BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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          |SENATE RULES COMMITTEE            |                        AB 478|
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                                    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  
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          (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)

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          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)  

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               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             |

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              |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   |

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          |  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

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          JL:nl  9/6/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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