BILL ANALYSIS Ó
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 151
Gloria Negrete McLeod, Chair
Hearing date: April 11, 2011
SB 151 (Correa) as amended 4/06/11 FISCAL: YES
MEMORANDA OF UNDERSTANDING FOR STATE BARGAINING UNITS 2, 6,
7, 9, 10, and 13: CASE, CCPOA, CSLEA, PECG, CAPS, IUOE
ADDENDA TO MEMORANDA OF UNDERSTANDING FOR STATE BARGAINING
UNITS 12, 16, 18, 19
HISTORY :
Sponsors: California Attorneys, Administrative Law
Judges, and Hearing Officers in State Employment
(State Bargaining Unit (BU) 2: CASE)
California Correctional Peace Officers Association
(BU 6: CCPOA)
California Statewide Law Enforcement Association
(BU 7: CSLEA)
Professional Engineers in California Government
(BU 9: PECG)
California Association of Professional Scientists
(BU 10: CAPS)
International Union of Operating Engineers (BUs12
and 13: IUOE)
Union of American Physicians and Dentists (BU 16:
UAPD)
California Association of Psychiatric Technicians
(BU 18: CAPT)
American Federation of State, County and Municipal
Employees (BU 19: AFSCME)
Department of Personnel Administration (DPA)
Prior legislation: SBX6 22 (Hollingsworth)
Chapter 3, Statutes of 2010
SB 846 (Correa)
Chapter 162, Statutes of 2010
AB 1625 (Perez)
Chapter 728, Statutes of 2010
SBX3 8 (Ducheny)
Chapter 4, Statutes of 2009
Pamela Schneider
Date: 4/6/11 Page 1
SUMMARY :
This bill provides legislative ratification for the memoranda
of understanding (MOU) between the State and state BUs 2, 6,
7, 9, 10, and 13.
In addition, it ratifies 4 addenda to MOUs ratified in 2010
in order to make provisions of those MOUs consistent with the
agreements reached in the six MOUs ratified in this bill.
This is an URGENCY BILL .
BACKGROUND AND ANALYSIS :
1) Existing law :
a) establishes the Ralph C. Dills Act, which requires the
State to collectively bargain with official representatives
of employee groups (i.e., bargaining units) regarding wages
and working conditions, and to define negotiated agreements
in MOUs.
b) establishes the Department of Personnel Administration
as the official representative of the Governor in all
matters related to collective bargaining.
c) requires that any MOU between the State and an official
representative must be ratified by the Legislature.
d) requires that an addendum to a ratified MOU must be
submitted to the Joint Legislative Budget Committee (JLBC)
for analysis, and, if so required by the JLBC, must also be
approved by the Legislature.
e) establishes the Public Employees Retirement Law, which
provides health and retirement benefits for state
employees.
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Date: 4/6/11 Page 2
f) specifies that if the provisions of certain statutes
are in conflict with an MOU, the terms of the MOU shall be
prevailing in those cases.
g) specifies that if a state MOU expires, the provisions
of the MOU continue in effect until a new MOU is ratified,
as long as the parties continue to bargain in good faith.
h) 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 (DPA).
i) creates the State Peace Officers' and Firefighters'
Defined Contribution Plan (PO/FF II), a defined
contribution plan exclusively for correctional peace
officers. Since 1998, the State has contributed 2% of
correctional officer pay to this plan for all officers in
the plan.
2) This bill :
a) provides legislative ratification for the MOUs agreed
to between the State and state BUs 2 (CASE), 6 (CCPOA),
7 (CSLEA), 9 (PECG), 10 (CAPS), and 13 (IUOE).
b) increases the normal employee contribution rate to
fund retirement benefits, effective on the first day of
the pay period following legislative ratification, as
follows:
--------------------------------------------------------------
| Retirement Classification | Current | New |
| |Contributi|Contribution|
| | on Rate | Rate (SB |
| | | 321) |
|--------------------------------------+----------+------------|
|BU 2: Miscellaneous & Industrial w/ |6% |9% |
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Date: 4/6/11 Page 3
|Social Security | | |
|--------------------------------------+----------+------------|
|BU 2: Miscellaneous & Industrial wo/ |7% |10% |
|Social Security | | |
|--------------------------------------+----------+------------|
|BU 2: Safety |7% |10% |
|--------------------------------------+----------+------------|
|BUs 6, 7, 9, 10: Miscellaneous & |5% |8% |
|Industrial w/ Social Security | | |
|--------------------------------------+----------+------------|
|BUs 6, 7, 9, 10: Miscellaneous & |6% |9% |
|Industrial wo/ Social Security | | |
|--------------------------------------+----------+------------|
|BUs 7, 9, 10: Safety |6% |9% |
|--------------------------------------+----------+------------|
|BU 6: Peace Officers |8% |11% |
|--------------------------------------+----------+------------|
|BU 7: Peace Officers |8% |10% |
|--------------------------------------+----------+------------|
|BU 13: Miscellaneous & Industrial w/ |5% |10% |
|Social Security | | |
|--------------------------------------+----------+------------|
|BU 13: Miscellaneous & Industrial |6% |11% |
|wo/ Social Security | | |
|--------------------------------------+----------+------------|
|BU 13: Safety |6% |11% |
--------------------------------------------------------------
c) requires that compensation for employees covered by
these agreements shall be continuously appropriated in the
event of a late budget for fiscal years 2012/2013 and
2013/2014.
d) makes 3 technical clarifications to previous
legislation enacted in 2010 as follows:
1) AB 1625 (Perez), Chapter 728, Statutes of 2010:
Reduces by 1% the contribution rate for excluded and
exempt employees connected to BU 2. The committee is
informed by DPA that the current rates in statute are
incorrect with regard to these employees, who have
always paid the lower amount, as corrected by this
bill (G.C. section 20682).
Pamela Schneider
Date: 4/6/11 Page 4
2) SB 846 (Correa), Chapter 162, Statutes of 2010:
This bill ratified the 2010 MOU agreement between the
state and BU 5 (California Association of Highway
Patrol), which allows the member contribution, for a
limited time as specified, to be redirected to the
members' retirement contribution. The amendment
included in this bill will allow DPA to apply that
provision to excluded and exempt patrol members of
CalPERS as well (G.C. section 22944.3).
3) changes a section number for a continuous
appropriation section added in 2010 so that it is
consistent with other such sections.
e) ratifies other terms and conditions of the MOUs,
including changes to the previous contracts, which are
summarized as follows:
-----------------------------------------------------------
| Provision | BU | Amount/ Time Frame/Other |
| | | Information |
|-----------------------+------+----------------------------|
|Increase to Maximum |All |BU 2: Misc/Sfty: 4% |
|Salary Step (linked to | |BU 6: Misc/Ind: 3% |
|amount of increased | | PO: 4% |
|member contributions | |BU 7: Misc/Ind/Sfty: 3% |
|and other | | PO: 2% |
|concessions): | |BU 9, 10: 3% |
|Effective 7/1/13 | |BU 13: Misc/Sfty: 5% |
|-----------------------+------+----------------------------|
|Personal Leave |All |Effective for 12 months. |
|Program: Approximately | |Days have no clash value. |
|5% pay reduction in | |BUs 2, 10, 13: Employees |
|exchange for 1 day of | |at State Compensation |
|leave per month. | |Insurance Fund exempt from |
| | |PLP |
| | |BU 10: Employees may |
| | |choose to have proportional |
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Date: 4/6/11 Page 5
| | |pay reduction in exchange |
| | |for 2 or 3 PLP days per |
| | |month over successive |
| | |months until 12 PLP days |
| | |are taken |
|-----------------------+------+----------------------------|
|Personal/Professional |All |BU 2: 2 days |
|Days: | |BUs 7, 9, 10, 13: 2 days |
|To be used for | |BU 6: 4 days in 2012 and 2 |
|personal or | |days in 2013 |
|professional | | |
|development. No cash | | |
|value and must be used | | |
|in fiscal year. | | |
|-----------------------+------+----------------------------|
|Other Leave |BU 2 |1.73 hours/month through |
| | |6/2013 (may be saved and |
| | |cashed out) |
|-----------------------+------+----------------------------|
|Health Benefits: |All |BUs 2, 7, 10, 13: 80/80 |
|80/80 Formula: | |Formula 1/1/12 & 1/1/13 |
|$482/'EE only | | |
|$946/'EE and 1 | |BU 9: 85/80 Formula 1/1/12 |
|dependent | |& 1/1/13 |
|$1,241/'EE and 2 or | | |
|more deps | |BU 6: Partial increase |
| | |upon ratification with |
|85/80 Formula (with | |full 80/80 Formula paid |
|COBEN) | |1/1/12 and 1/1/13 |
|$509 + /'EE only | | |
|$981/'EE and 1 | |(Note: BUs 9, 10 have the |
|dependent | |80/80 formula provided in |
|$1,285/'EE and 2 or | |statute, which can be |
|more deps | |modified via MOU.) |
|-----------------------+------+----------------------------|
|Length of Contract |All |BUs 2, 7, 9, 10, 13: |
| | |4/1/2011 to 7/1/2013 |
| | |BU 6: 4/1/2011 to 7/2/2013 |
|-----------------------+------+----------------------------|
|Furlough Protection |All |No furloughs during the 12 |
| | |months that the Personal |
| | |Leave Program is in effect. |
| | | |
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Date: 4/6/11 Page 6
|-----------------------+------+----------------------------|
|Number of Employees | |BU 2: 3,300 |
|Covered (in full-time | |BU 6: 28,124 |
|equivalents) | |BU 7: 6,185 |
| | |BU 9: 10,112 |
| | |BU 10: 2,440 |
| | |BU 13: 912 |
|-----------------------+------+----------------------------|
|Other Provisions |All |Acknowledge legislation |
| | |reducing retirement |
| | |formulas for employees |
| | |hired after 1/15/2011, |
| | |3-year final comp if |
| | |applicable, and elimination |
| | |of 2 state holidays. (SBX3 |
| | |8, Ducheny, Chapter 4, |
| | |Statutes of 2009-10, Third |
| | |Extraordinary Session; SBX6 |
| | |22 Hollingsworth, Chapter |
| | |3, Statutes of 2009-10, |
| | |Sixth Extraordinary |
| | |Session) |
|-----------------------+------+----------------------------|
|Other Provisions |BU 6 |Terminates employer |
| | |contribution of 2% of pay |
| | |to PO/FF II. |
| | |Employees will fund union |
| | |release time bank by |
| | |contributing 1 hour per |
| | |year. |
| | |Acknowledges legislation |
| | |prohibiting leave from |
| | |being counted as time |
| | |worked for the purpose of |
| | |calculating overtime. |
| | |Employees who work on |
| | |holidays earn 2 times |
| | |normal hourly rate. |
| | |$200 month differential for |
| | |working at Pelican Bay |
| | |State Prison, High Dessert |
| | |State Prison, or California |
| | |Correctional Center. |
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Date: 4/6/11 Page 7
|-----------------------+------+----------------------------|
|Other Provisions |BU 7 |Employees will fund union |
| | |release time bank by |
| | |contributing 1.5 hours per |
| | |year. |
| | |Time and a half plus |
| | |holiday credit for working |
| | |on specified holidays |
| | |Employees in state-owned |
| | |housing will pay fair |
| | |market value |
|-----------------------+------+----------------------------|
|Other Provisions |BUs |Time and a half for working |
| |9,10 |on specified holidays. |
| | |Salary Survey for |
| | |informational purposes. |
| | |Joint Labor/Management |
| | |Committee to assist with HR |
| | |Modernization. |
| | | |
-----------------------------------------------------------
f)provides legislative ratification for addenda to MOUs
ratified in 2010 between the State and state BUs 12
(IUOE), 16 (UAPD), 18 (CAPT), and 19 (AFSCME).
Specifically, these addenda provide 2 personal/professional
days for employees in these units, consistent with the 2
days provided to SEIU in its 2010 contract and the
contracts covered by this legislation.
3) The complete MOUs and addenda are posted at:
http://www.dpa.ca.gov/bargaining/contracts/index.htm
Complete analyses by the LAO are posted at:
http://www.lao.ca.gov/laoapp/main.aspx?type=3&CatID=13
FISCAL :
a) according to DPA the savings (in millions) created by the
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Date: 4/6/11 Page 8
MOUs are as follows:
------------------------------------------------------
| BU | FY 2010/2011 | Total Savings over |
| | | Life of Contract |
|------+-----------------------+-----------------------|
|2 |$34.4 (GF=$9.4 |$29.5 (GF=$8.7 |
| |OF=$25.0) |OF=$20.8) |
|------+-----------------------+-----------------------|
|6 |$291.2 (GF=$290.9 |$233.2 (GF=$233.0 |
| |OF=$.29) |OF=$.24) |
|------+-----------------------+-----------------------|
|7 |$37.8 (GF=$11.2 |$24.5 (GF=$7.8 |
| |OF=$26.4) |OF=$16.6) |
|------+-----------------------+-----------------------|
|9 |$134 (GF=$3.10 |$231 (GF=$5.3 OF=$226) |
| |OF=$131) | |
|------+-----------------------+-----------------------|
|10 |$22.9 (GF=$3.2 |$38.2 (GF=$5.4 |
| |OF=$19.6) |OF=$32.7) |
|------+-----------------------+-----------------------|
|13 |$ 7.5 (GF=$5.1 |$ 6.7 (GF=$4.4 |
| |OF=$2.3) |OF=$2.2) |
|------+-----------------------+-----------------------|
|TOTAL |$527.8 |$563.1 |
| | | |
------------------------------------------------------
Costs related to the addenda for the personal professional
days are minimal and absorbable by the departments according
to DPA.
b) the LAO analyses show an erosion of savings based on the
current year fiscal budget, which includes a full year of
furlough for employees in these bargaining units (i.e., 3
days per month/approximately 15% salary reduction). The
agreements result in the furlough program ending as of March
31, thus resulting in a reduction in the anticipated savings
for the final three months of the fiscal year.
DPA does not include the savings erosion due to ending the
furlough program in its cost analyses.
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Date: 4/6/11 Page 9
COMMENTS:
1) Arguments in support
Citing concessions in the MOU and the fact that many CASE
members will not have had a salary increase in over seven
years, while seeing salary cuts during that time, CASE
states: "While these concessions were difficult for our
members, CASE recognizes the fiscal realities facing the
State of California, and understands the need to contribute
to solving the current deficit."
From CCPOA : "A collective bargaining agreement is the
foundation of a harmonious relationship between the state
employer and its workforce." "Mindful of the fiscal
challenges facing the state, we are pleased to have reached
an agreement with the current Administration that helps
resolve the current budget shortfall while re-establishing a
solid framework for the relationship between our members and
the state."
From CSLEA : "In recent years, state employees have
experienced significant reductions in compensation in order
to help the state deal with its budget challenges. This
agreement continues to help the state cope with the current
budget problem while providing needed stability to our
members."
From PECG : "This bill generates hundreds of millions of
dollars in budget savings for the State at the same time it
provides state engineers and other state employees definitive
terms of employment."
From CAPS : "SB 151 provides significant savings to the state
during difficult times while ensuring stable working
conditions for state scientists and other state employees."
2) SUPPORT :
California Attorneys, Administrative Law Judges, and
Hearing Officers in State Employment (State Bargaining
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Date: 4/6/11 Page 10
Unit (BU) 2: CASE)
California Correctional Peace Officers Association (BU 6:
CCPOA)
California Statewide Law Enforcement Association (BU 7:
CSLEA)
Professional Engineers in California Government (BU 9:
PECG)
California Association of Professional Scientists (BU 10:
CAPS)
International Union of Operating Engineers (BUs12 and 13:
IUOE)
Union of American Physicians and Dentists (BU 16: UAPD)
California Association of Psychiatric Technicians (BU 18:
CAPT)
American Federation of State, County and Municipal
Employees (BU 19: AFSCME)
Department of Personnel Administration (DPA)
California-Nevada Conference of Operating Engineers
3) OPPOSITION :
None to date
#####
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Date: 4/6/11 Page 11