BILL ANALYSIS Ó
AB 583
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Date of Hearing: May 8, 2013
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 583 (Gomez) - As Introduced: February 20, 2013
SUBJECT : County free public libraries: withdrawal: use of
private contractors.
SUMMARY : Requires a city or library district in which a
withdrawal from the county free library system became effective
on or after January 1, 2012, to comply with specified
requirements before entering into a contract to operate a
library or libraries with a private contractor. Specifically,
this bill :
1)Requires that a legislative body of a city or 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, must comply with the specified statutory
requirements established by AB 438 (Williams), Chapter 611,
Statutes of 2011, before entering into a contract to operate a
library or libraries with a private contractor that will
employ library staff to achieve cost savings.
2)Requires that a legislative body of a city or board of
trustees of a library district in which a withdrawal from the
county free library system in both Los Angeles County or
Riverside County becomes effective on or after January 1,
2012, must comply with specified statutory requirements
established by AB 438 before entering into a contract to
operate a library or libraries with a private contractor that
will employ library staff to achieve cost savings.
3)Exempts a library or libraries from the withdrawal process, if
the library or libraries are funded only by proceeds of a
special tax imposed by the city or library district, as
specified.
4)Makes technical changes.
EXISTING LAW :
1)Allows boards of supervisors to establish and maintain county
free libraries, within their respective counties.
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2)Allows, after the establishment of a county free library, a
city or library district to be a part
of the county free library, and for the city or library district
to be entitled to the benefits of the county free library; the
property within the city or library district shall be liable
to taxes levied for county free library purposes.
3)Imposes requirements as specified by AB 438 (Williams), until
January 1, 2019, on a city or library district that intends to
withdraw from a county free library system and operate
libraries with a private contractor that will employ library
staff to achieve cost savings, as follows:
a) Establishes public notification requirements for the
legislative body of the city or board of trustees of a
library district prior to the meeting;
b) Specifies that the legislative body of a city or the
board of trustees of a library district must clearly
demonstrate that the contract will result in overall cost
savings as compared to the city's or library district's
actual costs of providing the same services, for the
duration of the entire contract;
c) Prohibits the contract for library services from causing
an existing city or library district employee from
incurring 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;
d) Requires the contract to be awarded through a publicized
competitive bidding process;
e) Requires provisions regarding the qualification of the
staff that will perform the work under the contract, and
assurances that the contractor's hiring practices meet
nondiscrimination standards;
f) Requires the contract to specify that it can be
terminated, if the contractor fails to perform, by the city
or library district without penalty, if there is a material
breach of the contract;
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g) Establishes additional requirements, if the contract for
library services is over $100,000 on the contractor to
disclose specified information, and for audits to measure
performance standards and cost savings;
h) Prohibits the term of the contract from being longer
than five years from the date on which the board of
trustees of a library district, or the legislative body of
a city approves the contract;
i) Specifies these provisions do not preclude a city,
library district, or local government from adopting more
restrictive rules regarding the contracting of library
services; and,
j) Specifies the requirements, as described above, also
apply to the special provisions for a withdrawal of a city
or library district from the county free library system in
Los Angeles County and Riverside County.
FISCAL EFFECT : None
COMMENTS :
1)The process contained in the Education Code allowing the
establishment of municipal libraries and the county free
library system dates back to 1911 and was continued in a new
code section in 1977 (Chapter 1010, Statutes of 1976), when
there was a major reorganization of the Education Code.
Before Proposition 13 (1978), a county could levy a separate
property tax rate to support its library system. After
Proposition 13, the Legislature divided the remaining property
tax revenues among local governments. Although they were not
separate institutions, state law treated county free libraries
as if they were special districts because they had their own
property tax rates before Proposition 13. The county free
libraries received shares of the property tax revenues and
they could receive money from the Special District
Augmentation Fund (AB 8, L. Greene, 1979). Prior to 2012, to
withdraw from a county library system, a city must negotiate
the amount of property tax revenues,
if any, that it will receive from the county library system.
Prior to January 1, 2012, the statute allowed a board of
trustees, common council, or other legislative body of any
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city or the board of trustees of any library district to
notify the county board of supervisors that the city or
library district wanted to withdraw from the county's free
library system. Before any legislative body could take action
to withdraw, the legislative body had to follow specific
noticing requirements contained in the Education Code.
2)Riverside County, several cities in Ventura County, including
Camarillo and Moorpark, the City of Redding (Shasta County),
and the City of Santa Clarita (Los Angeles County) currently
contract with a private corporation, Library Systems and
Services, Inc. (LSSI), for library services. In these cases
the city continues ownership of the library building and
materials, while LSSI provides the management of day-to-day
operations and staffing responsibilities. Cities that opt for
this model of providing library services argue that they
maintain control over library operations, planning, financing,
and the budget without having to deal with personnel and
staffing responsibilities which leads to cost savings.
Supporters of this bill argue the contrary and also express
concerns that libraries do not remain public under this new
model and that new fees may be charged.
3)AB 438 (Williams), Chapter 611, Statutes of 2011, establishes
standards for contracting to be met by any local government
wishing to withdraw from the county free library system, in
order to ensure that the private contractor achieves cost
savings over the duration of the contract for the city or
library district, as compared with the city's or library
district's actual costs of providing the same services. AB 438
imposes requirements related to public notice, demonstrated
cost savings, wages and benefits, competitive bidding, staff
qualifications and hiring, eligible contractors, contract
termination, contractor disclosure and performance
measurement. Provisions in AB 438 also require the contract
for library services to be no longer than five years in
duration, and to sunset on January 1, 2019, unless extended by
another statute.
AB 438, also sponsored by SEIU, noted as to the need for the
legislation that some public entities have opted to turn the
administration and operation of their libraries over to
private, for-profit companies, and in certain instances
taxpayers have opposed the idea but did not have adequate
ability to have their voices heard or to have their will as
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taxpayers impact the decision of their elected officials.
Opposition argued that the bill unfairly tied the hands of
local governments at a time when cities are expected to
provide the same level of services with less money.
4)On December 11, 2011, before AB 438 took effect, the Simi
Valley City Council adopted a resolution announcing its
withdrawal from the Ventura County Library System as of
December 31, 2011, in order to establish the Simi Valley
Public Library. The City of Simi Valley issued a request for
proposal (RFP) seeking an operator for the City's library
services, and entered into an agreement with the County of
Ventura to operate the library, for what was anticipated to be
a short-term transition to a new operator. According to the
City, two public agencies and one private firm responded to
the City's RFP. SEIU filed a lawsuit challenging the City's
withdrawal from the Ventura County Library System that was
eventually dismissed by a County Superior Court Judge.
Ventura County continues to operate the library.
The requirements established by AB 438 do not apply to cities
like Simi Valley that withdrew from a county free library
system to run their own library systems or contract with
another public entity for library services. AB 2592
(Williams, 2012) was gutted and amended at the end of session
to close this loophole in AB 438. Ultimately, AB 2592 failed
to get referred out of the Senate Rules Committee. This bill
is substantially similar to
AB 2592 (Williams).
5)The loophole that this bill is addressing was known at the
time that AB 438 (Williams) was making its way through the
legislative process; however, the provisions of AB 438 were
not amended to close that loophole. A June 27, 2011 analysis
of AB 438 by the Senate Governance and Finance Committee
stated the following:
"AB 438 doesn't apply to a city that chooses to withdraw from
a county free library system to run its own library system or
contract with another public entity for library services. A
city could avoid the bill's requirements by withdrawing from a
county system to run its own library for a short time before
contracting with a private firm for library services. To
close this potential loophole, the Committee may wish to
consider amending AB 438 to require a city to comply with the
bill's provisions if it seeks to contract with a private firm
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at any time within three years from the date on which it
withdraws from a county free library."
6)Under this bill, the requirements in existing law would not
apply to a city or library district that withdrew from a
county free library system prior to January 1, 2012, or
between January 1, 2012 and January 1, 2014, if they have
already entered into a private contract. However, under this
bill a city or library district that withdrew from a county
system after January 1, 2012, but has not entered into a
private contract by January 1, 2014, must comply with the
requirements in existing law before entering into a private
contract. Looking forward, this bill imposes existing
requirements on a city or library district which withdraws
from a county free library system before entering into a
contract to operate a library with a private contractor that
will employ library staff to achieve cost savings.
The requirements in existing law do not apply to charter
cities or to general law cities that fund their own library
systems, participate in a county library system under a joint
powers agreement, or receive library services through a
contract with a county or public library district. This bill
would expand upon this list by exempting a library or
libraries only funded by a special tax from the contracting
requirements in existing law.
This bill is sponsored by the California State Council of the
Service Employees International Union (SEIU).
7)The sponsor argues, "To illustrate the possible exploitation
of this loophole, a city may:
1) withdraw from a county free public library system without an
express statement of intent to privatize at the time of
withdrawal, 2) subsequently privatize after a period of time
following the withdrawal, and 3) withdraw and privatize
without being required to meet the provisions of existing
law."
8)In opposition to the bill the League of California Cities
argues, "According to the sponsor, this bill would simply
close a 'loophole' in existing law that allows a city to
withdraw from a county free public library system without
first meeting specified requirements. However, there is no
evidence to suggest that a single city has attempted to
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exploit the alleged 'loophole'."
The Committee staff is not aware of any cities or library
districts that have withdrawn from the county free library
system on or after January 1, 2012, and have not entered into
a private contract to operate their library.
9)Support arguments : SEIU argues that this bill simply closes a
loophole and that the provisions of the bill are neither
radical nor a departure from current law governing the state,
school districts and community colleges. Furthermore, this
bill will ensure that tax dollars are accountable and well
spent.
Opposition arguments : The League of California Cities, in
opposition, writes this bill further erodes local control by
expanding upon provisions in current law established by AB 438
which ties the hands of local governments.
REGISTERED SUPPORT / OPPOSITION :
Support
SEIU [SPONSOR]
California Labor Federation
Glendale City Employees Association
Organization of SMUD Employees
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Sana Rosa City Employees Association
Opposition
City of Simi Valley
League of California Cities
Library Systems and Services, Inc.
Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958