BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 621| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 621 Author: Speier (D) Amended: 8/22/05 Vote: 21 SENATE PUBLIC EMPLOYMENT & RET. COMMITTEE : 4-0, 4/11/05 AYES: Soto, Ashburn, Alarcon, Hollingsworth NO VOTE RECORDED: Dunn SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SENATE FLOOR : 40-0, 6/1/05 AYES: Aanestad, Ackerman, Alarcon, Alquist, Ashburn, Battin, Bowen, Campbell, Cedillo, Chesbro, Cox, Denham, Ducheny, Dunn, Dutton, Escutia, Figueroa, Florez, Hollingsworth, Kehoe, Kuehl, Lowenthal, Machado, Maldonado, Margett, McClintock, Migden, Morrow, Murray, Ortiz, Perata, Poochigian, Romero, Runner, Scott, Simitian, Soto, Speier, Torlakson, Vincent ASSEMBLY FLOOR : Not available SUBJECT : Department of Personnel Administration: posting of Memoranda of Understanding SOURCE : Author DIGEST : This bill revises the process by which the Legislature reviews and approves memoranda of understanding CONTINUED SB 621 Page 2 (MOUs) reached between the state employer and recognized employee organizations representing state civil service employees. Assembly Amendments (1) added the requirement that the Department of Personnel Administration must provide the Joint Legislative Budget Committee with each side letter, appendix, or other addendum to a ratified MOU that requires an expenditure of $250,000, and (2) shortened the time the Legislative Analyst has to review a MOU from 25 to 10 calendar days. ANALYSIS : Existing law provides that (1) the Governor and the representatives of recognized employee organizations "endeavor to reach agreement on matters with the scope of representation prior to the adoption by the state of its final budget for the ensuing year," and (2) while the parties have missed this preferred deadline in the past, bargaining must be concluded prior to the Legislature's recess because a written MOU must be submitted to the Legislature for approval. This bill: 1. Requires the Department of Personnel Administration (DPA) to post, in a clear and conspicuous manner on DPA's web site, each MOU that has been submitted to the Legislature for determination pursuant to the Ralph C. Dills Act and has been ratified by the affected union membership, in its entirety. 2. Requires the DPA's web site posting to include a declaration that the MOU has been submitted to the Office of the Legislative Analyst and the Legislature, including the date of that submission and a summary of the MOU that is the same summary provided to the Legislature by DPA. 3. Requires each MOU submitted by DPA to the Legislative Analyst to include a DPA analysis of costs and savings. 4. Allows the Legislative Analyst 10 calendar days from the date the tentative agreement is received to issue a fiscal analysis to the Legislature. SB 621 Page 3 5. Provides that the MOU will not be subject to legislative determination until either the Legislative Analyst has presented a fiscal analysis of the MOU to the Legislature or until 10 calendar days have elapsed since the MOU was received by the Legislative Analyst. 6. Requires the DPA to provide the Joint Legislative Budget Committee (JLBC) with each side letter, appendix, or other addendum to a ratified MOU that requires the expenditure of $250,000 or more and is not included in the Budget Act. The JLBC will have 30 days to determine if legislative ratification was required. Background According to the Legislative Analyst: "Under current practice, DPA is responsible for both negotiating contracts with employee unions and estimating the costs of the negotiated agreements. Generally, information from DPA on new agreements is available relatively soon after negotiations conclude. For each bargaining unit, this includes a summary sheet of major provisions and a costing sheet with estimates of items that have a direct cost (like pay raises). Sometimes these data are not immediately forthcoming, however, even though negotiations may have concluded and the bill approving the MOU may be before the Legislature. Oftentimes, the text of new or changed provisions is not provided until after legislative deliberations. "If the Legislature were to establish a more formalized review process, it would be critical for DPA to highlight MOU provisions with direct costs, potential costs (such as policy changes), and the full-year cost impact of provisions that take effect mid-year. Similarly, DPA should be expected to provide the text of all MOU changes. It would be important to start a 30-day review clock from the time DPA data became available, rather than the end of bargaining, because of the delay noted above. There is no reason, however, these data should only be available to the LAO. Making SB 621 Page 4 the data available to anyone by posting it on DPA's Web site would cast the widest possible net for complete oversight, enabling other parties to provide input to the Legislature. "With our current level of resources and the availability of data noted above, we would treat these MOU reviews like the current 30-day period for preparing our initial, "title-and-summary" analyses of proposed ballot initiatives and for mid-year budget requests. In other words, we would respond to MOUs on an episodic basis. In 30 days, with exiting staff, we could accomplish the following: - Provide a "reality check" on DPA's fiscal estimates. - Highlight the full-year impact of partial-year provisions. - Point out potential impacts of provisions on managers and supervisors. An example is "salary compaction", where subordinate employees make nearly as much or more that their supervisors. - Point out potential implementation or management issues departments will face because of new provisions. - Highlight any provisions, and possibly estimates a range of costs, for which DPA has not estimated an impact. This might occur for several reasons. For example, DPA might not estimate the cost of secondary impacts-such as a change in Department of Corrections sick leave approval policy-or DPA may have just missed the item-such as an expansion to year-round planned overtime for Department of Forestry and Fire Protection firefighters." FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 8/30/05) SB 621 Page 5 Consulting Engineers and Land Surveyors of California JJA:mel 8/30/05 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****