4 – 3 vote from Council to move forward with controversial minimum wage study

Against objections from community members and from three council-members, Flagstaff City Council voted 4-3 on Tuesday to move forward with an impact study of the minimum wage increase on area businesses. Rounds Consulting Group is the study contractor. 

Rounds was under fire from community members because a Rounds company principal, Jim Rounds, wrote data and analysis for the Goldwater Institute to be used in arguing against minimum wage increases.  

This data was used as anti minimum wage fodder during the 2018 rehash referendum forced in Flagstaff by a petition sponsored, in part, by the Flagstaff Chamber of Commerce. Rounds, it turns out is also listed as a Fellow at the conservative Goldwater Institute.

Citizens and some council members objected to a staff decision to chose Rounds on the grounds that Rounds is not likely to produce an unbiased study due to their activity around minimum wage issues previously.

Even though most economic markers for the city show a positive impact of the new minimum wages (more traffic in businesses, additional hiring of employees, and and increased sales tax revenue, to name a few) Council-members, Odegaard, Whelen, and Salas, joined Mayor Coral Evans in voting to continue the contract with Rounds Consulting Group. 

The study being conducted by Rounds was asked for by Evans, Whelan, Odegaard, after a December special meeting with the Flagstaff Chamber of Commerce. In that meeting the chamber complained that the new minimum wage increases were hurting businesses and that chamber members are afraid of the future. 

Back in December, (Dec 17), City Staff represented to Council that they had selected Rounds to do the work and that’s when questions began to come up. (The information wasn’t entirely new because staff had sent the information at least a couple of days before that meeting.)

Having seen that memo with other Council-members in advance of the December meeting, Council-member Jim McCarthy read into the meeting a prepared statement. McCarthy said he is concerned that the data from Rounds will be biased, at least in appearance, and that Rounds’ assurance otherwise is not reliable. Aslan and Shimoni echoed those concerns.

In response to citizen concerns at the Dec 17 meeting, staff went back to the drawing board and invited a second consulting firm, Seidman Research Institute of Arizona State University, to help provide additional data. 

But this week as staff presented the second firm to Council, Austin Aslan spoke up and said that Seidman had provided data used by APS in their fact free campaign to stop the 2018 renewable energy initiative and was therefore not to be trusted either.

Staff was asked why there was no labor component involved with developing and implementing the study during this week’s Council meeting and staff defended their choice of Rounds by saying that it hadn’t occurred to them to consider including research and analysis related to employees. Instead, their framework was acquiring data to view the impact on and from the perspective of business owners. Staff said that if someone had brought it up they would have included notions related to the perspective of workers.

Additionally, it was pointed out during this weeks meeting that adding Seidman would add $20,000 to the study and that the City would be on the hook for $15,000 of that as Rounds had agreed to absorb $5,000 of the Seidman fee.

To cover the overage staff suggested they could take $10,000 from BBB money and an additional $5,000 from the city’s Department of Labor Standards. 

DLS is an oversight agency put in place to insure compliance with the City’s new, more complicated minimum wage structure.

Odegaard, Salas, and Whelan, said they were happy with the selection of Rounds and with the addition of Seidman to provide additional analysis and didn’t indicate concern about raiding DLS. 

But Aslan, McCarthy, and Shimoni all three objected to the selection of Rounds and Seidman, and to the rush to start – and complete – a study in less time than necessary to get good data. Shimoni and Aslan also objected to taking money from DLS. 

After which Mayor Evans said the study should move forward and that taking $5k from DLS was justified. She read from the Department’s website to justify doing that. In arguing that raiding DLS is a legitimate way to fund the study the Mayor referenced language from the city website that she said indicates a part of the department’s mission is to provide education to business. 

However, Marilyn Weissman pointed out in public comment, the Mayor was characterizing that passage as meaning that the Department’s mission includes providing businesses with strategies on how to operate their business but that that characterization is not in accordance with the spirit of the ordinance.

“We can quibble Coral about what you read is saying” Weissman said, “and my belief is the office was legislated by the voters to exist to enforce and administer the ordinance. It is there to educate employers and employees about our minimum wage and to prevent wage theft.” 

McCarthy, and council-members Aslan and Shimoni voted against going forward with the Rounds contract. All three cited concerns that staff should not have hired a firm to study an issue about which the company had already exhibited bias. 

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