BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                   SB 621|
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                              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





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          (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.  







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          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  







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            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)








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          Consulting Engineers and Land Surveyors of California


          JJA:mel  8/30/05   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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