BILL ANALYSIS
AB 827
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 827 (De La Torre)
As Amended August 27, 2010
2/3 vote. Urgency
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|ASSEMBLY: | |(May 28, 2009) |SENATE: |37-0 |(August 30, |
| | | | | |2010) |
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(vote not relevant)
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|COMMITTEE VOTE: |6-1 |(August 31, 2010 |RECOMMENDATION: |Concur |
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Original Committee Reference: L. GOV.
SUMMARY : Prohibits automatic renewal provisions in the contract of
an excluded employee, prohibits automatic salary increases in these
contracts, unless it is a cost-of-living adjustment, without the
vote of a legislative body, and requires a performance review to
occur prior to increasing the salary of an excluded employee.
The Senate amendments delete the Assembly version of this bill, and
instead:
1)Prohibit, on or after January 1, 2011, any contract executed or
renewed between a local agency and an excluded employee to
provide for any of the following:
a) An automatic renewal of the contract;
b) An automatic increase in compensation that exceeds a
cost-of-living adjustment;
c) An automatic increase in compensation that is linked to
another contract, including an agreement entered into pursuant
to the Meyers-Milias-Brown Act or the Education Code's
employee relations provisions; or,
d) A maximum cash settlement that exceeds the amounts
established in existing law.
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2)Define "compensation" as any of the following:
a) Annual salary or stipend;
b) Local agency payments to the filer's deferred compensation
or defined benefit plans;
c) Automobile and equipment allowances;
d) Supplemental incentive and bonus payments; or,
e) Local agency payments to the filer that are in excess of
the standard benefits that the local agency offers for all
other employees.
3)Require the local agency, before a local agency may increase the
compensation of an excluded employee, to complete a performance
review of the excluded employee.
4)Provide that the records, procedures, and actions shall conform
to the requirements of law, including, but not limited to, the
Public Records Act (PRA) and the Ralph M. Brown Act (Brown Act).
5)State that a performance review of an excluded employee is not
necessary if the compensation increase is only a cost-of-living
adjustment.
6)Define "excluded employee" as any person who is or will be
employed by, and report directly to, the legislative body of a
local agency and who is not subject to the Meyers-Milias-Brown
Act or the Education Code's employee relations provisions.
7)State that "excluded employee" includes any person who performs
governmental duties for a local agency pursuant to a contract
with that local agency and any person who is considered an
at-will employee.
8)Define "local agency" as a county, city, whether general law or
chartered, city and county, town, school district, municipal
corporation, district, political subdivision, or any board,
commission or agency thereof, or other local public agency.
9)Define "cost-of-living" as the Consumer Price Index that applies
to a local agency, as calculated by the Department of Finance
using a formula developed by the Department of Industrial
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Relations.
10)Make legislative findings and declarations that the fiscal
integrity and stability of local government agencies in this
state, including charter cities, has a direct impact on the
long-term well-being of all the residents of this state and
therefore declare that the disclosure of compensation to officers
and designated employees is an issue of statewide concern and not
a municipal affair and therefore shall apply to charter cities.
11)Add an urgency clause allowing the measure to take effect
immediately upon enactment.
EXISTING LAW :
1)Governs, under the Meyers-Milias-Brown Act, labor-management
relations and collective bargaining in California local
government.
2)Governs, under portions of the Education Code, school districts
and community college districts' employee relations.
3)Provides that collective bargaining and representation procedures
generally do not apply to executive employees such as county
administrators, city managers, special district managers, school
superintendents, community college presidents that are employed
by, and report directly to, local elected governing boards.
4)Requires, under the Brown Act, that all meetings of a legislative
body of a local agency be open and public and all persons be
permitted to attend unless a closed session is authorized.
5)Requires, at least 72 hours before a regular meeting, the
legislative body of the local agency, or its designee, to post an
agenda containing a brief general description of each item of
business to be transacted or discussed at the meeting, including
items to be discussed in closed session.
6)Authorizes a legislative body of a local agency to hold closed
sessions with the local agency's designated representatives
regarding the salaries, salary schedules, or compensation paid in
the form of fringe benefits of its represented and unrepresented
employees, and, for represented employees, any other matter
within the statutorily provided scope of representation.
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7)Prohibits closed sessions from including final action on the
proposed compensation of one or more unrepresented employees.
8)Requires all contracts of employment between an employee and a
local agency employer to include a provision which provides that
regardless of the term of the contract, if the contract is
terminated, the maximum cash settlement that an employee may
receive shall be an amount equal to the monthly salary of the
employee multiplied by the number of months left on the unexpired
term of the contract. However, if the unexpired term of the
contract is greater than 18 months, the maximum cash settlement
shall be an amount equal to the monthly salary of the employee
multiplied by 18.
9)Provides that in enacting the PRA, the Legislature, mindful of
the right of individuals to privacy, finds and declares that
access to information concerning the conduct of the people's
business is a fundamental and necessary right of every person in
this state.
10)Provides that every employment contract between a state or local
agency and any public official or public employee is a public
record.
AS PASSED BY THE ASSEMBLY , this bill authorized a county board of
supervisors to impose a fee, not to exceed estimated reasonable
costs as well as not to exceed $3 for the first page and $1 for any
subsequent page, for the archiving of historical county records,
including, but not limited to, records pertaining to real property,
local agency meetings and actions, roads and other public works,
and other records of general public or historical interest.
FISCAL EFFECT : Unknown
COMMENTS : In July of this year it was reported by the Los Angeles
Times that the City Manager in the City of Bell was making nearly
$1 million per year (salary and benefits) according to public
records. This bill is one of many bills moving through the
Legislature to respond to the egregious acts that happened in the
City of Bell.
This bill requires all local governments to conduct performance
reviews before raising the compensation of their executive level
staff. Under this bill, local professional leaders such as city
managers, county executives, special district managers, school
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superintendents, community college presidents, must have
performance reviews before their employers give raises and expand
benefits. The bill bans so-called "evergreen contracts," forcing
local governing boards to connect top staffers' performance with
their pay decisions. This bill provides more transparency to the
process by which local agencies compensate high level staff.
Whether it's the city council of a big charter city or the board of
directors of a tiny, rural public cemetery district, governing
bodies need to link their compensation decisions to their
evaluations of staff performance.
The California Constitution gives cities the power to become
charter cities. The benefit of becoming a charter city is that
charter cities have supreme authority over "municipal affairs." In
other words, a charter city's law concerning a municipal affair
will trump a state law governing the same topic. Personnel matters
for the most part deemed a "municipal affair" and are under the
authority of the charter entity. Procedures set forth in
Meyers-Milias-Brown Act apply, but note, "[T]here is a clear
distinction between the substance of a public employee labor issue
and the procedure by which it is resolved. Thus there is no
question that 'salaries of local employees of a charter city
constitute municipal affairs and are not subject to general laws.'"
Voters for Responsible Retirement v. Board of Supervisors, 8
Cal.4th 765, 781 (1994). The California Supreme Court has observed
local governments "function both as employers and as democratic
organs of government." (Seal Beach, supra, 36 Cal.3d at p. 599.)
The court has upheld the Legislature's regulation of public
employee labor relations where "the burden on the [local
government's] democratic functions is minimal." Procedural
statutes do not conflict with the constitutional powers of local
governments because "the governing body of the agency . . . retains
the ultimate power to refuse an agreement and to make its own
decision." (Seal Beach, supra, 36 Cal.3d at p. 601.) A statute is
substantive, however, if under its provisions "the county's
governing body does not retain the ultimate power" to set employee
compensation. (Riverside, supra, 30 Cal.4th at p. 289.) In 2009
the Court of Appeals in the Sonoma County decision repeated the
rule that "procedural statutes do not conflict with the
constitutional powers of local governments." This bill's
requirement that local governing bodies conduct performance reviews
before raising the compensation of their key executive staff
appears to be a procedural statute that is within the Legislature's
power to require. However, the Legislature may wish to consider
whether the four contracting practices banned by this bill are
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procedural or substantive.
Support arguments: Supporters might argue that the provisions of
this bill provide more transparency to the process by which local
agencies compensate high level staff. Supporters may state that
most private sector jobs require employee performance review for
increased compensation why shouldn't public sector positions.
Opposition arguments: Opposition could argue that this bill is an
overreaction to the incident in Bell and that from information
gathered by informal surveys and discussions the outrageous
salaries and benefits provided to the City Manager in Bell is a
rarity.
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916) 319-3958
FN: 0006893