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 AB 646 Page 2 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 AB 646 Page 3 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. AB 646 Page 4 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