Common use of Cost of Living Differences Clause in Contracts

Cost of Living Differences. To ensure consistency in the cost of living of each survey location, a cost of living index should be used for comparison with the District. This index identifies the percentage difference in cost of living between each survey location and the Monterey Peninsula Water Management District. Any location with a cost of living index greater than 100 has a higher cost of living while indices less than 100 indicate a lower cost of living. Generally, differences of less than five percent are not statistically significant. The use of a cost of living index minimizes the possibility of significant data skewing. While it is impossible to find agencies that are exactly comparable to the Monterey Peninsula Water Management District, the agencies selected should provide a representative "picture" of comparable agencies. In order to ensure that a sufficient and valid sample of data is collected, 12 to 15 survey agencies should be used. The agencies used for comparison will be subject to review and revision in future compensation studies.