BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 478| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 478 Author: Gomez (D) Amended: 9/3/13 in Senate Vote: 27 - Urgency SENATE PUBLIC EMPLOYMENT & RETIREMENT COMM : 3-2, 9/6/13 AYES: Beall, Block, Yee NOES: Walters, Gaines SENATE APPROPRIATIONS COMMITTEE : Not available ASSEMBLY FLOOR : 53-21, 05/30/13 - See last page for vote SUBJECT : State employees: memorandum of understanding SOURCE : AFSCME - Health and Social Service Professionals California Association of Psychiatric Technicians California Correctional Peace Officers Association California Department of Human Resources California Statewide Law Enforcement Association International Union of Operating Engineers Union of American Physicians and Dentists DIGEST : This bill provides the implementing language and necessary appropriations to ratify the recent memoranda of understanding (MOUs) agreed to by the State with, respectively: BU 06 (Correctional Peace Officers) represented by: California Correctional Peace Officers Association (CCPOA); BU 07 (Protective Services and Public Safety) represented by: California Statewide Law Enforcement Association (CSLEA); BU09 CONTINUED AB 478 Page 2 (Professional Engineers) represented by: Professional Engineers in California Government (PECG); BU 12 (Craft and Maintenance) represented by: International Union of Operating Engineers (IUOE); BU 16 (Physicians, Dentists and Podiatrists) represented by: Union of American Physicians and Dentists (UAPD); BU 18 (Psychiatric Technician) represented by: California Association of Psychiatric Technicians (CAPT); and BU 19 (Health and Social Services/Professional) represented by: American Federation of State, County and Municipal Employees-Health and Social Service Professionals (AFSCME). ANALYSIS : Existing law: 1.Requires, under the State Employee-Employer Relations Act (the Ralph C. Dills Act), that the state, represented by the California Department of Human Resources (CalHR), collectively bargain with exclusive employee representatives over all aspects related to wages and working conditions, and that agreements be formalized in MOUs that are subsequently approved by the Legislature. 2.Requires the Office of the Legislative Analyst (LAO) to analyze state MOUs and to report on its findings to the Legislature within 10 days of receiving the MOU from CalHR. This bill approves the agreements between the state and the employee representatives for the following state bargaining units and would cover the Full Time Equivalent positions (approximately) for the term duration of the MOUs as cited below: Bargaining Unit FTE Covered Term BU 06 (Correctional Peace Officers): 28,3572 years (7/1/13 - 7/1/15) BU 07 (Protective Services and Public Safety): 6,7803 years (7/1/13 - 7/1/16) BU 09 (Profession Engineers in California) 10,8242 years (7/2/13 - 7/1/15) BU 12 (Craft and Maintenance): 10,8192 years (7/1/13 - 7/1/15) CONTINUED AB 478 Page 3 BU 16 (Physicians, Dentists and Podiatrists): 1,5143 years (7/1/13 - 7/1/16) BU 18 (Psychiatric Technician): 5,4133 years (7/1/13 - 7/1/16) BU 19 (Health and Social Services/Professional): 4,8593 years (7/1/13 - 7/1/16) Comments 1.General observations: The state employees in bargaining units covered in this bill (BU 6, 7, 9, 12, 16, 18, and 19) are currently working under MOUs that were ratified in 2010-2011 and that expired in July 2013. The terms of the covered bargaining units' respective MOUs are similar to those reached with the nine bargaining units represented by Service Employees International Union - Local 1000 (SEIU) earlier this year. The MOUs provide for modest general salary increases (GSIs) ranging from 1 - 4%effective July 1, 2014, and again in July 1, 2015, if state budget revenue projections are achieved. The Department of Finance is tasked with determining whether the state achieves budget revenue projections and thus, whether GSIs will be awarded in 2014. In the event the state does not award salary increases in 2014, covered bargaining unit classifications will receive an amount equivalent to the combined 2-year salary increase effective July 2015. Thus, a shortfall in projected state budget revenues will delay for one year but not prevent implementation of the respective GSIs for the affected bargaining units. 2.Provisions common to all contracts : Retirement Benefit Formula Calculation . All contracts reflect the requirements of the Public Employment Pension Reform Act (PEPRA). Under PEPRA employees who become CalPERS members on or after January 1, 2013, are subject to the following retirement benefit formulas: 2% at age 62 for Miscellaneous/Industrial (First Tier) members 1.5% at age 67 for Second Tier members 2% at age 57 for State Safety members 2.5% at age 57 for Peace Officer/Fire Fighter (PO/FF) CONTINUED AB 478 Page 4 members Pensionable compensation caps apply to new CalPERS members subject to PEPRA. Health Benefits Premium - Employer Contribution . The state's monthly contribution for healthcare coverage for employees and eligible dependents shall be an amount equal to eighty percent of the weighted average of the premiums for the four Basic health benefit plans with the largest enrollment (the 80/80 formula). Dependents Health Premium . 80/75 during first year of employment. BU 12, 18 and BU 19 have agreed to provisions providing the 80% employer contribution for employees' dependents after one year of state employment. During the one-year vesting period, the state will contribute 75% of the weighted average of the premiums for the four Basic health benefit plans with the largest enrollment for employee's dependents. Furloughs and Personnel Leave Program . The state agrees not to impose any furloughs or personnel leave programs during the terms of the MOUs. Miscellaneous . Business and Travel Reimbursements - the state increased the Business and Travel Reimbursements: the State increased the breakfast rate to $7.00, lunch to $11.00, dinner to $23.00 and incidentals to $5.00. The State increased lodging rates as follows: ------------------------------------------------------------- | County | Lodging Rate | |------------------------------+------------------------------| |All counties except those | $90 | |listed below. | | |------------------------------+------------------------------| |Los Angeles, Orange, Ventura, | $120 | |Edwards AFB, less the City of | | |Santa Monica | | |------------------------------+------------------------------| |Sacramento, Napa, Riverside | $95 | |------------------------------+------------------------------| |San Diego, Monterey, Alameda, | $125 | CONTINUED AB 478 Page 5 |San Mateo, Santa Clara | | |------------------------------+------------------------------| |San Francisco, City of Santa |$150 | |Monica | | ------------------------------------------------------------- Implementing Legislation . The parties agree to present to the Legislature, as part of the legislation implementing these MOUs, a provision to appropriate funds to cover the economic terms of these agreements through the final year of the contract term (i.e. 2015 or 2016 depending on the BU). 1.Provisions applicable to specific Bargaining Units : Legislation . BU 16's and BU 19's MOUs would require that Government Code Section 22871.8 be amended to provide that the employer contribution toward employees' health plan premiums be 80 % of the weighted average of the four basic health benefit plans premium for an active state civil service employee enrolled for self alone and 80% for dependents (the 80/80 formula). Current statute provides that the state's contribution toward BU 16 and BU 19 employees shall be 85% and 80%. The proposed amendment would make the lower employer contribution effective retroactively for employees beginning January 1, 2007. This statutory change will codify an agreement to reduce the 85/80 formula that was first agreed to in an earlier MOU. FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes Local: No According to CalHR fiscal costs are: (in millions) ---------------------------------------------------------------- | MOU | Fiscal Year | Total | Total Budgetary | | | 2013-14 Cost |Incremental Cost | Cost | ---------------------------------------------------------------- |---------+---------+---------+---------+---------+---------+---------+---------+---------+---------| |Bargainin| Total | General | Other | Total | General | Other | Total | General | Other | | g | | Fund | Funds | | Fund | Funds | | Fund | Fund | CONTINUED AB 478 Page 6 | Unit | | | | | | | | | | |---------+---------+---------+---------+---------+---------+---------+---------+---------+---------| | 06 | $14.8| $14.7| $0.1| $177.5| $176.3| $1.2| $297.2| $295.2| $2.0| |---------+---------+---------+---------+---------+---------+---------+---------+---------+---------| | 07 | $1.1| $0.3| $0.8| $26.4| $9.1| $17.3| $32.1| $10.8| $21.3| |---------+---------+---------+---------+---------+---------+---------+---------+---------+---------| | 09 | $0.0| $0.0| $0.0| $48.7| $1.5| $47.2| $48.7| $1.5| $47.2| |---------+---------+---------+---------+---------+---------+---------+---------+---------+---------| | 12 | $1.6| $0.5| $1.1| $44.8| $14.3| $30.5| $53.4| $17.1| $36.3| |---------+---------+---------+---------+---------+---------+---------+---------+---------+---------| | 16 | $0.0 | $0.0| $0.0| $20.1| $17.8| $2.3| $28.9| $25.8| $3.1| |---------+---------+---------+---------+---------+---------+---------+---------+---------+---------| | 18 | $1.0| $0.9| $0.1| $25.6| $23.5| $2.1| $38.6| $35.5| $3.1| |---------+---------+---------+---------+---------+---------+---------+---------+---------+---------| | 19 | $0.003| $0.003| $0.0| $23.1| $13.6| $6.5| $33.4| $24.0|$9.4 | | | | | | | | | | | | --------------------------------------------------------------------------------------------------- SUPPORT : (Verified 9/6/13) AFSCME - Health and Social Service Professionals California Association of Psychiatric Technicians California Correctional Peace Officers Association California Department of Human Resources California Statewide Law Enforcement Association International Union of Operating Engineers Union of American Physicians and Dentists ASSEMBLY FLOOR : 53-21, 5/30/13 AYES: Alejo, Ammiano, Atkins, Bloom, Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chesbro, Cooley, Daly, Dickinson, Eggman, Fong, Fox, Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall, Roger Hernández, Jones-Sawyer, Levine, Lowenthal, Medina, Mitchell, Mullin, Muratsuchi, Nazarian, Pan, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Weber, Wieckowski, Williams, Yamada, John A. Pérez NOES: Allen, Bigelow, Chávez, Dahle, Donnelly, Beth Gaines, Gorell, Grove, Harkey, Jones, Logue, Maienschein, Mansoor, Melendez, Morrell, Nestande, Olsen, Patterson, Wagner, Waldron, Wilk NO VOTE RECORDED: Achadjian, Conway, Hagman, Holden, Linder, Vacancy CONTINUED AB 478 Page 7 JL:nl 9/6/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED