract Administration, Department of Public Works. The Bureau would also prepare and present proposed regulations on the ordinance. That Office was previously assigned responsibility for administering a related measure, the Service Contract Worker Retention Act.

The CAO added that there was one area of concern: Until the regulations are written, there would not be absolute clarity as to all of the contractors that would be included. The CLA reported that its working standard for inclusion of businesses/contracts under the proposed ordinance was for work that was contracted out, that the City would have provided, absent that service contract. Councilmember Alatorre expressed concern that the Council would be asked to adopt the LWO without a specific "who's in/who's outs list or the rules and regulations for the implementation of this ordinance presented to the Council beforehand. However, he reiterated his support for the living wage concept and supported the CAO/CLA report on the draft ordinance.

The City Attorney was queried as to his position on the application of the proposed ordinance to the proprietary departments and

3 of 4 whether the City Attorney would approve the ordinance as to form and legality as written. The City Attorney asked for time to write a formal opinion, which would be available to the Council members prior to the date this matter would come before the Council. It was noted by the Committee members that it would be appropriate for the Council to inform the proprietary departments of what its vote would be on any given contract, with respect to the Living Wage provisions.

Council Member Goldberg moved, seconded by Council Member Rita Walters, that the Joint Committee send the CAO and CLA recommendations forward to Council so that the policy decision could be made. The implementation of the ordinance and the promulgation of regulations could then be left to staff to bring forward for consideration by Council.

RSIoectfully submitted,

PERSONNEL C. ITTEE B T AND FINANCE COMMITTEE

0 5 1997- Continued to_LittISE:a, 7O 6-61-74/tie ky4.4-1c-rwoiA4- ait) ArrAteren ADTerrpC8Ravtie--,s- voleimiciA) MAR 18 1997 LOS ANGELES CITY COUNCIE v-. Aegisexrie• ) 4-/ 4240PMD 4 10'.77 TO THE MAYOTZ FORTI-IWITH C8,44-(4)61--svosci/v1 1414e>4)44e /4f077 iiv-S i'v77.0-Ne"*,,t/ C8 '•v feleA4 A0 --to vet. le-f/Ltd) 4 of 4 Far J. MICHAEL CAREY %-:ITY OF LOS ANGELE:.) OFFICE OF THE CITY CLERK CALIFORNIA CITY CLERK ROOM 395, CITY HALL VYM At LOS ANGELES, CA 90012 (213) 485-5708 (11111111M1 FAX (213) 237-0636

96-1111-S1, S2 and S3 RICHARD J. RIORDAN MAYOR

April 7, 1997

pott tH FILE' All City Departments 1 0 1qq7 Board of Civil Service Commissioners APR Personnel Department DEPUTY City Administrative Officer City Attorney Chief Legislative Analyst Controller: Room 220 Accounting Division, F&A Disbursement Division

RE: ORDINANCE AGAIN ADOPTED BY COUNCIL ON APRIL 1, 1997 AND MAYOR'S VETO OVERRIDDEN IN APPROVING THE "LIVING WAGE" ORDINANCE

At the meeting of the Council held March 18. 1997 , the following action was taken:

City Clerk et steno\961111

OD AN EQUAL EMPLOYMENT OPPORTUNITY —.AFFIRMATIVE ACTION EMPLOYER Recyclable and made from recycled waste. .:1,S) Mayor's Time Stamp TIME LIMIT FILES City Clerk's Time Stamp ORDINANCES

RECEIVED

'97 11AR 19 Airi :1 1 FORTHWITH

COUNCIL FILE NUMBER 96-1111-S1, S2 & S3 COUNCIL DISTRICT

COUNCIL APPROVAL DATE March 18, 1997 LAST DAY FOR MAYOR TO ACT

ORDINANCE TYPE: Ord of Intent Zoning Personnel General

Improvement LAMC X LAAC CU or Var Appeals - CPC No

SUBJECT MATTER: Adding Article 11 to Chapter 1 of Division 10 to require that nothing less than a prescribed minimum level of compensation ("a living wage") be paid to employees of service contractors of the City and its financial assistance recipients and to employees of such recipients.

RECOMMENDATIONS: APPROVED DISAPPROVED

PLANNING COMMISSION

DIRECTOR OF PLANNING

CHIEF LEGISLATIVE ANALYST X

CITY ADMINISTRATIVE OFFICER X

PERSONNEL COMMITTEE X

BUDGET AND FINANCE COMMITTEE X

DATE OF MAYOR APPROVAL, DEEMED APPROVED OR VETO: 2 6 *VETOED ORDINANCES MUST BE ACCOMPANIED WIT ONS IN WRITING PURSUANT TO CHARTER SEC. 29

(CITY CLERK USE ONLY PLEASE DO NOT WRITE BELOW THIS LINE) DATE RECEIVED FROM MAYOR j #77-- 7ORDINANCE NO. r71-s-47

DATE PUBLISHED DATE POSTED EFFECTIVE DATE - C71

ORD OF INTENT: HEARING DATE ASSESSMENT CONFIRMATION

shells\ordtime PLEASE SCHEDULE THE FOLLOWING ITEM FOR COUNCIL MEETING NEXT TUESDAY, APRIL 1, 1997, per President Ferraro's request: tks, dt

VETO MESSAGE FROM THE MAYOR (10 Votes Required for Consideration - Motion Required)

ITEM NO. (34)*

96-1111 - MAYOR'S VETO MESSAGE disapproving the Ordinance adopted by Si, S2, Council on March 18, 1997, adding Article 11 to Chapter 1 of & S3 Division 10 of the Los Angeles Administrative Code to require that nothing less than a prescribed minimum level of compensation (a "living wage") be paid to employees of service contractors of the City of Los Angeles and its financial assistance recipients and to employees of such recipients.

10 VOTES REQUIRED TO OVERRIDE calagend\96-1111.age

PR 01 1997 - MA-foie, 46-10 ov5pp,\P \NM o12,9 A0A10 Avorra2 // Got, -1,-- • n

Y..

714 ) r•A. L. W <41-4C 1 March 26, 1997 Page Two

Consider the words of California State University, Northridge economist Shirley Svorney on passage of the ordinance:

"This legislation sets Los Angeles aside as a meddling, inefficient city. Businesses will be discouraged from locating here if they perceive that the city council will arbitrarily pass legislation of this sort. So much for creating jobs for the thousands of people who are coming off welfare."

And the Los Angeles Times:

A "noble idea but bad economic policy."

And the Daily News:

"A bad economic plan" that will "lead to higher prices" and which sends a "clear anti-business message to companies thinking of locating here."

Second, the provision relating to the proprietary departments should be rewritten.

The City Attorney has refused to vouch for the legality of the ordinance as it pertains to the Airport, Harbor and Water and Power Departments. In his memorandum of March 17, 1997, Deputy City Attorney Fred Merkin made clear the legal basis for his objection; former City Attorney Burt Pines made this same finding. This provision exposes the city to substantial liability. The ordinance can be made legal by requesting the proprietary departments to apply its provisions in their normal course of business. I would support that change.

One way to achieve the living wage goal we share is through collective bargaining. But perhaps the most important step we can take is to reform our schools so all Angelenos have the tools and skills to compete for and get quality jobs. That is why I am so committed to improving education as the surest and most durable way to open the doors of opportunity for all. We must also continue to develop and support city investment in meaningful job training and apprenticeships.

I have supported many efforts to raise wages for those at the bottom of the pay scale. This includes two increases in the federal minimum wage, as well as the new, higher state minimum wage. I have made bringing quality jobs to Los Angeles a centerpiece of my administration -- since I took office in July 1993 more than 49,000 new jobs have been created in our city.

Council members, with the changes I recommend, the city would still make an appropriate statement about the importance of paying workers a living wage.

Since •ly,

lard J. Ri Mayor cc: City Attorney PERSONNEL COMMITTEE

WEDNESDAY - JUNE 11, 1997

2:00 P.M. - ROOM 340 - CITY HALL 200 N. SPRING ST., LOS ANGELES, CA 90012

MEMBERS: COUNCIL MEMBER JACKIE GOLDBERG, CHAIR Cta, _a. — . • - • COUNCIL MEMBER LAURA CHICK

(John A. White - Legislative Assistant - 213-485-5775)

FILE NO. SUBJECT

(1) 96-1111-S1 Bureau of Contract Administration to report relative to the status and enforcement of the Living Wage Ordinance regulations.

Fiscal Impact Statement Submitted: No

DISPOSITION Cze4-f.( p) Ps tgo-‘_s (2) 97-0748 City Administrative Officer (CAO) report relative to Cooperative Security Guard Services Contracts with Elite Security S- ices, Inc., International Services, Inc., and Inter-ion Security Systems, Inc., for the Department of Wate' and Power. (Pursuant to Council referral of June 3, 1997)

Fiscal Impact Statement submitted: Yes, by the CAO

DISPOSITION

(3) 96-1111-S4 City Controller's report r- ative to Recommendations No.1 and No. 2 on the I• Audit of Independent Contractors dated February '2, 1997. [Referred by Council action 2/19/97.]

Fiscal Impact Statement submitt d: Yes, Dept.

DISPOSITION

PERSONNEL COMMITTEE Wednesday - June 11, 1997 (4) 96-1977-S1 Continued from meeting held May 28, 1997. CAO report elative to the cost and staffing requirements if wo performed by inmates in the Los Angeles County's Wor Release Program were performed by City staff.

Fiscal Impact .tatement submitted: Yes, by the CAO

DISPOSITION

(5) 96-1977 Continued from me-ting held May 28, 1997. Fire Department and Board of Fire Commissioners reports relative to the use of Community Service Workers from the Los Angeles Cou ty Work Release Program.

Fiscal Impact Stateme t Submitted: No

DISPOSITION

(6) 89-2374 Continued from meeting h ld May 28, 1997. Personnel Department to r ort relative to the Planning Assistant examination and certification list.

Fiscal Impact Statement Su•mitted: No

DISPOSITION

(7) 97-0198 CAO report relative to a re• est for staff and funds for the LAX Master Plan. (A1 =o referred to the Budget and Finance Committee.)

Fiscal Impact Statement submitted: Yes, by the CAO

DISPOSITION

(8) 95-0837-S1 Police and Personnel Departments to report relative to "weeding out" police officers ith racist and other hostile behavior or sentiments an. the establishment of a panel of experts to review the ychological screening process.

Fiscal Impact Statement submitted: No

DISPOSITION

PERSONNEL COMMITTEE Wednesday - June 11, 1997 (9) 96-0600-S68 CAO report relative to Motion (Bernson-Braude) to provide one Seni r Clerk Typist for the City Planning Department, Envir nmental Review Activity. (This matter may be considered or possible receive and file action, inasmuch as the Planning Department reports it does not need the position.)

Fiscal Impact State ent Submitted: Yes, by the CAO

DISPOSITION

(10,) 97-0841 CAO report relative tat a Police Department request to exempt from the hirinv freeze one Senior Management Analyst II position and two Management Analyst II positions for the Polide Commission Executive Office. (Also referred to the BIdget and Finance Committee.)

Fiscal Impact Statement ubmitted: Yes, by the CAO

DISPOSITION

(11) 97--0678 CAO report relative to a olice Department request to exempt from the hiring f eeze one Senior Custodial Services Attendant II p ition and one Custodial Services Attendant position for the Department's Harbor Area Station and jail. ( so referred to the Budget and Finance Committee.)

Fiscal Impact Statement sub tted: Yes, by the CAO

DISPOSITION

(12) 97-0684 CAO report relative to a Poli e Department request to exempt from the hiring freeze t o Management Analyst I positions and one Management ide position for the Department's Employee Opportu ity and Development Division Special Projects Secti n. (Also referred to the Budget and Finance Committee

Fiscal Impact Statement submitted: Yes, by the CAO

DISPOSITION

PERSONNEL COMMITTEE Wednesday - June 11, 1997 (13) 97-0840 CAO report relative to a Cultural Affairs Department request to empt from the hiring freeze various as- needed positio s to assist with special projects and to be assigned to he Public Art Services and City Arts Program. (Also eferred to the Budget and Finance Committee.)

Fiscal Impact Statement submitted: Yes, by the CAO

DISPOSITION

(14) 97-0637 CAO report relative to a Boa d of Public Works request to exempt from the hiring freeze three Executive Secretary II positions in t e Board Office. (Also referred to the Budget and Fin nce Committee.)

Fiscal Impact Statement submitte • Yes, by the CAO

DISPOSITION

COMMENTS FROM PUBLIC ON ITEMS OF PUBLIC INTEREST WITHIN COMMITTEE'S SUBJECT MATTER JURISDICTION pr0611.agd

PERSONNEL COMMITTEE Wednesday - June 11, 1997 SERVICE EMPLOY tES INTERNATIONAL UNION,f -,FL-CIO, CLC 511697 Los Angeles Office / 1247 West 71h St. • Los Angeles, CA 90017--- kat (213) 680-9567 • FAX (213) 488-0328

MEMORANDUM

TO: Honorable Members of the Personnel Committee of the Los Angeles City Council

FR: Eddie Iny, SEIU Local 1877

RE: Implementation of the Living Wage Ordinance at LAX

Da: May 28, 1997

SEIU Local 1877 represents over 300 janitors at LAX. These members, along with many other airport service workers, regularly attended City Council meetings as the Living Wage Ordinance(LWO) was debated; some even had an opportunity to testify before this committee. Although many of these workers enjoy the protection of a union contract, their earnings still keep them and their families below the poverty line. All were very thankful for the passage of the Ordinance and are eager for its implementation.

Unfortunately, since the passage of the LWO, company-sponsored misinformation has led many of these same workers to believe that they are not covered by the Ordinance. This is especially true for those service workers who are employed by sub-contractors hired by the airlines (and not the City) to provide services at the Terminals. These workers include many of our janitors, as well as most pre-board screeners, sky-caps, wheel chair and baggage assistants. In fact, over 90% of them are sub-contracted by the airlines.

Although the LWO Section 10.37.1 (h)(2) clearly includes these workers, we would like to recommend that regulations adopted to implement and enforce the LWO contain language that unambiguously states that: 1) the work performed by these (airline sub- contracted) employees is essential to the operation of the airport and 2)that these workers are covered by the LWO. We recommend that the regulations specifically include the following job classifications:

• All Janitors (including those who clean areas leased by the airlines, as well as those who scrub the tarmacs and parking lots) • Pre-Board Screeners

San Jose Office / 1010 Ruff Dr. Sacramento Office / 233 Hawthorne St. Oakland Office / 3166 Fruitvale Ave. San Jose, CA 95110 Sacramento, CA 95815 Oakland, CA 94602 (408) 280-7770 • FAX (408) 280-7804 (916) 563-6900 • FAX (916) 927-6977 (510) 261-6600• FAX (510) 261-1972 I •••

CITY HALL RICHARD J. RIORDAN THE MAYOR LOS ANGELES, CALIFORNIA 90012 OFFICE OF MAYOR (213) 847-2489 March 26, 1997

Honorable Members of the City Council do City Clerk Room 395, City Hall

Honorable Members:

Re: Council Files 96-1111-SI, S2, & S3

I share your goal of a living wage for all Angelenos. However, the ordinance passed last week, while well- intended, is a mistaken path. This ordinance is a step in the wrong direction and undermines our efforts to create quality jobs throughout the city.

The measure mandates wage hikes for the few at the expense of the many, and it will cost taxpayers millions of dollars each year. It will result in higher prices -- to be shouldered by all Angelenos -- at concession stands in city parks, the zoo and other city locations.

This ordinance sends an unhealthy message about Los Angeles as a place to do business, and comes just as the city's economy has begun to recover and our economic development efforts are resulting in thousands of new quality jobs for Angelenos. Moreover, the ordinance contains a provision that the City Attorney believes to be unlawful.

Therefore, I am vetoing the ordinance and returning it to you, asking that you consider making the following changes:

First, the city subsidy provision should be removed.

This provision is an obvious disincentive for job-creating businesses to invest in Los Angeles. It makes Los Angeles uncompetitive with others who vie in the new, global economy, including our neighboring 87 cities in Los Angeles County.

City subsidies are investments that are intended to result in the creation of quality jobs, economic growth, revitalization of economically disadvantaged areas, and increased city revenue. The very job-creating companies the city seeks to bolster may be unable to absorb another increase in the cost of doing business, or yet another discretionary action by the city. Moreover, the overall message to business is negative.

AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER gy Recyclable and made from recycled waste. Tei • Baggage Runners, Assistants, and Baggage Check Personnel • Wheel Chair Personnel • Sky-Caps

Secondly, as you know, the LWO goes into effect for these employees as soon as the airlines renew or renegotiate their lease agreements with the Department of Airports (DoA). While the renewal dates are clearly a matter of pubic record and are easily accessible, the timelines for renegotiations of lease agreements are not made public and therefore hinder the public's ability to enforce the implementation of the LWO in a timely manner.

At Terminal Four, for example, there are approximately 40 janitors, employed by Service Performance, who earn less than the Living Wage. These janitors are sub-contracted by American Airlines to clean the Terminal. While American's master terminal lease is set to expire in 2024, the airline is currently in the process of settling a law suit with the DoA over the terms of their lease agreement. As the settlement will constitute a renegotiation of the lease agreement between American Airlines and the City, implementation of the Living Wage Ordinance should be a condition of any settlement that the DoA reaches. In order to effectively ensure the implementation of the LWO, we need a mechanism to ensure that the public is notified before any such modification of a lease occurs.

In addition to the renegotiation of the lease at Terminal Four, many other airlines may also in the process of renegotiating their leases. It is essential that the public is notified in these instances in order to be able to enact the LWO as intended. Consider the following:

• The lease for Terminal One has just been renegotiated. It is unclear as to when the lease agreement will be approved by the Airport Commission.

• The lease for Tom Bradley International Airport expired in June 1995. The airlines currently operate under an Interim Resolution with the DoA. The public must be notified of whether this lease is currently on a month-to-month basis, or if a final lease agreement is to be approved.

• United Airlines does not have a lease agreement at Terminal Six, they currently have a Write ofEntry Permit. Again, we believe that the public must know the conditions of this permit and the timeline for the approval of a final lease agreement.

Thank you for allowing us the opportunity t o comment on the proposed regulations for the implementation and enforcement of the I .iving Wage Ordinance. SEIU, Local 1877 is committed to ensuring that the workers covered by the Ordinance receive decent wages as and benefits as soon as possible, as intended by the City. We believe that, in the case of the airport, by specifically mentioning the categories of workers who are covered by the Ordinance and by establishing mechanisms for informing the public as to when the City renegotiates an existing lease agreement, that the low-wage service workers at LAX, will, as the City intended, finally receive a Living Wage.

cc: Mike Garcia, President, SEIU, Local 1877 LATY OF Los ANGELEt, ELIAS MARTINEZ CALIFORNIA Office of City Clerk CITY CLERK Council and Public Services J. Michael Carey Room 395, City Hall Executive Officer Los Angeles, CA 90012 Council File Information - (213) 485-5703 When making inquiries General Information -(213) 485-5705 relative to this matter refer to File No. Pat Healy RICHARD J. RIORDAN Chief Legislative Assistant MAYOR

96-1111-S1

May 9, 1997

PERSONNEL COMMITTEE BUDGET AND FINANCE COMMITTEE

In accordance with Council Rules, communication from the City Administrative Officer relative to an analysis of staffing requirements for the Bureau of Contract Administration, Office of Contract Compliance, for full implementation of the Living Wage Ordinance, was referred on May 8, 1997, to the PERSONNEL and BUDGET AND FINANCE COMMITTEES.

City Clerk et

C721 AN EQUAL EMPLOYMENT OPPORTUNITY — AFFIRMATIVE ACTION EMPLOYER Recyclable and made from recycled waste "?1,61 ORDINANCE NO.

An ordinance adding Article 11 to Chapter 1 of Division 10 of the Los Angeles Administrative Code to require that nothing less than a prescribed minimum level of compensation (a "living wage") be paid to employees of service contractors of the City and its financial assistance recipients and to employees of such recipients:

THE PEOPLE OF THE CITY OF LOS ANGELES

DO ORDAIN AS FOLLOWS:

Section 1. The Los Angeles Administrative Code is hereby amended by adding Article 11 to Chapter 1 of Division 10 to read as follows:

ARTICLE 11 LIVING WAGE

Sec. 10.37 Legislative Findings

Experience indicates that procurement by contract of services has all too often resulted in the payment by service contractors to their employees of wages at or slightly above the minimum required by federal and state minimum wage laws. Such minimal compensation tends to inhibit the quantity and quality of services rendered by such employees, to the City and to the public. Underpaying employees in this way fosters high turnover, absenteeism, and lackluster performance. Conversely, adequate compensation promotes amelioration of these undesirable conditions.

Sec. 10.37.1 Definitions.

The following definitions shall apply throughout this article:

(b) "City" means the City of Los Angeles and all awarding authorities thereof, including those City departments which exercise independent control over their expenditure of funds, but excludes the Community Redevelopment Agency of the City of Los Angeles ("CRA"). The CRA is urged, however, to adopt a policy

2 similar to that set forth in this article.

4 (i) "Subcontractor" means any person not an employee that enters into a contract (and that employs employees for such purpose) with (a) a contractor to assist the contractor in performing a service contract or (b)a City financial assistance recipient to assist the recipient in performing the work for which the assistance is being given. Vendors, such as service contractors, of City financial assistance recipients shall not be regarded as subcontractors except to the extent provided in subsection (e).

Sec. 10.37.2 Payment of Minimum Compensation to Employees

(a) Wages

(b) Compensated days off

Sec. 10.37.3 Health Benefits

Health benefits required by this article shall consist of the payment of at least one dollar and twenty-five cents ($1.25) per hour towards the provision of health care benefits for employees and their dependents. Proof of the provision of such benefits must be submitted to the awarding authority to qualify for the wage rate in section

5 10.27.2(a) for employees with health benefits.

Sec. 10.37.4 Notifying Employees of their Potential Right to the federal Earned Income Credit

Employers shall inform employees making less than twelve dollars ($12) per hour of their possible right to the federal Earned Income Credit ("EIC") under § 32 of the Internal Revenue Code of 1954, 26 U.S.C. § 32, and shall make available to employees forms informing them about the EIC and forms required to secure advance EIC payments from the employer.

Sec. 10.37.5 Enforcement

(a) An employee claiming violation of this article may bring an action in the Municipal Court or Superior Court of the State of California, as appropriate, against an employer and may be awarded:

(1) For failure to pay minimum wages, back pay for each day during which the violation continued.

(2) For failure to pay medical benefits, the difference during the involved period between the minimum wage required herein without benefits and such minimum wage with benefits.

(b) The court shall award reasonable attorney's fees and costs to an employee who prevails in any such enforcement action.

6 (e) Notwithstanding any provision of this Code or any other ordinance to the contrary, no criminal penalties shall attach for any violation of this article.

Sec. 10.37.6 Administration

Sec. 10.37.7 Exclusion of Service Contracts from Competitive Bidding Requirement

Sec. 10.37.8 Coexistence with Other Available Relief for Specific Deprivations of Protected Rights

This article shall not be construed to limit an employee's right to bring legal action for violation of other minimum compensation laws.

7 Sec. 10.37.9 Expenditures Covered by this Article

Sec. 10.37.10 Article Applicable to New Contracts and City Financial Assistance

Sec. 10.37.11 Supersession by Collective Bargaining Agreement

Parties subject to this article may by collective bargaining agreement provide that such agreement shall supersede the requirements of this article.

Sec. 10.37.12 Severability

If any provision of this article is declared legally invalid by any court of competent jurisdiction, the remaining provisions shall remain in full force and effect.

8 Sec. 2. The City Clerk shall certify to the passage of this ordinance and cause the same to be published in some daily newspaper printed and published in the City of Los Angeles.

I hereby certify that the foregoing ordinance was passed by the Council of the City of Los Angeles, at its meeting of

J. MICHAEL CAREY, City Clerk

By Deputy

Approved

Mayor

Approved as to Form and Legality

JAMES K. HAHN, City Attorney

By FREDRICK N. MERKIN Senior Assistant City Attorney

File No. ORDINANCE NO.

An ordinance adding Article 11 to Chapter 1 of Division 10 of the Los Angeles Administrative Code to require that nothing less than a prescribed minimum level of compensation (a "living wage") be paid to employees of service contractors of the City and its financial assistance recipients and to employees of such recipients:

THE PEOPLE OF THE CITY OF LOS ANGELES

DO ORDAIN AS FOLLOWS:

Section 1. The Los Angeles Administrative Code is hereby amended by adding Article 11 to Chapter 1 of Division 10 to read as follows:

ARTICLE 11 LIVING WAGE

Sec. 10.37 Legislative Findings

Experience indicates that procurement by contract of services has all too often resulted in the payment by service contractors to their employees of wages at or slightly above the minimum required by federal and state minimum wage laws. Such minimal compensation tends to inhibit the quantity and quality of services rendered by such employees, to the City and to the public. Underpaying employees in this way fosters high turnover, absenteeism, and lackluster performance. Conversely, adequate compensation promotes amelioration of these undesirable conditions.

Sec. 10.37.1 Definitions.

The following definitions shall apply throughout this article:

(b) "City" means the City of Los Angeles and all awarding authorities thereof, including those City departments which exercise independent control over their expenditure of funds, but excludes the Community Redevelopment Agency of the City of Los Angeles("CRA"). The CRA is urged, however, to adopt a policy

2 similar to that set forth in this article.

(c) "City financial assistance recipient" means any person who receives from the City discrete fmancial assistance for economic development or job growth expressly articulated and identified by the City, as contrasted with generalized financial assistance such as through tax legislation, in accordance with the following monetary limitations. Assistance given in the amount of one million dollars ($1,000,000) or more in any twelve-month period shall require compliance with this article for five years from the date such assistance reaches the one million dollar ($1,000,000)threshold. For assistance in any twelve-month period totaling less than one million dollars ($1,000,000) but at least one hundred thousand dollars ($100,000), there shall be compliance for one year if at least one hundred thousand dollars ($100,000) of such assistance is given in what is reasonably contemplated at the time to be on a continuing basis, with the period of compliance beginning when the accrual during such twelve-month period of such continuing assistance reaches the one-hundred thousand dollar ($100,000) threshold.

3 (d) "Contractor' means any person that enters into a service contract with the City.

(e) "Employee" means any person -- who is not a managerial, supervisory, or confidential employee and who is not required to possess an occupational license -- who is employed (1) as a service employee of a contractor or subcontractor on or under the authority of one or more service contracts and who expends any of his or her time thereon, including but not limited to: hotel employees, restaurant, food service or banquet employees; janitorial employees; security guards; parking attendants; nonprofessional health care employees; gardeners; waste management employees; and clerical employees; or (2) by a City financial assistance recipient who expends at least half of his or her time on the funded project, or(3) by a service contractor of a City financial assistance recipient and who expends at least half of his or her time on the premises of the City financial assistance recipient directly involved with the activities funded by the City.

4 (i) "Subcontractor" means any person not an employee that enters into a contract (and that employs employees for such purpose) with (a) a contractor to assist the contractor in performing a service contract or(b) a City financial assistance recipient to assist the recipient in performing the work for which the assistance is being given. Vendors, such as service contractors, of City financial assistance recipients shall not be regarded as subcontractors except to the extent provided in subsection (e).

Sec. 10.37.2 Payment of Minimum Compensation to Employees

(a) Wages

(b) Compensated days off

Sec. 10.37.3 Health Benefits

5 10.27.2(a) for employees with health benefits.

Sec. 10.37.4 Notifying Employees of their Potential Right to the federal Earned Income Credit

Employers shall inform employees making less than twelve dollars ($12) per hour of their possible right to the federal Earned Income Credit ("EIC") under § 32 of the Internal Revenue Code of 1954, 26 U.S.C. § 32, and shall make available to employees forms informing them about the EIC and forms required to secure advance EIC payments from the employer.

Sec. 10.37.5 Enforcement

(a) An employee claiming violation of this article may bring an action in the Municipal Court or Superior Court of the State of California, as appropriate, against an employer and may be awarded:

(1) For failure to pay minimum wages, back pay for each day during which the violation continued.

(2)For failure to pay medical benefits, the difference during the involved period between the minimum wage required herein without benefits and such minimum wage with benefits.

(b) The court shall award reasonable attorney's fees and costs to an employee who prevails in any such enforcement action.

6 (e) Notwithstanding any provision of this Code or any other ordinance to the contrary, no criminal penalties shall attach for any violation of this article.

Sec. 10.37.6 Administration

During the first, third, and seventh years of this article's operation, and every third year thereafter, the Chief Administrative Officer and the Chief Legislative Analyst shall conduct or commission an evaluation of this article's operation and effects. The evaluation shall specifically address at least the following matters:(a) how extensively affected employers are complying with the article; (b) how the article is affecting the workforce composition of affected employers;(c) how the article is affecting productivity and service quality of affected employers;(d) how the additional costs of the article have been distributed among workers, their employers, and the City. Within ninety days of the adoption of this article, these offices shall develop detailed plans for evaluation, including a determination of what current and future data will be needed for effective evaluation.

Sec. 10.37.7 Exclusion of Service Contracts from Competitive Bidding Requirement

Sec. 10.37.8 Coexistence with Other Available Relief for Specific Deprivations of Protected Rights

This article shall not be construed to limit an employee's right to bring legal action for violation of other minimum compensation laws.

7 Sec. 10.37.9 Expenditures Covered by this Article

Sec. 10.37.10 Article Applicable to New Contracts and City Financial Assistance

Sec. 10.37.11 Supersession by Collective Bargaining Agreement

Parties subject to this article may by collective bargaining agreement provide that such agreement shall supersede the requirements of this article.

Sec. 10.37.12 Severability

If any provision of this article is declared legally invalid by any court of competent jurisdiction, the remaining provisions shall remain in full force and effect.

8 Sec. 2. The City Clerk shall certify to the passage of this ordinance and cause the same to be published in some daily newspaper printed and published in the City of Los Angeles.

I hereby certify that the foregoing ordinance was passed by the Council of the City of Los Angeles, at its meeting of Ka 1E 1997

J. MICHAEL CAREY, City Clerk

By Deputy Presented to me for my consideration on March 19, 1997, and returned to the City Clerk on March 27, 1997 with my di -2.roval letter/datO March 26, 1997.

Mayor

Approved as to Form and Legality

JAMES K. HAHN, City Attorney

By FREDRICK N. MERKIN Senior Assistant City Attorney

File No. 51-.55 CRIMINAL BRANCH (213) 485-5452

CIVIL BRANCH (213) 485-6370 ffire of t o City cAttonteg WRITER'S DIRECT DIAL bus .ttgeirs, IZalifornia fc A2g 485-5403 JAMES K. HAHN NU CITY ATTORNEY

REPORT No. R97-0072 MAR 1 7 1997

REPORT RE

REVISIONS TO THE DRAFT "LIVING WAGE" ORDINANCE FOLLOWING JOINT MEETINGS OF THE BUDGET & FINANCE AND PERSONNEL COMMITTEES

The Honorable City Council City of Los Angeles Room 395, City Hall Los Angeles, CA 90012

(Council File 96-1111-Si not transmitted but referred to)

Honorable Members:

The City Council is next scheduled to consider the proposed "living wage" ordinance ("LWO") on Tuesday, March 18, 1997. To ensure that the most current draft of the proposal is before the Council at that time, we are transmitting herewith a revised draft that reflects a few revisions to the draft (the "1-21-97 draft") that was before the Council's Budget & Finance and Personnel Committees when they met in joint session on January 21, 1997 and February 18, 1997. The revised draft we have dubbed the "3-18-97 draft," in anticipation of its consideration by the Council on that date. Essentially it makes three changes:

1. Viewing Service Contractor Employees as Substitutes for City Employees

Proponents of the LWO wish to ensure that the coverage of service contracts tightly focusses on whether the service contractor employee can be viewed as something of a substitute for a City employee even though the contractor employee remains under the direction and control of the contractor. This theme, first developed with particular reference to concessionaires and similar tenants, now has been extended to the entirety of the service contract side of the LWO.

AN EQUAL EMPLOYMENT OPPORTUNITY — AFFIRMATIVE ACTION EMPLOYER EIGHTEENTH FLOOR, CITY HALL EAST • 200 N. MAIN STREET • LOS ANGELES CA 90012-4131 Recyclable and made from recycled waste %() The Honorable City Council City of Los Angeles Page 2

To bring the text into accord with this approach, modifications have been made in the preamble (§ 10.37), the definition of "service contract" (§ 10.37.1(h)), and the administration provision (§ 10.37.6). We have framed the issue so as to ask whether but for the service contract the services to be rendered probably would otherwise be rendered by City employees. Since such a determination will necessarily involve some degree of speculation by the concerned City department and others, it was recognized that in this formulation the LWO could not be self- executing -- coverage or non-coverage could not be discerned from a reading of the LWO alone. Coverage determinations would be required, and this responsibility has been assigned in this draft to the Bureau of Contract Administration, the agency charged with responsibility for promulgating implementing regulations and monitoring compliance. It is anticipated that the Bureau would work closely with concerned City departments in making such determinations.

2. Periodic Review

At the January 21, 1997 meeting of the Committees we pointed out that we had inadvertently failed to include in the draft of that date a provision requiring periodic reports assessing the impact of the LWO. Professor Richard H. Sander had recommended such a provision. Today's draft corrects this omission. For this purpose we have modified the administration section of the LWO, § 10.37.6, by adding a second paragraph that borrows heavily from his suggested text.

3. Timing the Cost-of-Living Adjustment

In § 10.37.2 the minimum wage level set there is subject to modification in accordance with cost-of-living adjustments, if any, to retirement benefits paid by the City Employees Retirement System ("CERS"). Prior drafts have not specified the date by which any such change is to be reported by the City Administrative Officer to the Bureau of Contract Administration. We are advised that the CERS adjustment is acted upon by the Board of The Honorable City Council City of Los Angeles Page 3

Administration at the end of April each year, effective July 1. June 1, therefore, appears to be a feasible reporting date, and we have so specified in the provision.

Very truly yours,

JAMES K. HAHN, City Attorney

FREDERICK N. MERKIN Managing Assistant Employee Relations and Police-Fire Services Divisions

cc: The Honorable Richard J. Riordan Mayor

Keith Comrie City Administrative Officer

Ronald F. Deaton Chief Legislative Analyst

William Fujioka General Manager, Personnel Department

J.P. Ellman President, Board of Public Works

C. Bernard Gilpin Director, Bureau of Contract Administration

Professor Richard Sander UCLA School of Law

Assistant Professor E. Douglass Williams Carleton College, Economics Department contremp.074 3-18-97 draft (showing changes from 1-21-97)

ORDINANCE NO.

An ordinance adding Article 11 to Chapter 1 of Division 10 of the Los Angeles Administrative Code to require that nothing less than a prescribed minimum level of compensation (a "living wage") be paid to employees of service contractors of the City and its financial assistance recipients and to employees of such recipients:

THE PEOPLE OF THE CITY OF LOS ANGELES

DO ORDAIN AS FOLLOWS:

Section 1. The Los Angeles Administrative Code is hereby amended by adding Article 11 to Chapter 1 of Division 10 to read as follows:

ARTICLE 11 LIVING WAGE

Sec. 10.37 Legislative Findings

Experience indicates that procurement by contract of services has all too often resulted in the payment by service contractors to their employees of wages at or slightly above the minimum required by federal and state minimum wage laws. Such minimal compensation tends to inhibit the quantity and quality of services rendered by such employees, to the City and to the public. Underpaying employees in this way fosters high turnover, absenteeism, and lackluster performance. Conversely, adequate compensation promotes amelioration of these undesirable conditions. Through this article the City intends to require service contractors to provide a minimum level of compensation that will improve the level of services rendered to

1 and for the City. Among those so rendering services for the City are some of the tenants and concessionaires operating at City facilities. The service contractors, as well as the tenants and concessionaires, that are to be subject to this article are those that through their employees render services that otherwise probably would be performed by City employees. Even though these contractor employees are to work under the direction and control of the contractor, they may nonetheless be seen as substitutes for City employees.

Sec. 10.37.1 Definitions.

The following definitions shall apply throughout this article:

(b) "City" means the City of Los Angeles and all awarding authorities thereof, including those City departments which exercise independent control over their expenditure of funds, but excludes the Community Redevelopment Agency of the City of Los Angeles ("CRA"). The CRA is urged, however, to adopt a policy similar to that set forth in this article.

2 (c) "City financial assistance recipient" means any person who receives from the City discrete financial assistance for economic development or job growth expressly articulated and identified by the City, as contrasted with generalized financial assistance such as through tax legislation, in accordance with the following monetary limitations. Assistance given in the amount of one million dollars ($1,000,000) or more in any twelve-month period shall require compliance with this article for five years from the date such assistance reaches the one million dollar ($1,000,000) threshold. For assistance in any twelve-month period totaling less than one million dollars ($1,000,000) but at least one hundred thousand dollars ($100,000), there shall be compliance for one year if at least one hundred thousand dollars ($100,000) of such assistance is given in what is reasonably contemplated at the time to be on a continuing basis, with the period of compliance beginning when the accrual during such twelve-month period of such continuing assistance reaches the one-hundred thousand dollar ($100,000) threshold.

Categories of such assistance include, but are not limited to, bond financing, planning assistance, tax increment financing exclusively by the City, and tax credits, and shall not include assistance provided by the Community Development Bank. City staff assistance shall not be regarded as financial assistance for purposes of this article. A loan shall not be regarded as financial assistance. The forgiveness of a loan shall he regarded as financial assistance. A loan shall be regarded as financial assistance to the extent of any differential between the amount of the loan and the present value of the payments thereunder, discounted over the life of the loan by the applicable federal rate as used in 26 U.S.C. §§ 1274(d), 7872(f). A recipient shall not be deemed to include lessees and sublessees.

A recipient shall be exempted from application of this article if(a) it is in its first year of existence, in which case the exemption shall last for one year,(b) it employs fewer than five employees for each working day in each oftwenty or more calendar weeks in the current or preceding calendar year, or (c) it obtains a waiver as provided herein. A recipient -- who employs the long-term unemployed or provides trainee positions intended to prepare employees for permanent positions, and who claims that compliance with this article would cause an economic hardship -- may apply in writing to the City department or office administering such assistance, which department or office which shall forward such application and its recommended action on it to the City Council. Waivers shall be effected by Council resolution.

(d) "Contractor" means any person that enters into a service contract with the City.

3 (e) "Employee" means any person -- who is not a managerial, supervisory, or confidential employee and who is not required to possess an occupational license -- who is employed (1) as a service employee of a contractor or subcontractor on or under the authority of one or more service contracts and who expends any of his or her time thereon, including but not limited to: hotel employees, restaurant, food service or banquet employees; janitorial employees; security guards; parking attendants; nonprofessional health care employees; gardeners; waste management employees; and clerical employees; or (2) by a City financial assistance recipient who expends at least half of his or her time on the funded project, or (3) by a service contractor of a CFAR and who expends at least half of his or her time on the premises of the CFAR directly involved with the activities funded by the City.

(f) "Employer" means any person who is a City financial assistance recipient, contractor, or subcontractor and who is required to have a business tax registration certificate by Los Angeles Municipal Code §§ 21.00 -21.198 or successor ordinance or, if expressly exempted by the Code from such tax, would otherwise be subject to the tax but for such exemption; provided, however, that corporations organized under § 501(c)(3) of the United States Internal Revenue Code of 1954, 26 U.S.C. § 501(c)(3), whose chief executive officer earns a salary which when calculated on an hourly basis is less than eight times the lowest wage paid by the corporation., shall be exempted as to all employees other than child care workers.

4 (i) "Subcontractor" means any person not an employee that enters into a contract (and that employs employees for such purpose) with (a) a contractor to assist the contractor in performing a service contract or(b) a City financial assistance recipient to assist the recipient in performing the work for which the assistance is being given. Vendors, such as service contractors, of City financial assistance recipients shall not be regarded as subcontractors except to the extent provided in subsection (e).

Sec. 10.37.2 Payment of Minimum Compensation to Employees

(a) Wages

(b) Compensated days off

Sec. 10.37.3 Health Benefits

Health benefits required by this article shall consist of the payment of at least one dollar and twenty-five cents ($1.25) per hour towards the provision of health care benefits for employees and their dependents. Proof of the provision of such benefits

5 must be submitted to the awarding authority to qualify for the wage rate in section 10.27.2(a) for employees with health benefits.

Sec. 10.37.4 Notifying Employees of their Potential Right to the federal Earned Income Credit

Employers shall inform employees making less than twelve dollars ($12) per hour of their possible right to the federal Earned Income Credit("EIC") under § 32 of the Internal Revenue Code of 1954, 26 U.S.C. § 32, and shall make available to employees forms informing them about the EIC and forms required to secure advance EIC payments from the employer.

Sec. 10.37.5 Enforcement

(a) An employee claiming violation of this article may bring an action in the Municipal Court or Superior Court of the State of California, as appropriate, against an employer and may be awarded:

(1) For failure to pay minimum wages, back pay for each day during which the violation continued.

(2)For failure to pay medical benefits, the difference during the involved period between the minimum wage required herein without benefits and such minimum wage with benefits.

(b) The court shall award reasonable attorney's fees and costs to an employee who prevails in any such enforcement action.

6 (e) Notwithstanding any provision of this Code or any other ordinance to the contrary, no criminal penalties shall attach for any violation of this article.

Sec. 10.37.6 Administration

During the first, third, and seventh years of this article's operation, and every third year thereafter, the Chief Administrative Officer and the Chief Legislative Analyst shall conduct or commission an evaluation of this article's operation and effects. The evaluation shall specifically address at least the following matters:(a) how extensively affected employers are complying with the article, (b) how the article is affecting the workforce composition of affected employers,(c) how the article is affecting productivity and service quality of affected employers, and (d) how the additional costs of the article have been distributed among workers, their employers, and the City. Within ninety days of the adoption of this article, these offices shall develop detailed plans for evaluation, including a determination of what current and future data will be needed for effective evaluation.

Sec. 10.37.7 Exclusion of Service Contracts from Competitive Bidding Requirement

Sec. 10.37.8 Coexistence with Other Available Relief for Specific Deprivations of Protected Rights

This article shall not be construed to limit an employee's right to bring legal action for violation of other minimum compensation laws.

7 Sec. 10.37.9 Expenditures Covered by this Article

This article shall apply to the expenditure -- whether through aid to City financial assistance recipients, service contracts let by the City, or service contracts let by its financial assistance recipients -- offunds entirely within the City's control and to other funds, such as federal or state grant funds, where the application of this article is consonant with the laws authorizing the City to expend such other funds. As to any grant or similar program, this article shall become applicable to the funds authorized by such program if and only if the City Attorney's Office has obtained from the funding government either an opinion or other determination indicating such consonance or a judgment of compliance from a court of law or other tribunal, which procurement has been reported in writing by such Office to the City Council by a letter to the City Clerk.

Sec. 10.37.10 Article Applicable to New Contracts and City Financial Assistance

The provisions of this article shall apply to (a) a contract consummated and financial assistance provided after the effective date of this ordinance,(b) a contract amendment consummated after the effective date ofthis ordinance which itself meets the requirements of section 10.37.1(h) or which extends the duration of the contract, and (c) supplemental financial assistance provided after the effective date of this ordinance which itself meets the requirements of section 10.37.1(c).

Sec. 10.37.11 Supersession by Collective Bargaining Agreement

Parties subject to this article may by collective bargaining agreement provide that such agreement shall supersede the requirements of this article.

Sec. 10.37.12 Severability

If any provision of this article is declared legally invalid by any court of competentjurisdiction, the remaining provisions shall remain in full force and effect. contremp.073

8 t GET AND FINANCE COMMITTEE e ort ommunication for Signature Council File Number Fd - ////— 5/1 ,c 2,$3 Committee Meeting Date 2--4 — q?

Council Date

COMMITTEE MEMBER YES NO ABSENT

COUNCILMEMBER ALATORRE, Chair

COUNCILMEMBER FEUER .//''

COUNCILMEMBER WALTERS ..7

P it, I Remarks liVoceee 7t.-1444:2 00_5 e, exFat G4 t ee-fi c e__

Konrad Carter, Legislative Assistant ••••• Telephone 485-4467 File No. 96-1111-S1 96-1111-82 96-1111-83 TO THE COUNCIL OF THE CITY OF LOS ANGELES

Your PERSONNEL and BUDGET AND FINANCE COMMITTEES

report as follows:

Yes No Public Comments XX

PERSONNEL and BUDGET AND FINANCE COMMITTEES JOINT REPORT relative to the proposed Living Wage ordinance.

Recommendations for Council action:

1. REQUEST the City Attorney to finalize the language in the January 21, 1997 version of the proposed Living Wage ordinance and present that final ordinance to the City Council for approval.

2. INSTRUCT the Director of the Bureau of Contract Administra- tion, Department of Public Works and the City Administrative Officer (CAO) to report to a joint meeting of the Budget & Finance and Personnel Committees within 30 days with recommendations on the funding and staffing that would be necessary to administer and enforce this ordinance.

3. INSTRUCT the Director of the Bureau of Contract Administration in the Department of Public Works to promulgate and present to Council for consideration within 60 days proposed rules and regulations to implement the proposed Living Wage Ordinance, including development of a reporting and evaluation mechanism to closely monitor the cost implications of this ordinance, any job-loss in the affected industries, the effect on the number and type of bidders for service contracts, and any other information that Bureau believes will be helpful in measuring the actual effect of the ordinance on City services.

Fiscal Impact Statement: The City Administrative Officer (CAO) and the Chief Legislative Analyst (CLA) report that 68% ($14.7 million) of the $21.6 million projected costs of the proposed Living Wage Ordinance (LWO) would involve contracts and concessions

SUMMARY

On February 18, 1997, the members present at a joint meeting of the Budget & Finance and Personnel Committees unanimously approved the joint Chief Legislative Analyst (CLA) and City Administrative Officer (CAO) report as submitted, which summarized the latest version of the proposed Living Wage ordinance (LWO) and analyzed the UCLA study of this proposal that was commissioned by the City. This action marked the culmination of ten Personnel Committee meetings and three joint meetings of the Personnel and Budget and Finance Committees on the Living Wage issue, all of which were open to public comment.

The proposed Living Wage Ordinance, as agreed to by the Joint Committee on February 18, 1997, is a "compromise" version, dated January 21, 1997 that included many of the recommendations from the UCLA study, including the Earned Income Tax Credit (EITC), and affects only those employers who have contracts with or receive substantial financial assistance from the City of Los Angeles. The CAO and CLA reported that the affected group comprises less than of 1% of the City's total labor force. That compromise ordinance is projected by the UCLA study to cost an estimated $21.6 million in 2006 (first year of full phase-in), provide 3,800 persons (3,100 Full-time Employees(FTE'S)) with wage increases and improve the benefits of over 4,800 individuals (3,800 FTE's). Year 2006 is when the Department of Airports concession contracts will be up for renewal. The UCLA study determined that approximately 250 of the

2 of 4 1,000 City concessionaires would be covered by the proposed ordinance.

The CAO and CLA further found that 68% ($14.7 million) of the $21.6 million projected costs of the proposed LWO would involve contracts and concessions in the proprietary departments. Those costs would not affect the City's general fund. Some of the $6.9 million in anticipated cost of this proposed LWO on Council-controlled departments may be passed on to non-general fund sources. Similarly with regard to the costs of the measure on concessions in Council- controlled departments, most, if not all, of the $3.2 million increased cost of council-controlled concessions would also be passed onto the concessionaires and/or their consumers. As a result, about $3.3 million of the $6.9 million projected general fund impact may be paid from non-general fund sources, leaving an anticipated general fund impact of $3.6 million.

The CAO added that there was one area of concern: Until the regulations are written, there would not be absolute clarity as to all of the contractors that would be included. The CLA reported that its working standard for inclusion of businesses/contracts under the proposed ordinance was for work that was contracted out, that the City would have provided, absent that service contract. Councilmember Alatorre expressed concern that the Council would be asked to adopt the LWO without a specific "who's in/who's out" list or the rules and regulations for the implementation of this ordinance presented to the Council beforehand. However, he reiterated his support for the living wage concept and supported the CAO/CLA report on the draft ordinance.

The City Attorney was queried as to his position on the application of the proposed ordinance to the proprietary departments and

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January 6. 1997

Commissioner Margaret Milner Richardson Internal Revenue Service 1 1 11 Constitution Avenue. N.W. Washington. D.C. 20224

Dear Commissioner Richardson:

A report recently commissioned by the City of Los Angeles indicates that "less than a majority" of Angelenos eligible to take the Earned Income Tax Credit do so, a loss of benefits to residents of the city of over $100 million annually..

In An Empirical Analysis of the Proposed Living Wage, authors E. Douglass Williams. Ph.D.. of Carlton College. and Richard H. Sander. Ph.D.. of the University of California at Los Angeles. recommend that the city implement an education program requiring its contractors to inform low wage employees about the EITC.

While there may be an appropriate role for our city, this is first and foremost the job of the IRS. Therefore. I hope that you can tell me:

1. Is the assertion that less than a majority" of those eligible for the EITC actually take advantage of it correct? If not, what is your estimate of its use?

2. What education programs the IRS has to inform taxpayers of this program? What media are used: are programs multi-lingual. and if so. which languages do you use in Los Angeles: are the programs year-round or just at tax filing time?

AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER QeocIatle arc mace from recyciscl waste 9:1(::9 Commissioner Margaret Milner Richardson January 6. 1997 Page Two

3. What education programs do you have for employers to use in explaining the tax credit, or in handling the accounting to enable employees immediate benefits of the program?

4. Is there something you recommend the city do in partnership with the IRS to increase knowledge about EITC? Does the IRS have funds available for such a partnership?

If the case stated by Drs. Williams and Carlson is correct, it is extremely important that remedial actions be taken, especially in light of welfare reform. I look forward to hearing from you as soon as possible.

Sincerely,

'chard J. Mayor cc: Members of the City Council IRS District Director U.S. Conference of Mayors PRODUCERS FOR THE LIVING IDRGE ORDINRNCE 1459 Sixth Street Santa Monica, CR 90401

December 16, 1996

The Honorable Councilmember Ruth Galanter City Council Room 239 Los Angeles City Hall 200 N.Spring Street Los Angeles,CA 90012-4801

Dear Councilmember Galanter:

We are a group of concerned motion picture and television producers and we are writing to urge you to adopt the Living Wage Ordinance. A spokesperson for the Alliance of Motion Picture and Television Producers has declared their opposition to the ordinance. We believe this opposition is ill-advised and ill-informed.

Contrary to arguments that this ordinance is bad for business, we believe that if properly implemented and phased-in that the increase can be absorbed by the firms without creating any unemployment, causing any net increase to the city budget or resulting in any decline in city services.

The Living Wage Ordinance is both a positive step in the lives of people living below the poverty line and a benefit to the community at large: employers benefit from higher morale, lower turnover and higher quality work and the communities in which the emp14:›yces live benefit fLuut their increased earning power and creditworthiness.

We see the Living Wage Ordinance as an important building block in the effort to rebuild LA into a productive city where we can all enjoy to live and do business.

Sincerely,

Marc Abraham Kathleen Kennedy David Rintels Peter Almond Jordan Kerner Victoria Riskin Leslie Belzberg John Manulis Howard Rosen/flan Steven Bochco Frank Marshall Midge Sanford Mike Farrell Jerry Molex) Sigurjon Sighvatsson Naomi Foner Mace Neufeld Lauren Shuler-Donner Sid Ganis Bobby Newmyer Jonathan Taplin Steve Colin Lynda Obst Lawrence Turman Steven Gyllenhaal Jerry Offsay Nick Wechsler Debra Hill Sarah Pillsbury Harry Winer Mark Johnson Judy Polone Marvin Worth PRODUCERS FOR THE LIVING WAGE ORDINANCE

PRODUCER PHONE FAX

Marc Abraham 213-850-2651 213-850-2613 company:Beacon Pictures credits: THE COMMITMENTS,PRINCESS CARABOO

Peter Almond 213-850-2651 213-850-2613 company: Beacon Pictures

Leslie Belzberg 310-229-2441 310-229-2443 company:St. Qare Entertainment credits: BEVERLY HILLS COP,WEIRD SCIENCE

Steven Bochco 310-369-2400 310-369-3941 company:Steven Bochco Prods. credits: NYPD BLUE, MURDER ONE

Naomi Foner 213-938-3342 213-954-4513 company: Rollercoaster Films credits: LOSING ISAIAH, RUNNING ON EMPLY

Mike Farrell 818-789-5766 818-789-7459 company:Farrell / Minoff Prods. credits:DOMINICK AND EUGENE,SILENT MOTIVE

Sid Ganis 310-280-8000 310-280-1539 company: Out of the Blue

Steve Golin 213-462-6400 213-463-7874 company:Propaganda credits: THE GAME,PORTRAIT OF A LADY,SLEEPERS

Steven Gyllenktaal 213-938-3342 213-954-4513 company: Rollercoaster Films credits: LOSING ISAIAH,PARL5,TROUT

Debra Hill 310-319-0052 310-260-8502 company: Debra Hills Prods, credits: THE FISHER KING,ESCAPE FROM L.A.

Mark Johnson 818-733-9860 818-733-9870 company: MJ Prods. credits: I11 1LE PRINCESS,RAIN MAN

Kathleen Kennedy 310-656-8400 310-656-8430 company:Kennedy -Marshall Co. credits:THE COLOR PURPLE,INDIAN IN THE CUPBOARD

Jordan Kerner 310-838-2500 310-204-4208 company: Avnet/Kerner Co. credits: FRTED GREEN TOMATOES, UP CLOSE & PERSONAL

John Manulis 310-552-2255 310-284-8493 company:Samuel Goldwyn Co. credits: AMERICAN BUFFALO,BIG NIGHT

• L.ITY OF LOS ANGELES PARKER C. ANDERSON CALIFORNIA LOS ANGELES GENERAL MANAGER INDUSTRIAL DEVELOPMENT AUTHORITY COMMUNITY DEVELOPMENT DEPARTMENT 3RD FLOOR 215 WEST 6TH STREET 215 W. 6TH STREET LOS ANGELES, CA 90014 LOS ANGELES, CA 90014 (213) 485-6782 (213) 485-1617 FAX (213) 237-0890 FAX (213) 237-0551

RICHARD J. RIORDAN MAYOR January 7, 1997

The Honorable Jackie Goldberg Chair, City Council Personnel Committee City Hall, Room 240 200 N. Spring Street Los Angeles, CA 90012

Dear Councilmember Goldberg,

As Chair of the Board of Directors of the Los Angeles Industrial Development Authority (LAIDA), I would like to present the LAIDA's position on the inclusion of industrial development bond (IDB)financing within the currently proposed Living Wage Ordinance.

While the Living Wage Ordinance is laudable in its efforts to address poverty within our City, it incorrectly defines IDB financing as "discrete" City financial assistance. IDB financing is not a City loan or subsidy. No public funds are used; IDBs are private activity bonds which utilize private sector funds (funds provided by private investors) to provide capital for manufacturing projects which create jobs. The City acts only as the conduit issuer and is not responsible for the collection or repayment of principal or interest. Each bond issue is backed by a private letter of credit through a financial institution or sold by the underwriter to knowledgeable private investors.

If the draft ordinance is adopted as proposed, it would have deleterious effects on the City's IDB program. The conditions imposed upon applicants would render the City program uncompetitive. It is very likely that IDB applicants from within the City would choose one of two other statewide IDB issuers, either California Statewide Community Development Authority(CSCDA) or the California Economic Development Financing Authority (CEDFA). Neither of these organizations imposes living wage requirements. While the LAIDA must seek City Council approval for each bond issue, CEDFA is not legally required to seek municipal approval to issue an IDB project located within Los Angeles. The LAIDA must hold its TEFRA public hearing within Los Angeles, while CEDFA is legally allowed to hold TEFRA public hearings in Sacramento, even for projects located within Los Angeles.

The transfer of projects to these two other issuers would eliminate the need for the City's IDB program and would severely curtail the City's ability to influence or monitor an IDB financed manufacturing project within the City's jurisdiction.

Finally, it is not clear that the City is allowed to impose additional requirements upon IDB applicants. The City Attorney needs to research the provisions of the California Government Code, Title 10 - California Industrial Development Financing Act to make sure the language of the proposed ordinance conforms to state law.

Please reconsider the inclusion of industrial development bonds within the Living Wage Ordinance. hitutc-to RICHARD W. HAVEL Chair, Board of Directors City of Los Angeles Industrial Development Authority

cc: Councilmember Richard Alatorre, Chair ofBudget and Finance Committee Gary Mendoza, Deputy Mayor (3CY AN EQUAL EMPLOYMENT OPPORTUNITY -AFFIRMATIVE ACTION EMPLOYER Recyclable and made from recycled waste TE349 CITY HALL RICHARD J. RIORDAN THE MAYOR LOS ANGELES, CALIFORNIA 90012 OFFICE OF MAYOR (213) 847-2489

January 7, 1997

Honorable Richard Alatorre Chair Budget and Finance Committee

Honorable Jackie Goldberg Chair Personnel Committee

Re: Council File 96-1111-S1

Dear Councilmembers Alatorre and Goldberg:

We have reviewed the analysis of the impact of the proposed "Living Wage" Ordinance that the Council commissioned, and we believe it raises a number of significant concerns with respect to this Ordinance. This letter summarizes certain of these concerns.

• The UCLA study projects that the total costs of the Ordinance will be between $28-42 million per year and that these costs will eventually be borne by the City in form of higher costs or lower services (pg. 6). While this is at the low end of the cost estimates that have been received', this study clearly indicates that adoption of the proposed Ordinance will have a serious and adverse impact on the City's financial position.

• While no costs are assigned to the impact the Ordinance would have on financial assistance recipients, the report does note that "application of the Ordinance to economic subsidy programs risks more serious, inadvertent harms than is the case with the coverage of service contractors or concessionaires"(pg. 57). The study accordingly recommends

A study of the proposed Ordinance conducted by the UC Riverside estimated that the costs of the Ordinance would exceed $93 million. A report prepared by Spectrum Economics estimated that these costs would exceed $130 million.

AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER gy Recyclable and made from recycled waste -q=1,6) that the Ordinance be revised to effectively exempt economic subsidy programs from its coverage.

• Despite the significant increased costs associated with the Ordinance, the study estimates that only 800 workers would be lifted above the poverty level as a result of the Ordinance (pg. 7).

• The UCLA study also concludes that the Ordinance will produce lost jobs (pg. 7) and that the displacement of these workers could lower the wages of enough workers in the labor force to offset, in the aggregate, a significant part of the increased payments going to certain low wage workers pursuant to the provisions of the Ordinance (pg. 8).

The UCLA study concludes that the proposed "Living Wage" Ordinance will seriously imperil the City's fiscal health, reduce aggregate employment and have little, if any, positive impact on the economic well-being of low-wage workers. Although the authors of the study may disagree, based upon the breadth of input we have received from the business community, we remain convinced that passage of the "Living Wage" Ordinance will also materially and adversely impact the City's competitiveness as a place to conduct business.

The authors of the UCLA study have provided important information with respect to the significant, adverse impact that the "Living Wage" Ordinance will have on the City. The authors have also noted an important opportunity that many in this debate have overlooked--the potential that the federal Earned Income Tax Credit could make a significant and much more cost- effective contribution to the earnings of low-wage workers than the "Living Wage" Ordinance. As the attached letter that the Mayor sent to the IRS indicates, the Mayor's Office shares Councilmember Goldberg's enthusiastic interest in exploring this opportunity.

The Mayor's Office shares the goal of the proponents of the proposed "Living Wage" Ordinance and believes that it is important that all Angelenos have an opportunity to benefit from the City's economic vitality. We share the view of the authors of the UCLA study, however, that the proposed "Living Wage" Ordinance is a wrong and counterproductive way to pursue this shared goal.

Very truly yours,

Gary S. Mendoza Deputy Mayor

Attachment cc: Honorable Members of the City Council recommendation has also been ignored.'

Implementation Costs. The estimated costs of the Ordinance do not include the costs of implementation--costs which could be significant. By way of example, the Ordinance creates a new cause of action for employees who believe that their employer has violated the Ordinance. Given the significant degree of ambiguity that remains in the Ordinance, it is likely that passage of the Ordinance will generate material levels of litigation. The costs associated with this litigation are not factored into the estimated costs of the Ordinance. We do not believe that it is responsible to ignore these costs.

Very truly yours,

Gary S. Mend Deputy Mayor cc: Honorable Members of the City Council

1 We continue to believe that application of the Ordinance to financial assistance recipients will have a significant, adverse impact on the City's business climate. The proponents of the Ordinance appear to agree. For this reason, they have sought and continue to seek an explicit exemption from the coverage of the Ordinance. If the proponents are confident that the Ordinance won't adversely effect covered businesses, we continue to call upon them to recommend an amendment of the Ordinance to eliminate their exemption. INTERDEPARTMENTAL CORRESPONDENCE

DATE: JAN 1 F1997

TO: Honorable Members of the Budget & Finance and Personnel Committees

FROM: Ronald F. Deaton Chief Legislative Analyst

Keith Comrie City Administrative Officer

C.F. NO.: 96-1111-S1

SUBJECT: Proposed Living Wage Ordinance and Summary of Recommended Revisions pending in the Joint Committee

As requested at a joint meeting of the Budget & Finance and Personnel Committees on January 6, 1997, attached please find two documents distilling the options available to the members of the Joint Committee regarding the proposed Living Wage ordinance (LWO).

The first document briefly explains the components of the November 27, 1996 draft of the LWO in the form pending before the Joint Committee. The second document outlines the general concepts proposed as amendments to the LWO by various individuals. The latter documents also details the anticipated fiscal impact of each proposed amendment relative to the original November 27, 1996 draft.

The City Attorney is currently preparing a draft ordinance that would incorporate all of the proposed amendments outlined in the second document.

Attachments (2): Fact Sheet on the Living Wage Ordinance Chart showing projected impact of proposed amendments LIVING WAGE ORDINANCE FACT SHEET based on November 27, 1996 draft

Origin: Motion (Goldberg-Hernandez), CF#96-1111-S1 requesting preparation of this ordinance. Motion adopted by Council 7/3/96

Components: The November 27, 1996 draft will make certain employees eligible for:

8 paid holidays 7 working days vacation after 1 year 12 days sick leave per year (accrued at 1 day per month) A salary of $7.50/ hour for those employees that receive health benefits and $9.50/hour for those who don't. health benefits for employees and their dependents.

Applicability : The November 27th draft Living Wage ordinance will apply to employees of: any contractor who is awarded a contract by any City department to provide services for the City where the contract is greater than $25,000 and has a term of at least three months (applicable to contracts of proprietary departments when the governing board adopts the policy). "Services" include, but are not limited to, parking attendants, food services, janitors, security guards, nonprofessional health care employees, gardeners, and clerical employees.

any person or company that receives from the City more than $100,000 in "discrete financial assistance" in any 12 month period, or $1 million in one-time financial assistance mandates compliance for 5 years City staff assistance will not be regarded as financial assistance.

The ordinance is prospective, and will apply to:

- contracts, contract amendments, and financial assistance finalized after its effective date. - expenditure of grant funds only when the funding agency determines in writing that the Policy is consonant with the laws governing the grant funds. - non-profit corporations whose chief executive officer earns a salary of more than eight times the minimum wage (i.e. lowest paid worker) specified in this Policy.

General Exclusions: The current draft Living Wage Policy will not apply to: - Contractors or financial assistance recipients of the Community Redevelopment Agency of the City of Los Angeles. - Contracts for the purchase of goods or property. - Loans, except forgiveness of loans when the value of the forgiveness exceed the thresholds noted above. - Leases or subleases unless the tenant is deemed to be providing its services on behalf of the City (i.e. concessionaire employees are acting as substitutes for City employees) Service contracts in excess of $2 million if they would otherwise be subject to competitive bid. Companies that negotiate lower wages or benefits or fewer holidays through collective bargaining. PROPOSED REVISIONS TO NOVEMBER 27, 1996 DRAFT OF LIVING WAGE ORDINANCE Note: All estimates of impact from UCLA Fair Housing Institute Study of Proposed Living Wage by Professors Richard Sander and Doug Williams

Joint B&F/PersonnelCommittee UCLA Study

Estimated fiscal Estimated fiscal impact Issue November 27th Draft Proposed Revision impact of this Proposed Revision of this revision relative revision relative to to fully phased-in cost fully phased-in cost of Nov. 27th Draft of Nov. 27th Draft

Wage Rate $7.50/hour $7.25/hour -$3.5 million $7.25/hour - $3.5 million with benefits

Wage Rate $9.50/hour $8.50/hour -$11.5 million $8.50/hour -$11.5 million without ($2.00 toward benefits) ($1.25 towards ($1.25 towards benefits benefits) benefits)

Paid holidays 8 days per year 12 paid days for -$4 million 12 paid days for use -$4 million use as sick or as sick or vacation Paid sick days 12 days per year vacation time. time. 10 additional 10 additional unpaid days for sick Paid vacation 7 days per year unpaid days for time. sick time. Joint B&F/PersonnelCommittee UCLA Study

Service All contracts over $25,000 Exempt all non- - $2.5 million Apply ordinance only to contracts longer than 3 months profits except child janitorial and security covered care centers services contracts.

Lessees and Ordinance applies if the None None Exclude all. concessionaire City would, otherwise, - $15.6 million s covered provide the services

Workers All employees of None None Exempt administrative covered contractors and and clerical positions. concessionaires working on City project. Those employees of subsidy recipients who spend 50% or more of their time on City project

Economic Recipients of more than Same as 11/27/96 None (no Exclude all None (no subsidy $100,000 in financial version, only allow economic economic subsidy recipients assistance in any one year, exemption if hiring subsidy recipients currently covered or over $1 million in one- long-term recipients qualify under time assistance. unemployed or currently qualify 11/27/96 version providing training. under 11/27/96 of ordinance) version of ordinance)

Non-profits Exempt non-profit subsidy Exempt all non- - $2.5 million Exclude all - $2.5 million recipients if they meets profits, except certain salary-related child care workers criteria Joint B&F/PersonnelCommittee UCLA Study

Other Create evaluation None Create evaluation and None and cost- cost-comparison comparison mechanism mechanism

Initiate program to Unknown Initiate program to Unknown encourage encourage employers to employers to provide eligible provide eligible employees with the employees with the Advance Earned Income Advance Earned Tax Credit Income Tax Credit

Estimated FY 96-97 = $1.2 million* FY 96-97 = $700,000 FY 96-97 = $500,000 total labor cost FY 97-98 = $13 million* FY 97-98 = $7.5 million FY 97-98 = $3.7 million of proposal FY 98-99 = $17.5 million* FY 98-99 = $10 million FY 98-99 = $4.5 million FY 99-00 = $20.2 million* FY 99-00 = $11.5 million FY 99-00 = $4.8 million FY 2000-06=$22.8 million* FY 2000-06=$13 million FY 2000-06=$4.9 million FY 2006 + = $35 million* FY 2006 + = $20.5 million FY 2006 + = $4.9 million (fully phased-in) (fully phased-in) (fully phased-in)

FTE's affected 3,912 - wage increase 3,100 - wage increase 900 - wage increase 5,800 - health care 3,800 - health care 1,150 - health care

* Note: Estimated cost of November 27th proposal based on assumption that employers will pay $3,000 per year for health benefits. In comparison, the joint committee proposal and UCLA Study proposal calculate costs based on the proposed requirement that $1.25/hour (approx. $2,500 per year). be paid towards health benefits. Frank Marshall 310-656-8400 310-656-8430 company:Kennedy -Marshall credits: MILK MONEY,CONGO, INDIAN IN THE CUPBOARD

Jerry Molen 818-733-7000 credits: SCHINDLER'S LIST, JURASSIC PARK

Mace Neufeld 213-956-4816 213-862-2571 company: Neufeld/Rehme Prods. credits: CLEAR ANt)PRESENT DANGER,,PATRIOT GAMES

Bobby Newmyer 310-777-2000 310-777-2010 company:Outlaw Prods. credits:THE SANTA CLAUSE,sex, lies, and videotape

Lynda Obst 310-369-2993 310-369-2983 company: Lynda Obst Prods. credits:SI .FFPLPCS IN SEATTLE,THE FISHER KING

Jerry Offsay 310-234-5252 310-234-5353 company:Showtime Networks credits: BASTARD OUT OF CAROLINA, HIDDEN IN AMERICA

Sarah Pillsbury 310-393-5275 310-393-8665 company;Sanford/Pillsbury Prods. credits: HOW TO MAKE AN AMERICAN QUILT, AND THE BAND PLAYED ON

Judy Polone 310-309-5707 310-309-5206 company:Polorie/ Winer Co. credits: HOUSE ARREST,RIOT

David Rintels company: Hallmark of Fame credits: THE MEMBER OF THE WEDDING

Victoria Riskin company:Hallmark Hall of Fame credits: THE MEMBER OF THE WEDDING

Howard Rosenman 310-180-4977 310-280-2072 company: Rosenman Prods. credits: THE CELLULOID CLOSET,FATHER OF THE BRIDE

Midge Sanford 310-393-5225 310-393-8665 company:Sanfoni/ Pillsbury Prods. credits: HOW TO MAKE AN AMERICAN QUILT, AND THE BAND PLAYED ON

Lauren Shuler-Donner 818-954-3611 818-954-4908 company: Donner/Shuler-Donner Prods. credits: FREE WILLY,LETHAL WEAPON 1-3

Sigurjon Sighvatsson 213-956-4222 213-862-1190 company:Lakeshore Ent.

Jonathan Taplin 213-956-8333 213-862-1212 company: Hawkfilin credits: MEAN STREETS,THE LAST WALTZ

Lawrence Turman 213-280-4943 213-280-2332 company: The Turman-Morrisey Co. credits: BOOTY CALL

Nick Wechsler 213-954-9000 213-954-9009 company: Addis-Wechsler credits: THE PLAYER,sex, lies, and videotape

Harry Winer 310-309-5707 310-309-5206 company:Polone-Winer Co. credits: HOUSE ARREST,RIOT

Marvin Worth 310-273-0181 210-274-7378 company: Marvin Worth Prods. credits: MALCOLM X,PATTY HEARST,THE ROSE Businesses for a Living Wage

January, 1997

Honorable Council members and Mayor Los Angeles City Hall 200 N. Spring Street Los Angeles, CA 90012-4801

Dear Members ofthe City Council and Mayor Riordan:

We are owners and operators of businesses throughout the Los Angeles area. We are aware that the City Council will soon be voting on a Living Wage Ordinance and are writing to urge you to support this important measure. We believe that the Los Angeles Living Wage Ordinance will lead to long-range improved conditions for business and business standards, as well as for taxpayers and their communities, within the City of Los Angeles.

We believe that responsible business results in higher returns. Our experiences and research bear out that firms with human resource policies such as those contained in the LA Living Wage Ordinance reap a range of benefits that actually reduces costs and enhances product quality. Turnover is reduced, worker morale and productivity increase, and a larger pool of residents can afford to buy our products. Far from detracting from successful business enterprise in Los Angeles, the Living Wage Ordinance, properly implemented and monitored, can be a huge benefit to the business community. The safety and stability of a healthy community is not the least of these benefits.

One year after the implementation of a living wage ordinance in Baltimore— similar to that proposed for LA—.there were no increases in the prices of city contracts and no loss in employment. In addition, studies indicate that there will be no net costs to the City budget, no employment loss and no loss of services to LA residents. In fact, government subsidies of working families would decline by more than 50%, and public coffers would gain from the increased tax revenues of self-sufficient working people.

Furthermore, we believe that City leadership in implementing a living wage will reward those of us who already understand the value of good business, by leveling the playing field in the rewarding of City contracts.

We believe the Living Wage Ordinance is one positive step in the direction of a rebuilt local economy and a positive environment for responsible LA businesses.

Sincerely,

Leonard Gertler Theodore Williams Katherine Diamond President CEO Principal Siegel Diamond Architecture All Arneric? Home Center Bell Industries

Walter N. Marks Stephen S. Howe Ken Patel President Managing Director Senior Partner Walter N. Marks, Inc. Allan Jeffries, Inc. The Stationery Place Mcrr-F„.

Carmelo Alvarez Simone Wallace Co-owner Co-owner Geoff Cline, Esq. Cafe Luna Sol Sisterhood Bookstore General Counsel Patagonia, Inc.

Richard Foos Terry Carter Mary K. Paterson President Plant Manager Follow Your Heart Rhino Records Roger's Poultry

Margie Ghiz Thomas J. Sediva Midnight Special Bookstore Mitchell/Sediva Publishing Co., Inc.

Deborah Watson The Harman Press 411111111111111„1„mm %

CITY HALL RICHARD J. RIORDAN LOS ANGELES, CALIFORNIA 90012 OFFICE OF THE MAYOR MAYOR (213) 847-2489

January 21, 1997

The Honorable Richard Alatorre The Honorable Jackie Goldberg Chair, Budget and Finance Committee Chair, Personnel Committee

Re: Council File 96-1111-S1

Dear Councilmembers Alatorre and Goldberg:

The Mayor's Office continues to have significant concerns with respect to the proposed "Living Wage" Ordinance. These concerns include the following:

Legality of the Ordinance. As the September 11, 1996 report from the City Attorney's Office notes, application of the Ordinance to the independent departments is "clearly unlawful". The City Attorney's Office has also expressed its concerns with respect to other legally problematic provisions of the Ordinance. These legal concerns remain largely unaddressed. We respectfully urge you to instruct the City Attorney's Office to amend the proposed Ordinance to eliminate these serious legal deficiencies.

Costs of the Ordinance. In recognition of the significant, unfunded costs associated with the Ordinance, members of the Committees have expressed their willingness to accept all of the recommendations that Professors Williams and Sander have put forward to reduce these costs through a more targeted pilot program. It is our understanding, however, that the "compromise proposal" currently under discussion has a much broader scope than that proposed by Professors Williams and Sander and an estimated cost of more than $20 million. In addition, Professors Williams and Sander have expressed their view that, in light of the significant, adverse consequences associated with applying the Ordinance to financial assistance recipients, the Ordinance not cover financial assistance programs. This

JAN 2 1 1997 I- //I"- putp DEPUW Ju i.)/t/ 7-7-c

AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER Recyclable and made from recycled waste .cziO Can Employers Afford a Living Wage?

Q- What's the difference between Hamburger A and Hamburger B? They cost the same. They taste (roughly) the same. They're sold at the same place (LAX)- under EXACTLY the same contract with the City of LA... A- Read the following and decide for yourself.

Hamburger A: $2.49 The following is a price and wage/benefit Hamburger B: $2.37 -the Whopper- comparison between similar LAX venues (ie. same -the Big Mac- type of food and price-range) holding EXACTLY the made by unionized employees who made by non-unionized employees make $6.54 per hour with job same contract with the City of Los Angeles. who make $5.00-6.00/hour with no security, family medical and dental Whether pizza, burgers or Mexican food, the results family medical, dental or pension insurance and pension benefits. are the same: some companies pay their workers benefits, no job security and who qualify for any number of public well and offer union protection and benefits... and benefits- like AFDC, Medi-Cal, food some don't. Prices are clearly not affected. stamps and WIC. YOU DECIDE: can companies afford a Living Wage?

La Salsa (union) El Paseo Cafe (no contract)

Wage for Cook after 2 years $8.98/hr $6.00/hr Wage for Cashier after 2 years $6.56/hr $6.50/hr Wage for Utility workers after 2 years $6.41/hr $4.75/hr Wage for Pantry worker after 2 years $7.91/hr $6.00/hr WAGES Medical Insurance for individual (cost to worker) $0.00/m $0.00/m Medical Insurance for family of 3 (cost to worker) $0.00/m $140/m

Cheese Quesadilla $3.49 $4.95 Two Chicken Tacos $4.49 $5.95 Vegetarian Burrito $4.49 $4.95 Chicken Burrito $5.39 $5.95 PRICES Breakfast Burrito $4.99 $4.95

Burger King (union) McDonald's (non-union)

Fast food attendant after 2 years $6.54/hr $5.00-6.00/hr Medical Insurance for individual (cost to worker) $0.00/m $0.00 after limos. Medical Insurance for family of 3 (cost to worker) $0.00/m $100/m WAGES Specialty burger (Whopper/Big Mac) $2.49 $2.37 Hamburger $1.09 $ .78 6-piece chicken strips $3.29 $4.29 Regular soda $1.69 $1.18 PRICES Regular fries $1.29 $1.45

CA Pizza Kitchen (union) Wolfgang Puck (non-union)

Cook after 2 years $8.98/hr $5.50/6.40avr Medical Insurance for individual (cost to worker) $0.00/m $0.00/m Medical Insurance for family of 3 (cost to worker) $0.00/m $120/m WAGES Cheese Pizza $6.29 $7.00 BBQ Chicken Pizza $6.49 $7.75 Chinese Chicken Salad $4.99 $7.75 It Sandwich $6.79 $7.25 Chicken Foccacia PRICES Bacon and Egg Breakfast Pizza $5.49 $5.50 Who Contracts with the City of LA?

A common misconception regarding the proposed Los Angeles Living Wage Ordinance is that it would affect small, struggling businesses. In fact, the recent City Administrative Office and City Legislative Analyst report on the Ordinance expressly states that small and/or minority/women-owned businesses will NOT be disproportionately affected by this Ordinance. The following are just a few examples of firms that currently hold contracts with the City of LA*. You judge for yourself... Can these films afford to raise their workers' pay up to the Poverty Level? Can the City afford not to?

Ampco System Parking Marriot Hotel Parent: ABM, Inc. Parent: Marriot International CEO: William W. Steele CEO: J.W. Marriot Jr. (1995) Locations: 1,466 in 24 states. CEO Compensation: $1.5 million Revenue: $121 million. Employees: 179,400 City contract: for parking at LAX. Net Income: $196 million for first three Wages/benefits (for workers on City quarters of 1996. contract): $4.50-5.50/hour, no health benefits. City JTPA Money: at least $220,000

Lockheed-Martin Information CA One Services Management Systems Parent: Delaware North Corp.

CEO: Norman R. Augustine (1996) CEO: John Luther CEO Salary: $10.5 million. Employees: 3,080 Employees: 160,000. Revenue: approx. $55 million. $150-300,000/ Revenue: $4.5 billion in sales. month for each LAX venue. City Contract: $49 million contract for City Concession: 5 food venues at LAX. parking ticket processing. Wages/Benefits: $4.75-8.00. Costs worker Wages/Benefits: $6.03-8.00; no medical $120 for medical benefits for family of 3. benefits for family members.

Inter-Con El Paseo Cafe Security Systems Parent: Andy Camacho, Inc.

CEO: Enrique Hernandez Jr. CEO: Andy Camacho. Owns 7 cars, including 1 Employees: 10,000 in U.S.A. and in seven Rolls Royce and 3 Mercedes Benz countries. Sales: average $120,000 for first three quarters Net Worth: $6.8 million. $16.7 million in total of 1996 (for El Paseo Cafe only) assets. City Concession: for food venues at LAX, incl. City Contract: $2 million contract for security El Paseo Cafe. at LAX. Wages/Benefits: $4.75- 7.50. Costs worker Wages/Benefits: $5.00-6.00/hr for security $140 per month for medical insurance for family guard. No health benefits. of 3.

Empire Maintenance Co. LA Cha Maintenance Co.

CEO: Ruben Garcia (1995) CEO: Sung Ho Cha Employees: 230 on 160 accounts. Employees: approx 200 Sales: $3.7 million Sales: $1 million in 1995. Contract: .5 million over 3 years for janitorial Contract: $376,000/yr. for janitorial services at Harbor administration building. services at the LA Central Library. Wages/Benefits: $5.00/hr. No health Wages/Benefits: $4.75/hr. No health benefits. benefits.

" information reflects overall company (but not parent) income figures, etc... and the wages/ benefits of individuals working on the City contract.. You may note that some information was not available for certain companies.

Sources: City of LA Community Development Department/Youth Employment Services Division; Department of Airports; Dun & Bradstreet; Harbor Department; HERE International; HERE Local 814; SEC Disclosure; IBT Local 396; Ward's Business Director of U.S. Private and Public Companies--1997. Some wage and benefit information from interviews with workers. PERSONNEL COMMITTEE SUGGESTED NOTIFICATION OF COUNCIL ACTION

Council File No.

Council Member(s)

Interested Department 5W

Mayor (with/without file)

Board of Civil Service Commissioners

Personnel Department

City Administrative Officer

City Attorney

Chief Legislative Analyst z Controller

Treasurer

Information Services Department

Appropriate Pension System

Appropriate Bargaining Unit -- 22 A Motion

I MOVE that the City Council make the following changes to the proposed living wage ordinance dated January 21, 1997:

1) Define City in the proposed ordinance as follows:

"City" means the City of Los Angeles and all awarding authorities thereof, excluding those City departments which exercise independent control over their expenditures of funds and excludes the Community Redevelopment Agency of the City of Los Angeles ("CRA"). The CRA is urged to adopt a policy similar to that set forth in this article.

4 7,,eec,„ (-)7 BY ( ,PRESENTED Marvin Braude Councilman, 11th District / SECONDED BY JN\) VIVVVVY-, MAR 0 5 1997 - /rota/ it m7

MAR 1 8 1997 — fibeitsie N gy 7r/eat/vie--

MAR - 5 199 whether the City Attorney would approve the ordinance as to form and legality as written. The City Attorney asked for time to write a formal opinion, which would be available to the Council members prior to the date this matter would come before the Council. It was noted by the Committee members that it would be appropriate for the Council to inform the proprietary departments of what its vote would be on any given contract, with respect to the Living Wage provisions.

Respectfully submitted,

PERSONNEL C ITTEE B D T AND FINANCE COMMITTEE

MAR 05 tir - Continued to 41e-eg71; 1 /7 (49/41469v0/44- /1077QA) .417 '.8iedv26-Tiviebvti:49 ADOPTED MAR 18 1997 L OSANGELESCITYCOUNCII_181, ,7 ego-0%mb e./wpm TO T'ITA1 7027 FORTHWITH

rfovilivs cm,414.--SvoxiAeice.9 W arseAddw -.FocA410) ittle•eivetsy-ficeb-A-77-Aelleb 4 of 4 Pcer Do P /7-h4

tvAi-6— Fresevn Fer,s o A/AfeL- 11-D0P17-A) MOTION 2

I move that the City Council make the following changes to the proposed draft Living Wage Ordinance dated March 18, 1997:

1. Eliminate Section 10.37.1(c), thereby excluding city financial assistance recipients from the ordinance.

2. Direct the City Attorney to make necessary conforming changes.

PRESENTED B

SECONDED BY

March 18, 1997

MAR 1 R 1997. Receive:* and Filed 0 77rx../ L.

• ** • ••••• , ,• • .

••• ,i•••• •••'.

o March 14, 1997 RECEIVED Members ofthe Los Angeles City Council City Hall :0(pik c 200 N. Spring St. Los Angeles, CA 90012

Dear City Council Members:

We are Los Angeles attorneys familiar with a broad spectrum of legal issues concerning the Los Angeles region. We are experts on labor law, municipal law and general civil law. We come from a number of legal firms and join together in order to state with one voice that we strongly believe that the Los Angeles City Council has the plenary authority to apply the proposed LA Living Wage Ordinance to the Proprietary Departments. We also agree with the City Attorney's office that there is very little, if any, legal liability to the City if such authority is exercised.

Here's why we believe this:

Nothing in the Charter specifically exempts the proprietary departments from general City legislation standards to be adhered to by City contractors.

When requested by attorneys working with the Living Wage Coalition, the City Attorney's office produced only six (6) memoranda pertaining to the City Council's authority over the proprietary departments. Of these six, only one was written after the adoption of Charter Section 32.3 ("Proposition 5") in 1991. Each of these pre-1991 opinions relies on a patchwork analysis of Charter language granting the departments certain powers.

In 1991, the Charter was amended to give the Council considerable authority over the proprietary departments of the City. We therefore believe that any analysis that predates this Charter change is no longer applicable.

The Charter was amended in 1991 to add Section 32.3 which specifically provides for Council review of actions of the independent commissions. The section is extremely broad and the Council's power under this section is plenary. If the Council takes jurisdiction over any action of an independent board or commission, the Council supplants the board or commission and acts in its stead. Moreover, the section is not limited to only real property contracts, or even to contracts. It applies to "actions" of commissions and boards. The introductory clause of Section 32.3 states that its provisions apply,"Notwithstanding any other provision of this Charter.." Section 32.3 thus allows the Council to take jurisdiction of any such "action". Under the broad language of Section 32.3, even requests by the departments for proposals could be subject to Council review. Clearly, ifthe Council now has the power to review each and every action taken by a department or commission, the Council may adopt an ordinance imposing conditions on the departments and commissions.

Section 32.3 gives the Council the power not only to approve or disapprove of the actions taken by departments or commissions, but to amend or modify them. Pursuant to Section 32.3, the Council could review each action taken by the boards or commissions involving payment of workers to assure that the department's actions comply with the LWO. Since such Council action is permissible, it defies logic that the Council would not be able to make a living wage ordinance applicable to all City departments and commissions. In sum, since the addition of Section 32.3, none of the so-called "independent" departments are as independent as they once were.

Indeed it is a well-established principle of statutory interpretation that a statute— in this case the Charter— should be given a reasonable and common-sense interpretation consistent with the apparent purpose which will result in wise policy rather than mischief or absurdity. It is undisputed that the City Council has the power to disapprove any contract, or indeed, any action of any sort by the departments and that the Council has the authority to settle any litigation against any of the departments. It would be an absurd result tofind that the Council has the authority to review each and every contract and to apply a standardfor rejecting a contract, but does not have the power to issue general standards by which the contracts can be let. If such a position were maintained, it would require the City Council to assert its power in the least efficient and least expeditious manner, and yet arrive at the same outcome. We therefore hope that the Council will assert its authority under the Charter and adopt the Ordinance as currently proposed.

Unlike prior restrictions on contracting approved by Council and applied to all City contracts, including those let by proprietary departments, the LWO does not restrict or regulate to whom the departments may contract; it merely sets a floor amount which such contractors must pay their workers. All the proposed Ordinance provides is that any contractor selected by the department must comply with the LWO with regard to compensation and working conditions. All potential contractors are thus equal, for purposes of competitive bidding: each prospective contractor must present a bid which allows for compensation of workers within the requirements of the LWO.

The City Attorney agrees that it is highly unlikely that any legal challenge to a proposed Living Wage Ordinance would succeed on the grounds that it deprives the proprietary departments of any "independent" powers they may enjoy under the City Charter. Moreover, the City Attorney shares the view that there is no significant liability to the City ifit adopts the language as proposed, applying the Ordinance to the proprietary departments ofthe City.

Our confidence is borne out by example: the City Attorney raised this same concern about the Worker Retention Ordinance. The City Council, as it has often done, adopted the Ordinance despite the City Attorney's opinion. To date there has been no legal challenge raised to that Ordinance and there is no reason to believe that any legal challenge will be made to the LWO.

Thank you for your consideration of our views.

Yours very truly,

National Lawyers Guild Robert M. Myers, Esq., former Posner & Rosen L.A. Chapter Santa Monica City Attorney, 1981-92 Paul Harris, Esq. Barbara Hadsell, Esq. Peter A. Schey, Esq. Reich, Ade11, Crost & Cvitan* Hadsell & Stormer, Inc.* Center for Human Rights & Constitutional Law*

Dan Stormer, Esq. Mark Mitchell, Esq. Julie Martiz Ortega, Esq. Hadsell & Stormer, Inc.* Writer's Guild* Hadsell & Stormer, Inc.*

James Rutkowski,Esq. Virginia Keeney,Esq. Herman B. Santos, Esq. Van Bourg, Weinberg, Roger Hadsell & Stormer, Inc.* SEIU, Local 660* & Rosenfeld*

Gordon K. Hubel, Esq. Brenda E. Sutton, Esq. Anne Richardson, Esq. S. California Conference of Schwartz, Steinsapir, Dohrmann Hadsell & Stormer, Inc.* Carpenters* & Sommers*

Robin Toma,Esq. Laurence Steinsapir, Esq. Linda Philiou, Esq. Private Civil Rights Attorney Schwartz, Steinsapir, Dohrmann Hadsell & Stormer, Inc.* & Sommers*

Michael Peterson, Esq. Michael Catlin, Esq. Lise Anderson,Esq. Hadsell & Stormer, Inc.* Hadsell & Stormer, Inc.* Hadsell & Stormer, Inc.*

Barry Litt, Esq. D. William Heine,Esq. Dolly M. Gee, Esq. Litt & Marquez* Schwartz, Steinsapir, Dohrmann Schwartz, Steinsapir, Dohrmann & Sommers* & Sommers*

David Hannah,Esq. LaJuan Davis, Esq. Paul Crost, Esq. Hadsell & Stormer, Inc.* Hadsell & Stormer, Inc.* Reich, Adell, Crost & Cvitan*

Taima Ford, Esq. Olga Aguayo, Esq. William T. Payne, Esq. Hadsell & Stormer, Inc.* Hadsell & Stormer, Inc.* Schwartz, Steinsapir, Dohrmann & Sommers*

Henry Willis, Esq. Margo Feinberg, Esq. Randy Renick, Esq. Schwartz, Steinsapir, Dohrmann Schwartz, Steinsapir, Dohrmann Hadsell & Stormer, Inc.* & Sommers* & Sommers*

Erika Zucker, Esq. Michael Feinberg, Esq. Carrie White, Esq. Schwartz, Steinsapir, Dohrmann Schwartz, Steinsapir, Dohrmann Hadsell & Stormer, Inc.* & Sommers* & Sommers*

* organizations for identification only. 1 rz

ESTIMATED NUMBER OF FULL-TIME EQUIVALENTS (FTE's) THAT WOULD BE AFFECTED BY PROPOSED LIVING WAGE ORDINANCE (increases wages, benefits, or both)

Contractors Concessionaires Total

Council controlled 950 FTE's 900 FTE's 1850 FTE's(35%)

Proprietary Departments 850 FTE's 2600 FTE's 3450 FTE's(65%) Total 1800 FTE's(34%) 3500 FTE's(66%) 5300 FTE's

ESTIMATED LABOR COST OF PROPOSAL BY FISCAL YEAR

Council Proprietary FY 96-97 = $350,000 $350,000 FY 97-98 = $3.75 million $3.75 million FY 98-99 = $5 million $5 million FY 99-00 = $5.75 million $5.75 million FY 2000-06= $6.9 million $6.9 million FY 2006 + = $6.9 million $14.7 million

RECEIVED AR 1 7 INTERDEPARTMENTAL CORRESPONDENCE

DATE: February 12, 1997

TO: Honorable Members of the Budget & Finance and Personnel Committees

FROM: Ronald F. Deaton Chief Legislative Analyst

Keith Comrie City Administrative Officer

C.F. NO.: 96-1111-S1

SUBJECT: ANALYSIS OF THE UCLA FAIR HOUSING INSTITUTE STUDY OF THE PROPOSED LIVING WAGE ORDINANCE

SUMMARY

As requested at a joint meeting of the Budget & Finance and Personnel Committees on January 21,1997, a joint CLA/CAO report is submitted summarizing the latest version of the proposed Living Wage ordinance(LWO) and analyzing the UCLA study of this proposal that was commissioned by the City.

Based on our review, we find UCLA's data and study methodology to be sound and their estimates reasonable. On further analysis, we found that 68% ($14.7 million) of the $21.6 million projected costs of the proposed LWO would involve contracts and concessions in the proprietary departments (see Attachment 1), especially at the Department of Airports. Those costs would not affect the City's general fund. In preliminary discussions, the executive director of the Department of Airports anticipated that all of the Department's increased costs resulting from this LWO would be passed on to the departments' contractors, concessionaires, and/or consumers of airport goods and services (e.g. food service customers, airlines, etc.).

With regard to the $6.9 million in anticipated cost of this proposed LWO on council- controlled departments, some of these costs may be passed on to non-general fund sources, such as concessionaires and their customers, or owners of nuisance properties. The increased cost of services for barricading or demolishing nuisance buildings, or for fire-related brush clearance would be assessed against that property owner, in addition to an administrative charge. While the City has, historically, had a difficult time recouping these types of expenditures, the CLA has previously recommended that these assessments be placed on LA County's secured property tax rolls for collection along with

1 County property taxes. Given that the County has a 94% collection rate on all secured property tax bills, we anticipate that Council approval of this CLA recommendation would improve the City's cost recovery efforts.

With regard to the costs of the measure on concessions in Council-controlled departments, the chief administrative officers of the Convention Center and the Recreation & Parks Departments anticipate that most, if not all, of the $3.2 million increased cost of council-controlled concessions would also be passed onto the concessionaires and/or their consumers. As a result, about $3.3 million of the $6.9 million projected general fund impact may be paid from non-general fund sources, leaving an anticipated general fund impact of $3.6 million. If this estimate of $3.6 million proves correct and the City chooses to absorb it, it may require cuts in other City activities or an increase in City revenues. In the case where all $3.6 million is addressed through cuts, it is estimated that this would result in the elimination of 70 city jobs. It should be noted that the anticipated costs discussed in this report are the projected costs at full phase in, and will likely not impact the general fund in a single fiscal year due to the varying renewal dates for contracts.

Since the UCLA study did not find any "financial assistance recipients" to whom the proposed LWO would apply, we have no data on which to base an analysis of this provision of the proposed law. We do note that the latest version of the proposed LWO allows the Council to review on a case-by-case basis the situation of any company that would be receiving substantial City financial assistance at a level that would qualify that company under this ordinance. The proposed ordinance gives the Council the authority to exempt a financial-assistance recipient from this LWO if the company employs trainees or long-term unemployed individuals and claims that the LWO would cause economic hardship. Due to the lack of data, however, this report does not discuss the potential impact of the proposal on that group.

Long ago, policy makers in the City of Los Angeles decided that all City employees, including those we employ in so-called "low wage" occupations, should receive fair and reasonable wages and benefits for the services that they provide for the residents of Los Angeles. Subsequent policy makers have continued to uphold that commitment to fair and reasonable wages. Meanwhile, employees of independent contractors who would be affected by this proposal are essentially acting on behalf of City employees by providing City services that could otherwise be provided using City personnel.

The proposed Living Wage Ordinance affects only those employers who do business with or receive substantial financial assistance from the City of Los Angeles. The affected group comprises less than /12 of 1% of the City's total labor force. If this proposal were amended to affect all businesses in the City, it would give firms employing low-wage workers substantial incentive to relocate outside the City's borders, thereby harming workers living in the City, the City's economy, and lowering the general efficiency of the metropolitan economy. We would not recommend that the City put into place a City living or minimum wage that applies to all businesses. The proposed LWO pending before the

2 Joint Committee, however, does not propose a standard to be applied Citywide, instead only applying it to a limited universe of City-related employers.

Based on the scope of the proposed LWO, and the City's policy position to provide fair and reasonable wages for those who serve the City's residents, and our review of anticipated fiscal impact of this measure, we believe that it would be appropriate for the City Council to adopt this proposed LWO.

RECOMMENDATION

1. INSTRUCT the City Attorney to finalize the language in the January 21, 1997 version of the proposed Living Wage Ordinance and present that final ordinance to the City Council for approval.

2. INSTRUCT the Director of the Bureau of Contract Administration, Department of Public Works and the CAO to report to a joint meeting of the Budget & Finance and Personnel Committees within 30 days with recommendations on the funding and staffing that would be necessary to administer and enforce this ordinance.

3. FURTHER INSTRUCT the Director of the Bureau of Contract Administration in the Department of Public Works to promulgate and present to Council for consideration within 60 days proposed rules and regulations to implement this Living Wage Ordinance, including development of a reporting and evaluation mechanism to closely monitor the cost implications of this ordinance, any job-loss in the affected industries, the effect on the number and type of bidders for service contracts, and any other information that Bureau believes will be helpful in measuring the actual effect of the ordinance on City services.

BACKGROUND

Pending before the Personnel and Budget & Finance Committees is a proposed ordinance that would mandate, in its current form, a minimum salary of $7.25/hour (with benefits) or $8.50/hour (without benefits) for employees of City service contractors and concessionaires and employees of businesses that receive substantial financial assistance from the City (see Attachment 2). In an effort to project the anticipated effect of an earlier version of that proposed ordinance, the City on November 22, 1996 approved a Personnel Committee recommendation to commission a study of the proposed LWO by

3 the UCLA Fair Housing Institute ("UCLA study"). That study estimated that the total cost of the proposed LWO (November 27th version) would be $28-42 million. That study recommended certain revisions and modifications that the authors believed would reduce the anticipated cost of the LWO to $4.9 million beginning in the year 2000 (the first year of full phase-in), while targeting 100 contracts in industries that have a high concentration of "low wage workers" (identified by UCLA as janitorial and security services contracts). The UCLA study recommended the exclusion of all concession contracts and further recommended that the City make efforts to take full advantage of the Advance Earned Income Tax Credit (EITC).

During the Joint Committee meeting, the Chair of the Personnel Committee proposed a "compromise" version of the LWO ordinance, dated January 21, 1997 that included many of the recommendations from the UCLA study, including the EITC. That compromise ordinance is projected by the UCLA study to cost an estimated $21.6 million in 2006 (first year of full phase-in), provide 3,800 persons (3,100 FTE'S) with wage increases and improve the benefits of over 4,800 individuals (3,800 FTE's). Year 2006 is when the Airport Department concession contracts will be up for renewal.

Since that Joint Committee meeting, the CLA and CAO have worked closely with the UCLA study group to review the data and methodology used by UCLA to reach its conclusions. Based on that review, the CLA and CAO have determined that UCLA's methodology is sound and its overall estimates are reasonable. From our review of the UCLA study, we anticipate that the projected impact on the City's General Fund and the budgets of the respective proprietary departments will be much lower than the projected total cost of the proposed LWO because of the potential for pass-through of certain costs to non-City entities and/or individuals.

The City of Los Angeles has over 2,000 service and concession contracts with an estimated value of over $1 billion. The UCLA study group used a combination of stratified and random sampling to choose 650 companies with service contracts to be surveyed for specific worker-related information. Of the 650 companies that were selected in the sample, 310 responded to UCLA's request for specific written information. The estimated dollar value of these 310 contracts is $100 million. The CLA and CAO reviewed specific information on 120 of the 310 contracts. This group of 120 service contractors encompassed 80-90% of the employees identified by the 310 survey respondents as affected by the proposed LWO.

UCLA also determined that approximately 250 of the 1,000 City concessionaires would be covered by the proposed ordinance. The City provided UCLA researchers with wage data on many of those companies, and UCLA contacted those for which there was no data.

The UCLA study concludes that the latest version of the LWO could lead to the loss of approximately 1,000 jobs in sectors covered by the ordinance. In addition, the authors estimate that roughly three fourths of those 1,000 displaced workers would obtain

4 employment in sectors not covered by the ordinance. The UCLA study thus concludes that the LWO could lead to a net loss in City-wide employment of about 275. The study also reasons that the ordinance's effect on employment would be significantly lessened if the City absorbs the increased labor costs through higher contract budgets. Finally, the authors warn that to some extent, determining the amount of unemployment produced by the ordinance is "speculative" and very sensitive to a series of parameters for which data may not be complete.

The UCLA study explains that the number of workers left unemployed by the ordinance will vary according to three key parameters: 1) The sensitivity of labor demand and supply to wage changes -- "elasticity", 2)The City's ability and willingness to accept increases in contract costs, and 3)The ability of contractors and concessionaires to replace their work force with either machinery or more productive workers. In our view, the study makes appropriate use of current research and available data. The estimates' broad ranges, however, illustrate the difficulty of predicting employment losses resulting from the ordinance's implementation.

The UCLA study does not speculate on the ability of contractors and concessionaires to substitute machinery for their workforce. As the study notes, the extent to which employers are able to substitute technology for workers could affect the amount of unemployment produced by the LWO (even if the City absorbs cost increases). Though we suspect that many jobs which are contracted out could not be replaced with technology, we have no hard data on which to make a judgement on this issue. In addition, it should be noted that even if employers do not substitute technology for workers, the wage increase could attract more highly trained workers to these jobs and could thus displace current workers.

In our view, the most accurate model presented by UCLA is the one that anticipates most of the costs would be absorbed by the City or its concessionaires and would not result in service decreases. Service decreases would cause city service contractors to reduce their labor force and increase unemployment. Our review of the City's service contracts leads us to believe that, in most cases, the City would, in the long run, pay the increased cost of these services in order to maintain existing service levels. The City, for example, requires a certain level of security services for its various facilities and must meet this need -- even at additional cost. There may be cases where service contract cost increases for such services as tree-trimming may cause the City to reexamine its service needs, possibly resulting in reduced customer services. In most instances, that will not be the case and the City's relative inability to accept service reductions will soften the LWO's effect on employment levels and minimize job loss.

Concerns have been raised with regard to the direct impact this proposal would have on small businesses or minority-owned or women-owned businesses. The argument is that these types of businesses typically must pay a lower wage to their employees in order to compete for contracts with larger and/or more established businesses, and that the LWO

5 would decrease the likelihood that they could win a contract because of the ordinance's high wage requirements. Those making this argument believe that larger businesses have more opportunities to cut non-labor related costs through economies of scale or other savings across their remaining business enterprise-- business decisions that are not available to smaller businesses.

We agree that the proposed LWO would increase the minimum salary that City contractors must pay their employees. That is the intent of the ordinance. What we disagree with is the argument that this proposal would disproportionately affect small and/or minority/women-owned businesses. The ordinance defines small businesses as those with fewer than 5 employees for any 20 week period. We do not believe that city departments have any service contracts with small businesses, as defined, since it is unlikely that typical "small businesses" would be in the position to submit a response to an RFP for contracts of the size and scope targeted by this proposal (service contracts of $25,000 or more with a term of at least 3 months). Nor do we have data on which to validate or refute the argument that small businesses typically pay their employees less than larger businesses. We cannot conclude, therefore, that the proposed ordinance would in fact reduce the competitiveness of small businesses or minority/women-owned businesses. This issue should, however, be monitored closely if the City chooses to implement this proposed ordinance.

One of the most promising recommendations in the UCLA study is the proposal to increase employers' and low-wage workers' use of the federal Earned Income Tax Credit. That program, which has been in place since the late 1970's, is consistent with the goals of this proposed LWO. UCLA recommends that the City embark on a public-awareness campaign in an effort to increase utilization of this EITC, especially the option to increase eligible employees' take home pay throughout the year through the Advance EITC mechanism. The CLA and CAO support this proposal and recommend that the Council direct the General Manager of the Community Development Department to develop such a public-awareness program and report to the Council. Following implementation of such a program, the City can determine its effectiveness using the federal government's data on EITC utilization.

Administration

The CLA and CAO recommend that, should the City choose to implement this measure, the responsibility for administering and enforcing this program be assigned to the Office of Contract Compliance in the Bureau of Contract Administration, Department of Public Works. That Office was previously assigned responsibility for administering a related measure, the Service Contract Worker Retention Act. We have included recommendations directing this Bureau to report on the staffing and funding required for administration and enforcement of this ordinance. We also recommend that the Bureau be instructed to prepare and present proposed regulations on the ordinance.

6 Other Cities' Experiences

The CLA and CAO surveyed via telephone key staff in the cities of New York, Chicago Baltimore, St. Paul, and San Jose to attempt to determine the impact of existing "living wage ordinances" in those cities. The following is brief information on each of those cities.

Baltimore, Maryland

The City of Baltimore enacted Baltimore City Ordinance 442 on December 13, 1994. That measure directed that all City service contractors pay their employees a "prevailing minimum hourly wage rate" established by their Board of Estimates. The ordinance set a minimum wage rate of $6.10/hour in FY 1996, and that rate increased to $6.60/hour beginning January 1, 1997, and $7.10 beginning July 1, 1997. The ordinance sets an ultimate goal of $7.70/hour by the year 1999.

The Director of the Baltimore Wage Commission, who is in charge of administering this ordinance, notes that the ordinance applies only to those contracts that the City's Chief Purchasing Agent designates as "service contracts." Currently, the Chief Purchasing Agent has designated that the ordinance is applicable to food, maintenance & repair, janitorial, and school bus service contracts. The Director believes that the study of its ordinance by the Preamble Center for Public Policy is accurate with regard to year one data. Testimony on this study was provided at the last Joint Committee meeting.

Baltimore's Chief Purchasing Agent notes, however, that the 1997 increases in the City's living wage to $7.10/hour were a major cause in a significant increase in the most recent bids received for custodial services at 9 schools. The bids on those 5-year contracts came in $30,000-$40,000 per school higher than the previous 5-year contracts. This equates roughly to a $2.7 million increase in $9 million worth of contracts. There were no material changes in the job specifications between the two time periods. While some of these increased costs can be attributed to cost-of-living increases, the City's Chief Purchasing Agent determined that most of the cost increase can be attributed directly to the wage requirements of the city's living wage ordinance. The funding agency for these services (the US Department of Education) has declined to pay the increased cost. The City, meanwhile, is planning to rebid those contracts and is currently reviewing the bid specifications to determine how to reduce the cost of each contract by reducing personnel or service requirements.

St. Paul, Minnesota

The City of St. Paul enacted a resolution on January 2, 1997 requiring certain City economic development projects intended to create or retain jobs to pay their employees a living wage at 110% of the poverty level ($8.25/hour). This also applies to programs funded by the City's redevelopment agency. The resolution also has a provision

7 requiring that 60% of new jobs be held by City residents.

St. Paul's living wage resolution has only been in effect for a short time, so the City cannot measure its impact. No studies were conducted prior to its enactment to attempt to project its impact.

New York City

The City of New York's living wage law became effective on October 11, 1996, and covers employees under cleaning and security services contracts. The second phase of this law, which will take effect in May 1997, will apply to temporary clerical workers and food services employees. The City estimates that this law affects 3,000 employees. Employees of concessionaires are not covered.

The New York law does not specify a wage level, instead requiring the Comptroller to survey the market for each affected industry and set a "prevailing wage" for those contracts.

Prior to the law's enactment, the City Council's analyst estimated that the law would affect contracts with an estimated value of $51 million and would increase City contractual costs by $15 million. No impact studies have been conducted since the enactment of this law.

San Jose, California

The City of San Jose does not have a living wage law. Instead, the City has the San Jose First Employment Program, which is a voluntary program in which the City provides information on available hiring incentives and assists businesses to locate qualified employees from low income neighborhoods experiencing high unemployment. This program does not, however, specify minimum wage or benefit levels.

Chicago, Illinois

The City of Chicago does not have a living wage law. In May 1995, a group called the Chicago Jobs & Living Wage Campaign proposed such a law to the Chicago City Council, and received preliminary support from a majority of the Council members. An economic impact study of the proposal was subsequently released, causing support for the measure to decrease. As of now, there are no plans to reintroduce this proposal.

CONCLUSION

By commissioning a study from an outside agency, the City of Los Angeles has gone further in data collection than any other City that has enacted a living wage-type law. The results of that study provide valuable insight into the City's current contractual and concessions arrangements. The results of that study, we believe, are valid because they

8 are based on data collected directly from City contractors who are currently engaged in the affected services. While there is no absolute guarantee that these projections will hold 100%, we believe that the basic analysis conducted in this study coupled with UCLA's reliance on prevailing economic theory to fill in the data gaps results in conclusions and recommendations that are valid and practical.

Attachments (2)

9 Attachment 1 FISCAL IMPACT OF THE PROPOSED LIVING WAGE ORDINANCE (based on the January 21, 1997 version)

Contracts Concessions

Issue Council controlled Proprietary Council controlled Proprietary Totals departments departments departments departments

Require wage of $1.3 million $1.8 million $1 million $4.1 million $8.2 million $7.25/hour if provide benefits

Require payment $2.2 million $2 million $2.1 million $6 million $12.3 million for health benefits at $1.25/hour or wage of $8.50/hour

Mandate 12 paid $0.2 million $0.3 million $0.1 million $0.5 million $1.1 million days off

Totals $3.7 million $4.1 million $3.2 million $10.6 million $21.6 million

Estimated total labor cost of proposal Council Proprietary FY 96-97 = $350,000 $350,000 FY 97-98 = $3.75 million $3.75 million FY 98-99 = $5 million $5 million FY 99-00 = $5.75 million $5.75 million FY 2000-06= $6.9 million $6.9 million FY 2006 + = $6.9 million $14.7 million Persons affected: 3,800 persons (3,100 FTE's) to receive a wage increase 4,800 persons (3,800 FTE's) to receive improved benefits

10 Attachment 2

LIVING WAGE ORDINANCE FACT SHEET based on January 21, 1997 draft

Origin: Motion (Goldberg-Hernandez), CF#96-1111-S1 requesting preparation of this ordinance. Motion adopted by Council 7/3/96

Components: The January 21, 1997 draft of the proposed LWO would make certain employees eligible for:

• 12 paid days off for use as holidays, vacation, or sick time and 10 unpaid days off for use in cases of employee or family illness. • a salary of $7.25/ hour for those employees that receive health benefits and $8.50/hour for those who don't. • at least $1.25/hour paid by the employer towards the employees health benefits.

Applicability : The proposed LWO would be prospective only, and would apply to employees of:

• any contractor who is awarded a contract by any City department to provide services for the City where the contract is greater than $25,000 and has a term of at least three months (applicable to contracts of proprietary departments when the governing board adopts the policy). "Services" include, but are not limited to, parking attendants, food services, janitors, security guards, nonprofessional health care employees, gardeners, and clerical employees. • any person or company that receives from the City more than - $100,000 in "discrete financial assistance" in any 12 month period, or - $1 million in one-time financial assistance (requires compliance for 5 yrs.) City staff assistance will not be regarded as financial assistance. • grant funded programs only when the funding agency approves in writing. • non-profit corporations whose chief executive officer earns a salary of more than eight times the salary of the corporation's lowest paid worker.

Exclusions: The current draft Living Wage Policy will not apply to: • the Community Redevelopment Agency of the City of Los Angeles. • the Community Development Bank • contracts for the purchase of goods or property. • loans, except forgiveness of loans when the value of the forgiveness exceed the thresholds noted above. • leases or subleases unless the tenant is deemed to be providing its services on behalf of the City (e.g. concessionaire employees are acting as substitutes for City employees) • companies that negotiate lower wages or benefits or fewer holidays through collective bargaining. • financial assistance recipients that are small businesses, first-year businesses or businesses that obtain a waiver because of anticipated financial hardship.

11 National Lawyers Guild Economic Rights Task Force

MEMORANDUM

February 18, 1997

TO: HONORABLE MEMBERS OF THE BUDGET AND FINANCE COMMITTEE AND PERSONNEL COMMITTEE OF THE LOS ANGELES CITY COUNCIL

FROM: MARGO A. FEINBERG, ESQ. AND ERIKA A. ZUCKER, ESQ., SCHWARTZ, STEINSAPIR, DOHRMANN & SOMMERS

SUBJECT: APPLICATION OF PROPOSED LIVING WAGE ORDINANCE TO INDEPENDENT CITY DEPARTMENTS

As you are aware, an issue has arisen as to whether the City Council has the legal authority to adopt a living wage ordinance (hereinafter "LWO") that is applicable to the independent/proprietary departments of the City. Although, as of the time of this writing we have seen no written opinion from the City Attorney's office answering this question directly, we have prepared the following memo in anticipation of concerns raised by Senior Deputy City Attorney Fred Merkin.

First and foremost, it should be noted that nothing in the Charter specifically exempts the independent/proprietary departments from general City legislation regarding standards to be adhered to by City contractors.

We have requested and reviewed all previous memos from the City

Attorney's office that bear on the City Council's authority over independent/proprietary departments. There were six opinions in total. All of the opinions, with the exception of the opinion written with respect to the Worker

Retention Ordinance, were written prior to 1991 and rely on a patchwork analysis of To: Honorable Members of the Budget and Finance Committee and Personnel Committee of the Los Angeles City Council February 18, 1997 Page 2

Charter language granting the departments certain powers. In 1991, however, the

Charter was amended to give the Council considerable authority over

independent/proprietary departments of the City. We therefore believe that any

analysis that predates this Charter change is no longer applicable. (We should note

that we differ with the analysis in these memos as well, but that critique need not be

addressed herein.)

The Charter was amended in 1991 to add Section 32.3 which specifically

provides for Council review of actions of the independent Commissions. The

section is extremely broad. The section is not limited to only real property contracts,

or even to contracts. It applies to "actions" of commissions and boards. The

introductory clause of Section 32.3 states that its provisions apply, "Notwithstanding

any other provision of this Charter. . . ." Section 32.3 thus allows the Council to

take jurisdiction of any such "action." Under the broad language of Section 32.3,

even requests by the departments for proposals could be subject to Council review.

Clearly, if the Council now has the power to review each and every action taken by

an independent department or commission, the Council may adopt an ordinance imposing conditions on the departments and commissions. The latter is merely shortening the process which could be undertaken under Section 32.3.

"If the Council asserts such jurisdiction over the action, it shall have the same authority to act on the matter as that originally held by the board or commission. . . ." (Sec. 32.3) With this section, the Council has the power not only To: Honorable Members of the Budget and Finance Committee and Personnel Committee of the Los Angeles City Council February 18, 1997 Page 3

to approve or disapprove of the actions taken by independent departments or

commissions, but to amend or modify them. The Council could, therefore, review

each action taken by the boards or commissions involving payment of workers to

assure that the actions comply with the LWO. Since such Council action is

permissible, it defies logic that the Council would not be able to make a living wage ordinance applicable to all city departments and commissions.

Moreover, the Council's jurisdiction under Section 32.3 is plenary: the

Council may "bring such commission or board action before it for consideration and for whatever action, if any, it deems appropriate. . . If the Council asserts such jurisdiction over the action, it shall have the same authority to act on the matter as that originally held by the board or commission. . ." If the Council takes jurisdiction, it completely supplants the agency involved. In sum, since the addition of Section 32.3, none of the independent departments are as "independent" as they once were.

Moreover, the LWO does not restrict or regulate to whom the departments may contract; it merely sets a floor amount which such contractors must pay their workers. All the proposed ordinance provides is that any contractor selected by the department must comply with the LWO with regard to compensation and working conditions. For purposes of competitive bidding, all potential contractors are thus equal -- each prospective contractor must present a bid which allows for compensation of workers within the requirements of the LWO. In contrast with To: Honorable Members of the Budget and Finance Committee and Personnel Committee of the Los Angeles City Council February 18, 1997 Page 4

prior restrictions on contracting -- such as LAAC Section 10.34.1(b) which prohibited

contracting with firms participating in the Arab boycott of Israel -- the LWO allows

the departments to contract with anyone, without regard to their policies or

practices, as long as the contractor complies with the LWO once it has secured the contract.

For the foregoing reasons, it is highly unlikely that any legal challenge to a proposed Living Wage Ordinance would succeed on the grounds that it deprives the independent departments of any "independent" powers they may enjoy under the

City Charter.

The City Attorney, raised this same concern about the Worker Retention

Ordinance. The City Council, as it has often done, adopted the Ordinance despite the City Attorney's opinion. To date there has been no legal challenge raised to that

Ordinance and there is no reason to believe that there will be to the LWO. We believe there is no significant liability to the City if it adopts the language as proposed applying the Ordinance to the independent/proprietary departments of the City. We are further informed that the City Attorney's office shares that view.

In conclusion the City Council has the power to disapprove any contract, or indeed, any action of any sort by the departments. In fact, the Council has the authority to settle any litigation against any of the departments. It would be an absurd result to find that the Council has the authority to review each and every contract and to apply a standard for rejecting a contract, but does not have the power To: Honorable Members of the Budget and Finance Committee and Personnel Committee of the Los Angeles City Council February 18, 1997 Page 5 to issue general standards by which the contracts can be let. If such a position were maintained, it would require the City Council to assert its power in the least efficient and least expeditious manner, and yet arrive with the same outcome. Such an argument puts form over substance and is not legally sound. It is a well-established principle of statutory interpretation that a statute --in this case the Charter -- should be given a reasonable and common-sense interpretation consistent with the apparent purpose which will result in wise policy rather than mischief or absurdity.

We therefore hope that the Council will assert its authority under the Charter and adopt the Ordinance as currently proposed. e•t-&_

Carlos-- City Contracted Security, LAX Has wife and two daughters. Lives in 2 bedroom apartment with brother, sister-in-law and their 3 children.

Monthly Income

Earned Income— Net monthly income at $4.75/hr., full-time $674.12

Public Assistance*_ Medi-Cal for wife and 2 daughters. ATP (Ability to Pay— County program) helps with (only Carlos') medical costs. WIC food for newborn.

Community-based Assistance— House of Yahweh: 147th Street (weekly ration) 2 quarts milk, 6 loaves bread, 3 tomatoes, 1 ear corn, 2 heads lettuce, green onions, 8 sticks celery, 2 lemons, 6 turnips, 3 chiles, 3 bags chips, 1 rice crispy treat. 8-10 cans of food monthly.

St. Margaret's Center: (Hawthorne Blvd in Lennox) beans, flour, rice, canned foods, macaroni.

St. John's Episcopal Church: (Adams & Figueroa) beans, pasta, bread, sweet bread, sugar, canned items.

Monthly Expenses Rent $350( /12 of shared 2 bedroom apartment). Groceries Cannot afford. Gets food through WIC and 3 separate church food programs weekly. Utilities $135 Clothing/diapers $60 Transportation $42 MTA monthly pass, $12 family transport. Medicine/health Medi-Cal, ATP. Personal care $30 Household items (credit) $90 TOTAL EXPENSES $719

Monthly Balance $(-44.88)

* Carlos' family also qualifies for AFDC and food stamps, but he chooses not to get them. • A DOUBLING of the annual city deficit -- and a huge decrease in city funding available for police and other vital services.

• A reduction in competitive bidding for city contracts (only businesses that pay higher wages will be able to bid for contracts).

Great harm to small, women and minority owned businesses _that contract with the_ city (they'll be least able to bear higher labor costs). - * Creation of a huge( intrusive city "compliance" bureau empowered to audit the books of private businesses that contract with the city.

If this ordinance is approved, it won't be long before it is expanded to ALL companies in the city -- regardless of whether they do business with the city.

Despite overwhelming evidence that the ordinance will DOUBLE the underlying city deficit, a slim majority of the city council appears ready to approve the Wage Control Ordinance. Our coalition is working to defeat this ordinance. We CAN defeat it. But not without your immediate and active support and assistance. To get involved, call the coalition at (888) JOBS-4-LA. PLEASE CALL TODAY!

While our rapidly expanding coalition (see attached list) HAS made significant progress in reducing council support for the Wage Control Ordinance, our time is running short.

Please help us by getting involved today.

Sincerely,

Matt Bartosiak Senior Consultant, The Employers Group Member, Coalition to Keep LA Working CITY OF '.0S ANGELES SPEAKER CP -1r)

Date Council File No., Agenda Item, or Case No.

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Date Council File No., Agenda Item, or Case No. 11 /

I wish to speak before the iil _ersoviyve, i34-F C.iona-CA--€-‘2- (-C-e--P,-vi A__,1 PNa.meV of City Agency, De ar/tment, Committee or Council

Do you wish to provide general public comment, or to speak for or against a proposal on the agenda? For proposal ( ) Against proposal Name: ark ( ( ) General comments

Business or Organization Affiliation: KiC9T /4-1<

Address: S. 5pr/i4 (51- 6'71 -#/' (-14/ /00/ Street City State Zip Business phone: Representing:

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Client Name: Phone #:

Client Address: Street City State JAN 2 1 1997

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Date Council File No., Agenda Item, or Case No. 04147

I wish to speak before the AZI/rtet— 4,1" (7, I 0".".11 /1",rh-e#Lied Name of City Agency, epartment, Committee or Council

Do you wish to provide general public comment, or to speak for or against a proposal on the agenda?( VrFor proposal ( ) Against proposal Name: Eilyvi g or) c,i ( ) General comments

Business or Organization Affiliation: tin RIverS ;de.

Address: q Street City 614-tate Zip Business phone: 1909,____111 -9S73 Representing: efd\-41-e--elfr

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Client Name: Phone #:

Client Address: Street City State

Please see reverse of card for important information and submit this entire card to the presiding officer cDEPlatigon. CITY Of '..OS ANGELES SPEAKER Cl

Date Council File No., Agenda Item, or Case No. cY'

,e.:6:7 &Ie. 4_, A-1--,45) i1i ' i-c- , r7c,CA—/ / 47--1-) 4 .n.,- vi, .4-c.-%,... I wish to speak before the Name of City Agency, Department, Committee or Council

Do you wish etcte vide general public comment, or to speak for or against a proposal on the agenda? ( )For proposal ( ) Against proposal , -. 1)1 Name: /404.1 ( ) General comments z, Business or Organization Affiliation: &4 6- //elY" )41, 1/•—•9 YS -C) j, ..e., V ir-r_ f2_ 5' ,r..,1 ? Address: t A- Street City State Zip Business phone: Representing:

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Client Name: Phone #:

Client Address: Street City State 997

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Date Council File No., Agenda Item, or Case No. OJS ocvA7

I wish to speak before the y n OtAQ.C— co\ /C A& 4LLA 41111 IL Name of City Agency, Department, Com ee or Council

Do you wish to provide general public comment, or to speak for or against a proposal on the agenda? For proposal ) Against proposal Name: 0 r Z. 72_ ( ) General comments

Business or Organization Affiliation: U N.) TE 6)(C1,ONN CrC Oee r\ dos 46-16i 46(70)-

Address: aoci E 14 -r `) IS►S Street LgtSy (44\-a Cltate\-- 61'Zip° Business phone: \3)a -31— to Sao Representing: k...) Gitc(YVA/14-4 VOsNiVi13

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Client Name: Phone #:

Client Address: Street City State AA 2 1 1997

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Council File No., Agenda Item, or Case No., •

I wish to speak before the 1()/ /1 [Du - nut e_ (Id rso v\vv,11.1,-,0 Name of City Ag6ncy, Department, Committee or Council

Do you wish to provide general public comment, or to speak for or against a proposal on the agenda? ( ) For proposal gainst proposal Name: M 074 693ti Oadc az_ ) General comments

Business or Organization Affiliation: Ce ) Address: m $p Street City State Zip Business phone: Representing:

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Client Name: Phone #:

Client Address: Street City State JAN Z41991. Please see reverse of card for im ortant information and submit this entire card to the esidin• off, r erson. CITY 0- LOS ANGELES SPEAKER C'

Date / Council File No., Agenda Item, or Case No. 7

I wish to speak before the findo-6-14" /2, Name of City Agency, Department, Committee or Council

Do you( wish t9 7 provide general public comment, or to speak for or against a proposal on the agenda? ( )For proposal ( ) Against proposal Name: ri/ 1 it- e._,/ 4- (410-0--• ( ) General comments Pri.vA-/q tf://fr'fi&t-it-1 141, Business or Organization Affiliation: Z. c76,0- / 2 Address: .?,10 QC c, • &•4 Street City State Zip Business phone: Representing:

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Client Name: Phone #:

Client Address: Street City State JAN 2 1 1997

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Date Council File No., Agenda Item, or Case No. •:r•-• 1

I wish to speak before the \ V. (c. 't, r\a. I Cc vv‘ e\-A . Mame of City Agency, Department, Committee or Council

Do you wish to provide general public comment, or to speak for or against a proposal on the agenda? (14 'or proposal -----, ', ()Against proposal Name: tA1-1A - Pe- -t o ---tc.. I v.\v. --7-vc.-- ,i ( ) General comments NA)0":-.1 (t• &-...,:kA - I gal- Business or Organization Affiliation:.-C-:(,\AA.,,,,Nv-t- 7-1:6"Nemr Arv-Atny•

Address: LS,- 4)() LAAV1- 4__ ‘-SS) CA- c-iccq-8 Street City State . Zip Business phone: Representing: (. -k Lied, t-k,eky 1Ce4talOett (_) CHECK HERE IF YOU ARE A PAID SPEAKER AND PROVIDE CLIENT INFORMATION BELOW:

Client Name: Phone #:

Client Address: Street City State 4,p2 I 7

Please see reverse of card for important information and submit this entire card to the presiding officeraEagYrson. MY 7 LOS ANGELES SPEAKER - \RD

Date Council File No., Agenda Item, or Case e la;

I wish to speak before the eeveis e Cdlorwt, //cc Name of City Agency, Department, Committee or Council

Do you wish to provide general public comment, or to speak for or against a proposal on the agenda? ( ) For proposal ('Against proposal Name: 49-te-t4-4 ?/e6. ( ) General comments

Business or Organization Affiliation: Ch eatTA Le A.ifo 4,6'.s"Ai Address: Jy....ts-44 /.14 elto e4. 0.2230 Los 4.tfeks 9eNdo Street City • State Zip Business phone: A/43-3 -/O Representing: 6i4 jece-57—Ae‘otrsh,

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Client Name: Phone #:

Client Address: Street City State Zip

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