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7 <br /> Policy Considerations and Next Steps <br /> 1. Calculation Methodology <br /> The County has historically used a living wage formula that is driven by the Federal Poverty Level for <br /> a family of four, adjusted for costs in the region. While reliance on the poverty level is common and <br /> is used to determine eligibility for several federal programs, it is frequently criticized for using <br /> outdated metrics and lacking local cost sensitivity. Conversely, the fair market rent calculation is <br /> often viewed as being sensitive to local economic conditions by recognizing differences in local <br /> housing costs, but it typically does not account for variations in family size. In terms of impact on <br /> the wage rate, the market rent based formula would have yielded a higher rate for this fiscal year. <br /> The federal poverty rate calculation traditionally used by the County would have produced a rate of <br /> $12.53 per hour. Orange County Living Wage's living wage rate is$12.75. <br /> 2. Cost Analysis for Service Contracts <br /> As stated above, the County could adopt a living wage policy that applies to service contracts and <br /> construction contracts under $30,000 when a bid is not solicited. However, the County has not <br /> conducted a comprehensive analysis of service contracts that would quantify the cost impact and <br /> also identify policy considerations. For example, policies in other jurisdictions exempt certain <br /> providers from the living wage requirement. These exemptions typically apply to small firms or non- <br /> profit organizations where the requirement may be viewed as onerous. <br /> Developing a more complete profile of existing service contracts and providers would offer <br /> additional context for policy development. Staff would begin this analysis immediately in <br /> preparation for another presentation to the Board of County Commissioners. This presentation <br /> would occur prior to the completion of the County Manager's recommended budget so that any <br /> additional costs associated with policy implementation could be included if a policy is authorized by <br /> the Board at that time. <br /> Page 14 <br />