Council Gives Nod to Municipal Living Wage; Approves Budget

By Blair Clarkson
Staff Writer

June 17 -- The controversial issue of a living wage for municipal employees took center stage at Tuesday's City Council meeting, overshadowing the adoption of the City's "constrained but optimistic" $377 million budget.

Following a spirited debate over the merits of the contentious $11.50 hourly wage, the divided Council narrowly voted by a 4 to 3 margin to have staff review the financial impact and return with the necessary paperwork as soon as possible for approval.

"It's the biggest issue that confronts us," said Mayor Pro Tem Kevin McKeown. "I believe the argument for the (living wage) is compelling."

Joined by Mayor Richard Bloom and Council members Michael Feinstein and Ken Genser in support of the motion, McKeown maintained that taxpayer money would end up in these employee's pockets one way or another, either from a living wage or through the subsidized food stamp programs they are forced to rely on.

"Let's have it go there through wages in a way that has some dignity and transparency," McKeown said, "so it's not a hidden subsidy as it happens now."

If approved, funding for the living wage would come from a "budgetary shift" of the $300,000 currently set aside in the budget to pay for the benefits of as-needed employees.

Council member Herb Katz voiced the strongest opposition to the amendment, arguing that a living wage for City workers and contractors left the private sector out in the cold.

"All people need a living wage," he said. "All we're doing here is favoring one entity, which affects all of us in the private sector. That makes little or no sense to me."

Before adopting the proposed budget, the Council also voted unanimously to dole out the bulk of its one-time contingency funds to select city programs, including $50,000 to the Historical Society Museum, $11,000 to the Symphony, $10,000 for Legal Aid's Domestic Violence Clinic and $1,000 to the League of Women Voters' Smart Voter program.

After hearing pleas for funding from various symphony and Historical Society members, City Manager Susan McCarthy warned the Council about granting such one-time gifts to groups that come asking for it again and again.

"One of the ways that we get in trouble with organizations who have come to depend on us is when it's necessary to make reductions and we offer one-time funds," she cautioned. "The next time around you'll be accused of cutting the budget. You'll see it again and again."

According to City officials, the newly adopted 2004/05 budget -- down $5 million from last year -- will close the City's lingering $4 million General Fund shortfall through selective staffing reorganization and hiring freezes (without layoffs), new and higher fees for certain community services and an increased Transient Occupancy Tax (bed tax).

The budget also provides $6 million in funding to the school district per an agreement struck between City and School officials last month and a $4.2 million cushion to protect against State revenue uncertainties.

"It's not the budget that any of us would wish for," McCarthy told the Council. "Many compromises were made along the way. But it's an equitable budget that meets most of your objectives, it serves community needs and it preserves the financial flexibility that we need as we move forward with cautious optimism."

In its effort to bridge the remaining budget gap, the City hopes to earn $1.4 million in new revenue from increased recreation and service fees for area parks, field permits and youth camps, higher taxi decal fees, new charges for advanced life support and ambulance services and a new fee for consultants to use the City's traffic database.

Additionally, the proposed bed tax hike from 12 to 14 percent -- which would be placed on the ballot for voter approval in November -- could bring in up to $1.6 million in 2004/05 and $3.5 million in 05/06, according to officials.

The Council unanimously passed these budget resolutions without discussion.

Yet while adopting the budget was foremost on the Council's agenda, the night belonged to the living wage.

Many of the 30-odd members of the public who addressed the Council on Tuesday spoke out in favor of a new wage, arguing that it was needed to lift the City's working poor above the poverty line.

"This is a wage that will allow a family to live without depending on government funded assistance," said resident Bruria Finkel. "Working poverty is a huge problem in Los Angeles County. Our City must take a stand by establishing a standard that is realistic and reflects the economic realities in our community."

"It is vitally important," agreed Sonya Sultan. "Eleven fifty is not an arbitrary figure. It was based on recent calculations of the minimum amount needed to raise a family of four above poverty level food stamp eligibility."

The Council debate that followed was not as unanimous.

Although he generally agreed with Katz's case for an across-the-board living wage policy, Genser drew a sharp distinction between the public and private sectors and pushed the City's responsibility to set the pace.

"Government often is a leader in establishing benefits and worker's rights," he said. "We're different from the private sector. We're not here to make profit; we're here to do what's best for the community. When employees are paid adequately, it's to the benefit of the community as a whole."

Council member Pam O'Connor's argued against the living wage amendment, disagreeing with the amount.

"My concern is that the floor will be set too high," she said. The cities of Los Angeles and West Hollywood pay a lower $10.03 living wage.

In its instruction to staff to return with a living wage resolution, the slim Council majority did not mandate the $11.50 hourly rate, leaving open the possibility of a lower wage floor. When staff returns with a possible resolution, the Council will hold a public forum to hear comments from the greater community.

Following the Council vote, a visibly disgusted Katz continued to rail against the decision.

"What we're doing is selective," he said. "Either we have a living wage across the board for everybody, or we don't. And I'm not going to support something that's piecemeal.

"This is the most inconsistent thing I've ever seen."