BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 646
                                                                  Page  1

          Date of Hearing:   May 18, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                     AB 646 (Atkins) - As Amended:  May 11, 2011 

          Policy Committee:                              PERS Vote:4-2

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill allows local public employee organizations to request 
          fact finding if a mediator is unable to reach a settlement 
          within 15 days of appointment.   Specifically, this bill:  

          1)Requires the fact-finding panel shall meet with the parties 
            within 10 days after appointment and take other steps it deems 
            appropriate.  Specifies that the fact-finding panel consist of 
            one member selected by each party and a chairperson selected 
            by Public Employees Relations Board (PERB) or by agreement of 
            the parties.

          2)Authorizes the fact-finding panel to make inquiries and 
            investigations, hold hearings, and take any other steps it 
            deems appropriate, and to issue subpoenas requiring the 
            attendance and testimony of witnesses and the production of 
            witnesses.

          3)Requires state and local public agencies, if requested by the 
            panel, to furnish the panel with all records, papers and 
            information in their possession relating to any matter under 
            investigation by the panel. 

          4)Specifies the criteria the fact-finding panel should be guided 
            by in arriving at their finding and recommendations.

          5)Requires the fact-finding panel to make findings of fact and 
            recommend terms of a settlement if the dispute is not settled 
            within 30 days.  This information must first be provided to 
            the parties before being made available to the public.

          6)Requires the costs of the chairperson of the fact-finding 








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            panel to be paid for by both parties whether or not PERB 
            selected the chairperson.  Any other costs incurred will be 
            borne equally by the parties, as specified.

          7)Allows an employer to implement their last, best and final 
            offer once any applicable mediation and fact-finding 
            procedures have been exhausted and despite the implementation 
            of the best and final offer, allows a recognized employee 
            organization the right each year to meet and confer. 

           FISCAL EFFECT 

          1)Based on the staffing that PERB estimated was necessary to 
            administer the bill, the fiscal impact of administering the 
            provisions of this bill is approximately $200,000. 

          2)Though the bill is not keyed a local mandate, there could be 
            substantial state mandated reimbursement of local costs.  The 
            amount would depend on the number of requests for fact 
            finding.  PERB staff raised the possibility of exceeding 100 
            cases annually in the first years of the program.  Assuming an 
            individual case is likely to cost around $5,000, with the 
            local agency footing half the bill, reimbursable costs could 
            exceed $2.5 million. The Commission on State Mandates has 
            approved a test claim for any local government subject to the 
            jurisdiction of PERB that incurs increased costs as a result 
            of a mandate, meaning their costs are eligible for 
            reimbursement.

           COMMENTS  

           1)Purpose.   According to the author, "Currently, there is no 
            requirement that public agency employers and employee 
            organizations engage in impasse procedures where efforts to 
            negotiate a collective bargaining agreement have failed.  
            Without impasse procedures, negotiations may not be fully 
            effective, and bargaining may break down before all avenues 
            for agreement are explored.  Many municipalities and public 
            agencies promulgate local rules which include impasse rules 
            and procedures.  However, this requirement is not uniform, and 
            the lack of uniformity may serve to create confusion and 
            uncertainty.

            "The creation of mandatory impasse procedures is likely to 
            increase the effectiveness of the collective bargaining 








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            process, by enabling the parties to employ mediation and 
            fact-finding in order to assist them in resolving differences 
            that remain after negotiations have been unsuccessful.  
            Mediators are often useful in restarting stalled negotiations, 
            by encouraging dialogue where talks have broken down; 
            identifying potential areas where agreement may be reached; 
            diffusing tension; and suggesting creative compromise 
            proposals.  Fact-finding panels can also help facilitate 
            agreement, by making objective, factual determinations that 
            can help the parties engage in productive discussions and 
            reach reasonable decisions." 

           2)Background.   The Meyers-Milias-Brown Act (MMBA) governs 
            labor-management relations and collective bargaining in 
            California local government, including cities. The California 
            Public Employment Relations Board (PERB) is the administrative 
            agency charged with administering the MMBA.  MMBA contains 
            various provisions intended to promote full communication 
            between public employers and their employees by providing a 
            reasonable method of resolving disputes regarding wages, hours 
            and other terms and conditions of employment between public 
            employers and public employee organizations. 

             It also provides that if representatives of the public agency 
            and the employee organization fail to reach agreement, the two 
            parties may mutually agree on the appointment of a mediator 
            and equally share the cost.  If the parties reach impasse, the 
            public agency is not required to proceed to interest 
            arbitration and may implement its last, best and final offer.  
            MMBA also delegates jurisdiction over the employer-employee 
            relationship to the Public Employment Relations Board (PERB) 
            and charges PERB with resolving disputes and enforcing the 
            statutory duties and rights of local public agency employers 
            and employee organizations.

           3)Opposition.   The opponents, local governments and 
            associations, argue that AB 646 undermines a local agency's 
            authority to establish local rules for resolving impasse and 
            the requirement that a local agency engage in fact-finding may 
            delay rather than speed the conclusion of contract 
            negotiations.  Opponents state they are not aware of any 
            abuses or short-comings of the current process and question 
            the need for making such an important change in the process of 
            reaching a collective bargaining agreement.  









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            Opponents conclude that besides the delay, the bill could 
            result in additional costs to public employers at a time when 
            public agencies are struggling to address budget shortfalls 
            and maintain basic services for their residents.  They argue 
            that AB 646 would provide a disincentive for employee 
            organizations to negotiate in good faith when there is the 
            option of further processes under the PERB that will prolong 
            negotiations.  Most collectively bargained contracts are 
            stalled due to cost-saving measures being sought by the public 
            agency in a downturned economy; requiring mediation and 
            fact-finding prior to imposing a last, best and final offer 
            would simply add costs and be unhelpful to both the employer 
            and the employees.





           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081