California Legislature—2013–14 Regular Session

Assembly Bill No. 583

Introduced by Assembly Member Gomez

February 20, 2013

An act to amend Sections 19104.5 and 19116 of the Education Code, relating to libraries.

LEGISLATIVE COUNSEL’S DIGEST

AB 583, as introduced, Gomez. County free public libraries: withdrawal: use of private contractors.

Existing law provides that the county boards of supervisors may establish and maintain, within their respective counties, county free libraries pursuant to specified provisions of law. Existing law provides that the board of trustees, common council, or other legislative body of a city or the board of trustees of a library district may, on or before January 1 of any year, notify the county board of supervisors that the city or library district no longer desires to be a part of the county free library system, as specified.

Existing law imposes specified requirements on the board of trustees, common council, or other legislative body of a city or the board of trustees of a library district that intends to withdraw from the county free library system and operate the city’s or library district’s library or libraries with a private contractor that will employ library staff to achieve cost savings, subject to specified exceptions. These requirements, until January 1, 2019, include, but are not limited to, clearly demonstrating that the contract will result in actual overall cost savings to the city or library district for the duration of the entire contract, and prohibiting the contract from causing existing city or library district employees to incur a loss of employment or specified benefits or an involuntary transfer.

This bill would instead provide, until January 1, 2019, that a board of trustees, common council, or other legislative body of a city or the board of trustees of a library district in which a withdrawal from the county free library system becomes effective on or after January 1, 2012, shall comply with the above-described requirements before entering into a contract to operate the city’s or library district’s library or libraries with a private contractor that will employ library staff to achieve cost savings. The bill would make conforming and nonsubstantive changes.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 19104.5 of the Education Code is
amended to read:

19104.5.  

(a)  begin delete If the end delete begin insert The end insert board of trustees, common council, or
other legislative body of a city or the board of trustees of a library
district begin delete intends to withdraw end delete begin insert in which a withdrawal end insert from the county
free library system begin delete and end delete begin insert becomes effective on or after January 1,
2012, shall comply with all of the following requirements before
entering into a contract to end insert operate the city’s or the district’s library
or libraries with a private contractor that will employ library staff
to achieve cost begin delete savings, all of the following requirements shall
apply: end delete begin insert savings: end insert

(1) At least once a week for four consecutive weeks begin delete prior to end delete
begin insert before end insert taking any action, the board of trustees, common council,
or other legislative body of the city or the board of trustees of the
library district shall publish, in a newspaper designated by it and
circulated throughout the city or library district, notice of the
contemplated action, giving the date and place of the meeting at
which the contemplated action is proposed to be taken.

(2) The board of trustees, common council, or other legislative
body of a city or the board of trustees of a library district shall
clearly demonstrate that the contract will result in actual overall
cost savings to the city or library district for the duration of the
entire contract as compared with the city’s or library district’s
actual costs of providing the same services, provided that, in
comparing costs, all of the following occur:

(A) The city’s or library district’s additional cost of providing
the same services as proposed by the contract shall be included.
These additional costs shall include the salaries and benefits of
additional staff that would be needed and the cost of additional
space, equipment, and materials needed to perform the necessary
functions of the library.

(B) The city’s or library district’s indirect overhead costs shall
not be included unless those costs can be attributed solely to the
function in question and would not exist if that function was not
performed by the city or library district. For purposes of this
subparagraph, “indirect overhead costs” means the pro rata share
of existing administrative salaries and benefits, rent, equipment
costs, utilities, and materials.

(C) The cost of a contractor providing a service for any
continuing city or library district costs that would be directly
associated with the contracted function shall be included.
Continuing city or library district costs shall include, but not be
limited to, costs for inspection, supervision, and monitoring.

(3) The contract shall not be approved solely on the basis that
savings will result from lower contractor pay rates or benefits.
Contracts shall be eligible for approval if the contractor’s wages
are at the industry’s level and do not undercut city or library district
pay rates.

(4) The contract shall not cause an existing city or library district
employee to incur a loss of his or her employment or employment
seniority, a reduction in wages, benefits, or hours, or an involuntary
transfer to a new location requiring a change in residence.

(5) The contract shall be awarded through a publicized,
competitive bidding process.

(6) The contract shall include specific provisions pertaining to
the qualifications of the staff that will perform the work under the
contract, as well as assurances that the contractor’s hiring practices
meet applicable nondiscrimination standards.

(7) The contract shall provide that it may be terminated at any
time by the city or library district without penalty if there is a
material breach of the contract and notice is provided within 30
days of termination.

(8) If the contract is for library services in excess of one hundred
thousand dollars ($100,000) annually, all of the following shall
occur:

(A) The city or library district shall require the contractor to
disclose all of the following information as part of its bid,
application, or answer to a request for proposal:

(i) A description of all charges, claims, or complaints filed
against the contractor with any federal, state, or local administrative
agency during the prior 10 years.

(ii) A description of all civil complaints filed against the
contractor in any state or federal court during the prior 10 years.

(iii) A description of all state or federal criminal complaints or
indictments filed against the contractor, or any of its officers,
directors, or managers, at any time.

(iv) A description of any debarments of the contractor by any
public agency or licensing body at any time.

(B) The city or library district shall include in the contract
specific, measurable performance standards and provisions for a
performance audit by the city or library district, or an independent
auditor approved by the city or library district, to determine
whether the performance standards are being met and whether the
contractor is in compliance with applicable laws and regulations.
The city or library district shall not renew or extend the contract
begin delete prior to end delete begin insert before end insert receiving and considering the audit report.

(C) The contract shall include provisions for an audit by the
city or library district, or an independent auditor approved by the
city or library district, to determine whether and to what extent the
anticipated cost savings have actually been realized. The city or
library district shall not renew or extend the contract before
receiving and considering the audit report.

(9) The term of the contract shall not be more than five years
from the date on which the board of trustees, common council, or
other legislative body of a city or the board of trustees of a library
district approves the contract.

(b) This section does not preclude a city, library district, or local
government from adopting more restrictive rules regarding the
contracting of public services.

(c) This section shall not apply to contracts between a city or
library district and a nonprofit organization if both of the following
requirements are met:

(1) The nonprofit organization shall not be a parent or subsidiary
of a for-profit entity.

(2) The contract shall prohibit the nonprofit organization from
subcontracting the obligation to operate the library or libraries and
to employ and supervise library staff.

begin insert

(d) This section shall not apply to a library or libraries that are
funded only by the proceeds of a special tax imposed by the city
or library district pursuant to Article 3.5 (commencing with Section
50075) of Chapter 1 of Part 1 of Division 1 of Title 5 of the
Government Code.

end insert begin delete

(d)

end delete

begin insert (e) end insert  This section shall remain in effect only until January 1, 2019,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2019, deletes or extends that date.

SEC. 2.  

Section 19116 of the Education Code is amended to
read:

19116.  

(a) (1) Sections 19104 and 19105 are not applicable
to the withdrawal of a city or library district from the county free
library system in Los Angeles County or Riverside County. The
legislative body of a city or the board of trustees of a library
district, whose jurisdiction is within the County of Los Angeles
or the County of Riverside, may notify the board of supervisors
for Los Angeles County or Riverside County, as appropriate, that
the city or library district no longer desires to be a part of the
county free library system. The notice shall state whether the city
or library district intends to acquire property pursuant to
subdivision (c). The board of supervisors shall transmit a copy of
the notice to the Los Angeles County Assessor or Riverside County
Assessor, as appropriate, the Los Angeles County Auditor or
Riverside County Auditor, as appropriate, and the State Board of
Equalization.

(2)  begin delete If the city’s end delete begin insert The end insert legislative body begin insert of a city end insert or the begin delete library
district’s end delete board of trustees begin delete intends to withdraw end delete begin insert of a library district
in which a withdrawal end insert from the county free library system begin delete and end delete begin insert in
Los Angeles County or Riverside County becomes effective on or
after January 1, 2012, shall comply with the requirements of
Section 19104.5 before entering into a contract to end insert operate the
city’s or the district’s library or libraries with a private contractor
that will employ library staff to achieve cost savings, begin delete the
requirements of Section 19104.5 shall also apply, end delete unless the library
or libraries are funded only by the proceeds of a special tax
imposed by the city or library district pursuant to Article 3.5
(commencing with Section 50075) of Chapter 1 of Part 1 of
Division 1 of Title 5 of the Government Code.

(b) When a city or library district files a notice pursuant to
subdivision (a), it shall remain a member of the county free library
system until July 1 of the base year or the date on which property
is transferred pursuant to subdivision (c), whichever date is later.
Upon ceasing to be a member of the county free library system,
the city or library district shall not participate in any benefits of
the county free library system, and shall assume the responsibility
for the provision of library services within its jurisdiction. Unless
otherwise agreed by July 1 of the base year in writing by the Board
of Supervisors of Los Angeles County or the Board of Supervisors
of Riverside County, as appropriate, and the withdrawing city or
library district, an amount of property tax revenue equal to the
property tax revenues allocated to the county free library pursuant
to Article 2 (commencing with Section 96) of Chapter 6 of Part
0.5 of Division 1 of the Revenue and Taxation Code in the fiscal
year begin delete prior to end delete begin insert before end insert the base year and that were derived from
property situated within the boundaries of the withdrawing entity
shall be allocated to and used to maintain library services by the
withdrawing entity in the base year and, adjusted forward, in each
fiscal year thereafter at the same time allocations are made pursuant
to Article 2 (commencing with Section 96) of Chapter 6 of Part
0.5 of Division 1 of the Revenue and Taxation Code. This
subdivision shall not apply to property tax revenues that have been
pledged to repay bonded indebtedness of the county free library
system.

(c) If there are one or more county library facilities within the
territorial boundaries of the withdrawing entity at the time the
withdrawing entity provides notice pursuant to subdivision (a),
the withdrawing entity shall have the right to acquire any or all of
those facilities from the county and the county shall, no later than
July 1 of the base year, transfer to the withdrawing entity each
facility to be acquired and the personal property therein related to
the provision of library services. If the facility or personal property
was purchased with bond proceeds or other forms of indebtedness,
acquisition shall only take place if the withdrawing entity assumes
any remaining indebtedness and in no way impairs the repayment
thereof. If the withdrawing entity opts not to acquire any facilities
or personal property, the county at its discretion may dispose of
the facilities or personal property or convert the use of those
facilities or personal property, including transferring collections
and other personal property to other sites and converting facilities
to other purposes. If the withdrawing entity opts to acquire any
facilities or personal property, the acquisition prices shall be as
follows unless otherwise provided for by statute or contract:

(1) Each county library facility which, for purposes of this
section, shall include the real property upon which the facility is
located and any fixtures therein and shall not include computer
systems and software, shall be transferred for the lesser of:

(A) No cost, if the facility was donated to the county by the
withdrawing entity.

(B) The price paid to the withdrawing entity by the county for
the facility, if the county bought the facility from the withdrawing
entity. However, if the county constructed capital improvements
to the facility after it was bought from the withdrawing entity, the
county’s total out-of-pocket costs for the capital improvement
excluding any costs for routine repairs, restoration, or maintenance,
shall be added to the price.

(C) The fair market value of the facility. However, if any portion
of the facility was donated to the county by the withdrawing entity
or if any moneys were donated by the withdrawing entity toward
the county’s construction or acquisition of the facility or any
portion thereof, the value of the donation shall be subtracted from
the fair market value.

(2) Any personal property within the facility related to the
provision of library services, including books and resource
materials, computer systems and software, furniture, and
furnishings, shall be transferred for the lesser of:

(A) No cost, if the property was donated to the county by the
withdrawing entity.

(B) The fair market value of the personal property. However,
on or before the March 1 preceding the July 1 of the base year, the
county librarian may designate collections of resource books and
materials that are unique in, and integral to, the county free library
system to be special collections. The special collections shall be
acquired by the withdrawing entity only upon mutually agreeable
terms and conditions.

(d) If a facility transferred pursuant to subdivision (c) serves
residents of surrounding jurisdictions, the board of supervisors
governing the county free library system may require, as a
condition of transferring the facility, that the library services
provided by the withdrawing entity to its residents also be available
on the same basis to the residents of the surrounding jurisdictions.
However, if the withdrawing entity contributes to the provision of
library services from other city funds, or through taxes,
assessments, or fees of its residents, the withdrawing entity may
provide additional services to its residents. If the requirement to
provide regional services is imposed and, unless otherwise agreed
in writing by the county and the withdrawing entity by July 1 of
the base year, an amount of property tax revenues equal to the
property tax revenues derived from property situated in the
surrounding jurisdictions that were, in the fiscal year before the
base year, allocated to the county free library system pursuant to
Article 2 (commencing with Section 96) of Chapter 6 of Part 0.5
of Division 1 of the Revenue and Taxation Code shall be allocated
to and used to maintain library services by the withdrawing entity
in the base year and, adjusted forward, in each fiscal year thereafter
at the same time other allocations are made pursuant to Article 2
(commencing with Section 96) of Chapter 6 of Part 0.5 of Division
1 of the Revenue and Taxation Code. This subdivision shall not
apply to property tax revenues that have been pledged to repay
bonded indebtedness. If a surrounding jurisdiction subsequently
provides notice of its intent to withdraw from the county free
library system pursuant to subdivision (a), on the date the
surrounding jurisdiction ceases to participate in the benefits of the
county free library system pursuant to subdivision (b), the
withdrawing entity shall no longer be required to make library
services available to the residents of the surrounding jurisdiction
and property tax revenues derived from property situated in the
surrounding jurisdiction shall no longer be allocated to the
withdrawing entity pursuant to this subdivision.

(e) For purposes of this section, the following terms are defined
as follows:

(1) “Base year” means the fiscal year commencing on the July
1 following the December 2 following the date of the notice given
pursuant to subdivision (a) of this section.

(2) “Fair market value” means:

(A) Any value agreed upon by the withdrawing entity and the
county.

(B) If no agreement as to value is reached by the March 1
preceding the July 1 of the base year, the value assigned by an
appraiser agreed upon by the withdrawing entity and the county.

(C) If no agreement as to the appointment of an appraiser is
reached pursuant to subparagraph (B) by the April 1 preceding the
July 1 of the base year, the value assigned by an appraiser agreed
upon between the withdrawing entity’s appraiser and the county’s
appraiser.

(D) If no agreement as to the appointment of an appraiser is
reached pursuant to subparagraph (C) by the May 1 preceding the
July 1 of the base year, the value assigned by a state-certified
appraiser designated by the withdrawing entity. The designated
appraiser shall provide the appraisal in writing to the county no
later than the June 1 preceding the July 1 of the base year.

(E) The withdrawing entity shall reimburse the county for any
appraisal costs the county incurs in determining the fair market
value pursuant to this section.

(3) “Surrounding jurisdictions” means cities and library districts
that are adjacent to the withdrawing entity and tax rate areas in
unincorporated areas of the county that are wholly or partially
within the withdrawing entity’s sphere of influence, that are within
the county free library system, and that have no facility within
their territorial boundaries providing library services at the time
the withdrawing entity provides notice pursuant to subdivision (a).