BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 583 HEARING: 6/19/13
AUTHOR: Gomez FISCAL: No
VERSION: 2/20/13 TAX LEVY: No
CONSULTANT: Weinberger
COUNTY LIBRARIES
Requires a city or library district that withdraws from a
county library system to comply with specified conditions
before operating a library with a private contractor.
Background and Existing Law
More than a century ago, the Legislature authorized
counties to establish county free library systems (SB 289,
Hans, 1911). Before Proposition 13 (1978), a county could
levy a separate property tax rate to support its library
system. Nearly 30 county free libraries had separate
rates. A county could extend the property tax rate to
parcels in a city that wanted to join the library system
and would cease to levy the rate within a city that
withdrew from the 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). In general, 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. Different procedures apply to
city withdrawals from county free library systems in Los
Angeles and Riverside counties (AB 1998, Mountjoy, 1996 and
AB 927, Thompson, 1997).
Two years ago, the Legislature imposed additional
requirements on a city or library district that intends to
withdraw from a county free library system and operate a
AB 583 -- 2/20/13 -- Page 2
library with a private contractor (AB 438, Williams, 2011).
Specifically, state law provides that a city or library
district that "intends to withdraw from the county free
library system and operate the city or district's library
with a private contractor that will employ library staff to
achieve cost savings" must:
Provide public notice.
Demonstrate specified cost savings.
Publicly and competitively bid contracts.
Limit a contract's term to five years or less.
Include, in a contract, provisions related to staff
qualifications, hiring practices, contract
termination, contractor disclosure, audits, and
performance standards.
Not approve a contract solely to produce savings
from lower contractor pay rates or benefits.
Last year, a Ventura County Superior Court decision in
Service Employees International Union Local 721 v. City of
Simi Valley found that the requirements enacted by AB 438
apply only to a city or district that concurrently intends
to withdraw from a county library system and operate its
library with a private contractor. The decision suggests
that these requirements do not apply to a local entity that
withdraws from the county library to operate its own
library, even if the withdrawal ultimately may lead to
privatization at a later date.
Labor union officials want the Legislature to clarify that
a city or library district that withdraws from a county
library after 2011 must comply with specified statutory
requirements before operating a library with a private
contractor, regardless of whether the city or district
intended to privatize at the time it withdrew from the
county system.
Proposed Law
Assembly Bill 583 requires the 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 to comply with specified requirements
before entering into a contract to operate the city's or
the district's libraries with a private contractor that
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will employ library staff to achieve cost savings. AB 583
provides that the specified requirements do not apply if
the city or district libraries are funded only by the
proceeds of a special tax imposed by the city or district,
pursuant to state law.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . Assembly Bill 583 closes a
loophole in current law that lets a city or library
district use a two-step process to circumvent requirements
enacted by the Williams bill in 2011. A city or library
district that first withdraws from a county library system
without expressing its intent to operate libraries with a
private contractor can later operate libraries with a
private contractor without meeting the additional statutory
requirements. AB 583's proponents argue that the
Legislature did not intend to limit the Williams bill's
requirements to only those cities and library district that
intend, at the time they withdraw from a county system, to
contract with a private entity for services. The bill
amends current law to apply the additional statutory
requirements to any city or district that withdraws from a
county library system after January 1, 2012, when that city
or district chooses to operate libraries with a private
contractor.
2. Home rule . Deciding how to provide municipal services
to city residents is what city council members and special
district directors are elected to do. AB 583 exacerbates
the 2011 Williams bill's erosion of local officials'
ability to manage local affairs, making it more difficult
for them to preserve essential public services during tough
financial times. Local elected officials are
well-positioned to judge the merits of a library service
contract and can either negotiate better terms or reject a
contract altogether. The Committee may wish to consider
whether AB 583 imposes unnecessary new restrictions on
these local contracting decisions.
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3. Back to the future ? On February 28, 2013 the City of
Simi Valley entered into a contract with Library Systems
and Services, Inc. to operate the Simi Valley Public
Library beginning on July 1, 2013. Because the Ventura
County Superior Court ruled that Simi Valley's effective
withdrawal date from the county library system was January
11, 2012 and AB 583 applies to any city or district that
withdraws from a county library system on or after January
1, 2012, Simi Valley officials worry that AB 583 could be
interpreted to retroactively disallow the city's contract
with LSSI. If AB 583 becomes law, its provisions take
effect on January 1, 2014. Article I, Section 9 of the
California Constitution prohibits the Legislature from
passing laws that impair obligation of contracts and AB
583's provisions do not convey any intent to retroactively
abrogate contracts entered into before the bill's effective
date. A plain interpretation of AB 583 is that it applies
the Williams bill's contracting requirements to any city or
district that:
Withdraws from a county library after January 1,
2012, and
Enters into a contract for library services after
the bill takes effect.
The Committee may wish to consider whether it is necessary
to clarify further that AB 538 does not apply retroactively
to library services contracts.
Assembly Actions
Assembly Local Government Committee: 7-1
Assembly Floor: 52-19
Support and Opposition (6/13/13)
Support : SEIU; AFSME; California Fair Elections Campaign
(SCV Fair Elections Committee); California Labor
Federation; Glendale City Employees Association; Los
Angeles Alliance for a New Economy; Organization of SMUD
Employees; San Bernardino Public Employees Association; San
Luis Obispo County Employees Association; Sana Rosa City
Employees Association, more than 400 individuals.
Opposition : City of Simi Valley; League of California
Cities; Library Systems and Services, Inc.
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