BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 438|
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THIRD READING
Bill No: AB 438
Author: Williams (D)
Amended: 8/18/11 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 6-3, 7/6/11
AYES: Wolk, DeSaulnier, Hancock, Hernandez, Kehoe, Liu
NOES: Huff, Fuller, La Malfa
ASSEMBLY FLOOR : 43-28, 6/3/11 - See last page for vote
SUBJECT : County free libraries: withdrawal: use of
private contractors
SOURCE : Central Coast Alliance United for a Sustainable
Economy
Ventura Readers Book Group
DIGEST : This bill imposes requirements, until January 1,
2019, on a city or library district that intends to
withdraw from a county free library system and operate
libraries with a private contractor.
Senate Floor Amendments of 8/18/11 add library services
contracting requirements relating to library employees,
extend the maximum allowable length of a library services
contract, and extend the bill's sunset date.
ANALYSIS :
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Existing law:
1. Allows boards of supervisors to establish and maintain
county free libraries, within their respective counties.
2. Allows, after the establishment of a county free
library, a city or library district to be a part of the
county free library, and for the city or library
district to be entitled to the benefits of the county
free library; the property within the city or library
district shall be liable to taxes levied for county free
library purposes.
3. Allows the board of trustees, common council, or other
legislative body of any city or the board of trustees of
any library district, on or before January 1st of any
year, to notify the board of supervisors that the city
or library district no longer desires to be a part of
the county free library system.
4. Requires the board of trustees, common council, or other
legislative body of any city or the board of trustees of
any library district to publish at least once a week for
two successive weeks' notice of the contemplated action,
giving the date and the place of the meeting at which
the contemplated action will be taken, prior to
notifying the board of supervisors of the withdrawal.
5. Specifies that the notice of withdrawal shall be given
to specified entities including the county assessor and
the State Board of Equalization (BOE).
6. Contains special provisions for withdrawal of a city or
library district from the county free library system in
Los Angeles County and Riverside County.
If the legislative body of a city or the board of trustees
of a library district intends to withdraw from the county
free library system and operate the city or district's
library with a private contractor that will employ library
staff to achieve cost savings, this bill imposes
requirements relating to:
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Public notice
Demonstrated cost savings
Wages and benefits
Competitive bidding
Staff qualifications and hiring
Eligible contractors
Contract termination
Contractor disclosure and performance measurement
Term of contract
This bill specifies that its requirements do not apply if
the city or district library or libraries are funded only
by the proceeds of a special tax imposed by the city or
district, pursuant to state law.
1. Public notice . Requires the legislative body of the
city or the board of trustees of the library district to
publish a notice of the contemplated action, giving the
date and place of the meeting at which the contemplated
action is proposed to be taken. The notice must be
published at least once a week for four consecutive
weeks before the city or library district acts.
2. Demonstrated cost savings . Requires the legislative
body of a city or the board of trustees of a library
district to clearly demonstrate that the contract will
result in actual overall cost savings to the city or
library district for the duration of the entire
contract, provided that, in comparing costs, all of the
following occur:
A. The city or library district's additional cost of
providing the same services as proposed by the
contract must be included. These additional costs
include the salaries and benefits of additional staff
that would be needed and the cost of additional
space, equipment, and materials needed to perform the
necessary functions of the library.
B. The city or library district's indirect overhead
costs must not be included unless those costs can be
attributed solely to the function in question and
would not exist if that function was not performed by
the city or library district. "Indirect overhead
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costs" means the pro rata share of existing
administrative salaries and benefits, rent, equipment
costs, utilities, and materials.
C. The cost of a contractor providing a service for
any continuing city or library district costs that
would be directly associated with the contracted
function must be included. Continuing city or
library district costs include costs for inspection,
supervision, and monitoring.
3. Contract approval and wages . Prohibits city or library
district officials from approving a contract solely on
the basis that savings will result from lower contractor
pay rates or benefits. Specifies that contracts are
eligible for approval if the contractor's wages are at
the industry's level and do not undercut city or library
district pay rates.
4. Employees . Prohibits a contract from causing an
existing city or library district employee to suffer a
loss of his/her employment or seniority, or a reduction
in wages, benefits or hours, or an involuntary transfer
to a new location requiring a change in residence.
5. Competitive bidding . Requires that a contract must be
awarded through a publicized, competitive bidding
process.
6. Staff qualifications and hiring . Requires a contract to
include specific provisions pertaining to the
qualifications of the staff that will perform the work
under the contract, as well as assurances that the
contractor's hiring practices meet applicable
nondiscrimination standards.
7. Eligible contractors . Requires a contract to be with a
"firm," which means a corporation, limited liability
company, partnership, nonprofit organization, or sole
proprietorship.
8. Contract termination . Requires a contract to provide
that it may be terminated at any time by the city or
library district without penalty if the contractor fails
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to perform and notice is provided within 30 days of
termination.
9. Contractor disclosure and performance measurement . If
the contract is for library services in excess of
$100,000 annually, this bill requires:
A. A city or library district must require a
contractor to disclose the following information as
part of its bid, application, or answer to a request
for proposal:
(1) A description of all charges, claims, or
complaints filed against the contractor with any
federal, state, or local administrative agency
during the prior 10 years.
(2) A description of all civil complaints filed
against the contractor in any state or federal
court during the prior 10 years.
(3) A description of all state or federal
criminal complaints or indictments filed against
the contractor, or any of its officers, directors,
or managers, at any time.
(4) A description of any debarments of the
contractor by any public agency or licensing body
at any time.
B. The city or library district must include in the
contract specific, measurable performance standards
and provisions for a performance audit by the city or
library district, or an independent auditor approved
by the city or library district, to determine whether
the performance standards are being met and whether
the contractor is in compliance with applicable laws
and regulations. This bill prohibits a city or
library district from renewing or extending the
contract before receiving and considering the audit
report.
C. The contract must include provisions for an audit
by the city or library district, or an independent
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auditor approved by the city or library district, to
determine whether and to what extent the anticipated
cost savings have been realized. This bill prohibits
a city or library district from renewing or extending
the contract prior to receiving and considering the
audit report.
10. Term of contract . Specifies that the term of the
contract shall not be more than five years from the date
on which the board of trustees, common council, or other
legislative body of a city or the board of trustees of a
library district approves the contract.
This bill declares that it does not preclude a city,
library district, or local government from adopting more
restrictive rules regarding the contracting of public
services.
This bill has a sunset date of January 1, 2019.
Background
Exactly one century ago, the Legislature authorized
counties to establish county free library systems (SB 289,
Hans, 1911). Before Proposition 13 (1978), a county could
levy a separate property tax rate to support its library
system. Nearly 30 county free libraries had separate
rates. A county could extend the property tax rate to
parcels in a city that wanted to join the library system
and would cease to levy the rate within a city that
withdrew from the system.
After Proposition 13, the Legislature divided the remaining
property tax revenues among local governments. Although
they were not separate institutions, state law treated
county free libraries as if they were special districts
because they had their own property tax rates before
Proposition 13. The county free libraries received shares
of the property tax revenues and they could receive money
from the Special District Augmentation Fund
(AB 8, L. Greene, 1979). In general, to withdraw from a
county library system, a city must negotiate the amount of
property tax revenues, if any, that it will receive from
the county library system. Different procedures apply to
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city withdrawals from county free library systems in Los
Angeles and Riverside counties (AB 1998, Mountjoy, 1996 and
AB 927, Thompson, 1997).
Instead of participating in a county free library system, a
city can provide library services to its residents in
several other ways: by operating its own libraries,
through a library district, or by contracting with another
public agency or private firm. For charter cities,
contracting arrangements with private firms can be governed
by their charters. General law cities must follow the
standards and procedures in the state statutes. While
general law cities' specific statutory authority to
contract for services is limited, court opinions have
recognized general law cities' authority to enter into
contracts to carry out necessary functions, including those
expressly granted and those implied by necessity.
State law requires state departments that contract for
personal services to follow specific criteria: a clear
demonstration of cost savings, a clear definition of costs,
ensuring that work will not be contracted out solely on the
basis of lower pay or benefits, and justification of
savings based on the contract's size and duration. State
law requires school and community college districts to
comply with the same standards that apply to state
departments (AB 1419, Alarcón, 2002).
Riverside County and the Cities of Camarillo (Ventura
County), Moorpark (Ventura County), Redding (Shasta
County), and Santa Clarita (Los Angeles County) contract
with a private corporation, Library Systems and Services,
Inc. (LSSI), for library services. In response to some
cities' recent efforts to contract with LSSI, some library
advocates and labor unions want the conditions that apply
to state, school district, and community college district
service contracts to apply to any city that intends to
withdraw from a county free library system and contract
with a private firm for library services.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/22/11)
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Central Coast Alliance United for a Sustainable Economy
(co-source)
Ventura Reader's Book Group (co-source)
American Library Association Student Chapter at UCLA
California Democratic Party
California Labor Federation
California Nurses Association
California Professional Firefighters
California School Employees Association
California Teachers Association
City of Arcata Councilmember, Shane Brinton
City of Artesia Councilmember, Michele Diaz
City of Irvine Councilmember, Steven Choi
City of Port Hueneme former Mayor and Councilmember, Murray
Rosenbluth
Community Coalition
Concerned Citizens Coalition of Stockton
County of Los Angeles Public Library, Public Services
Assistant Director, Barbara S. Custen
Democratic Alliance for Action, Santa Clarita
Democratic Party of the San Fernando Valley
Friends of Bell Foundation
Friends of the Artesia Library, Treasurer
Friends of the Hollydale Library
Friends of the Huntington Park Library
Friends of the Nevada County Libraries
Laborers' International Union of North America Local 777 &
792
Los Angeles Alliance for a New Economy
Los Angeles County Democratic Party
Los Angeles Youth Council Chapter The Multi-Taskers
Montebello Friends of the Library
Santa Clara Valley Democratic Club
Santa Clarita Organization for Planning and the Environment
Santa Clarita Valley Fair Election Committee
Ventura County Democratic Party
OPPOSITION : (Verified 8/22/11)
Association of California Cities, Orange County
California Contract Cities Association
California Chamber of Commerce
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Cities of Artesia, Azusa, Bellflower, Beverly Hills, Brea,
Camarillo, Carlsbad, Cerritos, Chino, Cloverdale, Costa
Mesa, Covina, Culver City, Danville, Diamond Bar,
Fillmore, Galt, Goleta, Healdsburg, Highland, Holtville,
Huntington Park, Huron, Imperial Beach, Irvine, La Verne,
Laguna Hills, Lake Elsinore, Lakewood, Lathrop, Lemoore,
Livermore, Livingston, Lodi, Lynwood, Manteca, Merced,
Montclair, Moreno Valley, Moorpark, Mt. Shasta, Murrieta,
Norwalk, Palmdale, Paradise, Paramount, Pico Rivera,
Pomona, Rancho Cordova, Redding, Rocklin, Rosemead, San
Clemente, San Leandro, San Mateo, San Pablo, San Ramon,
Santa Clarita, Santa Maria, Santa Rosa, Selma, Signal
Hill, Simi Valley, South El Monte, Temecula, Torrance,
Tracy, Tulare, Union City, Visalia, Vista, Wasco, West
Hollywood, and Windsor
City of Arcata Councilmember, Mark Wheetley
Friends of Redding Library
Friends of the Camarillo Library
Howard Jarvis Taxpayers Association
League of California Cities
Library Systems & Services, LLC
Mayor of Fresno, Ashley Swearengin
Mayor of Pico Rivera, David Armenta
Mayor of Redwood City, Jeff Ira
Shasta Public Library Foundation
ASSEMBLY FLOOR : 43-28, 6/3/11
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Butler, Charles
Calderon, Campos, Cedillo, Davis, Dickinson, Eng, Feuer,
Fong, Fuentes, Furutani, Galgiani, Gatto, Hall, Hayashi,
Hill, Hueso, Huffman, Lara, Bonnie Lowenthal, Ma,
Mendoza, Pan, Perea, V. Manuel Pérez, Portantino,
Skinner, Solorio, Swanson, Wieckowski, Williams, Yamada,
John A. Pérez
NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Fletcher, Beth Gaines, Garrick, Gordon, Grove, Hagman,
Halderman, Harkey, Huber, Jeffries, Jones, Knight, Logue,
Mansoor, Miller, Morrell, Nielsen, Norby, Olsen, Silva,
Smyth, Valadao, Wagner
NO VOTE RECORDED: Buchanan, Carter, Chesbro, Gorell, Roger
Hernández, Mitchell, Monning, Nestande, Torres
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AGB:mw 8/23/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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