City faces rising costs as street sweeping wages soar

In a recent government meeting, city officials discussed the renewal of a street sweeping contract with Nationwide Environmental Services, which has been providing these services for over 30 years. The current agreement, set to expire at the end of this month, has been extended for an additional five years, maintaining the same scope of work that includes weekly street sweeping of approximately 8,570 curb miles and 13.4 million square feet of parking lots. The total cost for the first year of the new contract is approximately $492,000, with an annual 4% increase.

A significant point of discussion was the impact of prevailing wage requirements on the cost of street sweeping services. Following a 2021 opinion from the Department of Industrial Relations (DIR) stating that street sweeping qualifies as public work, cities are now required to pay prevailing wages for these services. This has raised concerns about escalating costs, as the current proposed wage is $96.25 per hour, which is substantially higher than previous rates.

City officials noted that while the new rates are competitive compared to other cities that have adopted prevailing wage requirements, they still represent a significant increase in expenses. For instance, neighboring Manhattan Beach recently received bids for similar services that were nearly 50% higher than Nationwide's proposal.

The city attorney's office is currently working with the League of California Cities to seek a more appropriate wage determination from the DIR. If the legislature clarifies that street sweeping is not subject to prevailing wage, or if a lower wage is published, Nationwide would be required to renegotiate the contract terms accordingly.

Officials emphasized the importance of maintaining a relationship with Nationwide, citing their familiarity with city streets and the high level of service provided. The proposed agreement includes a provision for renegotiation should prevailing wage issues evolve, ensuring that the city remains financially prudent while continuing to receive essential street cleaning services.