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# Budget hole? Living wage left out of city plans
- URL: https://www.smdp.com/budget-hole-living-wage-left-out-of-city-plans/
- Published: 2004-05-28T15:00:00.000Z
- Updated: 2026-10-23T04:25:35.000Z
- Author: John Wood
- Tags: Government & Politics, Santa Monica, #archive-import

*Councilmen upset it’s not in proposed budget*

CITY HALL — It was overlooked by city staffers in preparing next year’s budget, but an $11.50 hourly base wage for City Hall workers may still become reality.

Several members of the City Council said they were interested in including a so-called living wage as part of the budget for the 2004-2005 fiscal year, which starts July 1\. The proposed wage hike also would apply to contractors hired by City Hall.

But it could cost City Hall more than $1 million and require cuts from somewhere else. City leaders have pored over numbers for the past two months, finding $2 million in savings through cuts, as well as generating new revenue sources to shore up next year’s projected $4 million shortfall. A balanced budget is expected to be passed in June.

“There is one aspect of this budget I truly was disappointed in,” City Councilman Kevin McKeown said during budget sessions Tuesday. “How can we go forward as a community that has taken to heart ending working poverty and not ourselves be paying a living wage on these jobs?”

Paying city workers at least $11.50 an hour would cost City Hall $370,000, officials estimate. They also estimate it would cost City Hall between $750,000 and $1 million in increased costs if contractors were forced to pay their employees the living wage.

“Truly, budgeting is a matter of trade-offs, and in this situation we have set aside funds to do something for a group of city employees which we think is more meaningful than an arbitrary wage-setting measure,” City Manager Susan McCarthy told the council. “And that is we’re going to look at regularizing or otherwise changing the status of what we would refer to as as-needed employees, and temporary agency employees may be able to get some benefits...

“We believe that we’ve brought you a budget that in fact makes a more fundamental, a recommendation that makes a more fundamental equity adjustment to city employees,” McCarthy added. “And, in truth, we have not found a way to do the $1 million, or the $750,000 to $1 million, roughly, that the finance department survey suggests that the contractor model would handle. Remember that we have taken on other extraordinary costs of operating new facilities that are coming on line and new obligations in regards to the school district this year.”

That argument didn’t hold with City Councilman Mike Feinstein, who was the only council member present who didn’t vote for City Hall to double the amount it gives to the local school district. The contentious vote was taken earlier this month under pressure from school supporters who said if officials didn’t give the $6 million voluntarily they would push for an unprecedented charter amendment that would force City Hall to hand over the money.

“My understanding when we gave direction on (the living wage) issue was that we had asked for an ordinance to come back in time for the budget process,” Feinstein said. “Now our options are much more limited. It didn’t seem to me that that was the lineage that we had suggested when we had given direction...

“Although they’re both valid community desires and needs, we had not asked for $3 million for the school district to be budgeted,” he added. “We had said bring the living wage ordinance before the budget process happens, so it could inform us. And instead we got more for schools and nothing for the living wage, and neither of them is exactly what we asked for.”

Feinstein, McKeown and City Councilman Ken Genser asked staff to return with more information about how the cost would change if City Hall exempted certain intern-type positions and student workers, and only applied the wage increases to new contractors. Staffers also were told to look at different levels of municipal living wages in other California cities.

“I’m not yet willing to abandon the option of creating a meaningful city employee, city contractor living wage in this budget cycle, even though we didn’t get the information as soon as we could because we do still have a couple of weeks before we actually have to adopt a budget,” McKeown said.

Elected leaders supported a more ambitious living wage that was defeated at the polls in 2002\. It would have required businesses grossing more than $5 million in revenue annually to pay their workers between $10.50 and $12.25 per hour, depending on whether they also received health benefits.

A handful of living wage advocates spoke out at the budget sessions, criticizing City Hall for not maintaining its priorities. Rev. Sandie Richards, a minister at the Church in Ocean Park and an outspoken living wage advocate, questioned the estimates prepared by City Hall. She said the contractors will absorb much of the increased costs in order to remain competitive.

There are 16 job types at City Hall that currently garner less than $11.50 an hour, city documents show. They include lifeguards, police cadets, maintenance workers, library employees and crossing guards. The majority of those positions are filled by temporary and seasonal workers. Increasing their wages would cost about $350,000 a year, with an additional $24,000 in annual fringe benefits, according to estimates.

To gauge the cost of requiring contractors to pay their workers the higher wage, City Hall’s finance department sent out surveys to current contractors. About 55 percent of the contractors responded, saying their bids would increase by 30 percent to 40 percent. Contractors providing janitorial services, landscaping, parking citation issuance, security and carousel operations would be most affected, as well as those that offer temporary support, according to City Hall documents.

Though the proposed $377 million budget does not factor in a living wage, McCarthy pointed out it does set aside $300,000 to convert some as-needed employees to a more secure status where they would receive benefits. Those changes would begin in January. Also under the proposed budget plan, all temporary and seasonal workers would be hired through a competitive, civil service process starting next summer.

Whether that’ll be enough for the council members is unclear. They repeatedly have stressed their determination to better compensate the city’s lowest wage earners.

“I’m definitely interested in looking at it. I think it’s been a priority for several years and the question is how we can accommodate it into the budget, given the constraints that we have,” said Mayor Richard Bloom, adding later, “It’s unlikely that we could find, realistically, places to cut.”

*Originally published in the Santa Monica Daily Press print edition on May 28, 2004.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/052804.pdf?ref=smdp.com)