Minimum Wage Hike Excluded from City Strategic Plan

Members of the South Pasadena City Council recently engaged in a spirited debate over whether to include the minimum wage hike in the strategic plan, finally opting to exclude it for now until more information is received on the impact of such an increase.

The city’s strategic plan designates budget priorities the council will address for the upcoming year and lays out six broad goals.

“The goals are broad statements of citywide aspirations in delivering services to the community; they are both quantitative and qualitative in nature,” according to a report presented to the City Council April 17. “The plan identifies strategies and initiatives to support the core goals. Implementation of these strategies and initiatives is the way in which a shared vision of a vibrant and sustainable quality of life for South Pasadena residents and stakeholders is sustained and improved.”

The goals include developing and implementing strong fiscal policies to ensure a resilient financial future; creating and implementing a strong economic development strategy to strengthen local business districts; developing a comprehensive emergency preparedness plan to ensure public safety through

active response and recovery efforts; enhancing community sustainability through investment in infrastructure and

environmental management programs; planning for affordable housing to comply with state mandates and responding to community needs; and enhancing customer service through innovation to more effectively respond to community priorities.

These goals were decided upon during recent planning sessions and the minimum wage hike did not make the cut.

“On several occasions, members of the community have requested that the City Council consider enacting a local minimum wage,” according to the staff report. “During the March 1 strategic plan retreat, this item was considered for inclusion in the FY2019-20 strategic plan. Following discussion, it was lacking sufficient support to add it to the draft Plan and thus was not included in the document. However, during the March 20 City Council meeting, Councilman (Richard) Schneider requested that the council again consider adding it to the work program for the new fiscal year. Councilman (Michael) Cacciotti seconded the motion to discuss adding it to the plan when presented for City Council approval on April 17. The strategic plan, as drafted from the March I retreat (attached), maximizes the use of staff time for priority projects. It does not include capacity for the addition of another complex policy issue requiring considerable staff research, analysis, and reports, including a robust community engagement program, as would be required for the minimum wage issue. Should the council vote to add this item to the strategic plan another issue of similar complexity would need to be removed from the plan to free up the appropriate staff resources. Those items could include work on revenue enhancement strategies, economic development, affordable housing initiatives, or seismic safety.”

A group of residents, led by John Srebalus, has been pushing the council for months now to increase the minimum wage in South Pasadena by July 1, 2019, to $14.25 and $15 by July 1, 2020. The minimum wage now is $11 as it is throughout California. South Pasadena does not have a minimum wage ordinance for the city, according to officials.

“On February 18th, my group of concerned residents presented a draft ordinance to raise South Pasadena’s minimum wage to that of Los Angeles, Pasadena and other areas, applicable only to larger businesses with 26 or more employees,” Srebalus told the council back on March 6 during public comments. “This figure is important; it means that only 14 members of the 270 in the South Pasadena Chamber of Commerce will be required to pay higher wages. Four, if you include only locally based businesses.”

Meanwhile, the state has already passed an increase of the minimum wage that takes effect incrementally over the next five years. As an example, a business with 25 employees or less pays $11 per hour now; on Jan. 1, 2020, it goes to $12; Jan. 1, 2021, $13; Jan. 1, 2022, $14; and Jan. 1, 2023, $15. The federal minimum wage is $7.25.

Khubesrian said the city doesn’t have the infrastructure in place to have a local minimum wage increase. 

“The City of South Pasadena does not currently have the function or the infrastructure to enforce a minimum wage ordinance,” she said in an earlier email.

“We rely of the State’s role to monitor and enforce wages as do 85 out of the 88 cities in LA County,” Khubesrian continued. “We simply do not have the resources to create an 18-month wage increase acceleration management function at this time.”

The council decided to adopt the strategic plan without the wage hike with the caveat that Councilmember Michael Cacciotti and Mayor Pro Tem Robert Joe may adjust the plan to include the minimum wage hike after more information is received.

Schneider did not want the hike to be in competition with the broad goals already in the plan, saying it didn’t have to be used as a sacrificial item. Schneider said that the hike should not replace any of the other goals but be added. He said much work had already been done by the group advocating the wage increase that would ease the burden on city staff.

A nine-page proposed draft ordnance has already been written by the Srebalus group as well as a three-page research paper that includes a digest of supporting studies.

In fact and ironically, the Srebalus group said the hike being included in the city’s strategic plan is not important and the discussion whether to include it is irrelevant.

“Attached is our proposed ordinance establishing a higher minimum wage for businesses in the city with 26 or more employees,” Srebalus writes in a letter to Mayor Dr. Marina Khubesrian and the City Council dated Feb. 18, 2019. “Because this is urgent policy effectively covering only 18 months as the state minimum catches up to the higher minimum proposed here and adopted in Los Angeles, Pasadena, Santa Monica and unincorporated Los Angeles County, we proponents ask that you give this your immediate attention. We don’t accept that this is an issue for consideration at the upcoming strategic planning meeting. The strategic plan is a place for broad objectives for the coming fiscal year; our proposal is for urgent, straightforward legislation with regional precedent and strong local support.  A higher minimum wage clearly falls under ​current​ fiscal year objective … as it supports the local economy and enhances opportunities for live, work and play. Low-wage workers are an essential part of our local economy and deserve the same opportunities for live, work and play as anyone else. At their current wage they can work, but neither live nor play. And their income is income to be spent in our local economy. To send our proposal to strategic planning is to bury it where it doesn’t belong. It also suggests there is time to lose. Regional increases (and thus our proposed increases) are scheduled for July 1, and our businesses need time to plan. The research is in, Pasadena has affirmed. For our city to dig in its heels at this time sends a message at odds with the type of brand it seeks to build and maintain. Let’s do this.”

Joe and Cacciotti requested more information from the South Pasadena Chamber of Commerce as to how this would affect businesses before they would solidify their positions. Joe also said he wanted to know how it will affect nonprofits.

“I want to hear back from the chamber,” Joe said. “This is tough. I’m struggling with this.”

Sam Hernandez, chamber board chair, told the council that he was opposed to the minimum wage hike as well as were other businesses. It appeared that Hernandez was speaking as an individual and not on behalf of the chamber, however. Laurie Wheeler, chamber president and CEO, has called for a meeting with the executive board to discuss the issue.

Srebalus is not dissuaded by what he perceives as the council’s apparent lack of attentiveness to the issue. He said the public wants this and it deserves to be discussed in a public forum.

“We are going to keep doing what we are doing,” Srebalus said during an earlier interview. “We are going to keep raising the point that was raised tonight, I thought very well, and that is this is something that deserves a public forum. Show us where you stand on this. It’s important and the public wants it.”

Right now, the vote seems to be Khubesrian and Councilmember Diana Mahmud opposed while Schneider and Cacciotti are leaning for with Joe representing the swing vote.

There was no time-line given for the chamber to report back to council or when the issue would be resolved.

The City Council, though, did hear a report prepared by City Attorney Teresa Highsmith at the May 1 meeting.

Highsmith was expected to address the lead time needed for businesses to adopt a hike as well as how a local minimum wage increase would be enforced, among other issues.