by Jack Mayne
It could cost the City of SeaTac as much as $897,600 in the first year to set up the requirements of Proposition 1 and nearly $3.42 million over five years if it passes on Nov. 5, according to a new study released by the Common Sense SeaTac Campaign Committee, the major group opposed to the measure.
But if everything worked toward a “base case scenario,” could be $598,400 the first year and the five-year cost about $2.45 million.
The study was done by William Reid, the senior economic planning manager for Cardno Corp’s Portland office. Cardno is an international professional infrastructure and environmental services company.
As we have reported before, the measure goes well beyond increasing some SeaTac workers minimum wage to $15 an hour. It would also guarantee paid sick leave for employees and prioritize full-time employment to existing part-time employees before hiring new people. But the most potentially expensive factor would that the city government would have to establish both a monitoring process for violations of the ordinance, and mechanisms for enforcing compliance, investigating violations and adjudicating violations.
There is no revenue stream specified in the proposition, which means the city must take money from other parts of the budget or raise taxes and/or fees.
But the Yes! For SeaTac committee says that isn’t so.
‘The big issue here is that Proposition1 will cost the city very little if anything,” said Heather Weiner in a recent email regarding costs, noting a section of the proposal that “specifically says the city has no obligation to spend any funds. It’s up the city council to decide what audit means to them. That’s why no one can say what it will cost – there are no implementing policies yet. It could, and will probably, be a simple annual form or online form. But it doesn’t even have to be that.”
“That is so misleading,” said Gary Smith, for Common Sense SeaTac. “The truth is the initiative says the city ‘shall adopt auditing procedures sufficient to monitor and ensure compliance.’ There’s nothing optional or inexpensive about ‘ensuring compliance.
“Proposition 1 would be the most complicated wage and benefit ordinance in the country and it will cost SeaTac more, not less, than the other cities spend.
“It’s deceptive to suggest the city won’t enforce it or that the unions who wrote it won’t force the city to abide by it. And the shame of it is, only 2 percent of SeaTac residents will get a pay raise from this law.”
‘Most complex ordinance’
The Cardno study says other wage ordinances are in effect on the West Coast, “no other living wage ordinance is as complex as that proposed for SeaTac.”
They looked at similar ordinances in San Jose, Los Angeles, San Francisco and Oakland but decided to compare the SeaTac measure with San Jose, because both require active monitoring and enforcement.
Reid said the biggest problem in San Jose was and presumably in SeaTac will be the “monitoring or auditing firms for compliance with the city’s living wage ordinance and paid sick leave requirement.”
SeaTac’s Proposition 1 “requires that part-time employees be first offered full-time employment opportunity before external hiring occurs by firms subject to the ordinance,” says Reid’s study report.
“This is highly unique compared to ordinances identified in other … jurisdictions. This will, in some measure, require random auditing of firms for part-time vs. full-time status of employees, a database of employment records by the city for employment status verification, and potentially significant complaint volumes due to different employment classifications, job codes, and perceived violations by part-time employees.”
Complex and expensive, he suggests.
Other parts of the SeaTac proposal require the city to do these things:
- Adopt auditing procedures to ensure compliance by designated employers.
- Require employers to retain records of wages, hours worked, paid sick and safe leave time taken and benefits provided for at least two years. The city must have access to records to “investigate potential violations and to monitor compliance.”
- The city is authorized to investigate complaints is “authorized to initiate legal or other action to remedy any violation …”.
Then the caveat we noted earlier: “… although the city attorney is not obligated to expend any funds or resources in pursuit of a remedy.”
Costs different in SeaTac
Reid says because the SeaTac ordinance “will be new and its implementation cost will be quite variable” and because of “unpredictable nature of early-year complaint volume and process,” it will be a while before increased start-up staffing and cost can be lessened.
He lists a number of “base case” and “worst case” scenarios.
Under the worst case, Reid says it would take an initial year of six full-time employees to implement the new ordinance but staffing requirements could decrease by one employee annually and end with two and one-half people by 2018.
The cost of this “worst case” would be $897,600 the first year and decrease to $489,800 by 2018 a year, or a cost over five years of “approximately $3.42 million.”
Under the best case (called “base case” in the study), only four full-time workers would be needed in 2014 – or whenever the law might take effect considering that lawyers are gathering around for court appeals.
For the Base Case Scenario, the cost to the city is estimated to be “approximately $598,400 in the first year and to decrease each subsequent year until 2017, when the annual cost of $428,000 is reached. From 2014 to 2018, the total cost to the City of SeaTac (over five years) under this scenario is approximately $2.45 million.”