BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 846|
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UNFINISHED BUSINESS
Bill No: SB 846
Author: Correa (D), et al
Amended: 8/9/10
Vote: 21
PRIOR SENATE VOTE NOT RELEVANT
ASSEMBLY FLOOR : 75-4, 8/12/10 - See last page for vote
SUBJECT : State employees: memoranda of understanding
SOURCE : California Association of Highway Patrolmen
Department of Personnel Administration
DIGEST : As it left the Senate, this bill expressed the
intent of the Legislature to enact statutory changes
relating to the Budget Act of 2010.
Assembly Amendments delete the Senate version of the bill,
insert language relative to state employees and memoranda
of understanding and add co-authors.
This bill now ratifies the provisions of a memorandum of
understanding between the state and the following three
state bargaining units (BUs): BU 5 (Highway Patrol),
represented exclusively by the California Association of
Highway Patrolmen; BU 12 (Craft and Maintenance),
represented exclusively by the International Union of
Operating Engineers; and BU 18 (Psychiatric Technicians),
represented exclusively by the California Association of
CONTINUED
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Psychiatric Technicians:
ANALYSIS :
Existing Law
1.Requires, under the State Employee-Employer Relations Act
(the Dills Act), collective bargaining agreements that
are negotiated between the state and exclusive
representatives of each of the 21 state bargaining units
be ratified by the Legislature.
2.Establishes five separate retirement classes for state
employees: State Miscellaneous and Industrial (which
receive substantially the same benefits), State Safety,
State Peace Officer/Firefighter, and State Patrol.
3.Specifies that if the provisions of certain statutes are
in conflict with a memorandum of understanding (MOU), the
terms of the MOU are prevailing.
4.Requires the Legislative Analyst's Office to analyze all
state MOUs and to provide analyses of the MOUs and their
fiscal impact to the Legislature within 10 days of
receipt of the MOUs from the Department of Personnel
Administration.
This bill ratifies the provisions of a memorandum of
understanding between the state and the following three
state bargaining units (BUs): BU 5 (Highway Patrol),
represented exclusively by the California Association of
Highway Patrolmen; BU 12 (Craft and Maintenance),
represented exclusively by the International Union of
Operating Engineers; and BU 18 (Psychiatric Technicians),
represented exclusively by the California Association of
Psychiatric Technicians. Specifically, this bill:
1.Provides legislative ratification for MOUs agreed to
between the State and Bus 5, 12, and 18.
2.Requires new employees, as specified, to receive lower
pension benefits than current employees.
3.Requires new employees, as specified, to receive a
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retirement benefit based on the highest averaged three
years of compensation, instead of the highest one year.
4.Requires all employees covered by the agreements to pay
10 or 11% of compensation in employee contributions to
fund retirement benefits.
5.Requires that compensation for employees covered by these
agreements will be continuously appropriated in the event
of a late budget.
6.Includes statutory changes that apply to these BUs and
also BUs 8, 16, and 19, which MOUs are to be ratified in
AB 1592 (Buchanan, Huber and Nava), and makes this bill
operative only if AB 1592 is also passed.
The terms and conditions of the MOUs are summarized in the
following chart:
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|Retirement |2010 Tentative |Current Requirements |
|Class and BU |Agreements | |
| | | |
|---------------+------------------------+-----------------------|
|Miscellaneous |2% at age 60 for new |2% at age 55 |
|Employees |hires | |
| | | |
|(BUs 5, 8, 12, | | |
|16, 18,19) | | |
| | | |
|Retirement | | |
|Formula | | |
| | | |
|---------------+------------------------+-----------------------|
|Member |10% of pay after first |5% of pay after first |
|Contribution |$513 |$513 |
|to PERS | | |
| | | |
|(BUs 5, 8, 12, | | |
|16, 18,19) | | |
| | | |
|---------------+------------------------+-----------------------|
|Employer |80%/80% for employees |No statutory formula |
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|Health |and dependents |for these BUs (most |
|Contribution | |other BUs have |
| | |statutory |
|(BUs 12, 18) | |formulas-either |
| | |85%/80% or 80%/80%) |
| | | |
|---------------+------------------------+-----------------------|
|Employee |.5% of base salary |No contribution |
|Contribution | |currently |
|to prefund | | |
|Retiree Health | | |
|(BUs 12, 16) | | |
| | | |
|---------------+------------------------+-----------------------|
|Vesting for |Hew hires vest for 50% |50% after 10 years, |
|Retiree Health |after 15 years, |increasing 5% annually |
|(BU 12) |increasing 5% annually |to 100% after 20 years |
| |to 100% after 25 years | |
| | | |
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|Final |BUs 12, 16, 18, 19: No change; new hires at |
|Compensation |highest 3 years since 2006 |
|Calculation | |
|for New Hires |BUs 5 and 8: New hires go to highest 3 years |
| | |
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|Personal Leave |Duration=12 months: Reduces pay by approx. |
|Program |4.8% in exchange for 1 day off per month. Time |
| |off has no cash value and can be used for |
|(BUs 12, 16, |vacation or sick leave. |
|18, 19) | |
| | |
|---------------+------------------------------------------------|
|Pay Increase |5% increase to top step of relevant classes, |
| |effective 1/1/2012: Allows employees who are |
|(BUs 5, 8, 12, |topped out (i.e., no longer receive annual |
|16, 18, 19) |merit salary increases) to receive a 5% |
| |increase. |
| | |
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|State Safety |2% at age 55 increasing |2.5% at age 55 |
|Employees |to 2.5% at age 60 | |
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| | | |
|(BUs 12, 16, | | |
|18, 19) | | |
| | | |
|Retirement | | |
|Formula for | | |
|New Hires | | |
| | | |
|---------------+------------------------+-----------------------|
|Member |11% of pay after first |6% of pay after first |
|Contribution |$513 |$513 |
|to PERS | | |
| | | |
----------------------------------------------------------------
----------------------------------------------------------------
|Final |No change: New hires at highest 3 years since |
|Compensation |2006 |
|for New Hires | |
| | |
----------------------------------------------------------------
----------------------------------------------------------------
|Employer |80%/80% for employees |No statutory formula |
|Health |and dependents |for these BUs (most |
|Contribution | |other BUs have |
| | |statutory |
|(BUs 12, 18) | |formulas-either |
| | |85%/80% or 80%/80%) |
| | | |
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|Employee |.5% of base salary |No contribution |
|contribution | |currently |
|to prefund | | |
|Retiree Health | | |
|(BUs 12, 16) | | |
| | | |
|---------------+------------------------+-----------------------|
|Vesting for |Hew hires vest for 50% |50% after 10 years, |
|Retiree Health |after 15 years, |increasing 5% annually |
|(BU 12) |increasing 5% annually |to 100% after 20 years |
| |to 100% after 25 years | |
| | | |
----------------------------------------------------------------
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|Personal Leave |Duration=12 months: Reduces pay by approx. |
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|Program |4.8% in exchange for 1 day off per month. Time |
| |off has no cash value and can be used for |
|(BUs 12, 16, |vacation or sick leave. |
|18, 19) | |
| | |
|---------------+------------------------------------------------|
|Pay Increase |5% increase to top step of relevant classes, |
| |effective 1/1/2012: Allows employees who are |
|(BUs 12, 16, |topped out (i.e., no longer receive annual |
|18, 19) |merit salary increases) to receive a 5% |
| |increase. |
| | |
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|Firefighters |3% at age 55 |3% at age 50 |
|(BU 8) | | |
| | | |
|Retirement | | |
|Formula for | | |
|New Hires | | |
| | | |
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|Member |10% of pay after first |8% of pay after first |
|Contribution |$238 |$238 |
|to PERS | | |
| | | |
|---------------+------------------------+-----------------------|
|Final |3 Highest Years |1 Highest Year |
|Compensation | | |
|Calculation | | |
|for New Hires | | |
| | | |
----------------------------------------------------------------
----------------------------------------------------------------
|Pay Increase |4% increase to top step of relevant employee |
| |classes, effective 1/1/2012: Allows employees |
| |who are topped out (i.e., no longer receive |
| |annual merit salary increases) to receive a 4% |
| |increase. |
| | |
----------------------------------------------------------------
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|Patrol (BU 5) |3% at age 55 |3% at age 50 |
| | | |
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|Retirement | | |
|Formula for | | |
|New Hires | | |
| | | |
----------------------------------------------------------------
|Member |10% of pay after first |8% of pay after first |
|Contribution |$863 |$863 |
|to PERS | | |
| | | |
|---------------+------------------------+-----------------------|
|Final |3 Highest Years |1 Highest Year |
|Compensation | | |
|Calculation | | |
|for New Hires | | |
| | | |
----------------------------------------------------------------
----------------------------------------------------------------
|Pay Increase |2% increase to top step of relevant employee |
| |classes, effective 1/1/2012: Allows employees |
| |who are topped out (i.e., no longer receive |
| |annual merit salary increases) to receive a 2% |
| |increase. |
| | |
|---------------+------------------------------------------------|
|Other |Redirection of current 2% member contribution |
|Provisions |to retiree health pre-funding. This |
| |contribution shall be paid instead as employee |
| |contributions to pension until July 2013, at |
| |which time the retiree health pre-funding |
| |employee contributions shall resume. |
| | |
| | |
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In addition, the contracts contain the following agreed
upon elements:
1.No Furlough Program for the duration of the contracts.
(This provision is not included in the MOUs for BU 12 or
BU 16.)
2.Continuous appropriation of wages in the event of a late
budget.
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3.Requirements to reopen negotiations if any other state
bargaining unit enters into a contract that does not
include pension reforms and provides a greater value than
that provided to these bargaining units. (This provision
is not included in the MOUs for BU 12 or BU 16.)
4.Agreements to delete two state holidays from the
contracts (which were already deleted in law as of
February 2009): Lincoln's Birthday and Columbus Day.
5.Premium pay (i.e., time and a half) for the following
holidays: January 1st, last Monday in May, July 4th,
first Monday in September, Thanksgiving, and Christmas.
6.Agreements by bargaining units to not oppose legislation
requiring the California Public Employees' Retirement
System to use supportable assumptions and data that will
be evaluated by another party agreeable to the Department
of Personnel Administration and the bargaining units.
Contract Duration
BU 5: 3 years - July 3, 2010 to July 3, 2013
BU's 12 and 18: 2 years - July 1, 2010 to July 1, 2012
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Assembly Appropriations Committee, the
bill's near term impact of state costs is summarized in the
following table:
Net fiscal Impact on Bargaining Agreements*
(millions of dollars)
2010-11
2011-12 2012-13 2013-14
Bargaining Unit GF SF GF SF
GF SF GF SF
BU 5 0 0 0
8.5 0 9.3 0 41.6
BU 12 - 9.7 -22.3 4.2
8.9 3.7 7.9 -- --
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BU 18 -15.0 - 5.3 5.7
2.1 -- -- -- --
*The savings in 2010-11 are mainly related to the 12 month
personal leave program (PLP) and increased employee
contributions for retirement in BUs 12 and 18. (The
increased retirement contribution for BU 5 members is
offset by a suspension of their existing contribution to
prefund retiree health care, so there are no state costs or
savings for BU 5 in 2010-11.) Out year costs are related
to the termination of the PLP program, the additional pay
step, and changes in the compensation survey methodology
for setting CHP pay rates. Under existing law, CHP pay is
based on a survey of local law enforcement agencies.
Beginning in 2013, the contributions to prefund retiree
health care will no longer count as part of their
compensation for purposes of the survey comparison.
In the longer term, the state will realize significant
savings, eventually in the millions of dollars annually,
from the reduction in retirement and health benefits for
new hires, as well as from prefunding of health care
benefits for existing and new employees.
SUPPORT : (Verified 8/16/10)
California Association of Highway Patrolmen (co-source)
Department of Personnel Administration (co-source)
California Association of Psychiatric Technicians
California-Nevada Conference of Operating Engineers
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall,
Bill Berryhill, Tom Berryhill, Blakeslee, Block,
Blumenfield, Bradford, Brownley, Buchanan, Caballero,
Charles Calderon, Carter, Chesbro, Conway, Cook, Coto,
Davis, De La Torre, De Leon, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Galgiani, Garrick,
Gatto, Gilmore, Hagman, Hall, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue,
Bonnie Lowenthal, Ma, Mendoza, Miller, Monning, Nava,
Nestande, Niello, Nielsen, V. Manuel Perez, Portantino,
Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio,
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Audra Strickland, Swanson, Torlakson, Torres, Torrico,
Tran, Villines, Yamada, John A. Perez
NOES: DeVore, Gaines, Harkey, Norby
NO VOTE RECORDED: Vacancy
CPM:cm 8/16/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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