HomeMy WebLinkAboutAgenda - 05-26-1998 - 10c:1 . , ,
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
MEETING DATE: May 19, 1998
REFRU n TO MAY 26, 19 QUAj=RLy pIIByIG 88ARIM Action Agenda
SUBJECT: Living Wage Ordinance Item # /0-9,
DEPARTMENT: PUBLIC HEARING: Yes No
Purchasing & Central Services BUDGET AMENDMENT NEEDED: Yes—No.
Economic Development Commission
ATTACHMENT(S): INFORMATION CONTACT:
Proposed Living Wage Ordinance Greg Payne (ext. 2327)
Day Care Survey Summary Pam Jones (ext. 2652)
Non - Profit Survey Summary Albert Kittrell (ext. 2300)
TELEPHONE NUMBERS:
Hillsborough - 732 -8181
Durham - 699 -7331
Mebane - (336) 227 -2031
Chapel Hill - 967 - 9251/968 -4501
Purpose:
To receive further information regarding a proposed Living Wage Ordinance for Orange County,
which establishes a minimum wage level for certain firms doing business with County
government.
Background:
In May, 1997, the BOCC received a report detailing the history of living wage ordinances across
the country. In the Fall of 1997, the BOCC defined which issues and situations should be
covered in a Living Wage Ordinance for Orange County and directed the County Attorney to
draft an ordinance.
The attached Living Wage Ordinance proposal establishes a minimum wage of $8 per hour for
employees of certain service and construction firms contracting to do business with the County;
and for employees of firms receiving loans or grants through the Orange County Small Business
Loan Pool or any economic development program.
Update:
Public Hearing: A public hearing on this matter was held on February 23, 1998. Some citizens
spoke in favor of the proposal, while others expressed concern about the possible impact of the
Ordinance on day care providers.
Key Issues:
Contracts Which Would Be Affected: Currently, a few businesses have annual contracts over
$25,000 with Orange County. These include accounting firms and law firms, as well as the day
care providers mentioned below. In the future, other types of contracts - such as for painting,
mowing, and care of grounds - could also be affected by the Ordinance.
Day Care Provider Impact: A survey of day care providers currently having annual contracts of
$25,000 or more with the County was undertaken. Nineteen (19) day care providers responded,
indicating that a total additional annual cost of approximately $327,000 would be needed to bring
all their employees up to $8 per hour. For these 19 day care providers, 65 full -time and 78 part-
time employees now earn less than $8 per hour. Four (4) providers have not responded to the
survey. A survey summary is attached.
Non - Profit Impact: Earlier, a survey of non - profit firms doing business with the County was
completed. The 27 non - profits estimated a total annual impact of $74,500 to bring 29 full -time
and 28 part-time employees up to $8 per hour. A survey summary is attached. As the Living
Wage Ordinance is currently written, non - profits will not be affected.
Future Increases in Living _Wage Level: As written, the Ordinance will not automatically raise or
lower the Living Wage annually (based on the CPI or other index). The BOCC would need to
re- examine the wage level on a periodic basis.
Impact on Loan Pool Recipients: Some bank representatives involved in funding the Orange
County Small Business Loan Pool are concerned about the ability of very small businesses to pay
all employees the Living Wage. Discussions are ongoing between the bank representatives and
county officials. Until this matter is resolved, it may be advisable to exempt Loan Pool
recipients from the Living Wage Ordinance. They could be included in the Ordinance at a later
date.
Administration: Orange County staff will be involved in administration of the Ordinance,
primarily in these ways:
* Informing contractors and their employees of the Ordinance's provisions
* Gathering information regarding compliance
* Verifying (auditing, conducting spot checks for) compliance
* Pursuing remedies against non - compliant contractors
County staff in Purchasing/Central Services and Finance would be involved to the greatest
extent. At this time, it is believed that administration could be accomplished without additional
staff.
Recommendation:
After the Board has had an opportunity to review the information, the Manager recommends
pursuing one or more of the following options in lieu of adopting an ordinance:
1 . By approval of amendments to the Orange County Personnel Ordinance, the Board
establishes a living wage for employees of Orange County as County policy and shall
reflect the same through the salary schedule and pay plan which it may adopt as part of
the annual budget process; and
2. The Board may adopt a public policy that strongly encourages vendors with whom the
County contracts for services to pay their employees a living wage, which is currently
defined to be $8 per hour; and direct the Manager and the Director of Purchasing and
Central Services to ensure that language to this effect is incorporated into request for
proposals for service contracts which the County may consider; and
3. The Board may wish to consider steps as appropriate to address the living wage in
specific areas, such as child care providers, by endorsing statewide initiatves to elevate
these issues for approrpirate state -wide legislation or action.
LAW OFFICES
COLEMAN, GLEDHILL & HA.RGRAVE
A PROFESSIONAL CORPORATION
129 E TRYON STREET
P. O. DRAWER 1529
H&LSHOR000H. NORTH CAROLINA 27278
919- 732 -2196
FAX 919- 732.7997
Mr. Ted Abernathy
Director
Orange County Economic
Development Commission
Post Office Box 1177
February 9, 1998
Hillsborough, North Carolina 27278
RE: Orange County Living Wage ordinance
Dear Ted:
FROM THE DESK OF
GEOFFREY E. GLFDHILL.
Enclosed is a draft Living Wage Ordinance for consideration
by the Orange County Board of Commissioners following the public
hearing to be held on February 23, 1998. There are a couple of
things about this ordinance that are worth mentioning at this
time.
1. The December 1, 1997 Board of Commissioners meeting
agenda materials included a staff recommendation to include
construction contracts in the Living Wage Ordinance. For that
reason, I have included them in this ordinance. However, any
construction contract subject to federal or State bidding
requirements and particularly the lowest responsible bid
requirement of North Carolina law are going to, in my opinion,
escape coverage under this ordinance. This is so because the
State law has "preempted" the field with respect to contracts
covered by the public bidding laws. Any local requirement which
requires the County to award a construction contract to someone
who is not the lowest responsible bidder will not survive a legal
challenge.
2. I have borrowed generously from the remedies provision
of the Liveable Wage Ordinance recently adopted by the City of
Durham. With respect to administration and remedies, it is the
most comprehensive of the ordinances that I reviewed. It also
demonstrates_ the degree of County administration that will be
necessary to enforce a living wage ordinance.
3. I have not ad,
ordinance. Maintaining
rate to correspond with
administrative matter.
matter for the County's
Classification Plan.
dressed Orange County employees in this
the lowest Orange County employee wage
the Orange County Living Wage is an
The lowest Orange County wage rate is a
Personnel Ordinance and the Pay
3a
Mr. Ted Abernathy
Page 2
February 9, 1998
4. I have not included an automatic living wage escalator,
but have rather provided for periodic review and change in the
Living Wage by ordinance amendment following a public hearing.
Although it is attractive to include automatic escalators because
of their ease of administration, there are other considerations
that suggest a different approach. One of those is the
"education" benefit that flows from the public hearing process.
Another is ensuring that any escalator makes sense in Orange
County's economic environment. A third is ensuring that any
living wage change is incorporated into Orange County's Pay
Classification Plan.
S. I have put this ordinance in "Code" format because
Orange County will likely have an ordinance code by July 1, 1998.
I am available to answer any questions you may have.
Very truly yours,
GEG /lsg
Enclosure
xc: Margaret Brown
Moses Carey, Jr.
Bill Crowther
Alice Gordon
Stephen Halkiotis
Pam Jones
John M. Link, Jr.
lsg -11
abernat2.ltr
ILL & HARGRAVE, P.C.
edhi11
i
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AN ORDINANCE CONCERNING THE PAYMENT
OF A LIVING WAGE IN ORANGE COUNTY
WHEREAS, the federal minimum wage, as late as 1970, provided
a worker with annual earnings exceeding the federally defined
poverty level for a family of three; and
WHEREAS, the federal minimum wage has failed to keep up with
inflation and no longer provides a worker annual earnings
exceeding the federally defined poverty level for a family of
three; and
WHEREAS, it is beneficial to the health and welfare of the
citizens of Orange County to be paid a wage which enables them to
not live in poverty; and
WHEREAS, economic development in Orange County provides many
benefits for citizens of Orange County, one of which should be a
wage which enables all working people to not live in poverty; and
WHEREAS, this ordinance provides for a wage, consistent with
other programs operated by Orange County, to meet the employment,
economic development and housing needs of persons of low and
moderate income; and
WHEREAS, Orange County desires to use its authority to
procure services and to pursue economic development in a manner
that improves the health and welfare of the citizens of the
County; and
WHEREAS, it is the purpose of this ordinance to provide for
a living hourly wage rate for workers employed by persons
(natural or otherwise) awarded contracts and economic development
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opportunities by Orange County thus enhancing the welfare of
working citizens of Orange County; now therefore,
BE IT ORDAINED BY THE BOARD OF COMMISSIONERS OF ORANGE
COUNTY:
Section 1. This ordinance shall appear as Chapter of
the Code of Orange County, and shall be entitled, "Living wage,"
with the text of the ordinance to appear as follows:
Sec. -1. Service Contracts with Orange County.
It is the policy of Orange County that all service
contractors doing business with the County pay their
workers a living wage while working on County service
contracts.
Sec. -2. Construction Contracts with Orange County.
It is the policy of Orange County that all construction
contractors doing business with Orange County pay their
workers a living wage while working on County
construction contracts.
Sec. -3. It is the policy of Orange County that all
persons receiving the benefits of loans from the Orange
County loan pool or receiving economic development
loans or grants from Orange County pay their workers a
living wage for the duration of any loan or grant
agreement.
Sec. -4. Definitions.
As used in this ordinance, the following terms have the
2
meanings indicated, unless the context clearly requires
a different meaning:
(a) Board of County Commissioners: The Board of
County Commissioners of Orange County, North Carolina.
(b) County Manager: The County Manager of Orange
County, North Carolina, or his or her designee.
(c) Orange County Living Wage: The minimum hourly
wage rate that shall be paid to those who work on
service contracts with the County, work on construction
contracts with the County or who receive a loan from
the Orange County loan.pool or receive an economic
development loan or grant from Orange County.
(d) Person: Any individual, business entity,
corporation, limited liability company (LLC),
partnership or joint venture.
(e) Service Contract: Those contracts for services to
the County and its agencies in which the County is:
(1) obligated to pay the service contractor $25,000 or
more per year, and (2) for services which the County
could provide for itself with its own employees, should
it decide to do so. Service Contract shall not include
contracts governed by State or federal procurement or
bidding requirements, or those where services are
performed by federal, State and local government units
or nonprofit, tax - exempt organizations.
Notwithstanding the foregoing, the Board of
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8
Commissioners may make a determination that a contract
with the federal or State government or a unit of local
government or a nonprofit, tax- exempt organization is
one for which the County could have provided the
contracted service with its own employees, and that
upon such determination the contract shall be subject
to the provisions of this ordinance.
(f) Construction Contract: A contract for the
construction of, renovation of or repair or replacement
of a County -owned or leased facility or a contract for
the construction, replacement or repair of a privately -
owned facility where the contract will be paid for by
County funds or federal and State funds and the program
making the contract funds available is administered by
the County. Construction contracts covered by this
ordinance are those in excess of $25,000 and shall not
include contracts governed by State or federal
procurement or bidding requirements.
(g) Contractor: The person awarded a County service
or construction contract, 'specifically including all
subcontractors of contractors, and all persons
receiving a loan from the Orange County loan pool or an
economic development loan or grant from Orange County.
(h) Worker: Any employee of a contractor working on a
service or construction contract or working for a
person receiving a loan from the Orange County loan
0
pool or receiving an economic development loan or grant
from Orange County. A worker working for educational
purposes, such as an intern, coop student and any other
as determined by the County Manager, is not a worker as
defined in this ordinance.
Sec. -3. Administration of the Living wage.
(a) Each contractor shall pay its workers working on
County contracts a living wage during those hours that
the workers work on County service or construction
contracts, or in the case of a person receiving a loan
from the Orange County loan pool or an economic
development loan or grant from Orange County, for-as
long as the loan is outstanding or for as long as the
period of economic development benefit as defined in
the economic development grant agreement.
(b) In order to accomplish the objectives of this
ordinance, the County narrows its pool of eligible
contractors, thus making some contractors not eligible
for consideration for such contracts. -Therefore when a
contractor has been awarded a County contract subject
to this ordinance or a loan from the Orange County loan
pool or an economic development loan or grant, subject
to this ordinance, fails to fulfill the requirements of
this ordinance, the County suffers damages. The
precise amount of those damages is difficult to
ascertain. Therefore all contracts falling under this
il
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ordinance shall include language in substantial
conformance with the following paragraph:
In the event of a finding by the County
Manager or a judicial officer that any Worker
has been paid less than the compensation to
which the worker is entitled under the Orange
County Living Wage Ordinance, Contractor
shall make restitution to the Worker for the
amount due. Contractor shall also pay
restitution to the County in the form of
liquidated damages in the amount of Fifty
Dollars ($50.00) per day for each employee so
underpaid, provided, however, that these
damages shall not be assessed for wage
underpayment violations to any individual
which amount to a total of less than One
Dollar ($1.00) in any payroll period. Should
a Worker be found to have been discriminated
against for seeking to enforce the provisions
of the Orange County Living wage Ordinance,
and if the worker has been terminated from
employment, he or she shall be reinstated
upon an order to do so from the County
Manager or a judicial officer. A flyer
stating the Orange County Living Wage shall
be posted at the workplace of every
Contractor in a location easily seen by all
employees.
(c) When a Contractor has been found to have failed to
pay a Living Wage in the course of performing more than
three separate Contracts in a two year period, the
County Manager may prohibit that Contractor from
participating in future Contracts for up to three
years.
(d) Within one year from the date of work performed on
a Contract, a Worker may file a protest in writing with
the County Manager claiming that the amount of wages
paid to that worker on that Contract was less than the
Living Wage at the time the work was performed.
2
(e) A Contractor shall not discharge, reduce the
compensation or otherwise discriminate against any
Worker for seeking to enforce the provisions of this
ordinance. Actions protected under this ordinance
include, but are not limited to, making a complaint to
the County Manager, participating in any County
proceedings, or making use of any civil remedies. If
any violation of this paragraph is found to have
occurred, the County Manager may order appropriate
restitution and the reinstatement of such Worker, in
accordance with the terms of the Contract.
(f) The County may withhold or cause to be withheld
from the Contractor so much of any accrued payments
owed to the Contractor as may be necessary to: (1) pay
the Workers employed by the Contractor the full amount
of wages required by the provisions of this ordinance;
and (2) satisfy any liability of the Contractor for
liquidated damages accrued under the terms of the
Contract. The County may also withhold payments from
any Contractor who has failed to post and keep posted a
copy of the Living wage as required herein, until such
default of the terms of the Contract shall have been
corrected.
(g) The County Manager shall cause investigations to
be made as may be necessary to determine whether there
has been compliance with the provisions of this
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ordinance, the regulations promulgated thereunder, and
those contained in the Contract. The Contractor shall
permit representatives of the County to observe work
being performed upon the work site, to interview
Workers and to examine the books and records relating
to the payrolls on the project being investigated or
the person being investigated to determine the
correctness of classifications and any payment of
proper regular and overtime rates as required. All
such information provided by the Contractor will be
treated as confidential, to the extent permitted by
Chapter 132 of the North Carolina General Statutes, the
Public Records Law, as it may be amended from time to
time. Complaints of alleged violations shall be
investigated promptly and statements, written or oral,
made by a Worker shall be treated as confidential and
shall not be disclosed to the Contractor without the
consent of the Worker.
(h) If necessary for an investigation authorized by
this ordinance, the County Manager may issue subpoenas,
compel the attendance and testimony of witnesses and
the production of books, papers, records, and documents
relating to payroll records necessary for
investigations and hearings. Any such subpoena shall
be served by the Sheriff of Orange County. In case of
refusal to obey or fully comply with any such subpoena,
12
ordinance, the regulations promulgated thereunder, and
those contained in the Contract. The Contractor shall
permit representatives of the County to observe work
being performed upon the work site, to interview
Workers and to examine the books and records relating
to the payrolls on the project being investigated or
the person being investigated to determine the
correctness of classifications and any payment of
proper regular and overtime rates as required. All
such information provided by the Contractor will be
treated as confidential, to the extent permitted by
Chapter 132 of the North Carolina General Statutes, the
Public Records Law, as it may be amended from time to
time. Complaints of alleged violations shall be
investigated promptly and statements, written or oral,
made by a Worker shall be treated as confidential and
shall not be disclosed to the Contractor without the
consent of the Worker.
(h) If necessary for an investigation authorized by
this ordinance, the County Manager may issue subpoenas,
compel the attendance and testimony of witnesses and
the production of books, papers, records, and documents
relating to payroll records necessary for
investigations and hearings. Any such subpoena shall
be served by the Sheriff of Orange County. In case of
refusal to obey or fully comply with any such subpoena,
the person not complying may be summoned before the
General Court of Justice, and upon failure to give
satisfactory explanation of such failure or refusal,
the court shall find the failure to be a misdemeanor
violating Section of the Orange County Code of
Ordinances, such violation punishable by a fine not
exceeding $100 per day or imprisonment for a period not
exceeding thirty (30) days. In addition, the General
Court of Justice may issue any civil orders as may be
within its jurisdiction in order to enforce subpoenas
issued under this ordinance.
Sec. -4. Intentional Violation a Misdemeanor.
In the event the County Manager shall determine, after
notice and hearing, that any Contractor has failed to
pay the Living Wage or has otherwise violated the
provisions of this ordinance and that such failure was
intentional, no contract shall be awarded to such
Contractor, or to any business in which such Contractor
has an interest, until one year has elapsed from the
date of such determination. Provided, further, that
any such intentional violation of t;-:e provisions of
this ordinance shall be a misdemeanor, punishable upon
conviction by a fine of not more than Five Hundred
Dollars ($500.00). Proceedings before the County
Manager shall not be considered a pre- condition to
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criminal prosecution under this ordinance. Each day's
violation shall constitute a separate offense.
Sec. -S. Setting the Living Wage:
The Orange County Living Wage, effective July 1, 1998,
is $8.00 per hour. The Orange County Living Wage may
be revised from time to time by amendment to this
ordinance adopted by the Board of Commissioners
following a public hearing.
Sec. -6. Severability.
If any provision of this chapter or the application
thereof to any person or circumstances is held invalid,
the invalidity shall not affect other provisions or
application of this chapter which can be given effect
without the invalid provision or application; and to
this end, the provisions of this chapter are severable.
Section 2. AND BE IT FURTHER ORDAINED, that this ordinance
shall take effect for all service contracts, construction
contracts and Orange County loan pool or economic development
loan or grant contracts entered into after July 1, 1998.
lsg -11
livwg.ord
10
V • , `.
forprofit
Day Care Provider Summary
15
Orange County Living Wage Ordinance
Budgetary Impact Survey
I
i i
Full Time
Part Time
L
o CO
a
zwa_
m �j
w¢
o&
Q o
zwa
U
wQ
Total Add'I Cost to
Pay All Employees
$8 /Hr ($)
Bi -City Center for Children & Youth
6
12,688
1
2,517
15,205
Brooks Day Care Center
2
3.000
1
2,500
5,500
Cedar Grove Day Care Center
41
25,000
2
5,000
30,000
Chapel Hill Cooperative Pre - School
Chapel Hill Day Care Center
8
5,500
10
7,8001
13,300
Chapel Hill /Carrboro City Schools After School Program*
0
0
28
* **
Children's Learning Center of Orange County
0
0
4
1,6901
1,690
Children's School of Chapel Hill
5
9,880
4
6,955
16,835
Community School for People under Six**
6
8,133
16,129
Enrichment Center for School Age
0
0
3
800
800
Frank Porter Graham Child Development Center
0
0
0
0
0
Happy Day Nursery, Inc.
7
23,920
0
01
23,920
Hillsborough First Baptist Church Childcare
Holmes Day Care Center
1
1,466
0
0
1,466
Holy Family Day Care Center
3
3,200
1
395
3,600
Kiddie Quarters Playschool Inc.
7
28,824
2
1,259
30,083
Kindercare Learning Center #861
La Petite Academy
OCIM Child Care Center
5
17,222
2
6,2401
23,462
Orange County Schools Before & After School Program
0
0
0
01
0
Tiny Tots, Inc. **
9
76,000
0
01
76,000
Victory Village Day Care Center
0
0
12
9,600
9,600
Wee Care Child Development Center
8
2
59,250
TOTAL
65
206,700
78
52,8891
326,840
i
*Anticipate salary increase to >$8 /hr in 1998.
fi
* *Includes increase in hourly wage to senior employees to maintain balance.
** *Bound by state employee salary scales; cannot change wages without budget approval.
@Would necessitate an across the board increase of approximately 15 %.
Page 1 5/4/98
.." . 9_
16
Sheetl
Non - Profit Summary
Orange County Living Wage Ordinance
Budgetary Impact Survey
*Anticipate salary increase to >$8 /hr in 1998.
Full
Time
Part
Time
Total Add'I Cost to
Pay All Employees
$8 /Hr ($)
L
m CD
Z w Q_
O N
°
E
uU ¢ —'
� L
(D
fl
z w a
N
�j
E
w Q
Animal Protection Society
9
9345
1
851
9430
Habitat for Humanity
0
0
0
0
0
Kidscope /OPC Mental Center
0
0
2
2000
2000
Lutheran Family Service NC
3
2610
1
1044
3654
Orange Community Housing Corp.
0
0
0
0
0
Planned Parenthood*
1
0
21
0
0
Triangle Hospice, Inc.
4
2912
01
0
2912
Orange Enterprises, Inc.
3
420
01
0
420
Orange Congregations in Missions
1
1352
0
0
1352
OCIM Thrift Shop
1
582.4
6
6663.8
7246.2
OCIM Community Child Care Center
5
17222.4
2
6240
23462.4
Triangle Family Services
0
0
0
0
0
Center for Peace Education
0
0
0
0
0
Interfaith Council
0
0
0
0
0
Day Care Services Association
0
0
2
1280
1280
Orange - Chatham Alternative Sentencing
0
0
0
0
0
Orange County Rape Crisis Center
0
0
0
0
0
Durham /Orange Coalition for Battered Women
0
0
01
0
0
Volunteers for Youth
0
0
0
0
0
Orange Community in Schools, Inc.*
0
0
1
01
0
Orange County Dispute Settlement Center
0
0
0
0
0
Orange County Literacy Council
0
0
1
1000
1000
Charles House Association
0
0
4
4350.06
4350.06
The Arts Center, Inc.
0
0
1
1260
1260
Joint Orange- Chatham Community Action
2
3586
4
11774
15360
The Women's Center
0
0
1
800
800
Project Turn Around
0
0
0
0
0
TOTAL
29,38029.8T
28
36496.9
74526.66
*Anticipate salary increase to >$8 /hr in 1998.