BILL ANALYSIS �
AB 566
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Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 566 (Wieckowski) - As Amended: April 15, 2013
Policy Committee: JudiciaryVote:7-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill prohibits courts from entering into or renewing
contracts for services previously, currently or customarily
performed by trial court employees, or that were performed by
trial court employees when the contract was originally entered
into or renewed, unless specified requirements are met,
including:
1)Demonstrating actual cost savings compared, using specified
parameters, to the court's actual costs of providing the same
services.
2)That the contract shall not be approved solely because of cost
savings from lower contractor pay rates or benefits.
3)That the contract shall not cause loss of an existing
employee's job or a reduction in their wages or benefits.
4)That the contract shall be awarded through a competitive
bidding process and shall be limited to five years.
5)For contracts over $100,000, the contract must (i) disclose
specified information, (ii) provide measurable performance
standards; and (iii) require a performance audit and a cost
audit be done and considered prior to any contract renewal.
The bill also prohibits contract approval if, in light of the
special nature of the judicial function, it would be
inconsistent with the public interest to have the service
provided by a private entity.
The bill terminates, 90 days after the operative date of the
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act, any contract that does not comply with the above.
FISCAL EFFECT
The Judicial Council believes the bill will require the trial
courts to convert many existing contracts to court employees
rather than renewing the contracts, at a statewide cost in the
tens of millions of dollars, and that similar impacts could
incur going forward as opportunities to increase operating
efficiencies are discouraged due to the contracting
restrictions. The courts will also incur administrative costs to
demonstrate that a decision to contract-out for services is
allowable under the bill's parameters, and to provide the
specified additional information and performance audit for
contracts exceeding $100,000.
Offsetting a portion of these costs will be savings in cases
where the decisions to continue or resume performing functions
with court employees is more cost effective.
COMMENTS
1)Purpose . Nearly all government entities in California are
restricted from contracting out functions customarily done by
public employees, unless specified conditions are satisfied.
These requirements are designed to ensure that not only is
work done cost-effectively, but that the public interest in
government activities remains paramount. As a general rule,
work performed for the state must be done by state employees
unless the proposed contract for personal services meets
specified criteria, including a clear demonstration of cost
savings. Schools and community college districts are also
required to comply with the same standards that apply to state
departments.
AB 566, sponsored by the American Federation of State, County,
and Municipal Employees (AFSCME) and the Service Employees
International Union (SEIU), extends these same contracting
requirements to the courts.
2)Opposition . The Judicial Council contends the bill will
inhibit the local trial courts' ability to manage its staff
and resources and will require the use of court employees to
perform services even if contracting for these services would
be more cost effective. The Council objects to the unique,
additional requirements for contracts over $100,000, the lack
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of exceptions that are included in similar statutes, and the
lack of a grandfather clause allowing continuation and renewal
of existing contracts. The Council believes the subjecting
contracts for functions that can be performed more efficiently
through technology to the bill's strict parameters will
"sacrifice efficiency for additional personnel," and
discourage innovation. The Council has committed to working
with the author and sponsors to address these concerns.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081