The URL can be used to link to this page

99-523Council File # ��Z.3 OR�GINA�. Presented Referred To RESOLUTION CIT OF SAINT PAUL, MINNESOTA Green Sheet # �4D78 �O Committee Date 1 WHEREAS, the Saint Paul Port Authority adopted a revised wage policy in April 1999 which specifies that 2 the Port Authority will sripulate in its worl�'orce agreements that entry-level jobs in companies with which 3 the Port does business shall pay $9 per hour: 4 S 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1. Workforce agreements, as a rule, should stipulate $9 per hour as a minimum wage, plus benefits, after probarion, for entry-level jobs. 2. Workforce agreements may sripulate less than $9 per hour minimum entry-level wages, plus benefits, under certain conditions, namely: • provided the business has career paths for entry-level jobs that lead to living wages within approximately 1 year, • provided the business is willing to participate in a brief recruitment, retention and wage assessment with customized job training staff, and provided the assessment is carried out before the workforce agreement is executed. 3. Even where businesses start new-hires a$9 per hour, they sNll should be encouraged to do a brief self assessment, with Port help if necessary, of their career paths and "living" wage opporhxnities. In fact, all companies with which the Port plans to do business will be encouraged to go through brief, preliminary assessment. WHEREAS, the Saint Paul Port Authority has provided leadership in trus policy azea for years by requiring that the companies with which it conducts business shall pay $8 per hour; and 21 WI�REAS, the City of Saint Paul and the Saint Paul Housing and Redevelopment Authority (HRA) 22 adopted a policy in January 1997 which provides that when the City or HRA provides economic or 23 community development assistance in excess of $Y00,000, all wages for created or retained jobs in that 24 company sha11 be at least 110% of the federal poverty level for a family of four ($8.83 per hour in 1999), or 25 100% of the federal poverty level if full heath caze is provided ($8.02 in 1999); now, therefore, be it 26 RESOLVED, that the Saint Paul City Council commends the action of the Port Authority Board of 27 Commissioners in updating the Port's wage policy; and be it 28 RESOLVED, that the Samt Paul City Council requests that the Department of Planning and Economic 29 Development report back to the City Council on the feasibility and advisability of increasing the level of the 30 livmg wage rate in City of Saint Paul and HRA from 110% to 125% ($10.03 per hour in 1999) of the federal 31 poverty rate for a family of four, and from 100% to I 10% ($8.83 per hour in 1999) of the federal poverty 32 rate for a family of four if health care benefits aze provided. �'l�i ORIG{NAL Benanav � Blakey Boslrom � Coleman � Harris � Lantry � Keiter � Adopted by ci Date Adoptio Certified by Counc By: Approved by May�6r: Date ( J//{� Gy' /YQ� B �l�i.i.c �F�i�� Requested by Department of: � Form Approved by City Attomey � Approved by Mayor for Submission to Council � G G.—�� '� . , — �� DEPARTMENT/OFFICE/COUNCIL DAiE INmATED C% Counc�'/ �- Z- 9 9 GREEN SHEET No 64078 CO CT PEF2SON $ PFiONE InMaVDa1e InitlaWate �o%cnc�/iruM�der d�enenav, 26G•8� ,�.,�„ a ,,,� MUST BE ON COUNCIL AGENDA BY (DAT� ! - 9- 9 9 : Cc,�se.� '�""' NWWERFOR Q,,,.nOR1E„ m.CIFRK ROUTIpG � w+wcw.smxcFSOn. wuxu��mn/�ccrc ❑ rnran(ox�smtaxp ❑ TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) CTION REQUESTm R2SOIk.f�bn �P �uesh� �l�+# D�pt.o{P/a. a..o��'�o�•,o.�•�:� r�,��t to !�+ C' � C�OCcna.'I pn �i� � tasif i/•i�r anp/advi'sab:/!Fy o{�neieosi.,� ��v C'�.fy�s and f/RA's �ivin4 Wa� �a/+E. d RECAMMENDATION P.PPfOV2 (A) W R¢jBCI (R) VERSONAL SERViCE CON7RACf5 MUSTANSWERTHE FOLLOWING QUE57ION5: �. N35 fh� PQ��IRf1214f WOfkEd 11IId2f d WfIh2L{ {Of UII6 EEpBRlIIEf�f? PLANNING COMMISSION VES NO CIBCOMMITTEE 2. HasthispeisoNfirmeverbeenacityempbyee9 CIVILSERVICECAMMISSION YES NO 3. Does this pe�soNfirm possess a sldll not riormallypossessed by any curteM city employce? YES NO 4. Is this persoNfi�m a targetetl ventloY7 VES NO Emiain all yes ansviets on sepa2te sheet and atfach to 9reen sheet INITIATING PROBLEM ISSUE, OPPOR7UNIi7 (Whq Whffi, When, Where, Why) AWANTAGES IF APPROVED DISADVANTAGESIFAPPROVED � DISADVANTAGES IF NOT APPROVED TOTAL AMOIINT OF TRANSACTION S CO3T/REVENUE BUDCETED (GRCLE ONq YES NO FUNDING SOURCE ACTIVITY NUMBER FlNPNCIFL INFORMATION (IXPWN) �'� ��'�I �a???°4 t�3P,� � `; �9�1� �'4-sa3 From: Nancy Anderson �' To: PEDD.PEDsweeney Date: 7/19/99 2:17pm Subject: Resolution - 93523 Brian: i have placed the new date (September 22, 1999) on our Council calendar, per your conversation with Gerry Strathman. At this meeting PED will make a report to the City Council (C.F. 99-523) regarding the feasibility and advisability of increasing the City's and HRA's living wage rate. On September 22nd this item will be placed on the City Council Agenda as a DISCUSSION item. Nancy Anderson Assistant Secretary to the City Councit CC: gerrys, marye f; � CTTY OF SAINT PAUL h'Orm Co[emars, Mayor September, 1999 TO: St. Paul City Council DEPARTMENT OF PLANNMG & ECONOMIC DEVELOPMENT Briom Sweeney, Director 25 West Fourth Sbeet Saint Pau1, MN 55702 `�'R sa3 Telephone: 65l-266-6565 Fauimile: 651-218-316/ FROM: Brian Sweeney, Director of Planning and Economic Development�,��;� � � RE: Report in response to Resolution 99-523 Introduction On January 2, 1997, City Council passed Resolution 96-1512 estabiishing a Living Wage Policy for any Economic Development project receiving over $100,000 (cumulative in any one fiscal yeaz) in City assistance in which jobs aze created or retained (Exhibit A outlines the policy). City assistance was defined as loans, bonds, grants, and City tax incentives. The cuaent Living Wage is deFined as 110% of the Federal Poverty guidelines for a family of four ($8.83 for 1999). If the business provides employer-paid basic health insurance coverage, living wage is defined as 100% of the Federal Poverty guidelines for a family of four ($8.02 for 1999). The following information is in response to Resolution 99-523 (E�ibit B) passed by Ciry Council on June 23, 1999, requesting a report assessing the impact on City-funded projects if the St. Paul Living Wage was increased. The report was requested due to the Port Authority establishing $9.00 per hour as the required minimum living wage for their projects. Com�arisons It is important to note that the Port Authority funds mainly industrial projects that deal with manufacturing/technical jobs which pay more than the restaurant, retail and sen�ce industries that the City/HRA usually assists. The Port Authority also often subsidizes their projects by selling land to the company for $ l...which is why in return, manufacturers aze able to pay higher wage levels. In the attached "Comparison of Retail and Manufacturing Wages" the median houriy wa=es for hosts and hostesses in restaurants is $6.99 an hour, retaii salespersons $7.60 an hour, waiters and waitresses $5.57 an hour. The median hourly wages in the manufacturing industry ranges from $7.47 an hour for hand packers and packers to $14.40 for machinists to $11.56 for shippin�, receiving and traffic clerks. q9 sa3 i , Reseazch from the Employment Policies Institute states there aze 39 municipalities throughout the ', United States that currenfly have wage requirements. The average wage without benefits was $834. The City of St. Paul's is $8.83, which is currenfly higher than average. Minneapolis was contacted, and there aze no plans to change their Living Wage policy, which is currently consistent with the City of St. Paul. That, in itself, would put us at a disadvantage in inviting Economic Development to St. Paul. Impact on Snecitic Proiects -PED staff have been working on several fronts toward the revitalization of Wabasha as downtown's retail main street. While no specific project or financing structure has been negotiated, the objectives of this effort include the development of a proposal to Daytons to achieve a long term commitment for a remodeled store to remain downtown, and the attraction of strong complimentary retail tenants to locate stores along Wabasha. These retailers look at a potential store performance on a national basis in making location decisions. Imposition of a muumum wage requirement above those established in the mazket would severely 1'unit the City's ability to influence retail development in the downtown azea. -A proposed new full service grocery store/deli has been approved for a$235,000 STAR grant and a$90,000 HRA working capital loan. The project will create at least 6 full time }obs at an average wage of $12 an hour. However, this business may also be able to hire some part-time employees for deli counter or grocery delivery services to serve downtown residents, and an increased Living Wage would be higher than the mazket currently pays for these positions. In order to be successful, this grocery store would have to increase sales by neazly 30% over the levels achieved at a former downtown grocery store. A higher wage requirement could affect the ability of this business to succeed. -One of our most recent major deals, Media One, that retained and brought jobs to St. Paul, may not have happened if we had to impose an increased living wage amount on them. -With regazd to specific companies, Ecolab and Unipac aze two key customers. The 110% of poverty requirement appeazs to work for them. Current labor mazket conditions often demand that they pay fairly high entry level wages. However, with some smaller employers, and for some large employers who have very low skill requirements for their jobs, it is a stretch to pay at this level, and these might be the type of empioyers who would be impacted by an increase in the Living Wage. Recommendation In the long run, there is a very real risk that firms will not choose to locate in the City if they have to pay higher wages for less-skilled workers. Fums aze generally very sensitive to differences in costs across the regions. Prepazed by Jill Hughes EXHIBIT A SAINT PAUL'S LIVING WAGE POLICY �� Adopted on.7anuary 2, 1997 by Council Resolution 96-1512 In January 1997 the Saint Paul City Council established a Living Wage Policy requiring economic development projects receiving $100,000 or more in City assistance to pay employees at least 10% above the poverry line. The policy is in effect for projects that create or retain full time jobs and receive City loans, grants, bonds, andlor t� incentives. Milwaukee was the first to pass living wage legislation, followed by several U.S. cities including Minneapolis, Duluth, Madison, St. Louis, Boston, Portland, and Philadelphia. Exemptions: • Conduit 6onds, in which the City's only obligation is to issue bonds on behalf of the borrower. The borrower is responsible for repayment of ali principle and interest. • Small businesses, with typically 20 or fewer employees, as defined in MN Statute 645.445. • Intermediaries, such as community development corporafions or banks, who disburse City funding for community economic development projects. • first year fior new businesses. New businesses aze exempt until their second year of operation. • Redevelopment projects whose only public assistance is site remediation, investigation or assembly. REQUIREMENTS: • Wages: In Saint Paul and Minneapolis, living wage is defined as 110% of the Federal poverry guidelines for a family of four ($8.83 for 1999). If the business provides employer-paid basic heaith insurance, living wage is defined as 100% of the same Federal poveriy guidelines ($8.02 for 1999). • Job Creation & Residency: Job creation goals for economic development projects will be defned by businesses and City staff as part of contract or loan agreement documents. 60% of new hires must be Saint Paul residents. • Reporting: A Quarterly Wage Detail report, required of,all businesses by the state, must be provided to the City on an annual basis until the wage and job goals aze met. The Quarterly Wage Detaii Report consists of an employee roster, weeks worked and wages earned. Businesses must also provide an affidavit certifying any new hires and the city in which they reside. • Non-compliance: Failure to comply with the requirements of the Living Wage Policy results in a default. Options to remedy a default include accelerating the loan or increasing the interest rate on City financing to the mazket rate. • Waivers: A waiver may be requested at any time for any or all of the above requirements. The request must include a detailed explanation of why the requirements cannot be met. Requests must first be approved by the Director of the Department of Pianning and Economic Development and then must be granted by City Council Resolution. Amcllwregs.fly updated April 7999 — _ EXHZBZT B OR!G1NAL { 4 5 6 7 9 10 11 12 13 14 I7 18 19 20 RESOLUTION I. Workforce agreements, as a rule, shouid stipulate $9 per hour as a minimum wage, plus benefits, after probation, for rntry-level jobs. 2. VVorkforce agreements may stipulate less than $9 per hour minimum entry-level wages, plus benefits, under certain conditions, namely: • provided the business has career paths for en[ry-level jobs that lead to li��ing wages within approxima[ety 1 yeaz, .. • provided the business is willing to participate in a brief recruitment, retention and wage assessment witli customized job training staff, and provided the assessment is carried out before the workforce agreement is executed. 3. Even where businesses start new-hires a$9 per hour, they still should be encouraged to do a brief self usessment, with Port help if necessary, of their career paths and `7iving" wa¢e opportunilies. In fact, all companies tivith which the Port plans to do business will be encouraged to go through brieF, pceliminary assessment. WHEREAS, the Saint Paul Port Authority haz provided leadership in this policy area for years by requiring that ihc companies with which it conducts business shall pay $8 per hour; and 21 �b'I�AEAS, the City of Saint Paul and the Saint Paul Housing and Redevelopment Authority (HRA) 22 adopted a policy in January 1997 whicl� provides that when the City or HRA provides economic or 23 community development assistance in excess of $100,000, alt wages for created or retained jobs in tliat 24 company shail be at least 110°/a of the federal poverty level for a family of four (58.83 per hour in 1999), or 25 100% of the federal poverty level if full heath care is provided ($8.02 in 1999); now, therefore, be it 26 RESOLVED, that the Saint Paul City Council commends the action of the Port Authority Boazd of 27 Commissioners in updating the PoR's �vage policy; and be it 28 RESOLVED, that the Saint Paul City Council requests ffiat the Department of Planning 2nd Economic 29 Development report back to the City Council on the feasibility and advisabifity of increuing the level of the 30 living wage rate in City of Saint Paul and HRA from I] 0% to I25% ($10.03 per hour in 1499) of the federal 31 poverty rate for a family of four, and from 100% to 110% ($8.83 per hour in ] 999) of the federal poverty 32 rate for a family of four if healeh care benefits aze provided. , a .J a' Green Sheet #1 �� a Council File # ��Z3 � 10 1 WI-�REAS, the Saint Paul Port Authority adopted a revised wage poticy in April 1999 which specifies that 2 the Port Authority will stipulate in its workforce agreements that entry-level jobs in companies with which 3� the Port does business shall pay S9 per hour: EXAIBIT C , COiv7PRRISON OF RETAIL AND MANUFACTURING WAGES Largast Occupational Categories Twin Cities Metropoiitan Area: 1997 4. Occupational Category Retaii Hosts & Hostesses: Restaurant, Lounge, or Coffee Shop Sa�espersons, Retail Cashiers Waiters & Waitresses TOTAL Manufacturing Assemblers & Fabricators Generai Managers & Top Executives Secretaries, Except Legal & Medical Hand Packers & Packagers Machinists Electrical & Electronic Assemblers Sales Representatives, Except Scientific Shipping, Receiving 8 Traffic Clerks Bookkeeping, Accounting & Auditing Industrial Production Managers Meat, Poultry & Fish Cutters 8 Trimmers Packaging 8 Filling Machine Operators TOTAL % of All Retait Jobs 23.5% 12.6% 9.0% 6.7% 51.8% °/, of Ail Manufacturing Jobs 5.7% 2.3% 2.0% '1.8% '1.7% 1.6% 1.5% 1.5% 1.3% 1.3% 12% � z�ia 23.1 % Notes: > Data Source: Minnesota Department of Economic Security > Job percentages are for Minnesota, 1995 > Wagefigures are forTwin Cities Metropolitan Area, �997 > Data were not available for some manufacturing occupations 25% of Workers Eam an Hourly Wage of LESS Than: $5.96 56.38 $6.'15 $5.36 $8.77 $19.07 $10.60 $6.35 $11.20 $7.59 $14.27 $9.11 $10.11 $20.94 $6.73 $�.�� Median Hourly Wage $6.99 $7.60 S721 $5.57 510.82 $31.19 $12.39 $7.47 $14.40 $9.80 $18.96 $11.56 511.87 527.85 58.00 s�o.00 � � -Sa3 25% of Workers Eam an Hourly Wage of MORE Than: $8.03 $921 $8.27 $5.82 $14.56 $50.36 $14.70 587t $17.71 $12.40 $30.21 $15.61 $14.13 $38.85 5923 S t 3.58 Findings: - > Retail jobs are concentrated in a few occupations: four occupations account for more than half of aIl retail jobs > Manufacturing jobs are dispersed throughout many occupations: tweive occupations account for less than 25% of all manufacturingjobs > Retail jobs pay considerably less than manufacturing jobs: the highest-paying retail occupation (Salesperson, Retaii} earns wages comparab�e to the lowest-paying manufacuturing occupation (hand packers and packagers) > Retail wages are nowhere close to the proposed living wage rate of $10.03: even the threshold for the top 25% of workers in the highest-paying retail occupation ($9.21 for Saiesperson, Retail) was well below the 510.03 rate. > In contrast to retail, over half of the manufacturing occupations in 1997 had wage rates above $10.03 at the threshold for the lowest-paid 25% of workers DEPART[vIEN'1' OF PLANNPIG & ECONOMIC DEVELOPMENT Brim� Sweeney, Interim Director CITY OF SAIN"f PAUL No>m Coleman, Mayor July 8, 1999 Gerald Strathman, Director City Council Investigation & Reseazch Center City Ha11310 Saint Paul, MN 55102 Deaz Mr. Strathman: zs wzse Founa srreer Sa "vtt Paul, MN55102 �9'-sa3 Te7ephone: 657-266-6565 Facsimile: 651-228-326I In response to Resolution 99-523 passed by City Council on June 23, I haue begun assessing the impact on City-funded projects of increasing the living wage rate. My staff is working with our PED Account Officers to gather informafion in order to give a comprehensive response to City Councilmembers. We will be researching and preparing the report this sununer. Because of the press of current projects and sununer vacation schedules I am planning to have a report for the Council in September. Would it be possible to be on the City Council Agenda on September �for this report? r� Sincerely, Brian Swee ey, irect Deparhnent of Planning & Economic Development , ��g�� l � � �t.�-�,;��- �J� `"° (J�,�, `�� J'F� ' S� 1 \�Ped�S1'S2\SFiAILED\COPELANDUOBSU.W�brian ]tr str[hmawpd •�--'�v ORIGINAL Presencea Referred 1'0 RESOLUTION OF SAINT PAUL, M' couo�a Fue # �5Z.3 GreenSheet# 4D78 Committee Date 1 WHEREAS, the Saint Paul Port Authority adopted a revised wage policy in April 1999 which specifies that 2 the Port Authority will sGpulate in its workfocce agreements that entry-level jobs in companies with which 3 the Port does business shall pay $9 per hour: 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 1. Workforce agreements, as a rule, should stipulate $4 per hour as a minimum wage, plus benefits, after probation, for entry-level jobs. 2. Workforce agreements may stipulate less than $9 per hour minimum entry-(evel wages, plus benefits, under certain conditions, namely: • provided the business has career paths for entry-level jobs that lead to living wages within approximately 1 year, • provided the business is willing to participate in a brief recruitment, retention and wage assessment with customized job training staff, and provided the assessment is carried out before the workforce agreement is executed. 3. Even where businesses start new-hires a$9 per hour, they still should be encouraged to do a brief self assessment, with Port help if necessary, of their cazeer paths and "living° wage opportunities. In fact, all companies with which the Port plans to do business will be encouraged to go through brief, preliminary assessment. WHEREAS, the Saint Paui Port Authority has provided leadership in this policy azea for years by requiring that the companies with which it conducts business shall pay $8 per how; and 21 WHEREAS, the City of Saint Paul and the Saint Paul Housing and Redevelopment Authority (HRA) 22 adopted a policy in January 1997 which provides that when the City or I-IKA provides economic or 23 community development assistance in excess of $100,000, all wages for created or retained jobs in that 24 company shall be at least 110% of the federal poverty level for a family of four ($8.83 per hour in 1999), or 25 100% of the federal poverty level if full heaih caze is provided ($8.02 in 1999); now, therefore, be it 26 RESOLVED, that the Saint Paul City Council commends the action of the Port Authority Boazd of 27 Commissioners in updating the Port's wage policy; and be it 28 RESOLVED, that the Saint Paul City Council requests that the Department of Pianning and Economic 29 Devetopment report back to the City Couneil on the feasibility and advisability of increasing the level of the 30 living wage rete in City of Saint Paul and HRA from 110% to 125% ($10.03 per hour in 1999) of the federal 31 poveriy rate for a family of four, and from 100% to I 10% ($8.83 per hour in 1999) of the federal poverty 32 rate for a family of four if health caze benefits are provided. ��i�� 1 10 ,__. �RIGINAL a �i�t S?_3 �� 0 Yeas Na s Absent Requested by Department of: Benanav Blakey Bostrom Coleman Hazris Lantry Reiter � � � c/ Adopted by ci Date _ Adoptio Ce � ied by Councii s �� Approved by May r: Date _ By: � Form Approved by City Attomey B Approved by Mayor for Submission to Council By: Council File # ��Z.3 OR�GINA�. Presented Referred To RESOLUTION CIT OF SAINT PAUL, MINNESOTA Green Sheet # �4D78 �O Committee Date 1 WHEREAS, the Saint Paul Port Authority adopted a revised wage policy in April 1999 which specifies that 2 the Port Authority will sripulate in its worl�'orce agreements that entry-level jobs in companies with which 3 the Port does business shall pay $9 per hour: 4 S 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1. Workforce agreements, as a rule, should stipulate $9 per hour as a minimum wage, plus benefits, after probarion, for entry-level jobs. 2. Workforce agreements may sripulate less than $9 per hour minimum entry-level wages, plus benefits, under certain conditions, namely: • provided the business has career paths for entry-level jobs that lead to living wages within approximately 1 year, • provided the business is willing to participate in a brief recruitment, retention and wage assessment with customized job training staff, and provided the assessment is carried out before the workforce agreement is executed. 3. Even where businesses start new-hires a$9 per hour, they sNll should be encouraged to do a brief self assessment, with Port help if necessary, of their career paths and "living" wage opporhxnities. In fact, all companies with which the Port plans to do business will be encouraged to go through brief, preliminary assessment. WHEREAS, the Saint Paul Port Authority has provided leadership in trus policy azea for years by requiring that the companies with which it conducts business shall pay $8 per hour; and 21 WI�REAS, the City of Saint Paul and the Saint Paul Housing and Redevelopment Authority (HRA) 22 adopted a policy in January 1997 which provides that when the City or HRA provides economic or 23 community development assistance in excess of $Y00,000, all wages for created or retained jobs in that 24 company sha11 be at least 110% of the federal poverty level for a family of four ($8.83 per hour in 1999), or 25 100% of the federal poverty level if full heath caze is provided ($8.02 in 1999); now, therefore, be it 26 RESOLVED, that the Saint Paul City Council commends the action of the Port Authority Board of 27 Commissioners in updating the Port's wage policy; and be it 28 RESOLVED, that the Samt Paul City Council requests that the Department of Planning and Economic 29 Development report back to the City Council on the feasibility and advisability of increasing the level of the 30 livmg wage rate in City of Saint Paul and HRA from 110% to 125% ($10.03 per hour in 1999) of the federal 31 poverty rate for a family of four, and from 100% to I 10% ($8.83 per hour in 1999) of the federal poverty 32 rate for a family of four if health care benefits aze provided. �'l�i ORIG{NAL Benanav � Blakey Boslrom � Coleman � Harris � Lantry � Keiter � Adopted by ci Date Adoptio Certified by Counc By: Approved by May�6r: Date ( J//{� Gy' /YQ� B �l�i.i.c �F�i�� Requested by Department of: � Form Approved by City Attomey � Approved by Mayor for Submission to Council � G G.—�� '� . , — �� DEPARTMENT/OFFICE/COUNCIL DAiE INmATED C% Counc�'/ �- Z- 9 9 GREEN SHEET No 64078 CO CT PEF2SON $ PFiONE InMaVDa1e InitlaWate �o%cnc�/iruM�der d�enenav, 26G•8� ,�.,�„ a ,,,� MUST BE ON COUNCIL AGENDA BY (DAT� ! - 9- 9 9 : Cc,�se.� '�""' NWWERFOR Q,,,.nOR1E„ m.CIFRK ROUTIpG � w+wcw.smxcFSOn. wuxu��mn/�ccrc ❑ rnran(ox�smtaxp ❑ TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) CTION REQUESTm R2SOIk.f�bn �P �uesh� �l�+# D�pt.o{P/a. a..o��'�o�•,o.�•�:� r�,��t to !�+ C' � C�OCcna.'I pn �i� � tasif i/•i�r anp/advi'sab:/!Fy o{�neieosi.,� ��v C'�.fy�s and f/RA's �ivin4 Wa� �a/+E. d RECAMMENDATION P.PPfOV2 (A) W R¢jBCI (R) VERSONAL SERViCE CON7RACf5 MUSTANSWERTHE FOLLOWING QUE57ION5: �. N35 fh� PQ��IRf1214f WOfkEd 11IId2f d WfIh2L{ {Of UII6 EEpBRlIIEf�f? PLANNING COMMISSION VES NO CIBCOMMITTEE 2. HasthispeisoNfirmeverbeenacityempbyee9 CIVILSERVICECAMMISSION YES NO 3. Does this pe�soNfirm possess a sldll not riormallypossessed by any curteM city employce? YES NO 4. Is this persoNfi�m a targetetl ventloY7 VES NO Emiain all yes ansviets on sepa2te sheet and atfach to 9reen sheet INITIATING PROBLEM ISSUE, OPPOR7UNIi7 (Whq Whffi, When, Where, Why) AWANTAGES IF APPROVED DISADVANTAGESIFAPPROVED � DISADVANTAGES IF NOT APPROVED TOTAL AMOIINT OF TRANSACTION S CO3T/REVENUE BUDCETED (GRCLE ONq YES NO FUNDING SOURCE ACTIVITY NUMBER FlNPNCIFL INFORMATION (IXPWN) �'� ��'�I �a???°4 t�3P,� � `; �9�1� �'4-sa3 From: Nancy Anderson �' To: PEDD.PEDsweeney Date: 7/19/99 2:17pm Subject: Resolution - 93523 Brian: i have placed the new date (September 22, 1999) on our Council calendar, per your conversation with Gerry Strathman. At this meeting PED will make a report to the City Council (C.F. 99-523) regarding the feasibility and advisability of increasing the City's and HRA's living wage rate. On September 22nd this item will be placed on the City Council Agenda as a DISCUSSION item. Nancy Anderson Assistant Secretary to the City Councit CC: gerrys, marye f; � CTTY OF SAINT PAUL h'Orm Co[emars, Mayor September, 1999 TO: St. Paul City Council DEPARTMENT OF PLANNMG & ECONOMIC DEVELOPMENT Briom Sweeney, Director 25 West Fourth Sbeet Saint Pau1, MN 55702 `�'R sa3 Telephone: 65l-266-6565 Fauimile: 651-218-316/ FROM: Brian Sweeney, Director of Planning and Economic Development�,��;� � � RE: Report in response to Resolution 99-523 Introduction On January 2, 1997, City Council passed Resolution 96-1512 estabiishing a Living Wage Policy for any Economic Development project receiving over $100,000 (cumulative in any one fiscal yeaz) in City assistance in which jobs aze created or retained (Exhibit A outlines the policy). City assistance was defined as loans, bonds, grants, and City tax incentives. The cuaent Living Wage is deFined as 110% of the Federal Poverty guidelines for a family of four ($8.83 for 1999). If the business provides employer-paid basic health insurance coverage, living wage is defined as 100% of the Federal Poverty guidelines for a family of four ($8.02 for 1999). The following information is in response to Resolution 99-523 (E�ibit B) passed by Ciry Council on June 23, 1999, requesting a report assessing the impact on City-funded projects if the St. Paul Living Wage was increased. The report was requested due to the Port Authority establishing $9.00 per hour as the required minimum living wage for their projects. Com�arisons It is important to note that the Port Authority funds mainly industrial projects that deal with manufacturing/technical jobs which pay more than the restaurant, retail and sen�ce industries that the City/HRA usually assists. The Port Authority also often subsidizes their projects by selling land to the company for $ l...which is why in return, manufacturers aze able to pay higher wage levels. In the attached "Comparison of Retail and Manufacturing Wages" the median houriy wa=es for hosts and hostesses in restaurants is $6.99 an hour, retaii salespersons $7.60 an hour, waiters and waitresses $5.57 an hour. The median hourly wages in the manufacturing industry ranges from $7.47 an hour for hand packers and packers to $14.40 for machinists to $11.56 for shippin�, receiving and traffic clerks. q9 sa3 i , Reseazch from the Employment Policies Institute states there aze 39 municipalities throughout the ', United States that currenfly have wage requirements. The average wage without benefits was $834. The City of St. Paul's is $8.83, which is currenfly higher than average. Minneapolis was contacted, and there aze no plans to change their Living Wage policy, which is currently consistent with the City of St. Paul. That, in itself, would put us at a disadvantage in inviting Economic Development to St. Paul. Impact on Snecitic Proiects -PED staff have been working on several fronts toward the revitalization of Wabasha as downtown's retail main street. While no specific project or financing structure has been negotiated, the objectives of this effort include the development of a proposal to Daytons to achieve a long term commitment for a remodeled store to remain downtown, and the attraction of strong complimentary retail tenants to locate stores along Wabasha. These retailers look at a potential store performance on a national basis in making location decisions. Imposition of a muumum wage requirement above those established in the mazket would severely 1'unit the City's ability to influence retail development in the downtown azea. -A proposed new full service grocery store/deli has been approved for a$235,000 STAR grant and a$90,000 HRA working capital loan. The project will create at least 6 full time }obs at an average wage of $12 an hour. However, this business may also be able to hire some part-time employees for deli counter or grocery delivery services to serve downtown residents, and an increased Living Wage would be higher than the mazket currently pays for these positions. In order to be successful, this grocery store would have to increase sales by neazly 30% over the levels achieved at a former downtown grocery store. A higher wage requirement could affect the ability of this business to succeed. -One of our most recent major deals, Media One, that retained and brought jobs to St. Paul, may not have happened if we had to impose an increased living wage amount on them. -With regazd to specific companies, Ecolab and Unipac aze two key customers. The 110% of poverty requirement appeazs to work for them. Current labor mazket conditions often demand that they pay fairly high entry level wages. However, with some smaller employers, and for some large employers who have very low skill requirements for their jobs, it is a stretch to pay at this level, and these might be the type of empioyers who would be impacted by an increase in the Living Wage. Recommendation In the long run, there is a very real risk that firms will not choose to locate in the City if they have to pay higher wages for less-skilled workers. Fums aze generally very sensitive to differences in costs across the regions. Prepazed by Jill Hughes EXHIBIT A SAINT PAUL'S LIVING WAGE POLICY �� Adopted on.7anuary 2, 1997 by Council Resolution 96-1512 In January 1997 the Saint Paul City Council established a Living Wage Policy requiring economic development projects receiving $100,000 or more in City assistance to pay employees at least 10% above the poverry line. The policy is in effect for projects that create or retain full time jobs and receive City loans, grants, bonds, andlor t� incentives. Milwaukee was the first to pass living wage legislation, followed by several U.S. cities including Minneapolis, Duluth, Madison, St. Louis, Boston, Portland, and Philadelphia. Exemptions: • Conduit 6onds, in which the City's only obligation is to issue bonds on behalf of the borrower. The borrower is responsible for repayment of ali principle and interest. • Small businesses, with typically 20 or fewer employees, as defined in MN Statute 645.445. • Intermediaries, such as community development corporafions or banks, who disburse City funding for community economic development projects. • first year fior new businesses. New businesses aze exempt until their second year of operation. • Redevelopment projects whose only public assistance is site remediation, investigation or assembly. REQUIREMENTS: • Wages: In Saint Paul and Minneapolis, living wage is defined as 110% of the Federal poverry guidelines for a family of four ($8.83 for 1999). If the business provides employer-paid basic heaith insurance, living wage is defined as 100% of the same Federal poveriy guidelines ($8.02 for 1999). • Job Creation & Residency: Job creation goals for economic development projects will be defned by businesses and City staff as part of contract or loan agreement documents. 60% of new hires must be Saint Paul residents. • Reporting: A Quarterly Wage Detail report, required of,all businesses by the state, must be provided to the City on an annual basis until the wage and job goals aze met. The Quarterly Wage Detaii Report consists of an employee roster, weeks worked and wages earned. Businesses must also provide an affidavit certifying any new hires and the city in which they reside. • Non-compliance: Failure to comply with the requirements of the Living Wage Policy results in a default. Options to remedy a default include accelerating the loan or increasing the interest rate on City financing to the mazket rate. • Waivers: A waiver may be requested at any time for any or all of the above requirements. The request must include a detailed explanation of why the requirements cannot be met. Requests must first be approved by the Director of the Department of Pianning and Economic Development and then must be granted by City Council Resolution. Amcllwregs.fly updated April 7999 — _ EXHZBZT B OR!G1NAL { 4 5 6 7 9 10 11 12 13 14 I7 18 19 20 RESOLUTION I. Workforce agreements, as a rule, shouid stipulate $9 per hour as a minimum wage, plus benefits, after probation, for rntry-level jobs. 2. VVorkforce agreements may stipulate less than $9 per hour minimum entry-level wages, plus benefits, under certain conditions, namely: • provided the business has career paths for en[ry-level jobs that lead to li��ing wages within approxima[ety 1 yeaz, .. • provided the business is willing to participate in a brief recruitment, retention and wage assessment witli customized job training staff, and provided the assessment is carried out before the workforce agreement is executed. 3. Even where businesses start new-hires a$9 per hour, they still should be encouraged to do a brief self usessment, with Port help if necessary, of their career paths and `7iving" wa¢e opportunilies. In fact, all companies tivith which the Port plans to do business will be encouraged to go through brieF, pceliminary assessment. WHEREAS, the Saint Paul Port Authority haz provided leadership in this policy area for years by requiring that ihc companies with which it conducts business shall pay $8 per hour; and 21 �b'I�AEAS, the City of Saint Paul and the Saint Paul Housing and Redevelopment Authority (HRA) 22 adopted a policy in January 1997 whicl� provides that when the City or HRA provides economic or 23 community development assistance in excess of $100,000, alt wages for created or retained jobs in tliat 24 company shail be at least 110°/a of the federal poverty level for a family of four (58.83 per hour in 1999), or 25 100% of the federal poverty level if full heath care is provided ($8.02 in 1999); now, therefore, be it 26 RESOLVED, that the Saint Paul City Council commends the action of the Port Authority Boazd of 27 Commissioners in updating the PoR's �vage policy; and be it 28 RESOLVED, that the Saint Paul City Council requests ffiat the Department of Planning 2nd Economic 29 Development report back to the City Council on the feasibility and advisabifity of increuing the level of the 30 living wage rate in City of Saint Paul and HRA from I] 0% to I25% ($10.03 per hour in 1499) of the federal 31 poverty rate for a family of four, and from 100% to 110% ($8.83 per hour in ] 999) of the federal poverty 32 rate for a family of four if healeh care benefits aze provided. , a .J a' Green Sheet #1 �� a Council File # ��Z3 � 10 1 WI-�REAS, the Saint Paul Port Authority adopted a revised wage poticy in April 1999 which specifies that 2 the Port Authority will stipulate in its workforce agreements that entry-level jobs in companies with which 3� the Port does business shall pay S9 per hour: EXAIBIT C , COiv7PRRISON OF RETAIL AND MANUFACTURING WAGES Largast Occupational Categories Twin Cities Metropoiitan Area: 1997 4. Occupational Category Retaii Hosts & Hostesses: Restaurant, Lounge, or Coffee Shop Sa�espersons, Retail Cashiers Waiters & Waitresses TOTAL Manufacturing Assemblers & Fabricators Generai Managers & Top Executives Secretaries, Except Legal & Medical Hand Packers & Packagers Machinists Electrical & Electronic Assemblers Sales Representatives, Except Scientific Shipping, Receiving 8 Traffic Clerks Bookkeeping, Accounting & Auditing Industrial Production Managers Meat, Poultry & Fish Cutters 8 Trimmers Packaging 8 Filling Machine Operators TOTAL % of All Retait Jobs 23.5% 12.6% 9.0% 6.7% 51.8% °/, of Ail Manufacturing Jobs 5.7% 2.3% 2.0% '1.8% '1.7% 1.6% 1.5% 1.5% 1.3% 1.3% 12% � z�ia 23.1 % Notes: > Data Source: Minnesota Department of Economic Security > Job percentages are for Minnesota, 1995 > Wagefigures are forTwin Cities Metropolitan Area, �997 > Data were not available for some manufacturing occupations 25% of Workers Eam an Hourly Wage of LESS Than: $5.96 56.38 $6.'15 $5.36 $8.77 $19.07 $10.60 $6.35 $11.20 $7.59 $14.27 $9.11 $10.11 $20.94 $6.73 $�.�� Median Hourly Wage $6.99 $7.60 S721 $5.57 510.82 $31.19 $12.39 $7.47 $14.40 $9.80 $18.96 $11.56 511.87 527.85 58.00 s�o.00 � � -Sa3 25% of Workers Eam an Hourly Wage of MORE Than: $8.03 $921 $8.27 $5.82 $14.56 $50.36 $14.70 587t $17.71 $12.40 $30.21 $15.61 $14.13 $38.85 5923 S t 3.58 Findings: - > Retail jobs are concentrated in a few occupations: four occupations account for more than half of aIl retail jobs > Manufacturing jobs are dispersed throughout many occupations: tweive occupations account for less than 25% of all manufacturingjobs > Retail jobs pay considerably less than manufacturing jobs: the highest-paying retail occupation (Salesperson, Retaii} earns wages comparab�e to the lowest-paying manufacuturing occupation (hand packers and packagers) > Retail wages are nowhere close to the proposed living wage rate of $10.03: even the threshold for the top 25% of workers in the highest-paying retail occupation ($9.21 for Saiesperson, Retail) was well below the 510.03 rate. > In contrast to retail, over half of the manufacturing occupations in 1997 had wage rates above $10.03 at the threshold for the lowest-paid 25% of workers DEPART[vIEN'1' OF PLANNPIG & ECONOMIC DEVELOPMENT Brim� Sweeney, Interim Director CITY OF SAIN"f PAUL No>m Coleman, Mayor July 8, 1999 Gerald Strathman, Director City Council Investigation & Reseazch Center City Ha11310 Saint Paul, MN 55102 Deaz Mr. Strathman: zs wzse Founa srreer Sa "vtt Paul, MN55102 �9'-sa3 Te7ephone: 657-266-6565 Facsimile: 651-228-326I In response to Resolution 99-523 passed by City Council on June 23, I haue begun assessing the impact on City-funded projects of increasing the living wage rate. My staff is working with our PED Account Officers to gather informafion in order to give a comprehensive response to City Councilmembers. We will be researching and preparing the report this sununer. Because of the press of current projects and sununer vacation schedules I am planning to have a report for the Council in September. Would it be possible to be on the City Council Agenda on September �for this report? r� Sincerely, Brian Swee ey, irect Deparhnent of Planning & Economic Development , ��g�� l � � �t.�-�,;��- �J� `"° (J�,�, `�� J'F� ' S� 1 \�Ped�S1'S2\SFiAILED\COPELANDUOBSU.W�brian ]tr str[hmawpd •�--'�v ORIGINAL Presencea Referred 1'0 RESOLUTION OF SAINT PAUL, M' couo�a Fue # �5Z.3 GreenSheet# 4D78 Committee Date 1 WHEREAS, the Saint Paul Port Authority adopted a revised wage policy in April 1999 which specifies that 2 the Port Authority will sGpulate in its workfocce agreements that entry-level jobs in companies with which 3 the Port does business shall pay $9 per hour: 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 1. Workforce agreements, as a rule, should stipulate $4 per hour as a minimum wage, plus benefits, after probation, for entry-level jobs. 2. Workforce agreements may stipulate less than $9 per hour minimum entry-(evel wages, plus benefits, under certain conditions, namely: • provided the business has career paths for entry-level jobs that lead to living wages within approximately 1 year, • provided the business is willing to participate in a brief recruitment, retention and wage assessment with customized job training staff, and provided the assessment is carried out before the workforce agreement is executed. 3. Even where businesses start new-hires a$9 per hour, they still should be encouraged to do a brief self assessment, with Port help if necessary, of their cazeer paths and "living° wage opportunities. In fact, all companies with which the Port plans to do business will be encouraged to go through brief, preliminary assessment. WHEREAS, the Saint Paui Port Authority has provided leadership in this policy azea for years by requiring that the companies with which it conducts business shall pay $8 per how; and 21 WHEREAS, the City of Saint Paul and the Saint Paul Housing and Redevelopment Authority (HRA) 22 adopted a policy in January 1997 which provides that when the City or I-IKA provides economic or 23 community development assistance in excess of $100,000, all wages for created or retained jobs in that 24 company shall be at least 110% of the federal poverty level for a family of four ($8.83 per hour in 1999), or 25 100% of the federal poverty level if full heaih caze is provided ($8.02 in 1999); now, therefore, be it 26 RESOLVED, that the Saint Paul City Council commends the action of the Port Authority Boazd of 27 Commissioners in updating the Port's wage policy; and be it 28 RESOLVED, that the Saint Paul City Council requests that the Department of Pianning and Economic 29 Devetopment report back to the City Couneil on the feasibility and advisability of increasing the level of the 30 living wage rete in City of Saint Paul and HRA from 110% to 125% ($10.03 per hour in 1999) of the federal 31 poveriy rate for a family of four, and from 100% to I 10% ($8.83 per hour in 1999) of the federal poverty 32 rate for a family of four if health caze benefits are provided. ��i�� 1 10 ,__. �RIGINAL a �i�t S?_3 �� 0 Yeas Na s Absent Requested by Department of: Benanav Blakey Bostrom Coleman Hazris Lantry Reiter � � � c/ Adopted by ci Date _ Adoptio Ce � ied by Councii s �� Approved by May r: Date _ By: � Form Approved by City Attomey B Approved by Mayor for Submission to Council By: Council File # ��Z.3 OR�GINA�. Presented Referred To RESOLUTION CIT OF SAINT PAUL, MINNESOTA Green Sheet # �4D78 �O Committee Date 1 WHEREAS, the Saint Paul Port Authority adopted a revised wage policy in April 1999 which specifies that 2 the Port Authority will sripulate in its worl�'orce agreements that entry-level jobs in companies with which 3 the Port does business shall pay $9 per hour: 4 S 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1. Workforce agreements, as a rule, should stipulate $9 per hour as a minimum wage, plus benefits, after probarion, for entry-level jobs. 2. Workforce agreements may sripulate less than $9 per hour minimum entry-level wages, plus benefits, under certain conditions, namely: • provided the business has career paths for entry-level jobs that lead to living wages within approximately 1 year, • provided the business is willing to participate in a brief recruitment, retention and wage assessment with customized job training staff, and provided the assessment is carried out before the workforce agreement is executed. 3. Even where businesses start new-hires a$9 per hour, they sNll should be encouraged to do a brief self assessment, with Port help if necessary, of their career paths and "living" wage opporhxnities. In fact, all companies with which the Port plans to do business will be encouraged to go through brief, preliminary assessment. WHEREAS, the Saint Paul Port Authority has provided leadership in trus policy azea for years by requiring that the companies with which it conducts business shall pay $8 per hour; and 21 WI�REAS, the City of Saint Paul and the Saint Paul Housing and Redevelopment Authority (HRA) 22 adopted a policy in January 1997 which provides that when the City or HRA provides economic or 23 community development assistance in excess of $Y00,000, all wages for created or retained jobs in that 24 company sha11 be at least 110% of the federal poverty level for a family of four ($8.83 per hour in 1999), or 25 100% of the federal poverty level if full heath caze is provided ($8.02 in 1999); now, therefore, be it 26 RESOLVED, that the Saint Paul City Council commends the action of the Port Authority Board of 27 Commissioners in updating the Port's wage policy; and be it 28 RESOLVED, that the Samt Paul City Council requests that the Department of Planning and Economic 29 Development report back to the City Council on the feasibility and advisability of increasing the level of the 30 livmg wage rate in City of Saint Paul and HRA from 110% to 125% ($10.03 per hour in 1999) of the federal 31 poverty rate for a family of four, and from 100% to I 10% ($8.83 per hour in 1999) of the federal poverty 32 rate for a family of four if health care benefits aze provided. �'l�i ORIG{NAL Benanav � Blakey Boslrom � Coleman � Harris � Lantry � Keiter � Adopted by ci Date Adoptio Certified by Counc By: Approved by May�6r: Date ( J//{� Gy' /YQ� B �l�i.i.c �F�i�� Requested by Department of: � Form Approved by City Attomey � Approved by Mayor for Submission to Council � G G.—�� '� . , — �� DEPARTMENT/OFFICE/COUNCIL DAiE INmATED C% Counc�'/ �- Z- 9 9 GREEN SHEET No 64078 CO CT PEF2SON $ PFiONE InMaVDa1e InitlaWate �o%cnc�/iruM�der d�enenav, 26G•8� ,�.,�„ a ,,,� MUST BE ON COUNCIL AGENDA BY (DAT� ! - 9- 9 9 : Cc,�se.� '�""' NWWERFOR Q,,,.nOR1E„ m.CIFRK ROUTIpG � w+wcw.smxcFSOn. wuxu��mn/�ccrc ❑ rnran(ox�smtaxp ❑ TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) CTION REQUESTm R2SOIk.f�bn �P �uesh� �l�+# D�pt.o{P/a. a..o��'�o�•,o.�•�:� r�,��t to !�+ C' � C�OCcna.'I pn �i� � tasif i/•i�r anp/advi'sab:/!Fy o{�neieosi.,� ��v C'�.fy�s and f/RA's �ivin4 Wa� �a/+E. d RECAMMENDATION P.PPfOV2 (A) W R¢jBCI (R) VERSONAL SERViCE CON7RACf5 MUSTANSWERTHE FOLLOWING QUE57ION5: �. N35 fh� PQ��IRf1214f WOfkEd 11IId2f d WfIh2L{ {Of UII6 EEpBRlIIEf�f? PLANNING COMMISSION VES NO CIBCOMMITTEE 2. HasthispeisoNfirmeverbeenacityempbyee9 CIVILSERVICECAMMISSION YES NO 3. Does this pe�soNfirm possess a sldll not riormallypossessed by any curteM city employce? YES NO 4. Is this persoNfi�m a targetetl ventloY7 VES NO Emiain all yes ansviets on sepa2te sheet and atfach to 9reen sheet INITIATING PROBLEM ISSUE, OPPOR7UNIi7 (Whq Whffi, When, Where, Why) AWANTAGES IF APPROVED DISADVANTAGESIFAPPROVED � DISADVANTAGES IF NOT APPROVED TOTAL AMOIINT OF TRANSACTION S CO3T/REVENUE BUDCETED (GRCLE ONq YES NO FUNDING SOURCE ACTIVITY NUMBER FlNPNCIFL INFORMATION (IXPWN) �'� ��'�I �a???°4 t�3P,� � `; �9�1� �'4-sa3 From: Nancy Anderson �' To: PEDD.PEDsweeney Date: 7/19/99 2:17pm Subject: Resolution - 93523 Brian: i have placed the new date (September 22, 1999) on our Council calendar, per your conversation with Gerry Strathman. At this meeting PED will make a report to the City Council (C.F. 99-523) regarding the feasibility and advisability of increasing the City's and HRA's living wage rate. On September 22nd this item will be placed on the City Council Agenda as a DISCUSSION item. Nancy Anderson Assistant Secretary to the City Councit CC: gerrys, marye f; � CTTY OF SAINT PAUL h'Orm Co[emars, Mayor September, 1999 TO: St. Paul City Council DEPARTMENT OF PLANNMG & ECONOMIC DEVELOPMENT Briom Sweeney, Director 25 West Fourth Sbeet Saint Pau1, MN 55702 `�'R sa3 Telephone: 65l-266-6565 Fauimile: 651-218-316/ FROM: Brian Sweeney, Director of Planning and Economic Development�,��;� � � RE: Report in response to Resolution 99-523 Introduction On January 2, 1997, City Council passed Resolution 96-1512 estabiishing a Living Wage Policy for any Economic Development project receiving over $100,000 (cumulative in any one fiscal yeaz) in City assistance in which jobs aze created or retained (Exhibit A outlines the policy). City assistance was defined as loans, bonds, grants, and City tax incentives. The cuaent Living Wage is deFined as 110% of the Federal Poverty guidelines for a family of four ($8.83 for 1999). If the business provides employer-paid basic health insurance coverage, living wage is defined as 100% of the Federal Poverty guidelines for a family of four ($8.02 for 1999). The following information is in response to Resolution 99-523 (E�ibit B) passed by Ciry Council on June 23, 1999, requesting a report assessing the impact on City-funded projects if the St. Paul Living Wage was increased. The report was requested due to the Port Authority establishing $9.00 per hour as the required minimum living wage for their projects. Com�arisons It is important to note that the Port Authority funds mainly industrial projects that deal with manufacturing/technical jobs which pay more than the restaurant, retail and sen�ce industries that the City/HRA usually assists. The Port Authority also often subsidizes their projects by selling land to the company for $ l...which is why in return, manufacturers aze able to pay higher wage levels. In the attached "Comparison of Retail and Manufacturing Wages" the median houriy wa=es for hosts and hostesses in restaurants is $6.99 an hour, retaii salespersons $7.60 an hour, waiters and waitresses $5.57 an hour. The median hourly wages in the manufacturing industry ranges from $7.47 an hour for hand packers and packers to $14.40 for machinists to $11.56 for shippin�, receiving and traffic clerks. q9 sa3 i , Reseazch from the Employment Policies Institute states there aze 39 municipalities throughout the ', United States that currenfly have wage requirements. The average wage without benefits was $834. The City of St. Paul's is $8.83, which is currenfly higher than average. Minneapolis was contacted, and there aze no plans to change their Living Wage policy, which is currently consistent with the City of St. Paul. That, in itself, would put us at a disadvantage in inviting Economic Development to St. Paul. Impact on Snecitic Proiects -PED staff have been working on several fronts toward the revitalization of Wabasha as downtown's retail main street. While no specific project or financing structure has been negotiated, the objectives of this effort include the development of a proposal to Daytons to achieve a long term commitment for a remodeled store to remain downtown, and the attraction of strong complimentary retail tenants to locate stores along Wabasha. These retailers look at a potential store performance on a national basis in making location decisions. Imposition of a muumum wage requirement above those established in the mazket would severely 1'unit the City's ability to influence retail development in the downtown azea. -A proposed new full service grocery store/deli has been approved for a$235,000 STAR grant and a$90,000 HRA working capital loan. The project will create at least 6 full time }obs at an average wage of $12 an hour. However, this business may also be able to hire some part-time employees for deli counter or grocery delivery services to serve downtown residents, and an increased Living Wage would be higher than the mazket currently pays for these positions. In order to be successful, this grocery store would have to increase sales by neazly 30% over the levels achieved at a former downtown grocery store. A higher wage requirement could affect the ability of this business to succeed. -One of our most recent major deals, Media One, that retained and brought jobs to St. Paul, may not have happened if we had to impose an increased living wage amount on them. -With regazd to specific companies, Ecolab and Unipac aze two key customers. The 110% of poverty requirement appeazs to work for them. Current labor mazket conditions often demand that they pay fairly high entry level wages. However, with some smaller employers, and for some large employers who have very low skill requirements for their jobs, it is a stretch to pay at this level, and these might be the type of empioyers who would be impacted by an increase in the Living Wage. Recommendation In the long run, there is a very real risk that firms will not choose to locate in the City if they have to pay higher wages for less-skilled workers. Fums aze generally very sensitive to differences in costs across the regions. Prepazed by Jill Hughes EXHIBIT A SAINT PAUL'S LIVING WAGE POLICY �� Adopted on.7anuary 2, 1997 by Council Resolution 96-1512 In January 1997 the Saint Paul City Council established a Living Wage Policy requiring economic development projects receiving $100,000 or more in City assistance to pay employees at least 10% above the poverry line. The policy is in effect for projects that create or retain full time jobs and receive City loans, grants, bonds, andlor t� incentives. Milwaukee was the first to pass living wage legislation, followed by several U.S. cities including Minneapolis, Duluth, Madison, St. Louis, Boston, Portland, and Philadelphia. Exemptions: • Conduit 6onds, in which the City's only obligation is to issue bonds on behalf of the borrower. The borrower is responsible for repayment of ali principle and interest. • Small businesses, with typically 20 or fewer employees, as defined in MN Statute 645.445. • Intermediaries, such as community development corporafions or banks, who disburse City funding for community economic development projects. • first year fior new businesses. New businesses aze exempt until their second year of operation. • Redevelopment projects whose only public assistance is site remediation, investigation or assembly. REQUIREMENTS: • Wages: In Saint Paul and Minneapolis, living wage is defined as 110% of the Federal poverry guidelines for a family of four ($8.83 for 1999). If the business provides employer-paid basic heaith insurance, living wage is defined as 100% of the same Federal poveriy guidelines ($8.02 for 1999). • Job Creation & Residency: Job creation goals for economic development projects will be defned by businesses and City staff as part of contract or loan agreement documents. 60% of new hires must be Saint Paul residents. • Reporting: A Quarterly Wage Detail report, required of,all businesses by the state, must be provided to the City on an annual basis until the wage and job goals aze met. The Quarterly Wage Detaii Report consists of an employee roster, weeks worked and wages earned. Businesses must also provide an affidavit certifying any new hires and the city in which they reside. • Non-compliance: Failure to comply with the requirements of the Living Wage Policy results in a default. Options to remedy a default include accelerating the loan or increasing the interest rate on City financing to the mazket rate. • Waivers: A waiver may be requested at any time for any or all of the above requirements. The request must include a detailed explanation of why the requirements cannot be met. Requests must first be approved by the Director of the Department of Pianning and Economic Development and then must be granted by City Council Resolution. Amcllwregs.fly updated April 7999 — _ EXHZBZT B OR!G1NAL { 4 5 6 7 9 10 11 12 13 14 I7 18 19 20 RESOLUTION I. Workforce agreements, as a rule, shouid stipulate $9 per hour as a minimum wage, plus benefits, after probation, for rntry-level jobs. 2. VVorkforce agreements may stipulate less than $9 per hour minimum entry-level wages, plus benefits, under certain conditions, namely: • provided the business has career paths for en[ry-level jobs that lead to li��ing wages within approxima[ety 1 yeaz, .. • provided the business is willing to participate in a brief recruitment, retention and wage assessment witli customized job training staff, and provided the assessment is carried out before the workforce agreement is executed. 3. Even where businesses start new-hires a$9 per hour, they still should be encouraged to do a brief self usessment, with Port help if necessary, of their career paths and `7iving" wa¢e opportunilies. In fact, all companies tivith which the Port plans to do business will be encouraged to go through brieF, pceliminary assessment. WHEREAS, the Saint Paul Port Authority haz provided leadership in this policy area for years by requiring that ihc companies with which it conducts business shall pay $8 per hour; and 21 �b'I�AEAS, the City of Saint Paul and the Saint Paul Housing and Redevelopment Authority (HRA) 22 adopted a policy in January 1997 whicl� provides that when the City or HRA provides economic or 23 community development assistance in excess of $100,000, alt wages for created or retained jobs in tliat 24 company shail be at least 110°/a of the federal poverty level for a family of four (58.83 per hour in 1999), or 25 100% of the federal poverty level if full heath care is provided ($8.02 in 1999); now, therefore, be it 26 RESOLVED, that the Saint Paul City Council commends the action of the Port Authority Boazd of 27 Commissioners in updating the PoR's �vage policy; and be it 28 RESOLVED, that the Saint Paul City Council requests ffiat the Department of Planning 2nd Economic 29 Development report back to the City Council on the feasibility and advisabifity of increuing the level of the 30 living wage rate in City of Saint Paul and HRA from I] 0% to I25% ($10.03 per hour in 1499) of the federal 31 poverty rate for a family of four, and from 100% to 110% ($8.83 per hour in ] 999) of the federal poverty 32 rate for a family of four if healeh care benefits aze provided. , a .J a' Green Sheet #1 �� a Council File # ��Z3 � 10 1 WI-�REAS, the Saint Paul Port Authority adopted a revised wage poticy in April 1999 which specifies that 2 the Port Authority will stipulate in its workforce agreements that entry-level jobs in companies with which 3� the Port does business shall pay S9 per hour: EXAIBIT C , COiv7PRRISON OF RETAIL AND MANUFACTURING WAGES Largast Occupational Categories Twin Cities Metropoiitan Area: 1997 4. Occupational Category Retaii Hosts & Hostesses: Restaurant, Lounge, or Coffee Shop Sa�espersons, Retail Cashiers Waiters & Waitresses TOTAL Manufacturing Assemblers & Fabricators Generai Managers & Top Executives Secretaries, Except Legal & Medical Hand Packers & Packagers Machinists Electrical & Electronic Assemblers Sales Representatives, Except Scientific Shipping, Receiving 8 Traffic Clerks Bookkeeping, Accounting & Auditing Industrial Production Managers Meat, Poultry & Fish Cutters 8 Trimmers Packaging 8 Filling Machine Operators TOTAL % of All Retait Jobs 23.5% 12.6% 9.0% 6.7% 51.8% °/, of Ail Manufacturing Jobs 5.7% 2.3% 2.0% '1.8% '1.7% 1.6% 1.5% 1.5% 1.3% 1.3% 12% � z�ia 23.1 % Notes: > Data Source: Minnesota Department of Economic Security > Job percentages are for Minnesota, 1995 > Wagefigures are forTwin Cities Metropolitan Area, �997 > Data were not available for some manufacturing occupations 25% of Workers Eam an Hourly Wage of LESS Than: $5.96 56.38 $6.'15 $5.36 $8.77 $19.07 $10.60 $6.35 $11.20 $7.59 $14.27 $9.11 $10.11 $20.94 $6.73 $�.�� Median Hourly Wage $6.99 $7.60 S721 $5.57 510.82 $31.19 $12.39 $7.47 $14.40 $9.80 $18.96 $11.56 511.87 527.85 58.00 s�o.00 � � -Sa3 25% of Workers Eam an Hourly Wage of MORE Than: $8.03 $921 $8.27 $5.82 $14.56 $50.36 $14.70 587t $17.71 $12.40 $30.21 $15.61 $14.13 $38.85 5923 S t 3.58 Findings: - > Retail jobs are concentrated in a few occupations: four occupations account for more than half of aIl retail jobs > Manufacturing jobs are dispersed throughout many occupations: tweive occupations account for less than 25% of all manufacturingjobs > Retail jobs pay considerably less than manufacturing jobs: the highest-paying retail occupation (Salesperson, Retaii} earns wages comparab�e to the lowest-paying manufacuturing occupation (hand packers and packagers) > Retail wages are nowhere close to the proposed living wage rate of $10.03: even the threshold for the top 25% of workers in the highest-paying retail occupation ($9.21 for Saiesperson, Retail) was well below the 510.03 rate. > In contrast to retail, over half of the manufacturing occupations in 1997 had wage rates above $10.03 at the threshold for the lowest-paid 25% of workers DEPART[vIEN'1' OF PLANNPIG & ECONOMIC DEVELOPMENT Brim� Sweeney, Interim Director CITY OF SAIN"f PAUL No>m Coleman, Mayor July 8, 1999 Gerald Strathman, Director City Council Investigation & Reseazch Center City Ha11310 Saint Paul, MN 55102 Deaz Mr. Strathman: zs wzse Founa srreer Sa "vtt Paul, MN55102 �9'-sa3 Te7ephone: 657-266-6565 Facsimile: 651-228-326I In response to Resolution 99-523 passed by City Council on June 23, I haue begun assessing the impact on City-funded projects of increasing the living wage rate. My staff is working with our PED Account Officers to gather informafion in order to give a comprehensive response to City Councilmembers. We will be researching and preparing the report this sununer. Because of the press of current projects and sununer vacation schedules I am planning to have a report for the Council in September. Would it be possible to be on the City Council Agenda on September �for this report? r� Sincerely, Brian Swee ey, irect Deparhnent of Planning & Economic Development , ��g�� l � � �t.�-�,;��- �J� `"° (J�,�, `�� J'F� ' S� 1 \�Ped�S1'S2\SFiAILED\COPELANDUOBSU.W�brian ]tr str[hmawpd •�--'�v ORIGINAL Presencea Referred 1'0 RESOLUTION OF SAINT PAUL, M' couo�a Fue # �5Z.3 GreenSheet# 4D78 Committee Date 1 WHEREAS, the Saint Paul Port Authority adopted a revised wage policy in April 1999 which specifies that 2 the Port Authority will sGpulate in its workfocce agreements that entry-level jobs in companies with which 3 the Port does business shall pay $9 per hour: 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 1. Workforce agreements, as a rule, should stipulate $4 per hour as a minimum wage, plus benefits, after probation, for entry-level jobs. 2. Workforce agreements may stipulate less than $9 per hour minimum entry-(evel wages, plus benefits, under certain conditions, namely: • provided the business has career paths for entry-level jobs that lead to living wages within approximately 1 year, • provided the business is willing to participate in a brief recruitment, retention and wage assessment with customized job training staff, and provided the assessment is carried out before the workforce agreement is executed. 3. Even where businesses start new-hires a$9 per hour, they still should be encouraged to do a brief self assessment, with Port help if necessary, of their cazeer paths and "living° wage opportunities. In fact, all companies with which the Port plans to do business will be encouraged to go through brief, preliminary assessment. WHEREAS, the Saint Paui Port Authority has provided leadership in this policy azea for years by requiring that the companies with which it conducts business shall pay $8 per how; and 21 WHEREAS, the City of Saint Paul and the Saint Paul Housing and Redevelopment Authority (HRA) 22 adopted a policy in January 1997 which provides that when the City or I-IKA provides economic or 23 community development assistance in excess of $100,000, all wages for created or retained jobs in that 24 company shall be at least 110% of the federal poverty level for a family of four ($8.83 per hour in 1999), or 25 100% of the federal poverty level if full heaih caze is provided ($8.02 in 1999); now, therefore, be it 26 RESOLVED, that the Saint Paul City Council commends the action of the Port Authority Boazd of 27 Commissioners in updating the Port's wage policy; and be it 28 RESOLVED, that the Saint Paul City Council requests that the Department of Pianning and Economic 29 Devetopment report back to the City Couneil on the feasibility and advisability of increasing the level of the 30 living wage rete in City of Saint Paul and HRA from 110% to 125% ($10.03 per hour in 1999) of the federal 31 poveriy rate for a family of four, and from 100% to I 10% ($8.83 per hour in 1999) of the federal poverty 32 rate for a family of four if health caze benefits are provided. ��i�� 1 10 ,__. �RIGINAL a �i�t S?_3 �� 0 Yeas Na s Absent Requested by Department of: Benanav Blakey Bostrom Coleman Hazris Lantry Reiter � � � c/ Adopted by ci Date _ Adoptio Ce � ied by Councii s �� Approved by May r: Date _ By: � Form Approved by City Attomey B Approved by Mayor for Submission to Council By: