Montgomery County and a consulting firm it hired have mutually agreed that the county will not pay for a $149,000 flawed study that overestimated the number of jobs lost if the minimum wage was raised to $15 an hour.
The county has declined to pay an invoice sent by the Philadelphia-based firm PFM, said Patrick Lacefield, a spokesman for County Executive Isiah Leggett (D). The decision was first reported by Bethesda Beat on Wednesday.
"Basically because of the flaws, [the study] was not a useful product for us," Lacefield said. "This is a better way for us to proceed."
A spokesman for PFM said the error was made by a subcontractor and that the firm had agreed to waive its fee.
Leggett commissioned the study earlier this year after vetoing a bill that would have made Montgomery County the first jurisdiction in Maryland to require a $15 minimum wage by 2020. Businesses with fewer than 26 employees would have had until 2022 to comply. Five of the council's nine members voted for the bill — one short of six needed to override Leggett's veto.
The study, released in August, initially predicted that 47,000 jobs would be lost by 2022 if a $15 minimum wage was required. But later that month, the research group admitted to "a computation error" that overestimated the number of lost jobs.
Over the summer, council member Marc Elrich (D-At Large) introduced a revised bill that would grant small businesses, nonprofit organizations and adult day-care providers until 2022 to adopt the increase.
Leggett issued a memo last month proposing further changes to the bill. He asked council members to expand the definition of small businesses to include those with 50 or fewer employees — covering 96 percent of businesses and 50 percent of county employees, according to Leggett's office. Leggett also suggested giving large businesses until 2022 to comply, and small employers and nonprofit organizations until 2024.
Acting in line with Leggett's recommendations, the council's Health and Human Services Committee voted Monday to extend the bill's timeline and redefine small businesses.
Council member George L. Leventhal (D-At Large), who chairs the three-member committee and supported the original legislation, was the only committee member to vote against the changes. At Monday's committee meeting, Leventhal posed a question for Leggett's office: Would Montgomery get its money back from the consulting firm for the flawed study?
"I don't think we got our money's worth," Leventhal told The Washington Post. "I don't think the county got a good product."
Lacefield said the county and PFM had been talking for "a period of time" about mistakes in the initial study. But Leventhal publicly asking about payment pushed Leggett's office to respond this week, Lacefield said.
The firm presented the county with revisions to the first draft, but the county has chosen not to move forward with a new study, Lacefield said.
"When we looked at the revisions we thought there was still a lack of clarity," Lacefield said. "If there's still this lack of clarity, we don't need to work further on this."