BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Kevin Murray, Chairman

                                           357 (Perata)
          
          Hearing Date:  8/28/06          Amended: 8/14/06
          Consultant:  Maureen Ortiz      Policy Vote: P. E. & R. 4-1 
          _________________________________________________________________ 
          ____
          BILL SUMMARY:   SB 357, an urgency measure, ratifies an  
          agreement between the State and State Bargaining Unit 12  
          (Operating Engineers) and Bargaining Unit 13 (Operating  
          Engineers).    The bill appropriates $47,756,000 for expenditure  
          in the 2006-07 fiscal year for state employee compensation in  
          augmentation of the Budget Act of 2006.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2006-07      2007-08       2008-09     Fund
                                                                  
          Unit 12: Salary/health/other       $42,327            $38,494     
                                   Gen/Spec
          Unit 13: Salary/health/other         $5,428              $3,819   
                                     Gen/Spec     
          _________________________________________________________________ 
          ____

          STAFF COMMENTS:  This bill meets the criteria to be referred to  
          the Suspense file, however, due to the urgent nature of bills  
          that ratify an MOU, this committee generally does not refer that  
          legislation to the Suspense file.
          
          There are approximately 10,811 FTE's in Unit 12, and  
          approximately 947 FTE's in Unit 13.  The provisions of the MOU  
          include the following:

           Compensation:
           
             1)   Upon ratification, all employees of Unit 12 and Unit 13  
               will receive a one-time bonus of $1,000.
             2)   Effective July 1, 2006, all employees of Units 12 and 13  
               will receive a general salary increase of 3.5%.
             3)   Effective July 1, 2007, all employees of Units 12 and 13  
               will receive a COLA of 2-4% based on the CPI as specified
             4)   Unit 12:  Effective January 1, 2007, the top salary for  










               Hydroelectric classifications will be raised 7.5%, the top  
               salary for Telecommunication and Electronics  
               classifications will be raised 5%, and the top salary for  
               specific Equipment Operator classifications will increase  
               5%.
             5)   Unit 13:  Effective January 1, 2007, the existing  
               monthly differential for specified chief plant operators  
               increases from 5% to 6%; and a 4% differential will be  
               implemented for specified water and sewage plant  
               classifications, as specified.

           Retirement  :

          For all employees of Units 12 and 13 hired on or after January  
          1, 2007, retirement benefits will be based on the highest  
          consecutive three year average salary.

          SB 357 (Perata)
          Page 2
           

          Health Benefits:
           
             1)   Effective July 1, 2006, for Units 12 and 13, the state's  
               monthly contribution to employee health premiums will be  
               set at a dollar amount that equals the "80/80" formula.   
               When premiums increase January 1, 2007 to January 1, 2008,  
               the state will raise its contribution so the dollar amount  
               continues to equal the "80/80" formula.
             2)   Dependent coverage will be limited to 50% during the  
               first year, and 75% during the second year for employees  
               hired on or after January 1, 2007.  After two years of  
               employment, the state will contribute the normal amount for  
               dependent coverage.

           Other Provisions  :

             1)   For Units 12 and 13, eligible employees will be able to  
               claim mileage reimbursement at the federal standard mileage  
               rate (currently 44.5 cents per mile).
             2)   Employees at CalTrans assigned to perform duties outside  
               their classification specifications that involve rock  
               scaling, climbing, transporting of explosives, or suspended  
               work may receive special duty pay at the rate of $6 per  
               hour when they actually perform these duties.











          In addition, SB 357 provides that members of Unit 12 who are  
          working on the California highway system performing highway  
          maintenance will be provided the Special Death Benefit if his or  
          her death occurred as a  direct  result of injury arising out of  
          an din the course of his or her official duties.

          Staff notes that the costing analysis prepared by the Department  
          of Personnel Administration (DPA) indicates costs of  
          approximately $47,755,000 for fiscal year 2006-07, and costs of  
          approximately $42,313,000 for FY 2007-08.  The fiscal analysis  
          prepared by the LAO generally concurs with the DPA estimate for  
          2006-07, but believes that the costs for 2007-08 may be  
          overstated by approximately $7 million due primarily to a high  
          estimate of inflation.

          Staff notes that this agreement was reached on July 19, 2006,  
          and presented to the Legislature.  Pursuant to Chapter 499,  
          Statutes of 2005 (SB 621, Speier), the Legislative Analyst's  
          Office prepared and distributed an analysis of this MOU on July  
          28, 2006.  Senate Rule 29.4 requires the final version of an MOU  
          to be available to the Legislature for seven legislative days  
          before the Senate may act on the MOU.  This MOU between the  
          state and Bargaining Units 12 and 13 has been delivered in  
          sufficient time to be acted upon by the Senate.

          The terms of these MOU's are from July 1, 2006 through June 30,  
          2008.