A routine bid award inspired Gilroy’s most liberal councilman to
propose a new mandate for vendors: Pay workers
”
decent
”
wages and health insurance, or forget about contracts to mow
public parks and clean City Hall bathrooms.
Gilroy – A routine bid award inspired Gilroy’s most liberal councilman to propose a new mandate for vendors: Pay workers “decent” wages and health insurance, or forget about contracts to mow public parks and clean City Hall bathrooms.
The potentially expensive mandate could place Councilman Peter Arellano at odds with peers looking to slash millions of dollars from the city’s annual spending. The city relies on a competitive bidding process to drive down costs on janitorial, park maintenance and countless other services, and a requirement to hire companies with higher labor costs could mean passing up the lowest bids.
But budget numbers weighed less on Arellano’s conscience Monday night than the 2000 Census, which shows that more than 50 percent of Gilroy families earn less than the county’s median income.
“We’re not even considering if the people we’re hiring are paying anything that could help low-income workers get out of the situation they’re in,” Arellano said. “We’re providing (grants) for programs that will give them education, health, employment, but here’s somewhere we can help by asking that (vendors) provide a decent wage and medical insurance. Because if we don’t, we end up as taxpayers and the city paying for it when they go to the emergency room (without insurance).”
Failure to provide livable wages and medical benefits would not necessarily disqualify bidders, Arellano said. Instead, he suggested the city should weight a vendor’s final bid based on such factors.
Pointing to a $209,000 janitorial contract to Madrigals Cleaning Service, in Gilroy, Arellano said that, “Maybe he’s the lowest bidder because he’s not providing good wages or good benefits.”
The local cleaning business is not averse to Arellano’s ideas, said Ben Madrigal, a 22-year-old who helps his mother run the company. The business is now made up of eight relatives, but the family is looking to bring in hired help and they plan to pay those workers more than the state’s $7.50 per hour minimum wage. They also are exploring the cost of providing health benefits.
“Later on in life, I want to have my own business,” Madrigal said. “You keep your workers happy and they respect you.”
Livable wage policies are nothing new in California. The cities of San Jose and Santa Cruz adopted such polices in 1999 and 2000, respectively. The City of San Jose, for instance, mandates a $12.27 base hourly wage and another $1.25 per hour if no health coverage is offered.
Wage standards are not entirely new in Gilroy either. The city has voluntarily adopted policies requiring contractors on multimillion-dollar building projects to pay workers “prevailing wages.” And when such projects rely on federal and state grants, the city must ensure contractors farm out a percentage of work to small, minority-owned businesses.
The timing of Arellano’s proposal may prove the biggest stumbling block. City officials are scrambling to shave millions of dollars off the city’s annual budget in hopes of preserving a $27 million pool of reserve funds. Current budget projections suggest the entire reserve could vanish within six years without substantial cutbacks.
“The last thing you really want is to have a bunch of employees who are out there doing this work and getting paid the bare minimum,” Councilman Russ Valiquette said. But he said the decision would hinge on a review of insurance costs in the private sector, prevailing wages and other factors that could determine if the policy becomes a “big hit” to the city budget.
“I think it’s something we need to sit down and review to see the possible cost,” Valiquette said.
Budget constraints are no secret to Arellano, who has emerged as council’s leading champion of policies benefiting the environment and low-income families. The city’s annual round of grant funding for local nonprofit groups inspired Arellano’s latest policy idea.
A few hours after council approved the bid to Madrigals, officials doled out $143,000 to local nonprofit groups that provide food, shelter and other human services. The organizations vying for money face rigid standards, including a requirement that they use the funds to help bring in matching grants from other agencies.
“We go through a big process of trying to find people who are going to do a good job in leveraging other grant money,” Arellano said. “Why are we doing that if we’re not going to take seriously the fact that people are living in poverty or have minimum wage jobs?”
Councilmen will debate the livable wage standard July 20 during a day of informal policy talks. The meeting begins at 8am and will take place in the new police headquarters at Hannah and Seventh streets.
