BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 151| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 151 Author: Correa (D) Amended: 4/14/11 Vote: 27 - Urgency SEN. PUBLIC EMPLOYMENT & RETIREMENT COMM. : 3-2, 4/11/11 AYES: Negrete McLeod, Padilla, Vargas NOES: Walters, Gaines SENATE APPROPRIATIONS COMMITTEE : 6-3, 4/25/11 AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg NOES: Walters, Emmerson, Runner SUBJECT : State employees: memoranda of understanding SOURCE : California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment California Correctional Peace Officers Association California Statewide Law Enforcement Association Professional Engineers in California Government California Association of Professional Scientists International Union of Operating Engineers Union of American Physicians and Dentists California Association of Psychiatric Technicians American Federation of State, County and Municipal CONTINUED SB 151 Page 2 Employees, AFL-CIO Department of Personnel Administration DIGEST : This bill (1) provides legislative ratification for the memoranda of understanding (MOU) between the State and Bargaining Units (BUs) 2, 6, 7, 9, 10, and 13, (2) approves addenda to MOUs entered into by the State and BUs 12, 16, 18 and 19 which provides members with two Professional Development Days, and (3) approves addenda to BUs 1, 3, 4, 11, 14, 15, 17, 20 and 21 which will exempt employees in these bargaining units who work at the State Compensation Insurance Fund from the Personal Leave Program. ANALYSIS : Existing Law 1.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. 2.Establishes the Department of Personnel Administration (DPA) as the official representative of the Governor in all matters related to collective bargaining. 3.Requires that any MOU between the State and an official representative must be ratified by the Legislature. 4.Requires that an addendum to a ratified MOU must be submitted to the Joint Legislative Budget Committee (JLBC) before analysis, and, if so required by the JLBC, must also be approved by the Legislature. 5.Establishes the Public Employees' Retirement Law, which provides health and retirement benefits for state employees. 6.Specifies that if the provisions of certain statutes are in conflict with a MOU, the terms of the MOU shall be prevailing in those cases.. CONTINUED SB 151 Page 3 7.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.. 8.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 DPA. 9.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 two percent of correctional officer pay to this plan for all other officers in the plan. This bill: 1.Provides legislative ratification for the MOUs agreed to between the State and BUs 2 (California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment), 6 (California Correctional Peace Officers Association), 7 (California State Law Enforcement Association), 9 (Professional Engineers in California Government), 10 (California Association of Professional Scientists), and 13 (International Union of Operating Engineers). 2.Increases the normal employee contribution rate to fund retirement benefits, effective on the first day of the pay period following the legislative ratification, as follows: -------------------------------------------------------- | | Current | New | | |Contribution|Contributi| | Retirement Classification | | on Rate | | | Rate | | |--------------------------------+------------+----------| |BU 2: Miscellaneous & | 6% | 9% | |Industrial w/Social Security | | | CONTINUED SB 151 Page 4 |--------------------------------+------------+----------| |BU 2: Miscellaneous & | 7% | 10% | |Industrial w/Social Security | | | |--------------------------------+------------+----------| |BU 2: Safety | 7% | 10% | |--------------------------------+------------+----------| |BUs 6, 7, 9, 10: Miscellaneous | 5% | | |& Industrial w/Social Security | |8% | |--------------------------------+------------+----------| |BUs 6, 7, 9, 10: Miscellaneous | 6% | 9% | |& Industrial w/o Social | | | |Security | | | |--------------------------------+------------+----------| |BUs 7, 9, 10: Safety | 6% | 9% | |--------------------------------+------------+----------| |BU 6: Peace Officers | 8% | 11% | |--------------------------------+------------+----------| |BU 7: Peace Officers | 8% | 10% | |--------------------------------+------------+----------| |BU 13: Miscellaneous & | 5% | 10% | |Industrial w/Social Security | | | |--------------------------------+------------+----------| |BU 13 Miscellaneous & | 6% | 11% | |Industrial w/o Social Security | | | |--------------------------------+------------+----------| |BU 13: Safety | 6% |11% | | | | | -------------------------------------------------------- 3.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. 4.Makes three technical clarifications to previous legislation enacted in 2010 as follows: A. AB 1625 (Perez), Chapter 728, Statutes of 2010: Reduces by one percent the contribution rate for excluded and exempt employees connected to BU 2. The Senate Public Employment and Retirement Committee was 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 CONTINUED SB 151 Page 5 bill. B. 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 the California Public Employees' Retirement System as well. C. Changes a section number for a continuous appropriation section added in 2010 so that it is consistent with other such sections. 5.Ratifies other terms and conditions of the MOUs, including changes to the previous contracts, which are summarized as follows: --------------------------------------------------------- | | | Amount/Time Frame/Other | | Provision | BU | 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 and | |BU 7: Misc/Ind/Sfty: 3% | |other concessions): | | PO: 2% | |Effective 7/1/13 | |BU 9, 10: 3% | | | |BU 13: Misc/Sfty: 5% | |-------------------------+----+--------------------------| |Personal Leave Program: |All |Effective for 12 months: | |Approximately 5% pay | |Days have to cash value. | |reduction in exchange | |BUs 2, 10, 13: Employees | |for one day of leave per | |at State Compensation | |month | |Insurance fund exempt | | | |from PLP | | | |BU 10: Employees may | | | |choose to have | | | |proportional pay | CONTINUED SB 151 Page 6 | | |reduction in exchange for | | | |2 to 3 PLP days per month | | | |over successive months | | | |until 12 PLP days are | | | |taken | |-------------------------+----+--------------------------| |Personal/Professional |All |BU 2: 2 days | |Days: To be used for | |BUs 7, 9, 10, 13: 2 days | |personal or professional | |BU 6: 4 days in 2012 and | |development. No cash | |2 days in 2013 | |value and must be used | | | |in fiscal year. | | | |-------------------------+----+--------------------------| |Other Leave |BU |1.73 hours/month through | | |2 |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 and 1/1/13 | |$482 /'EE only | | | |$946/'EE and 1 dependent | |BU 9: 85/80 Formula | |$1,241/'EE and 2 or more | |1/1/12 and 1/1/13 | |dependents | | | | | |BU 6: Partial increase | |85/80 Formula (with | |upon ratification with | |COBEN) | |full 80/80 Formula paid | |$509+/'EE only | |1/1/12 and 1/1/13 | |$981/'EE and 1 dependent | | | |$1,285/'EE and 2 or more | |(NOTE: BUs 9 and 10 have | |dependents | |the 80/80 formula | | | |provided n statute, which | | | |can be 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 | | | |to7/2/2013 | |-------------------------+----+--------------------------| |Furlough Protection |All |No furloughs during the | | | |12 months that the | | | |Personal Leave Program is | | | |in effect. | |-------------------------+----+--------------------------| |Number of Employees | |BU 2: 3,300 | CONTINUED SB 151 Page 7 |Covered | |BU 6: 28,124 | |(in full-time | |BU 7: 6,185 | |equivalent) | |BU 9: 10,112 | | | |BU 10: 2,2440 | | | |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. (SBX# 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 |Terminates employer | | |6 |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 | | | |Desert State Prison, or | | | |California Correctional | | | |Center. | CONTINUED SB 151 Page 8 |-------------------------+----+--------------------------| |Other Provisions |BU |Employees will fund union | | |7 |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 | | |9, |working on specified | | |10 |holidays. | | | |Salary Survey for | | | |informational purposes. | | | |Joint Labor/Management | | | |Committee to assist with | | | |HR Modernization. | | | | | --------------------------------------------------------- 6.Provides legislative ratification for addenda to MOUs ratified in 2010 between the State and BUs 12 (International Union of Operating Engineers), 16 (Union of American Physicians and Dentists), 18 (California Association of Psychiatric Technicians), 19 (American Federation of State, County and Municipal Employees). Specifically, these addenda provide two personal/professional days for employees in these units, consistent with the two days provided to Service Employees International Union in its 2010 contract and the contracts covered by this legislation. 7.Provides legislative ratification for addenda to MOUs ratified in 2010 between the State and BUs 1, 3, 4, 11, 14, 16, 17, 20 and 21 (Service Employees International Union) which will exempt employees in these bargaining units who work at the State Compensation Insurance Fund from the Personal Leave Program. CONTINUED SB 151 Page 9 FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes Local: No Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Summary of MOU ($67,400) ($215,900) $18,495 Gen/Spec Costs Salary increases --Approximately $151.2 million annually-- Gen/Spec 7-1-13 (NOTE: For detailed fiscal information regarding each bargaining unit, please see the Senate Appropriations Committee analysis.) In addition to the fiscal impact noted above, there will be millions of dollars in savings to the state in future years as new state employees are hired on or after January 15, 2011, and will be subject to a significantly lesser retirement benefit formula. Those savings, however, have not been actuarially identified at this time, and will not be realized to the state until those affected new employees retire from state service. The increase in the employee's retirement contribution will result in an immediate corresponding reduction in the state rate. SUPPORT : (Verified 4/26/11) California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment (co-source) California Correctional Peace Officers Association (co-source) California Statewide Law Enforcement Association (co-source) Professional Engineers in California Government (co-source) California Association of Professional Scientists International Union of Operating Engineers Union of American Physicians and Dentists California Association of Psychiatric Technicians CONTINUED SB 151 Page 10 American Federation of State, County and Municipal Employees, AFL-CIO (co-source) Department of Personnel Administration (co-source) ARGUMENTS IN SUPPORT : Citing concessions in the MOU and the fact that many California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment (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." In support, the California Correctional Peace Officers Association states, "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." According to the California Statewide Law Enforcement Association, "In recent years, state employees have experienced significant reductions in compensation in order to help the state deal with budget challenges. This agreement continues to help the state cope with the current budget problem while providing needed stability to our members." Also in support, the Professional Engineers in California Government states, "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." The California Association of Psychiatric Technicians states, "SB 151 provides significant savings to the state during difficult times while ensuring stable working conditions for state scientists and other state employees." CONTINUED SB 151 Page 11 CPM:cm 4/26/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED